TCL Technology Group Corporation Annual Report 2021
TCL 科技集团股份有限公司
TCL Technology Group Corporation
ANNUAL REPORT 2021
April 27, 2022
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TCL Technology Group Corporation Annual Report 2021
Bucking up, Speeding up and Stepping up to a New Level
ANNUAL REPORT 2021 Chairman's Statement
In 2021, the Group recorded a revenue of RMB163.54 billion, up by 113.3% year-on-year; a
net profit of RMB14.96 billion, up by 195.3% year-on-year, a net profit attributable to the
company’s shareholders of RMB10.06 billion, up by 129.2% year-on-year; the net cash flow
generated from operating activities of RMB32.9 billion, up by 97% year-on-year; and a debt/asset
ratio of 61.2%, down by 3.8 percentage points. As stated above, the financial status remains stable,
various operating indicators significantly improved, relative competitive advantages were
strengthened obviously, and the Group took great steps towards becoming a global leader.
Excellent business performance depends on continuous corporate transformation, with a focus
on the main business, enhancing relative competitiveness and speeding up the development of core
industries. TCL CSOT achieved an operating revenue of RMB88.1 billion, a year-on-year increase
of 88.4%, and a net profit of RMB10.65 billion, a year-on-year increase of 339.6%. TCL
Zhonghuan achieved an operating revenue of RMB41.1 billion, a year-on-year increase of 115.7%,
and a net profit of RMB4.44 billion, a year-on-year increase of 200.6%. Other businesses under the
Group maintained stable growth.
The Group's development strategy focuses on the pan-semiconductor industry, aiming at
becoming a global leader or industry leader, continuously enhancing core competence and steadily
advancing various businesses. TCL CSOT will consolidate the competitiveness of large-sized LCD
business, maintain high efficiency, optimize the production line and product structure, and
accelerate the development of medium-sized t9 project. TCL CSOT has established a relative
competitive advantage in LTPS business and is investing in expanding LTPS production capacity
(Wuhan t5 project). TCL CSOT will strive to become the most competitive enterprise in the field of
semiconductor displayby enhancing the competitiveness of its t4 OLED production line and
developing the next generation of new display technology.
TCL Zhonghuan new energy photovoltaic business has established industry-leading
competitiveness in the field of crystals and wafers. With the production of Yinchuan Crystal Plant, it
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TCL Technology Group Corporation Annual Report 2021
will further enhance its competitive advantage. The Company will improve its industrial chain
layout, proactively expand global business, and make every effort to become a leader in the global
photovoltaic new energy industry.
Zhonghuan Advanced has made considerable progress in its semiconductor materials business.
While consolidating its competitive advantage of original products, it has rapidly improved the
competitiveness of 12-inch products and strives to become an industry leader in China.
The Group will firmly push ahead with its development strategy for the pan-semiconductor
industry and actively support the development of various industries.
The year 2022 will see a turbulent international situation. Risky events occur constantly,
posing a great impact on the global economy. The Group should be prepared for various risks with
worst-case scenario thinking.
The semiconductor display market has entered a downside circle since last September. In the
face of a pessimistic situation affected by economic slowdown and weak market demand, TCL
CSOT is under pressure. Moka Technology, acquired by the Group last year, is expected to maintain
stable business growth this year and contribute to profit growth, which will play a positive role in
the semiconductor display business. Benefiting from the global energy conservation and carbon
reduction policy, the new energy photovoltaic business ushers in a historic opportunity. TCL
Zhonghuan will accelerate the development of its new energy photovoltaic business. Zhonghuan
Advanced’s semiconductor materials business will seize the opportunity brought by the
development of China's integrated circuit industry. TCL Zhonghuan’s business is expected to
continue to grow robustly this year.
Facing the uncertainty of the global economy, the Group will firmly promote its global leading
development strategy, consolidate its basic capacity and actively expand the global operation. In the
meantime, the Group will prudently assess the project investments, manage operations risks,
maintain financial stability, and achieve development against the trend.
The Company has always been dedicated to returning high value to its shareholders. The
Board of Directors has proposed a final dividend of RMB1.5 per 10 shares to share the value of
corporate growth with shareholders.
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TCL Technology Group Corporation Annual Report 2021
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 27, 2022
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TCL Technology Group Corporation Annual Report 2021
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 Mr. Xi Wenbo, 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 Board has approved a final dividend plan for the ordinary shareholders as follows: based
on the share capital of 13,666,683,905 shares on April 27, 2022 that are eligible for profit
distribution (the total share capital of 14,030,642,421 shares minus the 363,958,516 shares in the
Company’s special securities account for repurchase that are not eligible for profit distribution), a
cash dividend of RMB1.5 (tax inclusive) per 10 shares is to be distributed to the shareholders,
totaling RMB2,050,002,585.75. The retained earnings of RMB5,971,326,768.25 will carry forward
for future distribution. Where any changes occur, before the implementation of the dividend plan, to
the 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 payout amount under the same dividend ratio”,
subject to the actual payout amount.
This Report and its summary has been prepared in both Chinese and English. Should there be
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TCL Technology Group Corporation Annual Report 2021
any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
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TCL Technology Group Corporation Annual Report 2021
Table of Contents
Part I Important Notes, Table of Contents and Definitions.......................................... 5
Part II Corporate Information and Key Financial Information .................................. 11
Part III Management Discussion and Analysis.......................................................... 16
Part IV Corporate Governance ................................................................................. 55
Part V Environmental and Social Responsibility ...................................................... 82
Part VI Significant Events ........................................................................................ 92
Part VII Share Changes and Shareholder Information ............................................ 114
Part VIII Bonds ...................................................................................................... 124
Part IX Financial Statements .................................................................................. 133
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TCL Technology Group Corporation Annual Report 2021
Documents Available for Reference
(I) The financial statements signed and stamped by the Company’s legal
representative, 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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TCL Technology Group Corporation Annual Report 2021
Definitions
Term Definition
The “Company”, the “Group”，“TCL”，“TCL TCL Technology Group Corporation
TECH.” or “we”
The “Reporting Period”, “current period” The period from January 1, 2021 to December 31, 2021.
TCL CSOT TCL China Star Optoelectronics Technology Co., Ltd.
Tianjin Zhonghuan Electronics Group Co., Ltd., which changed its name to TCL
Zhonghuan Electronics
TECHNOLOGY GROUP(TIANJIN) CO., LTD. in March 2022.
Tianjin Zhonghuan Semiconductor Co., Ltd., a majority-owned subsidiary of the
TCL Zhonghuan
Company listed on the Shenzhen Stock Exchange (stock code: 002129.SZ)
Tianjin Printronics Circuit Corporation, a majority-owned subsidiary of the
TPC
Company listed on the Shenzhen Stock Exchange (stock code: 002134.SZ)
Wuhan CSOT Wuhan China Star Optoelectronics Technology Co., Ltd.
Guangdong Juhua Guangdong Juhua Printed Display Technology Co., Ltd.
Highly Information Industry Co., Ltd., a majority-owned subsidiary of the
Highly Company listed on the National Equities Exchange and Quotations (stock code:
835281)
China Display Optoelectronics Technology Holdings Limited, a majority-owned
CDOT subsidiary of the Company listed on the Hong Kong Stock Exchange (stock code:
00334.HK)
Moka Technology Moka International Limited
712 Tianjin 712 Communication & Broadcasting Co., Ltd., (stock code: 603712.SH)
t1 The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT
The generation 8.5 (or G8.5) TFT-LCD (including oxide semiconductor)
t2
production line of TCL CSOT
t3 The generation 6 (or G6) LTPS-LCD panel production line of TCL CSOT
The generation 6 (or G6) flexible LTPS-AMOLED panel production line of TCL
t4
CSOT
Expanding the production line for generation 6 (or G6) semiconductor new
t5
display at Wuhan CSOT
t6 The generation 11 (or G11) new TFT-LCD display production line of TCL CSOT
The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD and
t7
AMOLED production line of TCL CSOT
The generation 8.6 (or G8.6) new oxide semiconductor production line of
t9
Guangzhou CSOT
The generation 8.5 (or G8.5) TFT-LCD production line of Suzhou China Star
t10
Optoelectronics Technology Co., Ltd.
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TCL Technology Group Corporation Annual Report 2021
GW Gigawatt, power unit for solar cells, 1GW = 1,000 megawatts
12-inch ultra-large DW-cut solar monocrystalline silicon square wafer, size:
G12 44,096mm diagonal line: 295mm, side length: 210mm, with its size 80.5%
larger than the conventional M2
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TCL Technology Group Corporation Annual Report 2021
Part II Corporate Information and Key Financial Information
I. Corporate Information
Stock name TCL TECH. Stock code 000100
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
TCL Technology Group Corporation
any)
Abbr. (if any) TCL TECH.
Legal representative Li Dongsheng
TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development District, Huizhou
Place of registration
City, Guangdong Province
Zip code 516001
TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development District, Huizhou
Office address
City, Guangdong Province
Zip code 516001
Company website https://www.tcltech.com/
Email address ir@tcl.com
“Top 60 brands under 2021 Chinese Corporate Citizenship 520”
“2021 CSR CHINA TOP 100 of CSR Award”
“Top 10 Private Enterprises under 2021 Chinese CSR Development Index”
Company honors
"Four-star CSR in electronic information industry in 2020-2021”
“The Best Practice Case of Board Office issued by CHINA ASSOCIATION FOR PUBLIC
COMPANIES”
II Contact Information
Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001 Nanshan District, Shenzhen,
Office address
Guangdong Province, China
Tel. 0755-3331 1666
Email address ir@tcl.com
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TCL Technology Group Corporation Annual Report 2021
III. Media for Information Disclosure and Place Where This Report is Lodged
Stock exchange website for publication of this Report http://www.szse.cn
Media name and website for publication of this Securities Times, China Securities Journal, Shanghai Securities News and
Report Securities Daily, as well as http://www.cninfo.com.cn
Place where this Report is lodged Office of the Board of TCL Technology Group Corporation
IV. Changes to Company Registered Information
Unified social credit code 91441300195971850Y
1. In 2019, the Company focused on semi-conductor display devices by sold
smart terminal businesses such as consumer electronics and household
appliances and related supporting businesses.
Changes in main business activities of the Company
2. In 2020, the Company acquired 100% equity of Tianjin Zhonghuan
since going public (if any)
Electronics through public delisting, shaping a business structure that
focused on semi-conductor display, new energy photovoltaic and
semi-conductor materials.
Changes of controlling shareholder since
Not applicable
incorporation (if any)
V. Other information
The independent audit firm hired by the Company:
Name Da Hua Certified Public Accountants (Special General Partnership)
Office address Room 1101, Building 7, No. 16 Xi Si Huan Zhong Road, Haidian District, Beijing
Accountants writing signatures Qiu Junzhou and Jiang Xianmin
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period
□ Applicable √ Not applicable
The independent financial advisor 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
CITIC Securities Tower, No. 8
Liu Jian, Wu Huiyu, The period from October 17, 2020 to
CITIC Securities Co., Ltd. Zhongxin 3rd Road, Futian
Fei Shaozhen December 31, 2021.
District, Shenzhen, China
VI. Key Financial Information
Indicate whether there is any retrospectively restated datum in the table below.
□ Yes √ No
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TCL Technology Group Corporation Annual Report 2021
2021 2020 2021-Over-2020 Change 2019
Revenue (RMB) 163,540,559,623 76,677,238,079 113.28% 74,933,085,688
Net profit attributable to the
10,057,443,528 4,388,159,018 129.20% 2,617,766,571
company’s shareholders (RMB)
Net profits attributable to the
company’s shareholders before
9,437,240,976 2,933,248,153 221.73% 235,119,321
non-recurring gains and losses
(RMB)
Net cash generated from operating
32,878,450,437 16,698,282,775 96.90% 11,490,096,405
activities (RMB)
Basic earnings per share
0.7463 0.3366 121.72% 0.1986
(RMB/share)
Diluted earnings per share
0.7354 0.3226 127.96% 0.1935
(RMB/share)
Weighted average return on equity Up by 12.71 percentage
26.46% 13.75% 9.09%
(%) points
Change of December 31,
At the end of the December 31,
December 31, 2020 2021 over December 31,
Reporting Period 2019
2020
Total assets (RMB) 308,733,133,305 257,908,278,887 19.71% 164,844,884,926
Owners’ equity attributable to the
43,034,234,611 34,107,795,454 26.17% 30,111,946,237
company’s shareholders (RMB)
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
The total share capital at the end of the last trading session before the disclosure of this Report:
Total share capital at the end of the last trading session before
14,030,642,421
the disclosure of this Report (share)
Fully diluted earnings per share based on the latest total share capital above:
Fully diluted earnings per share based on the latest total share
0.7168
capital above (RMB/share)
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TCL Technology Group Corporation Annual Report 2021
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
2. Differences in Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 32,143,561,563 42,155,085,195 46,629,888,432 42,612,024,433
Net profit attributable to the company’s shareholders 2,403,729,935 4,380,154,872 2,318,085,363 955,473,358
Net profits attributable to the company’s shareholders
2,123,056,041 3,374,761,906 3,060,177,204 879,245,825
before non-recurring gains and losses
Net cash generated from operating activities 8,003,201,979 5,892,512,178 10,063,994,904 8,918,741,376
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 2021 2020 2019 Note
Gains and losses on disposal of non-current
assets (inclusive of impairment allowance -184,525,551 226,829,348 1,419,020,969 Not applicable
write-offs)
Government subsidies charged to current
profits and loss (except for government
subsidies closely related to the Company’s
699,270,673 736,747,146 1,170,648,526 Not applicable
normal business which comply with national
policies and regulations and are enjoyed on
an ongoing basis according to certain
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TCL Technology Group Corporation Annual Report 2021
standard quotas or quantities)
Gain equal to the amount by which
investment costs for the Company to obtain
subsidiaries, associates and joint ventures
40,299,579 292,440,389 68,021,706 Not applicable
are lower than the Company’s enjoyable fair
value of identifiable net assets of investees
when making investments
Gain or loss on fair-value changes on
held-for-trading financial assets and
liabilities & income from disposal of
held-for-trading financial assets and
238,629,291 350,757,476 186,339,457 Not applicable
liabilities and available-for-sale financial
assets (exclusive of the effective portion of
hedges that arise in the Company’s ordinary
course of business)
Non-operating income and expenses other
275,789,900 80,764,287 9,263,922 Not applicable
than the above
Less: Corporate income tax 93,176,105 135,130,967 165,397,982 Not applicable
Non-controlling interests (net of tax) 356,085,235 97,496,814 305,249,348 Not applicable
Total 620,202,552 1,454,910,865 2,382,647,250 --
Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable √ Not applicable
Explanation of defining the 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 as recurring profit and loss
items
□ Applicable √ Not applicable
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TCL Technology Group Corporation Annual Report 2021
Part III Management Discussion and Analysis
I. Principal Activity of the Company in the Reporting Period
In 2021, the international situation was increasingly complex, and regional conflicts worsened.
With the continuation of the pandemic, the global economy faced huge risk challenges. China
pushed ahead the establishment of a "dual circulation" development pattern that focuses on
domestic flow and features positive interplay between domestic flow and international engagement
as a major strategic task. China built its comparative advantages in major links, strengthened its
influence in the industrial chain, supply chain and innovation chain, gradually transformed in an
orderly way, upgraded to a green and low-carbon development mode and achieved high-quality
development across the board. In the face of opportunities and challenges, the Company
continuously focused on the semi-conductor display business, the new energy photovoltaic and
semi-conductor materials business. In accordance with its requirements of "Ramp up, Catch up", the
Company implements the operating strategy of "improving operating quality and profitability,
consolidating advantages and improving disadvantages, accelerating global layout, and promoting
innovation-driven development" and is dedicated to be a global leading and competitive group with
core industries all occupying world leading positions.
During the reporting period, the semiconductor display business, and new energy photovoltaic
and semiconductor materials business drove the growth of the Company. Both the operating scale
and financial revenue hit a new high. The Company achieved an operating revenue of RMB163.54
billion, a year-on-year increase of 113.3%; achieved a net profit of RMB 14.96 billion, a
year-on-year increase of 195.3%; achieved a net profit attributable to the shareholders of the listed
company of RMB10.06 billion, a year-on-year increase of 129.2%. Benefiting from the overall
higher prosperity in the industry, the Company's capacity scale increased and its structure was
optimized, as the Company’s display business saw its revenue increase by 88.4% year -on-year and
the net profit increase by 339.6%. The Company seized the development opportunity in the new
energy photovoltaic industry and gave full play to the advantages of intelligent manufacturing,
advanced technology and production capacity. G12 silicon wafer ranked top in global market shares.
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TCL Technology Group Corporation Annual Report 2021
The semiconductor material business continued to maintain strong growth, and shipments of
8-12-inch polished wafers and epitaxial wafers rose quickly. The new energy photovoltaics and
semiconductor materials businesses achieved an operating revenue of a year-on-year increase of
115.7%, and a net profit of a year-on-year increase of 200.6%.
Driven by innovation in product technology and continuously expanding in the major
links alongside the industrial chain and value chain. During the reporting period, the Company
invested RMB8.77 billion in R&D, with a year-on-year increase of 34.1%. The company newly
filed 1,254 PCT patent applications, with a total of 14,051 applications filed, ranked top among the
Chinese enterprises. The display business further increased R&D investments in the process,
materials and equipment of new display technologies such as printing OLED, QLED and
Micro-LED, and jointly built an industrial ecosystem for technology development and application
with industries, scientific research institutions and universities. The number of patent applications
for quantum dot electroluminescence technology and materials reached 1,964, ranking second in the
world. A series of patented technologies and know-how have been developed with independent
intellectual property rights in the new energy photovoltaic field, and the introduction of the "G12 +
integrated shingle" technology platform has been accelerated. The Company will continue to
increase resource investment in the field of new energy photovoltaic and semi-conductor materials
and improve its technical strength in key links alongside the industrial chain.
Strengthen the integration of intelligent technology and industrial manufacturing, and
build future competitiveness based on digitization and intelligence. The Company has greatly
improved its production efficiency and product quality through introducing automation and
intelligent equipment, building the industrial Internet and a big data platform, accelerating industrial
4.0 upgrading, and integrating intelligent technologies such as artificial intelligence and IoT into
products. TCL CSOT has introduced intelligent technology projects such as artificial intelligence
identification systems and multi-factor analysis to develop an overall solution for AI industrial
quality inspection with independent intellectual property rights, and the level of intelligent
manufacturing has been greatly improved. Through the construction of intelligent benchmarking
factories, TCL Zhonghuan has improved its production and operation efficiency by more than 70%
and increased its labor efficiency by 4 to 5 times.
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TCL Technology Group Corporation Annual Report 2021
Increase production capacity in an orderly way, along with a high-end product system,
and optimize the business portfolio and revenue structure. The semi-conductor display business
follows a strategy featuring the high-end development for large-sized panels and excellent quality
for medium-sized and small-sized panels. The market share of TV panels is second in the world, of
which the high-end market occupies first place, and the market share of interactive whiteboards is
the first in the world; the medium-sized business revenue of the LTPS production line accounts for
41%, the shipment of notebook computers is the second in the world, onboard products have been
imported into many core customers, having become a profit growth point. New energy
photovoltaics further enhanced the industrial application of G12 + silicon wafers and the integrated
shingled technology platform. The Company's total monocrystalline silicon production capacity was
increased to 88GW. Ningxia Yinchuan 50GW (G12) solar grade monocrystalline silicon material
intelligent plant was put into operation in January 2022. Both production and sales of
semiconductor materials have increased significantly, enabling the company to transform into a
first-class comprehensive solution provider in the industry.
In order to actively implement CSR and achieve high-quality development, the Company
upgraded its corporate culture and took on "leading technology, realizing harmony and
coexistence" as its vision and mission to promote sustainable social development. The
Company advocates a green development model and promotes low-carbon at the production and
final-user ends. TCL CSOT improves the use of clean energy by building a photovoltaic power
generation system on the plant roof. HVA, 1G1D display and other technologies can effectively
improve the transmission of light, improving image quality while saving energy. The G12 silicon
wafer of TCL Zhonghuan can achieve higher photoelectric conversion and manufacturing efficiency.
The Company continues to devote itself to poverty alleviation, student aid, disaster relief and other
charitable activities in an innovative manner. The funds and materials with a total of RMB300
million are used for normalized charitable services to promote joint social progress.
On the occasion of the 40th anniversary and looking into the future, we will pool our
efforts, take science and technology as the guide and innovation as the driving force, continue
to “ramp up, catch up”, and accelerate to become the world's leading intelligent technology
industry group, and shoulder greater responsibility and missions for the prosperity of the
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TCL Technology Group Corporation Annual Report 2021
national economy and people's lives.
II. Main businesses of the Company during the reporting period
Based on the semi-conductor display business, new energy photovoltaic and semi-conductor
materials as the main business, the Company will continue to optimize its business structure, and
further focus on its main businesses, to achieve the strategic goal of global leadership in its two core
industries.
TCL TECH.
Semi-conductor New energy photovoltaic & Industrial finance & Other
display Semi-conductor materials investment
Zhonghuan Zhonghuan TCL TCL Capital
TCL CSOT China Ray Highly TPC
Photovoltaic Advanced Financial
Moka TCL
Juhua
Technology M icrochip
(I) Semiconductor display business
In the first half of 2021, the supply-demand relationship was improved in the semi-conductor
display industry with increased industry concentration. Affected by fluctuated market demands and
logistics costs, the large-size products saw a sharp decrease in price in the second half of the year.
As a leading enterprise, TCL CSOT continued to expand its scale and optimize its business
structure through endogenous growth and external acquisition. Both revenue and profit hit a
record high. During the reporting period, TCL CSOT achieved a total of sales areas of 39.4915
million square meters, a year-on-year increase of 36%, and semi-conductor display business
achieved a revenue of RMB88.1 billion, a year-on-year growth of 88.4% and a net profit of
RMB10.65 billion, a year-on-year increase of 339.6%.
In the large-size segment, TCL CSOT continued to expand its scale, adhering to the
strategy of high-end products and enhanced its competitive advantage. Factories t1, t2 and t6
maintained effective operations, Factory t7 ramped up as scheduled; Factory t10 (formerly Samsung
Suzhou LCD factory) has been consolidated since Q2 and the acquisition of the remaining 30%
minority equity was completed at the end of September, thus becoming a wholly-owned subsidiary
of TCL CSOT. The Company's leading position in large-size panels was further reinforced, ranking
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TCL Technology Group Corporation Annual Report 2021
2nd globally in terms of market share of TV panels, ranking 1st globally in terms of market share of
55-inch products; the high-end strategy has achieved remarkable results, with the shipment area of
65 inch and above products exceeding 47% of the total shipment area, 65-inch and 75-inch products
ranked No.2 in terms of market share, and the Company ranked 1st globally in terms of market
share of 8K and 120 HZ high-end TV panels; the Company has accelerated the adjustment of its
product structure, with non-TV business exceeded 23%, and become the core supplier for the
leading customers in terms of commercial display markets such as interactive whiteboards, digital
signage and splicing screens, among which the market share of interactive whiteboards increased to
No.1 globally.
In the medium-sized segment, TCL CSOT diversified its product structure, actively
introduced leading customers, invested in new production capacity and de veloped a new
engine for business growth. The Company has seized opportunities for rapid growth in the market
of medium-sized products and increased its market share through optimizing existing production
lines. The Company ranks 1st globally in terms of market share of e-sports displays in Q4, Factory
t3 production line accelerated the medium-sized transformation, and the revenue of non-mobile
phone products increased to 41%, 2nd globally in terms of shipment volume of LTPS notebook
panels, and 1st globally in terms of shipment volume of LTPS tablet PC panels; the shipment
volume of vehicle-mounted panels has increased rapidly by introducing a number of Chinese and
foreign leading customers; the Company has achieved cooperation with brand customers with
respect to display and laptop products equipped with Mini LED backlighting. To meet the needs of
customers, the Company is expanding its 6th generation LTPS LCD display panel production line.
The plant of t9 project has been constructed for 8.6th generation oxide semi-conductor new display
device production line and SoP is expected in 2023. The Company's medium-sized business layout
will be gradually improved to explore a new drive for business growth.
In the field of small-sized product businesses, TCL CSOT has improved productivity
through technological differentiation, improved the customer portfolio and improved the
operating indicators. The shipment volume of LTPS mobile phone panels of Factory t3 production
line ranked fourth in the world, and the new VR/AR display products were expanded to improve the
profitability. The first phase of t4 project has successfully reached production capacity, and the
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TCL Technology Group Corporation Annual Report 2021
second and third phases of production capacity are constructed as scheduled. The differentiation
advantage has been realized thanks to folding screens, under screen camera technology and LTPO
technology. The folding screen has successfully realized the SoP and supplied to the first-tier brand
manufacturer, and made a breakthrough in the development of new customers. Affected by high
R&D investments in the early stage and the fixed expenditure in the production capacity increase
period, t4 operating efficiency did not meet expectations. The Company will focus on improving
technical capacity of products, meeting the needs of strategic customers and gradually improving
operating efficiency.
Breakdown of semi-conductor display business：
Shipment area Shipment volume Revenue Net profit
10,000
10,000 Year- Year- RMB Year- RMB Year-
Item pieces /
square on-year on-year 100 on-year 100 on-year
10,000
meters (%) (%) million (%) million (%)
sets
Large-sized
3,774.7 36% 6,332.4 38% 565.5 95.1% 123.0 306.4%
products
Medium-to-small Decreased
sized products by RMB
174.5 23% 9,622 -3% 234.1 31.6% -11.1
1,150
million
Moka Not Not Not
- - 903.9 120.0 3.3
Technology applicable applicable applicable
Other and offsets - Not Not
- - - -38.5 -8.7
applicable applicable
Total - - - - 881.0 88.4% 106.5 339.6%
Note: Moka Technology has been integrated since the second quarter of 2021. The numbers in the Table may contain rounding
errors.
In the long term, the LCD display industry will remain centered on Mainland China with an
optimized competitive pattern. The leading enterprises had significant advantages in terms of
management efficiency, scale, technology, research and development, supply chain, and so forth,
significantly increasing industry entry barriers. In the short term, affected by the turbulent
21
TCL Technology Group Corporation Annual Report 2021
international political and economic situation, economic growth has slowed down, and market
demands have become sluggish. The semi-conductor display industry faces huge operating
challenges.
TCL CSOT will further optimize its business portfolio and accelerate transformation and
upgrading from a leader in large-sized displays to a leader in all sizes of displays. With the capacity
increase of Factory t4 phase II and phase III and the expansion of Factory t9 and Factory t3, TCL
CSOT will continue to increase its capacity and improve the layout of large, medium and small size
display businesses. Large size businesses continue to increase the proportion of high-end products
and take a lead in becoming a global leader. Small and medium-sized businesses build a business
matrix mixed with product lines and technology lines, shapi ng a diversified business layout in
combination with flexible OLEDs, LTPS and module factories, with product planning for all
technological categories.
The Company will uphold efficiency-oriented operations, maintain industry-leading
profitability, improve intelligent manufacturing capacity, management efficiency and personnel
efficiency by building a digital plant. The existing production lines will end their depreciation
period respectively, it is expected that the proportion of depreciation in revenue will gradually
decline, further improving the profitability of TCL CSOT. Meanwhile, TCL CSOT will further
increase R&D investments. By means of equity investment and strategic cooperation and other
methods, the Company works with industrial chain partners to jointly promote the development of
new display technologies such as OLED, Miniled and Microled.
(II) New energy photovoltaic and semiconductor materials business
The global energy structure is undergoing transformation. Renewable energy ushers in new
opportunities for development, and semi-conductor materials, as the upstream of the electronic
industry chain, ushering in fast development following the trend of domestic substitution. Since
2021, as the raw material price keeps rising, the manufacturers face pressure in the short term. In
the face of both opportunities and challenges, TCL Zhonghuan adopts a "9215" development plan,
resolutely implementing "global leading strategies for new energy photovoltaic materials and the
strategy of catching up and surpassing for semiconductor materials", to deepen institutional reform,
comprehensively improve organizational capacity and release corporate vitality. TCL Zhonghuan
22
TCL Technology Group Corporation Annual Report 2021
pushes ahead with technological innovation and deeply participates in the governance of global
intellectual property rights; builds a scientific and orderly manufacturing mode of transformation to
ensure high-quality corporate development.
During the reporting period, the new energy photovoltaics and semiconductor materials
businesses achieved a total revenue of RMB41.1 billion, a year-on-year increase of 115.7%, and a
net profit of RMB4.44 billion, a year-on-year increase of 200.6%.
1. New energy photovoltaics industry
The Company gives full play to its leading technology advantages and drives rapid growth of
the business scale. During the reporting period, TCL Zhonghuan increased the capacity of new
energy photovoltaics to 88GW, with improved product adaptability, and the market share rose to
28%. Relying on the advantages of G12 silicon wafer technology and the manufacturing mode, the
G12 silicon wafer market share ranked first in the world, while high-efficiency N-type
monocrystalline silicon wafer ranked first in the world, and the global industrial influence was
further strengthened. The Company continues to expand the advantages of advanced production
capacity. The 50GW (G12) single crystal silicon material plant of Ningxia Zhonghuan phase VI has
been put into operation, and the 25GW monocrystalline silicon plant in Tianjin and 30GW
monocrystalline silicon material plant in Inner Mongolia are under construction, which will further
facilitate the release of G12 silicon chip production capacity of the Company.
In terms of modules, benefiting from the rapid increase of overseas high-power and distributed
products, the Company has expanded its international market through patented technology of
shingle 3.0, making it the benchmark in power generation efficiency of high-power modules.
During the reporting period, the production capacity of photovoltaic modules increased to 11GW,
with a year-on-year increase of 120%. The G12 high-efficiency shingled PV module project has
realized SoP in Jiangsu Province, while the G12 high-efficiency shingled PV module project in
Tianjin has hastened its SoP.
Based on long-term technological development and the comprehensive application of industry
4.0, the Company has established its differentiated competitiveness in production efficiency and
product reliability. During the reporting period, the consumption rate of silicon material per unit
decreased by nearly 3% year-on-year, the monthly production of silicon rod per unit increased by
23
TCL Technology Group Corporation Annual Report 2021
30%, the labor productivity and the first pass yield (FPY) of G12 production line increased
significantly, and the monthly production and output per single unit took a lead in the industry.
Relying on industry 4.0, the Company has cooperated with upstream and downstream customers to
establish a flexible cooperation mode, which has effectively driven the production and marketing
scale and improved product quality.
2. Semiconductor materials industry
The global semi-conductor industry is increasingly moving to Mainland China. China has
become the largest semiconductor market and continues to maintain the fastest growth rate, driving
the rapid development of the semiconductor material industry. The Company's semiconductor
materials business has developed rapidly. During the reporting period, semiconductor materials
reached the preset capacity targets of 8-inch 750,000 pieces/month and 12-inch 170,000
pieces/month. 8-inch products have established a comprehensive product capability and market
competitiveness comparable to international first-tier manufacturers; the 12-inch products were in a
breakthrough period. The products applied to the customized process have passed the certification
of several domestic leading customers under stable SoP. The products adopting the advanced
process accelerated to catch up, and products above 28nm were successfully verified by several
customers and entered a stage of capacity increase.
Looking into the future, the dual carbon policy will drive the high-efficiency and high-quality
development of the global economy, and the global economic pattern is bound to drive the
reconstruction of the high-tech industrial chain dominated by electronic information. The Company
will seize strategic opportunities, increase investment in new energy photovoltaic and
semi-conductor fields, strengthen the control of key links and strategic nodes alongside the
industrial chain, and contribute to the high-tech industry breakthrough under the trend of energy
structure transformation.
The Company is maintaining steady development in other aspects of corporate development.
TCL financial company focused on ensuring the Company's project capital demand, reducing costs
and increasing efficiency, improving its active management of industrial funds and risks, and
supporting the high-quality development of the industry. TCL Capital explored investment and
deployment opportunities in key areas that drive the development of the science and technology
24
TCL Technology Group Corporation Annual Report 2021
industry, such as new display types, semiconductor and core materials and process equipment
related to the industrial chain, and promoted technology and business synergy. Highly and TPC
stably improved their operation benefits, significantly enhancing both quality and efficiency.
III. Analysis of core competitiveness
In 2021, TCL grandly celebrated its 40th anniversary. Over the last 40 years, TCL has
celebrated outstanding achievements. We have gone through different cycles and grown from a
small local enterprise to become China's leading group in the technology manufacturing industry.
Now, the Company has developed a business structure based on semi-conductor display devices,
new energy photovoltaic and semi-conductor materials. The Company, with a clear development
path, efficient operation and distinct culture, has greatly improved its profitability under
professional operation, and continuously improved its core competitiveness and ability in
sustainable development.
Leading scale: High-speed growth and leading position in the global market
As a global leading enterprise in semi-conductor display and a pioneer in independent line
construction in the domestic display field, the Company has brought the aggregation effect into full
play through the centralized production line layout, and continues to expand production capacity
through endogenous growth and external acquisition; through the construction of two 8.5-gen lines,
TCL CSOT has gained a firm foothold in the field of TV panels; subsequently, two 6-gen lines
successfully introduce small-size panels, and the shipment has exceeded 10%; in recent years,
through the investment and construction of two 11-gen lines and the acquisition of Suzhou Samsung
Factory t10 production line, we have further expanded our large-sized production capacity and kept
a leading position for large-sized panels in the world; in 2021, the Company invested in the
construction of t9 production lines for high value-added IT, commercial display and other
medium-sized products to speed up full-size strategic layout. At present, the market share of TCL
CSOT TV panel shipping area ranks second in the world, LTPS laptop ranks second in the world,
LTPS mobile phone panels rank fourth in the world, E-sports panels rank second in the world, and
IWB ranks first in market share.
At the same time, TCL CSOT has also actively extended the value chain downward, and
25
TCL Technology Group Corporation Annual Report 2021
further improved the Company's position and profitability on the value chain by expanding the
production capacity of its independently constructed modules, and by acquiring Moka Technology
and Samsung's module factory. The Company will further strengthen its core competitive advantage
based on scale effect and supply chain synergy, and with industry recovery and optimizing the
competition layout, TCL CSOT will usher in rapid scale growth and industry improvement driven
by a high growth rate, and consolidate its industry status and comprehensive competitiveness.
Leading in technology and ecology: Actively laying the groundwork for next-generation
display technologies and materials, building a first-mover advantage through ecological
leadership
Relying on TCL CSOT, the Company accelerated the vertical layout of the industrial chain and
continuously improved its upstream capacity for technological innovation. The Company, focusing
on basic materials, next-generation display materials, key equipment in new techniques and other
fields for its ecological layout, has constructed a TCL ecosystem within the display field, so as to
establish its leading advantage based on next generation display technology, and its high-tech value
continues to be enhanced.
The "National Printing and Flexible Display Innovation Center" of Guangdong Juhua, a
subsidiary of the Company, is the only national innovation center in the display field within China,
and has built a global leading public platform for G4.5 printed display R&D, integrating industrial
chain resources from all links including materials, techniques, processes and application verification.
In addition, the Company will continue to invest in Micro-LED display technology, establish a joint
laboratory with San'an to focus on the development of Micro-LED technology, so as to promote the
Company's ecological layout in this field from materials, techniques, equipment, and production
line solutions to independent intellectual property, and form a process flow solution for Micro-LED
commercial scale mass production.
In 2021, the Company ranked top among Chinese Mainland enterprises, with 14,051 patents
applied, and ranked second globally in terms of quantum dot patents. More than half of them are
invention patents, covering 14 fields such as quantum dot materials, backlights and panels, shaping
a well-designed patent layout, and it is expected that the Company will establish its competitive
advantage when the next generation of display technology arrives.
Leading in management: TCL CSOT takes the lead in global efficiency and traverses the
26
TCL Technology Group Corporation Annual Report 2021
cycle with relative competitiveness
While establishing market scale, technology and ecological advantages, the Company has
taken the lead in efficiency and benefit indicators. Since beginning operations in 2011, TCL CSOT
has weathered two rounds of sharp fluctuation cycles in the display industry with ten consecutive
years of profitability, where the net margin has always been positive across the panel cycle, with
extreme cost efficiency and lean management being key factors.
Through the synergistic effect of centralized factories, the Company gives full play to the
efficiency of its production line layout and capacity increase, further improving the activation and
product scheduling efficiency with advantages in industrial chain integration and locking in
strategic customers, promoting end-to-end cost and expense control through refined management
and extreme efficiency cost measures, so as to build its relative competitiveness in the industry. In
the past several rounds of cyclical industry fluctuations, the Company has continuously maintained
an industry leading level of net profit margin and EBITDA margin, making it a model for
profitability within the panel industry. In the future, the Company will go through the industrial
development cycle and take a lead in the industrial development relied on this major advantageous
capacity.
New strategic track: Arranging the layout for semiconductor and photovoltaics
businesses to open up a secondary growth curve
Focusing on enterprise development and the national planning of strategic emerging industries,
the Company actively seeks new tracks that are technology-intensive and capital-intensive with
long development cycles that can give full play to and continue to enhance TCL's core competence.
In July 2020, Zhonghuan successfully achieved state-ownership reform. In 2021, TCL Zhonghuan
released its growth potential through institutional reform, optimized capital structure, stimulated
organizational vitality, accelerated business development, its surpassed performance doubling plan,
and achieved significant growth in revenue and profit. At present, TCL Zhonghuan ranks second in
the world in the sales of photovoltaic materials and for sales volume of semiconductor materials
ranks first in China, making Zhonghuan the second growth engine under the TCL Group.
Organizational and cultural guarantee: Creating a “Path to Global Leadership” and
strengthening the genes of corporate culture
The "greatness, innovation, determination, change and vision" championed by TCL over the
27
TCL Technology Group Corporation Annual Report 2021
past magnificent 40 years is the most important value for TCL's 40 years of development and the
driving force to push TCL to a new level to become a global leader. Aiming at the strategic goal of
“Ramp up, Catch up and Go all out to be a Global Leader”, the Company is committed to reshaping
an organizational culture of accountability, behavior, and performance orientation. TCL will carry
forward its values of “greatness, innovation, determination, change and vision”, deepen team
building and corporate culture, and create a more dynamic corporate organizational culture.
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
2021 2020
As % of total As % of total Change (%)
Amount Amount
revenue (%) revenue (%)
Total 163,540,559,623 100% 76,677,238,079 100% 113.28%
By operating division
Semi-conductor
88,102,920,983 53.87% 46,765,152,291 60.99% 88.39%
display
New energy
41,104,685,049 25.13% 5,682,961,642 7.41% 623.30%
photovoltaic
Distribution business 31,932,016,149 19.53% 22,518,401,333 29.37% 41.80%
Other businesses and
internally offset 2,400,937,442 1.47% 1,710,722,813 2.23% 40.35%
accounts
By product category
Semi-conductor
88,102,920,983 53.87% 46,765,152,291 60.99% 88.39%
display devices
New energy
photovoltaic &
41,104,685,049 25.13% 5,682,961,642 7.41% 623.30%
semi-conductor
materials
Distribution of
31,932,016,149 19.53% 22,518,401,333 29.37% 41.80%
electronics
28
TCL Technology Group Corporation Annual Report 2021
Other businesses and
internally offset 2,400,937,442 1.47% 1,710,722,813 2.23% 40.35%
accounts
By operating segment
Mainland China 104,742,993,732 64.05% 54,350,588,776 70.88% 92.72%
Overseas (including
58,797,565,891 35.95% 22,326,649,303 29.12% 163.35%
Hong Kong)
Distribution mode
Direct sales 135,292,006,356 82.73% 56,095,910,392 73.16% 141.18%
Distribution 25,981,764,486 15.89% 19,929,066,792 25.99% 30.37%
Dealer 2,266,788,781 1.39% 652,260,895 0.85% 247.53%
Note: The year-on-year growth change is larger for new energy photovoltaic & semi-conductor materials, because
TCLZhonghuan was consolidated as part of the Company in Q4 2022. This table may contain rounding errors.
(2) Operating division, product category, region or sales mode contributing over 10% of the revenue or
operating profit:
√ Applicable □ Not applicable
Unit: RMB
YoY change in
Gross profit YoY change in YoY change in
Revenue Cost of sales gross profit
margin revenue (%) cost of sales (%)
margin (%)
By operating division
Semi-conductor
88,102,920,983 66,411,847,114 24.62% 88.39% 70.88% 7.73%
display
New energy
41,104,685,049 32,190,397,141 21.69% 623.30% 601.67% 2.41%
photovoltaic
Distribution business 31,932,016,149 30,775,267,445 3.62% 41.80% 41.57% 0.16%
By product category
Semi-conductor
88,102,920,983 66,411,847,114 24.62% 88.39% 70.88% 7.73%
display devices
New energy
photovoltaic &
41,104,685,049 32,190,397,141 21.69% 623.30% 601.67% 2.41%
semi-conductor
materials
Distribution of
31,932,016,149 30,775,267,445 3.62% 41.80% 41.57% 0.16%
electronics
By operating segment
29
TCL Technology Group Corporation Annual Report 2021
Mainland China 104,742,993,732 85,551,184,486 18.32% 92.72% 77.02% 7.24%
Overseas (including
58,797,565,891 45,507,474,011 22.60% 163.35% 154.04% 2.84%
Hong Kong)
Distribution mode
Direct sales 135,292,006,356 103,822,066,115 23.26% 141.18% 124.29% 5.78%
Distribution 25,981,764,486 25,291,879,997 2.66% 30.37% 30.36% 0.01%
Dealer 2,266,788,781 1,944,712,385 14.21% 247.53% 252.34% -1.17%
Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2021 2020 Change (%)
Sales 10,000 square meters 3949 2910 35.71%
Semi-conductor
Production volume 10,000 square meters 4058 2887 40.56%
display
Inventory 10,000 square meters 170 61 178.31%
Sales 10,000 sets 904 / /
Module and finished
Production volume 10,000 sets 941 / /
machine
Inventory 10,000 sets 49 / /
Sales 10,000 sets 821,234 / /
Photovoltaic silicon
Production volume 10,000 sets 824,803 / /
wafer
Inventory 10,000 sets 12,025 / /
Million square
Sales 752 / /
inches
Semiconductor Million square
Production volume 751 / /
silicon wafer inches
Million square
Inventory 25 / /
inches
Sales MW 4,166 / /
Photovoltaic module Production volume MW 4,763 / /
Inventory MW 628 / /
Sales 10,000 kWh 81,031 / /
Photovoltaic power
Production volume 10,000 kWh 81,031 / /
stations
Inventory 10,000 kWh / / /
Explanation of why any financial indicator in the table above registered a year-on-year change of over 30%
The year-on-year change is larger mainly due to revenue increase. TCL Zhonghuan was consolidated in October 2020. Moka
30
TCL Technology Group Corporation Annual Report 2021
Technology was consolidated in April 2021. The production, sales and inventory of modules and complete machines, photovoltaic
silicon wafers, semiconductor silicon wafers, photovoltaic modules and photovoltaic power stations are not comparable.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of operating cost
Operating division
Unit: RMB
2021 2020
Operating division Breakdown of Cost As % of As % of operating Change (%)
Amount Amount
operating cost cost
Semi-conductor Materials, salary,
66,411,847,114 50.67% 38,864,960,717 58.67% 70.88%
display depreciation etc.
New energy Materials, salary,
32,190,397,141 24.56% 4,587,699,136 6.93% 601.67%
photovoltaic depreciation etc.
Distribution
Finished goods etc. 30,775,267,445 23.48% 21,737,804,382 32.82% 41.57%
business
Materials, salary,
Other 1,681,146,797 1.28% 1,051,814,193 1.59% 59.83%
depreciation etc.
Note: The year-on-year growth change is larger for new energy photovoltaic, because TCL Zhonghuan was consolidated as part of
the Company in Q4 2022. The year-on-year data are the consolidated amount.
Product category
Unit: RMB
2021 2020
Product category Item As % of As % of operating Change (%)
Amount Amount
operating cost cost
Semi-conductor Materials, salary,
66,411,847,114 50.67% 38,864,960,717 58.67% 70.88%
display devices depreciation etc.
New energy Materials, salary,
photovoltaic & depreciation etc.
32,190,397,141 24.56% 4,587,699,136 6.93% 601.67%
semi-conductor
materials
Distribution of Finished goods etc.
30,775,267,445 23.48% 21,737,804,382 32.82% 41.57%
electronics
Materials, salary,
Other 1,681,146,797 1.28% 1,051,814,193 1.59% 59.83%
depreciation etc.
31
TCL Technology Group Corporation Annual Report 2021
Note: The year-on-year growth change is larger for new energy photovoltaic & semi-conductor materials, because TCL Zhonghuan
was consolidated as part of the Company in Q4 2022. The year-on-year data are the consolidated amount.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
Compared with 2020, 35 subsidiaries (18 newly incorporated and the other 17 over which theCompany newly obtained control
of) are newly included and 30 subsidiaries (20 transferred, 8 de-registered, and the other 2 changed into affiliated companies) are
excluded from the consolidation scope of 2021.
(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
Total sales of top five customers (RMB) 57,063,520,152
Total sales of top five customers as % of total sales of the
35.44%
Reporting Period (%)
Total sales of related parties among top five customers as % of
9.72%
total sales of the Reporting Period (%)
Top five customers:
Serial No. Customer Sales revenue (RMB) As % of total sales revenue (%)
1 1 18,422,044,625 11.44%
2 2 15,642,946,590 9.72%
3 3 11,752,841,832 7.30%
4 4 6,438,331,108 4.00%
5 5 4,807,355,997 2.99%
Total -- 57,063,520,152 35.44%
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 media for information disclosure.
Major suppliers
Total purchases from top five suppliers (RMB) 28,606,000,601
Total purchases from top five suppliers as % of total purchases
22.51%
of the Reporting Period (%)
Total purchases from related parties among top five
-
suppliersas % of total purchases of the Reporting Period (%)
Top five suppliers
32
TCL Technology Group Corporation Annual Report 2021
Purchase in the Reporting
Serial No. Supplier name As % of total purchases (%)
Period (RMB)
1 1 7,950,214,472 6.26%
2 2 6,504,776,293 5.12%
3 3 5,653,948,037 4.45%
4 4 4,397,147,828 3.46%
5 5 4,099,913,971 3.23%
Total -- 28,606,000,601 22.51%
Other information about major suppliers
□ Applicable √ Not applicable
3. Expense
Unit: RMB
2021 2020 Change (%) Main reason for change
Increase in the business size and acquisition of
Selling expenses 1,919,285,105 886,816,654 116.42%
TCL Zhonghuan
Increase in the business size and acquisition of
Administrative expense 4,393,319,922 2,370,378,495 85.34%
TCL Zhonghuan
Increase in the business size and acquisition of
Financial expenses 3,727,915,281 2,357,022,129 58.16%
TCL Zhonghuan
Increase in the business size and acquisition of
R&D expenses 7,236,340,804 4,402,820,839 64.36%
TCL Zhonghuan
4. R&D investments
√ Applicable □ Not applicable
Expected influence on
Main R&D
Purpose Progress Preset goals the future development
project name
of the Company
Realize the
Intelligent speech Meet the voice
Synthesis technology for Realized industrial industry-leading voice
synthesis interaction requirements
speech interactive scenario transformation interaction standard of
technology of intelligent products
intelligent products
Overall technical solutions for The ADC system developed Realize the coverage of
Improve the overall
AI industrial quality by TCL CSOT self-developed ADC
ADC system intelligent manufacturing
inspection with independent multi-production line has system at TCL CSOT
level of the Company
intellectual property rights been fully launched factories
Medium-size Screen technology of Continuous innovation in Become an industry
SoP development
technology high-end flagship notebook function integration, image benchmark to support the
33
TCL Technology Group Corporation Annual Report 2021
development computer and tablet computer quality improvement, eye implementation of the
market protection and company's medium-sized
energy-saving, and transformation strategy
appearance design
The WQHD LTPO
technology platform has
Meet the market requirements been built and the first Ensure major brand
LTPO SoP Improve product
for long endurance electronic LTPO display screen with customers and occupy the
introduction features and yield
products WQ resolution has been market share
directly developed in the
domestic LTPO market
Some technical
LCD image quality reaches Reduce reflectivity and
development has been Improve the
the industry benchmark level, improve rating score;
HVA technology completed and products competitiveness of HVA
and energy efficiency takes a improved UD panel
have been imported after Technology
lead in the industry penetration rate
verification
Deploy the layout in
Develop new Deploy the layout in new-type
Some products develop SoP Develop core algorithms new-type display
display products display products
technology
Research and Improve the
Meet the market demand for
development of monomorph qualified
12-inch photovoltaic crystal Enhance the core
new energy Thermal field and process rate, optimize product
technical indicators and competitiveness of the
photovoltaic design have been completed parameters and further
strengthen the company's core company's main business
12-inch crystal reduce cost and increase
competitiveness
technology proficiency
Research and develop
Achieve 150μm thick
R&D of 210 ultra-thin solar silicon wafer
Equipment upgrading and SoP target of silicon Enhance the core
silicon wafer cutting technology to meet the
cutting process design have wafer; and complete competitiveness of the
slicing demand for thin film in the
been completed 130μm thick technical company's main business
technology downstream market and
reserve of silicon wafer
improve unit output
R&D on Enhance the core
Meet the market demand for Increase the market
semiconductor SoP for Silicon wafers for competitiveness of the
large-size silicon wafers of share of semiconductor
12-inch silicon 12-inch power devices Company's
12-inch integrated circuits 12-inch silicon wafer
wafer technology semi-conductor materials
R&D personnel
2021 2020 Change (%)
Number of R&D Employees 10,517 8,156 28.95%
As % of R&D Employees (%) 16.14% 16.83% -0.69%
Education
34
TCL Technology Group Corporation Annual Report 2021
PhD 202 197 2.54%
Master 2,081 1,716 21.27%
Bachelor’s degree and others 8,234 6,243 31.89%
Age
Under 30 years old 5,730 4,678 22.49%
30~ 40 years old 4,394 3,215 36.67%
Over 40 years 393 263 49.43%
R&D investments
2021 2020 Change (%)
R&D investment amount (RMB) 8,772,389,079 6,543,368,860 34.07%
R&D investments as % of total
5.36% 8.53% -3.17%
revenue (%)
Capitalization amount of R&D
3,813,925,123 2,836,134,458 34.48%
investments (RMB)
Capitalization amount of R&D
43.48% 43.34% 0.13%
investments 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 applica ble
Reasons for significant changes in R&D investments capitalization and rationality explanation
□ Applicable √ Not applicable
5. Cash Flow
Unit: RMB
Item 2021 2020 Change (%)
Sub-total of cash generated from
153,026,874,325 86,452,810,939 77.01%
operating activities
Sub-total of cash used in operating
120,148,423,888 69,754,528,164 72.24%
activities
Net cash generated from operating
32,878,450,437 16,698,282,775 96.90%
activities
Sub-total of cash generated from
43,772,408,329 32,460,222,661 34.85%
investment activities
Subtotal of cash used in investing 77,405,450,301 71,233,732,364 8.66%
35
TCL Technology Group Corporation Annual Report 2021
activities
Net cash used in investing activities -33,633,041,972 -38,773,509,703 13.26%
Sub-total of cash generated from
75,934,217,326 75,566,392,668 0.49%
financing activities
Subtotal of cash used in financing
63,151,712,744 52,701,802,798 19.83%
activities
Net cash generated from financing
12,782,504,582 22,864,589,870 -44.09%
activities
Net increase in cash and cash
11,873,288,084 570,673,851 1980.57%
equivalents
Explanation of why related data has significant changes year-on-year
√ Applicable □ Not applicable
Large increase in net cash flow generated from operating activities: Mainly due to the expansion of operating revenue scale and the
merger of TCL Zhonghuan
The net increase in cash and cash equivalents increased significantly: Increase in cash inflow generated from operating activ ities
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
V. Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount As % of gross profit Source Sustainability
Asset Falling price of inventory write-off in line
2,911,463,958 16.58% No
impairment with market
Non-operating
351,979,944 2.00% Not applicable No
income
Non-operating
140,452,279 0.80% Not applicable No
expense
VI. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
The end of 2021 Beginning of 2021 Change in Main reason for change
36
TCL Technology Group Corporation Annual Report 2021
percentage
As % of As % of
Amount Amount (%)
total assets total assets
Monetary assets Increase in net cash generated
31,393,692,485 10.17% 21,708,904,743 8.42% 1.75%
from operating activities
Accounts receivable Mainly due to the expansion of
18,238,782,247 5.91% 12,557,614,486 4.87% 1.04%
operating revenue scale
Contract assets 233,528,786 0.08% 183,650,278 0.07% 0.00% No significant change
Inventories Mainly due to the expansion of
14,083,356,918 4.56% 8,834,957,692 3.43% 1.14%
operating revenue scale
Investment property 761,902,236 0.25% 1,664,201,130 0.65% -0.40% No significant change
Long-term equity No significant change
25,640,578,245 8.31% 24,047,036,004 9.32% -1.02%
investments
Fixed assets 113,579,297,130 36.79% 92,829,901,894 35.99% 0.80% No significant change
Construction in No significant change
36,965,885,393 11.97% 31,508,310,783 12.22% -0.24%
progress
Right-of-use assets Adoption of the new
2,426,911,208 0.79% - 0.00% 0.79% accounting standard governing
leases
Short-term Optimization of the debt structure
9,341,426,543 3.03% 12,263,713,979 4.76% -1.73%
borrowings
Contract liabilities 2,593,882,004 0.84% 2,004,004,181 0.78% 0.06% No significant change
Long-term Increase in financings
87,279,081,955 28.27% 73,589,403,308 28.53% -0.26%
borrowings
Lease liabilities Adoption of the new accounting
1,102,071,813 0.36% - 0.00% 0.36%
standard governing leases
Explanation of high proportion of overseas assets
□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
37
TCL Technology Group Corporation Annual Report 2021
Impairm
ent
Gain/loss on Cumulative
allowan
fair-value fair-value Purchased in Sold in the
Beginning ces Other
Item changes in the changes the Reporting Repor ting Ending amount
amount establish changes
Reportin g recorded in Period Period
ed in the
Period equity
Reportin
g Period
Financial
assets
1.Held-for-
trading
financial
assets
8,355,640,976 155,319,290 31,086,333,926 29,292,000,403 10,305,293,789
(excluding
derivative
financial
assets)
2. Derivative
financial 453,578,245 -317,003,187 -52,084,504 8,051,884 21,613,872 70,928,566
assets
3.
Receivables 2,176,743,646 40,895,090 2,217,638,736
financing
4. Other debt
152,062,601 152,062,601 0
investments
5.
Investments
in other 1,333,675,630 -212,103,988 3,391,150 197,643,345 927,319,447
equity
instruments
Subtotal of
financial 12,471,701,098 -161,683,897 -264,188,492 31,097,776,960 29,663,320,221 40,895,090 13,521,180,538
assets
Total of the
12,471,701,098 -161,683,897 -264,188,492 31,097,776,960 29,663,320,221 40,895,090 13,521,180,538
above
Financial
912,804,772 -15,099,498 -130,076,277 219,887,900 40,276,590 947,240,307
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
38
TCL Technology Group Corporation Annual Report 2021
3. Restricted Asset Rights as at the Period-End
Carrying amount
Restricted assets Reason for restriction
(RMB10,000)
Monetary assets 35,818 Deposited in the central bank as the required reserve
Monetary assets 95,381 Other monetary funds and restricted bank deposits
Notes receivable 11,938 Pledge
Fixed assets 6,446,982 As collateral for loan
Intangible assets 275,942 As collateral for loan
Held-for-trading financial assets 3,434 Put in pledge for loan
Right-of-use assets 5,700 As collateral for lease
Accounts receivable 105,034 Pledge
Contract assets 17,583 Pledge
Total 6,997,811
VII. Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount in the Reporting Total investment amount in the same
Change (%)
Period (RMB) period of last year (RMB)
46,434,920,794 53,763,722,110 -13.63%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB'0,000
Anticip Investm
Index
Progres ated ent Any
Inve Share Co- (if any)
Name s as of return income/ legal Date (if
stme Amount of sholdi Fundin investor Investm Type of to
of Principal the on loss in matter any) of
nt Investmen ng g (trading ent product disclose
investe Activity balance investm the involve disclos
mod t Ratio Source counter Term s d
e sheet ent Reporti d ure
e (%) part) informa
date investm ng or not
tion
ent Period
39
TCL Technology Group Corporation Annual Report 2021
State-
owned
enterpri
se
undue
the
coordin
ation of
Producti
the
on and
People’
sales of
Funds f s
medium- Equi
rom pla Govern
Guangz sized ty Not Not Not Not April
nned pr ment of
hou high inve 962,500 55% applica applica applica applica 1,091 No 10,
ivate pl Guangz
CSOT value-ad stme ble ble ble ble 2021
acemen houMu
ded nts
t nicipali
display http://w
ty and
panels, ww.cni
Guangz
etc nfo.co
hou
m.cn
Develo
pment
Zone
Manage
ment
Commi
t tee
R&D,
TCL
procurem
Industri
ent,
Equi es,
productio
Moka ty Self-rai Holdin Not Not Not Not Decem
n and
Technol inve 280,000 100% sed g applica applica applica applica 32,542 No ber 12,
sales of
ogy stme funds (Hong ble ble ble ble 2020
intelligen
nts Kong)
t display
Co.,
terminal
Ltd.
products
Total -- -- 1,242,500 -- -- -- -- -- -- -- 33,633 -- -- --
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
40
TCL Technology Group Corporation Annual Report 2021
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB'0,000
Gain/l
Cumul
oss on
Se Begi ative
fair-va
cu Mea nnin fair-va
Initial lue Purchase Sold in Gain/los
rit Securities sure g lue Ending Accou Fundi
Security invest change d in the the Repor s in the
ie Abbreviati ment carry change carrying ntin g ng
type men t s in Reportin ting Reportin
s on meth ing s amount title source
cost the g Period Period g Period
co od amou record
Report
de nt ed in
in g
equity
Period
Changjian
g pension
N golden
Held-f
ot short-term
or-trad
ap bonds No. Fair
ing Self-f
Other pli 2 45,000 valu - 297 - 45,000 - 297 45,297
financ unded
ca collective e
ial
bl asset
assets
e managem
ent
product
Financia
N
l Held-f
ot China
manage or-trad
ap Securities Fair
ment of ing Self-f
pli “Stable 32,000 valu - 29 - 32,000 - 29 32,029
securitie financ unded
ca Income” e
s ial
bl No. 7347
compani assets
e
es
Financia CITIC
N
l Future - Held-f
ot
manage Yue Wan or-trad
ap Fair
ment of No. 2 ing Self-f
pli 30,000 valu - 859 - 30,000 - 859 30,859
securitie Collective financ unded
ca e
s Asset ial
bl
compani Managem assets
e
es ent Plan
41
TCL Technology Group Corporation Annual Report 2021
N
Held-f
Bank’s ot
or-trad
wealth ap Sunshine Fair
ing Self-f
manage pli 6M bonus 30,000 valu - 586 - 30,000 - 586 30,586
financ unded
ment ca No. 2 e
ial
product bl
assets
e
Xingyin
Wealth
Managem
ent Gold
N Snowball
Held-f
Bank’s ot Solid
or-trad
wealth ap Income Fair
ing Self-f
manage pli No. 1 A- 50,000 valu - 547 - 50,000 20,000 547 30,547
financ unded
ment ca type Net e
ial
product bl Value
assets
e Wealth
Managem
ent
Product
(Jijifeng)
N Sunshine
Held-f
Bank’s ot 12M
or-trad
wealth ap bonus Fair
ing Self-f
manage pli exclusive 30,000 valu - 329 - 30,000 - 329 30,329
financ unded
ment ca for the e
ial
product bl National
assets
e Day
China
Constructi
on Bank's
"Qianyuan
N Huizhong
Held-f
Bank’s ot " (daily
or-trad
wealth ap applicatio Fair
ing Self-f
manage pli n and 30,000 valu - 197 - 30,000 - 197 30,197
financ unded
ment ca quarterly e
ial
product bl redemptio
assets
e n) open
net worth
RMB
financial
products
42
TCL Technology Group Corporation Annual Report 2021
N
Held-f
Bank’s ot
Sunshine or-trad
wealth ap Fair
daily ing Self-f
manage pli 30,000 valu - 192 - 30,000 - 192 30,192
purchase financ unded
ment ca e
180 days ial
product bl
assets
e
China
Constructi
on Bank's
"Qianyuan
N Huizhong
Held-f
Bank’s ot " (daily
or-trad
wealth ap applicatio Fair
ing Self-f
manage pli n and 60,000 valu - 117 - 60,000 30,325 117 29,792
financ unded
ment ca weekly e
ial
product bl redemptio
assets
e n) open
net worth
RMB
financial
products
CCB
trust -
N
Shengjing Held-f
ot
Tongying or-trad
ap Fair
Trust bond ing Self-f
pli 20,000 valu - 437 - 20,000 - 437 20,437
products investmen financ unded
ca e
t ial
bl
collective assets
e
fund trust
plan
Other securities investments 3,208,9 550,9 -26,55 -21,21 2,794,72
-- 2,831,257 20,038 520,118 -- --
held at the period-end 58 54 0 0 0
3,565,9 550,9 -21,21 3,151,72
Total -- -22,96 2,881,583 23,628 830,383 -- --
58 54 0 0
0
Disclosure date of the board
announcement approving March 11, 2021
the securities investments
Disclosure date of the
general meeting
May 6, 2021
announcement approving
the securities investments
43
TCL Technology Group Corporation Annual Report 2021
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB'0,000
Funding source Mostly foreign-currency revenue
Legal matters involved (if applicable) Not applicable
Disclosure date of the board
announcement approving the April 28, 2018
derivative investments (if any)
Disclosure date of the general
meeting announcement approving the Not applicable
derivative investments (if any)
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 trend and
predicting the operation (including orders and capital plans), adopts forward foreign
exchange contracts, options and interest rate swaps to avoid future exchange rate and
interest rate risks. As its business scale changes subsequently, the Company will adjust the
exchange rate risk management strategy according to the actual market conditions and
business plans.
Risk analysis:
1. Market risk: the financial derivatives business carried out by the Group belongs to
hedging and trading business related to main business operations, and there is a market risk
of loss due to the fluctuation of underlying interest and exchange rates, which lead to the
fluctuation of prices of financial derivatives;
Analysis of risks and control 2. Liquidity risk: the derivatives business carried out by the Group is an over-the-counter
measures associated with derivative transaction operated by a financial institution, and there is a risk of loss due to paying fees to
investments held in Reporting Period the bank for the operations of evening up or selling the derivatives below the buying prices;
(including but not limited to market 3. Performance risk: the Group conducts the derivative business based on rolling budgets for
risk, liquidity risk, credit risk, risk management, and there is a risk of performance failure due to deviation between the
operational risk, legal risk, etc.) actual operating results and budgets;
4. Other risks: in the case of specific business operations, if the operator fails to finish the
prescribed procedures for report or approval, or fails to record the financial derivative
business information accurately, timely and completely, it may result in loss of derivative
business or trading opportunities. Moreover, if the trading operator fails to fully understand
the terms of transaction contracts or product information, the Group will face the legal risks
and transaction losses therefrom.
Measures taken for risk control:
1. Basic management principles: the Group strictly follows the hedging principle and the
main purpose of locking costs and avoiding risks. It is required that the financial derivatives
business to be carried out matches the variety, size, direction and duration of spot goods, and
no speculative trading should be involved. In the selection of hedging instruments, only
simple financial derivatives that are closely related to the main business operation and meet
44
TCL Technology Group Corporation Annual Report 2021
the requirements of hedge accounting treatment should be selected, and avoid complex
business that exceeds the prescribed business scope or is difficult to recognize in terms of
risk and pricing;
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 operation 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 operation and risk
management system of derivatives. Before starting the derivatives business, the holding
company must submit to the competent department of the Group detailed business reports
including its internal approval, main product terms, operational necessity, preparations, risk
analysis, risk management strategy, fair value analysis and accounting methods, and special
summary reports on business operated. Operation is only allowed upon the approval of the
functions under the Group;
3. Relevant departments should track the changes in the open market price or fair value of
financial derivatives, timely assess the risk exposure changes of invested financial
derivatives, and make reports to the board of directors on business development;
4. When the combined impairment of the fair value of derivatives and changes in the value
of the assets (if any) used for risk hedging by the Group results in a total loss or floating loss
amounting to 10% of the recently audited net assets of the Company, and the absolute
amount exceeds RMB10 million, the Group will disclose it in a timely manner.
With the rapid expansion of overseas sales, the Company keeps following the above rules in
Changes in market prices or fair value
the operation of forward foreign exchange contracts, interest rate swap contracts and futures
of derivative investments in
contracts to avoid and hedge foreign exchange risks arising from operation and financing.
Reporting Period (fair value analysis
The profit and loss during the reporting period was RMB184.15 million. The fair value of
should include measurement method
derivatives is determined by real-time quoted price of the foreign exchange market, based on
and related assumptions and
the difference between the contractual price and the forward exchange rate quoted
parameters)
immediately in the foreign exchange market on the balance sheet date.
Major changes in accounting policies
and specific accounting principles
adopted for derivative investments in No significant change
Reporting Period compared to last
reporting period
In view of the fact that certain raw materials of the core business of the Company are
purchased overseas, a wide range of settlement currencies is involved. The Company
reduces exchange losses and locks transaction costs by reasonable financial derivatives,
Opinion of independent directors on which helps to reduce risk control costs and improve company competitiveness. Risks are
derivative investments and risk effectively controlled as the Company has taken series of measures such as conducting a
control rigorous internal evaluation for the operation of financial derivatives business, establishing a
corresponding regulatory mechanism, formulating reasonable accounting policies and
specific accounting principles, setting limits for risk exposure management, and operating
simple financial derivatives. The contracting agent for financial derivatives business of the
45
TCL Technology Group Corporation Annual Report 2021
Company is a sound financial agent with good credit standing. We are of the opinion that the
financial derivatives transactions carried out by the Company in 2021 were closely related to
the daily operation needs of the Company with controllable risks in line with the interests of
the Company and minority shareholders and the relevant provisions of relevant laws and
regulations.
Unit: RMB'0,000
Ending contractual
Gain/loss amount as % of the
Beginning amount Ending amount
in Company’s ending
Type of contract
Reporting net assets
Contractual Actual Contractual Actual Period Contractual Actual
amount amount amount amount amount amount
1. Forward forex contracts 1,931,617 59,359 1,736,175 61,406 14.51 0.51
2. Interest rate swaps 758,846 22,765 415,696 12,471 18,415 3.47 0.10
3. Currency swaps 310,520 15,526 0 0 0.00 0.00
Total 3,000,983 97,650 2,151,871 73,877 18,415 17.98 0.61
Note: The 8th meeting of the 6th board of directors of the Company deliberated and approved the proposal on Adjusting the Lim it of
Financial Derivative Business, which raised the upper limit of operating financial derivatives to RMB2 billion. The financial
derivatives operated are hedging contracts related to the main business, mainly including forwards, options, swaps, futures a nd other
products or a combination of the above products. Within the scope of this limit, the business limit for financial derivat ives can be
recycled.
5. Use of Funds Raised
√ Applicable □ Not applicable
(1) General Information about the Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB'0,000
Amount
Cumulativ Cumulative Purpose and
with
Total Used in e amount amount with whereabouts Amount being
Way of Cumulativ changed Unused
Year of raising amount the current with changed used of the idle for more
raising ely used use in the amount
raised period changed as % of total unused than two years
reporting
used amount raised amount
period
Private
placement
Not
2020 (raising the 256,880 67.6 256,894.96 0 0 0.00% 0 0
applicable
matching
funds)
2021 Public 50,000 50,000 50,000 0 0 0.00% 0 Not 0
46
TCL Technology Group Corporation Annual Report 2021
offering to applicable
qualified
investors
Total -- 306,880 50,067.6 306,894.96 0 0 0.00% 0 -- 0
Use of funds raised
1. During the reporting period, the Company publicly issued scientific and technological innovation short-term corporate bonds (phase I) to
qualified investors in 2021, raised a total of RMB500 million to replace the existing debt of the Company's scientific and technological
innovation business, and all the funds raised by bonds were used up.
2. In 2020, the Company issued shares, convertible corporate bonds, purchased assets in cash and raised supporting funds. The total amount of
supporting funds raised was RMB2.5688 billion. As of March 10, 2021, the Company had invested RMB2.5689496 billion (including
RMB149,600 of accumulated interest saved in the special account and income after deducting handling fees), and the raised funds had been used
up.
(2) Promised Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB'0,000
Investm
Total
ent Time Signific
Project promised Adjusted Cumulative
progres when the Benefits ant
Promised project changed investme total Investme investment Meeting the
s as at project is derived change
funded with raised or not nt investme nt in the amount at expected
the ready for in the to
funds and investment (includin amount nt Reporting the benefits or
period- its Reporting project
with over-raised funds g partial with amount Period period-end not
end (3) intended Period feasibili
change) raised (1) (2)
= (2) / use ty or not
funds
(1)
Promised projects
Not Not Not
1. Acquired 39.95% of 100.00 Not
No 161,700 161,700 0 161,700 applicabl applicabl applicab
equity of Wuhan COST % applicable
e e le
2. Repaying debts of
Not Not Not
listed companies and 100.00 Not
No 95,180 95,180 67.6 95,194.96 applicabl applicabl applicab
supplementing the % applicable
e e le
working capital
Not
Subtotal of promised
-- 256,880 256,880 67.6 256,894.96 -- -- applicabl -- --
projects
e
Over-raised funds
None
Subtotal of over-raised
-- - - - - -- -- - -- --
funds
47
TCL Technology Group Corporation Annual Report 2021
Total -- 256,880 256,880 67.6 256,894.96 -- -- - -- --
-
Description of major
changes in project Not applicable
feasibility
Over-raised fund
amount, purpose and Not applicable
use progress
Location change of the
project with raised Not applicable
funds
Adjustment of project
Not applicable
implementation
Advance investments
On November 26, 2020, the Proposal on the Swap of Raised Funds and Advance Investments of
in promised projects
Self-Pooled Funds was approved at the Second Meeting of the Company’s Seventh Board of Directors. As
funded with raised
such, raised funds were agreed to be swapped with the advance investments of self-pooled funds in projects
funds and subsequent
funded with raised funds. Total swap amount was RMB1.617 billion.
swaps
Supplemented the
working capital with Not applicable
idle funds
Amount and reasons
for the balance of
Not applicable
raised funds in the
project implementation
Unused fund purpose
Not applicable
and whereabouts
Problems and other
circumstances in raised Not applicable
fund use and disclosure
(3) Change of the raised fund projects
□ Applicable √ Not applicable
No such cases in the Reporting Period.
48
TCL Technology Group Corporation Annual Report 2021
VIII. Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
2. Sale of Major Equity Investments
√ Applicable □ Not applicable
Net profit
Ratio of the Execute
contribut
net profit d as
ed to the Relationsh Equity
contribut ed schedule
Transact Compan y Any ip between investment Index to
by the sale Pricin d or not; Date
Equity i on from the Effect on associ the involved disclose
Trading Date of of the equity g if not, of
investment price period-be the ated transaction has been d
counterpart sale investment princip give disclos
sold (RMB’0 gin to the Company transac party and all informat
to the le reasons ure
,000) date of tions the transferred ion
Compan y’s and
sale Company or not
total profit measure
(RMB’0,0
(%) s taken
00)
Further
optimize
the
business Mr. Li
Based
structure Dongshen
on
and focus g serves as
valuati
on the the
on
developme Chairman
with
nt of the of the
TCL referen
main Board in
TCL Financial ce to http://w
business; both the May
Industries Holding May 31, the ww.cnin
257,202 4,776 comply 0.1% Yes Company Yes Yes 22,
Holdings Group 2021 market fo.com.c
with and TCL 2021
Co., Ltd. (Guangzho prices n
national Industries,
u) Co., Ltd. of
policies and TCL
transac
and meet Industries
tions
the needs is a related
of the
of the corporatio
same
Company' n of the
kind
s Company
announced
financing
projects
49
TCL Technology Group Corporation Annual Report 2021
IX. Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Companys net profit:
Registered
Relationship Operating Operating
Principal capital Total assets Net assets Net profit
Company Name with the revenue profit
activity (RMB100 (RMB’0,000) (RMB’0,000) (RMB’0,000)
Company (RMB’0,000) (RMB’0,000)
million)
TCL China Star
Optoelectronics Semi-conduc
Subsidiary 304.68 20,387,161 8,453,049 8,005,172 1,171,071 1,011,063
Technology tor display
Co., Ltd.
Tianjin
New energy
Zhonghuan
Subsidiary photovoltaic 32.32 7,797,936 4,166,978 4,110,469 500,560 443,513
Semiconductor
and materials
Co., Ltd.
Highly
Information Distribution
Subsidiary 4.12 613,589 133,062 3,193,202 38,292 27,205
Industry Co., business
Ltd.
Acquisition and disposal of subsidiaries in the reporting period
√ Applicable □ Not applicable
How subsidiary was obtained or disposed of Effects on overall operations and
Company Name
in the Reporting Period operating performance
Shenzhen Huatuo Trade Technology Co., Ltd. Newly incorporated No significant effect
Xiamen Xinying Display Technology Co., Ltd. Newly incorporated No significant effect
Shaanxi Xiaoyi E-commerce Service Co., Ltd. Newly incorporated No significant effect
Shaanxi RunhuanTianyu Technology Co., Ltd. Combination not under common control No significant effect
Highly (Tianjin) Technology Co., Ltd. Newly incorporated No significant effect
Tianjin WanfangNuoxin Technology Co., Ltd. Newly incorporated No significant effect
Zhonghuan Advanced Semiconductor
Newly incorporated No significant effect
(Shanghai) Co., Ltd.
Ningxia Zhonghuan Solar Material Co., Ltd. Newly incorporated No significant effect
Suzhou China Star Optoelectronics Technology
Combination not under common control No significant effect
Co., Ltd.
Suzhou China Star Optoelectronics Display
Combination not under common control No significant effect
Co., Ltd.
Moka International Limited and its subsidiaries Combination not under common control No significant effect
50
TCL Technology Group Corporation Annual Report 2021
Huizhou Shengyao New Energy Technology
Newly incorporated No significant effect
Co., Ltd.
Inner Mongolia Huanya Hotel Management
Newly incorporated No significant effect
Co., Ltd.
HuludaoXincheng New Energy Technology
Combination not under common control No significant effect
Co., Ltd.
En Yi Investment Co., Ltd. Newly incorporated No significant effect
Zhonghuan Semi-Conductor (Singapore)
Newly incorporated No significant effect
Private Ltd.
Inner Mongolia Huanxing Power Construction
Combination not under common control No significant effect
Engineering Co., Ltd
Shaanxi HuanboXinneng Power Engineering
Combination not under common control No significant effect
Construction Co., Ltd
Beijing Lingyun Data Technology Co., Ltd. Newly incorporated No significant effect
Guangdong TCL New Technology Co., Ltd. Combination not under common control No significant effect
Tianjin Silica Material Technology Co., Ltd. Newly incorporated No significant effect
Tianjin Huanou New Energy Technology Co.,
Newly incorporated No significant effect
Ltd
Xiamen TCL Technology Industrial Investment
Newly incorporated No significant effect
Co., Ltd.
Tianjin TiTiYunchuang Technology Co., Ltd Newly incorporated No significant effect
Tianjin Xincheng Pilot Technology Co., Ltd. Newly incorporated No significant effect
Junjia Development Co., Ltd. Newly incorporated No significant effect
TCL Communication Technology (HK)
De-registered No significant effect
Limited
Tianjin Huanyan Technology Co., Ltd. Transferred No significant effect
Tianjin Huan’Ou International New Energy
De-registered No significant effect
Technology Co., Ltd.
KangbaoShenghui New Energy Co., Ltd. De-registered No significant effect
Winshero Investment Limited De-registered No significant effect
Tianjin Xietong Real Estate Development Co.,
De-registered No significant effect
Ltd.
TCL International Distribution (HK) Limited De-registered No significant effect
TCL Financial Holding Group (Guangzhou)
Transferred No significant effect
Co., Ltd. and its subsidiaries
TCL Huanxin Semi-conductor (Tianjin) Co.,
Increase in non-controlling interests No significant effect
Ltd. and its subsidiaries
51
TCL Technology Group Corporation Annual Report 2021
Tianjin ZhonghuanXinyu Technology Co., Ltd. Transferred No significant effect
UTOP (Shanghai) Co., Ltd. De-registered No significant effect
Li Rong Development Limited and its
Transferred No significant effect
subsidiaries
TCL Medical Ultrasound Technology (Wuxi)
Transferred No significant effect
Co., Ltd.
Peer College Education Technology (Huizhou)
Transferred No significant effect
Co., Ltd.
TCL Light Source Energy-saving Technology De-registered No significant effect
(Huizhou) Co., Ltd.
X. Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX. Prospects
Looking into 2022, in the face of great changes unseen in a century, the central government is
promoting the transformation of China's economy from high growth to high-quality development.
The micro foundation of high-quality economic development is the high-quality development of
enterprises, and the high-quality development of the country is the high-quality development of
enterprises.
TCL Tech seizes the strategic opportunity period of high-quality development of the national
economy, develops core assets in the global technology industry, and strategically focuses on the
business development of semiconductor display, new energy photovoltaic and semiconductor
materials. The two industries are on the track of high growth and great potential. Based on the
advantages of technology, management and scale, the Company is committed to becoming a global
leader in these two industries.
As one of the world's leading semiconductor display enterprises, the Company will focus on
seizing the opportunity of industry integration, enhancing the leading advantage of large-sized
products, improving the layout of small and medium-sized products, optimizing the business,
product and customer structure, and transforming into an industry leader at all sizes.
Through the acquisition of TCL Zhonghuan, the Company actively engages in the two strategic
industries of new energy and semiconductor, aiming to establish the core track of the science and
technology industry in the next decade. TCL Zhonghuan has become one of the main engines of
52
TCL Technology Group Corporation Annual Report 2021
TCL's scientific and technological performance growth through institutional reform, activating the
organizational vitality, releasing growth potential and accelerating business development.
On the occasion of the 40th anniversary, TCL will pool its efforts, take science and technology
as the guide and innovation as the drive, and continue to ramp up, catch up and achieve high-quality
development.
XII. Communications with the Investment Community such as Researches, Inquiries and
Interviews
√ Applicable □ Not applicable
Way of Type of Main discussions
Index to main information
Date Place communic communic Communication party and materials
communicated
ation ation party provided
Know the business On March 15, 2021, Log
The
By visit + JPMorgan Chase, Morgan Stanley, UBS group, situation and Sheet No. 2021-001 on
Ritz-Carlton
March 11, teleconfer Aspen Capital Management (HK), DBS, HSBC, development plan Investor Relations Activities
Beijing, Institution
2021 ence + live Nomura, CICC, Foresight Fund, TruValue Asset of TCL Tech and on March 11, 2021
Financial
streaming Management etc. TCL CSOT in disclosed on
Street
2020 http://www.cninfo.com.cn.
On April, 13, 2021, Log
Company E Funds, China Asset Management, Huaxi
Sheet No. 2021-002 on
Conference Securities, Hwabao WP Fund Management, Know the
April 10, Investor Relations Activities
Room in By phone Institution Sequoia Capital, Haitong International, Company’s
2021 on April 10, 2021 disclosed
Shenzhen GuotaiJunan Securities, Everbright Securities, GF business
on
Headquarters Fund, SINOLINK Securities, etc.
http://www.cninfo.com.cn.
On April, 14, 2021, Log
Company Know the business
CICC, Harvest Fund, HFT Fund, OTT Capital, Sheet No. 2021-003 on
Conference situation and
April 12, Soochow Asset Management, GF Fund, High Investor Relations Activities
Room in By phone Institution development plan
2021 Flyer Quant, CP Investment, HSBC, LMR on April 12, 2021 disclosed
Shenzhen of TCL Tech in
Partners, etc on
Headquarters Q1 2021
http://www.cninfo.com.cn.
Agricultural Bank of China Life Insurance, On April, 30, 2021, Log
Company Know the business
Southern Asset Management, Morgan Stanley Sheet No. 2021-004 on
Conference situation and
April 28, Huaxin Funds, ICBC AXA Asset Management, Investor Relations Activities
Room in By phone Institution development plan
2021 Perseverance Asset Management, Goldman on April 28, 2021 disclosed
Shenzhen of TCL Tech in
Sachs, Hillhouse Investment, Zhong'an Insurance, on
Headquarters Q1 2021
China Post Finance, China Post Fund, etc http://www.cninfo.com.cn.
June 15, Company China Life Pension, JPMorgan Chase, Loyal Know the On June, 17, 2021, Log
By phone Institution
2021 Conference Valley Capital, TF International Securities, Company’s Sheet No. 2021-005 on
53
TCL Technology Group Corporation Annual Report 2021
Room in Standard Chartered Bank, CITIC Securities, business Investor Relations Activities
Shenzhen China Securities, China Fund, China Re-Asset on June 15, 2021 disclosed
Headquarters Management, Optimas Capital Limited etc. on
http://www.cninfo.com.cn.
Know the business On July, 16, 2021, Log
Company Goldman Sachs, Hillhouse Capital, E Funds,
situation and Sheet No. 2021-006 on
Conference Xintai Life Insurance, OTT Capital, Yingda Asset
July 14, development plan Investor Relations Activities
Room in By phone Institution Management, CIDA Securities, New China Asset,
2021 of TCL Tech in on July 14, 2021 disclosed
Shenzhen Southwest Securities Asset Management, China
the first half of on
Headquarters Fund etc.
2021 http://www.cninfo.com.cn.
Know the business On August, 12, 2021, Log
Hillhouse Investment, Goldman Sachs (Asia),
situation and Sheet No. 2021-007 on
Perseverance Asset Management, China Life
August 10, Shangri-La By visit - development plan Investor Relations Activities
Institution Pension, China Life Asset Management, CCB
2021 Shenzhen phone call of TCL Tech in on August 10, 2021
Pension Management, Morgan Huaxin Fund,
the first half of disclosed on
Taikang Pension, Tian'an Life, E Funds, etc
2021 http://www.cninfo.com.cn.
CICC, Zhongbao Ideal Investment Management On October, 29, 2021, Log
Company Know the business
Co., Ltd., Western Securities, Sealand Securities, Sheet No. 2021-008 on
Conference situation and
October 27, Morgan Stanley, September 1st Conference, Investor Relations Activities
Room in By phone Institution development plan
2021 Zhejiang Shaoxia Investment Management Co., on October 27, 2021
Shenzhen of TCL Tech in
Ltd., CITIC Securities, TX Capital, Guosheng disclosed on
Headquarters Q3 2021
Securities, etc http://www.cninfo.com.cn.
54
TCL Technology Group Corporation Annual Report 2021
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 government work in many
aspects. At present, the Company has established an organizational structure that meets the needs of 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. The Company has a complete internal audit
and internal control system, especially in terms of internal audit, with a clarified structure and clear
responsibilities defined, which can effectively prevent Group risks.
The board of directors of the Company sets up four dedicated committees: strategy committee, audit
committee, nomination committee and remuneration and appraisal committee to provide advice and suggestions to
the board of directors to ensure the board meetings and decision-making in a professional and efficient manner.
The board of supervisors perform their duties diligently and conscientiously. 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. The Company actively arranges
directors, supervisors, senior managers and heads of relevant departments to participate in the dedicated training
organized by regulators and associations, effectively promotes the management's learning and understanding of
relevant laws, regulations and documents on the governance of listed companies, 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
55
TCL Technology Group Corporation Annual Report 2021
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 shown in the following table and all the policies have been
published on www.cninfo.com.cn.
Category of rules Title of rules
Articles of Association The Articles of Association of TCL Technology Group Corporation
The Dividend Rules of TCL Corporation
Dividend rules The Shareholder Reward Plan of TCL Technology Group Corporation for the Next Three Years
(2020-2022)
The Rules Governing the Shareholdings of Directors, Supervisors and Senior Management in TCL
Corporation and Changes therein
The Rules Governing the Registration of Information Insiders of TCL Corporation
The Accountability Rules for Material Errors in Annual Report Disclosure of TCL Corporation
The Rules Governing External Users of Information of TCL Corporation
Information disclosure
The Rules Governing Investor Relations of TCL Corporation
policy
The Work Rules for Independent Directors Concerning Annual Reports of TCL Corporation
The Reception and Promotional Work Rules of TCL Corporation
The Rules Governing Internal Reporting of Significant Information of TCL Corporation
The Work Rules for the Board Secretary of TCL Corporation
The Rules Governing Information Disclosure of TCL Corporation
Governance and operation The Rules of Procedure for the General Meeting of TCL Technology Group Corporation
rules The Rules of Procedure for the Supervisory Committee of TCL Technology Group Corporation
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TCL Technology Group Corporation Annual Report 2021
The Rules of Procedure for the Board of Directors of TCL Technology Group Corporation
The Work Rules for the Independent Directors of TCL Corporation
The Specific Work Rules for the CEO of TCL Corporation
The Rules of Procedure for the Audit Committee under the Board of Directors of TCL Corporation
The Work Procedures for the Annual Audit by the Audit Committee under the Board of Directors of
TCL Corporation
The Rules of Procedure for the Remuneration and Appraisal Committee under the Board of Directors
of TCL Corporation
The Rules of Procedure for the Nomination Committee under the Board of Directors of TCL
Corporation
The Rules of Procedure for the Strategy Committee under the Board of Directors of TCL
Corporation
The Rules Governing Major Investments of TCL Corporation
The Rules Governing the Use of Raised Funds of TCL Technology Group Corporation
The Internal Control Rules for Venture Capital of TCL Corporation
The Rules Governing Securities Investment of TCL Technology Group Corporation
The Internal Control Rules for Investment in Derivative Financial Instruments of TCL Technology
Group Corporation
Internal control rules The Majority-Owned Subsidiary Management Measures of TCL Corporation
The Rules Governing the Related-Party Transactions of TCL Corporation
The Rules Governing the Guarantees Provided for External Parties of TCL Technology Group
Corporation
The Internal Control Rules of TCL Corporation
The Internal Audit Charter of TCL Corporation
The Internal Control Evaluation Rules of TCL Corporation
The following rules are revised during the Reporting Period and relevant rules are disclosed on http://www.cninfo.com.cn:
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TCL Technology Group Corporation Annual Report 2021
Title of rules
The Articles of Association of TCL Technology Group Corporation
Revised
The Rules of Procedure for the Board of Directors of TCL Technology Group Corporation
Is there any material incompliance with the regulatory documents issued by the CSRC governing the governance of listed
companies?
□ Applicable √ Not applicable
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
All proposals were adopted. Please refer to
Annual the Notice on Resolutions of General Meeting
The 2020 Annual
general 27.24% April 30, 2021 May 6, 2021 of Shareholders in 2020 disclosed on
General Meeting
meeting www.cninfo.com.cn on May 6, 2021 (Notice
No.: 2021-046)
All proposals were adopted. Please refer to
The First
Extraordinary the Notice on the 1st Extraordinary General
Extraordinary
general 30.11% May 13, 2021 May 14, 2021 Meeting of Shareholders in 2021 disclosed on
General Meeting
meeting www.cninfo.com.cn on May 14, 2021 (Notice
of 2021
No.: 2021-052)
All proposals were adopted. Please refer to
The Second
Extraordinary the Notice on the 2nd Extraordinary General
Extraordinary
general 20.08% June 7, 2021 June 8, 2021 Meeting of Shareholders in 2021 disclosed on
General Meeting
meeting www.cninfo.com.cn on June 8, 2021 (Notice
of 2021
No.: 2021-065)
The Third Extraordinary All proposals were adopted. Please refer to
Extraordinary general 13.99% July 6, 2021 July 7, 2021 the Notice on the 3rd Extraordinary General
General Meeting meeting Meeting of Shareholders in 2021 disclosed on
58
TCL Technology Group Corporation Annual Report 2021
of 2021 www.cninfo.com.cn on July 7, 2021 (Notice
No.: 2021-080)
All proposals were adopted. Please refer to
The Fourth
Extraordinary the Notice on the 4th Extraordinary General
Extraordinary
general 22.11% August 25, 2021 August 26, 2021 Meeting of Shareholders in 2021 disclosed on
General Meeting
meeting www.cninfo.com.cn on August 26, 2021
of 2021
(Notice No.: 2021-102)
All proposals were adopted. Please refer to
The Fifth
Extraordinary the Notice on the 5th Extraordinary General
Extraordinary December 20, December 21,
general 18.17% Meeting of Shareholders in 2021 disclosed on
General Meeting 2021 2021
meeting www.cninfo.com.cn on December 21, 2021
of 2021
(Notice No.: 2021-131)
Note: Investor participation ratio refers to the share proportion of investors who attend the meeting to the Company’s total shares.
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
V. Performance of Duty by Independe nt Directors in the Reporting Period
1. General information
Increas Decreas
Beginnin Granted Other
e in the e in the Ending
g Share restricte increas Reason
Nam Incumbent Gen Start of End of Reporti Reporti shareho
Office title Age sharehold optio d e/decre for
e /Former der tenure tenure ng ng lding
ing n shares ase change
Period Period (share)
(share) (shares) (share)
(share) (share)
Li 4/19/20
Chairman Not
Dong 02 11/12/2 813,575, 813,57
Incumbent Male 64 - - - - - applica
shen 6/20/20 023 470 5,470
CEO ble
g 05
Lian
Vice Not
g 11/13/2 11/12/2
Charmian of Incumbent Male 40 - - - - - - - applica
Weih 020 023
the Board ble
ua
Not
Du Fem 3/19/20 11/12/2 417,73
Director Incumbent 51 417,730 - - - - - applica
Juan ale 18 023 0
ble
JinX 1/25/20 11/12/2 521,99 Not
Director Incumbent Male 67 521,997 - - - - -
uzhi 19 023 7 applica
59
TCL Technology Group Corporation Annual Report 2021
Senior Vice 8/13/20 ble
President 15
11/13/2
Director
020
Shen Not
11/12/2
Haop Incumbent Male 59 - - - - - - - applica
Senior Vice 11/14/2 023
ing ble
President 020
9/1/201
Director
7
Not
Liao Board 4/23/20 11/12/2 229,59
Incumbent Male 41 229,596 - - - - - applica
Qian Secretary 14 023 6
ble
Senior Vice 8/27/20
President 20
Not
Liu 5/13/ 4/13/20
Director Incumbent Male 43 - - - - - - - applica
Kun 2021 22
ble
Not
Yu Independent 11/13/2 11/12/2
Incumbent Male 74 - - - - - - - applica
Yong director 020 023
ble
Not
Chen Independent 11/13/2 11/12/2
Incumbent Male 65 - - - - - - - applica
Shiyi director 020 023
ble
Wan
Not
Lian Independent 11/13/2 11/12/2
Incumbent Male 42 - - - - - - - applica
gyon director 020 023
ble
g
Liu Not
Independent 9/1/201 11/12/2
Xunc Incumbent Male 63 - - - - - - - applica
director 7 023
i ble
Chairman of
He Not
the 9/2/201 11/12/2
Zhuo Incumbent Male 56 - - - - - - - applica
Supervisory 5 023
hui ble
Committee
Qiu Not
Fem 9/1/201 11/12/2
Haiy Supervisor Incumbent 47 - - - - - - - applica
ale 4 023
an ble
Mao Employee Incumbent Male 41 9/1/201 11/12/2 128,979 - - - - - 128,97 Not
60
TCL Technology Group Corporation Annual Report 2021
Tian Supervisor 7 023 9 applica
xiang ble
Wan
Not
g 8/9/202 11/12/2 157,66
COO Incumbent Male 47 157,661 - - - - - applica
Chen 1 023 1
ble
g
Not
Li Fem 8/9/202 11/12/2
CFO Incumbent 49 97,709 - - - - - 97,709 applica
Jian ale 1 023
ble
Senior Vice 9/1/201
Yan Not
President 4 11/12/2 1,018,17 1,018,1
Xiaol Incumbent Male 55 - - - - - applica
12/6/20 023 6 76
in CTO ble
12
816,147, 816,14
Total -- -- -- -- -- -- - - - - - --
318 7,318
During the reporting period, any resignation of directors and supervisors and dismissal of senior managers during their term of
office?
□ Yes √ No
Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Type of
Name Office title Date of change Reason for change
change
Non-executive Nominated by Wuhan Optics Valley Industrial Investment Co.,
Liu Kun Elected May 13, 2021
Director Ltd., a shareholder with an over-3% stake in the Company
Resignatio Resigned COO and CFO due to job changes, but still holding
Du Juan COO and CFO August 9, 2021
n the role of non-executive director
Wang Chief Operation Appointm
August 9, 2021 Nominated by Chairman and CEO Li Dongsheng.
Cheng Office (COO) ent
Chief Financial Office Appointm
Li Jian August 9, 2021 Nominated by Chairman and CEO Li Dongsheng
(CFO) ent
2. Positions
Professional background, major work experience and current holds the post in the Company of incumbent director, supervisor an d
senior manager:
Mr. Li Dongsheng, born in July 1957, the founder of TCL who currently serves as TCL Tech’s Chairman
and CEO; he was elected as a delegate to China’s 16th National Congress of the CPC and a deputy to the 10th,
11th, 12th and 13th National People’s Congress. Mr. Li holds a number of prestigious positions: Vice Chairman of
61
TCL Technology Group Corporation Annual Report 2021
All China Federation of Industry and Commerce (ACFIC), Honorary President of China Video Industry
Association, Vice Chairman of China Commerce of International Chamber, President of Guangdong Provincial
Enterprise Confederation, President of Guangdong Provincial Association of Entrepreneurs, First President of
China Manufacturing Innovation Alliance, Honorary President of South China University of Technology
Education Development Foundation, Vice President of Alumni Association South China University of Technology,
Member of the Council of South China University of Technology, Visiting Professor in Wuhan University and
Honorary Professor in Beijing Institute of Technology. From 1982 to 1985, he served as Technician, Workshop
Manager and Production Director in TTK Household Appliances TCL Technology Group Corporation Annual
Report 2020Co., Ltd.; from 1985 to 1986, he served as First General Manager of TCL Communication Devices
Company; from 1986 to 1989, he served as Director of the Introduction Department in Guangdong Huizhou
Industrial Development Corporation; from 1990 to 1993, he served as Deputy General Manager, Deputy Secretary
of the Party Committee and Secretary of the Youth League Committee of Huizhou Electronic Communication
Corporation; from 1993 to 1996, he served as General Manager of TCL Electronics Group; from 1996 to 2002, he
served as Chairman and President of TCL Corporation and in 2002; from April 2002 to January 2004, he served as
Chairman and President of TCL Corporation; from January 2004 till now, he serves as Chairman and CEO of TCL
Technology Group Corporation.
Mr. Liang Weihua, Vice Chairman of TCL TECH. He was born in March 1981. He holds a master's degree
and is a Party member. He graduated from the Department of Sociology of the School of Government, the Sun
Yat-sen University, in July 2003 and graduated from the Economics and Management School of Wuhan
University in July 2003 and obtained the MBA degree in December 2012. Currently, he serves as Deputy General
Manager and director at Huizhou Investment Holding Co., Ltd. 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. (and participated in the Special
Seminar for Young and Middle-aged Cadres at Section Chief Rank in Huizhou City to Learn and Implement Spirit
of Third Plenary Session of the 18th CPC Central Committee (Zhong Qing Class 2) from May to August, 2014).
From June 2016 to the present, he has taken office as Deputy General Manager of Huizhou Investment Holding
Co., Ltd. (and also served as a director of the company since August 2016). Since March 2017, he has been a
62
TCL Technology Group Corporation Annual Report 2021
director of Huizhou Financing Guarantee Company and 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. on November 19, 2020; In June 2021, he was appointed as
Deputy General Manager of Huizhou State-Owned Asset Investment Group.
Ms. Du Juan currently serves as non-executive director at TCL TECH. Born in May 1970, she graduated
from the Department of Investment atZhongnan University of Economics and Law and obtained an EMBA from
CKGSB. From July 1991 to May 1999, she worked at CCB Huizhou Branch. In May 1999, she joined TCL
Corporation and served as General Manager of the Settlement Center of TCL Corporation and General Manager
of TCL Financial. From October 2014 to May 2021, she served as President and Chairman of TCL Financial
Holdings Group (Guangzhou) Co., Ltd. From July 2016 to February 2018, she served as Vice President of TCL
Corporation. From March 2018 to August 2021, she served as Chief Operating Officer (COO) of TCL TECH.
From January 2019 to August 2021, she concurrently served as Chief Financial Officer (CFO) of TCL TECH.
From October 2019 to October 2021, she was appointed as non-executive director of the Bank of Shanghai Co.,
Ltd. From August 2021 until now, she serves as the director and general manager of TCL Industrial Holdings Co.,
Ltd. and the chairman and executive director of the board of directors at TCL Electronic Holdings Co., Ltd.
Mr. JinXuzhi currently serves as Executive Director and Senior Vice President of TCL Tech, as well as CEO
and Director of TCL CSOT, Chairman of the Board of Wuhan CSOT and Chairman of the Board of Wuhan China
Star Optoelectronics Semiconductor Display Technology Co., Ltd. Born in September 1955, he obtained his
Master’s Degree in Material Engineering from Yonsei University in South Korea and MBA from McGill
University. He worked at LG Semiconductor Co., Ltd. and served as Deputy General Manager in LG Display
(formerly known as LG Philips LCD) and Head of the IT Business Division. From April 2009 to March 2010, he
served as Senior Consultant at Fuhrmeister Electronics. He joined TCL Corporation in March 2010 and served as
Senior Vice President, President and CEO of TCL CSOT and General Manager of Wuhan CSOT.
Mr. Shen Haoping, Executive Director and Senior Vice President of TCL TECH. Born in 1962, he holds a
bachelor's degree. He is a Senior Engineer receiving a special allowance from the State Council. At present, he
serves as Vic Chairman and General Manager of Tianjin Zhonghuan Semiconductor Co., Ltd. and Deputy
63
TCL Technology Group Corporation Annual Report 2021
Secretary of the Party Committee and General Manager of Tianjin Zhonghuan Electronics and Information Group
Co., Ltd. He used to work as Chairman and Deputy General Manager of Tianjin Zhonghuan Semiconductor Co.,
Ltd.
Mr. Liao Qian currently serves as Executive Director, Senior Vice President, Chief of Staff and Board
Secretary of 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
GuotaiJunanInternational 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 TCL
Technoly Electronics(Huizhou)Co.,Ltd. and CDOT (0334.HK); Vice Chairman of the Board of Tianjin 712
Communication & Broadcasting Co., Ltd. (603712.SH), Independent Director of Jiawei Renewable Energy Co.,
Ltd. (300317.SZ) and Director of Tianjin Zhonghuan Semiconductor Co., Ltd. (002129.SZ).
Mr. Liu Kun, non-executive director, graduated from Wuhan University in 2000 (formerly Wuhan Technical
University of Surveying and Mapping) majoring in geophysics. Now, he acts as the Deputy General Manager of
Hubei Science and Technology Investment Group, presiding over setting up the Group's industrial investment
company and the industrial investment system. As a major participant in provincial and municipal major industrial
investments, he has led the investment of Wuhan CSOT, Yangtze Memory, Wuhan Industrial Technology Research
Institute, Xiaomi funds and other projects in recent years. He is also a member of the Investment Committee of
industrial funds such as the master fund of China Information Communication Technology Group Corporation,
Xiaomi fund and China Unicom 5G fund.
Mr. Gan Yong, independent director of TCL TECH., Professor Senior Engineer, metallurgist and materials
scientist, academician of the Chinese Academy of Engineering (CAE) (2001), and doctoral supervisor. He serves
as Director of the National Advisory Committee on New Materials Industry Development, Honorary President of
the Association of China Rare Earth Industry (ACREI), and President of the Chinese Society for Metals (CSM). In
June 2010, he was elected Assistant Dean of the CAE and became a member of the 12th National Committee of
the Chinese People's Political Consultative Conference (CPPCC) and Deputy Director of the Committee of
Population, Resources and Environment of the CPPCC.
Mr. Chen Shiyi, independent director of TCL TECH. He was born in Tiantai, Zhejiang in October 1956. He
started to work in July 1987. His titles include Doctor of Science, doctoral supervisor, academician of the Chinese
64
TCL Technology Group Corporation Annual Report 2021
Academy of Sciences (CAS) and the World Academy of Sciences (TWAS), and former principal of the Southern
University of Science and Technology (SUSTech). Now he serves as Chair Professor of the SUSTech,
Co-president of the Southern University of Science and Technology Education Foundation, Vice President of the
11th Council of the Chinese Society of Theoretical and Applied Mechanics (CSTAM), Vice President of the 2nd
Council of the China Engineering Education Accreditation Association (CEEAA), member of the Standing
Committee of the 6th Shenzhen Municipal Committee of the CPPCC, and Vice Chairman of the 6th Committee of
the Shenzhen Municipal Science and Technology Association.
Mr. Wan Liangyong, independent director of TCL TECH. Born in 1979, he is a Party member who joined
the "National Leading Accounting Talent" of the Ministry of Finance of the People's Republic of China. He is also
a council member of the Accounting Society of China (ASC), Vice President of the Branch of Engineering
Institutions of Higher Education of the ASC, and independent director of multiple companies, including Wens.
Mr. Liu Xunci, independent director of TCL TECH., professor, and Top Talent in Huizhou City. He was
born in Shaoyang, Hunan Province, in September 1959. He holds a master's degree in Economics. In September
1976, he became an educated urban young man working in the countryside. In July 1983, he started to work upon
graduation. He taught at the Hunan Agricultural University and the Huizhou University as a lecturer, associate
professor, and professor. He is an expert of the Decision-making Consultative Committee.
Mr. He Zhuohui, Chairman of the Supervisory Committee of TCL TECH. Born in July 1966, he serves as
Full-time Deputy Secretary and Director in Huizhou Investment Holdings Co., Ltd. From August 1991 to June
1995, he served as Deputy Director of the General Office and Director of the Office in China Construction Bank
Huiyang Branch; from June 1995 to August 2008, he served as Manager at Renchengchang (Huizhou) Investment
Co., Ltd.; from August 2008 to September 2009, he served as General Manager of Huizhou Investment Holdings
Asset Management Co., Ltd.; from September 2009 to December 2012, he served as Manager of the Management
and Development Department in Huizhou Investment Holdings Co., Ltd. and Deputy General Manager and
Director of Huizhou Fairway Investment and Construction Co., Ltd.; from December 2012 till now, he serves as
Full-time Deputy Secretary at Huizhou Investment Holdings Co., Ltd.; from February 2014 till now, he serves as
Director at Huizhou Investment Holdings Co., Ltd. (from April 2010 to January 2017, he concurrently served as
Director of the First and Second Session of the Board of Huizhou Fairway Investment and Construction Co., Ltd.;
from August 2015, he concurrently serves as Chairman of the Fifth and Sixth Supervisory Committees of TCL
Corporation).
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TCL Technology Group Corporation Annual Report 2021
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. She is an accountant and member of the Communist Party of
China. From July 1995 to March 1998, she served as a finance officer in Huizhou Zongli Real Estate Company;
from March 1998 to June 2002, she served as a finance officer at Huizhou Trust Investment Company; from June
2002 till now, she serves as Accountant, Deputy Manager and Manager of the Finance Department in Huizhou
Investment Holdings Co., Ltd.; from February 2014 till now, she serves as Workers’ Director in Huizhou
Investment Holdings Co., Ltd. (from June 2009 to February 2013, she concurrently served as Supervisor at
Huizhou Fairway Investment and Construction Co., Ltd.; from June 2013 to May 2018, she concurrently served as
Director in Huizhou Investment Holdings Asset Operation Co., Ltd.; from March 2014, she concurrently serves as
Workers’ Representative Director at Huizhou Investment and Development Co., Ltd.; from April 2014, she
concurrently serves as Supervisor of the Fifth, Sixth and Seventh Supervisory Committees of the Company).
Mr. Mao Tianxiang, Employee Supervisor of TCL TECH. Now, he is Deputy Secretary of the Party
Committee, Assistant President, and Head of the Audit and Supervision Department of TCL TECH. He was born
in January 1980 and graduated from Guangxi University 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; from November 2007 to June 2009, he served as Deputy Head of the Legal
Section and Head of the General Section in Huizhou Auditing Bureau; from June 2009 to August 2014, he served
as Deputy Director and Deputy Director of the Divisional Level in the Law Enforcement Inspection Office and the
Efficacy Inspection Office of Huizhou Discipline Committee. He has been working in the Company since
September 2014. He served as Deputy Director of the Party-Masses Work Department in the Company and
Secretary of the Youth League Committee of the Company; from August 2015 to January 2016, he concurrently
served as Acting General Manager of the Electronic Device Business Division in Techne Corporation; in
November 2016, he was elected as Member of the Party Committee and Deputy Secretary of the Discipline
Committee of TCL Corporation; in February 2017, he served as Head of the Audit and Supervision Department.
From March 2017 to December 2018, he concurrently served as General Manager of TCL Resource Investment
Company. From July 2019 to July 2020, he concurrently served as Auditor General of TCL CSOT. Since 2019, he
has successively been a Supervisor of Tianjin 712 Communication & Broadcasting Co., Ltd. (603712.SH), the
Chairman of the Supervisory Committee of Highly Information Industry Co., Ltd., and the Chief Supervisor of
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TCL Technology Group Corporation Annual Report 2021
TCL Financial Co., Ltd. Since October 2020, he has been Chairman of the Supervisory Committee of Tianjin
Zhonghuan Semiconductor Co., Ltd. (002129.SZ); since October 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, Deputy Secretary of the Party Committee and Secretary
of the Discipline Inspection Committee of TCL TECH.
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.
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, Professor Senior Engineer, serves as Chief Technology Officer (CTO) and Senior Vice
President of TCL Technology Group Corporation and its consolidated subsidiaries, except where otherwise stated,
and Dean of the Wuhan TCL Industrial Technology Research Institute, Ltd.; Executive Director of TCL
Electronics (Huizhou) Co., Ltd., director of TCL CSOT, and Chief Scientist of TCL CSOT; Chairman of
Guangdong Juhua and China Ray, director of Kateeva, an American "printed display equipment" company,
Chairman of the International Electrotechnical Commission (IEC)/TC110, and Vice Chairman and Asian President
of the Organic and Printed Electronics Association (OE-A). He is an expert of the National Advisory Committee
on New Materials Industry Development and initiator of the New Display Direction of the National "Key New
Materials R&D and Application" Key Project (2030), the New Display Direction of the "Special Project of New
Display and Strategic Electronic Materials" of the National Key R&D Plan of the 14th Five-Year Plan, the New
Display Direction of the "Key Project of Strategic and Advanced Electronic Materials" of the National Key R&D
Plan of the 13th Five-Year Plan, and the New Display Direction of "863" of the 12th Five-Year Plan of the
Ministry of Science and Technology of the People's Republic of China. He is also a Leading Talent in Scientific
and Technological Innovation of the Special Support Plan for High-level Talent of the Organization Department of
the Central Committee of the CPC and Young Expert with Outstanding Contribution to China of the National
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TCL Technology Group Corporation Annual Report 2021
"Hundred-Thousand-Ten Thousand Talent Project.
Positions held at the shareholding entity
√ Applicable □ Not applicable
Any pay received
Office title at the
Name Name of shareholding entity Start of tenure End of tenure from the
shareholding entity
shareholding entity
Ningbo JiutianLiancheng Equity
Representative appointed
Li Dongsheng Investment Partnership (Limited August 2014 Incumbent No
by the executive partner
Partnership)
Liang Weihua Huizhou Investment Holding Director, deputy general August 2016 Incumbent Yes
Co., Ltd. manager
Huizhou Investment Holding Full-time Deputy
He Zhuohui December 2012 Incumbent Yes
Co., Ltd. Secretary and Director
Huizhou Investment Holding
Qiu Haiyan Workers’ Director February 2014 Incumbent Yes
Co., Ltd.
Notes to
positions held at
Not applicable
the shareholding
entity
Positions held at other entities
√ Applicable □ Not applicable
Office title at other Pay received from
Name Name of other entities Start of tenure End of tenure
entities other entities
TCL Industries Holdings Co., Ltd. Chairman Septermber 2018 Incumbent Yes
Independent and
Li Dongsheng
Tencent Holdings Limited non-exeuctive April 2004 Incumbent Yes
director
Huizhou New Material Industrial
Chairman and general
Park Investment and Construction October 2019 Incumbent No
manager
Co., Ltd
Liang Weihua Huizhou Innovation Investment Chairman and general
November 2020 Incumbent No
Co., Ltd manager
Huizhou State-owned Capital Deputy General June 2021 Incumbent Yes
Investment Group Co., Ltd Manager
TCL Industries Holdings Co., Ltd. Director and General September 2018 Incumbent Yes
Du Juan
Manager
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TCL Technology Group Corporation Annual Report 2021
TCL ELECTRONICS HOLDINGS Chairman of the August 2021 Incumbent No
LIMITED board
Getech Ltd. Chairman September 2018 Incumbent No
Shenzhen JiaWei Renewable
Independent director November 2016 Incumbent Yes
Energy Co., Ltd.
Liao Qian
Tianjin 712 Communication & Vice Charmian of the
June 2019 Incumbent No
Broadcasting Co., Ltd. Board
Yu Yong The Chinese Society for Metals President May 2017 Incumbent Yes
China Railway Construction Heavy Independent director April 2019 Incumbent Yes
Industry Corporation Limited
Wan Liangyong
URTRUST Insurance Co., Ltd. Independent director February 2020 Incumbent Yes
Guangdong Goworld Co., Ltd Independent director October 2021 Incumbent Yes
Tianjin 712 Communication &
Mao Tianxiang Supervisor June 2019 Incumbent No
Broadcasting Co., Ltd.
TCL Microchip Technology May 2021 Incumbent
Director No
Wang Cheng (Guangdong) Co., Ltd.
Amlogic (Shanghai) Co., Ltd Director May 2020 Incumbent No
Wuhan NITE Photoelectricity Chairman December 2020 December No
Equipment Manufacture Co., Ltd. 2021
Yan Xiaolin
TCL Microchip Technology Chairman May 2021 Incumbent No
(Guangdong) Co., Ltd.
Notes to
positions held at Other major jobs or concurrrently held jobs and resume
other entities
Punishments imposed in recent three years by the securities regulator on the incumbent directors, supervisors and senior mana gement
as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
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
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TCL Technology Group Corporation Annual Report 2021
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 management rules.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax
Remuneration
remuneration
Name Office title Gender Age Incumbent/Former from any related
from the
party or not
Company
Chairman of the Board and
Li Dongsheng Male 64 Incumbent 1,312.98 Yes
CEO
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TCL Technology Group Corporation Annual Report 2021
Liang Weihua Vice Charmian of the Board Male 40 Incumbent 0 Yes
Du Juan Director Female 51 Incumbent 690.50 Yes
Director, Senior Vice
JinXuzhi Male 67 Incumbent 1,257.37 No
President
Director, Senior Vice
Shen Haoping Male 59 Incumbent - No
President
Director, Board Secretary
Liao Qian Male 41 Incumbent 587.96 No
and Senior Vice President
Liu Kun Director Male 43 Former 0 No
Yu Yong Independent director Male 74 Incumbent 0 No
Chen Shiyi Independent director Male 65 Incumbent 0 No
Wan Liangyong Independent director Male 42 Incumbent 20 No
Liu Xunci Independent director Male 63 Incumbent 16 No
Chairman of the Supervisory
He Zhuohui Male 56 Incumbent 16 Yes
Committee
Qiu Haiyan Supervisor Female 47 Incumbent 10 Yes
Mao Tianxiang Employee Supervisor Male 41 Incumbent 241.34 No
Wang Cheng COO Male 47 Incumbent 323.46 No
Li Jian CFO Female 49 Incumbent 306.05 No
Yan Xiaolin Senior Vice President, CTO Male 55 Incumbent 1,038.21 No
Total -- -- -- -- 5,819.87 --
Note: 1. As of the end of the Reporting Period, Non-Executive Director Mr. Liang Weihua and Independent Directors Mr. Gan Yong
and Mr. Chen Shiyi hadn’t collected their allowances of RMB181,300 (before tax) respectively.
2. Non-executive director Liu Kun gave up to collect his allowance.
3. Director Shen Haoping collected his allowance from TCL Zhonghuan. Specific data is subject to the notice of TCL Zhonghuan.
VI. Performance of Duty by Directors in the Reporting Period
1. Board of Directors During the Reporting Period
Meeting Date of the meeting Date of disclosure Resolutions of the meeting
All proposals were adopted. Please refer to the Notice on
The 4th meeting of the 7th Resolutions adopted at the 4th Meeting of the 7th Board
February 8, 2021 April 10, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on April
10, 2021 (Notice No.: 2021-029)
All proposals were adopted. Please refer to the Notice on
The 5th meeting of the 7th
March 10, 2021 March 11, 2021 Resolutions adopted at the 5th Meeting of the 7th Board
Board of Directors
of Directors disclosed onwww.cninfo.com.cn on March
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TCL Technology Group Corporation Annual Report 2021
11, 2021 (Notice No.: 2021-009)
All proposals were adopted. Please refer to the Notice on
The 6th meeting of the 7th Resolutions adopted at the 6th Meeting of the 7th Board
April 8, 2021 April 10, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on April
10, 2021 (Notice No.: 2021-031)
All proposals were adopted. Please refer to the Notice on
The 7th meeting of the 7th Resolutions adopted at the 7th Meeting of the 7th Board
April 27, 2021 April 28, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on April
28, 2021 (Notice No.: 2021-041)
All proposals were adopted. Please refer to the Notice on
The 8th meeting of the 7th Resolutions adopted at the 7th Meeting of the 8th Board
May 21, 2021 May 22, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on May
22, 2021 (Notice No.: 2021-054)
All proposals were adopted. Please refer to the Notice on
The 9th meeting of the 7th Resolutions adopted at the 7th Meeting of the 9th Board
June 20, 2021 June 21, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on June
21, 2021 (Notice No.: 2021-066)
All proposals were adopted. Please refer to the Notice on
The 10th meeting of the 7th Resolutions adopted at the 10th Meeting of the 7th Board
August 9, 2021 August 10, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on August
10, 2021 (Notice No.: 2021-093)
All proposals were adopted. Please refer to the Notice on
The 11th meeting of the 7th Resolutions adopted at the 11th Meeting of the 7th Board
September 27, 2021 September 28, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on
September 28, 2021 (Notice No.: 2021-105)
All proposals were adopted. Please refer to the Notice on
The 12th meeting of the 7th Resolutions adopted at the 12th Meeting of the 7th Board
October 26, 2021 October 27, 2021
Board of Directors of Directors disc losed on www.cninfo.com.cn on
October 27, 2021 (Notice No.: 2021-113)
All proposals were adopted. Please refer to the Notice on
The 13th meeting of the 7th Resolutions adopted at the 13th Meeting of the 7th Board
November 1, 2021 November 2, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on
November 2, 2021 (Notice No.: 2021-116)
All proposals were adopted. Please refer to the Notice on
The 14th meeting of the 7th Resolutions adopted at the 14th Meeting of the 7th Board
December 2, 2021 December 3, 2021
Board of Directors of Directors disclosed on www.cninfo.com.cn on
December 3, 2021 (Notice No.: 2021-126)
72
TCL Technology Group Corporation Annual Report 2021
2. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total number Board Board
Board
of board Board meetings meetings The director failed to
meetings General
meetings the meetings attended by the attend two
Director attended meetings
director attended on way of director consecutive board
through a attended
eligible to site telecommunica failed to meetings or not
proxy
attend tion attend
Li Dongsheng 11 3 8 - - No 1
Liang Weihua 11 1 10 - - No 6
Du Juan 11 3 8 - - No -
JinXuzhi 11 2 9 - - No -
Shen Haoping 11 1 10 - - No -
Liao Qian 11 3 8 - - No 3
Liu Kun 7 - 7 - - No -
Yu Yong 11 1 10 - - No -
Chen Shiyi 11 1 10 - - No 1
Wan Liangyong 11 1 10 - - No 1
Liu Xunci 11 1 10 - - No 5
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
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TCL Technology Group Corporation Annual Report 2021
independently and impartially in strict accordance with the Regulations on the Work of Independent Directors and
relevant laws and regulations, and issued independent and impartial opinions on major matters such as the
Company's private placement, annual profit distribution and annual daily affiliated transaction forecast, effectively
safeguarded the legitimate rights and interests of investors, especially small and medium-sized investors.
VII. Performance of Duties by Dedicated Committees During the Reporting Period
Meeting
Other Objection
s Date of the Important opinions and
Name Members Meeting agenda duties matters (if
convene meeting proposals raised
performed any)
d
The audit committee
carried out its work in
strict accordance with
the Company Law, the
1. 2020 Audit Plan for
regulatory rules of the
Financial Statements of
CSRC, the Articles of
TCL Technology Group
Association and the Not
January 20, 2021 Corporation; -
Rules of Procedure of applicable
2. 2020 Internal Control
the Board of Directors.
Plan of TCL Technology
Upon thorough
Group Corporation;
communication and
discussion, all proposals
were unanimously
Audit Wan Liangyong, adopted.
Commit Chen Shiyi, Du 2
tee Juan
1. 2020 Financial
The audit committee
Report;
carried out its work in
2. Summary Report of
strict accordance with
the Audit Committee
the Company Law, the
under the Board
regulatory rules of the
Regarding the 2020
CSRC, the Articles of
Annual Audit Carried
Association and the Not
March 10, 2021 out by Da Hua Certified -
Rules of Procedure of applicable
Public Accountants
the Board of Directors.
(Special General
Upon thorough
Partnership);
communication and
3. Proposal on the
discussion, all proposals
Reappointment of
were unanimously
DaHua Certified Public
adopted.
Accountants (Special
74
TCL Technology Group Corporation Annual Report 2021
General Partnership) as
the Independent Auditor.
Proposal on adding All proposals were
Not
Chen Shiyi, Wan April 27, 2021 directors to the 7th adopted upon -
Nomina applicable
Liangyong, Liu board of directors. deliberation.
tion
Xunci, Liang 2 Proposal on
Commit All proposals were
Weihua, Liao appointment of Mr. Not
tee August 8, 2021 adopted upon -
Qian Wang Cheng as COO applicable
deliberation.
and Li Jian as CFO.
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 447
Number of in-services of the Company of major subsidiaries 64,712
Total number of in-services of the Company at the end of period 65,159
Total number of paid employees in the Reporting Period 65,159
Number of retirees to whom the Company as the parent or its
2,449
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 43,028
Sales 1,917
R&D and technical 10,517
Financial 799
Administrative 507
Managerial 1,370
Other 7,021
Total 65,159
Educational backgrounds
Educational background Employees
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TCL Technology Group Corporation Annual Report 2021
PhD 255
Master 3,143
Bachelor’s degree 11,916
Junior college and others 4,051
Total 19,365
Note: The “educational backgrounds” section excludes overseasemployees and operating workers.
2. Employee Remuneration Policy
The Company implements the remuneration management principle of “determining position by
responsibilities, determining salary by position and determining remuneration by 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.
3. Employee Training Plans
On September 10, 2000, the Training Department of TCL Headquarters shifted to TCL Training Institute. On
August 16, 2005, TCL Training Institute changed its name to TCL Leadership Development Institute, which
focused on cultivation of management talent and development of leadership. In 2015, the institute has been
upgraded to TCL University. In 2021, to better focus on the business scenario, training talents for the organization,
TCL University was merged into the Organizational Department of the Group, changed its name to the Learning
and Development Group.
The Learning and Development Group shoulders the mission of "empower employees and development of
organization by men". It has unswervingly implemented the "Hawk" Project for more than a decade, cultivated
many excellent management personnel at all levels for enterprises, and supported the development of TC. In the
meantime, to empower the strategy and business, create an atmosphere that fosters the intensive learning and
actively implement the digital transformation, in 2020, T-school launched an online learning platform with more
than 50000 users registered and more than 2300 online courses provided, committed to creating an innovative
experience combined with knowledge, function and social culture learning.
The Learning and Development Group will continue to build a more comprehensive training system and
build a management and professional talent pool that meets the strategic requirements of the Company. In terms of
long-term goals, the Learning and Development Group 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.
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TCL Technology Group Corporation Annual Report 2021
4. Labor Outsourcing
□ Applicable √ Not applicable
X. Profit Distributions to Shareholders (in the Form of Cash and/or Stock)
Formation, implementation or adjustment of profit distribution policy, especially cash dividend policy, in the Reporting Period
√ Applicable □ Not applicable
Special explanation of cash dividend policy
In compliance with the Company’s Artic les 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 played
Yes
their due roles
Non-controlling interests were able to fully express their opinions
Yes
and desires and their legal rights and interests were 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 forprofit distribut ion for
shareholders were positive, but no cash dividend distr ibution plan was put forward.
□ Applicable √ Not applicable
Final Dividend P lan for the Reporting Period
√ Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 1.50
Bonus issue from capital reserves (share/10 shares) 0
Share base (share) 13,666,683,905
Cash dividends (RMB) (tax inclusive) 2,050,002,585.75
Cash dividends in other forms (e.g. share
629,175,986.4
repurchase) (RMB)
Total cash dividends (including those in other
2,679,178,572.15
forms) (RMB)
Distributable profits (RMB) 8,021,329,354
Total cash dividends (including those in other
forms) as a percentage of total profits to be 100%
distributed (%)
Cash dividend plan
77
TCL Technology Group Corporation Annual Report 2021
Based on the share capital of 13,666,683,905 shares on April 27, 2022 that were eligible for profitdistribution (the total share
capital of 14,030,642,421 shares minus the 363,958,516 shares inthe Company’s special securities account for repurchase that were
not eligible for profit distribution), a cash dividend of RMB1.5 (tax inclusive) per 10 shares was to be distributed to
theshareholders, totaling RMB2,050,002,585.75. Where any changes occur, before the implementation of the dividend plan, to the
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 payout amount
under the same dividend ratio”, subject to the actual payout amount.
Details of profit distribution or capital reserve fund transfer plan
Based on the share capital of 13,666,683,905 shares on April 27, 2022 that were eligible for profitdistribution (the total share
capital of 14,030,642,421 shares minus the 363,958,516 shares inthe Company’s special securities account for repurchase that were
not eligible for profit distribution), a cash dividend of RMB1.5 (tax inclusive) per 10 shares was to be distributed to
theshareholders, totaling RMB2,050,002,585.75. The retained earnings of RMB5,971,326,768.25will carry forward for future
distribution. Meanwhile, there will be no bonus issue from either profit or capital reserves for the year under review. Where any
changes occur, before the implementation of the dividend plan, to the 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 payout amount under the same dividend ratio”, subject to the actual
payout amount.
XI. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
√ Applicable □ Not applicable
(I) Equity Incentives
The 2019 Restricted Stock Incentive Plan and the TCL Global Innovation Partner Plan
1. On June 20, 2021, the Proposal on the Repurchase and Retirement of Restricted Shares That Were Granted
to Certain Awardees under the 2019 Restricted Stock Incentive Plan But Are Still in Lockup and the Adjustment to
the Repurchase Price was approved at the Ninth Meeting of the Seventh Board of Directors and the Seventh
Meeting of the Seventh Supervisory Committee, which agreed on the repurchase and retirement of restricted
shares that had been granted but were still in lockup to 10 awardees including Zhang Kun due to personal
resignation. At the same time, according to the Company’s implementation arrangement of profit distribution in
2020, the repurchase price granted under the 2019 restricted stock incentive plan would be adjusted from RMB
1.86/share to RMB 1.64/share.
In addition, the Proposal on the Satisfaction of the Unlocking Conditions for the Second Unlocking Period
under the 2019 Restricted Stock Incentive Plan and the Second Global Innovation Partner Plan was approved
upon deliberation. This time, a total of 85 awardees were eligible for unlocking, and the number of restricted
stocks that can be applied for to be unlocked and listed for circulation was 1,351,316, accounting for 0.0096% of
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TCL Technology Group Corporation Annual Report 2021
the Company’s total share capital at that time. The Company’s independent directors issued their independent
opinions of consent, and the Supervisory Committee issued their supervision opinion, with respect to the
aforesaid.
2. On June 24, 2021, the Company disclosed the Reminder on the Shares Unlocked in the Second Unlocking
Period under the 2019 Restricted Stock Incentive Plan and the Second Global Innovation Partner Plan Being
Allowed for Public Trading. The number of restricted shares released from this restriction and listed for
circulation was 1,351,316, and the date of listing and circulation was June 28, 2021.
3. On July 6, 2021, the Proposal on the Repurchase and Retirement of Restricted Shares That Were Granted
to Certain Awardees under the 2019 Restricted Stock Incentive Plan But Are Still in Lockup and the Adjustment to
the Repurchase Price was approved at the Third Extraordinary General Meeting of 2021.
4. On September 11, 2021, the Company disclosed the Announcement on Completing the Repurchase and
Retirement of Some Restricted Shares and Unchanged Share Transfer Price of Convertible Company Bonds. As of
the date of this announcement, the Company had completed the repurchase and retirement of 145,941 restricted
shares in China Securities Depository and Clearing Corporation Limited Shenzhen Branch.
Equity Incentives Granted to Directors and Senior Management
□ Applicable √ Not applicable
Appraisal of and Incentive for Senior Management
During the Reporting Period, the Company carried out performance appraisal and competenceexamination
on managers. The KPI (key performance indicators) system was used for performance appraisal. In respect to the
team led by each manager, the key factors of performance appraisal included phased goals of strategic
transformation and operating indicators of the current period (such as profits, cash flow, products and service
quality); the comprehensive results of the accomplishment of each 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 steer the work orientation of all systems of the
Company and serve the purpose of enhancing the overall efficiency of the Company. Leader examination
consisted of four dimensions of assessment, which included leader performance, competence, experience and
quality (potential, personality and aspiration/values). An annual examination report for leaders was generated
through annual performance assessment, virtual assessment 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.
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TCL Technology Group Corporation Annual Report 2021
(II) Implementation of Employee Stock Ownership Plan
√ Applicable □ Not applicable
All the valid employee stock ownership plans during the Reporting Period
Proportion to
Funding source
Scope of Number of Total amount of total share capital
Name Changes for implementing
employees employees shares held of listed
the plan
companies
The Third Global The Company's
Partner Plan middle and senior The Company's
management and 1,800 43,859,649 shares Not applicable 0.31% special incentive
outstanding key fund for 2020
staff
2021-2023 The Company's
Employee Stock middle and senior The Company's
113,143,154
Ownership Plan management and 3,600 Not applicable 0.81% special incentive
shares
(Phase I) outstanding key fund for 2021
staff
Shareholdings of Directors, Supervisors and Senior Management under the Employee Stock Ownership Plan during the Reporting
Period
Beginning amount in the Ending amount in the Proportion to total share capital
Name Office title
Reporting Period Reporting Period of listed companies
Chairman of the Board
Li Dongsheng
and CEO
Du Juan Director
Director, Senior Vice
JinXuzhi
President About 15.0466 million About 22.2425
0.16%
Director, Board Secretary shares million shares
Liao Qian
and Senior Vice President
Senior Vice President,
Yan Xiaolin
CTO
Mao Tianxiang Employee Supervisor
Note: The number of shares in the above table is the conversion data according to the announced Employee Stock Ownership Plan,
and the final ownership result shall prevail.
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
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TCL Technology Group Corporation Annual Report 2021
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 attrib uted to
individuals.
Termination of Employee Stock Ownership P lan during the Reporting Period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(III) 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
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TCL Technology Group Corporation Annual Report 2021
XIV. Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal
Controls
1. Internal Control Self-Evaluation Report
Disclosure date of the internal control
April 28, 2022
self-evaluation report
Index to the disclosed internal control
http://www.cninfo.com.cn
self-evaluation report
Evaluated entities combined assets as a
96%
percentage of consolidated total assets
Evaluated entities combined revenue as a
95%
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) material
violations of the country’s laws or
regulations in the Company’s operating
Material weaknesses: (1) an invalid control activities; (2) any material
environment; (2) fraud of directors, decision-making error that is caused by
supervisors and senior management; (3) any an irrational decision-making procedure
material misstatement of financial reporting and causes material property loss to the
of the current period which is identified by Company; (3) a massive loss of the key
the registered accountants but which the managerial or technical personnel; and
Company failed to report; and (4) invalid (4) frequent negative news coverage that
internal control supervision by the Audit causes great concern for the regulatory
Nature standard
Committee and the internal audit organ. administration and a material long-lasting
Serious weaknesses: A single weakness or a impact on the Company’s brand and
group of weaknesses which are less serious reputation.
than a material weakness but could still Serious weaknesses: A single weakness
cause deviation from the control objectives or a group of weaknesses which are less
Common weaknesses: Other internal control serious than a material weakness but
weaknesses that are neither material nor could still cause deviation from the
serious control objectives
Common weaknesses: Other internal
control weaknesses that are neither
material nor serious
Material weaknesses: misstatements ≥5% of
profit before tax;
Quantitative standard Not applicable
Serious weaknesses: 3% of profit before tax
≤misstatements <5% of profit before tax;
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TCL Technology Group Corporation Annual Report 2021
Common weaknesses: misstatements <3% of
profit before tax
Number of material weaknesses in internal Not applicable
controls over financial reporting
Number of material weaknesses in internal Not applicable
controls not related to financial reporting
Number of serious weaknesses in internal Not applicable
controls over financial reporting
Number of serious weaknesses in internal Not applicable
controls not related to financial 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 financ ial
reporting as of December 31, 2021, based on the Basic Rules on Enterprise Internal Controls and other applicable rules.
Independent auditor’s report on The Internal Control Audit Report of TCL Technology Group Corporation disclosed at
internal controls disclosed or not http://www.cninfo.com.cn dated April 28, 2022
Disclosure date April 28, 2022
Index to such report disclosed http://www.cninfo.com.cn
Type of the auditor’s opinion Unqualified opinion
Material weaknesses in internal No
controls 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
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. Self-Examination and Rectification of Special Actions for Listed Company Governance
□ Applicable √ Not applicable
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TCL Technology Group Corporation Annual Report 2021
Part V Environmental and Social Responsibility
I. Major Environme ntal Issues
Whether the listed company and its subsidiaries are major polluters announced by the environmental protection department
√ Yes □ No
Approved
Number Governing Total
Distribution of Discharge total
Name of the Company or Major Way of of discharge discharge Excessive
discharge concentratio discharge
subsidiary pollutants discharge discharge standards (metric discharge
outlets n (mg/L) (metric
outlets (mg/L) ton)
tons/year)
Intermittentl y Not
COD Northwester n 147.5mg/L 260 mg/L 1108 t /
discharged to applicable
1 corner of the
Ammonia Guangming Not
TCL China Star plant area 6.83 mg/L 30 mg/L 51.3 t /
nitrogen Sewage Plant applicable
Optoelectronics Technology
Artificial Not
Co., Ltd. COD Continuousl y 16 mg/L 30 mg/L 60.4 t /
wetland to the applicable
discharged to 1
Ammonia north of the Not
Dongkengshui 0.18 mg/L 1.5 mg/L 0.71 t /
nitrogen plant area applicable
Continuously Not
COD 58mg/L 500mg/L 146.4t 453.6t
discharged to In CSSD applicable
CSSD Environmental
Suzhou China Star
Environmental Technology
Optoelectronics Technology 1
Ammonia Technology Wastewater Not
Co., Ltd. 3.62mg/L 45 mg/L 9.13t 22.68t
nitrogen Wastewater Treatment applicable
Treatment Plant
Plant
Phase 1:
Continuously 120mg/L Not
COD 500mg/L 19.48t 75.69t
discharged to Southeast Phase 2: applicable
Suzhou China Star Suzhou corner of the
12mg/L
Optoelectronics Display Co., Industrial Park 2 plant area /
Phase 1:
Ltd. First Sewage South gate of
Ammonia Treatment 14.4mg/L Not
the plant area
45mg/L 2.31t 5.65t
nitrogen Plant Phase 2: applicable
0.48mg/L
Intermittently 30.5589 64.479 353.55 Not
Wuhan China Star COD Southwestern 400mg/l
discharged mg/l tons tons applicable
Optoelectronics Technology 1 corner of the
Ammonia Intermittently 1.311 35.36 Not
Co., Ltd. plant area 0.9397 mg/l 30mg/l
nitrogen discharged tons tons applicable
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TCL Technology Group Corporation Annual Report 2021
Approved
Number Governing Total
Distribution of Discharge total
Name of the Company or Major Way of of discharge discharge Excessive
discharge concentratio discharge
subsidiary pollutants discharge discharge standards (metric discharge
outlets n (mg/L) (metric
outlets (mg/L) ton)
tons/year)
Wastewater:
COD,
ammonia
nitrogen,
other
characteristic
pollutants DB12/356-2018
TianJinZhonghuan Advanced (total General As per Comprehensive
Not Not
Material&Technology Co., nitrogen, Organized 1 discharge emission Sewage Standard
exceeding applicable
Ltd. total outlet standard Discharge
phosphorus, Standard
pH value,
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Wastewater:
COD,
ammonia
nitrogen,
other
characteristic
pollutants DB12/356-2018
Tianjin Huan'Ou
(total General As per Comprehensive
Semiconductor Not Not
nitrogen, Organized 1 discharge emission Sewage Standard
Material&Technology Co., exceeding applicable
total outlet standard Discharge
Ltd.
phosphorus, Standard
pH value,
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Waste gas: General GB16297-1996
As per
Inner Mongolia Zhonghuan Particulate Organized, discharge Comprehensive Not Not
Multiple emission Standard
Solar Material Co., Ltd. matter, unorganized outlet, plant Air Pollutant exceeding applicable
standard
nitrogen area, and roof Emission
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TCL Technology Group Corporation Annual Report 2021
Approved
Number Governing Total
Distribution of Discharge total
Name of the Company or Major Way of of discharge discharge Excessive
discharge concentratio discharge
subsidiary pollutants discharge discharge standards (metric discharge
outlets n (mg/L) (metric
outlets (mg/L) ton)
tons/year)
oxides, of production Standard,
VOCs, workshop GB8978-1996
fluoride Comprehensive
Wastewater: Sewage
COD, Discharge
ammonia Standard
nitrogen,
other
characteristic
pollutants
(total
phosphorus,
pH,
suspended
matter,
BOD5,
fluoride)
Wastewater:
COD,
ammonia GB/T 31962
nitrogen, Water Quality
other Standard for
characteristic Sewage
Zhonghuan Advanced pollutants General As per Discharged into
Not Not
Semiconductor Materials Co., (fluoride, Organized 1 discharge emission Urban Sewers Standard
exceeding applicable
Ltd. total outlet standard GB8978-1996
nitrogen, Comprehensive
total Sewage
phosphorus, Discharge
suspended Standard
matter, pH,
BOD5)
Wastewater: GB 30484-2013
COD, Discharged Discharge
General
Huansheng Solar (Jiangsu) ammonia according Standard for Not Not
Organized 1 discharge Standard
Co., Ltd. nitrogen, to the Battery exceeding applicable
outlet
other standard Industry
characteristic Pollutants
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TCL Technology Group Corporation Annual Report 2021
Approved
Number Governing Total
Distribution of Discharge total
Name of the Company or Major Way of of discharge discharge Excessive
discharge concentratio discharge
subsidiary pollutants discharge discharge standards (metric discharge
outlets n (mg/L) (metric
outlets (mg/L) ton)
tons/year)
pollutants
(fluoride,
total
nitrogen,
total
phosphorus,
suspended
matter, pH)
Wastewater:
COD,
ammonia
nitrogen,
GB 30484-2013
other
Discharged Discharge
characteristic General
Wuxi Zhonghuan Applied according Standard for Not Not
pollutants Organized 1 discharge Standard
Materials Co., Ltd. to the Battery exceeding applicable
(total outlet
standard Industry
nitrogen,
Pollutants
total
phosphorus,
suspended
matter, pH)
Construction and operation of facilities for preventing pollution:
During this Reporting Period, an advanced sewage management system was established by the Company and
its subsidiaries, and regular monitoring and supervision and inspection mechanisms were adopted to ensure the
waste water, waste gas, solid waste and factory noises generated during the operation were emitted and treated
according to national and local laws and regulations.
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, and industrial waste water enters different treatment systems according to its
characteristics, and is discharged after physical, chemical and biochemical treatment. 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
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TCL Technology Group Corporation Annual Report 2021
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 the
property company 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 Impact Assessment on Construction Projects and Other Environmental Protection Administrative
Licenses
The Company complies with the laws and regulations of environmental impact assessment on construction
projects and other environmental protection administrative licenses.
Emergency Response Plan for Environmental Incidents
The Company has set up an environmental incident emergency organization led by the seniormanagement of
the enterprise and prepared an environmental emergency response plan, which hasbeen filed with the local
environmental protection department in accordance with relevant nationallaws and regulations. In addition,
regularly staff trainings and emergency drills are conducted for environmental incidents according to the plan to
ensure valid and accurate treatment of environmental pollution emergencies.
Environmental Self-Monitoring Program
The Company has formulated an environmental self-monitoring program in accordance with national
regulations, and monitors the discharge of pollutants by automatic monitoring or manual monitoring performed by
a third-party qualified agency. The monitoring plans and annual monitoring reports can be checked on the key
environmental monitoring information platform managed by local environmental authorities or subsidiary
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TCL Technology Group Corporation Annual Report 2021
websites.
Major administrative punishments received with respect to environmental issues in the Reporting Period:
□ Applicable √ Not applicable
Measures taken to reduce its carbon emissions and their effects during the Reporting Period
√ Applicable □ Not applicable
To meet the challenges of global climate change, TCL Technology is committed to green development,
energy saving and emission reduction in all aspects of the Company's operations. TCL technology has effectively
reduced the carbon emissions for business by continuously improving the energy management system, increasing
the utilization of renewable energies, building a green supply chain, and enhancing employee low carbon
awareness. At the same time, TCL Technology actively expands its green industry, and is developing its
photovoltaic semiconductor industry through TCL Zhonghuan’s business, which helps meet the challenges of
climate change.
In terms of efficient energy management, a sound energy management system has been established for the
main industries of TCL Technology and passed the third-party ISO50001 certification. In 2021, TCL CDOT saved
3,915,500 kWh of electricity by improving productivity and other energy management actions. Suzhou CSOT
Plant saved up to RMB 52.16 million by starting the Extreme Kinetic Energy Project, in which extreme frugality
measures were carried out for basic energies such as water, electricity and gas.
To increase the use of renewable energy, TCL Technology Industry actively promotes the laying of roof
photovoltaic systems. Shenzhen CSOT has independently established the largest photovoltaic system among the
industrial parks of South China and continues to expand it by using the existing roof of the plant area with the
principle of “laying as much as possible”. By the end of 2021, the total installed capacity of Shenzhen CSOT
reached 44MW, which can generate 44 million kWh per year, and the annual energy saving is equal to the daily
electricity consumption of 220,000 households. In 2021, Huizhou CSOT Roof Solar Photovoltaic Project
generated 21.5 million kWh.
In terms of supply chain, TCL Technology uses green finance to help member enterprises and upstream and
downstream of the industrial chain to improve the level of green development. In April 2021, TCL Technology
Group Finance Co., Ltd. successfully launched the first green note rediscount business, which is expected to save
nearly RMB 1 million in costs for the enterprise. In November 2021, TCL Technology successfully launched the
first "Green Carbon Chain System” of its supply chain finance based on low-carbon evaluation of enterprises in
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TCL Technology Group Corporation Annual Report 2021
China. The "Green Carbon Chain System" not only saves more financial costs for enterprises, but also motivates
enterprises to carry out a transformation of energy conservation and emission reduction.
To improve employee low-carbon awareness, TCL Technology continues to carry out various knowledge
trainings, experience sharing and theme activities on environmental protection. In August 2021, TCL CSOT
organized a low-carbon and energy-saving publicity month with the theme of “starting from myself to realize
energy saving, consumption reduction, green development, and circular economy”. Twelve activities were carried
out, including publicity and promotion, strengthening of energy-saving awareness, and commendation of
outstanding employees in energy-saving, so as to further enhance the green and low-carbon awareness of all
employees. In December 2021, TCL Technology Group launched the Initiative for All Employees to Promote
“Energy Saving and Carbon Reduction” and to Keep the Spirit of Hard Work, which aims to call on all employees
to practice the green office concept and to create a strong atmosphere of energy saving and carbon reduction
throughout the group.
With the philosophy of sustainable development, TCL Technology Group actively deploys green industries.
TCL Zhonghuan accelerates the production and manufacturing of semiconductor materials, and strengthens the
Company’s national industrial layout with its manufacturing bases in Inner Mongolia, Tianjin and Jiangsu. TCL
Zhonghuan conducts continuous R&D and innovation to reduce the cost of photovoltaic products and promote the
development of the global photovoltaic industry. The Company continues to focus on the development and
integration of two major platforms: G12 large-size silicon wafer and high-efficiency imbricated component
technology, which effectively reduce the Levelized Cost of Electricity and push photovoltaic power generation
forward to the "parity era". The installed capacity of TCL Zhonghuan's wholly-owned photovoltaic project
reached 1.2GW.
In the future, all companies of TCL Technology will continue to forge ahead in sustainable development, and
constantly explore and implement the carbon reduction strategy, leading the industry and the whole value chain
towards green and low carbon.
Other relevant information:
Not applicable
II Social Responsibility
See TCL Technology Group Corporation ESG Report 2021.
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TCL Technology Group Corporation Annual Report 2021
III. Consolidating and Extending the Achievements of Poverty Alleviation and Pushing
Forward Rural Revitalisation
Plan for consolidating and extending the achievements of poverty alleviation and pushing forward
rural revitalisation
The Company actively responds to the call of the state, and constantly channels efforts toward innovation by
devoting itself to three major fields of public welfare: poverty alleviation, student financial aid, and disaster relief.
It focuses on educational public welfare and promotes rural revitalization. It explores the innovative mode of
science and technology + public welfare, and uses A.I. technology to accompany left-behind children. TCL has
always taken responsibility for society, fulfilled its social responsibility with practical actions, and contributed to
common prosperity.
The “TCL Project Hope Candlelight Award”, jointly established by the Shenzhen TCL Public Welfare
Foundation and the CYDF, rewards outstanding rural teachers and organizes offline training. The Shenzhen TCL
Public Welfare Foundation cooperated with TCL Industrial Technology Research Institute to initiate the “A.I. Go
Home” project. An “Eagle” storytelling robot was developed and designed with professional technology and AI
technology. The robot is designed to imitate parents’ voices telling stories for children who lack parental
companionship, so as to strengthen the parent-child relationship. In 2021, the “A.I. Go Home” project was
upgraded again, and the “Eagle Listen” WeChat Mini Program was launched. The Shenzhen T CL Public Welfare
Foundation and the Education Foundation of the Central Conservatory of Music jointly launched the “Little Music
+” project and developed the “Xiao Xue” music robot. In this way, they care for children who lack musical
resources, bring them famous Chinese and foreign musical pieces and appreciation, which enrich the music
teaching resources of rural primary schools, and encourage every child to be positive and optimistic with the
power of music. The Candlelight Micro-Loan Project, a micro-loan oriented public welfare project jointly
provided by the Shenzhen TCL Public Welfare Foundation and TCL Finance Group for rural teachers, aims to
solve the financial needs of rural teachers and their families in the areas of major diseases, daily consumption and
skills training.
Annual summary of consolidating and extending the achievements of poverty alleviation and pushing
forward rural revitalisation
In 2021, the seventh “TCL Project Hope Candlelight Award” was launched, and outstanding rural teachers
were selected from 523 counties in 23 provinces nationwide. After registration, data screening, verification and
other procedures, 524 qualified rural teachers entered the final evaluation, in which they were finally reviewed by
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TCL Technology Group Corporation Annual Report 2021
experts. Finally, 400 outstanding rural teachers were selected, and each of the winning teachers was given a
personal award worth RMB8,000, including a cash reward and 7-day offline “Candlelight Classroom” training. In
October 2021, the glory ceremony of the seventh “TCL Project Hope Candlelight Award” was held in Shenzhen
with the theme of “Revitalize the Countryside Together with the Love of Candlelight”.
The “Eagle Story Club”, a project of “A.I. Go Home”, encouraged the whole school to participate by taking
the class as a unit. Based on the language learning situation of the pilot class, the “Eagle” storytelling robot was
used to select the appropriate stories. The story club gathered children together and popularized the allusions from
famous literary works at home and abroad for them. In 2021, the “Eagle Story Club” continued to be carried out.
The project set up 14 rural pilot schools in 9 provinces across the country, and distributed 50 “Eagle” story boxes
in total, benefiting more than 2,000 people. In 2021, the “A.I. Go Home” project was upgraded again, and the
“Eagle Listen” WeChat Mini Program was developed. “Eagle Listen” is a WeChat Mini Program integrating AI
(Artificial Intelligence) technology which customizes parents’ voices and plays stories and music. It has built-in
industry-leading ASR and voiceprint recognition technology, which allows users to synthesize AI simulated voice
with recording, and listen to stories told in a synthesized voice. Up to now, there have been more than 150 people
recording with “Eagle Listen”, and the number of users is nearly 1,000.
In 2021, the “Little Music +” project visually displayed the famous Chinese and foreign music pieces and
appreciations in the “Xiao Xue” music robot. Music story picture books were designed and created to help rural
children understand the connotations of music and enhance their imagination. In 2021, the “Xiao Xue Music Class”
project had pilots run in 13 schools in 10 provinces in total. A total of 50 Xiao Xue Music Boxes were distributed,
covering more than 3,000 students. In the first half of 2021, “Xiao Xue Music Class” set up pilot schools in
Heilongjiang and Inner Mongolia, and paid a return visit to minority primary schools in Qiqihar and Heilongjiang
about the development of “Xiao Xue Music Class”. In the second half of the year, pilot schools were set up in
Henan. A return visit was paid to Xiangyang Primary School in Suixian County, Henan Province to explore the
expansion of pilot schools “from point to area”. A forum of principals was held with the principals of seven
schools in Suixian County, in which they discussed the current situation and approach of “Eagle Story Club” and
“Xiao Xue Music Class”.
The Candlelight Micro-Loan Project uses the innovations in public welfare and finance to improve the
quality of life of rural educators working on the frontline to ensure the development of rural education. In 2021,
nearly 20 rural teachers submitted application materials for the “Candlelight Micro-Loan Project”, which granted
a loan of nearly RMB 300,000 to 6 teachers.
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TCL Technology Group Corporation Annual Report 2021
Effects of consolidating and extending the achievements of poverty alleviation and pushing forward rural revitalisation
Index Unit Quantity/Development
I Overall Situation —— ——
Of which: 1. Fund RMB’0,000 602
II Specific investments —— ——
1. Education —— ——
1.1 Amount of investment to improve the
RMB’0,000 492
educational resources in poverty-stricken areas
2. Society —— ——
2.1 Amount of public welfare fund investment RMB’0,000 110
Subsequent plans for consolidating and extending the achievements of poverty alleviation and pushing
forward rural revitalisation
In 2022, the eighth “TCL Project Hope Candlelight Award” will continue to be implemented. Rural teachers
who devote themselves to grassroots education in rural areas will be supported, so as to promote the development
of education in rural areas and rural revitalization. This plan will seek for outstanding rural teachers nationwide,
who have worked hard in the grassroots education front in poverty-stricken areas for their posts, and encourage
more outstanding young teachers to take root in rural basic education and promote rural education development.
In addition, it will expand the existing rewarding and publicity influence, continue to strengthen the engagement
of netizens on Internet platforms, and maintain its popularity in society.
In 2022, the “A.I. Go Home” project will continue to expand. The promotion and usage of “Eagle Listen”
will be strengthened, to provide “Eagle” storytelling robots with parents’ voices for more left-behind children, and
to strengthen the parent-child relationship and emotional support. At the same time, the project will set up 8 to 10
new pilot schools for “Eagle Story Club” and distribute 50 to 80 story boxes, so that more classes can listen to
stories with “Eagle” storytelling robots. Students will be encouraged to listen to, write and tell stories, from which
their learning ability, reading interest and positive ecology will be improved. It is estimated that more than 5,000
students will be covered.
In 2022, “Xiao Xue Music Class” will continuously expand pilot schools and distribute 50 to 80 Xiao Xue
Music Boxes, covering more than 5,000 students. At the same time, the project will publish music story picture
books matched with the “Xiao Xue” music robot, which will provide more opportunities and resources for
students in rural primary schools to learn and understand music. We will also expand the coverage of the
“Candlelight Micro-Loan Project” and discuss its development and future planning. Through the Candlelight
Micro-Loan Project, we will solve the financial needs of some rural teachers and their families.
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TCL Technology Group Corporation Annual Report 2021
Part VI Significant Events
I. Fulfillme nt of Commitme nts
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 Term of
Type of Fulfillm
Commitment Promisor Details of commitment commitme commitme
commitment ent
nt making nt
1. This company shall not transfer the shares in
TCL TECH. obtained through this transaction
within 12 months since the end date of issuance
of shares, including but not limited to direct or
indirect transfer in the securities market or by
agreement.
2. This company shall obey the above agreement
regarding the shares in TCL TECH. additionally
obtained because of allocation of bonus shares
and conversion to share capital, after the end of
About the
this issuance.
lockup
Commitments made 3. This company shall not transfer the convertible
period of the
in asset purchases bonds obtained through this transaction within 12 12 months
shares
via share and months of the end date of issuance, including but from the
Wuhan subscribed
convertible bonds not limited to direct or indirect transfer in the June 16, date of the Having
Industrial for and the
offering and cash securities market or by agreement. 2020 completio expired
Investment bond-to-stoc
payment and 4. The conversion period of the convertible bonds n of the
k period of
matching fund in this issuance starts from the first trading day 12 offering
convertible
raising months after the end date of issuance to the
corporate
maturity date of convertible bonds.
bonds
5. This company shall not transfer its shares in
TCL TECH. if this issuance is registered and
investigated by judicial authorities or the China
Securities Regulation Commission (CSRC) where
information provided or disclosed in this issuance
contains false presentations, misleading
statements, or material omissions, and the
investigation conclusion is unclear. Moreover, this
company shall submit its written application for
suspension of transfer and share account to the
94
TCL Technology Group Corporation Annual Report 2021
Board of Directors of the listed company, within
two trading days upon receipt of the notice on
case registration and investigation. The Board of
Directors will, on behalf of this company, apply
for lockup with the stock exchange and the
clearing house. If this company fails to submit the
lockup application within two trading days, the
Board of Directors will be authorized to verify the
situation and directly submit the identity and
account information of this company to and apply
for lockup with the stock exchange and the
clearing house. If the Board of Directors fails to
submit the identity and account information of
this company to the stock exchange and the
clearing house, the stock exchange and the
clearing house will be authorized to directly lock
up relevant shares. This company promises that it
will voluntarily use the shares locked up to
compensate relevant investors, should the
investigation conclusion identify violations of
laws and regulations.
About the This organization agrees that it will not transfer
commitment its subscribed convertible bonds within six
Subscribers
letter and months from the date when this issuance ends and
to the 6 months
the share the registration is completed. In addition, it
convertible from the
lockup entrusts the Board of Directors of TCL TECH. to
corporate completio
application apply for lockup of the above subscribed
bonds November n of the Having
of issuing convertible bonds with China Securities
privately 17, 2020 offering expired
targets of Depository and Clearing Corporation Limited
placed to and
the private (CSDC) Shenzhen Branch so as to ensure that the
raise the registratio
placement of above subscribed convertible bonds will not be
matching n
convertible transferred within six months from the date when
funds
corporate this issuance ends and the registration is
bonds completed.
1) I shall avoid horizontal competition between During the
About the companies, enterprises or other business tenure of
There is
horizontal organizations that I own, control, control with the
no
competition, others, have significant influence on and the Company’
Commitments made Li August 30, violatio
related-party Company with its subsidiaries; and 2) I shall s director,
in refinancing Dongsheng 2013 n of
transaction reduce and control transactions of related parties supervisor
commit
and capital between the companies, enterprises or other or senior
ment
occupation business organizations that I own, control, control manageme
with others, or have significant influence on and nt
95
TCL Technology Group Corporation Annual Report 2021
the Company with its subsidiaries.
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 competes or may constitute
competition with the main business of TCL Group
and its affiliated enterprises, and will urge the
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
The largest
controlled by me/this partnership obtain the
shareholder
opportunity to engage in new business, which
of the listed During the
constitutes or may constitute horizontal There is
company period of
About competition with the main business of TCL Group no
Commitments made and person being the
avoiding and its affiliated enterprises. I/this partnership December violatio
in selling major acting in largest
horizontal will, when it is possible, try my/our best to make 7, 2018 n of
assets concert (Mr. shareholde
competition this business opportunity available to TCL Group commit
Li r of TCL
or its affiliated enterprises in the first place based ment
Dongsheng Group
on reasonable and fair terms and conditions.
and Jiutian
4. If the business of mine/this partnership and the
Liancheng)
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 aforementione d
commitments, I/this partnership will make
comprehensive, timely and full joint and several
compensations for the losses to TCL Group
96
TCL Technology Group Corporation Annual Report 2021
caused thereby.
1. I/this partnership will minimize the related
party transactions between me/this partnership
and the enterprises controlled by me/this
partnership and TCL Group and its affiliated
enterprises.
2. For inevitable or reasonable related party
transactions, I/this partnership and the enterprises
controlled by me/this partnership and TCL Group
and its affiliated enterprises will conduct them
according to fair market principles and normal
commercial conditions, so as to ensure the
The largest
fairness of the related party transaction price, and
shareholder
will perform the decision-making procedures for
of the listed During the
Commitmen related party transactions according to the law, to There is
company period of
ts on ensure that the related party transactions will not no
and person being the
reducing and be used to illegally transfer TCL Group’s funds or December violatio
acting in largest
regulating to damage the legitimate rights and interests of 7, 2018 n of
concert (Mr. shareholde
related party TCL Group and its shareholders. commit
Li r of TCL
transactions 3. I/this partnership and the enterprises controlled ment
Dongsheng Group
by me/this partnership will not ask TCL Group
and Jiutian
and its affiliated enterprises to give more
Liancheng)
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
compensations for the losses to TCL Group
caused thereby.
The largest After this transaction, I/this partnership will
shareholder continue to exercise shareholder’s rights
Commitmen During the
of the listed according to laws, regulations and the Articles of There is
ts on period of
company Association of TCL Group, and maintain the no
maintaining being the
and person independence of TCL Group in terms of assets, December violatio
the largest
acting in personnel, finance, business and institutions. I/this 7, 2018 n of
independenc shareholde
concert (Mr. partnership will ensure: commit
e of listed r of TCL
Li (I) The independence of TCL Group personnel. ment
companies Group
Dongsheng I/this partnership promise(s) to maintain
and Jiutian personnel independence with TCL Group. TCL
97
TCL Technology Group Corporation Annual Report 2021
Liancheng) Group’s senior management, including the
general manager, deputy general manager, 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 enterprise.
(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.
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
98
TCL Technology Group Corporation Annual Report 2021
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
commitments on Not applicable
time and plans for
next steps
2. Where there had been an earning 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
Current Current
Reasons for not Date of
Name of asset or forecast actual
Forecast start Forecast end reaching the original Index to original
project with an performance performance
time time forecast (if forecast forecast disclosure
earnings forecast (RMB’0,00 (RMB’0,000
applicable) disclosure
0) )
Announcement on
the Acquisition of
the 100% Equity
Moka Interests of Moka
January 1, December 31, December 12,
International 22,443 40,823 Not applicable International
2021 2023 2020
Limited Limited & the
Related-Party
Transactions
(2020-166)
99
TCL Technology Group Corporation Annual Report 2021
Commitments Made by the Company’s Shareholders and Counterparties on the Annual Operating Performance of the
Report
√ Applicable □ Not applicable
According to the Announcement on the Acquisition of the 100% Equity Interests of Moka International
Limited & the Related-Party Transaction, 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 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 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.
Achievement of Performance Commitment and Its Influence on Goodwill Impairment Tests
In 2021, the target company Moka International Limited realized a net profit of RMB408.23 million, which
exceeded the estimated amount in the Asset Evaluation Report of the TCL Technology Group Corporation to buy
100
TCL Technology Group Corporation Annual Report 2021
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
For details, see “41. Changes to main accounting policies and estimates” in “III Significant accounting policies and estimates” in
“Part IX Financial Report”.
VII. YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
Compared with 2020, 35 subsidiaries (18 newly incorporated and the other 17 over which the Company
newly obtained control of) are newly included and 30 subsidiaries (20 transferred, 8 de-registered, and the other 2
changed into affiliated companies) are excluded from the consolidation scope of 2021. Please refer to Note VI to
the financial statements.
VIII. Engage ment and Disengagement of Independent Auditor
Current independent auditor:
101
TCL Technology Group Corporation Annual Report 2021
Da Hua Certified Public Accountants (Special General
Name of the domestic independent auditor
Partnership)
The Company’s payment to the domestic independent auditor (RMB’0,000) 384.6
How many consecutive years the domestic independent auditor has
14
provided audit services for the Company
Names of the certified public accountants from the domestic independent
Qiu Junzhou and Jiang Xianmin
auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants have
3 years, 3 years
provided 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)
Not applicable
(if 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
Not applicable
auditor writing signatures on the auditor’s report (if any)
How many consecutive years the certified public accountants have
Not applicable
provided audit services for the Company (if any)
Indicate whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
CPA firm, 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. Punishme nts and Rectifications
□ Applicable √ Not applicable
102
TCL Technology Group Corporation Annual Report 2021
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
http://www.cninfo.com.cn.
2 Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
Refer to VIII “Sale of Major Equity Investments” of Part III in this report.
3 Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No related-party transactions regarding joint investments in third parties which occurred during the Company’s Reporting 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 of
Capital Amount of
recovered Interest in
occupation Beginning new grants Ending
Relationshi grants in current
Related for balance in current balance
p with the Source current Coupon rate period
parties non-operati (RMB’0,00 period (RMB’0,000
Company period (RMB’0,00
ng purposes 0) (RMB’0,00 )
(RMB’0,00 0)
or not 0)
0)
TCL
Sale of
Industries Related
equity No 0 257,202.01 131,173.03 0.00% 0 126,028.98
Holdings corporation
investments
Co., Ltd.
The Influence of The Company sells 100% equity of Guangzhou Financial Development Service Center to TCL Industries
Amounts Due to Related Holdings Inc., in order to seize the opportunity in industrial development, further optimize the business
Parties on the structure, and focus resources on the development of the main business in line with the national policy
103
TCL Technology Group Corporation Annual Report 2021
Company’s Operating guidance, and based on the demands of the Company’s announced financing projects. According to the
Results and Financial agreement signed by both parties, TCL Industries Holdings Inc. shall pay 51% of the equity transfer price
Status to the Company within 40 days from the effective date of the agreement. The remaining 49% of the
equity transfer price will be paid within two years from the effective date of the agreement. Refer to the
Announcement on the Disposal of Equity Interests in Guangzhou Financial and the Related-party
Transactions disclosed by the Company on http://www.cninfo.com.cn dated May 22, 2021.
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
Relationsh Daily deposit Beginning Ending
Range of Total deposit amount Total withdrawal
Related parties ip with the ceiling balance balance
interest in current period amount in current
Company (RMB’0,000) (RMB’0,000) (RMB’0,000)
(RMB’0,000) period (RMB’0,000)
Subsidiary of
Related
TCL Industries
corporatio 600,000.00 0.01%-2.25% 252,815.49 6,767,979.46 7,018,667.16 2,127.79
Holdings Co.,
n
Ltd.
Loans:
Amount incurred in the current
period
Relationship Beginning Total
Loan limit Range of Total loan Ending balance
Related parties with the balance repayment
(RMB’0,000) interest amount in (RMB’0,000)
Company (RMB’0,000) amount in
current period
current period
(RMB’0,000)
(RMB’0,000)
Subsidiary of
TCL Industries Related Comprehensive
0.7%-4.5% 135,823.30 202,781.50 338,604.80 -
Holdings Co., corporation credit
Ltd.
Credit or other financial business:
Relationship
Total line of credit
Related parties with the Business type Ending balance (RMB’0,000)
(RMB’0,000)
Company
Subsidiary of TCL Industries Holdings Related Credit granting (bill The balance of
83,334.22
Co., Ltd. corporation discount) comprehensive credit
104
TCL Technology Group Corporation Annual Report 2021
on any one day shall
Subsidiary of TCL Industries Holdings Related Credit granting (bill
not exceed RMB 6 31,557.21
Co., Ltd. corporation acceptance)
billion
7. Other Major Related-Party Transactions
√ Applicable □ Not applicable
Index to relevant announcements:
Title of announcement Date of disclosure Website for disclosure
Announcement on TCL Finance Co., Ltd. Continuing to Provide Financial
March 11, 2021
Services for TCL Industries Holdings Inc. and Extending the Financial Service
Agreement between Them and the Related-Party Transaction http://www.cninfo.com.cn
Announcement on the Launch of Accounts Receivable Factoring and the May 22, 2021
Related-party Transaction
XV. Major Contracts and Execution Thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
There were no entrustment projects that brought profits and losses to the Company reaching more than 10% of the Company’s total
profits in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
There were no contracting projects that brought profits and losses to the Company reaching more than 10% of the Company’s total
profits in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
There were no lease projects that brought profits and losses to the Company reaching more than 10% of the Company’s total prof its
in the Reporting Period.
2. Major Guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
105
TCL Technology Group Corporation Annual Report 2021
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure
date of the Counter Term Guarantee
Actual Actual Collat Expir
guarantee Line of Type of guarante of for related
Obligor occurrenc guarantee eral (if ed or
line guarantee guarante e e (if guarant parties or
e date amount any) not
announceme any) ee not
nt
56
TCL King Electrical Joint
December August days-7.
Appliances (Huizhou) 345,000 327,138 liability / No Yes
7, 2018 29, 2020 36
Co., Ltd. guarantee
years
TCL King Electrical Joint 0.47-0.
December July 27,
Appliances (Chengdu) 60,000 51,653 liability / 49 No Yes
7, 2018 2021
Co., Ltd. guarantee years
Huizhou TCL Mobile Joint 41
December July 12,
Communication Co., 450,000 212,507 liability / days-0. No Yes
7, 2018 2021
Ltd. guarantee 5 years
TCL Communication Joint
December
Technology Holdings 120,000 - - liability / - No Yes
7, 2018
Limited guarantee
TCL Mobile Joint 0.25-0.
December September TCL
Communication (HK) 248,500 29,225 liability / 34 No Yes
7, 2018 16, 2021 Industrie
Company Limited guarantee years
s
Joint
TCT Mobile Overseas December Holding
6,625 - - liability / - No Yes
Limited 7, 2018 s Co.,
guarantee
Ltd.
Joint
December provided
TCT Mobile (US) Inc. 84,500 - - liability / - No Yes
7, 2018 counter
guarantee
guarante
Joint
TCT Mobile December es
31,000 - - liability / - No Yes
International Limited 7, 2018
guarantee
Joint
TCT Mobile Italy December
1,600 - - liability / - No Yes
S.R.L 7, 2018
guarantee
Joint
TCT MOBILE - December
12,000 - - liability / - No Yes
TELEFONES LTDA. 7, 2018
guarantee
30
TCL Home Joint
December March 2, days-1.
Appliances (Hefei) 140,000 68,280 liability / No Yes
7, 2018 2021 97
Co., Ltd. guarantee
years
TCL Home December June 29, Joint 36-189
16,000 4,929 / No Yes
Appliances 7, 2018 2021 liability days
106
TCL Technology Group Corporation Annual Report 2021
(Zhongshan) Co., Ltd. guarantee
Joint 18
TCL Air-Conditioner December March 13,
158,600 80,991 liability / days-3 No Yes
(Zhongshan) Co., Ltd. 7, 2018 2020
guarantee years
Joint
TCL Air Conditioner December January 18-190
131,600 13,480 liability / No Yes
(Wuhan) Co., Ltd. 7, 2018 19, 2021 days
guarantee
Zhongshan TCL Joint
December March 24, 32-364
Refrigeration 75,300 31,749 liability / No Yes
7, 2018 2021 days
Equipment Co., Ltd. guarantee
Guangdong TCL
Joint
Smart Heating & December July 23, 43-186
7,000 2,522 liability / No Yes
Ventilation Equipment 7, 2018 2021 days
guarantee
Co., Ltd.
TCL Home Joint
December June 18,
Appliances (Huizhou) 11,500 10,000 liability / 1 year No Yes
7, 2018 2021
Co., Ltd. guarantee
TCL Intelligent Joint
December
Technology (Hefei) 800 - - liability / - No Yes
7, 2018
Co., Ltd. guarantee
Joint
TCL Air-Conditioner December January 51-189
25,000 5,488 liability / No Yes
(Jiujiang) Co., Ltd. 7, 2018 25, 2021 days
guarantee
TCL Home Joint
December
Appliances (Hong 20,000 - - liability / - No Yes
7, 2018
Kong) Limited guarantee
Shenzhen TCL
Joint
Hangxiang Supply December
500 - - liability / - No Yes
Chain Service Co., 7, 2018
guarantee
Ltd.
Zhongshan Hhappy Joint
December
Tree Network 2,000 - - liability / - No Yes
7, 2018
Technology Co., Ltd. guarantee
Joint 80
TCL Tonly Electronics December April 23,
40,000 39,496 liability / days-3 No Yes
(Huizhou) Co., Ltd. 7, 2018 2021
guarantee years
TCL Commercial
Joint
Information December
14,000 - - liability / - No Yes
Technology (Huizhou) 7, 2018
guarantee
Co., Ltd.
TCL Very Lighting Joint
December October 8, 62-125
Technology (Huizhou) 4,000 1,034 liability / No Yes
7, 2018 2021 days
Co., Ltd. guarantee
107
TCL Technology Group Corporation Annual Report 2021
Joint
TCL Capital (Hong December
100,000 - - liability / - No Yes
Kong) Limited 7, 2018
guarantee
Huizhou Cool Friends Joint
December
Network Technology 13,000 - - liability / - No Yes
7, 2018
Co., Ltd. guarantee
SHIFENDAOJIA Joint
December September 100-11
Online Service Co., 3,000 77 liability / No Yes
7, 2018 15, 2021 4 days
Ltd. guarantee
Joint
TCL Technology Park December
27,000 - - liability / - No Yes
Co., Ltd. 7, 2018
guarantee
Guangzhou Yunsheng Joint
December
Tianji Technology 110,000 - - liability / - No Yes
7, 2018
Co., Ltd. guarantee
Guangzhou TCL
Joint
Science and December December 13
200,000 84,700 liability / No Yes
Technology 7, 2018 18, 2018 years
guarantee
Development Co., Ltd.
Shenzhen Bao’an TCL
Joint
Haichuanggu December
20,000 - - liability / - No Yes
Technology Park 7, 2018
guarantee
Development Co., Ltd.
TCL Industries Joint
December April 14, 1-3
Holdings (HK) 800,000 514,629 liability / No Yes
7, 2018 2020 years
Limited guarantee
Canyon Circuit Joint
December July 29, 98-183
Technology (Huizhou) 5,000 499 liability / No No
7, 2018 2021 days
Co., Ltd. guarantee
Joint
Huizhou Shenghua December
9,000 - - liability / - No No
Industrial Co., Ltd. 7, 2018
guarantee
Joint
Taiyang Electro-optic December
4,000 - - liability / - No No
(Huizhou) Co., Ltd. 7, 2018
guarantee
Joint
Huizhou Gaoshengda December
9,000 - - liability / - No No
Technology Co., Ltd. 7, 2018
guarantee
With
Shenzhen Qianhai Joint
March 11, December counter- 186-19
Qihang Supply Chain 40,000 33,799 liability / No Yes
2021 23, 2020 guarante 9 days
Management Co., Ltd. guarantee
e
Qihang March 11, Joint With
6,000 - - / - No No
Import&Export 2021 liability counter-
108
TCL Technology Group Corporation Annual Report 2021
Limited guarantee guarante
e
Shenzhen Qianhai With
Joint
Qihang International March 11, May 6, counter- 181
110,000 10,978 liability / No No
Supply Chain 2021 2021 guarante days
guarantee
Management Co., Ltd. e
Guarant
ee in
proporti
AGC New Electronic Joint
March 11, April 28, on to
Display Glass 55,000 29,447 liability / 8 years No No
2021 2020 sharehol
(Shenzhen) Co., Ltd.* guarantee
ding
percenta
ge
With
Qihang International Joint
March 11, counter-
Import & Export 50,000 - - liability / - No No
2021 guarante
Limited guarantee
e
Huizhou Zhongkai With
Joint
TCL Zhirong May 22, January 5, counter-
45,500 16,500 liability / 1 year No Yes
Technology 2021 2021 guarante
guarantee
Microcredit Co., Ltd. e
With
Guangzhou TCL Joint
May 22, February counter-
Internet Microcredit 100,000 30,000 liability / 1 year No Yes
2021 26, 2021 guarante
Co., Ltd. guarantee
e
Total actual amount of
Total approved line for such
406,500.00 such guarantees in 2,009,214.23
guarantees in Reporting Period (A1)
Reporting Period (A2)
Total actual balance of
Total approved line for such
such guarantees at end
guarantees at the end of Reporting 3,712,025.00 1,599,120.67
of Reporting Period
Period (A3)
(A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure
date of the Counter Term Guarantee
Actual Actual Collat Expir
guarantee Line of Type of guarante of for related
Obligor occurrenc guarantee eral (if ed or
line guarantee guarante e e (if guarant parties or
e date amount any) not
announceme any) ee not
nt
1
Wuhan China Star Joint
March 11, April 13, month
Optoelectronics 1,110,000 454,860 liability / / No No
2021 2016 -8
Technology Co., Ltd. guarantee
years
109
TCL Technology Group Corporation Annual Report 2021
Shenzhen China Star
3
Optoelectronics Joint
March 11, April 28, month
Semiconductor 3,650,000 1,014,620 liability / / No No
2021 2018 -8
Display Technology guarantee
years
Co., Ltd.
3
TCL China Star Joint
March 11, April 21, month
Optoelectronics 710,800 59,646 liability / / No No
2021 2015 -8
Technology Co., Ltd. guarantee
years
Wuhan China Star
3
Optoelectronics Joint
March 11, December month
Semiconductor 1,700,000 869,083 liability / / No No
2021 22, 2017 -8
Display Technology guarantee
years
Co., Ltd.
Huizhou China Star Joint
March 11, August 1-8
Optoelectronics 990,000 498,068 liability / / No No
2021 21, 2020 years
Technology Co., Ltd. guarantee
China Star
Joint
Optoelectronics August 10, December
500,000 159,393 liability / / 3 years No No
International (HK) 2021 5, 2020
guarantee
Limited
China Display
Joint
Optoelectronics March 11, March 31, 43-190
150,000 53,096 liability / / No No
Technology (Huizhou) 2021 2021 days
guarantee
Co., Ltd.
Wuhan China Display Joint
March 11, June 1, 1-5
Optoelectronics 50,000 223 liability / / No No
2021 2020 years
Technology Co., Ltd. guarantee
Guangdong Juhua Joint
March 11, November 6
Printed Display 20,000 266 liability / / No No
2021 19, 2020 months
Technology Co., Ltd. guarantee
Joint
March 11,
TCL Finance Co.,Ltd 200,000 - - liability / / - No No
2021
guarantee
Joint 263-
Highly Information March 11, June 17,
383,000 288,079 liability / / 633 No No
Industry Co., Ltd. 2021 2020
guarantee days
Beijing Joint
March 11, July 23,
HechengNuoxin 5,000 5,000 liability / / 1 year No No
2021 2021
Technology Co., Ltd. guarantee
Joint
Beijing Lingyun Data March 11, April 28, 89-394
131,500 20,688 liability / / No No
Technology Co., Ltd. 2021 2021 days
guarantee
Beijing Sunpiestore March 11, 87,000 June 19, 83,000 Joint / / 89-394 No No
110
TCL Technology Group Corporation Annual Report 2021
Technology Co., Ltd. 2021 2020 liability days
guarantee
Shaanxi Titi Joint
March 11, July 23,
Electronic Technology 3,000 3,000 liability / / 1 year No No
2021 2021
Co., Ltd. guarantee
Joint
TCL Technology Park March 11, April 24, 1-10
180,000 99,700 liability / / No No
(Huizhou) Co., Ltd. 2021 2020 years
guarantee
Joint
TCL Technology March 11, July 14,
400,000 192,000 liability / / 5 years No No
Investments Limited 2021 2020
guarantee
Joint
Ningbo TCL Equity March 11,
50,000 - - liability / / - No No
Investment Ltd. 2021
guarantee
Joint
TCL Moka April 28, October 2-3
360,000 66,949 liability / / No No
International Limited 2021 27, 2021 months
guarantee
Joint
April 28,
US Moka Limited 210,000 - - liability / / - No No
2021
guarantee
Huizhou Moka Joint
April 28,
Technology 50,000 - - liability / / - No No
2021
Development Co., Ltd. guarantee
Joint
Moka Technology April 28, January 8, 1-6
400,000 84,946 liability / / No No
(Guangdong) Co., Ltd. 2021 2021 months
guarantee
Guangzhou China Star
Optoelectronics Joint
April 10,
Semiconductor 1,750,000 - - liability / / - No No
2021
Display Technology guarantee
Co., Ltd.
Suzhou China Star Joint
August 10, May 7, 252
Optoelectronics 200,000 500 liability / / No No
2021 2021 days
Display Co., Ltd. guarantee
Suzhou China Star Joint
August 10, May 7, 252
Optoelectronics 400,000 3,660 liability / / No No
2021 2021 days
Technology Co., Ltd. guarantee
Joint
Highly (Tianjin) August 10,
50,000 - - liability / / - No No
Technology Co., Ltd. 2021
guarantee
Joint
Highly (Tianjin) August 10,
5,000 - liability / / - No No
E-Commerce Co., Ltd. 2021
guarantee
111
TCL Technology Group Corporation Annual Report 2021
Total approved line for such Total actual amount of
guarantees in the Reporting Period 13,745,300 such guarantees in the 2,034,131
(B1) Reporting Period (B2)
Total actual balance of
Total approved line for such
such guarantees at the
guarantees at the end of the Reporting 13,745,300 3,956,777
end of the Reporting
Period (B3)
Period (B4)
Guarantees provided between subsidiaries
Disclosure
date of the Counter Term Guarantee
Actual Actual Collat Expir
guarantee Line of Type of guarante of for related
Obligor occurrenc guarantee eral (if ed or
line guarantee guarante e e (if guarant parties or
e date amount any) not
announceme any) ee not
nt
Huhehaote Huanju Joint
November April 13, 9.5
New Energy 29,529 29,529.00 liability / / No No
26, 2014 2015 years
Development Co., Ltd. guarantee
Zhonghuan Energy Joint
June 24, July 21, 15
(Inner Mongolia) Co., 12,360 12,360.00 liability / / No No
2017 2017 years
Ltd. guarantee
Joint
Otog Banner Huanju June 24, August 10
21,328 21,328.28 liability / / No No
New Energy Co., Ltd. 2017 30, 2017 years
guarantee
Joint
Qinhuangdao Tianhui November January 12
10,100 10,100.00 liability / / No No
Solar Energy Co., Ltd. 11, 2017 19, 2018 years
guarantee
Inner Mongolia Joint
November May 31, 108,750.0
Zhonghuan Solar 108,750 liability / / 5 years No No
29, 2017 2018 0
Material Co., Ltd. guarantee
Joint
Qinhuangdao Tianhui September April 26, 10
13,629 13,629.18 liability / / No No
Solar Energy Co., Ltd. 6, 2018 2019 years
guarantee
Joint
GuyuanShengju New September October 8, 11
10,869 10,869.34 liability / / No No
Energy Co., Ltd. 6, 2018 2018 years
guarantee
Zhangjiakou Joint
September October 8, 11
Shengyuan New 14,740 14,740.00 liability / / No No
6, 2018 2018 years
Energy Co., Ltd. guarantee
Joint
Zhonghuan Hong December
0 - - liability / / No No
Kong Holding Limited 8, 2018 -
guarantee
Joint
Zhonghuan Hong August 22,
0 - - liability / / No No
Kong Holding Limited 2019 -
guarantee
112
TCL Technology Group Corporation Annual Report 2021
Joint
Zhonghuan Hong March 22, March 26,
65,000 52,259.08 liability / / 3 years No No
Kong Holding Limited 2021 2021
guarantee
Inner Mongolia
Joint
ZhonghuanXiexin March 22, April 30, 412,500.0
412,500 liability / / 7 years No No
Solar Material Co., 2021 2021 0
guarantee
Ltd.
Joint
Huansheng Solar March 22, April 1,
54,000 54,000.00 liability / / 5 years No No
(Jiangsu) Co., Ltd. 2021 2021
guarantee
Tianjin Huanzhi New Joint
January 21, July 20,
Energy Technology 131,500 57,096.72 liability / / 7 years No No
2021 2021
Co., Ltd. guarantee
Total approved line for such Total actual amount of
guarantees in the Reporting Period 663,000 such guarantees in the 575,856
(C1) Reporting Period (C2)
Total actual balance of
Total approved line for such
such guarantees at the
guarantees at the end of the Reporting 884,306 797,162
end of the Reporting
Period (C3)
Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total actual guarantee
Total guarantee line approved in the
amount in the Reporting 4,619,201
Reporting Period (A1+B1+C1) 14,814,800
Period (A2+B2+C2)
Total actual guarantee
Total approved guarantee line at the
balance at the end of the
end of the Reporting Period 6,353,059
18,341,631 Reporting Period (A4+
(A3+B3+C3)
B4+ C4)
Total actual guarantee amount (A4+B4+C4) as % of the
147.63%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, the actual
controller and their related parties (D) 1,558,197
Balance of debt guarantees provided directly or indirectly for
obligors with an over 70% debt/asset ratio (E) 2,805,115
Amount by which the total guarantee amount exceeds 50% of the
Company’s net assets (F) 4,201,347
Total of the three amounts above (D+E+F)
4,201,347
Joint liability possibly borne or already borne in the Reporting
-
Period for outstanding guarantees (if any)
Guarantees provided in breach of prescribed procedures (if any) -
113
TCL Technology Group Corporation Annual Report 2021
Note: ① * indicates that the vouchee’s company changed during the Reporting Period.
②The 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.
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
Unrecovered overdue
Type Funding source Amount Undue amount
amount
Bank’s wealth
Self-funded 1,044,652.90 249,674.54 -
management product
Securities firm’s wealth
Self-funded 30,000.00 30,000.00 -
management product
Trust plan Self-funded 120,000.00 70,000.00 -
Other Self-funded 361,044.17 279,078.22 -
Total 1,555,697.07 628,752.76
High-risk wealth management transactions with a significant single amount liquidity:
□ Applicable √ Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
(2) Loan Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of loan entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
Total amount of loan entrusted Funding source of loan entrusted
Undue amount Unrecovered overdue amount
for wealth management for wealth management
- Self-funded 23.28 -
High-risk loan transactions with a significant single amount liquidity:
□ Applicable √ Not applicable
Loan transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
114
TCL Technology Group Corporation Annual Report 2021
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI. Other Significant Events
√ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Announcement on the Incorporation of TCL Semiconductor Technology
2021-03-11
(Guangdong) Co., Ltd. and the Related-party Transaction
Announcement on Capital Increase in TCL CSOT 2021-05-22 http://www.cninfo.com.cn
Announcement on the Transfer of Subsidiary Equity and the Related-party
2021-09-28
Transaction
XVII. Significant Events of Subsidiaries
√ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Voluntary Announcement on Increasing the Equity-holdings in Tianjin
2021-02-04
Printronics Circuit Corporation
Voluntary Announcement on Increasing the Equity-holdings in Tianjin
2021-03-17
Printronics Circuit Corporation
Voluntary Announcement on Increasing the Equity-holdings in Tianjin
2021-03-18 http://www.cninfo.com.cn
Zhonghuan Semiconductor Co., Ltd.
Announcement on Increase and Investment in Expanding Production on the
2021-12-3
Generation 6 (or G6) Semiconductor Production Line of Wuhan CSOT
Voluntary Announcement on Public Delisting and Acquisition of Minority
2021-10-11
Shareholders’ Equity in Subsidiaries
115
TCL Technology Group Corporation Annual Report 2021
Part VII Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Increase/decrease in the Reporting
Before After
Period (+/-)
Shares Ratio Other Subtotal Shares Ratio
I.Restricted shares 1,374,578,078 9.80% -762,467,590 -762,467,590 612,110,488 4.36%
1. Shares held by state-owned
511,508,951 3.65% -511,508,951 -511,508,951 0 0.00%
legal persons
2. Shares held by other
772,504,348 5.51% -160,785,358 -160,785,358 611,718,990 4.36%
domestic investors
Among which: Shares held by
150,908,441 1.08% -150,908,441 -150,908,441 0 0.00%
domestic legal persons
Shares held by domestic natural
621,595,907 4.43% -9,876,917 -9,876,917 611,718,990 4.36%
persons
3. Shares held by foreign
90,564,779 0.65% -90,173,281 -90,173,281 391,498 0.00279%
investors
Among which: Shares held by
90,532,347 0.65% -90,532,347 -90,532,347 0 0.00%
foreign legal persons
Shares held by foreign natural
32,432 0.000231% 359,066 359,066 391,498 0.00279%
persons
II. Unrestricted shares 12,656,210,284 90.20% 762,321,649 762,321,649 13,418,531,933 95.64%
1、RMB-denominated ordinary
12,656,210,284 90.20% 762,321,649 762,321,649 13,418,531,933 95.64%
stock
III. Total shares 14,030,788,362 100.00% -145,941 -145,941 14,030,642,421 100.00%
Reasons for share changes:
√ Applicable □ Not applicable
1. During the Reporting Period, locked-up shares held by senior management decreased by 8,020,594 restricted shares, as
unrestricted shares decreased by the same number;
2. During the Reporting Period, on September 11, 2021, the Company disclosed the Announcement on Completing the
Repurchase and Retirement of Some Restricted Shares and Unchanged Share Transfer Price of Convertible Company Bonds . Ten
people have resigned for personal reasons, and the Company has repurchased and cancelled 145,941 restricted stocks collectively
held by them. As such, the total share capital of the Company decreased from 14,030,788,362 to 14,030,642,421 shares.
3. During the Reporting Period, on November 8, 2021, the Company disclosed the Reminder on the Release of the Restricted
116
TCL Technology Group Corporation Annual Report 2021
Shares for Asset Purchase via Share and Convertible Corporate Bonds Offering and Cash Payment and Matching Funds Raised in
2020, in which the date of listing and circulation of 511,508,951 restricted shares released was November 11, 2021, and the number
of unrestricted shares increased correspondingly, while the total number of the Company’s shares remains unchanged.
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity 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 2021
Basic earnings per share (RMB/share) 0.7463
Diluted earnings per share (RMB/share) 0.7354
Item December 31, 2021
Net profit attributable to ordinary shareholders of the Company
3.07
(RMB)
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Beginning Increase in Unlocked in Ending restricted Reason for Date of
Shareholder
restricted shares Reporting Period Reporting Period shares restriction unlocking
Wuhan Optics Restricted shares 2021-11-11
Valley Industrial in a share
511,508,951 0 511,508,951 0
Investment Co., offering
Ltd.
Star Century Restricted shares 2021-1-11
Enterprises 90,532,347 0 90,532,347 0 in a share
Limited offering
Ningbo Restricted shares 2021-1-11
XinglanZhonglian in a share
Enterprise offering
Management 42,521,163 0 42,521,163 0
Partnership
(Limited
Partnership)
Ningbo 38,380,684 0 38,380,684 0 Restricted shares 2021-1-11
117
TCL Technology Group Corporation Annual Report 2021
XingyongZhonglia in a share
n Enterprise offering
Management
Partnership
(Limited
Partnership)
Ningbo Restricted shares 2021-1-11
XingyuanZhonglia in a share
n Enterprise offering
Management 37,695,315 0 37,695,315 0
Partnership
(Limited
Partnership)
Ningbo Restricted shares 2021-1-11
XinglianZhonglian in a share
Enterprise offering
Management 32,311,279 0 32,311,279 0
Partnership
(Limited
Partnership)
Other Locked-up shares 2021
620,131,082 0 8,020,594 612,110,488 of senior
management
2019 Restricted Restricted shares 2021-9-10
Stock Incentive 1,497,257 0 1,497,257 0 granted as
Plan incentives
Total 1,374,578,078 0 762,467,590 612,110,488 -- --
II Issuance and Listing of Securities
1. Issuance of Securities (Preferred Shares Exclusive) in the Reporting Period
√ Applicable □ Not applicable
Name of
Issue price Number Termination Index to
stock and its Issued Date of
Issue date (or interest Listing date approved for date of disclosed
derivative number disclosure
rate) public trading transaction information
securities
Shares
Not
applicable
Type: convertible corporate bonds, convertible corporate bonds with warrants, corporate bonds
118
TCL Technology Group Corporation Annual Report 2021
Corporate Announcement
2021-03-29 3.65% 5,000,000 pcs 2021-04-07 5,000,000 pcs 2021-09-25 2021-03-24
bonds No.: 2021-024
Other derivative securities
Not
applicable
2. Changes in the Total Number of Shares, Shareholder Structure, and the Structure of Assets and
Liabilities
√ Applicable □ Not applicable
(1) For Changes in the total number of shares and shareholder structure, see “I. Share Changes” in this section.
(2) During the Reporting Period, all convertible corporate bonds “TCL Private Convertible 1” issued by the Company were conve rted
into shares, and the net assets increased.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Shareholders and Their Shareholdings
Unit: share
Number of
preference
Number of Number of
shareholders
ordinary preference
Total ordinary with resumed
shareholders at the shareholders with
shares held at 799,609 773,077 0 voting rights at 0
month-end prior to resumed voting
the period-end the month-end
the disclosure of rights at the
prior to the
this Report period-end
disclosure of this
Report
5% or greater shareholders or top 10 shareholders
Unrestricted Shares in pledge, marked or
Increase/decr
Shareholdi Total shares ordinary frozen
Name of Nature of ease in the Restricted
ng ratio held at the shares held
Shareholder shareholder Reporting shares held
(%) period-end at the Share Status Shares
Period
period-end
Li Dongsheng Domestic Put in pledge by
198,838,800
and his natural Li Dongsheng
8.26 1,158,599,393 0 610,181,602 548,417,791
acting-in-concer person/gener Put in pledge by
344,899,521
t party al legal JiutianLianchen
119
TCL Technology Group Corporation Annual Report 2021
person g
Huizhou
Investment State-owned
5.30 743,139,840 0 0 743,139,840
Holding Co., legal person
Ltd.
Wuhan Optics
Valley
State-owned
Industrial 3.98 558,552,396 47,043,445 0 558,552,396 Pledge 255,754,475
legal person
Investment Co.,
Ltd.
Hong Kong
Securities Foreign
3.19 447,848,011 -75,894,556 0 447,848,011
Clearing legal person
Company Ltd.
China Securities
Domestic
Finance
general legal 2.66 373,231,553 0 0 373,231,553
Corporation
person
Limited
Tibet Tianfeng
Domestic
Enterprise
general legal 1.76 246,568,838 -109,294,877 0 246,568,838
Management
person
Co., Ltd.
TCL
Technology
Group Fund,
Corporation - wealth
0.81 113,143,154 113,143,154 0 113,143,154
2021 to 2023 management
Employee Stock product, etc.
Ownership Plan
(Phase I)
Sinatay Life
Fund,
Insurance Co.,
wealth
Ltd. - 0.74 104,190,172 25,499,072 0 104,190,172
management
Conventional
product, etc.
Product
ICBC Credit
Suisse Fund -
Fund,
Agricultural
wealth
Bank of China - 0.53 74,761,500 0 0 74,761,500
management
ICBC Credit
product, etc.
Suisse China
Securities
120
TCL Technology Group Corporation Annual Report 2021
Financial Asset
Management
Plan
Southern Asset
Management-
Agricultural
Fund,
Bank of China-
wealth
Southern China 0.53 74,761,500 0 0 74,761,500
management
Securities
product, etc.
Financial Asset
Management
Plan
Strategic investor or general
legal person becoming a
Not applicable
top-10 shareholder in a rights
issue
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
Note on the above
Partnership) became persons acting in concert by signing the Agreement on Concerted Action,
shareholders’ associations or
holding 1,158,599,393 shares in total and becoming the largest shareholder of the
concerted actions
Company.
Explain if any of the
shareholders above was
involved in entrusting/being Not applicable
entrusted with voting rights
or waiving voting rights
Special account for share The top 10 shareholders above include “The Securities Account of TCL Technology Group
repurchases among the top 10 Corporation for Repurchases”, but they are not listed in the above top 10 shareholders. As of the end
shareholders of the Reporting Period, there were 293,415,852 shares in the account.
Top 10 unrestricted ordinary shareholders
Shares by class
Name of Shareholder Unrestricted shares held at the period-end
Shares by class Shares
RMB-denomina
Huizhou Investment Holding
743,139,840 ted ordinary 743,139,840
Co., Ltd.
stock
Wuhan Optics Valley RMB-denomina
Industrial Investment Co., 558,552,396 ted ordinary 558,552,396
Ltd. stock
RMB-denomina
Li Dongsheng and his
548,417,791 ted ordinary 548,417,791
acting-in-concert party
stock
Hong Kong Securities 447,848,011 RMB-denomina 447,848,011
121
TCL Technology Group Corporation Annual Report 2021
Clearing Company Ltd. ted ordinary
stock
RMB-denomina
China Securities Finance
373,231,553 ted ordinary 373,231,553
Corporation Limited
stock
RMB-denomina
Tibet Tianfeng Enterprise
246,568,838 ted ordinary 246,568,838
Management Co., Ltd.
stock
TCL Technology Group
RMB-denomina
Corporation - 2021 to 2023
113,143,154 ted ordinary 113,143,154
Employee Stock Ownership
stock
Plan (Phase I)
RMB-denomina
Sinatay Life Insurance Co.,
104,190,172 ted ordinary 104,190,172
Ltd. - Conventional Product
stock
ICBC Credit Suisse Fund -
Agricultural Bank of China - RMB-denomina
ICBC Credit Suisse China 74,761,500 ted ordinary 74,761,500
Securities Financial Asset stock
Management P lan
Southern Asset Management-
Agricultural Bank of China- RMB-denomina
Southern China Securities 74,761,500 ted ordinary 74,761,500
Financial Asset Management stock
Plan
Related or acting-in-concert
parties among top 10
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
unrestricted outstanding
Partnership) became persons acting in concert by signing the Agreement on Concerted Action,
shareholders, as well as
holding 1,158,599,393 shares in total and becoming the largest shareholder of the
between top 10 unrestricted
Company.
outstanding shareholders and
top 10 shareholders
Top 10 ordinary shareholders Tibet Tianfeng Enterprise Management Co., Ltd., a shareholder of the Company, holds 154,173,746
involved in securities margin shares through the general securities account, and holds 92,395,092 shares through the credit
trading securities account, with a total of 246,568,838 shares actually held.
Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
122
TCL Technology Group Corporation Annual Report 2021
2. The Company’s Controlling Shareholders
Explanation of The Company’s Absence of Controlling Shareholders
Mr. Li Dongsheng and Ningbo JiutianLiancheng Equity Investment Partnership (Limited Partnership)
became persons acting in concert by signing the Agreement on Concerted Action, holding 1,158,599,393 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 his 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.
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The Company’s controlling shareholder did not change during the Reporting Period.
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 with a greater than 10% interest at the ultimate control level:
□ Applicable √ Not applicable
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The Company’s actual controller did not change during the Reporting Period.
4. The cumulative pledged shares of the Company’s controlling shareholder or the largest shareholder and
its acting-in-concert parties account for 80% of the company shares held by them.
□ Applicable √ Not applicable
5. Other Corporate Shareholders Holding 10% or Greater
□ Applicable √ Not applicable
123
TCL Technology Group Corporation Annual Report 2021
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV. Specific Implementation of Share Repurchase During the Reporting Period
Progress on any share repurchase:
√ Applicable □ Not applicable
The
proportion
of
Discl repurchased
Purpose Quantity of
osure Amount of Proposed shares to the
Number of shares to be Proportion to total share of share repurchased
time shares to be repurchase underlying
repurchased capital repurch shares
of the repurchased period shares
ase (shares)
plan involved in
the equity
incentive
plan
According to the upper limit of
According to the upper
the total amount of repurchase Within 12
limit of the total amount of
and the upper limit of The total months after
repurchase and the upper
repurchased share price, it is amount of the 9th
limit of repurchased share For
estimated that the number of share Meeting of
price, it is estimated that employ
eligible shares accounts for repurchase is the
the number of eligible ee stock
about 0.42% of the Company’s not less than Company’s
June shares is no less than owners
total share capital at that time. RMB600 Seventh
21, 58.3333 million. According hip 80,663,588 0.57%
According to the lower limit of million Board of
2021 to the lower limit of the plans or
the total amount of repurchase (inclusive) and Directors
total amount of repurchase equity
and the upper limit of the not more than deliberates
and the upper limit of the incentiv
repurchased share price, it is RMB700 and approves
repurchased share price, it es
estimated that the number of million this share
is estimated that the
eligible shares accounts for (inclusive). repurchase
number of eligible shares is
about 0.36% of the Company’s plan
about 50 million.
total share capital at that time.
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
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TCL Technology Group Corporation Annual Report 2021
Part VIII 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
Bond Date of Outstanding Coupon Place of
Bond name Abbr. Value date Maturity repayment and
code issuance balance rate transaction
interest
payment
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
April 19, April 19,
Publicly Offered in 17TCL01 112518 April 18, 2017 100,000 3.40% principal Stock
2017 2022
2017 to Qualified repayable in full Exchange
Investors (Tranche 1) upon maturity
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
Publicly Offered in 17TCL02 112542 July 6, 2017 July 7, 2017 July 7, 2022 15,700 3.45% principal Stock
2017 to Qualified repayable in full Exchange
Investors（ Tranche 2) upon maturity
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
June 6, June 6,
Publicly Offered in 18TCL01 112717 June 5, 2018 17,001.90 4.00% principal Stock
2018 2023
2018 to Qualified repayable in full Exchange
Investors (Tranche 1) upon maturity
TCL Corporation
Interest payable
Corporate Bonds
annually and Shenzhen
Publicly Offered in August 17, August 20, August 20,
18TCL02 112747 200,000 3.55% principal Stock
2018 to Qualified 2018 2018 2023
repayable in full Exchange
Investors（ Tranche 2)
upon maturity
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TCL Technology Group Corporation Annual Report 2021
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
May 20, May 20,
Publicly Offered in 19TCL01 112905 May 17, 2019 100,000 4.33% principal Stock
2019 2024
2019 to Qualified repayable in full Exchange
Investors (Tranche 1) upon maturity
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
July 23, July 23,
Publicly Offered in 19TCL02 112938 July 19, 2019 100,000 4.30% principal Stock
2019 2024
2019 to Qualified repayable in full Exchange
Investors (Tranche 2) upon maturity
TCL Corporation Interest payable
Corporate Bonds annually and Shenzhen
October 17, October 21, October 21,
Publicly Offered in 19TCL03 112983 200,000 4.20% principal Stock
2019 2019 2024
2019 to Qualified repayable in full Exchange
Investors (Tranche 3) upon maturity
Investor eligibility (if any) For qualified investors / For professional investors
Trading system applicable Not applicable
Risk of termination of listing and trading (if
No
any) and countermeasures
Overdue bonds:
□ Applicable √ Not applicable
2. Triggering and implementation of issuer or investor option clauses and investor protection clauses
√ Applicable □ Not applicable
In accordance with the provisions of the Prospectus for TCL Technology Group Corporation Corporate
Bonds Publicly Offered in 2018 to Qualified Investors (Tranche 1), the bondholders of 18TCL01 elected to sell
back all or part of their 18TCL01 to TCL Technology Group Corporation during the sell-back registration period
(May 11, 2021 to May 17, 2021) at the sell-back price of RMB100/bond (excluding interest). The coupon rate
decreased from 5.48% to 4.00% 2 years after the existence period, and the sell-back fund was released on June 7,
2021. According to the data provided by the Shenzhen Branch of China Securities Depository and Clearing
Corporation Limited, the number of 18TCL01 sold back was 8,299,810 during the sell-back registration period,
and the sell-back amount was RMB829,981,000. As indicated in the Announcement on Sell-back Declaration
Results, the issuer would resell the sold-back bonds from June 8, 2021 to July 6, 2021, and the number of bonds to
be resold would be 8,299,810. Based on cost considerations, the Company decided not to resell the bonds of the
tranche, so the number of resold bonds of the tranche was 0. After the implementation of the resale, the Company
applied to the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited for the
125
TCL Technology Group Corporation Annual Report 2021
cancellation of the 8,299,810 bonds not resold. After the cancellation, the number of remaining 18TCL01
depository bonds was 1,700,190.
In accordance with the provisions of the Prospectus for TCL Technology Group Corporation5 Corporate
Bonds Publicly Offered in 2018 to Qualified Investors (Tranche 1), the bondholders of 18TCL02 elected to sell
back all or part of their 18TCL02 to TCL Technology Group Corporation during the sell-back registration period
(July 23, 2021 to July 29, 2021) at the sell-back price of RMB100/bond (excluding interest). The coupon rate
decreased from 5.3% to 3.55% 2 years after the existence period, and the sell-back fund was released on August
20, 2021. According to the data provided by the Shenzhen Branch of China Securities Depository and Clearing
Corporation Limited, the number of 18TCL02 sold back during the sell-back registration period was 11,871,052,
and the sell-back amount was RMB1,187,105,200. As indicated in the Announcement on Sell-back Declaration
Results, the issuer would resell the sold-back bonds from August 23, 2021 to October 12, 2021, and the number of
bonds to be resold would be 11,871,052. According to the Announcement on the Implementation Results of Bond
Resale, the number of bonds resold in this tranche was 11,871,052, and the average resale price was
RMB100.254/bond, of which 11,871,052 bonds were resold through manual transfer, and the number of
remaining 18TCL02 depository bonds was 20,000,000.
3. Intermediary Organizations
Accountants
Name of intermediary Contact of intermediary
Name of bond project Office address writing Tel.
organization organization
signatures
19TCL03, 19TCL02,
19TCL01, 18TCL02, GuotaiJunan Securities 33F, One Museum Place, Xu Lei, Wu Lei, Li 021
-
18TCL01, 17TCL02, Co., Ltd. 669 Xinzha Road, Shanghai Hongyu -38032198
17TCL01
19TCL03, 19TCL02, Yang Fang, Deng
Citic Office Tower, 48
19TCL01, 18TCL02, Xiaoqiang, Song Yuxi, 010
CITIC Securities Co., Ltd. Liangmaqiao Road, -
18TCL01, 17TCL02, Chen Donghui, Peng -60833575
Chaoyang District, Beijing
17TCL01 Jiajun
19TCL03, 19TCL02,
F1-8, CDB Building, 29
19TCL01, 18TCL02, China Development Bank Ji Tuo, Zhao Liang, Zhao 010
Fuchengmen Outer Avenue, -
18TCL01, 17TCL02, Securities Co., Ltd. Zhipeng -88300907
Xicheng District, Beijing
17TCL01
5F, 83 Deshengmen Outer
19TCL03, 19TCL02, 010
TF Securities Co., Ltd. Avenue, Xicheng District, - Huang Yike, Liu Yue
19TCL01 -56702804
Beijing
19TCL03, 19TCL02, ShenwanHongyuan 19 Taipingqiao Avenue, Zhou Fan, Ouyang 010
-
19TCL01 Securities Underwriting Xicheng District, Beijing Wenjian -88085933
126
TCL Technology Group Corporation Annual Report 2021
Co., Ltd.
26F, China Travel Hong
18TCL02, 18TCL01, Huatai United Securities Kong Building, CBD Yu Shouxiang, Tian 0755
-
17TCL02, 17TCL01 Co., Ltd. Central Plaza, Futian Jianrong -82492000
District, Shenzhen
19TCL03, 19TCL02,
F408, Yuanyang Building,
19TCL01, 18TCL02, Beijing Jia Yuan Law Wen Liangjuan, Wang 010
158 Fuxingmen Inner -
18TCL01, 17TCL02, Offices Ying -66413377
Avenue, Beijing
17TCL01
Building 6, Galaxy SOHO,
19TCL03, 19TCL02,
China Chengxin No. 2 Nanzhuxuan Hutong,
19TCL01, 18TCL02, 010
International Credit Chaoyangmen Inner - Yan Yan
18TCL01, 17TCL02, -66428877
Rating Co., Ltd. Avenue, Dongcheng
17TCL01
District, Beijing
Qiu Junzhou,
19TCL03, 19TCL02, Jiang
Da Hua Certified Public Building 7, Yard 16, West
19TCL01, 18TCL02, Xianmin, Li 0755
Accountants (Special Fourth Ring Middle Road, Jiang Xianmin
18TCL01, 17TCL02, Bingxin, -82900734
General Partnership) Haidian District, Beijing
17TCL01 Zhang
Yuanyuan
Whether the above organizations are changed in the Reporting Period
□ Yes √ No
4. Use of Funds Raised
Unit: RMB'0,000
Whether
consistent with
Total Operation of
Rectification of the purpose,
amount of special
Name of bond project Used amount Unused amount illegal use of usage plan and
raised fund-raising
raised funds other agreements
funds account
promised in the
prospectus
Set up a
fund-raising
19TCL03, 19TCL02,
account to ensure
19TCL01, 18TCL02,
1,100,000 1,100,000 0 that the funds Not applicable Consistent
18TCL01, 17TCL02,
raised are
17TCL01
earmarked for
special purposes
The raised funds are used for construction projects
□ Applicable √ Not applicable
127
TCL Technology Group Corporation Annual Report 2021
The funds raised by the above bonds are changed by the Company in the Reporting Period
□ Applicable √ Not applicable
5. Adjustments to credit ratings in the Reporting Period:
□ Applicable √ Not applicable
6. Execution and changes of guarantees, repayment plans and other repayment guarantee measures in the
Reporting Period, and impact on bond investor equity:
□ Applicable √ Not applicable
III. Debt financing instrume nts of a non-financial enterprise:
√ Applicable □ Not applicable
1. General information of debt financing instruments of a non-financial enterprise:
Unit: RMB'0,000
Way of
principal
Date of Outstanding Place of
Bond name Abbr. Bond code Value date Maturity Coupon rate repayment
issuance balance transaction
and interest
payment
TCL Interest
Technology payable
Group annually
Corporation 20TCL J. 102000509. and Inter-bank
2020-03-25 2020-03-27 2023-03-27 300,000 3.6%
Medium-Te MTN001 IB principal market
rm Notes in repayable in
2020 full upon
(Tranche 1) maturity
TCL
Technology
Interest
Group
payable
Corporation
annually
Medium-Te
21TCL J. 102100966. and Inter-bank
rm Notes in 2021-05-10 2021-05-12 2024-05-12 200,000 4.15%
MTN001 IB principal market
2021
repayable in
(Tranche
full upon
2021)
maturity
(High-Grow
th Debt)
128
TCL Technology Group Corporation Annual Report 2021
Investor eligibility (if any) Not applicable
Trading system applicable Not applicable
Risk of termination of listing and
Not applicable
trading and countermeasures
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
Accountants Contact of
Name of bond Name of intermediary
Office address writing intermediary Tel.
project organization
signatures organization
55 Fuxingmen Inner
20TCL J. MTN001, Industrial and Commercial
Avenue, Xicheng District, - Dai Ying 010 -66109649
21TCL J. MTN001 Bank of China
Beijing
69 Jianguomen Inner
20TCL J. MTN001 Agricultural Bank of China Avenue, Dongcheng - An Liwei 010 -85109045
District, Beijing
China Construction Bank 25 Jinrong Avenue,
21TCL J. MTN001 - Zhou Peng 010 -67596478
Corporation Xicheng District, Beijing
Building 6, Galaxy
SOHO, No. 2
China Chengxin
20TCL J. MTN001, Nanzhuxuan Hutong,
International Credit Rating - Yan Yan 010 -66428877
21TCL J. MTN001 Chaoyangmen Inner
Co., Ltd.
Avenue, Dongcheng
District, Beijing
Da Hua Certified Public Building 7, Yard 16, West Qiu Junzhou
20TCL J. MTN001,
Accountants (Special Fourth Ring Middle Road, and Jiang Jiang Xianmin 0755 -82900734
21TCL J. MTN001
General Partnership) Haidian District, Beijing Xianmin
Whether the above organizations are changed in the Reporting Period
□ Yes √ No
4. Use of Funds Raised
Unit: RMB'0,000
Total amount of Operation of Rectification of Whether consistent with the
Name of bond project Used amount Unused amount
raised funds special illegal use of purpose, usage plan and
129
TCL Technology Group Corporation Annual Report 2021
fund-raising raised funds other agreements promised
account in the prospectus
Set up a
fund-raising
account to
20TCL J. MTN001,
500,000 500,000 0 ensure that the Not applicable Consistent
21TCL J. MTN001
funds raised are
earmarked for
special purposes
The raised funds are used for construction projects
□ Applicable √ Not applicable
The funds raised by the above bonds are changed by the Company in the Reporting Period
□ Applicable √ Not applicable
5. Adjustments to credit ratings in the Reporting Period:
□ Applicable √ Not applicable
6. Execution and changes of guarantees, repayment plans and other repayment guarantee measures in the
Reporting Period, and impact on bond investor equity:
□ Applicable √ Not applicable
IV Convertible Corporate Bonds:
√ Applicable □ Not applicable
1. Bond-to-stock price adjustments:
Name Price before adjustment Adjusted price Start date for the adjustment
(RMB/share) (RMB/share)
TCL Private Convertible 1 (convertible 3.91 3.79 May 19, 2021
bond code： 124016)
TCL Private Convertible 2 (convertible 8.00 7.88 May 19, 2021
bond code： 124017)
2. Cumulative bond-to-stock conversions:
√ Applicable □ Not applicable
130
TCL Technology Group Corporation Annual Report 2021
The
proportion of
converted The
Cumulative
Start and end Cumulative shares to the proportion of
Abbreviation Total amount amount of Unconverted
date of Total quantity number of Company’s unconverted
of convertible issued converted shares
bond-to-stock issued (bond) converted total issued shares to the
bond (RMB) shares (RMB)
conversion shares (share) shares before total issued
(RMB)
the start date amount
of the
conversion
November
TCL Private 11, 2021 to
6,000,000 600,000,000 600,000,000 158,311,345 1.128% 0 0
Convertible 1 November
10, 2022
3. Top 10 holders of convertible corporate bonds
Percentage of
Number of convertible Amount of convertible
convertible
Serial corporate bonds held corporate bonds held
Name of holder Nature of holder corporate bonds
No. at the period-end at the period-end
held at the
(bond) (RMB)
period-end
Domestic general
1 GF Securities Co., Ltd. 3,900,000 390,000,000 15.00%
legal person
State-owned legal
2 Guosen Securities Co., Ltd. 3,000,000 300,000,000 11.54%
person
Fullgoal Fund Management Domestic general
3 2,500,000 250,000,000 9.62%
Co., Ltd. legal person
State-owned legal
4 Western Securities Co., Ltd. 1,700,000 170,000,000 6.54%
person
China Life Pension
Sustaining Fixed Income Fund, wealth
5 Pension Product No. management 1,300,000 130,000,000 5.00%
9-China Merchants Bank product, etc.
Co., Ltd.
China Life Pension
Hongxin Fixed Income Fund, wealth
6 Pension Product- Industrial management 1,300,000 130,000,000 5.00%
and Commercial Bank Of product, etc.
China Limited
131
TCL Technology Group Corporation Annual Report 2021
ICBC Credit Suisse Asset Domestic general
7 1,000,000 100,000,000 3.85%
Management Co., Ltd. legal person
ShenwanHongyuan Group Domestic general
8 1,000,000 100,000,000 3.85%
Co., Ltd. legal person
China Life Yongfeng
Enterprise Annuity Fund, wealth
9 Collective Plan- management 1,000,000 100,000,000 3.85%
Agricultural Bank of China product, etc.
Limited
China Life Insurance
(Group) Company Fund, wealth
10 Enterprise Annuity Plan- management 1,000,000 100,000,000 3.85%
Agricultural Bank of China product, etc.
Limited
4. Significant changes to the profitability, assets and credit standing of the guarantor
□ Applicable √ Not applicable
5. Liability condition and credit rating changes of the Company at the end of the Reporting Period, as well
as future cash arrangements for repayment
For details of the Company’s debt/asset ratio, interest coverage ratio, debt repayment ratio, interest payment
ratio and other relevant indicators by the end of the Reporting Period, see “Selected Financial Information of the
Company in the Past Two Years” in this section.
The company issued directional convertible bonds without debt rating.
V. Consolidated loss of the Reporting Period over 10% of the 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. Selected financial information of the Company in the past two years:
132
TCL Technology Group Corporation Annual Report 2021
Unit: RMB'0,000
Change of December
Item End of the Reporting Period End of the prior year 31, 2021 over December 31,
2020
Current ratio 1.08 0.92 15.43%
Debt/asset ratio 61.2% 65.1% -3.84%
Quick ratio 0.83 0.66 16.95%
2021 2020 YoY change
Net profit before non-recurring 1,398,268 351,280 298.05%
gains and losses
Debt to EBITDA ratio 20.86% 11.36% 9.50%
Interest coverage ratio 4.57 2.58 77.50%
Cash coverage ratio 8.54 6.45 32.52%
EBITDA coverage ratio (times) 8.39 5.98 40.28%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
In the Reporting Period, benefiting from growth in the industry, in addition to the Company's fast production ramp-up and
acquisition of Zhonghuan, the Company saw a year-on-year surge in size, operating performance and profitability, resulting in great
changes seen in the financial indicators in the table above.
Part IX Financial Statements
133
Da Hua Certified Public Accountants (Special General Partnership)
12/F, Building 7, Yard 16, Middle West Fourth Ring Road, Haidian District, Beijing [100039]
Tel: 86 (10) 5835 0011 Fax: 86 (10) 5835 0006
www.dahua-cpa.com
Auditor’s Report
DHSZ [2022] No. 000588
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 balance sheets of the
consolidated company and parent company (the Company as the parent
exclusive of subsidiaries) as of December 31, 2021, the statements on
income, cash flow and changes in shareholder equity of the consolidated
company and parent company for the year ended, as well as the notes to
financial statements.
In our opinion, the financial statements referred to above present
fairly, in all material respects. The financial position of the consolidated
company and parent company as of December 31, 2021, and the
consolidated company and parent company operations results and cash
flow for the year ended conform with the Corporate Accounting
Standards.
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.
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
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Auditor's Report DHSZ [2022] No.000588
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 36. “Revenue recognition” under Note III to the
financial statements and 58. Operating 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 We looked into and assessed whether the management's
period was approximately RMB163.5 design and operation of key internal controls in respect
to revenue recognition were effective or not;
billion, representing an increase of
RMB86.8 billion or 113% year-on-year
We looked into and assessed whether the management's
from RMB76.7 billion of last year. selection and implementation of the policies related to
As operating revenue is one of the revenue recognition complied with the Corporate
Company’s key operating indicators Accounting Standards;
with the hereditary risk of the
management manipulating the revenue We selected samples of recorded transactions with
revenue for the year and examined relevant supporting
recognition time point for the purpose of documents involved during the transaction process,
achieving a specific objective or including outbound delivery orders, customer receipt
expectation, and the revenue recognition records, sale invoices, customs declarations and fund
for the current period has a big influence receipt proofs;
on the financial statements, we have
We selected samples of the recorded transactions with
identified revenue recognition as a key revenue around the balance sheet date and examined
audit matter. outbound delivery orders and other supporting
documents to assess whether the revenue had been
recorded for the appropriate accounting period;
We obtained 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;
We executed confirmation procedures with key accounts
and inquired about the sales amount and the account
receivable balance incurred for the current period;
We checked to see whether revenue-related information
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 Corporate Accounting Standards.
III. Key Audit Matters (continued)
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Auditor's Report DHSZ [2022] No.000588
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.
Related parties
Please refer to "X. Related parties and related transactions" in 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 2021, the Company's daily related We looked into and evaluated the internal controls adopted
transactions amounted to about by management for identifying and disclosing the
RMB29.7 billion, representing an relationships between related parties and related
increase of about 26% from the last transactions, and reviewed the effectiveness of the design
period. and implementation of the internal controls;
The integrity of the disclosure of related
parties and related transactions, the We acquired the statements of management on the integrity
of the relationships between related parties and related
authenticity of related transactions and transactions, etc., and also acquired the list of relationships
the fairness of transaction prices will between related parties provided by the management, and
have an important impact on the fair checked this with the information acquired from other
presence of the financial statements. public channels;
Therefore, we identify the related
balance and transactions as key matters We checked the customers, suppliers and other stakeholders
that do business with the Company to identify whether there
in this audit. were any omissions for the related parties. We also acquired
the resolutions of the board of directors and the
shareholders' meeting related to related transactions,
checked the decision-making authority and procedures of
the related transactions, judged the legality and compliance
of the related transactions, and looked into whether they had
been properly authorized and approved;
We compared the prices for selling goods to the related
parties with those of similar products sold to unrelated
parties to judge the fairness of the prices of related
transactions;
We acquired the occurrence amount and balance details of
related transactions, and checked 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; in addition, we
executed confirmation procedures for the amounts and
balances of the related transactions with important related
parties;
We looked into and evaluated the internal controls adopted
by management for identifying and disclosing the
relationships between related parties and related
transactions, and reviewed the effectiveness of the design
and implementation of the internal controls;
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Auditor's Report DHSZ [2022] No.000588
The integrity of the disclosure of related parties and related transactions, the authenticity of related transactions
and the fairness of transaction prices will have an important impact on the fairness of the financial statements.
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 2021 Annual Report other than 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 Corporate
Accounting Standards, 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 have 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 Financia l
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. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with the China
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Auditor's Report DHSZ [2022] No.000588
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．Identify and assess the risks of material misstatements in
financial statements, and whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our
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．Gain an understanding of internal controls relevant to the audit in
order to design audit procedures that are appropriate to the circumstances.
3．Evaluate the appropriateness of accounting policies used and
determine how reasonable accounting estimates and related disclosures
made by the management are.
4．Conclude on the appropriateness of the management's use of the
going concern assumption of accounting and, based on the audit evidence
obtained, and draw 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．Evaluate the overall presentation, structure and content of the
financial statements and whether the financial statements represent the
underlying transactions and events in a manner that maintains fair
presentation.
6．Obtain sufficiently appropriate audit evidence regarding the
financial information of the entities or business activities within the
Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the
Company audit. We remain solely responsible for our audit opinions.
Page 5
Auditor's Report DHSZ [2022] No.000588
We communicate 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 provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding
independence, and communicate 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 6
Auditor's Report DHSZ [2022] No.000588
(There is no text on this page, which is used for the signature and seal of
Audit Report DHSZ [2022] No. 000588)
Da Hua Certified Public
Accountants(Special General Chinese CPA:
Partnership)
(Engagement
Qiu Junzhou
Partner)
Beijing China Chinese CPA:
Jiang Xianmin
April 27, 2022
Page 7
TCL Technology Group Corporation
Consolidated Balance Sheet
___________(RMB’000)_____________
Assets Note V December 31, 2021 December 31, 2020
Current assets
Monetary assets 1 31,393,692 21,708,905
Held-for-trading financial assets 2 7,601,256 5,300,046
Derivative financial assets 3 70,929 453,578
Notes receivable 4 776,202 595,685
Accounts receivable 5 18,238,782 12,557,614
Receivables financing 6 2,217,639 2,176,744
Prepayments 7 2,306,325 1,355,653
Other receivables 8 4,458,621 2,793,640
Inventories 9 14,083,357 8,834,958
Contract assets 10 233,529 183,650
Held-for-sale assets 11 - 360,936
Other current assets 12 5,802,960 9,367,055
Total current assets 87,183,292 65,688,464
Non-current assets
Loans and advances to customers 13 - 981,876
Debt investments 14 - 119,350
Other debt investments 15 - 152,063
Long-term receivables 16 651,118 778,889
Long-term equity investments 17 25,640,578 24,047,036
Investments in other equity instruments 18 927,319 1,333,676
Other non-current financial assets 19 2,704,038 3,055,595
Investment property 20 761,902 1,664,201
Fixed assets 21 113,579,297 92,829,902
Construction in progress 22 36,965,885 31,508,311
Right-of-use assets 23 2,426,911 -
Intangible assets 24 13,982,647 10,054,045
Development costs 25 2,508,419 2,103,995
Goodwill 26 9,158,841 6,943,265
Long-term deferred expenses 27 2,640,530 2,536,670
Deferred income tax assets 28 2,153,346 1,578,088
Other non-current assets 29 7,449,009 12,532,853
Total non-current assets 221,549,840 192,219,815
Total assets 308,733,132 257,908,279
Person-in-char
ge of the
Legal Person-in-charge of financial
representative: Li Dongsheng financial affairs: Li Jian department: Xi Wenbo
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 shareholder equity: Note V December 31, 2021 December 31, 2020
Current liabilities
Short-term borrowings 30 9,341,427 12,263,714
Borrowings from the Central Bank 31 1,437,062 469,834
Customer deposits and deposits from
other banks and financial institutions 32 666,056 2,850,139
Held-for-trading financial liabilities 33 925,035 527,901
Derivative financial liabilities 34 22,205 384,904
Notes payable 35 3,275,296 4,725,612
Accounts payable 36 24,297,860 16,468,932
Advances from customers 37 5,794 78,597
Contract liabilities 38 2,593,882 2,004,004
Financial assets sold under repurchase
39
agreements - 50,080
Employee compensation payable 40 3,311,933 1,856,664
Taxes and levies payable 41 1,238,849 670,059
Other payables 42 19,386,888 14,869,433
Current portion of non-current
43
liabilities due within a one-year period 13,006,765 13,429,670
Other current liabilities 44 1,269,887 366,971
Total current liabilities 80,778,939 71,016,514
Non-current liabilities
Long-term borrowings 45 87,279,082 73,589,403
Bonds payable 46 13,066,281 18,040,773
Lease liabilities 47 1,102,072 -
Long-term payables 48 671,344 1,280,300
Long-term employee compensation
40
payable 669,931 27,858
Deferred income 49 2,361,205 1,509,867
Deferred income tax liabilities 28 3,158,986 2,386,497
Total non-current liabilities 108,308,901 96,834,698
Total liabilities 189,087,840 167,851,212
Share capital 50 14,030,642 14,030,788
Other equity instruments 51 200,334 230,241
Capital reserves 52 6,079,267 5,442,385
Less: Treasury stock 53 1,885,557 1,913,029
Other comprehensive income 74 (409,447) (145,573)
Surplus reserves 54 2,550,173 2,452,892
Specific reserves 55 1,549 211
General risk reserve 56 8,934 386
Retained earnings 57 22,458,340 14,009,494
Total equity attributable to shareholders of
the Company as the parent 43,034,235 34,107,795
Non-controlling interests 76,611,057 55,949,272
Total shareholders’ equity 119,645,292 90,057,067
Total liabilities and shareholder equity 308,733,132 257,908,279
Person-in-charge
Legal Person-in-chargeof of the financial
Representative: Li Dongsheng financial affairs: Li Jian department: Xi Wenbo
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 2021 2020
1. Total revenue 163,690,643 76,830,401
Of which: Revenue 58 163,540,560 76,677,238
Interest income 59 150,083 153,163
Less: Cost of sales 58 131,058,658 66,242,278
Interest expenditures 59 34,936 33,034
Taxes and levies 60 647,935 300,776
Selling expenses 61 1,919,285 886,817
Administrative expenses 62 4,393,320 2,370,378
R&D expenses 63 7,236,341 4,402,821
Financial expenses 64 3,727,915 2,357,022
Including: Interest expenses 4,125,399 2,594,868
Interest income 446,450 405,409
Plus: Other income 65 1,967,750 1,771,035
Return on investment 66 3,904,526 3,254,404
Including: Share of profit or loss of
3,217,871 2,170,917
joint ventures and associates
Exchange gain 59 (1,224) (2,039)
Gain on changes in fair value 67 (146,584) 672,793
Credit impairment loss 68 (92,256) (64,665)
Asset impairment loss 69 (2,911,464) (511,607)
Asset disposal income 70 (40,434) 2,708
2. Operating profit 17,352,567 5,359,904
Plus: Non-operating income 71 351,980 492,374
Less: Non-operating expenses 72 140,454 116,974
3. Gross profit 17,564,093 5,735,304
Less: Income tax expenses 73 2,605,125 670,100
4. Net profit 14,958,968 5,065,204
(1) Classification by business continuity
1. Net profit from continuing operations 14,900,672 4,919,052
2. Net profit from discontinued operations 58,296 146,152
(2) Classification by ownership
1. Net profits attributable to the shareholders
of the parent company 10,057,444 4,388,159
2. Net profit attributable to non-controlling
interests 4,901,524 677,045
5. Other comprehensive income, net of tax 74 (244,003) 407,553
5.1 Other comprehensive income that will
(286,219) 45,029
not be reclassified to profit or loss
5.2 Other comprehensive income that may
subsequently be reclassified to profit or loss 42,216 362,524
upon satisfaction of prescribed condition
6. Total comprehensive income 14,714,965 5,472,757
Total comprehensive income attributable to
the shareholders of the parent company 9,793,570 4,776,668
Total comprehensive income attributable to
non-controlling interests 4,921,395 696,089
7. Earnings per share 75
7.1 Basic earnings per share (RMB
yuan/share) 0.7463 0.3366
7.2 Diluted earnings per share (RMB
yuan/share) 0.7354 0.3226
Person-in-charg
e of the
Legal Person-in-charge financial
Representative: Li Dongsheng of financial affairs: Li Jian department: Xi Wenbo
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 2021 2020
I. Cash flow from operations activities:
Proceeds from sale of commodities and rendering of services 140,078,647 77,471,361
Net increase/(decrease) in customer deposits and deposits from
other banks and financial institutions (2,184,083) 1,495,010
Net increase/(decrease) in borrowings from central bank 967,228 (103,388)
Interest, fees and commissions received 150,083 153,163
Tax and levy rebates 7,001,327 3,981,892
Cash generated from other operating activities 76 7,013,673 3,454,773
Sub-total of cash generated from operating activities 153,026,875 86,452,811
Payments for commodities and services (100,881,893) (59,086,181)
Net (increase)/decrease in loans and advances to customers 1,085,486 892,263
Net (increase)/decrease in deposits in central bank and other
banks and financial institutions (148,200) 361,021
Cash paid to and for employees (8,145,698) (4,234,200)
Taxes and levies paid (4,211,870) (3,934,588)
Cash used in other operating activities 77 (7,846,247) (3,752,843)
Sub-total of cash used in operating activities (120,148,422) (69,754,528)
Net cash generated from operating activities 82 32,878,453 16,698,283
II. Cash flow generated from investing activities:
Proceeds from disinvestments 40,260,161 30,873,459
Proceeds from return on investments 2,125,675 1,130,055
Net proceeds from disposal of fixed assets, intangible assets and
188,900 8,119
other long-term assets
Net proceeds from disposal of subsidiaries and other business
units 1,164,590 298,795
Cash generated from other investing activities 78 33,083 149,793
Sub-total of cash generated from investment activities 43,772,409 32,460,221
Payments for the acquisition and construction of fixed assets,
intangible assets and other long-term assets (30,855,133) (33,085,563)
Payments for investments (41,931,051) (31,121,562)
Net payments for acquiring subsidiaries and other business
units (4,139,505) (6,929,567)
Cash used in other investing activities 79 (479,761) (97,040)
Subtotal of cash used in investing activities (77,405,450) (71,233,732)
Net cash used in investing activities (33,633,041) (38,773,511)
Person-in-charge of
Legal Person-in-charge the financial
Representative: Li Dongsheng of financial affairs: Li Jian department: Xi Wenbo
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 2021 2020
III. Cash flow generated from financing activities:
Capital contributions received 19,804,515 3,822,240
Including: Capital contributions by non-controlling
interests to subsidiaries 19,804,515 3,822,240
Borrowings raised 52,186,527 61,815,269
Net proceeds from issuance of bonds 3,686,905 9,039,321
Cash generated from other financing activities 80 256,271 889,562
Sub-total of cash generated from financing activities 75,934,218 75,566,392
Cash paid for debt repayment (49,819,646) (42,412,001)
Interest and dividends paid (7,296,551) (4,959,433)
Including: Dividends paid by subsidiaries to
non-controlling interests (362,852) (279,922)
Cash used in other financing activities 81 (6,035,517) (5,330,369)
Subtotal of cash used in financing activities (63,151,714) (52,701,803)
Net cash generated from financing activities 12,782,504 22,864,589
IV. Effect of exchange rate changes on cash and cash
equivalents (154,628) (218,687)
V. Net increase of cash and cash equivalents 11,873,288 570,674
Add: Beginning balance of cash and cash equivalents? 18,208,417 17,637,743
VI. Closing balance of cash and cash equivalents 83 30,081,705 18,208,417
Pe
Person-in-charg Person-in-c
e harge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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)_____________
2021
Equity attributable to shareholders of the Company as the parent
Other Specif Other Appropriat
Non-controlli Shareholder
Share equity Capital Treasury ic comprehensi Surplus ion to Undistributed
ng equity
capital instrument reserves stock reserv ve reserves general profit
interests Total
s es income reserve
1. Balance as at the end of the prior year 14,030,788 230,241 5,442,385 (1,913,029) 211 (145,573) 2,452,892 386 14,009,494 55,949,272 90,057,067
Add: Adjustment for change in accounting
policy - - - - - - - - - - -
2. Balance as at the beginning of the year 14,030,788 230,241 5,442,385 (1,913,029) 211 (145,573) 2,452,892 386 14,009,494 55,949,272 90,057,067
3. Increase/decrease in the period (146) (29,907) 636,882 27,472 1,338 (263,874) 97,281 8,548 8,448,846 20,661,785 29,588,225
3.1 Total comprehensive income - - - - - (141,053) - - 10,057,444 4,921,395 14,837,786
3.2 Capital increased and reduced by
shareholders (146) (29,907) 636,882 27,472 - - - - - 16,271,882 16,906,183
1. Capital increased by shareholders - - - - - - - - - 18,150,004 18,150,004
2. Capital increased by holders of other
equity instruments - (29,907) 75,461 537,972 - - - - - - 583,526
3. Share-based payments included in owner
equity (146) - 2,823 118,559 - - - - - - 121,236
4. Other - - 558,598 (629,059) - - - - - (1,878,122) (1,948,583)
3.3 Profit distribution - - - - 1,338 - 97,831 8,548 (1,731,969) (531,492) (2,155,744)
1. Appropriation of surplus reserves - - - - - - 97,831 - (97,831) - -
2. Appropriation of general reserves - - - - 1,338 - - 8,548 (8,548) - 1,338
3. Appropriation to shareholders - - - - - - - - (1,625,590) (287,220) (1,912,810)
4. Other - - - - - - - - - (244,272) (244,272)
3.4 Transfers within owners’ equity - - - - - (122,821) (550) - 123,371 - -
1. Other comprehensive income transferred
to retained earnings - - - - - (122,821) (550) - 123,371 - -
4. Balance as at the end of the period 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
Person-in-charge of the
Legal Representative: Xi Wenbo Person-in-charge of financial affairs: Li Jian financial depart ment: Xi Wenbo
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 Shareholder Equity (Continued)
___________(RMB’000)_____________
2020
Equity attributable to shareholders of the Company as the parent
Non-controlli Shareholder
Other Specif Other Appropriat ng equity
Share equity Capital Treasury ic comprehensi Surplus ion to Undistributed interests Total
capital instrumen reserves stock reserv ve reserves general profit
ts es income reserve
1. Balance as at the end of the prior year 13,528,439 - 5,716,667 (1,952,957) - (534,082) 2,238,368 361 11,115,150 33,771,198 63,883,144
Add: Adjustment for change in accounting
policy - - - - - - - - (83) (99) (182)
2. Balance as at the beginning of the year 13,528,439 - 5,716,667 (1,952,957) - (534,082) 2,238,368 361 11,115,067 33,771,099 63,882,962
3. Increase/decrease in the period 502,349 230,241 (274,282) 39,928 211 388,509 214,524 25 2,894,427 22,178,173 26,174,105
3.1 Total comprehensive income - - - - 388,481 - - 4,388,159 696,089 5,472,729
3.2 Capital increased and reduced by
shareholders 502,349 230,241 (274,282) 39,928 - - - - - 21,740,157 22,238,393
1. Capital increased by shareholders 511,509 - 1,488,791 - - - - - - 3,273,095 5,273,395
2. Capital increased by holders of other
equity instruments - 230,241 - - - - - - - - 230,241
3. Share-based payments included in owner
equity (9,160) - (16,814) 39,928 - - - - - - 13,954
4. Other - - (1,746,259) - - - - - - 18,467,062 16,720,803
3.3 Profit distribution - - - - 211 - 214,524 25 (1,493,704) (258,073) (1,537,017)
1. Appropriation of surplus reserves - - - - - - 214,524 - (214,524) 16,983 16,983
2. Appropriation of general reserves - - - - - - - 25 (25) -
3. Appropriation to shareholders - - - - - - - - (1,279,155) (275,056) (1,554,211)
4. Other - - - - 211 - - - - - 211
3.4 Transfers within owners’ equity - - - - - 28 - - (28) - -
1. Other comprehensive income transferred
to retained earnings - - - - - 28 - - (28) - -
14,030,788 230,241 5,442,385 (1,913,029) 211 (145,573) 2,452,892 386 14,009,494 55,949,272 90,057,067
4. Balance as at the end of the period
Person-in-charge of financial Person-in-charge of the financial
Legal Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 as the Parent
___________(RMB’000)_____________
assets Note XV December 31, 2021 December 31, 2020
Current assets
Monetary assets 10,467,962 2,208,790
Held-for-trading financial
assets 4,372,557 1,221,657
Notes receivable - 6,000
Accounts receivable 1 93,566 175,787
Prepayments 47,333 97,963
Other receivables 2 13,819,512 25,555,924
Inventories 41,029 5,997
Other current assets 15,011 2,333
Total current assets 28,856,970 29,274,451
Non-current assets
Long-term equity investments 3 71,303,126 65,094,459
Investments in other equity
4
instruments 5,000 15,000
Other non-current financial
5
assets 1,051,536 1,145,022
Investment property 84,795 88,687
Fixed assets 37,402 46,012
Construction in progress 1,360 11,441
Right-of-use assets 452,398 -
Intangible assets 93,324 42,311
Long-term deferred expenses 26,079 469,425
Deferred income tax assets 12 7
Total non-current assets 73,055,032 66,912,364
Total assets 101,912,002 96,186,815
Person-in-charg Person-in-c
e harge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 shareholder equity: Note XV December 31, 2021 December 31, 2020
Current liabilities
Short-term borrowings 1,250,989 3,670,231
Derivative financial liabilities - 16,513
Notes payable - -
Accounts payable 141,877 129,701
Advances from customers - -
Contract liabilities 23,823 1,872
Employee compensation payable 294,653 220,510
Taxes and levies payable 13,076 26,071
Other payables 38,597,139 26,377,029
Current portion of non-current liabilities due
within a one-year period 4,843,348 6,141,029
Other current liabilities 4,284 316
Total current liabilities 45,169,189 36,583,272
Non-current liabilities
Long-term borrowings 12,898,000 12,087,500
Bonds payable 11,159,524 14,092,345
Lease liabilities 13,365 -
Long-term employee compensation payable 108,384 21,991
Deferred income 60,198 42,652
Total non-current liabilities 24,239,471 26,244,488
Total liabilities 69,408,660 62,827,760
Share capital 14,030,642 14,030,788
Other equity instruments 200,334 230,241
Capital reserves 9,900,679 9,846,835
Less: Treasury stock 1,885,557 1,913,029
Other comprehensive income (112,194) 141,998
Surplus reserves 2,348,109 2,250,828
Retained earnings 8,021,329 8,771,394
Total shareholders’ equity 32,503,342 33,359,055
Total liabilities and shareholder equity 101,912,002 96,186,815
Person-in-charg Person-in-char
e ge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 as the Parent
___________(RMB’000)_____________
Note XV 2021 2020
1. Revenue 6 1,490,937 1,141,258
Less: Cost of sales 6 1,111,439 911,211
Taxes and levies 15,832 17,265
Selling expenses 35,458 30,066
Administrative expenses 550,668 427,591
R&D expenses 171,151 178,751
Financial expenses 1,824,650 1,254,686
Including: Interest expenses 2,441,346 1,824,303
Interest income 685,498 595,141
Plus: Other income 2,057 17,898
Return on investments 7 3,005,570 3,404,821
Including: Share of profit or loss of joint
7
ventures and associates 1,406,116 1,420,363
Gain on changes in fair value 26,134 (6,260)
Credit impairment loss (187) 775
Asset disposal income 36 63
2. Operating profit 815,349 1,738,985
Plus: Non-operating income 223,830 414,744
Less: Non-operating expenses 60,875 8,496
3. Gross profit 978,304 2,145,233
Less: Income tax expenses - (7)
4. Net profit 978,304 2,145,240
5. Other comprehensive income (259,693) 85,934
6. Total comprehensive income 718,611 2,231,174
Person-in-char Person-in-c
ge harge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 as the Parent
___________(RMB’000)_____________
Note
XV 2021 2020
I. Cash flow from operations activities:
Proceeds from sale of commodities and rendering
1,286,514 1,145,211
of services
Tax and levy rebates - 1,073
Cash generated from other operating activities 30,834,436 4,976,960
Sub-total of cash generated from operating
32,120,950 6,123,244
activities
Payments for commodities and services (1,002,839) (1,022,906)
Cash paid to and for employees (162,489) (165,109)
Taxes and levies paid (196,647) (62,672)
Cash used in other operating activities (3,099,415) (2,229,386)
Sub-total of cash used in operating activities (4,461,390) (3,480,073)
Net cash generated from operating activities 8 27,659,560 2,643,171
II. Cash flow from investment activities:
Proceeds from disinvestments 27,292,959 16,546,116
Proceeds from return on investments 2,384,221 5,501,892
Net proceeds from disposal of fixed assets,
- 1
intangible assets and other long-term assets
Sub-total of cash generated from investment
29,677,180 22,048,009
activities
Payments for the acquisition and construction of
fixed assets, intangible assets and other (69,121) (71,954)
long-term assets
Payments for investments (35,551,461) (34,291,251)
Cash used in other investing activities - (26,181)
Subtotal of cash used in investing activities (35,620,582) (34,389,386)
Net cash used in investing activities (5,943,402) (12,341,377)
Person-in-char
Person-in-charge ge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 Parent Company (Continued)
___________(RMB’000)_____________
Note XV 2021 2020
III. Cash flow generated from financing activities:
Capital contributions received - -
Borrowings raised 11,900,000 30,795,000
Net proceeds from issuance of bonds 3,686,905 6,972,834
Cash generated from other financing activities - 910,300
Sub-total of cash generated from financing activities 15,586,905 38,678,134
Cash paid for debt repayment (25,430,014) (28,073,128)
Cash paid for distribution of dividends and profits or
payment of interests (2,971,569) (2,546,431)
Cash used in other financing activities (642,381) (77,630)
Subtotal of cash used in financing activities (29,043,964) (30,697,189)
Net cash generated from financing activities (13,457,059) 7,980,945
IV. Effect of exchange rate changes on cash and cash
equivalents (54,006) (27,546)
V. Net increase of cash and cash equivalents 8,205,093 (1,744,807)
Add: Beginning balance of cash and cash equivalents? 2,196,283 3,941,090
VI. Closing balance of cash and cash equivalents 9 10,401,376 2,196,283
Person-in-char
Person-in-charge ge of the
Legal of financial financial
Representative: Li Dongsheng affairs: Li Jian department: Xi Wenbo
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 as the Parent
___________(RMB’000)_____________
2021
Other Total
Other equity Capital Treasury comprehensive Surplus shareholders’
Share capital instruments reserves stock income reserves Retained earnings equity
1. Balance as at the end of the prior
year 14,030,788 230,241 9,846,835 (1,913,029) 141,998 2,250,828 8,771,394 33,359,055
Add: Adjustment for change in
accounting policy - - - - - - - -
2. Balance as at the beginning of the
year 14,030,788 230,241 9,846,835 (1,913,029) 141,998 2,250,828 8,771,394 33,359,055
3. Increase/decrease in the
period
(146) (29,907) 53,844 27,472 (254,192) 97,281 (750,065) (855,713)
3.1 Total co mprehensive inco me - - - - (259,690) - 978,304 718,614
3.2 Capital increased and reduced by (146) (29,907) 53,844 27,472
shareholders
- - - 51,263
1. Cap ital increased by owners - - - - - - - -
2. Cap ital increased by holders of other
- (29,907) 75,461 537,972 - - - 583,526
equity instruments
3. Share-based payments included in
owner equity
(146) - (3,278) 118,560 - - - 115,136
4. Other - - (18,339) (629,060) - - - (647,399)
- - - - - 97,831 (1,723,421) (1,625,590)
3.3 Profit distribution
1. Appropriation of surplus reserves - - - - - 97,831 (97,831) -
2. Appropriation to shareholders - - - - - - (1,625,590) (1,625,590)
3. Other - - - - - - - -
3.4 Transfers within o wners’ equity - - - - 5,498 (550) (4,948) -
1. Other co mprehensive income
transferred to retained earnings - - - - 5,498 (550) (4,948) -
5. Balance as of the end of the period 14,030,642 200,334 9,900,679 (1,885,557) (112,194) 2,348,109 8,021,329 32,503,342
Person-in-charge of the
Legal Representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian financial depart ment: Xi Wenbo
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 Parent Company (Continued)
___________(RMB’000)_____________
2020
Other Total
Other equity Capital Treasury comprehensive Surplus shareholders’
Share capital instruments reserves stock income reserves Retained earnings equity
1. Balance as at the end of the prior
year 13,528,439 - 8,382,776 (1,952,957) 56,064 2,036,304 8,119,833 30,170,459
Add: Adjustment for change in
accounting policy - - - - - - - -
2. Balance as at the beginning of the
year 13,528,439 - 8,382,776 (1,952,957) 56,064 2,036,304 8,119,833 30,170,459
3. Increase/decrease in the
period 502,349 230,241 1,464,059 39,928 85,934 214,524 651,561 3,188,596
3.1 Total comprehensive income - - - - 85,934 - 2,145,240 2,231,174
3.2 Capital increased and reduced by
shareholders 502,349 230,241 1,464,059 39,928 - - - 2,236,577
1. Capital increased by owners 511,509 - 1,488,791 - - - - 2,000,300
2. Capital increased by holders of
other equity instruments - 230,241 - - - - - 230,241
3. Share-based payments included in
(9,160) - (20,025) 39,928 - - - 10,743
owner equity
4. Other - - (4,707) - - - - (4,707)
3.3 Profit distribution - - - - - 214,524 (1,493,679) (1,279,155)
1. Appropriation of surplus reserves - - - - - 214,524 (214,524) -
2. Appropriation to shareholders - - - - - - (1,279,155) (1,279,155)
3. Other - - - - - - - -
4. Balance as at the end of the period 14,030,788 230,241 9,846,835 (1,913,029) 141,998 2,250,828 8,771,394 33,359,055
Legal Person-in-charge of Person-in-charge of the
Representative: Li Dongsheng financial affairs: Li Jian financial department: Xi Wenbo
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, 2021 to December 31, 2021
___________(RMB’000)_____________
I General information
(I) Place of incorporation and organizational structure
TCL Technology Group Corporation (hereinafter referred to as the “Company”) is a limited liability company
incorporated in the People's Republic of China (hereinafter referred to as "China") on July 17, 1997 under the
Corporate Law of the People's Republic of China (hereinafter referred to as “Corporate Law”). As per the
approval documents of YBH [2002] No. 94 and YFH [2002] No. 134 issued by the People’s Government of
Guangdong Province, and YJMH [2002] No. 112 and YJMH [2002] No. 184 issued by the Economic and
Trade Commission of Guangdong Province, the Company was changed to a joint stock limited company with
a registered capital of RMB1,591,935,200, which was approved by Guangdong Province Administration for
Industry and Commerce on April 19, 2002. The registration number is 4400001009990.
Upon approval of ZJFXZ [2004] Document No. 1 issued by the China Securities Regulatory Commission
(CSRC) on January 2, 2004, the Company was permitted to issue 590,000,000 shares to the public on
January 7, 2004 and 404,395,944 ordinary shares denominated in RMB (A shares) to all public shareholders
of TCL Communication Equipment Co., Ltd. (hereinafter referred to as " TCL Communication Equipment") in
a stock-for-stock deal, which were listed on the Shenzhen Stock Exchange on January 30, 2004. The shares
issued to the public were all priced online, with a par value of RMB1 and an issue price of RMB4.26 per
share, raising a total of RMB2,513,400,000. Upon the completion of this deal, the registered capital of the
Company increased to RMB2,586,331,144, and on July 16, 2004, the Company was approved by the
Guangdong Province Administration for Industry and Commerce to change its business license to Business
License QGYZZ No. 003362. Upon the completion of the shareholder structure reform and the expiration of
the share lockup period, the foreign shareholding ratio in the Company was less than 10%. On September 11,
2007, the Company was approved by Guangdong Province Administration for Industry and Commerce to
change its business license to Business License No. 440000000011990.
Upon the approval of the CSRC on January 7, 2009 with the ZJXK [2009] Document No. 12, the Company
privately placed 350,600,000 ordinary shares denominated in RMB (A shares) to designated investors on April
23 2009, with a par value of RMB1 and an issue price of RMB2.58 per share, raising a total of
RMB904,548,000. Upon the completion of this deal, the registered capital of the Company increased from
RMB2,586,331,144 to RMB2,936,931,144, and on June 2, 2009, the Company was approved by Guangdong
Province Administration for Industry and Commerce to change its business license to Business License No.
440000000011990.
Upon the approval of the CSRC on May 27, 2010 with the ZJXK [2010] Document No. 719, the Company
privately placed 1,301,178,273 ordinary shares denominated in RMB (A shares) to designated investors on
July 26, 2010, with a par value of RMB1 and an issue price of RMB3.46 per share, raising a total of
RMB4,502,076,824.58. Upon the completion of this deal, the registered capital of the Company increased
from RMB2,936,931,144 to RMB4,238,109,417, and on September 19, 2010, the Company was approved by
Guangdong Province Administration for Industry and Commerce to change its business license to Business
License No. 440000000011990.
On May 19, 2011, the Company carried out a bonus issue of 10 additional shares for every 10 shares to all the
shareholders with capital reserves, representing a total of 4,238,109,417 new shares, with a par value of
RMB1 per share. Upon the completion of this bonus issue, the registered capital of the Company increased
from RMB4,238,109,417 to RMB8,476,218,834, and on June 27, 2011, the Company was approved by
Huizhou Administration for Industry and Commerce to change its business license to Business License No.
440000000011990.
During the years of 2013 and 2014, the exercise of 58,870,080 stock options increased the total share capital
of the Company from 8,476,218,834 shares to 8,535,088,914 shares.
15
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
I General information (continued)
(I) I Place of incorporation and organizational structure (continued)
Upon the approval of the CSRC on February 13, 2014 with the［2014］ Document No. 201, the Company
privately placed 917,324,357 ordinary shares denominated in RMB (A shares) to designated investors on 30
April 2009, with a par value of RMB1 and an issue price of RMB2.18 per share, raising a total of
RMB1,999,767,098.26. Upon the completion of this deal, the registered capital of the Company increased
from RMB8,535,088,914 to RMB9,452,413,271, and on June 10, 2014, the Company was approved by
Huizhou Administration for Industry and Commerce to change its business license to Business License No.
440000000011990.
In 2015, 48,357,920 stock options were exercised under an incentive plan of the Company, and upon
approval by the CSRC on January 28, 2015 with the ZJXK [2015] Document No.151, the Company issued
2,727,588,511 shares in a private placement. As such, the total share capital of the Company increased from
9,452,413,271 shares to 12,228,359,702 shares.
In the year of 2016, 923,340 stock options were exercised under an incentive plan of the Company, and the
share capital of the Company increased from 12,228,359,702 shares to 12,229,283,042 shares. Later,
15,601,300 shares were repurchased and retired, and the share capital of the Company decrease d from
12,229,283,042 shares to 12,213,681,742 shares. On April 26, 2016, the Company was approved by
Huizhou Administration for Industry and Commerce to change its business license to Business License No.
91441300195971850Y (unified social credit code).
In the year of 2017, the Company purchased an interest in subsidiary TCL China Star Optoelectronics
Technology Co., Ltd. by means of a new issue of 1,301,290,321 shares. Upon the completion of this deal,
the total share capital of the Company increased from 12,213,681,742 shares to 13,514,972,063 shares.
In 2018, the Proposal on the Grant of Restricted Stock to Awardees was approved at the 7th Meeting of the
6th Board of Directors, and a total of 34,676,444 shares were subscribed for under the restricted s tock
incentive plan. Upon the completion of this deal, the total share capital of the Company increased from
13,514,972,063 shares to 13,549,648,507 shares.
In 2019, the Company repurchased and retired 21,209,788 restricted shares that had been granted to certain
awardees under the 2018 Restricted Stock Incentive Plan & Global Innovation Partner Plan but were still in
lockup. As such, the total share capital of the Company decreased from 13,549,648,507 to 13,528,438,719
shares.
In 2020, the Proposal on the Intended Change of the Company’s Full Name and Stock Name were approved
respectively at the 23rd Meeting of the 6th Board of Directors and the First Extraordinary General Meeting
of 2020. The name of the Company was then changed from “TCL Corporation” to “TCL Technology Group
Corporation” (abbreviation from “TCL CORP.” to “TCL TECH.”）since February 7, 2020, with the stock
name changed from “TCL CORP.” to “TCL TECH.” while the stock code “000100” remained unchanged.
In July 2020, the Company repurchased and retired 9,159,308 restricted shares that had been granted under
the 2018 and 2019 Restricted Stock Incentive Plans but were still in lockup. As such, the total share capital
of the Company decreased from 13,528,438,719 to 13,519,279,411 shares.
In October 2020, the Company issued 511,508,951 new shares to acquire a non-controlling interest in
subsidiary Wuhan China Star Optoelectronics Technology Co., Ltd. Upon the completion of this deal, the
total share capital of the Company increased from 13,519,279,411 shares to 14,030,788,362 shares.
16
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
I General information (continued)
In September, 2021, the Company repurchased and retired 145,941 restricted shares that had been granted
under the 2019 Restricted Stock Incentive Plans but were still locked up. As such, the total share capital of
the Company decreased from 14,030,788,362 to 14,030,642,421 shares.
As of December 31, 2021, the total issued share capital of the Company was 14,030,642,421 shares. See
note V, 50 for details.
The registered address of the Company is: TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech
Development District, Huizhou City, Guangdong Province.
(II) Scope of business
The Company and its subsidiaries (collectively referred to as the “Company”) are primarily engaged in the
research, development, production and sales of semi-conductors, electronic products and communication
devices, new optoelectronic products, liquid crystal display devices, import and export of goods and
technologies (excluding goods and technologies that are prohibited from import and export or require an
administrative approval for import and export), venture capital business and venture capital consultation,
entrepreneurial management services for start-up enterprises, participation in the initiation of venture capital
institutions and investment management advisory institutions, immovable property leasing, IT services,
conference services, computer technical services and development service of electronic products and
technologies, development and sale of software, patent transfer, customs clearance services, consulting
services, payments and settlements (where any approval from any relevant department is required according
to law, it must be obtained before carrying out the relevant operations activities).
(III) Authorization of financial statements for issue
These financial statements were authorized for issue by the Company’s Board of Directors on April 27,
2022.
II Scope of consolidated financial statements
As of the end of the Reporting Period, for subsidiaries included in the consolidated financial statements,
please refer to Note VII, 1, (1) Breakdown of important subsidiaries. For the changes to the scope of the
consolidated financial statements of the Reporting Period, see Note VI.
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 "Corporate Accounting Standards - 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 2014) 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.
17
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
3 Statement of compliance with corporate accounting standards
The financial statements are in compliance with the requirements of the corporate accounting standards, and
truly and completely reflect the financial status, operating results, cash flow and other relevant information
of the Company during the Reporting Period.
4 Accounting period
The Company adopts the calendar year as accounting year, and a fiscal year is from January 1 to December
31 of the Gregorian calendar.
5 Operations cycle
The Company does not take the operating cycle as the criteria for liquidity classification of assets and
liabilities.
6 Base currency for bookkeeping
The base currency for bookkeeping and the preparation of financial statements are all in RMB, and are
presented in the unit of RMB’000 in all the tables herein unless otherwise specified.
7 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-bystep
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;
(b) These transactions can only achieve a complete business outcome when treated as a whole;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
(d) A transaction alone is uneconomical, but is economical when considered together with other transactions.
(2) Business combinations involving enterprises under common control
(a) Individual financial statement
The assets and liabilities acquired by the Company in business combinations are measured in accordance
with the book value of assets and liabilities of the combined party on the date of combination (including the
goodwill of the ultimate controlling party resulting from the acquisition of the combined party). The
difference between the book value of net assets acquired in the combination and the book value of the
consideration paid for the combination (or the total par value of shares issued) is used to adjust the capital
stock premium in the capital reserve, and when the capital stock 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 the estimated liabilities or assets, the difference between the estimated amount of
liabilities or assets and the settlement amount of subsequent contingent consideration is used to adjust the
capital reserve (capital stock premium), and when the capital reserve is insufficient, it is used to adjust the
retained earnings.
18
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under common control
7
(continued)
(2) Business combinations involving enterprises under common control (continued)
(a) Individual financial statements (continued)
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 book value of long-term equity investments before the combination plus the book value 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.
The agency fees paid for audits, legal services, assessments and consultations and other direct related
expenses incurred in the business combination are recognized in profit or loss in the period in which they
were 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; transaction costs directly
related to the issuance of a debt instrument as a combination consideration are treated as an initial
recognized amount included in the debt instrument.
If the combined party has a consolidated financial statement, the initial investment cost of the long-term
equity investment is determined based on the owner's equity attributable to the Company as the parent in the
consolidated financial statements of the combined party.
(b) Consolidated financial statements
The assets and liabilities acquired by the combining party in the business combination are measured in
accordance with the book value of the owner's equity of the combined party in the consolidated financial
statements of the ultimate controlling party.
For the case where a business combination is finally realized through multiple transactions, if it is a package
transaction, each transaction is treated as a transaction for acquiring control; if it is not a package
transaction, the long-term equity investments held by the combined party before the combination, the gains
and losses, other comprehensive income and other changes in owners' equity have been recognized between
the date of acquisition or the date of the combining party and the combined party under the final control of
the same party, whichever is later, and the date of combination. These are used to offset the initial retained
earnings or current profit and loss during the comparative reporting periods respectively.
If the accounting policies adopted by the combined parties are inconsistent with those adopted by the
Company, the Company shall make adjustments in accordance with the accounting policies of the Company
on the date of combination, and on this basis, confirm the consolidated financial statements in accordance
with the provisions of Accounting Standards for Business Enterprises.
19
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under common control
7
(continued)
(3) Combination not under common control
The assets paid and liabilities incurred or assumed of 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 the book value is recognized in profit or loss. Where a future event that may affect the combination
costs is agreed in the combination contract, if the estimated future events are likely to occur on the date of
purchase and the amount of the impact on combination costs can be reliably measured, it is also included in
the combination costs.
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;
The difference between the higher combination cost and lower fair value of identifiable net assets of the
acquired party gained in the combination is recognized as goodwill by the Company. In case that the cost of
combination is less than the fair value of the identifiable net assets of the acquired party gained in the
combination, and the difference is still less than the fair value of identifiable net assets of the acquired party
gain in the combination after review, the difference is included in the current profit and loss by the
Company.
For the case where a business combination involving enterprises not under common control is finally
realized through multiple transactions step by step, if it is a package transaction, each transaction is treated
as a transaction for acquiring control; if it is not a package transaction, the individual financial stateme nts
and consolidated financial statements are treated separately for accounting purposes.
(a) In the individual financial statements, if the equity investment held before the date of combination is
accounted for in the equity method, the sum of the book value of equity investments of the acquired party
held before the date of acquisition plus the new investment cost on the date of acquisition is recognized as
the initial cost of the investment; the remaining comprehensive income confirmed in equity inve stments by
the equity method before the date of acquisition is accounted for, when the investment is disposed, on the
same basis as those the invested party 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 book value of the original equity interest, and the accumulated
fair value changes originally included in other comprehensive income should be transferred to return on
investment in the current period of combination date.
(b) In the consolidated financial statements, the equity of the acquired party held before the date of acquisition
is re-measured according to the fair value of the equity on the date of acquisition. The difference between
the fair value and the book value is included in the current return on investment; if the equity of the acquired
party held before the date of acquisition involves other comprehensive income, etc. under the equity method,
other comprehensive income, etc. related to it is converted into return on investment in the current period of
the acquisition date.
20
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
8 Method for preparing consolidated financial statements
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 parent Company) are included in the consolidated financial
statements.
The accounting policies and accounting periods adopted by all subsidiaries included in the consolidated financial
statements are consistent with the Company. If the accounting policies or accounting periods adopted by the subsidiaries
are inconsistent with the Company, necessary adjustments will be made in accordance with the Company's accounting
policies and accounting periods when preparing consolidated financial statements. The consolidated financial statements
are based on the financial statements of the Company and its subsidiaries as well as other relevant information, and are
prepared by the Company after adjusting the long-term equity investments for the subsidiaries in accordance with the
equity method.
The impact of internal transactions between the Company and its subsidiaries, and internal transactions between
subsidiaries, on the consolidated balance sheet, consolidated income statement, consolidated cash flow statement and
consolidated statement of changes in shareholder equity is offset in the preparation of consolidated financial statements.
If the current losses shared by the minority shareholders of a subsidiary exceed the share enjoyed by the minority
shareholder in the initial owner's 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 balance of the consolidated balance sheet is adjusted; the income, expenses and
profits of the subsidiary or business 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 from the beginning of the
period of combination to the end of the Reporting Period are included in the consolidated cash flow statement. 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 subs idiary or business from the date of acquisition to the end of the Reporting Period is
included in the consolidated cash flow statement.
During the Reporting Period, if a subsidiary or business is added due to a business combination involving enterpris es
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.
During the Reporting Period, if the Company disposes of a subsidiary or business, the income, expenses and profits of
the subsidiary or business from the beginning of the period to the disposal date are included in the consolidated income
statement; the cash flow of the subsidiary or business from the beginning of the Reporting Period to the disposal date is
included in the consolidated cash flow statement.
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 according to 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 owner's
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.
21
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
9 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 almost 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
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.
22
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
10 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.
11 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 “undistributed profits” 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 foreign operation listed in other comprehensive
income items in the balance sheet are transferred from the other comprehensive income item to the current
profit and loss. All the incurred items in the cash flow statement are translated at the current average exchange
rate of the period in which transactions occur. All the opening balance and actual amount of the previous year
are listed on the basis of the amount translated in the previous year.
23
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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 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 measured at
amortized cost include monetary assets, notes receivable, accounts receivable, other receivables, long-term
receivables, debt investments, etc.
24
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 Financial instruments (continued)
(1) Classification and measurement of financial assets (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.
(b) Financial assets classified as measured at fair value through other comprehensive 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.
(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.
25
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
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 measured at fair value through profit or loss
If failing to be classified as 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 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.
(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 for the first time whether similar mixed contracts need to be split, it is almost 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.
26
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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 essence 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 if:
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.
27
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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 of this article, and loan
commitments that do not fall under category (1) of this article 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 contr act
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
(a) Financial asset are derecognized, i.e. written off from its account and balance sheet if:
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.
28
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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 almost all the risks and rewards of the financial asset ownership are retained, such financial asset shall
(b)
continue to be recognized.
(c) In circumstances where the Company neither transfers nor retains almost all the risks and rewards of the
financial asset ownership (i.e. circumstances other than ① and ② of this article), according to 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 between the
(a)
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
corresponding 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).
29
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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.
30
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 Financial instruments (continued)
(6) Impairment of financial instruments
Based on the expected credit loss, the Company conducts impairment accounting of financial assets
classified as measured at amortized cost, financial assets classified as 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 measured at
fair value through other comprehensive income, the credit loss reserve will offset the carrying amount of the
financial assets. For financial assets classified as 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.
31
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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.
32
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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 Company’s assessment of expected credit losses of financial instruments is based on single items and
combinations. 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 econo mic situation
forecast that can be obtained on the balance sheet date without unnecessary extra costs or efforts.
33
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
12 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:
(a) The Company has the legal right, which is currently enforceable, to offset the confirmed amount;
The Company plans to settle on a net basis, or realize the financial assets and settle the financial liabilities at the
(b)
same time.
13 Notes receivable
For the determination method and accounting treatment method of the Company's expected credit loss on notes
receivable, please refer to 12(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.
34
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
14 Accounts receivable
For the determination method and accounting treatment method of the Company's expected credit loss on
accounts receivable, please refer to 12(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)
15 Other receivables
For the determination method and accounting treatment method of the Company's expected credit loss of
other receivables, please refer to 12(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.
16 Inventories
(1) Classification of inventories
The Company classifies inventories into raw materials, in-process products, development costs, and finished
products, goods shipped in transit, turnover materials and molds with an expected benefit period of less than
one year, depending on the purpose of holding the inventories. Turnover materials include low-value
consumables and packaging materials.
(2) Valuation method for inventories shipped in transit
All types of inventories are accounted for at actual cost, and actual costs include purchase costs, processing
costs and other costs. Inventories are shipped in transit by weighted average method.
35
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
16 Inventories (continued)
Basis for determining the net realizable value of inventories and accrual method for inventory valuation
(3)
allowance
Closing inventories are measured at cost or net realizable value, whichever is lower. In cases where
differences exists due to the net realizable value being less than the cost of inventory, inventory valuation
allowance is made based on individual inventory items or the inventory category, and the difference is
recognized in the current profit and loss.
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 selling price 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 price 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 amortizes turnover materials by the one-off amortization method, and the molds with a
benefit period of less than one year are amortized within the period of not exceeding one year according to
the expected benefit period.
17 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 12(6) of note III Impairment of financial instruments.
36
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
18. Held-for-sale
(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 for non-current assets or disposal groups held for sale
The Company shall not depreciate or amortize non-current assets or disposal groups held for sale. If the book
value 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 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.
19 Other debt investments
For the determination method and accounting treatment methods of the Company’s expected credit loss of
other debt investments, please refer to 12(6) of note III Impairment of financial instruments.
20 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 12(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 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.
37
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
21 Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and
the Company’s long-term equity investments in its associates and joint ventures.
Subsidiaries are the investees over which the Company is able to exercise control. A joint venture is a joint
arrangement which is structured through a separate vehicle over which the Company has joint control together
with other parties and only has rights to the net assets of the arrangement based on legal forms, contractual
terms and other facts and circumstances. Associates are the investees that the Company has significant
influence on their financial and operating policies.
Investments in subsidiaries are presented in the Company’s financial statements using the cost method, and
are adjusted to the equity method when preparing the consolidated financial statements. Investments in a joint
venture and associates are accounted for using the equity method.
(1) Recognition of initial investment cost
(a) Long-term equity investment formed by business combination
For long-term equity investment acquired by business combination involving enterprises under common
control, the book value of assets and liabilities of the combined party in the consolidated financial statements
of the ultimate controlling party as at the date of combination (including the goodwill formed by the ultimate
controlling party's acquisition of the combined party) is recognized as investment cost. For long-term equity
investment formed by combination, the share of the book value of shareholder equity of the combined party
acquired on the date of combination is recognized as initial investment cost. The difference between the initial
investment cost and assets paid as per consideration for combination, the book value of liabilities incurred or
assumed and the total par value of shares issued, is used to adjust capital reserve, and when the capital reserve
is insufficient, it is used to adjust retained earnings.
For long-term equity investment acquired by business combinations involving enterprises not under common
control, the combination cost is recognized as investment cost of the long-term equity investment. The
combination cost is the fair value of assets paid, the liabilities incurred o r assumed, and the equity securities
issued to acquire the control of acquired party on the date of acquisition. The difference between the higher
combination cost and lower fair value of identifiable net assets of the acquired party acquired in the
combination is recognized as goodwill; the difference between the lower combination cost and higher fair
value of identifiable net assets of the acquired party acquired in the combination is included in current profits
and losses after review. For business combination involving enterprises not under common control realized
step by step through multiple transactions, the sum of the book value of equity investment held by the acquirer
before the date of acquisition and the new investment cost on the date of acquisition is recognized as initial
investment cost, and the combination cost includes the sum of assets paid, the liabilities incurred or assumed
by the acquirer, and the fair value of equity securities issued.
(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; the transaction costs incurred when issuing or
acquiring the own equity instruments of acquirer attributed directly to equity transactions which can be
deducted from the equity.
For long-term equity investment acquired by issuing equity securities, the fair value of equity securities issued
is recognized as initial investment cost.
38
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
21 Long-term equity investments (continued)
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 book value 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.
(2) Subsequent measurement and recognition of related profit and loss
(a) Subsequent measurement
The Company adopts the cost method to account for the long-term equity investments under the control of
investee, and the consolidated financial statements are adjusted in accordance with the equity method in
preparation.
The Company adopts the equity method to account for the long-term equity investments in associates and
joint ventures. The difference between the higher initial investment cost 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 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.
(b) Recognition of profit and loss
Under the cost method, in addition to the actual payment or the cash dividends or profits included in the
consideration that have been declared but not yet paid, the Company recognizes the investment income
according to the cash dividends or profits that the investee declared to pay.
Under the equity method, when the investment enterprise confirms that it should enjoy the net profit or net
loss of the investee, it should adjust the net profit of the investee based on the fair value of identifiable assets
of the investee at the time of conducting the investment before the confirmation, and the part of profit and loss
of internal transaction between the investor and associates and joint venture that should be attributed to the
investor according to the shareholding ratio, should be offset, and the investment profits and losses should be
confirmed on this basis. When the Company confirms that it should assume the loss occurred by the investee,
the process hereunder is followed: first, the book value of the long-term equity investment is offset. Secondly,
if the book value of the long-term equity investment is insufficient for the offset, the investment loss is
continued to be recognized, and the book value of long-term receivable items is offset, subject to other book
value of the longterm equity that substantially constitutes the net investment of the investee. Finally, after the
above-mentioned treatment, if the Company still bears additional obligations in accordance with the
investment contract or agreement, the estimated liabilities 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 confirmed
liabilities and recover other long-term equity that substantially constitutes net investment of the investee and
the book value of the long-term equity, and recognize the profit as return on investment.
Other changes in the owner's equity other than net profit or loss, other comprehensive income and profit
distribution of the investee, are used to adjust the book value of the long-term equity investment and included
in capital reserve. The unrealized profit and loss from internal transactions between the Company and the
investee attributed to the Company according to the shareholding ratio, is offset, and the investment profit and
loss is recognized on this basis. In respect of the internal transaction losses incurred by the Company and the
investee, for the part recognized asset impairment losses, the corresponding unrealized losses are not offset.
39
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
21 Long-term equity investments (continued)
(3) Step-by-step disposal of investment in subsidiaries
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 treated as a whole;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
(d) A transaction alone is uneconomical, but is economical when considered together 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
"Corporate Accounting Standards 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 book value. 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.
(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 book value 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.
40
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
21 Long-term equity investments (continued)
(4) Basis for determining control, common control and significant influence on the investee
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.
Common control means the control that is common to an arrangement in accordance with the relevant
agreement, and the decisions of relevant activities of the arrangement must be made upon agreement of the
Company and other parties sharing the control rights.
Significant influence means the power to participate in the decision-making of the financial and operating
policies of the investee, but by which cannot control or commonly control together with other parties the
formulation of the policies.
(5) Impairment test and allowance for impairment
On the balance sheet date, if there is any indication that the long-term equity investment is impaired due to
continuous decline in the market price or deterioration of operating conditions of the investee, the recoverable
amount of long-term equity investment is determined according to the net value of a single long-term equity
investment less the disposal expenses or the present value of expected future cash flows of the long-term
equity investment, whichever is higher. When the recoverable amount of the long-term equity investment is
lower than the book value, the book value of assets is written-off to the recoverable amount, and the amount
written-down is recognized as asset impairment losses, which is included in the current profit and loss, and the
corresponding allowance for asset impairment is made.
For long-term equity investments without significant influence or quotation in an active market and whose fair
value cannot be measured in a reliable way, the impairment loss is determined by the difference between the
book value and the present value determined by discounting the future cash flows of similar financial assets at
the current market rate of return.
Other long-term equity investments with signs of impairment other than goodwill arising from business
combination, if the measurement of recoverable amount indicates that the recoverable amount of the
long-term equity investment is lower than its book value, the difference is recognized as impairment losses.
Goodwill arising from a business combination is tested for impairment annually, regardless of whether there is
any indication of impairment.
Once the impairment loss of long-term equity investment is confirmed, it will not be reversed.
22 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.
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.
41
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
23 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 2-5%
Machinery and equipment (exclude mold) 5-18 years 5-20%
Mold (with benefit period more than one year) 1-3 years 33-100%
Office and electronic equipment 3-22 years 4-33%
Transportation equipment 4-8 years 12-25%
Other devices 4-5 years 20-25%
Power stations 25 4%
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 no t
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.
42
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
24 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.
25 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 (only refers
to inventories with an acquisition, construction and production process for more than one year) that require a
substantial period of acquisition, construction or production activities to get ready for the intended use or
sale status.
Borrowing costs refer to the interest of borrowings, the amortization of discounts or premiums, auxiliary
expenses and exchange differences arising from foreign currency borrowings incurred by the Company.
Borrowing costs begin to be capitalized when the following three conditions are all satisfied:
(1) Asset expenditure has occurred;
(2) Borrowing costs have occurred;
The acquisition, construction or production activities necessary to enable the assets to be ready for the
(3)
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 reco gnized 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.
43
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
26 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 depreciation reserves have been accrued are depreciated
in future periods at their carrying value net of depreciation reserves, with reference to the above principles.
44
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
27 Intangible assets
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
10 years or the shorter of service life, beneficiary years and legally
Patents and non-patent technologies
valid years
Other 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.
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;
(5) Expenditures attributable to the development stage of the intangible asset can be measured in a reliable way.
If the above conditions cannot be all satisfied, the expenditures are included in the current profit and loss
when incurred.
45
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
28 Long-term prepaid expense
Long-term prepaid expenses refer to various expenses that the Company has paid 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.
29 Impairment of long-lived assets
The impairment of assets other than inventories, financial assets and deferred income tax assets is
determined by the Company as follows:
On the balance sheet date, if there is evidence indicating that the asset is idle, there is a use termination plan
or the market price drops sharply, or the external environment changes significantly, impairment tests should
be conducted. The difference between the recoverable amount of the asset and its book value is recognized
as impairment loss and included in the current profit and loss, and corresponding allowance for asset
impairment is made. 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. The recoverable amount is determined based on the net amount of fair value of assets less the
disposal expenses, or the present value of estimated future cash flows of the assets, whichever is lower. The
Company estimates the recoverable amount based on the individual assets. If it is difficult to estimate the
recoverable amount of the individual assets, the recoverable amount of the asset is determined based on the
asset group to which the asset belongs. After the asset impairment loss is recognized, the depreciation or
amortization expense of the impaired assets will be adjusted accordingly in the future period.
Once the asset impairment loss is confirmed, it cannot be reversed in the future accounting period.
Treatment of goodwill impairment: in the impairment test of goodwill, the book value of goodwill is
apportioned to the asset group or asset group portfolio expected to benefit from the synergy of business
combination, and the book value of goodwill is apportioned to the relevant asset group or asset group
combination in a reasonable way. In the case of impairment test, the asset group or asset group portfolio that
does not contain goodwill is tested for impairment first to confirm the corresponding asset impairment loss,
and then the asset group or asset group containing goodwill is tested for impairment to confirm the
corresponding goodwill impairment loss.
30 Asset transfer with repurchase conditions
When the Company sells products or transfers other assets, it signs a product or a transfer asset repurchase
agreement with the purchaser, and determines whether the sales commodity satisfies the revenue recognition
conditions according to the terms of the agreement. If the after-sales repurchase is a financing transaction,
the Company does not recognize the sales revenue when the product or asset is delivered. If the repurchase
price is greater than the difference between the sales prices, interest of the difference is accrued on time
during the repurchase period, and included in finance costs.
31 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.
46
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
32 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.
47
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
33 Estimated liabilities
When the Company is involved in any litigation, debt guarantee, contract loss or reorganization, which is
likely in need of future delivery of assets or rendering of services, and the amount of which can be measured
in a reliable way, it is recognized as estimated liabilities.
(1) Recognition standards for estimated liabilities
When an obligation related to the contingent events satisfies all the following conditions, it is recognized by
the Company as estimated liabilities:
(a) The obligation is the current obligation of the Company;
(b) The fulfillment of the obligation is likely to cause economic benefits to flow out of the Company;
(c) The amount of the obligation can be measured in a reliable way.
(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 book
value of estimated liabilities.
48
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
34 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 of substantive
(a)
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 certain that the
(c)
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;
(e) The estimated amount payable based on the secured residual value provided by the 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.
35 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 owner's equity after the vesting date.
49
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
36 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).
(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 resulting economic
(a)
benefit;
(b) The client is able to control the commodities under construction during the Company’s 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.
50
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
36 Revenue recognition (continued)
(2) 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 from taking back commodities from the book value of commodities predicted to be returned
(including the impairment of value of returned commodities) shall be checked and calculated 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.
(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.
(3) 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) Royalties income
Accounted for according to the time and method of charging as stipulated in the relevant contract or
agreement.
51
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
36 Revenue recognition (continued)
(3) Specific revenue recognition method (continued)
(d) Revenue from photovoltaic power stations
a. Centralized power stations: Power stations are combined to the grid. The income will be confirmed 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 income will be confirmed based on the
documents on settlement provided by the business departments of the Company.
37 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;
(b) The cost adds various resources that can be applied by the Company to fulfill due performance obligations.
(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 adopt 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.
52
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
37 Contract costs (continued)
(4) Impairment of contract costs
For the asset related to the contract cost as mentioned above, if the book value 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 book value, it shall be restituted to previously
established asset impairment allowances and included in current profit and loss. However, the book value of
restituted assets shall not exceed the book value of the asset on the date of restitution without establishing
impairment allowances.
38 Government grants
(1) Type of change
Government grants are transfers of monetary or non-monetary assets from the government to the Group at
nil consideration. According to the grants targets stipulated in the relevant government documents,
government grants are classified into government grants related to assets and government grants related to
income.
(2) Recognition of government grants
If a government grant is a monetary asset, it is measured at the amount received or receivable. If a
government 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). Government grants measured at nominal
amounts are recognized directly in the current profits and losses.
(3) Accounting treatment
Government grants related to assets offset the book value of the underlying assets.
If the government 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; government 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 government grants related to the daily activities of the enterprise, the R&D and VAT-related subsidies
are included in other income; other government grants offset related costs according to the nature of
economic activities. Government 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 government 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 government finance department directly appropriates the
interest grant funds to the Company, the grants offset the related borrowing costs.
In case that a confirmed government grant is required to be returned, the book value of the asset is adjusted
if the book value 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; in case of
other circumstances, it is directly included in the current profit and loss.
53
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
39 Deferred income tax assets and deferred income tax liabilities
The income taxes of the Company include current income tax and deferred income tax. Both current income
tax and deferred income tax are recognized in the current profit and loss as income tax expense or gain,
except for the following:
(1) Adjusting goodwill due to income tax arising from business combination;
Income tax related to transactions or events directly included in shareholders' equity is included in
(2)
shareholders’ equity.
On the balance sheet date, the Company recognizes the deferred income tax assets or deferred income tax
liabilities in accordance with the balance sheet liability method on temporary differences between the book
value of assets or liabilities and their tax base.
The Company recognizes all taxable temporary differences as deferred tax liabilities except the taxable
temporary differences incurred in the following transactions:
(1) Initial recognition of goodwill; or initial recognition of assets or liabilities arising from transactions with the
following characteristics: the transaction is not a business combination, and does not affect the accounting
profits or the amount of taxable income which occurs;
(2) For taxable temporary differences related to investments in subsidiaries, associates and joint ventures, the
timing of the reversal of the temporary differences can be controlled and the temporary differences are
unlikely to be reversed in the foreseeable future.
The Company recognizes deferred income tax assets arising from deductible temporary differences, subject
to the amount of taxable income likely to be obtained to offset the deductible temporary differences, except
the deductible temporary differences incurred in the following transactions:
The transaction is not a business combination, and does not affect the accounting profits or the amount of
(1)
taxable income when occurs;
(2) The deductible temporary differences related to investment in subsidiaries, associates and joint ventures
cannot satisfy all the following: the temporary differences are likely to be reversed in the foreseeable future
and are likely to be used for deduction of deductible taxable income for temporary differences in the future.
On the balance sheet date, the Company measures the deferred income tax assets and deferred income tax
liabilities according to the tax law based on the applicable tax rate during the period of expectation of
recovering the assets or paying off the liabilities, and reflects the income tax impact of the expected
recovery of assets or liquidation of liabilities on the balance sheet date.
On the balance sheet date, the Company reviews the book value of deferred income tax assets. If it is
probable that no sufficient taxable income will be available in the future to offset the benefits of deferred tax
assets, the book value of deferred tax assets is written down. When it is probable that sufficient taxable
income will be available, the amount written-down will be reversed.
54
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
40 Leases (applicable before December 31 2020)
(1) Accounting treatment of operating leases
(a) The rental fees paid by the Company for the lease of assets are apportioned on a straight-line basis over the
entire lease term without deduction of the rent-free period and included in the current expenses. The initial
direct costs associated with the lease transactions paid by the Company are included in the current expenses.
When the lessor of an asset bears the expenses related to the lease that should be borne by the Company, the
Company deducts the part of the expenses from the total rent. The deducted rental expenses are apportioned
during the lease term and included in the current expenses.
(b) The rental fees charged by the Company for renting out assets are apportioned on a straight-line basis over the
entire lease term without deduction of the rent-free period and is recognized as rental income. The initial direct
expenses related to lease transactions paid by the Company are included in the current expenses; if the amount
is a significant one, it is capitalized and included in the current income in the same period as the lease income is
recognized throughout the lease period.
When the Company bears the lease-related expenses that should be borne by the lessee, the Company deducts
the part of the expenses from the total rental income, and distributes the deducted rental expenses within the
lease term.
(2) Financial leased assets
On the date when lease starts, the Company recognizes the fair value of the leased asset or the present value of
the minimum lease payment as the book value of the leased asset, whichever is lower, and recognizes the
minimum lease payment amount as the book value of the long-term payable, and the difference between the two
is recognized as unconfirmed financing expenses. The Company adopts the effective interest rate method to
amortize the unrecognized financing expenses during the asset lease period and includes them in financial
expenses.
(3) Financial leasing assets
On the date when the lease starts, the Company recognizes the receivable of the financial lease, the difference
between the sum of unsecured residual value and its present value as unrealized financing income, and
recognizes the lease income in the future period of the lease. The initial direct costs incurred by the Company in
connection with lease transactions are included in the initial measurement of financial lease receivable, and the
amount of income recognized during the lease term is reduced.
41 Leases (applicable from January 1, 2021) (continued)
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.
55
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
41 Leases (applicable from 1 January 2021) (continued)
(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 constitute a package deal,
(a)
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 depe nds on the pricing or
(b)
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 strai ghtline 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 lease An asset lease with a value of less than RMB40,000 or its foreign currency
equivalents
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, 26 and Note III,
(b)
34.
56
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
41 Leases (applicable from January 1, 2021) (continued)
(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.
57
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
41 Leases (applicable from January 1, 2021) (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 value that is
related to the use right acquired by the leaseback, and recognise 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.
42 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.
58
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
43 Discontinued operations
The Company recognizes a component disposed of or classified as a component that can be separately
distinguished from the category held for sale and satisfies any of the following as a component of
discontinued operations: (1) The component represents an independent major business or a separate major
business area; (2) This component is part of a related plan to dispose of an independent major business or a
separate major operating area; (3) This component is a subsidiary that is acquired for 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.
44 Changes to major accounting policies and estimates
(1) Change of accounting policy
(a) Impact of the adoption of the new lease standards on the Company
From January 1, 2021, the Company started to adopt the Corporate Accounting Standards No. 21-Leases revised
in 2018 by the Ministry of Finance. For details of the changed accounting policies, please refer to Item 41 in Note
III to the financial statements in this report.
Therefore, the bridging provisions of the Accounting Standards are applicable to only the above -mentioned
contracts that are identified as leases under the original accounting standards.
Moreover, regarding the above-mentioned lease contracts, the Company chose to adopt a simplified retrospective
application method for the bridging accounting treatment in accordance with the provisions of the Accounting
Standards for Business Enterprises No. 28 - Changes in Accounting Policies and Estimates, and Correction of
Errors, that is, to adjust the amounts of retained earnings and other relevant items in the financial statements at the
beginning of the year when the Accounting Standards were first adopted, without adjusting the information of
comparable periods.
The Company’s accounting policy for low-value asset leases is not to recognise right-of-use assets and lease
liabilities. According to the bridging provisions of the new accounting standards, the accounting treatment of the
Company’s low-value asset leases before the date of first adoption will be conducted in accordance with the new
accounting standards from the date of first adoption, and no retrospective adjustment will be made to the
low-value asset leases.
The impact of the implementation of the new Lease Standards on the beginning balances of the relevant items of
the Balance Sheet are shown as follows:
Carrying amount as per Effect of remeasurement Carrying amount as per
Item
the former lease standard Amount of change the revised lease standard
Fixed assets 92,829,902 (1,338,471) 91,491,431
Right-of-use assets - 2,105,059 2,105,059
Long-term deferred
2,536,670 (437,301) 2,099,369
expenses
Current portion of
non-current liabilities
13,429,670 43,844 13,473,514
due within a one-year
period
Lease liabilities - 1,112,141 1,112,141
Long-term payables 1,280,300 (826,698) 453,602
59
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
44 Changes to major accounting policies and estimates (continued)
(1) Changes to accounting policies (continued)
Impact of the adoption of Interpretation to Accounting Standards for Business Enterprises No. 14 on the
(b)
Company
On January 26, 2021, the Ministry of Finance issued the Interpretation to Accounting Standards for Business
Enterprises No. 14 (CK [2021] No. 1, hereinafter referred to as “Interpretation No. 14”), which will come into
force from January 26, 2021 (hereinafter referred to as the “adoption date”). The Company has implemented
Interpretation No. 14 since the adoption date, which has no significant impact on the financial statements for the
reporting period.
Impact of the adoption of Interpretation to Accounting Standards for Business Enterprises No. 15 on the
(c)
Company
On December 31, 2021, the Ministry of Finance issued the Interpretation to Accounting Standards for Business
Enterprises No. 15 (CK [2021] No. 35, hereinafter referred to as “Interpretation No. 15”), which will be adopted
from the issue date. The Interpretation No. 15 regulates the presentation of centralized and unified management of
the funds of the parent company and member units through internal settlement centers and financial companies,
etc.
The Company has implemented Interpretation No. 15 since December 31, 2021, which has no significant impact
on the financial statements for the comparable periods.
Changes to
(2) accounting
estimates
No change occurred to the major accounting estimates in the Reporting Period.
45 Correction of previous accounting errors
No previous accounting errors were identified and corrected in the Reporting Period.
60
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(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 Dike protection fee
Dike protection fee is paid according to relevant national tax regulations and local regulations.
5 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.
61
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax
The corporate income tax rate for the Company was 25% in the Current Period (2020: 25%).
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 government supports.
The following subsidiaries are entitled to tax preferences, overseas subsidiaries adopt the loc al tax rates, and the other
subsidiaries of the Company are all taxed at a rate of 25%.
Subsidiaries entitled to tax preferences:
Preferential
Company Name Reason
tax rate
TCL China Star Optoelectronics Technology Co., Ltd. 15% High-tech enterprise
Shenzhen China Star Optoelectronics Semiconductor 15% High-tech enterprise
Display Technology Co., Ltd.
Wuhan China Star Optoelectronics Technology Co.,
15% High-tech enterprise
Ltd.
Wuhan China Star Optoelectronics Semiconductor 15% High-tech enterprise
Display Technology Co., Ltd.
Shenzhen TCL High-Tech Development Co., Ltd. 15% High-tech enterprise
Qingdao Blue Business Consulting Co., Ltd. 15% High-tech enterprise
Tianjin Huan'Ou Semiconductor Material&Technology 15% High-tech enterprise
Co., Ltd.
TianJinZhonghuan Advanced Material&Technology
15% High-tech enterprise
Co., Ltd.
Inner Mongolia Zhonghuan Solar Material Co., Ltd. 15% High-tech enterprise
Huansheng Solar (Jiangsu) Co., Ltd. 15% High-tech enterprise
Zhangjiakou Huan? Ou International New Energy
15% High-tech enterprise
Technology Co., Ltd.
Wuxi Zhonghuan Applied Materials Co., Ltd. 15% High-tech enterprise
Tianjin Printronics Circuit Corporation 15% High-tech enterprise
Tianjin Huanbo Science and Technology Co., Ltd. 15% High-tech enterprise
Tianjin Zhonghuan Electronics Computer Co., Ltd. 15% High-tech enterprise
Guangdong TCL New Technology Co., Ltd. 15% High-tech enterprise
Ningxia Zhonghuan Solar Material Co., Ltd. 15% Encouraged business in West China
Inner Mongolia ZhonghuanXiexin Solar Material Co.,
15% Encouraged business in West China
Ltd.
State-supported public infrastructure project,
Huhehaote Huanju New Energy Development Co., Ltd. 15%
Encouraged business in West China
Inner Mongolia Zhonghuan Advanced Semiconductor Encouraged business of integrated circuit
12.5%
Material Co., Ltd. materials
Yixing Huanxing New Energy Co., Ltd. 12.5% State-supported public infrastructure project
GuyuanShengju New Energy Co., Ltd. 12.5% State-supported public infrastructure project
ShangqiuYaowei Photovoltaic Power Generation Co.,
12.5% State-supported public infrastructure project
Ltd.
Tianjin HuanyuYangguang New Energy Technology
12.5% State-supported public infrastructure project
Co., Ltd.
HuludaoZhongrun Energy Technology Co., Ltd. 12.5% State-supported public infrastructure project
KangbaoHuanju New Energy Co., Ltd. 12.5% State-supported public infrastructure project
Qinhuangdao Tianhui Solar Energy Co., Ltd. 12.5% State-supported public infrastructure project
62
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
HuludaoXincheng New Energy Technology Co., State-supported public infrastructure
12.5%
Ltd. project
State-supported public infrastructure
Zhangjiakou Shengyuan New Energy Co., Ltd. 12.5%
project
Shenzhen Qianhai Maojia Software Technology 10% Key software enterprise
Co., Ltd.
State-supported public infrastructure
Dushan Anju Photovoltaic Technology Co., Ltd. 7.5% project, Encouraged business in West
China
State-supported public infrastructure
Sonid Left Banner Huanxin New Energy Co., Ltd. 7.5% project, Encouraged business in West
China
State-supported public infrastructure
Otog Banner Huanju New Energy Co., Ltd. 7.5% project, Encouraged business in West
China
State-supported public infrastructure
Inner Mongolia New HuanyuYangguang New 7.5% project, Encouraged business in West
Energy Technology Co., Ltd. China
State-supported public infrastructure
GengmaHuanxing New Energy Co., Ltd. 7.5% project, Encouraged business in West
China
State-supported public infrastructure
Shanxi RunhuanTianyu Technology Co., Ltd. Tax-free project, Encouraged business in West
China
State-supported public infrastructure
Tianjin Binhai Huanneng New Energy Co., Ltd. Tax-free
project
State-supported public infrastructure
GaoqingHuanyuan Energy Technology Co., Ltd. Tax-free
project
GaoqingChengguang Energy Technology Co., State-supported public infrastructure
Tax-free
Ltd. project
State-supported public infrastructure
NingjinJinchen New Energy Co., Ltd. Tax-free
project
State-supported public infrastructure
Tianjin Zhonghuan New Energy Co., Ltd. Tax-free
project
State-supported public infrastructure
DangxiongYouhao New Energy Development Tax-free project, Encouraged business in West
Co., Ltd.
China
63
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
ShangqiuSuoguang Energy Technology Co.,
2% ~ 10% Small low-profit business
Ltd.
ShangqiuSuoyuan Energy Technology Co., Ltd. 2% ~ 10% Small low-profit business
UlanqabDishengsheng Energy Co., Ltd. 5% Small low-profit business
Tongliao Guangdong New Energy Co., Ltd. 5% Small low-profit business
Alxa League Huanju New Energy Co., Ltd. 5% Small low-profit business
JinxiangHaotian New Energy Co., Ltd. 5% Small low-profit business
Inner Mongolia Zhonghuan Asset Management
5% Small low-profit business
Co., Ltd.
Inner Mongolia Huanya Hotel Management Co., 5% Small low-profit business
Ltd.
ShangqiuSuoneng Energy Technology Co., Ltd. 3% Small low-profit business
Tianjin ZhonghuanZhongda Technology Co.,
3% Small low-profit business
Ltd.
Sichuan Sunpiestore Technology Co., Ltd. 5% Small low-profit business
Guizhou Sunpiestore Technology Co., Ltd. 5% Small low-profit business
Tianjin ZhonghuanHengda Technology Co., Small low-profit business
3%
Ltd.
Tianjin Yingtuo Computer Control Technology Small low-profit business
3%
Co., Ltd.
Tianjin Zhongdian High Tech Co., Ltd. 3% Small low-profit business
Tianjin Zhonghuan Electronic Instrument Co., Small low-profit business
3%
Ltd.
According to Article II of the Notice on the Implementation of Inclusive Tax Reduction and Exemption Policies
for Small and Micro Enterprises (CS [2019] No. 13) issued by the Ministry of Finance and the State Taxation
Administration, the portion of the annual taxable income of each small and micro profit enterprise that does not
exceed RMB1 million will be included in the taxable income at a reduced rate of 25% and the corporate income
tax will be paid thereon at a tax rate of 20% from January 1, 2019 to December 31, 2021; the portion of the
annual taxable income of each small and micro profit enterprise that exceeds RMB1 million but does not exceed
RMB3 million will be included in the taxable income at a reduced rate of 50% and the corporate income tax will
be paid thereon at a tax rate of 20% from January 1, 2019 to December 31, 2021.
According to the Announcement on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Households (Announcement of the Ministry of Finance
and the State Taxation Administration No. 12 of 2021) issued by the Ministry of Finance and the State Taxation
Administration on April 2, 2021, the portion of the annual taxable income of each small and micro profit
enterprise that does not exceed RMB1 million will be subject to halved corporate income taxes on the basis of
the above preferential policies from January 1, 2021 to December 31 2022.
7 Individual income tax
Individual income tax of income paid to employees by the Company is withheld by the Company on behalf of
employees in accordance with to the relevant national tax regulations.
64
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements
1 Monetary assets
December 31, 2021 December 31, 2020
Cash on hand 789 1,189
Bank deposits 29,049,850 17,744,850
Deposits with the central bank 481,162 209,978
Interest receivable on deposits 64,825 84,459
Other monetary assets 1,797,066 3,668,429
31,393,692 21,708,905
Note Monetary assets with restricted use rights
December 31, 2021 December 31, 2020
TCL Tech Finance's statutory reserve deposits with
the central bank 358,178 209,978
Restricted bank deposits 79,265 -
Restricted amount of other monetary assets 809,719 3,206,051
Interest receivable on deposits 64,825 84,459
1,311,987 3,500,488
As of December 31, 2021, the Company’s bank deposits of RMB358,178 thousand (December 31, 2020:
209,978 thousand) are statutory reserve deposits placed in the central bank by TCL Tech Finance
Co.,Ltd.. a subsidiary of the Company.
As of December 31, 2021, the Company’s monetary assets abroad amounted to RMB2,817,430 thousand
(December 31, 2020: RMB1,131,911 thousand), all of which were owned by the overseas subsidiaries of
the Company.
65
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
December 31,
December 31, 2020
2021
Financial assets at fair value through profit or loss 7,601,256 5,300,046
Including: Debt instrument investments 7,288,741 4,628,306
Equity instrument investments 312,515 671,740
7,601,256 5,300,046
3 Derivative financial assets
December 31, 2021 December 31, 2020
Foreign exchange forwards 59,063 445,690
Interest rate swaps 11,866 -
Others - 7,888
70,929 453,578
4 Notes receivable
(1) Notes receivable by category
December 31, 2021 December 31, 2020
Bank acceptance notes 775,423 576,468
Trade acceptance notes 779 19,217
776,202 595,685
66
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
4 Notes receivable (continued)
(1) Notes receivable by category (continued)
December 31, 2021 December 31, 2020
Gross amount Allowance Gross amount Allowance
Book Book
Ratio Am Perce Ratio Am Perce
Amount value Amount value
(%) ount ntage (%) ount ntage
Notes receivable for
which the allowance
for doubtful accounts 776,202 100% - - 776,202 595,685 100% - - 595,685
were established on
the grouping basis
Of which: group with 99.90 96.77
775,423 - - 775,423 576,468 - - 576,468
no recovery risk % %
By aging
analysis 779 0.10% - - 779 19,217 3.23% - - 19,217
776,202 100% - - 776,202 595,685 100% - - 595,685
(2) As at December 31, 2021, notes receivable in pledge were RMB119,381 thousand.
(3) Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were derecognized
as at December 31, 2021 amounted to RMB1,019 thousand. Endorsed or discounted notes receivable that were
not outstanding on the balance sheet date and were not derecognized as at December 31, 2021 amounted to
RMB157,915 thousand.
5 Accounts receivable
December 31, 2021 December 31, 2020
Accounts receivable 18,657,744 12,838,895
Less: allowance for doubtful accounts 418,962 281,281
18,238,782 12,557,614
67
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
Accounts receivable in the period from January 1, 2021 to December 31, 2021 are classified as follows by
(1) how the allowances for doubtful accounts were established:
December 31, 2021
Gross amount Allowance
Lifetime
ECL rate Gross amount
Accounts receivable for which the 284,712 99.73% 283,951
related allowances for doubtful
accounts were established on the
individual basis
Of which:
Accounts receivable 284,712 99.73% 283,951
Accounts receivable for which the
related allowances for doubtful accounts
were established on the grouping basis 18,373,032 0.73% 135,011
Of which:
Group 1 ： by aging analysis 13,908,732 0.65% 91,033
Group 2 ： by related party grouping 3,520,701 1.25% 43,978
Group 3: Group with no recovery risk 943,599 0.00% -
18,657,744 418,962
(2) The aging of accounts receivable is analysed as follows:
December 31, 2021 December 31, 2020
Amount Ratio (%) Amount Ratio (%)
Within 1 year 17,493,941 93.76% 11,810,255 91.99%
1 to 2 years 465,391 2.49% 392,397 3.06%
2 to 3 years 309,150 1.66% 400,671 3.12%
Over 3 years 389,262 2.09% 235,572 1.83%
18,657,744 100% 12,838,895 100%
68
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(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, 2021 December 31, 2020
Beginning amount 281,281 45,020
New subsidiary 33,745 199,462
Accrued in current period 209,480 76,552
Reversal of current period (86,588) (26,300)
Write-off of current period (12,759) (12,439)
Reduced subsidiary (5,381) -
Exchange adjustment (816) (1,014)
Ending amount 418,962 281,281
(4) There is no debt owed by shareholders holding 5% or more voting shares in this account balance.
(5) As of December 31, 2021, the accounts receivable of the top five balances are as follows:
December 31, 2021 December 31, 2020
Total amount owed by the top five 8,922,641 6,443,402
Proportion of total accounts receivable 47.82% 50.19%
6 Receivables financing
December 31, 2021 December 31, 2020
Notes receivable financing 2,217,639 1,206,289
Accounts receivable financing - 970,455
2,217,639 2,176,744
Note Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were
derecognized as of December 31, 2021 amounted to RMB15,826,495 thousand.
As of December 31, 2021, the Company believes that the held receivables financing did not have
significant credit risk and will not cause significant losses due to default.
69
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
December 31, 2021 December 31, 2020
Within 1 year 2,297,910 1,352,128
1-2 years 6,560 399
2-3 years 1,376 414
Over 3 years 479 2,712
2,306,325 1,355,653
(2) As of December 31, 2021, the prepayments of the top five balances are as follows:
December 31, 2021 December 31, 2020
Total amount owed by the top five 1,681,650 816,964
As % of total prepayments 72.91% 60.26%
8 Other receivables
December 31, 2021 December 31, 2020
Other receivables 4,458,621 2,793,640
4,458,621 2,793,640
70
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(1) Other receivables
December 31, 2021 December 31, 2020
Other receivables 4,681,100 3,046,810
Less: allowance for
doubtful accounts 222,479 253,170
4,458,621 2,793,640
(a) Nature of other receivables is analyzed as follows:
December 31, 2021 December 31, 2020
Subsidy receivable 1,696,203 1,612,041
Equity transfer receivables 1,480,960 100,802
Receivables from external
entities 832,197 678,933
Security deposits 421,430 343,367
Others 27,831 58,497
4,458,621 2,793,640
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL Lifetime ECL
12-month (credit not (credit
ECL impaired) impaired) Total
Beginning amount 64,800 113,836 74,534 253,170
Current accrual 11,564 6,455 3,004 21,023
Increase due to
newly acquired - - 343 343
subsidiaries
Reversal of current
- - (3,675) (3,675)
period
Write-off of current
- - (30,357) (30,357)
period
Decrease due to
disposal of - - (17,915) (17,915)
subsidiary
Exchange
(110) - - (110)
adjustment
December 31, 2021 76,254 120,291 25,934 222,479
71
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
December 31, 2021 December 31, 2020
Carrying amount Ratio (%) Carrying amount Ratio (%)
Within 1 year 3,991,248 85.25% 2,713,832 89.07%
1 to 2 years 292,805 6.26% 80,991 2.66%
2 to 3 years 228,974 4.90% 131,394 4.31%
Over 3 years 168,073 3.59% 120,593 3.96%
4,681,100 100% 3,046,810 100%
(d) There is no debt owed by shareholders holding 5% or more voting shares in this account balance.
(e) As of December 31, 2021, the other receivables of the top five balances are as follows:
December 31, 2021 December 31, 2020
Total amount owed by the top
five 3,381,203 2,004,109
As % of total other
receivables 72.23% 65.78%
(f) As of December 31, 2021, there is no transfer of other receivables that do 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 is the subject of securitization and does not
conform to the conditions for derecognition.
72
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventories are classified as follows:
December 31, 2021 December 31, 2020
Inventor
y
valuatio
Inventory n Carrying
Gross valuation Carrying Gross allowan amount
amount allowance amount amount ce
Raw materials 4,247,095 652,265 3,594,830 2,698,477 196,354 2,502,123
Work in
progress 2,705,288 321,606 2,383,682 1,900,684 213,991 1,686,693
Finished Goods 8,541,513 823,701 7,717,812 4,606,092 273,232 4,332,860
Turnover
materials 388,135 1,102 387,033 317,162 3,880 313,282
15,882,031 1,798,674 14,083,357 9,522,415 687,457 8,834,958
As of December 31, 2021, the Company had no inventory for liabilities guarantee.
(2) Inventory valuation allowances are analyzed as follows:
Exchan
ge
January 1, Current New Current Current Reduced Adjust December
2021 Accrual subsidiary Reversal Write-off subsidiary ment 31, 2021
Raw
materials 196,354 682,314 16,710 (90,871) (151,529) (713) - 652,265
Work in
progress 213,991 419,666 25,833 (22,212) (315,672) - - 321,606
Finished
Goods 273,232 954,725 16,317 (19,601) (354,090) (46,367) (515) 823,701
Turnover
materials 3,880 285 - - (3,063) - - 1,102
687,457 2,056,990 58,860 (132,684) (824,354) (47,080) (515) 1,798,674
73
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
December 31, 2021 December 31, 2020
Allowance Allowance
Carrying
Gross for Gross for Carrying
amount doubtful amount doubtful amount
amount
accounts accounts
Electricity 239,753 6,224 233,529 186,516 2,866 183,650
charges
receivable
(2) Valuation allowances for contract assets are analyzed as follows:
Current
January 1, Current Other increases December
Reversal or
2021 Accrual and decreases 31, 2021
write-off
Electricity
charges 2,866 2,880 - 478 6,224
11 Held-for-sale assets
December 31, 2021 December 31, 2020
Assets held for sale - 360,936
12. Other current assets
December 31, 2021 December 31, 2020
Short-term debt investments 571,140 1,418,900
VAT to be deducted, to be certified, etc. 3,931,095 3,697,455
Current portion of loans and advances to customers
(note) 1,169,487 4,104,903
Other 131,238 145,797
5,802,960 9,367,055
Note: The current portion of loans and advances is loans due within the next year issued by subsidiary TCL Tech
Finance Co., Ltd., of which interest receivable is RMB3,441 thousand.
74
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
13 Loans and advances to customers
December 31, 2021 December 31, 2020
Loans and advances to customers - 981,876
14 Debt investments
December 31, 2021 December 31, 2020
National debt and secondary market debt (note) - 119,350
Note As of December 31, 2021, there were no significant debt investments.
15 Other debt investments
Accumulated
Fair loss reserves
Interes value Cumulat recognized in
Beginnin t change Ending ive fair other
Cost
g amount accrua in balance value comprehensive
l current change income
period
Trust plan 152,063 - - - - - -
Note As of December 31, 2021, there were no significant other debt investments.
16 Long-term receivables
December 31, 2021 December 31, 2020
Allo Carrying Range of
Gross Carrying Gross Allow discount rate
wanc amount
amount amount amount ance
e
Finance lease 651,118 - 651,118 778,889 - 778,889
Of which:
unrealized 7.125%-8
848,837 - 848,837 990,529 - 990,529
financing .115%
income
651,118 - 651,118 778,889 - 778,889
17 Long-term equity investments
December 31, 2021 December 31, 2020
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Associates (1) 25,086,945 1,624 25,085,321 23,941,424 13,622 23,927,802
Joint ventures
(2) 604,760 49,503 555,257 168,737 49,503 119,234
25,691,705 51,127 25,640,578 24,110,161 63,125 24,047,036
As of December 31, 2021, the Company established impairment allowances for long-term equity investments in investees with
poor management and insolvent assets.
75
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates
Increase or decrease in current period
Increase/d Investment Othe
Other
ecrease in gains and r Accrued
comprehen Cash dividends Other
Beginning investmen losses equit Impairme
Name of investee sive or profit increases and December 31,
amount t in recognized y nt
income distribution decreases 2021
current by equity chan allowance
adjustment declared
period method ges
Bank of Shanghai Co., Ltd. 11,232,138 - 1,269,007 (254,192) - (327,157) - - 11,919,796
China Innovative Capital Management
Limited 1,037,627 - 25,592 - - - - - 1,063,219
LG Electronics (Huizhou) Co., Ltd. 90,381 - 13,898 - - (12,200) - - 92,079
Shenzhen Qianhai Qihang Supply Chain
Management Co., Ltd. 39,561 - (3,401) - - - - - 36,160
Shenzhen Jucai Supply Chain Technology
Co., Ltd. 6,668 - 4,038 - - - - - 10,706
Shenzhen Tixiang Business Management
Technology Co., Ltd. 2,465 - 1,155 - - - - - 3,620
TCL Air Conditioner (Wuhan) Co., Ltd. 37,834 - 771 - - - - - 38,605
TCL Finance (Hong Kong) Co., Limited 23,124 83,704 2,820 - - - - (331) 109,317
Zhihui Xinyuan Commercial (Huizhou)
12,110 - (12,110) - - - - - -
Co., Ltd.
Shenzhen TianyiHemeng Education Co.,
Ltd. 4,719 (8,000) (2,941) - - - - 6,222 -
Urumqi TCL Equity Investment
Management Co., Ltd. 226 - (155) - - - - - 71
Hubei Changjiang Hezhi Equity
Investment Fund Partnership (Limited 1,367,292 327,459 - - - - - 1,555,876
(138,875)
Partnership)
Ningbo DongpengWeichuang Equity
Investment Partnership (Limited 850,489 (98,344) 266,671 (8) - (622,008) - (27) 396,773
Partnership)
DeqingPuhua Equity Investment Fund
194,671 - (1,573) - - - - (142) 192,956
Partnership (Limited Partnership)
76
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associate
Increase or decrease in current period
Investme
Other
Increase/de nt gains Other
comprehe Declared
crease in and losses Other increases
Beginning nsive Cash dividends or Impairmen December 31,
Name of investee investment recognize equity and
amount income profit distribution t allo wance 2021
in current d by changes decrease
adjustme declared
period equity s
nt
method
Ningbo Dongpeng Heli Equ ity Investment
511,859 (44,946) 3,373 - - (6,992) - - 463,294
Partnership (Limited Partnership)
Wuxi TCL A isikai Semi-conductor Industry
Investment Fund Partnership (Limited 221,698 (6,362) 21,115 - - (3,687) - - 232,764
Partnership)
Wuxi TCL Venture Capital Partnership (Limited
Partnership) 35,638 - (55) (3) - - - - 35,580
Ningbo Meishan Bonded Port Qiyu Investment
66,373 - (1,282) - - - - (116) 64,975
Management Partnership (Limited Partnership)
Shanghai Gen Auspicious Venture Capital
Partnership (Limited Partnership) 44,084 - 25,917 (1,371) - (38,685) - - 29,945
Nanjing Zijin A Dynamic Investment Partnership
(Limited Partnership) 21,216 - (13) (1,478) - - - - 19,725
Huizhou Kaichuang Venture Investment
Partnership (Limited Partnership) 8,709 - (9) - - - - - 8,700
Beijing A Dynamic Venture Capital Center
(Limited Partnership) 7,365 - (35) (915) - - - - 6,415
Yixing Jiangnan Tianyuan Venture Capital
Co mpany (Limited Partnership) 7,800 - (4,046) (4) - - - - 3,750
Shenzhen Chuangdong New Industry Investment
11,436 - (4) (9,091) - - - - 2,341
Fund Enterprise (Limited Partnership)
Hubei Changjiang Hezh i Equity Investment Fund
6,107 - 2,149 - - (2,250) - - 6,006
Management Co., Ltd.
Huizhou Kaimeng Angel Investment Partnership
- - - - -
(Limited Partnership) 2,660 - (65) 2,595
Ningbo Jiutian Matrix Investment Management
- - - - -
Co., Ltd. (note) 2,660 - 191 2,851
Uru mqi Qixinda Equity Investment Management
- - - - -
Co., Ltd. 1,611 - (474) 1,137
77
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associate
Increase or decrease in current period
Increase/d Investment Othe
Other Declared
ecrease in gains and r Accrued
comprehen Cash dividends Other
Beginning investmen losses equit Impairme December 31,
Name of investee sive or profit increases and
amount t in recognized y nt 2021
income distribution decreases
current by equity chan allowance
adjustment declared
period method ges
Urumqi TCL Create Dynamic Equity
Investment Management Co., Ltd. 759 - 2 - - - - - 761
Beijing A Dynamic Investment Consulting
Co., Ltd. 473 - (4) - - - - - 469
Shanghai Gen Auspicious Investment
Management Co., Ltd. 509 - 409 - - - - - 918
Nanjing A Dynamic Equity Investment Fund
Management Co., Ltd. 282 - 1 - - - - - 283
Wuxi TCL Medical Imaging Technology
Co., Ltd. 40,889 - (11,620) - - - - (34) 29,235
Beijing WeMed Medical Equipment Co.,
Ltd. 4,340 (230) (813) - - - - (3,297) -
TCL Healthcare Equipment (Shanghai) Co.,
Ltd. - (1,000) - - - - - 1,000 -
Aijiexu New Electronic Display Glass
(Shenzhen) Co., Ltd. 542,770 - 92,590 - - - - - 635,360
TCL Ventures Fund L.P. 54,220 - 357 - - - - (1,558) 53,019
Getech Ltd. 26,147 - (5,115) - - - - - 21,032
Qingteng Intellectual Property Holding
(Shenzhen) Co., Ltd. - (4,900) 4,900 - - - - - -
TCL Environmental Technology Co., Ltd. 98,010 25,811 6,822 - - - - - 130,643
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
377,553 - (4,577) - - - - - 372,976
Industry Equity Investment Fund
Partnership (Limited Partnership)
Guangdong Utrust Emerging Industry
Equity Investment Fund Partnership 150,677 - 349 - - - - - 151,026
(Limited Partnership)
78
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associate
Increase or decrease in current period
Investment
Increase/de Other
gains and Other Declared
crease in equit Accrued
Beginning losses comprehens Cash dividends or Other increases December 31,
Name of investee investment y Impairmen
amount recognized ive inco me profit distribution and decreases 2021
in current chan t allo wance
by equity adjustment declared
period ges
method
Pride Teleco m Limited - - - - - - - - -
Shenzhen Xinhuoyicheng Recreational and Sports
Industry Co., Ltd. 1,514 - (128) - - - - 31 1,417
JOLED Incorporation 1,192,994 - (184,827) - - - - (139,094) 869,073
Sichuan Shengtian New Energy Develop ment Co.,
Ltd. 457,190 - 26,004 - - (4,930) - - 478,264
YanyuanFengguang New Energy Co., Ltd. 58,418 - 4,110 - - - - - 62,528
SunPower Systems International Limited 26,367 - 1,425 - - - - - 27,792
ZhonghuanAineng (Beijing) Technology Co., Ltd. 6,067 - 776 - - - - - 6,843
Jiangsu Huanxin Semiconductor Co., Ltd. 33,849 (38,000) (833) - - - - 4,984 -
Inner Mongolia Zhongjing Science and
Technology Research Institute Co., Ltd. 86,275 - 36,753 - - - - (68) 122,960
Hunan Guo xin Semiconductor Technology Co.,
Ltd. 9,969 - (157) - - (54) - - 9,758
Maxeon So lar Technologies, Ltd. 1,883,629 219,574 (98,130) - - - - 15,121 2,020,194
Xin jiang Xiexin New Energy Material Technology
Co., Ltd. 463,779 - 1,227,582 - - - - - 1,691,361
Ruihuan (Inner Mongolia) So lar Power Co., Ltd. 11,768 - (5,872) - - - - - 5,896
Tianjin ZhonghuanHaihe Intelligent
Manufacturing Fund Partnership (Limited 464,614 195,109 (93) - - - - - 659,630
Partnership)
Tianjin Hope Equity Investment Fund
Management Co., Ltd. 413 (3,000) - - - - - 2,587 -
ZhonghuanFeilang (Tianjin) Technology Co., Ltd. 5,126 - (404) - - - - - 4,722
Tianjin ZhonghuanTengliang Technology Co.,
Ltd. 6,909 (4,000) - - - - - (2,909) -
Ningbo Zhongxin Venture Capital Partnership
Tianjin Huan xin - 60,000 (1,722) - - - - - 58,278
79
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associate
Increase or decrease in current period
Increase/ Investme
Other Oth
decrease nt gains Declared
comprehe er Accrued Other
in and losses Cash dividends
Beginning nsive equi Impairme increases December
Name of investee investme recognize or profit
amount income ty nt and 31, 2021
nt in d by distribution
adjustmen cha allowance decreases
current equity declared
t nges
period method
TCL Huanxin Semi-conductor
(Tianjin) Co., Ltd. - - (13,562) - - - - 435,324 421,762
Inner Mongolia Shengou
Electromechanical Engineering Co.,
Ltd. - 600 2,314 - - - - - 2,914
Inner Mongolia Huanye Material
Co., Ltd. - 4,000 109 - - - - - 4,109
Shenzhen Shutuo Technology Co.,
Ltd. - 40,000 (1,962) - - - - - 38,038
Shenzhen Qianhai Qihang
International Supply Chain
Management Co., Ltd. - 35,000 14,964 - - - - - 49,964
Wuhan Guochuangke Optoelectronic
Equipment Co., Ltd. - 25,353 (609) - - - - - 24,744
Other 2,073,771 (943,718) 125,838 - - (69,496) - (356,299) 830,096
23,927,802 (602,224) 3,152,870 (267,062) - (1,087,459) - (38,606) 25,085,321
Note: Tianjin Huanxin Technology & Development Co., Ltd. Was renamed as TCL Huanxin
Semi-conductor (Tianjin) Co., Ltd in April 2022.
80
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(2) Joint ventures
Increase or decrease in current period
Increase/
Other Declared
decrease Investment
comprehe Cash Other
in gains and Other Accrued
Beginnin nsive dividends or increases December 31,
Name of investee investme losses equity Impairment
g amount income profit and 2021
nt in recognized by changes allowance
adjustme distribution decreases
current equity method
nt declared
period
TCL Huizhou City, Kai Enterprise
Management Limited 1,308 - 21 - - - - - 1,329
Huizhou TCL Human Resources
Service Co., Ltd. 2,121 - 1,175 - - - - - 3,296
Zhangjiakou Qixin Equity
Investment Fund Partnership 115,805 - 86,876 - - (110,000) - - 92,681
Huaxia CPV (Inner Mongolia)
- - - - - - - - -
Power Co., Ltd. (Note 1)
Tianjin Huanyan Technology Co.,
Ltd. - 35,000 (138) - - - - 109,655 144,517
TCL Microchip Technology
(Guangdong) Co., Ltd. - 350,000 (22,933) - - - - (13,633) 313,434
119,234 385,000 65,001 - - (110,000) - 96,022 555,257
81
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
Increase
Decrease in
in
January 1, 2021 current December 31, 2021 Note
current
period
period
Note
Pride Telecom Limited 1,624 - - 1,624 1
Beijing WeMed Medical Equipment Co., Note
Ltd. 11,998 - (11,998) - 1
Huaxia CPV (Inner Mongolia) Power Co., Note
Ltd. 49,503 - - 49,503 1
63,125 - (11,998) 51,127
Not Impairment allowances were established for the long-term investments in these investees at recoverable amounts because continuous
e1 operations loss occurred to these investees with poor management.
18 Investments in other equity instruments
December 31, 2021 December 31, 2020
Stocks 109,011 263,084
Equity of unlisted companies 818,308 1,070,592
927,319 1,333,676
Reasons for
Amount of other
Reasons designated as other
comprehensive
Accumu measured at fair value comprehensive
Dividend Accumulat income
Item name lated and whose changes are income
income ed gains transferred to
losses included in other transferred to
recognized retained
comprehensive income retained
earnings
earnings
Sold in
Stocks - 35,459 (53,402) 56,751 Being held long term for current
strategic purposes period
Sold in
Equity of unlisted
3,625 7,341 (210,364) 71,570 Being held long term for current
companies
strategic purposes period
Total 3,625 42,800 (263,766) 128,321
19 Other non-current financial assets
December 31, 2021 December 31, 2020
Equity investments 2,149,781 2,422,328
Debt investments 554,257 633,267
2,704,038 3,055,595
82
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
20 Investment property
Houses and
Land use rights Total
buildings
Gross amount:
January 1, 2021 1,646,742 195,007 1,841,749
Increase
Increase in current period 37,715 - 37,715
Reclassified from fixed assets and
intangible assets 175,269 4,393 179,662
Reclassified from construction in
progress 29,583 - 29,583
Decreases
Reclassified to fixed assets and
intangible assets (992,893) (106,583) (1,099,476)
December 31, 2021 896,416 92,817 989,233
Accumulated depreciation and
amortization:
January 1, 2021 115,212 10,263 125,475
Increase
Increase in current period 34,240 2,844 37,084
Reclassified from fixed assets and
intangible assets 54,206 17 54,223
Decreases
Reclassified to fixed assets and
intangible assets (37,668) (4,748) (42,416)
December 31, 2021 165,990 8,376 174,366
Investment property, net:
December 31, 2021 730,426 84,441 814,867
January 1, 2021 1,531,530 184,744 1,716,274
Impairment allowance:
January 1, 2021 52,073 - 52,073
Increase
Increase in current period 892 - 892
Decreases
Decrease in current period - - -
December 31, 2021 52,965 - 52,965
Investment property, carrying
amount:
December 31, 2021 677,461 84,441 761,902
January 1, 2021 1,479,457 184,744 1,664,201
83
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
21 Fixed assets
Office and
Houses and Machinery electronic Transportation Power
buildings equipment equipment equipment stations Other Total
Gross amount:
December 31, 2020 24,344,118 107,045,621 4,236,113 140,658 2,369,816 9,227 138,145,553
Change of accounting
policy - (1,595,161) - - - - (1,595,161)
January 1, 2021 24,344,118 105,450,460 4,236,113 140,658 2,369,816 9,227 136,550,392
Increase
New subsidiary 6,002,363 17,004,982 565,645 51,211 - 10,089 23,634,290
Acquisition and other 10,405 931,392 505,250 25,856 8,690 1,327 1,482,920
Reclassified fro m
investment property 992,893 - - - - - 992,893
Reclassified fro m
construction in
progress 6,303,543 27,811,306 1,164,031 30,949 880 1,257 35,311,966
Decreases
Written down with
government grants (168,245) (486,490) - - - - (654,735)
Reduced subsidiary (45,077) (663,888) (71,809) (609) - - (781,383)
Reclassified to
investment property (168,872) - - - - - (168,872)
Other decreases (459,378) (5,778,186) (257,484) (19,010) (18,350) (126) (6,532,534)
Exchange adjustment (2,263) (1,003) (541) (94) - (198) (4,099)
December 31, 2021 36,809,487 144,268,573 6,141,205 228,961 2,361,036 21,576 189,830,838
Accumulated
depreciation:
December 31, 2020 3,137,624 38,615,003 1,781,623 89,472 336,269 5,592 43,965,583
Change of accounting
policy - (256,690) - - - - (256,690)
January 1, 2021 3,137,624 38,358,313 1,781,623 89,472 336,269 5,592 43,708,893
Increase
New subsidiary 2,126,109 15,743,952 464,374 43,426 - 6,744 18,384,605
Accrual 1,269,475 13,382,067 437,728 26,830 90,121 1,339 15,207,560
Reclassified fro m
investment property 37,668 - - - - - 37,668
Other increases - - - 59 532 - 591
Decreases
Written down with
government grants (60,663) (286,655) - - - - (347,318)
Reduced subsidiary (3,336) (392,485) (58,696) (311) - - (454,828)
Reclassified to
investment property (54,206) - - - - - (54,206)
Other decreases (28,253) (1,892,246) (124,534) (13,924) - (126) (2,059,083)
Exchange adjustment (95) (663) (242) (54) - (45) (1,099)
December 31, 2021 6,424,323 64,912,283 2,500,253 145,498 426,922 13,504 74,422,783
Fixed assets, net:
December 31, 2021 30,385,164 79,356,290 3,640,952 83,463 1,934,114 8,072 115,408,055
January 1, 2021 21,206,494 67,092,147 2,454,490 51,186 2,033,547 3,635 92,841,499
December 31, 2020 21,206,494 68,430,618 2,454,490 51,186 2,033,547 3,635 94,179,970
84
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
21 Fixed assets (continued)
Office and Transporta
Houses and Machinery Power
electronic tion Other Total
buildings equipment stations
equipment equipment
Impairment
allowance:
January 1, 2021 771,541 170,409 404,553 3,565 - - 1,350,068
New subsidiary - 81,234 977 375 - 412 82,998
Accrued in current
period - 520,901 9,361 176 62,059 - 592,497
Reclassified from
investment property - - - - - - -
Reduced subsidiary - - - - - - -
Write-off of current
period - (118,704) (76,414) (1,687) - - (196,805)
Exchange
adjustment - - - - - - -
December 31, 2021 771,541 653,840 338,477 2,429 62,059 412 1,828,758
Fixed assets,
carrying amount:
December 31, 2021 29,613,623 78,702,450 3,302,475 81,034 1,872,055 7,660 113,579,297
January 1, 2021 20,434,953 66,921,738 2,049,937 47,621 2,033,547 3,635 91,491,431
December 31, 2020 20,434,953 68,260,209 2,049,937 47,621 2,033,547 3,635 92,829,902
Please refer to Item 84 of Note V for information on fixed asset mortgage. As of December 31, 2021, the gross
amount of the fixed assets that were sufficiently depreciated and still in use was RMB33,070,988 thousand.
Fixed assets with pending ownership certificates at the end of the current period:
Expected time of obtaining
Carrying amount
ownership certificate
Houses and buildings
16,077,770 Within 2022
(Note)
Note As at December 31, 2021, the fixed assets with pending ownership certificates of the Company are mainly the
buildings and constructions of CSOT's t3, t4, t6 and t7 manufacturing bases, as well as the buildings and
constructions of Inner Mongolia Zhonghuan Solar Material Co., Ltd., Inner Mongolia ZhonghuanXiexin Solar
Material Co., Ltd., Inner Mongolia Zhonghuan Advanced Semi-conductor Material Co., Ltd., Jiangsu Zhonghuan
Enterprise Management Co., Ltd. and Tianjin ZhongkeHuanhai Industrial Park Co., Ltd.
85
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
22 Construction in progress
(1) List for construction in progress:
December 31, 2021 December 31, 2020
Construction in progress 37,112,045 31,508,311
Less: Impairment allowance 146,160 -
36,965,885 31,508,311
(2) Provision for impairment of construction-in-progress accrued in the current period
Amount accrued in
current period
Purchase and installation of machinery and equipment of
Zhonghuan 136,552
Other 9,608
146,160
86
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
22 Construction in progress (continued)
Interest
capitaliza
Of which : t ion rate
Increase in Transfer-in in Pro ject input Project Cu mulat ive capitalized for
Beginning New current current period Other December Investment progres capitalized interest in current
Project name Budget amount subsidiary period Fixed assets decreases 31, 2021 as % of budget s interest current period period Funding source
t7 production line of Self-funded +
LCD panel 35,337,000 9,338,643 - 12,641,547 (18,574,666) (43,174) 3,362,350 64% 64% 392,432 267,728 4.22% external-loan-funded
t4 production line of Self-funded +
LCD panel 27,081,000 10,892,755 - 6,809,367 (465,653) (10,200) 17,226,269 95% 95% 1,091,024 250,996 3.63% external-loan-funded
t9 production line of
LCD panel 9,707,616 - - 3,916,693 - - 3,916,693 40% 40% - - - Self-funded
Huizhou modular Self-funded +
integration project 7,066,680 1,638,831 - 163,791 (1,062,020) (119,800) 620,802 100% 100% - - - external-loan-funded
Production line of
8-12-inch
semiconductor silicon 5,707,172 2,027,583 - 939,709 (1,580,078) (79,768) 1,307,446 58% 58% - - - Self-funded
wafers for integrated
circuit
Industrialization phase
V of monocrystalline
silicon materials for
renewable solar power
Self-funded +
batteries and 9,125,010 1,417,284 - 3,456,697 (3,639,934) (278,088) 955,959 86% 86% 54,018 54,018 4.35%
external-loan-funded
monocrystalline silicon
wafers for ultra -thin
high-efficient solar
power batteries
Not Not
Not Not applica Not Not applicabl
Other applicable 6,193,215 105,257 13,281,290 (9,989,615) (13,781) 9,576,366 applicable ble applicable applicable e Not applicable
31,508,311 105,257 41,209,094 (35,311,966) (544,811) 36,965,885
87
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
23 Right-of-use assets
Houses and Transportation Machinery Land use
Total
buildings equipment equipment rights
Gross amount:
January 1, 2021 574,884 165 1,786,700 - 2,361,749
Increase
New subsidiary 7,447 1,660 182 - 9,289
Leased in 299,466 259 339,251 13,335 652,311
Other increases - 296 - - 296
Decreases
Reduced subsidiary (12,461) - - - (12,461)
Other decreases (241) (1,199) (143,753) - (145,193)
Exchange adjustment (1,584) (17) - - (1,601)
December 31, 2021 867,511 1,164 1,982,380 13,335 2,864,390
Accumulated
depreciation:
January 1, 2021 - - 256,690 - 256,690
Increase
New subsidiary 502 1,100 116 - 1,718
Accrual 102,800 441 122,275 83 225,599
Decreases
Reduced subsidiary (1,377) - - - (1,377)
Other decreases (195) (1,017) (43,555) - (44,767)
Exchange adjustment (382) (2) - - (384)
December 31, 2021 101,348 522 335,526 83 437,479
Right-of-use assets,
carrying amount:
December 31, 2021 766,163 642 1,646,854 13,252 2,426,911
January 1, 2021 574,884 165 1,530,010 - 2,105,059
Impairment allowance:
January 1, 2021 - - - - -
December 31, 2021 - - - - -
Right-of-use assets,
carrying amount
December 31, 2021 766,163 642 1,646,854 13,252 2,426,911
January 1, 2021 574,884 165 1,530,010 - 2,105,059
88
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
24 Intangible assets
Non-patent
Land use rights technologies Other Total
/patents
Gross amount:
January 1, 2021 5,788,722 6,206,466 1,106,104 13,101,292
Increase
New subsidiary 666,130 116,080 136,329 918,539
Purchase 2,217,295 481,488 333,183 3,031,966
Reclassified from
investment property 106,583 - - 106,583
Reclassified from
construction in progress 6,504 682 113,558 120,744
Reclassified from
development costs - 1,348,216 - 1,348,216
Decreases
Sale and disposal (81,950) (25,235) (29,644) (136,829)
Reclassified to investment
property (10,790) - - (10,790)
Reduced subsidiary (8,078) (1,529) (68,925) (78,532)
Other decreases (34,770) - - (34,770)
Exchange adjustment - (42,504) (55) (42,559)
December 31, 2021 8,649,646 8,083,664 1,590,550 18,323,860
Accumulated amortization:
January 1, 2021 569,351 1,864,170 535,315 2,968,836
Increase
New subsidiary 39,649 200 129,611 169,460
Accrual 203,764 811,359 161,880 1,177,003
Reclassified from
investment property 4,748 - - 4,748
Decreases
Sale and disposal (5,224) (16,889) (20,321) (42,434)
Reclassified to investment
property (17) - - (17)
Reduced subsidiary (1,138) (115) (65,986) (67,239)
Other decreases (8,294) - (980) (9,274)
Exchange adjustment - (4,570) (29) (4,599)
December 31, 2021 802,839 2,654,155 739,490 4,196,484
Intangible assets, net：
December 31, 2021 7,846,807 5,429,509 851,060 14,127,376
January 1, 2021 5,219,371 4,342,296 570,789 10,132,456
Impairment allowance:
January 1, 2021 23,562 32,625 22,224 78,411
New subsidiary - - - -
Accrual - 78,139 769 78,908
Write-off of current period - - (11,845) (11,845)
Exchange adjustment - (745) - (745)
December 31, 2021 23,562 110,019 11,148 144,729
Intangible assets, carrying
amount:
December 31, 2021 7,823,245 5,319,490 839,912 13,982,647
January 1, 2021 5,195,809 4,309,671 548,565 10,054,045
Please refer to Item 84 of Note V for information on collateralized intangible assets.
At the end of the period, the book value of the land use right for which the property ownership certificate had not been issued was
RMB2,067,076 thousand, which were expected to be issued in 2023.
89
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
25 Development expenditures
Development expenditures are as follows:
December 31, 2021 December 31, 2020
Semi-conductor display 1,266,973 1,383,727
New energy photovoltaic & semi-conductor materials 1,241,446 720,268
2,508,419 2,103,995
26 Goodwill
(1) Gross amount of goodwill
Decrease in
current
Increase in current period period
Name of investee or Beginning Ending
Incurred in Increase due
item incurring goodwill amount Disposal and balance
business to newly
other
combination acquired
Other
subsidiaries
TCL Medical Radiological Technology Note
28,967 - - - 28,967
(Beijing) Co., Ltd. 1
Qingdao Blue Business Consulting Co., Note
2,452 - - - 2,452
Ltd. 2
Tianjin Huan'Ou Semiconductor Note
214,683 - - - 214,683
Material&Technology Co., Ltd. 3
Tianjin Zhonghuan Electronics Group Co., Note
6,726,130 - - - 6,726,130
Ltd. 4
Note
- - 1,728,973 - 1,728,973
Moka International Limited 5
Suzhou China Star Optoelectronics Note
- - 486,603 - 486,603
Technology Co., Ltd. 6
6,972,232 - 2,215,576 - 9,187,808
(2) Goodwill impairment allowance
Beginning Increase in Decrease in
Name of investee amount current period current period Ending balance
TCL Medical Radiological Technology (Beijing)
Co., Ltd. 28,967 - - 28,967
Note In 2010, the Company acquired a 51.82% interest in TCL Medical Radiological Technology (Beijing) Co., Ltd. (hereinafter referred to
1 as “TCL Medical Radiological Technology”) with capital of RMB 52,319 thousand. Thus, the difference between the accumulated
investment of the Company in TCL Medical Radiological Technology (corresponding to 51.82% interest) and the fair value of the
identifiable net assets of TCL Medical Radiological Technology attributable to the Company on t he settlement date (equal to RMB
28,967 thousand) was recorded in the Company's goodwill. An impairment allowance of RMB 28,967 thousand had been established
on this goodwill item for 2018.
90
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
26 Goodwill (continued)
Note 2 Highly Information Industry Co., Ltd., a subsidiary of the Company, acquired in October 2016 a 60% interest in
Qingdao Blue Business Consulting Co., Ltd. (hereinafter referred to as “Blue Business Consulting”) with a capital of
RMB 10,000 thousand. 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 identifiable net assets of
Blue Business Consulting attributable to Highly Information Industry Co., Ltd. on the settlement date (equivalent to
RMB 2,452 thousand) was recorded in the Company’s goodwill.
Note 3 Tianjin Huan’Ou Semiconductor Material&Technology Co., Ltd. is a subsidiary of Zhonghuan Electronics, which the
Company has acquired in a business combination not involving entities under common control.
Note 4 The Company acquired on October 1, 2020 100% interest in Tianjin Zhonghuan Electronics Group Co., Ltd.
(hereinafter referred to as “Zhonghuan Electronics”) with a cash payment of RMB 12,500,000 thousand. As from the
date of acquisition, the Group has obtained the control of Zhonghuan Electronics and has thus included it into the
consolidated financial statements. As such, the difference between the accumulated investment of the Company in
Zhonghuan Electronics (corresponding to the 100% interest) and the fair value of the identifiable net assets of
Zhonghuan Electronics attributable to the Company on the settlement date (equal to RMB6,726,130 thousand) was
recorded in the Company’s goodwill.
Note 5 The Company acquired in April 2021 100% interest in Moka International Limited with a cash payment of
RMB2,800,000 thousand. Thus, the difference between the accumulated investment of the Company in Moka
International Limited (corresponding to the 100% interest) and the fair value of the identifiable net assets of Moka
International Limited attributable to the Company on the settlement date (equal to RMB 1,728,973 thousand) was
recorded in the Company’s goodwill.
Note 6 The Company acquired in April 2021 60% interest in Suzhou China Star Optoelectronics Technology Co., Ltd.
(formerly known as “Samsung Suzhou LCD Co. Ltd.” with a cash payment of RMB4,757,727 thousand. The difference
between the accumulated investment of the Company in Suzhou China Star Optoelectronics Technology Co., Ltd.
(corresponding to the total 70% interest) 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 (equal to RMB486,604
thousand) was recorded in the Company’s goodwill.
(III) Goodwill impairment test
The Company tested the impairment of its goodwill on December 31, 2021. The recoverable amount of the asset
portfolio with goodwill was calculated with the discounted future cash flow approach, based on the budget approved by
the Management (the budget period is five years). The estimated perpetual annual growth rate was ado pted to calculate
the future cash flow exceeding the budget period. The perpetual annual growth rate (primarily 0% - 0.37%) adopted by
the Management was consistent with predicted data on the industry. The Management confirmed the revenue growth
rate (mainly 7.61% - 33%) and the EBITDA (primarily 2.40% - 15%) in accordance with historical experience and the
prediction of market development and the consistency with strategic planning for future enterprise development. The
special risk discount rate (mainly 8% - 13.5%) that could reflect relevant asset portfolios was adopted. There was no
need for the Company to set aside allowances for asset impairment for the asset portfolio of Qingdao Blue Business
Consulting Co., Ltd., Tianjin Zhonghuan Advanced Materials & Technology Co., Ltd., and Tianjin Printronics Circuit
Corp., semi-conductor and semi-conductor photovoltaic materials, Moka International Limited, Suzhou China Star
Optoelectronics Technology Co., Ltd., and the goodwill of Guangdong TCL New Technology Co ., Ltd. on December
31, 2021, after the Management analyzed the recoverable amount of each asset portfolio according to the assumption.
91
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
27 Long-term prepaid expense
December Change of Increase Amortizati Disposal
New
31, 2020 accounting 2021 in on in of December
subsidi Other
policy current current subsidiar 31, 2021
ary
period period y
Improvement
expense on
1,837,100 (437,301) 1,399,799 485,067 - (245,149) (10,194) (48) 1,629,475
leased fixed
assets
Other 699,570 - 699,570 1,479,234 3,367 (1,034,925) (54,327) (81,864) 1,011,055
2,536,670 (437,301) 2,099,369 1,964,301 3,367 (1,280,074) (64,521) (81,912) 2,640,530
28 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
December 31, 2021 December 31, 2020
Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deductible losses 6,758,713 1,090,916 6,894,358 1,123,164
Asset impairment
allowances 3,038,745 633,013 863,644 157,705
Provisions 744,189 117,497 348,755 63,881
Changes in fair value 55,287 13,230 55,115 9,708
Others 1,546,420 298,690 1,236,231 223,630
12,143,354 2,153,346 9,398,103 1,578,088
92
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
28 Deferred income tax assets and deferred income tax liabilities (continued)
(2) Un-offset deferred income tax liabilities
December 31, 2021 December 31, 2020
Taxable Taxable Deferred
temporary Deferred tax temporary income tax
differences liabilities differences liabilities
Accelerated depreciation
of fixed assets 14,655,416 2,288,989 9,964,402 1,632,989
Increase in value of
assets as assessed in
business combination not 2,491,577 531,018 1,677,938 330,039
involving entities under
common control
Changes in fair value 527,471 129,006 1,387,815 339,098
Government grants 273,470 41,021 120,200 18,030
Other 721,284 168,952 333,004 66,341
18,669,218 3,158,986 13,483,359 2,386,497
(3) Unrecognized deferred income tax assets
December 31, 2021 December 31, 2020
Deductible temporary
difference 181,612 450,345
Deductible losses 5,840,378 2,805,343
6,021,990 3,255,688
(4) There were no deferred tax assets or liabilities presented at the net amount after offsetting.
93
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
28 Deferred income tax assets and deferred income tax liabilities (continued)
(5) Deductible losses in respect of unrecognized deferred income tax assets will expire in the following years:
December 31, 2021 December 31, 2020
2020 - 85,905
2021 178,533 186,872
2022 268,913 278,304
2023 477,404 497,214
2024 476,543 487,234
2025 464,426 460,523
2026 onwards 3,974,559 809,291
5,840,378 2,805,343
29 Other non-current assets
December 31, 2021 December 31, 2020
Advance payment for equipment
and land use rights (Note) 6,310,004 11,725,289
Advance payment for patents 211,606 244,462
Other 927,399 563,102
7,449,009 12,532,853
Note The Company reclassifies long-lived assets such as advance payment for equipment and land use rights
reflected in prepaid accounts to other non-current assets.
94
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
30 Short-term borrowings
December 31, 2021 December 31, 2020
Unsecured borrowings 9,315,505 10,983,337
Borrowings secured by pledge 22,549 1,059,306
Borrowings secured by
collateral - 192,000
Interest payable 3,373 29,071
9,341,427 12,263,714
As of December 31, 2021, short-term borrowings secured by pledge were RMB22,549 thousand (including
amounts translated from other currencies) (December 31, 2020: RMB1,059,306 thousand), which were secured
by the pledge of held-for-trading financial assets of RMB34,337 thousand (including amounts translated from
other currencies) (December 31, 2020: RMB2,111,342 thousand). Short-term borrowings secured by collateral
amounted to RMB 0 thousand (including amounts translated from other currencies) (December 31, 2020: RMB
192,000), which were secured by the collateral of machinery equipment (including amounts translated from
other currencies) (December 31, 2020: RMB207,407).
As of December 31, 2021, the Company does not have any short-term borrowings that have expired and have
not been repaid.
31 Borrowings from central bank
As of December 31, 2021, the balance of the borrowings of TCL Tech Finance Co., Ltd., a subsidiary of the
Company, from the central bank was RMB1,437,062 thousand (December 31, 2020: RMB469,834 thousand).
32 Customer deposits and deposits from banks and other financial institutions
December 31, 2021 December 31, 2020
Customer deposits and deposits from other
banks and financial institutions 666,056 2,850,139
Customer deposits and deposits from banks and other financial institutions are the deposits of related and
nonrelated enterprises absorbed by TCL Tech Finance Co., Ltd., a subsidiary of the Company, within the
business scope approved by the regulatory authority.
95
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
33 Held-for-trading financial liabilities
December 31, 2021 December 31, 2020
Financial liabilities at fair value through profit 925,035 527,901
or loss.
34 Derivative financial liabilities
December 31, 2021 December 31, 2020
Derivative financial liabilities 22,205 384,904
35 Notes payable
December 31, 2021 December 31, 2020
Bank acceptance notes 2,877,554 4,324,150
Trade acceptance notes 397,742 401,462
3,275,296 4,725,612
There is no amount payable to shareholders holding 5% or more voting shares in this account.
36 Accounts payable
December 31, 2021 December 31, 2020
Amounts due to suppliers 24,297,860 16,468,932
As of December 31, 2021, there were no significant accounts payable with an age of over one year. There is no
amount payable to shareholders holding 5% or more voting shares in this account.
96
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
37 Advances received
December 31,
December 31, 2020
2021
Advances from customers 5,794 78,597
The Company had no advances from customers of a large amount with an age of over one year.
There is no advance from shareholders holding 5% or more voting shares in this account balance.
38 Contract liabilities
December 31, 2021 December 31, 2020
Advances from customers 2,593,882 2,004,004
39 Financial assets sold under repurchase agreement
December 31, 2021 December 31, 2020
Financial assets sold under repurchase agreements - 50,080
40 Employee benefits payable and long-term employee benefits payable
(1) Employee compensation payable
December 31, 2021 December 31, 2020
Short-term employee benefits payable 3,274,021 1,828,681
Defined contribution plans payable 34,383 25,394
Dismissal benefits payable 3,529 2,589
3,311,933 1,856,664
97
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
40 Employee benefits payable and long-term employee benefits payable (continued)
(1) Employee benefits payable (continued)
(a) Short-term employee benefits payable
January 1, 2021 Increase in Decrease in December 31,
current period current period 2021
Wages, bonuses, allowances
and subsidies 1,493,952 8,796,514 (7,405,279) 2,885,187
Employee services and
benefits 20,028 384,876 (377,240) 27,664
Social insurance benefits 37,127 351,672 (342,234) 46,565
Of which:
Medical insurance 34,566 328,490 (318,434) 44,622
Employment injury
insurance 1,016 11,293 (11,356) 953
Maternity insurance 1,545 11,889 (12,444) 990
Housing fund 36,660 277,851 (284,185) 30,326
Trade union funds and staff
education funds 11,498 82,203 (66,126) 27,575
Others 229,416 169,764 (142,476) 256,704
1,828,681 10,062,880 (8,617,540) 3,274,021
(b) Defined contribution plans
January 1, 2021 Increase in Decrease in December 31,
current period current period 2021
Basic pension insurance 24,005 484,941 (475,967) 32,979
Unemployment insurance 1,389 14,702 (14,687) 1,404
25,394 499,643 (490,654) 34,383
(2) Long-term employee compensation payable
December 31,
December 31, 2021
2020
Supplementary pension insurance 26,595 27,858
Other long-term benefits 643,336 -
669,931 27,858
98
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
41 Taxes and levies payable
December 31, 2021 December 31, 2020
Corporate income tax 1,020,711 471,670
Value-added tax 30,967 75,769
Individual income tax 39,920 33,518
Urban maintenance and construction tax 43,081 23,919
Education surcharges 30,800 17,105
Other 73,370 48,078
1,238,849 670,059
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.
42 Other payables
December 31, 2021 December 31, 2020
Dividends payable 34,607 1,293
Other payables 19,352,281 14,868,140
19,386,888 14,869,433
(1) Dividends payable
December 31, 2021 December 31, 2020
Other non-controlling interests 34,607 1,293
34,607 1,293
99
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
42 Other payables (continued)
(2) Other payables
December 31, 2021 December 31, 2020
Payables for engineering equipment 13,368,026 9,586,852
Amounts due to external entities 4,241,736 4,192,022
Unpaid expenses 1,531,544 879,629
Security deposits 210,975 209,637
19,352,281 14,868,140
There is no amount payable to shareholders holding 5% or more voting shares in this account.
100
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
43 Current portion of non-current liabilities
December 31, January 1, 2021 December 31, 2020
Note V
2021
Current portion of long-term
45
borrowings (note 1) 6,062,928 4,360,381 4,360,381
Current portion of bonds payable 5,646,822 8,146,771 8,146,771
Current portion of lease liabilities 47 681,087 43,844 -
Current portion of long-term
payables 168,132 361,110 361,110
Current portion of interest
payable 447,796 561,408 561,408
13,006,765 13,473,514 13,429,670
Note 1 As of December 31, 2021, the current portion of long-term borrowings included unsecured borrowings of
RMB6,062,928 thousand (including amounts translated from other currencies). The interest rates of the
current portion of long-term borrowing ranged from 0.46% to 4.15% (2020: 1.35% - 5.70%)
44 Other current liabilities
December 31, 2021 December 31, 2020
After-sales service expense (note) 792,847 197,515
Output tax to be transferred 286,384 56,405
Others 190,656 113,051
1,269,887 366,971
Note After-sales service expense expected to occur within 1 year is reflected in current liabilities.
101
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
45 Long-term borrowings
December 31, 2021 December 31, 2020
Borrowings secured by collateral 39,633,561 39,413,026
Borrowings secured by pledge 928,156 445,100
Unsecured borrowings 52,780,293 38,091,658
93,342,010 77,949,784
Of which: Current portion of long-term borrowings (6,062,928) (4,360,381)
87,279,082 73,589,403
The maturities of the Company's long-term borrowings vary from 2021 to 2030.
As of December 31, 2021, the long-term borrowings secured by collateral were equivalent to
RMB39,633,561 thousand (including amounts translated from other currencies) (December 31, 2020:
RMB39,413,026 thousand), which were secured by the collaterals of the land use right, houses and buildings,
machinery and equipment of about RMB66,737,167 thousand (including amounts translated from other
currencies) (December 31, 2020: RMB83,524,779 thousand); the long-term pledged borrowings were
equivalent to RMB928,156 (including amounts translated from other currencies) (December 31, 2020:
RMB445,100 thousand), which were pledged by the collaterals of the charge use right, etc., of about
RMB328,069 thousand (December 31, 2020: RMB302,447 thousand);
The interest rates of the Company’s long-term borrowing ranged from 1.31% to 5.7% in the current period
(2020: 1.3% - 5.70%).
46 Bonds payable
December 31, 2021 December 31, 2020
Corporate bonds 8,073,016 13,047,234
MTN 4,993,265 4,993,539
13,066,281 18,040,773
102
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
46 Bonds payable (continued)
(1) Movements in bonds payable
Increase due Accrued Amortizatio
Issued in Repaid in
Matu Issued to newly Beginning interest as n of Others (note Ending
Bond name Par value Issue date current current
rity amount acquired amount per par premium or 1) balance
period period
subsidiaries value discount
17TCL01 1,000,000 4/19/2017 5 1,000,000 - 1,000,947 - 34,051 - - (1,000,947) -
17TCL02 3,000,000 7/7/2017 5 3,000,000 - 157,000 - 5,523 - - (157,000) -
18TCL01 1,000,000 6/6/2018 5 1,000,000 - 998,544 - 27,747 599 (829,981) - 169,162
18TCL02 2,000,000 8/20/2018 5 2,000,000 - 1,996,841 - 92,076 6,198 - - 2,003,039
19TCL01 1,000,000 5/20/2019 5 1,000,000 - 998,056 - 43,419 574 - - 998,630
19TCL02 1,000,000 7/23/2019 5 1,000,000 - 998,009 - 43,353 559 - - 998,568
19TCL03 2,000,000 10/21/2019 5 2,000,000 - 1,995,742 - 83,770 1,118 - - 1,996,860
20TCL TECH.MTN001 3,000,000 3/27/2020 3 3,000,000 - 2,994,641 - 108,000 2,400 - - 2,997,041
TCL Private
Convertible 1 (Note 2) 600,000 11/11/2020 2 600,000 - 572,190 - 11,000 27,810 - (600,000) -
TCL Private
Convertible 2 (Note 3) 2,600,000 11/30/2020 2 2,600,000 - 2,380,375 - 11,917 99,426 - (2,479,801) -
103
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
46 Bonds payable (continued)
(1) Movements in bonds payable (continued)
Increase
Accrued
due to Amortization
Par Beginning Issued in interest as Repaid in Others (note Ending
Bond name Issue date Maturity Issued amount newly of premium or
value amount current period per par current period 1) balance
acquired discount
value
subsidiaries
1,957,4
TCLTEC1 7/14/2020 5
83 1,957,483 - 1,949,530 - 35,863 13,236 - (56,009) 1,906,757
19 Zhonghuan
Semiconductor 600,000 3/15/2019 3 600,000 - 600,263 - 34,500 27,109 - (627,372) -
MTN001
19 Zhonghuan
Semiconductor 600,000 8/23/2019 3 600,000 - 599,871 - 34,560 12,138 - (612,009) -
MTN002
20 Zhonghuan01 800,000 6/22/2020 3 800,000 - 798,764 - 41,600 22,741 - (821,505) -
21TCLJ.MTN001 2,000,0
5/10/2021 3 2,000,000 - - 2,000,000 53,211 (3,776) - - 1,996,224
(High- Growth Debt) 00
23,157,
483 23,157,483 - 18,040,773 2,000,000 660,590 210,132 (829,981) (6,354,643) 13,066,281
Note
Others are the current portion of bonds payable reclassified to the current portion of non-current liabilities.
1
Note TCL fixed conversion 1 is a convertible corporate bond: valid for 2 years. The period of conversion to stock starts from the first trading day after the expiration of 12 months from the date of issue to
2 the maturity date of the convertible bond, with an interest rate of 2% for the first year and 1.5% for the second year.
Note TCL fixed conversion 2 is a convertible corporate bond: valid for 2 years. The period of conversion to stock starts from the first trading day after the expiration of 6 months from the date of issue to
3 the maturity date of the convertible bond, with an interest rate of 0.5% for the first year and 0.1% for the second year.
104
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
47 Lease liabilities
December 31, 2021 January 1, 2021
Total lease liabilities 1,783,159 1,155,985
Less: current portion of lease liabilities 681,087 43,844
Total 1,102,072 1,112,141
Descriptions of main leases:
Inner Mongolia ZhonghuanXiexin Solar Material Co., Ltd., a subsidiary of the Company, signed a finance
lease contract with SPDB Financial Leasing Co., Ltd. in July 2020. According to the contract, 60 fully
automatic single-crystal furnaces will be leased for a term of five years. Of the finance lease payables
totalling RMB125,689 thousand, RMB108,000 thousand is the principal payable and RMB17,689 thousand
is the unrecognised financing costs. The Company's finance lease payables due within one year add up to
RMB19,790 thousand and are presented as non-current liabilities due within one year. Its finance lease
payables net of those due within one year reach RMB72,067 thousand and are presented as lease liabilities.
Inner Mongolia ZhonghuanXiexin Solar Material Co., Ltd., a subsidiary of the Company, signed a finance
lease contract with Tianjin Binhai New Area Technology Financial Leasing Co., Ltd. in August 2020.
According to the contract, 240 fully automatic single-crystal furnaces will be leased for a term of five years.
Of the finance lease payables totalling RMB473,277 thousand, RMB432,000 thousand is the principal
payable and RMB41,277 thousand is the unrecognised financing costs. The Company’s finance lease
payables due within one year add up to RMB60,177 thousand and are presented as non-current liabilities due
within one year. Its finance lease payables net of those due within one year reach RMB319,600 thousand and
are presented as lease liabilities.
China Resources Leasing Co., Ltd. signed a finance transfer contract with Taiping & Sinopec Financial
Leasing Co., Ltd. on June 20, 2019, transferring the leased assets and all its rights and interests in Dushan
Anju Photovoltaic Technology Co., Ltd., including rentals and other payments, to Taiping & Sinopec
Financial Leasing Co., Ltd. In June 2019, according to the contract and a newly signed agreement, the
longterm account payable was re-recognised. In the end, the long-term account payable amounts to
RMB238,106 thousand (excluding tax) and the unrecognised financing amount is RMB55,226 thousand
(excluding tax). The Company’s finance lease payables due within one year add up to RMB17,924 thousand
and are presented as non-current liabilities due within one year. Its finance lease payables net of those due
within one year reach RMB124,993 thousand and are presented as lease liabilities.
On May 20, 2021, ShangyiShengyao New Energy Development Co., Ltd., a subsidiary of the Company,
signed a financial lease contract with Industrial Bank Financial Leasing Co., Ltd. on the lease object of EPC
equipment and photovoltaic modules contained in the Shangyi 160MW project for a lease term of 12 ye ars,
and the total amount of financial lease payables is RMB321,478 thousand (excluding tax), including
principal payable (excluding tax) of RMB238,938 thousand and interest payable (excluding tax) of
RMB82,540 thousand. In the finance lease contract, the Company is a co-lessee. The Company's finance
lease payables due within one year add up to RMB10,389 thousand (excluding tax) and are presented as
non-current liabilities due within one year. Its finance lease payables net of those due within one year reac h
RMB230,034 thousand (excluding tax) and are presented as lease liabilities.
105
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
48 Long-term payables
December 31, 2021 January 1, 2021 December 31, 2020
Finance lease 671,344 429,602 1,256,300
Technological 24,000
development fund - 24,000
671,344 453,602 1,280,300
49 Deferred income
Increase
due to
Increase in Decrease in
Beginning newly Ending
current current
amount acquired balance
period period
subsidiarie
s
Government grants 1,506,777 8,361 4,587,243 (3,741,210) 2,361,171
Other 3,090 - 23,646 (26,702) 34
1,509,867 8,361 4,610,889 (3,767,912) 2,361,205
Items involving government grants
Amount
Amount
Increase recorded
Amount used to
due to New in
recorded in offset costs
January newly grants in non-opera Other December
other income and
1, 2021 acquired current ting changes 31, 2021
in current expenses in
subsidiarie period income in
period current
s current
period
period
Government
grants 1,621,19 (715,333
483,641 4,721 (8,734) (58,580) (52,930) 1,273,978
related to 3 )
assets
Government
grants 1,023,13 2,966,05 (1,065,753
3,640 (5,044) (1,827,714) (7,122) 1,087,193
related to 6 0 )
income
1,506,77 4,587,24 (1,118,683 (722,455
7 8,361 3 (13,778) (1,886,294) ) ) 2,361,171
Note "Other changes" were deferred income offset by the carrying amounts of relevant assets.
106
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
50 Share capital
January 1, 2021 Increase or decrease in current period December 31, 2021
Amount Ratio (%) New issues Other Subtotal Amount Ratio (%)
1. Restricted shares 1,374,578 9.77% - (762,468) (762,468) 612,110 4.36%
2. Unrestricted shares 12,656,210 90.23% - 762,322 762,322 13,418,532 95.64%
III. Total shares 14,030,788 100% - (146) (146) 14,030,642 100%
As of December 31, 2021, the Company's total share capital was 14,030,642 thousand 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.
107
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
51 Other equity instruments
Increase in Decrease in
January 1, 2021 current period current period December 31, 2021
Convertible bonds 230,241 - (29,907) 200,334
52 Capital reserves
Increase in Decrease in
January 1, 2021 current period current period December 31, 2021
Share premium 5,442,385 2,097,710 (1,471,827) 6,068,268
Other capital reserves - 10,999 - 10,999
5,442,385 2,108,709 (1,471,827) 6,079,267
53 Treasury stock
January 1, 2021 Increase in Decrease in
current period current period December 31, 2021
Treasury stock 1,913,029 629,059 (656,531) 1,885,557
1,913,029 629,059 (656,531) 1,885,557
According to the Report on Repurchase of Some Social Public Shares in 2021 at the 9th meeting of the 7th board of directors
held on June 20, 2021 deliberated and approved by the Company, the Company accumulatively repurchased its own shares
through centralized bidding trading through the special securities account for repurchase, which will be used for ESOP or
equity incentive. As of December 31, 2021, the total number of shares repurchased was 80,664 thousand shares at the total
consideration of RMB629,059 thousand.
The decrease in the current period is mainly due to the fact that the 6 million convertible corporate bonds held in the
Company’s “TCL fixed conversion 1” have been fully converted into the Company’s A-share common shares, with the number
of shares converted by 158,311 thousand, and treasury shares correspondingly decreased by RMB537,972 thousand.
54 Surplus reserves
Increase in Decrease in
January 1, 2021 current period current period December 31, 2021
Statutory surplus reserves 2,270,022 97,281 - 2,367,303
Discretionary surplus
reserves 182,870 - - 182,870
2,452,892 97,281 - 2,550,173
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.
108
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
55 Specific reserves
January 1, 2021 Increase in Decrease in
current period current period December 31, 2021
Production safety reserve 211 1,338 - 1,549
56 General reserve
Decrease in
Increase in current
January 1, 2021 current period period December 31, 2021
General risk reserve 386 8,548 - 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, this subsidiary appropriated 1%
of its net profit as general reserve in the previous years.
57 Retained earnings
2021 2020
Beginning retained earnings 14,009,494 11,115,150
Change of accounting policy - (83)
Net profit for current period 10,057,444 4,388,159
Decrease in current period (1,608,598) (1,493,732)
Including: Appropriated as surplus reserves (97,831) (214,524)
Distributed to ordinary shareholders as dividends (1,625,590) (1,279,155)
Other 114,823 (53)
Ending retained earnings 22,458,340 14,009,494
109
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
58 Revenue and cost of sales
2021 2020
Revenue Cost of sales Revenue Cost of sales
Core business 160,994,720 129,618,531 75,938,207 66,049,377
Non-core business 2,545,840 1,440,127 739,031 192,901
163,540,560 131,058,658 76,677,238 66,242,278
(1) Business by operating segment
Revenue Cost of sales Gross profit
2021 2020 2021 2020 2021 2020
Dome
stic
sales 104,742,994 54,350,588 85,551,184 48,329,062 19,191,810 6,021,526
Foreig
n sales 58,797,566 22,326,650 45,507,474 17,913,216 13,290,092 4,413,434
163,540,560 76,677,238 131,058,658 66,242,278 32,481,902 10,434,960
(2) The sales revenue from the top five customers combined was RMB57,063,520 thousand and RMB29,538,238
thousand respectively for 2021 and 2020, accounting for 35.45% and 38.90% of the core business revenue.
59 Interest income/expense and exchange gain
2021 2020
Interest income 150,083 153,163
Interest expenditures 34,936 33,034
Exchange gain/(loss) (1,224) (2,039)
The interest income, interest expense and exchange gain/(loss) above occurred with the Company's subsidiary TCL
Tech Finance Co., Ltd., which are presented separately herein as required for a financial enterprise.
110
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
60 Taxes and levies
2021 2020
Property tax 221,506 117,164
Stamp tax 161,505 83,661
Urban maintenance and construction tax 126,384 42,124
Education surcharges 90,303 29,948
Land use tax 27,531 12,336
Others 20,706 15,543
647,935 300,776
The applicable tax and levy standards are detailed
in Note IV.
61 Selling expenses
2021 2020
Employee salaries and benefits 593,521 304,706
After-sales service expenses 617,663 239,256
Ad and sales promotion expenses 58,927 34,538
Others 649,174 308,317
1,919,285 886,817
62 Administrative expenses
2021 2020
Employee salaries and benefits 1,823,044 934,400
Depreciation and amortization expense 737,318 469,747
Expense for hiring intermediary organizations 496,566 382,596
Others 1,336,392 583,635
4,393,320 2,370,378
111
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
63 R&D expenses
2021 2020
Depreciation and amortization expenses 2,477,401 1,746,405
Material and lab expenses 2,703,695 1,602,260
Employee salaries and benefits 1,421,683 701,448
Others 633,562 352,708
7,236,341 4,402,821
64 Financial Expenses
2021 2020
Interest expenditures 4,125,399 2,594,868
Interest income (446,450) (405,409)
Exchange loss / (gain) (55,357) 144,797
Others 104,323 22,766
3,727,915 2,357,022
65 Other income
2021 2020
R&D subsidies 1,844,420 1,703,282
VAT rebates on software 31,186 1,328
Over-deduction in taxable amount for VAT 1,374 9,603
Others 90,770 56,822
1,967,750 1,771,035
112
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
66 Return on investments
2021 2020
Gain on disposal of debt instruments at fair
value through profit or loss 526,862 237,721
Gain on disposal of debt instruments at fair
value through profit or loss
(40,149) 388,726
Gain on disposal of equity instruments at fair
value through profit or loss
Gain on disposal of debt instruments at fair
value through profit or loss
(132,695) 86,866
Gain on holding of equity instruments at fair
value through profit or loss
Gain on disposal of debt instruments at fair
value through profit or loss
263,901 184,200
Gain on holding of debt instruments at fair value
through profit or loss
Share of net income of associates 3,152,870 2,176,035
Share of net income of joint ventures 65,001 (5,118)
Net income from disposal of long-term equity
investments (159,433) 211,578
Others 228,169 (25,604)
3,904,526 3,254,404
67 Gain on changes in fair value
2021 2020
Held-for-trading financial assets 155,320 404,920
Derivative financial assets (317,003) 273,916
Held-for-trading financial liabilities 12,941 (13,522)
Derivative financial liabilities 2,158 7,479
(146,584) 672,793
68 Credit impairment loss
2021 2020
Loss on uncollectible accounts receivable (122,892) (50,252)
Loss on uncollectible other receivables (17,349) (11,876)
Other financial assets 47,985 (2,537)
(92,256) (64,665)
Notes to Consolidated Financial Statements
V
(Continued)
113
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
69 Inventory valuation loss
2021 2020
Inventory valuation loss (1,924,306) (492,300)
Loss on impairments of fixed assets (592,497) (41,144)
Loss on impairments of construction in progress (146,160) -
Loss on impairments of intangible assets (78,909) -
Loss on impairments of other assets (169,592) 21,837
(2,911,464) (511,607)
70 Asset disposal income
2021 2020
Income/(loss) from disposal of fixed assets (60,496) 2,708
Other 20,062 -
(40,434) 2,708
71 Non-operating income
Amount through
current
non-recurring gains
2021 2020 and losses
Gains on retired or damaged
non-current assets 259 89 259
Negative goodwill - 292,440 -
Government grants and others 351,721 199,845 351,721
351,980 492,374 351,980
72 Non-operating expense
Amount through
current non-recurring
2021 2020 gains and losses
Losses on retired or damaged
non-current assets 21,233 12,631 21,233
Other 119,221 104,343 119,221
140,454 116,974 140,454
114
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
Notes to Consolidated Financial Statements
V
(Continued)
73 Income tax expenses
(1) Table of income tax expenses
2021 2020
Current income tax expense 2,274,141 383,063
Deferred income tax expense 330,984 287,037
2,605,125 670,100
(2) Accounting profit and income tax adjustment process
2021 2020
Gross profit 17,564,093 5,735,304
Income tax expense calculated at statutory/applicable tax
rate 4,391,023 1,433,826
Impact of different tax rates applied to subsidiaries (1,119,518) (695,654)
Impact of adjusting income tax in previous periods (102,803) 14,308
Impact of non-taxable income (340,956) (247,750)
Impact of non-deductible costs, expenses and losses 112,433 4,669
Impact of the use of deductible losses carry forward without
recognize deferred tax assets in the previous periods (424,609) (111,372)
Impact of unrecognized deferred tax assets of deductible
temporary differences or deductible losses in the current 652,219 30,736
period
Others (562,664) 241,337
Income tax expense 2,605,125 670,100
115
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
74 Other comprehensive income
(1) Other comprehensive income items, income tax effects and reclassifications to profit or loss
2021 2020
I. Items that cannot be reclassified to profit or loss
subsequently
1. Share of other comprehensive income of investees that will
1,626 (7,313)
be reclassified to profit or loss under equity method
1,626 (6,715)
Previous other comprehensive income reclassified to
retained earnings for current period - (598)
2. Changes in fair value of other equity instruments (287,845) 52,342
Current gain/(loss) (212,104) 51,716
Previous other comprehensive income reclassified to
retained earnings for current period (122,821) 626
Income tax effects recorded in other comprehensive income 47,080 -
II. Items that will be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will
(268,688)
be reclassified to profit or loss under equity method 90,758
Share amount in current period (268,688) 90,758
Income tax effects recorded in other comprehensive income - -
2. Changes in fair value of financial assets recorded in other
comprehensive income - (162)
Current gain/(loss) - (162)
3. Cash flow hedges 65,566 8,175
Current gain/(loss) 77,992 (6,896)
Previous other comprehensive income reclassified to profit
for current period - -
Income tax effects recorded in other comprehensive income (12,426) 15,071
4. Differences arising from translation of foreign currency
financial statements of overseas operations 245,338 263,753
5. Net income arising from disposal of overseas operations
through profit or loss - -
(244,003) 407,553
116
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
74 Other comprehensive income (continued)
(2) Changes in other comprehensive income items
Equity attributable to shareholders of the Company as the parent
Differences
Share of other arising from Other
comprehensive translation comprehen
income of investees Gain/loss on of foreign Fair value sive
that will be changes in Gain/(Loss) currency-de Fair value changes of income
Accountin reclassified to profit fair value of on changes nominated changes of other debt transferred Total other
g policy or loss under equity financial in cash flow financial other equity instrument to retained Non-controll comprehensiv
changes method assets hedges statements instruments s earnings Subtotal ing interests e income
January 1, 2020 334,950 230,179 (350,407) (34,472) (733,647) 19,315 - - (534,082) (38,016) (572,098)
Change in 2020 - 83,771 (162) 28,784 224,208 51,880 - 28 388,509 19,044 407,553
December 31, 2020 334,950 313,950 (350,569) (5,688) (509,439) 71,195 - 28 (145,573) (18,972) (164,545)
Increase and decrease
for 2021 - (267,062) - 68,234 270,260 (212,485) - (122,821) (263,874) 19,871 (244,003)
December 31, 2021 334,950 46,888 (350,569) 62,546 (239,179) (141,290) - (122,793) (409,447) 899 (408,548)
117
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
75 Earnings per share
(1) Basic EPS
2021 2020
Net profit attributable to shareholders of the Company as the parent 10,057,444 4,388,159
Weighted average outstanding ordinary shares (in thousand shares) 13,476,907 13,035,985
Basic earnings per share (RMB yuan/share) 0.7463 0.3366
(2) Diluted EPS
2021 2020
Net profit attributable to shareholders of the Company as the parent 10,057,444 4,388,159
Diluted weighted average outstanding ordinary shares (in thousand
shares) 13,675,916 13,604,246
Diluted earnings per share (RMB yuan/share) 0.7354 0.3226
76 Cash generated from other operating activities
Cash generated from other operating activities in the consolidated cash flow statement was RMB7,013,673
thousand (2020: RMB 3,454,773 thousand), which primarily consisted of current payments received, government
grants and special appropriation, etc.
77 Cash used in other operating activities
Cash used in other operating activities in the consolidated cash flow statement was RMB 7,846,247 thousand
(2020: RMB3,752,843 thousand), which primarily consisted of various expenses and current payments.
78 Cash generated from other investing activities
Cash used in other investing activities in the consolidated cash flow statement was RMB 33,083 thousand (2020:
RMB149,793 thousand), which primarily consisted of net cash from disposal of subsidiary.
79 Cash used in other investing activities
Cash used in other investing activities in the consolidated cash flow statement was RMB 479,761 thousand
(2020: RMB97,040 thousand), which primarily consisted of net cash from bank acceptance bills, irrevocable
letter of credit margins, and disposal of subsidiaries, etc.
118
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
80 Cash generated from other financing activities
Cash generated from other financing activities in the consolidated cash flow statement was RMB256,271
thousand (2020: RMB889,562), which primarily consisted of amounts received from finance leases.
81 Cash used in other financing activities
Cash used in other financing activities in the consolidated cash flow statement was RMB6,035,517 thousand
(2020: RMB5,330,369 thousand), which was mainly cash paid to repurchase non-controlling interests,
repurchase shares, and pay finance lease accounts, etc.
119
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
82 Supplementary information for the cash flow statement
(1) Reconciliation of net profit to net cash generated from/used in operating activities
2021 2020
Net profit 14,958,968 5,065,204
Add： Asset impairment allowance 3,003,720 576,272
Depreciation of fixed assets 15,244,644 8,860,953
Depreciation of right-of-use assets 225,599 -
Amortization of intangible assets 1,177,003 709,902
Amortization of long-term prepaid expense 1,280,074 974,158
Loss/(Gain) on disposal of fixed assets, intangible assets and other
long-lived assets 40,434 (2,708)
Loss on retired or damaged fixed assets 20,974 12,542
Loss/(Gain) on changes in fair value 146,584 (672,793)
Financial expenses 4,106,202 2,774,738
Return on investment (3,904,526) (3,254,404)
Decrease/(Increase) in deferred income tax assets (575,258) (466,876)
Increase/(Decrease) in deferred income tax liabilities 772,489 983,284
Decrease/(Increase) in inventory (7,172,706) (1,421,831)
Decrease/(Increase) in operating receivables (8,678,460) (1,678,659)
Increase/(Decrease) in operating receivables 13,055,727 3,790,917
Others (823,015) 447,584
Net cash generated from operating activities 32,878,453 16,698,283
(2) Net cash payments for acquisition of subsidiaries in the current
period
2021 2020
Payments of cash and cash equivalents made in current period due
9,768,401 13,177,909
to business combinations incurred in current period
Less: cash and cash equivalents held by subsidiary on acquisition
5,628,896 6,248,342
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 4,139,505 6,929,567
(3) Net cash proceeds from disposal of subsidiaries in the current
period
2021 2020
Cash or cash equivalents received in current period due to disposal
1,984,421 319,088
of subsidiary in current period
Less: cash and cash equivalents held by subsidiary on the date
900,316 20,293
when the Company’s control over the subsidiary ceased
120
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
82 Supplementary information for the cash flow statement
(3) Net cash proceeds from disposal of subsidiaries in the current period (continued)
2021 2020
Add: Cash or cash equivalents received in current period due to
disposal of subsidiaries in prior periods 80,485 -
Net proceeds from the disposal of subsidiaries 1,164,590 298,795
(4) Breakdown of cash and cash equivalents
December 31, 2021 December 31, 2020
I. Cash 30,081,705 18,208,417
Of which: Cash on hand 789 1,189
Bank deposits available for payment on demand 28,970,585 17,744,850
Other monetary assets available for payment on demand 987,347 462,378
Deposits with the central bank available for payment 122,984 -
II. Cash equivalents - -
III. Cash and cash equivalents, end of the period 30,081,705 18,208,417
83 Changes in cash and cash equivalents, net
2021 2020
Ending cash and cash equivalents 30,081,705 18,208,417
Less: Beginning cash 18,208,417 17,637,743
Net increase in cash and cash equivalents 11,873,288 570,674
Analysis of ending cash and cash equivalents:
Ending monetary assets 31,393,692 21,708,905
Less: Ending non-cash equivalents (note) 1,311,987 3,500,488
Ending cash and cash equivalents 30,081,705 18,208,417
Note: The ending non-cash equivalents primarily included interest receivable on bank deposits, the statutory reserve
deposits placed by TCL Tech Finance Co., Ltd. in the central bank and other monetary assets, detailed in
Annex V, 1.
121
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
84 Assets with restricted ownership or use rights
December 31, 2021 Reason for restriction
Deposited in the central bank
Monetary assets 358,178
as the required reserve
Other monetary funds and
Monetary assets
953,809 restricted bank deposits
Notes receivable 119,381 Pledge
Fixed assets 64,469,815 As collateral for loan
Intangible assets 2,759,415 As collateral for loan
Held-for-trading financial assets 34,337 Put in pledge for loan
Right-of-use assets 57,004 As collateral for lease
Accounts receivable 1,050,343 Pledge
Contract assets 175,831 Pledge
69,978,113
85 Foreign currency monetary items
December 31, 2021
Foreign currency balance Conversion rate RMB balance
Monetary assets
Including: USD 961,867 6.3757 6,132,573
HKD 125,636 0.8176 102,720
EUR 3,068 7.2173 22,142
JPY 6,508 0.0554 361
SGD 56 4.7178 266
Accounts receivable
Including: USD 1,042,585 6.3757 6,647,209
HKD 999,364 0.8176 817,080
EUR 0.2 7.2173 1
Receivables financing
Including: USD 48,054 6.3757 306,379
Accounts payable
Including: USD 305,924 6.3757 1,950,477
HKD 1,450,871 0.8176 1,186,232
JPY 5,798,499 0.0554 321,237
INR 107,349 0.0855 9,178
EUR 0.04 7.2173 0.30
122
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
85 Foreign currency monetary items (continued)
December 31, 2021
Foreign currency balance Conversion rate RMB balance
Other receivables
Including: USD 8,739 6.3757 55,717
HKD 299,479 0.8176 244,854
JPY 11,970 0.0554 663
PLN 1,685 1.5722 2,649
INR 41,789 0.0855 3,573
KRW 102,390 0.0054 549
EUR 4 7.2173 29
MXN 8,455 0.3114 2,633
Notes payable
Including: USD 27,636 6.3757 176,196
EUR 4,587 7.2173 33,105
JPY 1,284,020 0.0554 71,135
Other payables
Including: USD 95,069 6.3757 606,128
HKD 584,890 0.8176 478,206
JPY 1,771,692 0.0554 98,152
INR 1,802,221 0.0855 154,090
PLN 165 1.5722 259
KRW 12,711 0.0054 68
MXN 8,306 0.3114 2,586
EUR 17 7.2173 124
Short-term borrowings
Including: USD 55,571 6.3757 354,304
Long-term borrowings
Including: USD 1,966,170 6.3757 12,535,710
123
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI . Changes to Consolidation Scope
1 Newly consolidated entities for current period
The
Consolidated Reason for Registered capital (RMB) Company
Name of investee period change ’s interest
Shenzhen Huatuo Trade Technology Co., Newly
2021 RMB10,000,000 100%
Ltd. incorporated
Xiamen Xinying Display Technology Co., Newly
2021 RMB300,000,000 55%
Ltd. incorporated
Shaanxi Xiaoyi E-commerce Service Co., February - Newly
RMB1,000,000 60%
Ltd. December 2021 incorporated
Combination not
Shaanxi RunhuanTianyu Technology Co., February -
under common RMB65,800,000 100%
Ltd. December 2021 control
March - December Newly
Highly (Tianjin) Technology Co., Ltd. RMB50,000,000 100%
2021 incorporated
Zhonghuan Advanced Semiconductor February - Newly
RMB40,000,000 100%
(Shanghai) Co., Ltd. December 2021 incorporated
March - December Newly
Ningxia Zhonghuan Solar Material Co., Ltd. RMB100,000,000 100%
2021 incorporated
Combination not
Suzhou China Star Optoelectronics April - December
under common RMB6,260,405,000 100%
Technology Co., Ltd. 2021 control
Combination not
Suzhou China Star Optoelectronics Display March - December under common RMB1,535,850,989 100%
Co., Ltd. 2021
control
Combination not
Moka International Limited and its April - December
under common USD1 100%
subsidiaries 2021
control
Huizhou Shengyao New Energy Technology March - December Newly
RMB1,000,000 100%
Co., Ltd. 2021 incorporated
Inner Mongolia Huanya Hotel Management April - December Newly
RMB500,000 100%
Co., Ltd. 2021 incorporated
Combination not
HuludaoXincheng New Energy Technology June - December under common RMB51,200,000 100%
Co., Ltd. 2021 control
124
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI. Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
The
Consolidated Reason for Registered capital (RMB) Company
Name of investee period change ’s interest
Tianjin WanfangNuoxin Technology Co., March - December Newly RMB30,000,000 100%
Ltd. 2021 incorporated
En Yi Investment Co., Ltd. July - December Newly HKD1 100%
2021 incorporated
Zhonghuan Semi-Conductor (Singapore) July - December Newly SGD10,000,000 100%
Private Ltd. 2021 incorporated
Combination not
Inner Mongolia Huanxing Power September - under common RMB10,000,000 100%
Construction Engineering Co., Ltd December 2021
control
Combination not
Shaanxi HuanboXinneng Power Engineering September -
under common RMB1,000,000 100%
Construction Co., Ltd December 2021 control
Beijing Lingyun Data Technology Co., Ltd. September - Newly RMB20,000,000 100%
December 2021 incorporated
Combination not
October - December
Guangdong TCL New Technology Co., Ltd. under common RMB13,843,000 100%
2021
control
Tianjin Silica Material Technology Co., Ltd. October - December Newly RMB2,800,000,000 100%
2021 incorporated
Tianjin Huanou New Energy Technology November - Newly RMB800,000,000 95%
Co., Ltd December 2021 incorporated
Xiamen TCL Technology Industria l December 2021 Newly RMB1,000,000,000 100%
Investment Co., Ltd. incorporated
Tianjin TiTiYunchuang Technology Co., Ltd December 2021 Newly RMB30,000,000
100%
incorporated
Tianjin Xincheng Pilot Technology Co., Ltd. December 2021 Newly RMB30,000,000
100%
incorporated
Junjia Development Co., Ltd. December 2021 Newly USD50,000
100%
incorporated
125
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
Note Business combination not involving entities under common control incurred in the current period
(1) Acquisition of equity interests in Suzhou China Star Optoelectronics Technology Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired on April 1, 2021 (the date of acquisition) a 60% interest in Suzhou China Star Optoelectronics
Technology Co., Ltd. (formerly known as "Samsung Suzhou LCD Co. Ltd." with a cash payment of RMB4,757,727 thousand.
At the date of acquisition, the Group actually obtained 70% equity of Samsung Suzhou LCD Co. Ltd., which was included in
the consolidated financial statements. In September 2021, the Group purchased 30% equity of Samsung Suzhou LCD Co. Ltd.
and completed 100% holdings of the company. This subsidiary is primarily engaged in semiconductor display and materials.
Cash consideration 4,757,727
Fair value of previous euity-holdings at acquisition date 792,955
Less: Share of fair value of identifiable net assets acquired 5,064,079
Difference of lower goodwill / merger cost and higher share of fair value of
identifiable net assets acquired 486,603
② The assets and liabilities as at the acquisition date are as follows:
Fair value at acquisition date Carrying value at acquisition
date
Monetary assets 2,152,933 2,152,933
Accounts receivable 1,207,714 1,207,714
3,533,370
4,478,055
Non-current assets
Accounts payable 814,870 814,870
Net assets 7,234,398 6,429,154
Less: non-controlling interests 2,170,319 1,928,746
Net assets acquired 5,064,079 4,500,408
Assets evaluated as appreciated assets were mainly buildings and constructions and intangible assets-land use rights. The
③ evaluation methods of the above main assets are as follows:
a Buildings are mainly appraised by the replacement method: According to construction project materials and settlement data,
the full replacement value of a building (structure) is calculated based on the project volume of the building, taking into
account the current quota standard, market price level, stipulated construction fees, and lending rate, and the newness rate is
determined comprehensively based on the service life of the building and the on-site survey of the building, before the net
appraisal value of the building is calculated;
b The methods for land use right appraisal include the market approach and the method of benchmark land price coefficient
modification: The market approach is a method used to estimate the price of a piece of land at the time of appraisal by
comparing the land being valued with similar instances of land that has been traded recently according to the principle of
substitution, and making adjustments for the differences between them, such as transaction situation, time, region and
individual factors, based on the known prices of the latter. The idea behind the method of benchmark land price coefficient
modification is that the regional and other conditions of the land being valued are compared with the average conditions of the
region in which it is located according to the principle of substitution, using appraisal results such as the urban benchmark
land price and the benchmark land price modification coefficient table, and then corresponding modification coefficients are
selected from the modification coefficient table to modify the benchmark land price, so as to determine the price of the land
being valued on the valuation date.
126
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
(2) Acquisition of 100% equity interests in Suzhou China Star Optoelectronics Display Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired on April 1, 2021 (the date of acquisition) 100% equity interest in Suzhou China Star Optoelectronics
Display Co., Ltd. (formerly known as “Samsung Display Suzhou Co., Ltd.” with a cash payment of RMB2,210,673 thousand.
At the date of acquisition, the Group obtained control of Suzhou China Star Optoelectronics Display Co., Ltd., which was
included in the consolidated financial statements. This subsidiary is primarily engaged in semiconductor display and materials.
Cash consideration 2,210,673
Less: Share of fair value of identifiable net assets acquired 2,250,973
Difference of lower goodwill / merger cost and higher share of fair value of
(40,300)
identifiable net assets acquired
② The assets and liabilities as at the acquisition date are as follows:
Fair value at acquisition date Carrying value at acquisition
date
Monetary assets 1,045,605 1,045,605
Accounts receivable 276,283 276,283
Non-current assets 1,222,641 1,012,405
Accounts payable 207,745 207,745
Net assets 2,250,973 2,092,238
Less: non-controlling interests - -
Net assets acquired 2,250,973 2,092,238
③ Assets evaluated as appreciated assets were mainly intangible assets-land use rights. The evaluation method is as follows:
a The methods for land use right appraisal include the market approach and the method of benchmark land price coefficient
modification: The market approach is a method used to estimate the price of a piece of land at the time of appraisal by
comparing the land being valued with similar instances of land that has been traded recently according to the principle of
substitution, and making adjustments for the differences between them, such as transaction situation, time, region and
individual factors, based on the known prices of the latter. The idea behind the method of benchmark land price coefficient
modification is that the regional and other conditions of the land being valued are compared with the average conditions of the
region in which it is located according to the principle of substitution, using appraisal results such as the urban benchmark
land price and the benchmark land price modification coefficient table, and then corresponding modification coefficients are
selected from the modification coefficient table to modify the benchmark land price, so as to determine the price of the land
being valued on the valuation date.
(3) Acquisition of 100% equity interests in Moka International Limited
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired in April, 2021 (the date of acquisition) 100% equity interest in Moka International Limited with a cash
payment of RMB2,800,000 thousand. At the date of acquisition, the Group obtained control of Moka International Limited,
which was included in the consolidated financial statements. This subsidiary primarily processes intelligent terminals.
127
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
Cash consideration 2,800,000
Fair value of contigent consideration 181,220
Less: Share of fair value of identifiable net assets acquired 1,252,247
Difference of lower goodwill / merger cost and higher share of fair value of
1,728,973
identifiable net assets acquired
② The assets and liabilities as at the acquisition date are as follows:
Fair value at acquisition date Carrying value at Fair value adjustment
acquisition date
Current assets 6,905,287 6,905,287 -
Non-current assets 515,635 217,038 298,597
Current liabilities 5,919,055 5,919,055 -
Less: non-controlling interests - - -
Net assets acquired 1,252,247 1,027,857 224,390
Assets evaluated as appreciated assets were mainly buildings and constructions, machinery equipment, electronic equipment
③ and intangible assets (including the right to use land as well as technological assets like patents, know-how, software
copyrights). The evaluation methods of the above main assets are as follows:
a The primary assessment methods for buildings include the market comparison approach, the income capitalization approach
and the replacement cost approach. In terms of the market comparison approach, the subject property is compared with similar
real estate transaction cases that have happened recently or will happen soon, transaction conditions, time of price formation,
regional factors (external conditions of the real estate), and individual factors (own conditions of the real estate). The
reasonable market price most possible for the subject property is calculated after necessary correction of the known prices of
similar real estate transaction cases that have happened recently or will happen soon. With respect to the income capitalizat ion
approach, first, the future normal net earnings of the subject property are estimated, when the value of the subject property is
calculated. Then, a suitable capitalization rate is selected and discounted to the valuation date for summation to estimate the
value of the subject property. In regard to the replacement cost approach, the basic formula is: Full replacement value of the
building x newness rate = value of the subject property.
b Machinery and equipment are valued mainly by the replacement method based on market prices, combined with the
characteristics of the machinery and equipment being valued and the information collected;
c The full replacement value of electronic equipment is determined based on its tax-exclusive purchase prices according to local
market information and recent market price data such as those provided by Zhongguancun Online;
d The main assessment methods for the right to use land are the market comparison approach and the integrated evaluation of the
housing and land of the main building. For the market comparison approach, the land to be evaluated and similar cases of land
transactions that have occurred recently are compared in line with the substitution principle, when the price of the land to be
evaluated is calculated. Then, the price of the land to be evaluated on the valuation date is calculated, after the known price of
the latter is corrected by reference with the transaction situation, time, region, and individual factors of the land. S. de R.L. de
C.V. has been reflected in the valuation of the buildings as the ownership has been valued based on the market value
determined by the integrated evaluation of housing and land;
e The primary assessment method for technological assets like patents, know-how, and software copyright is the income
approach. For this method, the expected future earnings of such technological assets are calculated and discounted to the
present value at a suitable discount rate. Then, the value of such technological assets is calculated by summation.
128
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI . Changes to Consolidation Scope (Continued)
2 Deconsolidated entities for current period
Time of
Name of investee deconsolidation Reason for change
Tianjin Huanyan Technology Co., Ltd. January 2021 Transferred
TCL Communication Technology (HK) Limited March 2021 De-registered
Tianjin ZhonghuanXinyu Technology Co., Ltd. March 2021 Transferred
Tianjin Huan’Ou International New Energy
Technology Co., Ltd. March 2021 De-registered
KangbaoShenghui New Energy Co., Ltd. April 2021 De-registered
Winshero Investment Limited May 2021 De-registered
Tianjin Xietong Real Estate Development Co.,
Ltd. May 2021 De-registered
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. May 2021 Increase in
and its subsidiaries non-controlling
interests
TCL International Distribution (HK) Limited June 2021 De-registered
TCL Financial Holding Group (Guangzhou) Co.,
Ltd. and its subsidiaries June 2021 Transferred
UTOP (Shanghai) Co., Ltd. August 2021 De-registered
Li Rong Development Limited and its September 2021 Transferred
subsidiaries
TCL Medical Ultrasound Technology (Wuxi) Co., December 2021 Transferred
Ltd.
Peer College Education Technology (Huizhou) December 2021 Transferred
Co., Ltd.
TCL Light Source Energy-saving Technology December 2021 De-registered
(Huizhou) Co., Ltd.
129
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VI. Changes to Consolidation Scope (Continued)
3 Subsidiaries disposed in current period
TCL Financial
Tianjin Tianjin
TCL Huanxin Holding Group
Huanyan ZhonghuanXinyu
Name of subsidiary Semi-conductor (Tianjin) (Guangzhou) Co.,
Technology Technology Co.,
Co., Ltd. and its subsidiaries Ltd. and its
Co., Ltd. Ltd.
subsidiaries
Price for equity interest
93,845 12,000 - 2,572,020
disposal
% equity interest disposed 50% 100% 55% 100%
Transferred Transferred Increase in
non-controlling
Way of disposal interests Transferred
Time of loss of control January 2021 March 2021 May 2021 June 2021
Rights & Rights &
Determination basis for Rights & obligations all Rights & obligations
obligations obligations all
time of loss of control transferred all transferred
all transferred transferred
Difference between the
disposal price and the
Company’s share of the
subsidiary’s net assets in the 12,536 2,900 22,475 10,539
consolidated financial
statements relevant to the
disposed equity interest
(Continued)
Li Rong
TCL Medical Ultrasound Peer College
Development
Name of subsidiary Technology (Wuxi) Co., Education Technology
Limited and its
Ltd. (Huizhou) Co., Ltd.
subsidiaries
Price for equity interest
disposal 528,165 0.001 5,130
% equity interest disposed 100% 100% 100%
Way of disposal Transferred Transferred Transferred
September
Time of loss of control December 2021 December 2021
2021
Rights &
Determination basis for Rights & obligations all Rights & obligations
time of loss of control obligations all
transferred all transferred
transferred
Difference between the
disposal price and the
Company’s share of the
subsidiary’s net assets in the 117,843 0.001 (57)
consolidated financial
statements relevant to the
disposed equity interest
130
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Shareholding ratio (%) How
Place of Nature of Principal place
Name of investee subsidiary was
registration business of business Direct Indirect
obtained
Manufacturin g
TCL China Star Optoelectronics Technology Co., Ltd. Shenzhen and sales Shenzhen 83.02% - Incorporated
Shenzhen China Star Optoelectronics Semiconductor Manufacturin g
Display Technology Co., Ltd. Shenzhen and sales Shenzhen - 54.31% Incorporated
Research and
Guangzhou China Ray Optoelectronic Materials Co., Ltd. Guangzhou development Guangzhou - 100% Incorporated
Manufacturin g
Wuhan China Star Optoelectronics Technology Co., Ltd. Wuhan and sales Wuhan - 91.66% Incorporated
Wuhan China Star Optoelectronics Semiconductor Manufacturin g
Wuhan Wuhan - 57.14% Incorporated
Display Technology Co., Ltd. and sales
Business
combination
Manufacturin g
Shenzhen CPT Display Technology Co., Ltd. Shenzhen Shenzhen - 100% not under
and sales
common
control
China Star Optoelectronics International (HK) Limited Hong Kong Sales Hong Kong - 100% Incorporated
Business
combination
China Display Optoelectronics Technology Holdings Investment
Bermuda Bermuda - 64.20% not under
Limited holding
common
control
China Display Optoelectronics Technology (Huizhou) Manufacturin g
Co., Ltd. Huizhou and sales Huizhou - 100% Incorporated
Wuhan China Display Optoelectronics Technology Co., Manufacturin g
Ltd. Wuhan and sales Wuhan - 100% Incorporated
Business
combination
Manufacturin g
Suzhou China Star Optoelectronics Technology Co., Ltd. Suzhou Suzhou - 100% not under
and sales
common
control
Business
combination
Manufacturin g
Suzhou China Star Optoelectronics Display Co., Ltd. Suzhou Suzhou - 100% not under
and sales
common
control
Beijing HAWK Cloud Information Technology Co., Ltd. Beijing Internet service Beijing 100% - Incorporated
TCL Culture Media (Shenzhen) Co., Ltd. Shenzhen Ad planning Shenzhen 100% - Incorporated
Product
Highly Information Industry Co., Ltd. Beijing distribution Beijing 66.46% - 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 Tech Finance Co., Ltd. Huizhou Financial Huizhou 82.00% 18.00% Incorporated
Investment
100% -
Xinjiang TCL Equity Investment Ltd. Xinjiang business Shenzhen Incorporated
131
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Principal subsidiaries (Continued)
Place of Principal place of Shareholding ratio (%) How subsidiary
Name of investee Nature of business
registration business Direct Indirect was obtained
Ningbo T CL Equity Investment Ltd. Ningbo Investment business Shenzhen 100% - Incorporated
Property
- 100%
T CL Technology Park (Huizhou) Co., Ltd. Huizhou management Huizhou Incorporated
Research and
- 100%
T CL Research America Inc. U.S. development U.S. Incorporated
T CL Industrial Technology Research Institute (Hong Kong)
Research and - 100%
Limited Hong Kong development Hong Kong Incorporated
T CL Technology Investments Limited Hong Kong Investment business Hong Kong 100% - Incorporated
Business
Manufacturin g and combination not
Tianjin Zhonghuan Semi-conductor Co., Ltd. (Note) Tianjin Tianjin 2.41% 25.55%
sales under common
control
Business
Manufacturin g and combination not
Tianjin Printronics Circuit Corporation Tianjin Tianjin - 26.86%
sales under common
control
Business
Manufacturin g and combination not
Tianjin Huan'Ou Semiconductor Material&Technology Co., Ltd. Tianjin Tianjin - 100%
sales under common
control
Business
Manufacturin g and combination not
Wuxi Zhonghuan Applied Materials Co., Ltd. Wuxi Wuxi - 81.48%
sales under common
control
Business
Manufacturin g and combination not
Tianjin Huanzhi New Energy Technology Co., Ltd. Tianjin Tianjin - 81.58%
sales under common
control
Business
Manufacturin g and combination not
Inner Mongolia Zhonghuan Solar Material Co., Ltd. Inner Mongolia Inner Mongolia - 100%
sales under common
control
Business
Manufacturin g and combination not
TianJinZhonghuan Advanced Material&Technology Co., Ltd. Tianjin Tianjin - 100%
sales under common
control
Business
Manufacturin g and combination not
Huansheng Solar (Jiangsu) Co., Ltd. Wuxi Wuxi - 77.00%
sales under common
control
Business
Procurement & combination not
Tianjin Huanou International Silicon Material Co., Ltd. Tianjin Tianjin - 100%
sales under common
control
Business
combination not
Zhonghuan Hong Kong Holding Limited Hong Kong Sales Hong Kong - 100%
under common
control
132
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Principal subsidiaries (Continued)
Shareholding ratio (%) How
Place of Nature of Principal p lace
Name of investee subsidiary
registration business of business Direct Indirect
was obtained
Business
combination
Procurement &
Tianjin Huanrui Electronic Technology Co., Ltd. Tianjin Tianjin - 100% not under
sales
common
control
Business
combination
Inner Mongolia ZhonghuanXiexin So lar Material Co., Inner Manufacturin g Inner
- 59.32% not under
Ltd. Mongolia and sales Mongolia
common
control
Business
combination
Inner Mongolia Zhonghuan Advanced Semiconductor Inner Manufacturin g Inner
- 100% not under
Material Co., Ltd. Mongolia and sales Mongolia
common
control
Business
combination
Zhonghuan Advanced Semiconductor Materials Co., Manufacturin g
Wuxi Wuxi - 60.00% not under
Ltd. and sales
common
control
Business
combination
Investment
Moka International Limited BVI BVI 100% not under
holding
common
control
Business
combination
Manufacturin g
Moka Technology (Guangdong) Co., Ltd. Huizhou Huizhou 100% not under
and sales
common
control
.
(2) Subsidiaries with substantial non-controlling interests
Non-controllin Current period
Current period Ending non-controlling
g profit or loss attributable
Name of subsidiary Div idends distributed to interests
shareholding to non-controlling
non-controlling interests Shareholder equity
ratio (%) interests
TCL China Star Optoelectronics Technology
Co., Ltd. 16.98% 1,511,703 53,965 42,283,748
Tianjin Zhonghuan Semi-conductor Co., Ltd.
(Note) 72.03% 3,349,461 270,439 32,812,046
Highly Informat ion Industry Co., Ltd. 33.54% 102,139 45,889 497,776
133
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII 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, 2021 December 31, 2020
Current Non-current assets Current Non-curre liabilities
Current Non-current assets Current Non-current liabilities
assets assets Total liabilities nt Total
assets assets Total liabilities liabilities Total
liabilities
TCL China Star
Optoelectronics
68,597,560 135,274,049 203,871,609 53,275,700 66,065,421 119,341,121 57,189,005 117,985,042 175,174,047 55,328,869 55,005,109 110,333,978
Technology Co.,
Ltd.
Tianjin Zhonghuan
Semiconductor Co., 24,458,844 53,520,516 77,979,360 20,443,660 15,865,920 36,309,580 16,085,100 42,634,584 58,719,684 17,329,888 13,308,403 30,638,291
Ltd.
Highly Information
6,035,827 100,060 6,135,887 4,782,662 22,603 4,805,265 4,771,001 67,485 4,838,486 3,653,818 113,762 3,767,580
Industry Co., Ltd.
2021 2020
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 80,051,717 10,110,629 10,189,107 27,060,041 46,765,152 2,427,604 2,517,639 16,482,499
Technology Co., Ltd.
Tianjin Zhonghuan
Semiconductor Co., 41,104,685 4,435,128 4,435,128 4,281,641 5,682,962 427,175 426,746 665,007
Ltd.
Highly Information
31,932,016 272,046 272,046 (103,091) 22,518,401 186,177 186,177 111,130
Industry Co., Ltd.
Note: Tianjin Zhonghuan Semi-conductor Co., Ltd. was merged on October 1, 2020, and the profit and loss data from 2020 only includes that of the period from October to December 2020.
134
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates
⑴ Basic information about principal joint ventures and associates
Principal place of Strategic to the Shareholding ratio
Nature of
Name of investee business/place of Group’s (%)
business
registration activities or not Direct Indirect
Associate
Bank of Shanghai Co., Ltd. Shanghai Financial Yes 5.76% -
R&D, production
& sale of
Xinjiang Xiexin New
polycrystalline
Energy Material Technology Xinjiang Yes - 27%
silicon &
Co., Ltd. (note)
monocrystalline
silicon;
(2) Key financial information of major associates
December 31, 2021 December 31, 2020
Bank of Xinjiang Xiexin Bank of
Shanghai Co., New Energy Shanghai Xinjiang Xiexin
Ltd. Material Co., Ltd. New Energy
Technology Co., Material Technology
Ltd. Co., Ltd.
Total assets 2,653,198,679 11,377,813 2,462,144,021 8,711,309
Total liabilities 2,447,430,234 5,110,841 2,271,205,002 6,990,937
Non-controlling interests 564,813 Not applicable 541,129 Not applicable
Equity attributable to 205,203,632 190,397,890
shareholders of the Company as
the parent 6,266,973 1,720,373
Share of equity in proportion to 11,813,895 10,966,925
the Company’s interest 1,692,083 464,501
Carrying amount of investment 11,919,796 11,232,138
in associate 1,691,361 463,779
135
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates
(2) Key financial information of major associates (continued)
2021 2020
Bank of Xinjiang Xiexin Bank of Xinjiang Xiexin
Shanghai New Energy Shanghai New Energy
Co., Ltd. Material Technology Co., Ltd. Material Technology
Co., Ltd. Co., Ltd.
Revenue 56,229,904 8,892,844 50,746,123 2,179,433
Net profit 22,042,452 4,535,988 20,885,062 169
Dividends from associate to the Group
in current period 327,157 - 316,955 -
Note: Other major associates are not presented herein for being listed company with financial statements pending
disclosure.
(3) Financial information of other joint ventures and associates combined respectively
2021 2020
Joint ventures:
Aggregated carrying amount of investments 555,257 119,234
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) 65,001 (5,118)
Other comprehensive income (note) -
Total comprehensive income 65,001 (5,118)
Associate:
Aggregated carrying amount of investments 11,474,164 12,231,885
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) 656,281 992,498
Other comprehensive income (note) (12,870) (2,489)
Total comprehensive income 643,411 990,009
Note: The net profit and other comprehensive income have taken into account the impacts of both the fair value of the
identifiable assets and liabilities upon the acquisition of investment and accounting policies unifying.
(4) The Company had no significant joint ventures in the Reporting Period.
136
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VIII 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.
Main risks caused by the Company’s financial instruments include the credit risk, the liquidity risk and the
market risk (including the foreign exchange risk and the 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, bills receivable, account
receivable, issued loan and monies advanced 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 of December 31, 2021, 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 headquarters 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.
137
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
VIII 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, 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 USD56,924 thousand, equivalent to RMB362,932 thousand 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
2021 December 31, 2021
USD/RMB 6.4474 6.3757
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 RMB18,147 thousand in shareholder equity and net profit respectively of the
Group on December 31.
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, 2021, the Group’s liabilities with floating
interest rates accounted for 75.60% 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.
138
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
IX. 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.
3 Items measured at continuous level 2 fair value adopt the following valuation techniques and 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 parameters
4
(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.
139
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
IX 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 (see
926,094 6,607,461 67,701 7,601,256
Note V, 2)
Derivative financial assets (see Note V,
- 70,929 - 70,929
3)
Receivables financing (see Note V, 6) - 2,217,639 - 2,217,639
Investments in other equity instruments
109,011 - 818,308 927,319
(see Note V, 18)
Other non-current financial assets (see
- 924,066 1,779,972 2,704,038
Note V, 19)
Total assets continuously measured at
1,035,105 9,820,095 2,665,981 13,521,181
fair value
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial liabilities (see
Note V, 33) 256,592 493,141 175,302 925,035
Derivative financial liabilities (see Note
- 22,205 - 22,205
V, 34)
Total liabilities continuously measured at
fair value 256,592 515,346 175,302 947,240
140
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
1 Actual controller and its acting-in-concert parties
Explanation of The Company’s Absence of Controlling Shareholders
Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr. Li Dongsheng and Ningbo
JiutianLiancheng Equity Investment Partnership (Limited Partnership) (hereinafter referred to as “JiutianLiancheng”) are the
biggest shareholders of the Company with a total of 1,158.5994 million shares.
As per Article 217 of the Corporate 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 le ss
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 tota l
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
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. Associate
Shenzhen Qianhai Qihang International Supply Chain Management Co., Ltd. Associate
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. Associate
SunPower Systems International Limited Associate
Shenzhen Jucai Supply Chain Technology Co., Ltd. Associate
Inner Mongolia Zhongjing Science and Technology Research Institute Co., Ltd. Associate
Shenzhen Tixiang Business Management Technology Co., Ltd. Associate
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. Associate
Xinjiang Xiexin New Energy Material Technology Co., Ltd. Associate
Xinjiang DongpengWeichuang Equity Investment Partnership (Limited
Associate
Partnership)
Xinjiang Dongpeng Heli Equity Investment Partnership (Limited Partnership) Associate
Inner Mongolia Huanye Material Co., Ltd. Associate
Bank of Shanghai Co., Ltd. Associate
ZhonghuanAineng (Beijing) Technology Co., Ltd. Associate
LG Electronics (Huizhou) Co., Ltd. Associate
Ulanqab Xinyuan New Energy Co., Ltd. Associate
YanyuanFengguang New Energy Co., Ltd. Associate
Sichuan Shengtian New Energy Development Co., Ltd. Associate
Tianjin 712 Communication & Broadcasting Co., Ltd. Associate
JOLED Incorporation Associate
TCL Finance (Hong Kong) Co., Limited Associate
TCL Intelligent Technology (Ningbo) Co., Ltd. Associate
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. Associate
ZhonghuanFeilang (Tianjin) Technology Co., Ltd. Joint venture
141
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
2 Related parties that do not control or are not controlled by the Company (Continued)
Company Name Relationship with the Company
Tianjin Huanyan Technology Co., Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Huizhou TCL Human Resources Service Co., Ltd. Joint venture
Tianjin ZhonghuanHaihe Intelligent Manufacturing Fund Partnership
Joint venture
(Limited Partnership)
Qihang International Import & Export Limited Associate’s subsidiary
QihangImport&Export Limited Associate’s subsidiary
Shenzhen Xirang International Network Information Technology Co., Ltd. Associate’s subsidiary
JC Supply Chain International (HK) Co., Limited Associate’s subsidiary
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. Associate’s subsidiary
Elite Excellent Investments Limited Associate’s subsidiary
Huixing Holdings Limited Associate’s subsidiary
Zijinshan Investment Co., Ltd. Associate’s subsidiary
Marvel Paradise Limited Associate’s subsidiary
Union Dynamic Investment Limited Associate’s subsidiary
Esteem Venture Investment Limited Associate’s subsidiary
Petro AP S.A. Associate’s subsidiary
SunPower Malaysia Manufacturing Sdn.Bhd. Associate's subsidiary
SunPower Systems Sarl Associate's subsidiary
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. Joint venture’s subsidiary
Jiangsu Huanxin Semiconductor Co., Ltd. Joint venture’s subsidiary
Anhui TCL Human Resources Service Co., Ltd. Joint venture’s subsidiary
Shanxi Shengwei Enterprise Management Co., Ltd. Joint venture’s subsidiary
Mostar Semi-conductor (Guangdong) Co., Ltd. Joint venture’s subsidiary
Mosun Semi-conductor Technology (Shanghai) Co., Ltd. Joint venture’s subsidiary
TCl Environmental Technology Co., Ltd. and its subsidiaries Associate and its subsidiaries
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries Associate and its subsidiaries
Getech Ltd. and its subsidiaries Associate and its subsidiaries
Under control of the same
TCL Industries Holdings Co., Ltd. and its subsidiaries
director
Significantly influenced by the
CJ Speedex Logistics Co., Ltd.
Company’s senior management
142
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions
(1) Selling raw materials and finished goods to related parties Note 1
2021 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries 15,594,088 11,907,330
SunPower Systems Sar 1,434,224 -
Shenzhen Qianhai Qihang International Supply Chain
641,810 720,035
Management Co., Ltd.
Qihang International Impo rt & Export Limited 528,883 436,002
SunPower Systems International Limited 323,973 223,755
TCl Environmental Technology Co., Ltd. and its subsidiaries 48,858 31,156
SunPower Malaysia Manufacturing Sdn.Bhd. 41,403 -
TCL Huan xin Semi-conductor (Tianjin) Co., Ltd. 35,337 -
QihangImport&Export Limited 5,728 177,473
ZhonghuanFeilang (Tianjin) Technology Co., Ltd. 3,355 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 843 766
Tianjin 712 Co mmunication & Broadcasting Co., Ltd. 671 -
Inner Mongolia Zhongjing Science and Technology Research
333 -
Institute Co., Ltd.
Shenzhen Tixiang Business Management Technology Co., Ltd. 17 17
CJ Speedex Logistics Co., Ltd. - 12
Wuxi Zhonghuan Applied Materials Co., Ltd. - 826,569
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. - 227,848
Jiangsu Huanxin Semiconductor Co., Ltd. - 4,756
Ziteng Intellectual Property Operat ion (Shenzhen) Co., Ltd. - 522
Sichuan Shengtian New Energy Develop ment Co., Ltd. - 140
18,659,523 14,556,381
(2) Purchasing raw materials and finished products from related parties Note 2
2021 2020
Aijiexu New Electronic Display Glass (Shenzhen) Co.,
3,288,681 2,353,119
Ltd.
Xin jiang Xiexin New Energy Material Technology Co.,
2,440,128 364,982
Ltd.
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,556,530 607,405
Shenzhen Jucai Supply Chain Technology Co., Ltd. 960,377 263,053
Inner Mongolia Zhongjing Science and Technology
213,923 45,826
Research Institute Co., Ltd.
Inner Mongolia Shengou Electro mechanical Engineering
142,865 -
Co., Ltd.
Shenzhen Qianhai Qihang International Supply Chain
128,872 -
Management Co., Ltd.
TCl Environmental Technology Co., Ltd. and its
51,335 53,648
subsidiaries
Shenzhen Qianhai Qihang Supply Chain Management Co.,
29,348 141
Ltd.
JC Supply Chain International (HK) Co., Limited 6,951 -
TCL Intelligent Technology (Ningbo) Co., Ltd. 1,521 795
Huaxia CPV (Inner Mongolia) Power Co., Ltd. - 5,711
Jiangsu Huanxin Semiconductor Co., Ltd. - 1,079
8,820,531 3,695,759
143
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(3) Receiving funding from related parties Note 3
2021 2020
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 229,133 -
Xinjiang DongpengWeichuang Equity Investment Partnership
(Limited Partnership) 162,982 58,845
Jiangsu Huanxin Semiconductor Co., Ltd. 109,384 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 101,130 52,757
Shenzhen Qianhai Qihang Supply Chain Management Co.,
Ltd. 44,945 103,136
Shenzhen Qianhai Qihang International Supply Chain
Management Co., Ltd. 24,975 98,476
TCL Finance (Hong Kong) Co., Limited 21,238 528,391
QihangImport&Export Limited 12,779 31,363
Shenzhen Tixiang Business Management Technology Co., Ltd. 7,868 3,328
Shenzhen Xirang International Network Information
Technology Co., Ltd. 7,555 5,826
Anhui TCL Human Resources Service Co., Ltd. 5,740 2,548
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. 4,937 -
Elite Excellent Investments Limited 3,860 2,008
Peer College Education Technology (Huizhou) Co., Ltd. 3,410 -
Qihang International Import & Export Limited 3,234 34,717
Shanxi Shengwei Enterprise Management Co., Ltd. 725 -
Huixing Holdings Limited 672 667
Marvel Paradise Limited 570 592
Union Dynamic Investment Limited 377 417
Huizhou TCL Human Resources Service Co., Ltd. 371 3,926
Esteem Venture Investment Limited 41 90
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 40 1,236
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. - 2,000,623
Xinjiang Dongpeng Heli Equity Investment Partnership
(Limited Partnership) - 266,839
Petro AP (Hong Kong) Company Limited - 112
745,966 3,195,897
(4) Providing funding for related parties Note 3
2021 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries - 1,063,580
TCl Environmental Technology Co., Ltd. and its subsidiaries - 47,945
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries - 195,550
- 1,307,075
144
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
3 Major related-party transactions (continued)
(5) Leases
2021 2020
Rental income
Aijiexu New Electronic Display Glass (Shenzhen) Co.,
Ltd. 80,552 50,856
TCL Industries Holdings Co., Ltd. and its subsidiaries 72,763 96,973
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 1,949 -
TCl Environmental Technology Co., Ltd. and its
subsidiaries 988 2,187
ZhonghuanFeilang (Tianjin) Technology Co., Ltd. 886 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 812 789
Getech Ltd. and its subsidiaries 532 2,074
Inner Mongolia Huanye Material Co., Ltd. 509 -
TCL Intelligent Technology (Ningbo) Co., Ltd. 460 -
Huizhou TCL Real Estate Development Co., Ltd. 367 657
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 350 322
Wuxi Zhonghuan Applied Materials Co., Ltd. - 2,239
Ziteng Intellectual Property Operation (Shenzhen) Co.,
Ltd. - 29
160,168 156,126
Leases (continued)
Rental expense
TCL Industries Holdings Co., Ltd. and its subsidiaries 52,989 41,379
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 834 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 232 -
54,055 41,379
(6) Providing labour service for or accepting labour service from related parties
2021 2020
Providing labour service for related parties 242,517 126,819
Accepting labour service from related parties 885,757 441,668
(7) Receiving interest from or paying interest to related parties Note 3
2021 2020
Interest received 81,607 86,235
Interest paid 18,244 9,611
145
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
3 Major related-party transactions (continued)
(8) Remuneration of key management personnel
2021 2020
Remuneration of key management personnel 58,199 28,304
(9) Other related transactions
1 In April 2021, the Group signed an equity transfer agreement with T.C.L. Industrial Ho ldings (Hong Kong) Co., Ltd. to obtain 100%
equity of Moka International Limited, held by T.C.L. Industrial Ho ldings (Hong Kong) Co., Ltd., at a transaction price of RMB2,800,000
thousand.
2 In June 2021, the Group signed an equity transfer agreement with TCL Industrial Hold ings Co., Ltd. to transfer 100% of the eq uity of TCL
Financial Hold ing Group (Guang zhou) Co., Ltd., held by the Group, to TCL Industrial Ho ldings Co., Ltd. at a transaction price of
RM B2,572,020 thousand.
3
In September 2021, the Group signed an equity transfer agreement with T.C.L. Industrial Ho ldings (Hon g Kong) Co., Ltd. to transfer
100% equity of Li Rong Develop ment Limited, held by the Group, to T.C.L. Industrial Ho ldings (Hong Kong) Co., Ltd. at a trans action
price of HKD 633,977 thousand (equivalent to about RMB526,010 thousand).
4
In December 2021, the Group signed an equity transfer agreement with Huizhou TCL Hu man Resources Service Co., Ltd. to transfer
100% equity of Peer Education Technology (Hu izhou) Co., Ltd., held by the Group, to Hu izhou TCL Hu man Resources Service Co., Ltd.
at a transaction price of RM B5,130 thousand.
5 In April 2021, TCL Environ mental Protection Technology Co., Ltd., an associate of the Group, increased its registered capital by
RM B129,057 thousand by being subscribed by all shareholders in the original shareholding ratio, among which the Group increased its
capital by RM B25,811 thousand.
Note 1 Selling raw materials and fin ished products to related parties
The Co mpany 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
Co mpany’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 Co mpany purchases raw materials and fin ished 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 Co mpany’s net profit^ but play an important role as to the Co mpany’s continued operations.
Note 3 Providing funding for or receiving funding fro m related parties and corresponding interest received or paid
The Co mpany set up a settlement center in 1997 and TCL Tech Finance Co., Ltd. in 2006 (together, the “Financial Settlement Ce nter”).
The Financial Settlement Center is responsible for the financial affairs of the Co mpany, including capital operation and allocation. The
Center settles accounts with the Co mpany’s subsidiaries, joint ventures and associates and pays the interest. It also allocat es 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 receive d means the
balances of related parties’ deposits in the Center.
146
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
Note 4 The following transactions taken between the following companies and the Company from October to
December 2020 are related transactions
Company name Relationship with the Company
SunPower Systems International Limited Associate
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Inner Mongolia Zhongjing Science and Technology
Research Institute Co., Ltd. Associate
Sichuan Shengtian New Energy Development Co.,
Ltd. Associate
Xinjiang Xiexin New Energy Material Technology
Co., Ltd. Associate
YanyuanFengguang New Energy Co., Ltd. Associate
ZhonghuanAineng (Beijing) Technology Co., Ltd. Associate
Note 5 The transactions taken between Wuxi Zhonghuan Applied Materials Co., Ltd. and the Company from October
to November 2020 are related transactions.
Note 6 The transactions taken between TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. and the Company from June
to December 2021 are related transactions.
Note 7 Transactions between Moka International Limited and its subsidiaries and the Company from January to
March in the current period are included in TCL Industries Holdings Co., Ltd. and its subsidiaries.
Note 8 Transactions between TCL Financial Holding Group (Guangzhou) Co., Ltd. and its subsidiaries and the
Company during June and December in the current period are included in TCL Industries Holdings Co., Ltd.
and its subsidiaries.
Note 9 The transactions between Peer College Education Technology (Huizhou) Co., Ltd. and the Company in
December in the current period are related-party transactions.
Note The transactions taken between Petro AP (Hong Kong) Company Limited, Fantasia Holdings Group Co.,
10 Limited and Huizhou TCL Real Estate Development Co., Ltd. from January to September in the current period
are related transactions.
Note The transactions between Ziteng Intellectual Property Operation (Shenzhen) Co., Ltd. and the Company from
11 January to June in the current period are related-party transactions.
4 Balances due from and to related parties (continued)
(1) Notes receivable
December 31, 2021 December 31, 2020
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 13,441 -
13,441 -
147
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties (continued)
(2) Accounts receivable
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries 2,230,056 2,580,564
SunPower Systems Sarl 281,163 -
Shenzhen Qianhai Qihang International Supply Chain
Management Co., Ltd. 276,090 381,327
Qihang International Import & Export Limited 235,474 17,265
SunPower Systems International Limited 119,817 99,791
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 24,710 -
SunPower Malaysia Manufacturing Sdn.Bhd. 2,183 -
ZhonghuanFeilang (Tianjin) Technology Co., Ltd. 1,569 -
Tianjin ZhonghuanHaihe Intelligent Manufacturing Fund
Partnership (Limited Partnership) 199 -
Tianjin 712 Communication & Broadcasting Co., Ltd. 40 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 1 13,825
QihangImport&Export Limited - 112,535
Jiangsu Huanxin Semiconductor Co., Ltd. - 6,983
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. - 2,149
TCl Environmental Technology Co., Ltd. and its subsidiaries - 1,148
Bank of Shanghai Co., Ltd. - 45
Huizhou TCL Real Estate Development Co., Ltd. - 4
3,171,302 3,215,636
(3) Receivables financing
December 31, 2021 December 31, 2020
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 500 -
500 -
(4) Accounts payable
December 31, 2021 December 31, 2020
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 552,883 385,787
TCL Industries Holdings Co., Ltd. and its subsidiaries 448,553 32,336
Shenzhen Jucai Supply Chain Technology Co., Ltd. 274,366 122,863
Inner Mongolia Shengou Electromechanical Engineering Co.,
Ltd. 30,029 1,365
TCl Environmental Technology Co., Ltd. and its subsidiaries 24,033 11,435
Getech Ltd. and its subsidiaries 10,762 21,594
JC Supply Chain International (HK) Co., Limited 6,503 -
148
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties (continued)
(4) Accounts payable (Continued)
December 31, 2021 December 31, 2020
Inner Mongolia Zhongjing Science and Technology Research
5,246 31,115
Institute Co., Ltd.
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 2,240 8,562
Inner Mongolia Huanye Material Co., Ltd. 1,457 -
Shenzhen Xirang International Network Information
1,195 -
Technology Co., Ltd.
Peer College Education Technology (Huizhou) Co., Ltd. 38 -
1,357,305 615,057
(5) Other receivables
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,390,733 41,645
TCL Intelligent Technology (Ningbo) Co., Ltd. 3,777 -
ZhonghuanAineng (Beijing) Technology Co., Ltd. 3,099 3,099
TCl Environmental Technology Co., Ltd. and its subsidiaries 2,139 25,486
Shenzhen Xirang International Network Information Technology
Co., Ltd. 1,185 2,755
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 663 -
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. 524 66
Getech Ltd. and its subsidiaries 404 -
LG Electronics (Huizhou) Co., Ltd. 109 26
Inner Mongolia Shengou Electromechanical Engineering Co.,
Ltd. 64 -
Shenzhen Qianhai Qihang International Supply Chain
Management Co., Ltd. 8 -
Mostar Semi-conductor (Guangdong) Co., Ltd. 7 -
Petro AP S.A. - 1,218
Ulanqab Xinyuan New Energy Co., Ltd. - 425
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. - 218
Jiangsu Huanxin Semiconductor Co., Ltd. - 2
1,402,712 74,940
(6) Other payables
December 31, 2021 December 31, 2020
Tianjin ZhonghuanHaihe Intelligent Manufacturing Fund
Partnership (Limited Partnership) 428,100 -
Getech Ltd. and its subsidiaries 118,911 34,003
Shenzhen Jucai Supply Chain Technology Co., Ltd. 84,988 14,556
149
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(6) Other payables (continued)
December 31, 2021 December 31, 2020
Xinjiang DongpengWeichuang Equity Investment Partnership
(Limited Partnership) 48,969 47,782
TCL Industries Holdings Co., Ltd. and its subsidiaries 39,554 53,036
QihangImport&Export Limited 12,779 31,363
Anhui TCL Human Resources Service Co., Ltd. 6,073 2,548
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 5,316 5,500
Elite Excellent Investments Limited 3,860 2,008
Peer College Education Technology (Huizhou) Co., Ltd. 3,624 -
Qihang International Import & Export Limited 3,234 34,717
CJ Speedex Logistics Co., Ltd. 1,772 1,050
TCl Environmental Technology Co., Ltd. and its subsidiaries 1,365 243
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 1,330 -
Mosun Semi-conductor Technology (Shanghai) Co., Ltd. 1,000 -
Shanxi Shengwei Enterprise Management Co., Ltd. 725 -
Huixing Holdings Limited 672 667
Marvel Paradise Limited 570 592
Union Dynamic Investment Limited 377 417
Huizhou TCL Human Resources Service Co., Ltd. 370 3,926
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 245 372
Shenzhen Tixiang Business Management Technology Co., Ltd. 197 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 45 45
Esteem Venture Investment Limited 41 90
Xinjiang Dongpeng Heli Equity Investment Partnership (Limited
Partnership) 33 266,838
Xinjiang Xiexin New Energy Material Technology Co., Ltd. 4 4
JOLED Incorporation - 63,300
Petro AP (Hong Kong) Company Limited - 21,698
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. - 11,836
TCL Finance (Hong Kong) Co., Limited - 11,419
Ziteng Intellectual Property Operation (Shenzhen) Co., Ltd. - 1,281
Shenzhen Qianhai Qihang International Supply Chain
Management Co., Ltd. - 500
Huizhou TCL Real Estate Development Co., Ltd. - 91
YanyuanFengguang New Energy Co., Ltd. - 28
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries - 4
764,154 609,914
150
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(7) Current portion of non-current liabilities due within a one-year period
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries
6,346 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd.
4,648 -
TCL Huan xin Semi-conductor (Tianjin) Co., Ltd.
957 -
11,951 -
(8) Prepayments
December 31, 2021 December 31, 2020
Xin jiang Xiexin New Energy Material Technology Co., Ltd.
74,672 28,520
Getech Ltd. and its subsidiaries
4,850 3,130
TCL Industries Holdings Co., Ltd. and its subsidiaries
40 92
Shenzhen Xirang International Network Info rmation Technology Co., Ltd.
- 4,162
JOLED Incorporation
- 1,962
TCL A ir Conditioner (Wuhan) Co., Ltd. and its subsidiaries
- 35
79,562 37,901
(9) Advances from customers
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries
- 341
TCl Environmental Technology Co., Ltd. and its subsidiaries
- 34
- 375
(10) Contract liabilities
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries
10,633 42,533
TCl Environmental Technology Co., Ltd. and its subsidiaries
2,885 -
Shenzhen Qianhai Qihang International Supply Chain Management Co.,
Ltd. 111 -
13,629 42,533
151
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(11) Lease liabilities
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries 6,576
-
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 6,242
-
TCL Huan xin Semi-conductor (Tianjin) Co., Ltd. 275
-
13,093 -
(12) Deposits from related parties (note)
December 31, 2021 December 31, 2020
TCL Huan xin Semi-conductor (Tianjin) Co., Ltd.
229,154 -
Xin jiang DongpengWeichuang Equity Investment Partnership (Limited
Partnership) 114,413 11,062
Jiangsu Huanxin Semiconductor Co., Ltd.
109,395 -
Shenzhen Jucai Supply Chain Technology Co., Ltd.
101,181 52,677
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd.
45,018 103,136
Shenzhen Qianhai Qihang International Supply Chain Management
Co., Ltd. 25,040 98,476
TCL Finance (Hong Kong) Co., Limited
21,241 528,391
Shenzhen Tixiang Business Management Technology Co., Ltd.
7,873 3,328
Shenzhen Xirang International Network Info rmation Technology Co.,
Ltd. 7,559 5,826
Shanghai Tixiang Enterprise Management Consulting Co., Ltd.
4,940 -
Zhihui Xinyuan Co mmercial (Hu izhou) Co., Ltd.
185 2,000,623
TCL A ir Conditioner (Wuhan) Co., Ltd. and its subsidiaries
46 1,232
Petro AP (Hong Kong) Co mpany Limited
- 112
Xin jiang Dongpeng Heli Equity Investment Partnership (Limited
Partnership) - 1
666,045 2,804,864
These deposits are made by related parties in the Co mpany’s subsidiary TCL Tech Finance Co., Ltd.
(13) Other current assets
December 31, 2021 December 31, 2020
TCL Industries Holdings Co., Ltd. and its subsidiaries -
1,055
TCL A ir Conditioner (Wuhan) Co., Ltd. and its subsidiaries -
275
TCl Environmental Technology Co., Ltd. and its subsidiaries - 85
Huaxia CPV (Inner Mongolia) Power Co., Ltd. - 42
- 1,457
152
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties (continued)
(14) Other non-current assets
December 31, 2021 December 31, 2020
Ziteng Intellectual Property Operation (Shenzhen) Co.,
Ltd. - 232,613
- 232,613
XI Commitments
1 Capital commitments
December 31, 2021 December 31, 2020
Under contractual obligations Note
but not provided for 1 17,764,772 8,522,634
Approved by Board but not Note
under contractual obligations 2 172,384 189,019
17,937,156 8,711,653
Note 1 The capital commitments under contractual obligations but not provided for in the current period primarily
consisted of such commitments for construction of investment projects and external investments.
Note 2 The capital commitments were approved by the Board but are not under contractual obligations in the current
period primarily consisting of such commitments for CSOT’s LCD panel project.
As of December 31, 2021, apart from the disclosures above, there were no other major commitments that are
required to be disclosed.
XII Contingencies
Guarantees Provided for External Parties
The guaranteed amount for related party bank loan, commercial drafts, letters of credit, etc. is
RMB15,991,207 thousand.
XIII Events after Balance Sheet Date
1 According to the Proposal of the Company's 2021 Annual Profit Distribution Plan considered and adopted at
the 18th meeting of the seventh board of directors on April 27, 2022, the Company's 2021 annual profit
distribution plan was: it was proposed to distribute a cash dividend of RMB1.5 (including tax) for every 10
shares to all shareholders based on the share capital of 13,666,683,905 shares that can participate in profit
distribution on April 27, 2022 (total share capital of 14,030,642,421 shares less 363,958,516 shares in the
Company's repurchase special securities account that does not participate in profit distribution), with a total
profit of RMB 2,050,002,585.75 distributed. Meanwhile, there will be no bonus issue from either profit or
capital reserves for the year under review.
153
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XIII Events after Balance Sheet Date (continued)
2 Fro m January 12 to 13, 2022, TCL Technology completed the issue of the first phase of med iu m-term notes in 2022, with interest
valued fro m January 14, 2022, an issue scale of RM B2 billion, a term of 3 years, and a coupon rate of 3.45%.
3 Fro m April 25 to 26, 2022, TCL Technology completed the issue of the second phase of green mediu m-term notes in 2022, with interest
valued fro m April 27, 2022, an issue scale of RM B1.5 billion, a term of 3 years, and a coupon rate of 3.3%.
There were no other significant post-balance-sheet-date events that are required to be disclosed as at the date of the authorization of the
financial statements for issue.
XIV Other Important Matters
(I) Discontinued operations
In May 2021, the proposal on the sale of the 100% equity of TCL Financial Serv ices Holdings (Guangzhou) Group Co., Ltd.was
deliberated and approved at the second extraord inary general meeting of the Co mpany: 100% equity of the co mpany would be sold to
TCL Industrial Hold ings Co., Ltd. for RM B2,572,020,000, and the delivery would be co mpleted at the end of May.
2021 2020
Revenue fro m d iscontinued operations 168,312 361,300
Gross profit of discontinued operations 63,259 175,739
Income tax expense of discontinued operations 15,502 29,587
Net profit of discontinued operations 47,757 146,152
Add: Net gain/loss on disposal of discontinued operations 10,539 -
Total net profit of discontinued operations 58,296 146,152
(II) Seg ment report ing
1 Basis for determining reporting segment and accounting policies
According to the Company’s internal organizational structure, management requirements and internal reporting system, the Co mp any’s
business is divided into four reporting segments: the semi-conductor display business, the new energy photovoltaic and semi-conductor
materials business, the distribution business and the other businesses. The Co mpany's management regularly evaluates the operating
results of these reporting segments to determine the allocation of resources and evaluate their performance. The Co mpany’s four reporting
segments are:
Semi-conductor display and materials business: main ly includes research and development, manufacturing and sales of semi-conductor
(1)
display panels and semi-conductor display modules.
New energy photovoltaic and semi-conductor materials business: mainly includes the manufacturing and sales of semi -conductor
(2) materials, semi-conductor devices, new energy materials and new energy; and the development and operation of highly -efficient
photovoltaic power station projects.
(3) Distribution business: mainly includes the sales of computers, software, tablet co mputers, 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, amort ization and impairment losses of assets att ributable to
each segment, gains or losses fro m changes in fair value, investment inco me, non -operating income and inco me tax expenses. Transfer
pricing of inter-segment income is calculated on terms similar to other foreign transactions.
154
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XIV Other Important Matters (Continued)
(II) Segment reporting (continued)
2 Financial information of reporting segments
For the 12 months ending on December 31, 2021
New energy
Semi-conduct photovoltaics and Distribution Other and
Total
or display semi-conductor business offsets
materials business
Revenue 88,102,921 41,104,685 31,932,016 2,400,938 163,540,560
Gross profit 12,383,028 5,000,031 366,835 (185,801) 17,564,093
Income tax
expense 1,735,094 564,903 94,789 210,339 2,605,125
Net profit 10,647,934 4,435,128 272,046 (396,140) 14,958,968
Total assets 206,580,881 77,979,359 6,135,887 18,037,005 308,733,132
Total liabilities 120,788,713 36,309,580 4,805,264 27,184,283 189,087,840
Other items
Depreciation
and
amortization 14,307,942 2,977,409 23,292 619,270 17,927,913
Capital
expenditure 24,135,467 6,102,319 - 617,348 30,855,133
Net interest
expense 944,263 827,243 55,480 1,736,816 3,563,802
For the 12 months ending on December 31, 2020
Semi-conductor New energy
display photovoltaics and Distribution Other and
Total
and materials semi-conductor business offsets
business materials business
Revenue 46,765,152 5,682,962 22,518,401 1,710,723 76,677,238
Gross profit 2,681,812 464,004 251,352 2,338,136 5,735,304
Income tax 259,681 36,829 65,175 670,100
expense 308,415
Net profit 2,422,131 427,175 186,177 2,029,721 5,065,204
Total assets 167,530,948 58,719,684 4,838,486 26,819,161 257,908,279
Total liabilities 102,716,040 30,638,290 3,767,580 30,729,302 167,851,212
Other items
Depreciation 9,770,114 634,433 6,252 134,213 10,545,012
and
amortization
Capital 31,326,649 931,541 - 827,373 33,085,563
expenditure
Net interest 549,748 231,729 49,291 1,238,562 2,069,330
expense
Note: The new energy photovoltaics and semi-conductor materials business has been consolidated since October 2020.
155
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV Notes to Financial Statements of the Company as Parent
1 Accounts receivable
December 31, 2021 December 31, 2020
Allo Accrual
Ratio Ratio
Amount wanc Ratio Amount Allow Percenta
(%) (%)
e (%) ance ge
Within 1
93,929 100% 363 0.39% 175,944 100% 157 0.09%
year
As of December 31, 2021, there were no such accounts receivable from any shareholder with a 5% or greater voting stock.
2 Other receivables
December 31, 2021 December 31, 2020
Dividends receivable - -
Other receivables 13,819,512 25,555,924
13,819,512 25,555,924
(a) Nature of other receivables is analyzed as follows:
December 31, 2021 December 31, 2020
Equity transfer receivables 1,260,290 -
Receivables from external entities 107,708 216,836
Security deposits 1,407 2,354
Others 12,450,107 25,336,734
13,819,512 25,555,924
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL (credit Lifetime ECL (credit
12-month ECL Total
not impaired) impaired)
December 31, 2020 962 - 40,573 41,535
Adjustment for change
in accounting policy - - - -
January 1, 2021 962 - 40,573 41,535
Accrued in current
period - - - -
Reversal of current
period - - (19) (19)
Write-off of current
period - - (8,588) (8,588)
December 31, 2021 962 - 31,966 32,928
156
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV 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, 2021 December 31, 2020
Amount Ratio (%) Amount Ratio (%)
Within 1
year 12,536,263 90.50% 22,903,192 89.48%
1 to 2
years 363,773 2.63% 1,554,740 6.07%
2 to 3
years 587,773 4.24% 750,517 2.93%
Over 3
years 364,631 2.63% 389,010 1.52%
13,852,440 100.00% 25,597,459 100%
The outstanding other receivables were mostly current accounts with related parties. As of December 31,
2021, there were no such other receivables from any shareholder with a 5% or greater voting stock.
The top five other receivables of the Company are about RMB12,357,035 thousand (December 31, 2020:
RMB21,175,647 thousand), accounting for 89.20% (December 31, 2020: 82.73%) of the total other
receivables of the Company.
3 Long-term equity investments
December 31, 2021 December 31, 2020
Allowance for
doubtful Carrying Gross Impairment Carrying
Gross amount accounts amount amount allowance amount
Associates and
joint ventures (1) 14,968,764 - 14,968,764 13,903,039 - 13,903,039
Subsidiaries (2) 56,334,362 - 56,334,362 51,191,420 - 51,191,420
71,303,126 - 71,303,126 65,094,459 - 65,094,459
As of December 31, 2021, there are no major restrictions on the realization of investment and the remittance of
return on long-term equity investments.
157
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Co mpany (Continued)
3 Long-term equity investments (continued)
⑴ Associates and joint ventures
Increase or decrease in current period
Increase/decre Investment gains Other Other
Other Declared cash December 31,
ase in or losses comprehensiv Impairment increases
Beginning amount equity dividends or 2021
investment in recognized by e inco me allo wance or
changes profits
current period equity method adjustment decreases
Bank o f Shanghai Co., Ltd. 11,232,138 - 1,269,007 (254,192) - (327,157) - - 11,919,796
China Innovative Capital Management Limited 1,037,627 - 25,592 - - - - - 1,063,219
LG Electronics (Hu izhou) Co., Ltd. 90,381 - 13,898 - - (12,200) - - 92,079
Shenzhen Qianhai Qihang Supply Chain
Management Co., Ltd. 39,561 - (3,401) - - - - - 36,160
Shenzhen Tixiang Business Management
Technology Co., Ltd. 2,465 - 1,155 - - - - - 3,620
Shenzhen Jucai Supply Chain Technology Co.,
Ltd. 6,668 - 4,038 - - - - - 10,706
TCL Environmental Technology Co., Ltd. 89,758 25,811 6,822 - - - - - 122,391
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
377,553 - (4,577) - - - - - 372,976
Industry Equity Investment Fund Partnership
(Limited Partnership)
Guangdong Utrust Emerging Industry Equity
Investment Fund Partnership (Limited 150,677 - 349 - - - - - 151,026
Partnership)
Huizhou TCL Hu man Resources Service Co.,
2,121 - 1,175 - - - - - 3,296
Ltd.
TCL M icrochip Technology (Guangdong) Co.,
- 350,000 (22,933) - - - - (13,633) 313,434
Ltd.
Shenzhen Qianhai Qihang International Supply
- 35,000 14,964 - - - - - 49,964
Chain Management Co., Ltd.
Others 874,090 (88,084) 100,027 - - (10,093) - (45,843) 830,097
13,903,039 322,727 1,406,116 (254,192) - (349,450) - (59,476) 14,968,764
158
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Direct
shareholdi Increase in
ng
January 1, current
Decrease in December 3
2021 current period 1, 2021
Ratio period
(%)
TCL China Star Optoelectronics
Technology Co., Ltd. 83.02% 27,432,498 5,268,400 - 32,700,898
TCL Tech Finance Co., Ltd. 82% 1,256,003 - - 1,256,003
Tianjin Zhonghuan Electronics
Group Co., Ltd. 100% 12,500,000 2,500,000 - 15,000,000
Tianjin Zhonghuan Semiconductor
Co., Ltd. 2.57% 1,752,635 - - 1,752,635
Wuhan China Star Optoelectronics
Technology Co., Ltd. - 4,217,000 - (4,217,000) -
TCL Financial Holdings Group
(Guangzhou) Co., Ltd. - 772,000 - (772,000) -
Guangzhou TCL Internet
- 1,000,000 - (1,000,000) -
Microcredit Co., Ltd.
Huizhou Zhongkai TCL Zhirong - 457,994 - (457,994) -
Technology Microcredit Co., Ltd.
TCL Culture Media (Shenzhen) Co.,
Ltd. 100% 361,414 - - 361,414
Xinjiang TCL Equity Investment Ltd. 100% 200,000 - - 200,000
Huizhou Sailuote Communication
Co., Ltd. 100% 110,000 - - 110,000
Highly Information Industry Co.,
Ltd. 66.46% 107,296 - - 107,296
TCL Communication Equipment
(Huizhou) Co., Ltd. 75.00% 79,500 - - 79,500
TCL Medical Radiological
Technology (Beijing) Co., Ltd. 100% 58,497 - - 58,497
Shenzhen TCL Strategic Equity
Investment Fund Partnership 100% 43,880 26,946 - 70,826
(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
Development Co., Ltd. 100% 20,000 - - 20,000
Beijing HAWK Cloud Information
Technology Co., Ltd. 100% 20,000 - - 20,000
Peer College Education Technology
(Huizhou) Co., Ltd. - 5,000 - (5,000) -
Huizhou Hongsheng Science and
Technology Development Co., Ltd. 100% 1,000 - - 1,000
Beijing Zhiqujia Technology Co.,
Ltd. 100% 257,627 - - 257,627
Tianjin Silica Material Technology
Co., Ltd. 100% - 1,000,000 - 1,000,000
Ningbo TCL Equity Investment Ltd. 100% 300,000 - - 300,000
159
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries (continued)
Direct
sharehol Increase in Decrease in
December
ding January 1, current current
31, 2021
Ratio 2021 period period
(%)
TCL Technology Investments
100% 188,293 2,800,000 - 2,988,293
Limited
Equity incentives of subsidiaries 10,783 80 (490) 10,373
51,191,420 11,595,426 (6,452,484) 56,334,362
For the registered capital of subsidiaries and the Company's equity interests in the subsidiaries, see Note V.
160
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
4 Investments in other equity instruments
December 31, 2021 December 31, 2020
Equity of unlisted companies 5,000 15,000
5 Other non-current financial assets
December 31, 2021 December 31, 2020
Equity investments 1,051,536 1,145,022
6 Revenue and cost of sales
2021 2020
Revenue Cost of sales Revenue Cost of sales
Core business 1,133,244 1,111,423 886,980 897,447
Non-core business 357,693 16 254,278 13,764
1,490,937 1,111,439 1,141,258 911,211
7 Return on investment
2021 2020
Gain on disposal of debt instruments at fair value through profit or
loss 253,698 176,098
Gain on disposal of equity instruments at fair value through profit or
loss 24,321 289,959
Profit from holding debt instruments at fair value through profit or loss 84,124 20,323
Debt instruments at amortized cost through profit or loss 877 -
Profit from holding equity instruments at fair value through profit or
loss - 12,265
Dividends from subsidiaries 410,500 736,919
Share of profit of associates for current period 1,427,874 1,430,174
Share of profit of joint ventures for current period (21,758) (9,811)
Net income from disposal of long-term investments 825,934 748,894
3,005,570 3,404,821
As of December 31, 2021, there were no significant restrictions on the collection of return on investment.
161
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XV 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 as the parent was RMB27,659,560 thousand.
9 Cash and cash equivalents, end of the period
Cash and cash equivalents, end of the period of the parent Company was RMB10,401,376 thousand.
10 Contingent liabilities
As of December 31, 2021, the contingent liabilities not provided for in the financial report were as follows:
December 31, 2021 December 31, 2020
Guarantees for commercial drafts and L/Gs and other instruments of
subsidiaries 10,025,125 10,903,205
Guarantees for bank loans of subsidiaries 29,542,641 33,054,210
Guarantees for bank loans, commercial drafts, letters of credit,
etc. of related parties 15,991,207 16,144,884
162
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XVI Comparative Data
Certain comparative data have been reclassified to comply with the presentation of the current period.
XVII Non-Recurring Gains and Losses
2021 2020
Gain or loss on disposal of non-current assets (inclusive of
impairment allowance write-offs) (184,526) 226,828
Government grants through profit or loss (exclusive of government
grants given in the Company’s ordinary course of business at fixed 699,271 736,747
quotas or amounts as per the government’s uniform standards)
Gain equal to the amount by which investment costs for the
Company to obtain subsidiaries, associates and joint ventures are
40,300 292,440
lower than the Company’s fair value of identifiable net assets of
investees when making investments;
The profits or losses generated from changes in fair value arising
from holding marketable financial assets and marketable financial
liabilities, as well as the investment-related income from the
disposal of marketable financial assets, marketable financial 238,629 350,757
liabilities and available-for-sale financial assets, except for the
effective hedging business related to the Company’s normal
business operation.
Non-operating income and expenses other than the above 275,790 80,764
Other gains and losses that meet the definition of non-recurring
gain/loss - -
Income tax effects (93,176) (135,131)
Non-controlling interests effects (356,085) (97,494)
Non-recurring gains and losses attributable to ordinary shareholders
of the Company as the parent 620,203 1,454,911
The Company recognizes non-recurring gain and loss items in accordance with the provisions of (2008)
No.43 "Explanatory Announcement No.1-Non-recurring Gains and Losses (2008)" issued by the China
Securities Regulatory Commission.
163
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2021 to December 31, 2021
___________(RMB’000)_____________
XVIII 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 China Securities Regulatory
Commission and relevant provisions of accounting standards:
Item The EPS (RMB yuan)
“Current
Period”
Net profit
Weighted
attributable
average Basic
to the
return on earnings per Diluted EPS
parent
equity (%) share
Company
for the
Reporting
Period
Net profit attributable to ordinary
10,057,444 26.46% 0.7463 0.7354
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company
9,437,241 24.83% 0.7003 0.6901
before non-recurring gains and
losses
Company Name: TCL Technology Group Corporation
Date: April 27, 2021
The financial statements and the notes thereto from page 1 to page 164 are signed by:
Person-in-charge
of the
Legal Person-in-charge accounting
Representative: Li Dongsheng of financial affairs: Li Jian department: Xi Wenbo
164
