TCL Technology Group Corporation Interim Report 2022
TCL 科技集团股份有限公司
TCL Technology Group Corporation
INTERIM REPORT 2022
August 26, 2022
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TCL Technology Group Corporation Interim Report 2022
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 person-in-charge of the Company, 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 (Chief Accountant), hereby
guarantee that the financial statements carried in this Interim Report are factual,
accurate, and complete.
All the Company’s directors attended the Board meeting for the review of
this report.
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 Company has no interim dividend plan, either in the form of cash or
stock, nor for the conversion of capital reserve into share capital.
This Report has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.
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TCL Technology Group Corporation Interim Report 2022
Table of Contents
Part I Important Notes, Table of Contents and Definitions .................................... 2
Part II Corporate Information and Key Financial Information ............................ 6
Part III Management Discussion and Analysis ........................................................ 9
Part IV Corporate Governance................................................................................ 31
Part V Environmental and Social Responsibility ................................................... 33
Part VI Significant Events ........................................................................................ 41
Part VII Changes in Shares and Information about Shareholders ...................... 56
Part VIII Bonds ......................................................................................................... 62
Part IX Financial Report .......................................................................................... 67
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TCL Technology Group Corporation Interim Report 2022
Documents Available for Reference
(I) The financial statements signed and stamped by the person-in-charge of the
Company, the Chief Financial Officer and person-in-charge of the financial department.
(II) The originals of all the Company’s announcements and documents that were
disclosed to the public during the Reporting Period.
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TCL Technology Group Corporation Interim Report 2022
Definitions
Term Refers to Definition
The “Company”, the “Group”，
Refers to TCL Technology Group Corporation
“TCL”，“TCL Tech.” or “we”
The “Reporting Period”, “current
Refers to The period from January 1, 2022 to June 30, 2022.
period”
TCL CSOT Refers to TCL China Star Optoelectronics Technology Co., Ltd.
TCL Zhonghuan Renewable Energy Technology Co., Ltd., a majority-owned
TCL Zhonghuan Refers to subsidiary of the Company listed on the Shenzhen Stock Exchange (stock
code: 002129.SZ)
Tianjin Printronics Circuit Corporation, a majority-owned subsidiary of the
TPC Refers to
Company listed on the Shenzhen Stock Exchange (stock code: 002134.SZ)
Wuhan CSOT Refers to Wuhan China Star Optoelectronics Technology Co., Ltd.
Guangdong Juhua Refers to Guangdong Juhua Printed Display Technology Co., Ltd.
Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
Jiutian Liancheng Refers to
Partnership)
Highly Information Industry Co., Ltd., a majority-owned subsidiary of the
Highly Refers to Company listed on the National Equities Exchange and Quotations (stock
code: 835281)
Moka Technology Refers to Moka International Limited
Semiconductor materials Refers to Materials with electrical conductivity between conductors and insulators.
Single-crystal silicon in which the silicon atoms are structured periodically
Monocrystalline silicon Refers to and made of high-purity polycrystalline silicon by the Czochralski (CZ) and
float zone (FZ) method.
Polycrystal of silicon composed of silicon grains at a certain size, in which
each silicon grain has a different crystalline orientation. High-purity
Polycrystalline silicon Refers to
polysilicon used to prepare monocrystalline silicon is primarily purified from
metallurgical-grade polysilicon by the improved Siemens method.
P-type monocrystalline silicon created by adding trivalent elements (such as
P-type Refers to boron) to replace silicon atoms in the production process of monocrystalline
silicon.
P-type monocrystalline silicon created by adding pentavalent elements (such
N-type Refers to as phosphorus) to replace silicon atoms in the production process of
monocrystalline silicon.
Polished wafer Refers to Silicon wafer obtained through cutting, grinding, and polishing.
Semiconductor silicon wafer formed through the epitaxial process on the
Epitaxial wafer Refers to
polished wafer.
t1 Refers to 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 Refers to
production line of TCL CSOT
t3 Refers to 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
t4 Refers to
TCL CSOT
The generation 6 (or G6) of new semiconductor production line of Wuhan
t5 Refers to
CSOT
The generation 11 (or G11) new TFT-LCD display production line of TCL
t6 Refers to
CSOT
The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD and
t7 Refers to
AMOLED production line of TCL CSOT
The generation 8.6 (or G8.6) new oxide semiconductor production line of
t9 Refers to
Guangzhou CSOT
The generation 8.5 (or G8.5) TFT-LCD production line of Suzhou China Star
t10 Refers to
Optoelectronics Technology Co., Ltd.
GW Refers to Gigawatt, power unit for solar cells, 1GW = 1,000 megawatts
12-inch ultra-large DW-cut solar monocrystalline silicon square wafer, size:
G12 Refers to 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 Interim Report 2022
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. (if any) TCL 科技
Company name in English (if any) TCL Technology Group Corporation
Abbr. (if any) TCL TECH.
Legal representative Li Dongsheng
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
III. Other Information
1. Contact Information of the Company
Whether the registered address, office address and their zip codes, website address and email address of the Company changed during
the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the registered address, office address and their zip codes, website address and email address of the Company
during the Reporting Period. Please refer to the Annual Report 2021 for details.
2. Media for Information Disclosure and Place Where This Report is Lodged
Whether the media for information disclosure and place where this report is lodged changed during the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the newspapers designated by the Company for information disclosure, the website designated by the CSRC
for disclosing the Company’s periodic reports and the place for lodging such reports during the Reporting Period. Please refer to the
Annual Report 2021 for details.
3. Other Information
Whether other information changed during the Reporting Period.
□ Applicable √ Not applicable
IV. Key Accounting Data and Financial Indicators
Indicate whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reasons for retroactive adjustment or restatement
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TCL Technology Group Corporation Interim Report 2022
Change of accounting policy
H1 2021 Change
H1 2022
Before adjustment After adjustment After adjustment
Revenue (RMB) 84,522,181,128 74,298,646,758 74,405,849,039 13.60%
Net profit attributable to the company’s
663,522,871 6,783,884,807 6,802,218,487 -90.2%
shareholders (RMB)
Net profits attributable to the
company’s shareholders before non- -626,869,385 5,497,817,947 5,516,151,627 -111.36%
recurring gains and losses (RMB)
Net cash generated from operating
9,016,635,743 13,895,714,157 13,895,714,157 -35.11%
activities (RMB)
Basic earnings per share (RMB/share) 0.0489 0.5026 0.5040 -90.30%
Diluted earnings per share (RMB/share) 0.0485 0.4835 0.4848 -90.00%
Decrease by 17.3
Weighted average return on equity (%) 1.71% 18.96 % 19.01% percentage points
year on year
End of the December 31, 2021 Change
Reporting Period Before adjustment After adjustment After adjustment
Total assets (RMB) 330,356,529,181 308,733,133,305 308,987,970,915 6.92%
Owners’ equity attributable to the
39,024,099,358 43,034,234,611 43,103,580,799 -9.46%
company’s shareholders (RMB)
Reasons for change in accounting policies and correction of accounting errors
In accordance with the Interpretation No. 15 of the Accounting Standards for Business Enterprises issued by the Ministry of Finance,
the Company implemented related requirements and retroactively adjusted relevant items of the financial statements at the beginning
of the year and the same period of the previous year. Such change in accounting policy has no material impact on the Company’s
financial position and operating results.
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
0.0473
capital above (RMB/share)
V. Accounting Data Differences under China Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Differences in Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
There were no differences in the net profit and equity reported by the Company under CAS and IFRS during the Reporting Period.
2. Differences in Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
There were no differences in the net profit and equity reported by the Company under CAS and Foreign Accounting Standards during
the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
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TCL Technology Group Corporation Interim Report 2022
VI. Non-Recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount
Gains and losses on disposal of non-current assets (inclusive of impairment allowance write-offs) 464,268,004
Government subsidies charged to current profits and loss (except for government subsidies closely related
to the Company’s normal business which comply with national policies and regulations and are enjoyed on 429,923,376
an ongoing basis according to certain standard quotas or quantities)
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
-11,163,893
financial assets, marketable financial liabilities and available-for-sale financial assets, except for the
effective hedging business related to the Company’s normal business operation.
Reversal of provision for impairment of receivables that have been individually tested for impairment 10,179,957
Non-operating income and expenses other than the above 538,584,560
Less: Corporate income tax 47,765,551
Non-controlling interests (net of tax) 93,634,197
Total 1,290,392,256
Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable √ Not applicable
The Company has no other profit and loss items that meet the definition of non-recurring profits and losses.
Note on non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define Recurring Gain/Loss items
□ Applicable √ Not applicable
The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit and
loss items.
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TCL Technology Group Corporation Interim Report 2022
Part III Management Discussion and Analysis
I. Main businesses of the Company during the reporting period
1. Overview
In the first half of the year affected by factors such as intensifying geopolitical conflicts, rising
inflationary pressures, and multiple waves of COVID-19 outbreaks across the world, the demand in
end market remained sluggish and the global economy slowed down significantly. The complex and
changing political and economic situation has further impacted the high-tech industry and driven the
transformation of energy structures. In response to these changes, the Company laid out its business
in the pan-semiconductor industry on a basis of semiconductor display, new energy photovoltaics,
and semiconductor materials, strengthened its risk management and control, and secured the bottom
line of operation with ultimate cost efficiency to improve comparative competitiveness and pursue
sustainable high-quality development.
During the reporting period, the Company achieved an operating revenue of RMB84.52 billion,
a year-on-year increase of 13.6%; a net profit of RMB1.93 billion, a year-on-year decrease of 79.3%;
and a net profit of RMB660 million attributable to the shareholders of listed companies, a year-on-
year decrease of 90.2%. The Company saw decreased profits primarily due to overall sluggish
demand for display terminals, sharp decline in orders from key regional markets and customers
caused by geopolitical conflicts, and significantly lower prices of major products than that at the same
period of last year. The net profit of the Company's semiconductor display business decreased by
RMB8.9 billion year on year.
In terms of its new energy photovoltaic business, the Company seized the promising
opportunities of the industry, fully utilized its leading advantages in products and process technology,
and accelerated the construction of advanced capacity. In terms of its semiconductor material business,
the Company continued to diversify its product and customer structure, with both production and
sales increasing significantly. TCL Zhonghuan achieved an operating income of RMB31.7 billion, a
year-on-year increase of 79.7%, and a net profit of RMB3.225 billion, a year-on-year increase of
68.4%, with rapidly increased proportion of contribution to the Company's performance. The
Company has recently begun working with its partners to launch a project of 100,000 tons of granular
silicon and silicon-based materials and a project of 10,000 tons of electronic grade polycrystalline
silicon, enabling the Company to coordinate industrial chain resources and secure the supply of major
materials on the upstream.
Building long-term competitive advantages based on the technological innovation-driven
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TCL Technology Group Corporation Interim Report 2022
business development. During the reporting period, the Company invested RMB5.25 billion in R&D,
a year-on-year increase of 3.65%. The Company filed a total of 475 new international patent
applications under the PCT, for a total of 14,526 applications filed. The Company has increased R&D
investment in the semiconductor display business by focusing on new display technologies such as
printed OLED, QLED, and Micro-LED, and made breakthroughs in key technologies and materials
such as flexible displays, near-to-eye displays, and basic chemicals. The Company's patent
applications for quantum dot electroluminescence technology and materials reached 2,033, ranking
second in the world. The Company has developed a series of proprietary technologies and expertise
with independent intellectual property rights in the field of new energy photovoltaics and
semiconductor materials. The Company's market share of G12 large silicon wafers and high-
efficiency N-type silicon wafers ranked first in the world, leading the upgrade of thin-wafer and thin-
line process technology in the photovoltaic industry.
Optimizing product and customer structures, growing market shares, and balanced
development of overall business structure. In the semiconductor display sector, the first product of
the high-end t9 production line has been launched and the expansion project for G6 LTPS has been
constructed as planned, improving the balance of the Company's capacity layout. In the first half of
this year, the Company's shipments of e-sports MNTs and LTPS tablets ranked first in the world, its
shipment of LTPS laptops ranked second in the world, and its shipment of LTPS vehicle screen ranked
top five in the world. Its product portfolio has been continuously optimized. The Company's total
capacity of photovoltaic materials reached 109GW, and its market share of silicon wafers external
sales ranked first in the world. It is expected that the Company's crystal capacity will exceed 140GW
by the end of 2022, becoming the largest manufacturer of photovoltaic monocrystalline silicon in the
world. The capacity scale and market share of the Company's imbricated modules have been steadily
improved. The Company has further enhanced its global competitiveness by strengthening its
synergistic advantage with MAXEON. The Company continued to optimize its total solution for
semiconductor materials, doubling its year-on-year growth in the shipment of 8-12 inch polished
wafers and epitaxial wafers.
Building a digital and industry 4.0 platform while pioneering cutting-edge intelligent
manufacturing technology. Through the deep integration of intelligence, digitization, and advanced
manufacturing in the semiconductor display business, the Company has driven the continuous
improvement of processes, greatly improved manufacturing efficiency, and realized the dynamic
management of the whole production process and the product lifecycle. The Company has adopted a
lean management model combined with industry 4.0 manufacturing in its new energy photovoltaics
business, significantly increasing the flexible manufacturing capability and quality assurance. The
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TCL Technology Group Corporation Interim Report 2022
Company's monthly output of single furnaces, number of wafers per kilogram, man-machine ratio,
and other indicators have been continuously optimized. TCL Zhonghuan Yinchuan's phase 6 single-
crystal plant has increased its man-machine ratio to 384 units per person in the crystal drawing process,
realizing personnel efficiency far above the industry average.
Driving the entire value chain towards green and low-carbon development through a
people-oriented approach, and constantly exploring harmonious coexistence and sustainable
development. Upholding a green development model, the Company has promoted the low-carbon
process in both the production and consumption process. TCL CSOT and other major businesses
improve the utilization of clean energy by building photovoltaic power generation systems on plant
roofs. New display technologies such as HVA, 1G1D, and LTPO can effectively reduce the power
consumption of consumer products while improving image quality. TCL Zhonghuan has accelerated
the production and manufacturing of new energy photovoltaic materials, strengthened the national
industrial layout with Inner Mongolia, Tianjin, and Jiangsu as manufacturing bases, and reduced the
integrated cost of global energy transformation through R&D and innovation.
Looking forward, the increasing restructuring of the global economy will pose both
opportunities and challenges to the high-tech industry. The increasing competition in the
semiconductor display industry will optimize the industry layout in the long run and recover earnings.
We will comprehensively consider the industrial chain layout and resource investment in new energy
photovoltaics to achieve more sustainable and stable development while choosing the opportunity to
expand related field layout based on our experience in semiconductor materials. We will continue to
implement the business strategy of “improving operating quality and profitability, consolidating
advantages and improving disadvantages, accelerating global layout, and promoting innovation-
driven development”, stick to the bottom line of extreme cost efficiency, and strengthen risk control
capabilities and adaptability to drive high-quality development.
2. Operation of main businesses
Based on the semi-conductor display business, new energy photovoltaic and semi-conductor
materials as the main business, the Company 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.
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TCL Technology Group Corporation Interim Report 2022
TCL TECH.
Semi-conductor New energy photovoltaic & Industrial finance &
Other
display Semi-conductor materials investment
Zhonghuan Zhonghuan TCL TCL
TCL CSOT China Ray Highly TPC
Photovoltaic Advanced Financial Capital
Moka TCL Microc Xinhuan /
Juhua Xinhua
Technology hip
(I) Semiconductor display business
Under the influence of international political conflicts and the COVID-19 pandemic, the
recovery of the global economy has been slow, downstream consumer demand has remained sluggish,
the semiconductor display industry fell at the bottom of the industry cycle, and the prices of major
products have significantly lowered compared to the same period of last year. During the reporting
period, TCL CSOT achieved a total of sales area of 22.496 million square meters, a year-on-year
increase of 26.4%, and achieved a revenue of RMB37.26 billion from the semiconductor display
business, a year-on-year decrease of 8.81%, with a loss of RMB2.27 billion. In order to meet these
challenges, the Company took adopted extreme cost-effectiveness as the bottom line of operations
and improved its business structure to enhance risk control and resilience capacity in this economic
cycle.
In its large-size product business, TCL CSOT has consolidated its leading position in TV
panels with a high-end product strategy, and gradually increased its proportion of commercial
displays such as interactive whiteboards, digital signs, and video walls. The t1, t2, t6, and t10
plants maintained efficient operations, and the t7 plant has ramped up as scheduled. The Company's
TV panel market share ranked second in the world, 55-inch and 75-inch product market share ranked
first in the world, 65-inch product market share ranked second in the world, and 8K and 120Hz high-
end TV panel market share ranked first in the world by a firm margin. The Company has accelerated
the adjustment of its product structure, with revenue from non-TV businesses rising to 25%,
becoming the core supplier for leading customers in terms of commercial display markets such as
interactive whiteboards, digital signs, and TV walls. The Company's market share of interactive
whiteboards has risen to first in the world.
In its medium-size product business, TCL CSOT has accelerated the expansion of new
business such as IT and vehicle screen products while improving the distribution of production
capacity to create a new growth engine. In order to meet market and customer needs, the Company
improved the ordering of its medium-sized product and customer structure based on the optimization
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TCL Technology Group Corporation Interim Report 2022
of existing capacity, and achieved a rapid growth in high-end IT segments. The company's e-sports
display market share ranked first in the world, LTPS laptop shipments ranked second in the world,
and shipment of LTPS tablets ranked first in the world. The Company achieved breakthroughs in
multiple key vehicle screen customers, with both shipment volume and revenue scale increasing
significantly. Revenue from t3 non-mobile products also increased by 56%. The t9 production line,
which is positioned in the new business layout of medium-sized IT and vehicle-mounted products has
launched its first product. The G6 LTPS production line constructed as planned. After commissioning,
the overall capacity and competitiveness of LTPS will rank first in the world, making further
breakthroughs in the medium-sized business strategy of the Company.
In its small-size product business, TCL CSOT focused on foldable and other technologies
while expanding VR/AR new displays to optimize its product and customer structure. The
shipment volume of LTPS mobile panels from the t3 production line remained the fourth highest in
the world. The independently developed industry-leading 1512 PPI LCD-VR screens are expected to
achieve SoP and shipment to brand customers in September. The t4 production line was still under
pressure due higher R&D costs and fixed expenses for the scaling of capacity during the early stage.
However, the development of new technologies and products such as foldable OLEDs, under-screen
cameras, LTPOs, and narrow bezels has progressed smoothly. This has acquired many brand
customers, diversified the product portfolio and customer resources, and laid a foundation for
subsequent business enhancement.
In the long run, the growth of large-size display production capacity will decrease and
further optimization of the competitive landscape will continue. The industry will accelerate its
restructuring, old capacity will continue to be eliminated, and leading manufacturers will take the
initiative in cutting down on production. With gradually reducing capacity at the supply side and the
recovery of demand, the industry is expected to rebound. TCL CSOT will further optimize its business
portfolio, increase the proportion of high-end large-size products, improve the product layout for
medium-size products, improve the business situation for small-size products, and accelerate its
transformation from a leader in large-sized displays to a cutting-edge enterprise covering all display
sizes. The Company will pursue efficiency in its operations and continue to improve its comparative
competitive advantages in the industry.
(II) New energy photovoltaic and semiconductor materials business
Driven by the accelerated transformation of the global energy structure, demand in the
photovoltaics industry has experienced explosive growth. The demand for semiconductor materials
has also maintained rapid development as China has continued the independent development of its
domestic semiconductor manufacturing industry. The new energy photovoltaics and
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TCL Technology Group Corporation Interim Report 2022
semiconductor material industries have fully utilized their leading technological advantages,
accelerated the construction of advanced production capacity, and are continuing to improve
operating efficiency, results in sharp growths in both revenue and performance. During the
reporting period, TCL Zhonghuan achieved an operating revenue of RMB31.70 billion, a year-on-
year increase of 79.7%, and earned a net profit of RMB3.225 billion, a year-on-year increase of 68.4%.
1. New energy photovoltaics business
Accelerating advanced capacity building, strengthening industrial collaboration, and
realizing rapid and high-quality business growth. During the reporting period, the capacity scale
and market share of TCL Zhonghuan in new energy photovoltaic materials grew rapidly, with capacity
increasing to 109GW and the advanced capacity maintaining a leading global position. Sales scale
increased by 24% year-on-year, market share of G12 silicon wafers ranked first in the world, and the
market share of high-efficiency N-type monocrystalline silicon wafers ranked first in the world.
Shingled PV modules with patent advantages have also achieved a rapid growth in production
capacity. The production capacity of the G12 high-efficiency shingled PV module project in Jiangsu
has reached 8GW, while the production capacity of the G12 high-efficiency shingled PV module
project (Phase I) in Tianjin has reached 3GW. Based on the future design for the next generation of
differentiated battery technology, the Company has completed the construction of an automated and
intelligently industry-leading G12 battery engineering demonstration line with an annual capacity of
2GW. The Company has also strengthened its strategic cooperation with ecosystem partners and
acquired the upstream core resources in advance to further consolidate its competitive advantages in
non-silicon materials and manufacturing costs while enhancing its control in key links and value
nodes alongside the industrial chain.
Increasing the monthly production capacity per furnace, leading thin-wafer and thin-line
trends, and continuously improving the efficiency of the photovoltaics industry based on long-
term technology accumulation and process optimization. During the reporting period, the
Company's monthly output of silicon rods per furnace increased by 19%, while the consumption rate
of silicon materials per unit product decreased by 6% year on year. The Company continued to lead
the industry in the thin-line standards and achieved SoP of 150um p-type and 130um n-type products
with manufacturing efficiency significantly ahead of the industry. Relying on an industry 4.0
intelligent manufacturing platform, the Company has established a flexible cooperation model with
the upstream and downstream to effectively meet the differentiated needs of customers for p-type and
n-type batteries, and further improved the production and sales scale and product quality of the
Company's products.
2. Semiconductor materials business
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TCL Technology Group Corporation Interim Report 2022
Semiconductor material business adopts the Total Solution, to significantly increasing
production and sales by following a dual development route (characteristic technology and
advanced processes control), continuously improving product and customer structure. Driven
by the zone melting and direct-pulling process, the Company has engaged in intensive power + IC
development. During the reporting period, the Company achieved full coverage of 8-inch and below
mainstream products, completed SoP of 12-inch products below 28nm, ensuring the provision of a
full series solutions for global customers. The shipped area of polished wafer and epitaxial wafer
products increased by 76.2% year-on-year, of which the shipment of 8-inch and 12-inch products
increased by 107% year-on-year. Operating revenue increased by 79.9% year-on-year, achieving a
leading position in the Chinese market.
The Company will seize the opportunities of the development of the semiconductor industry and
continue to diversity its product and customer structure to improve the scale of production capacity.
By the end of this year, the Company expects to reach a production capacity of 900,000, 1,000,000,
and 300,000 pieces per month for 6-inch, 8-inch, and 12-inch products respectively.
The Company will also continue to improve its layout in the new energy photovoltaics and
semiconductor industries, and constantly enhance industrial chain synergy and supply chain stability.
The Company and its partners have recently jointly invested in the construction of a project with an
annual output of around 100,000 tons of granular silicon and silicon-based materials, along with a
project with an annual output of 10,000 tons of electronic grade polycrystalline silicon. This will
realize the vertical expansion of the industrial chain and enhance the Company's leading position in
the new energy photovoltaics and semiconductor materials business. The Company also invested in
Xinxin Semiconductor, and jointly promoted resources in overseas markets to horizontally expand its
business layout in semiconductor materials.
The company will continue to focus on the overall semiconductor strategy of
semiconductor display, new energy photovoltaic and semiconductor materials，adopting the
principle of “improving operating quality and profitability, consolidating advantages and improving
disadvantages, accelerating global layout, and promoting innovation-driven development” to
constantly improve its core competitiveness, achieve high-quality development, and become a
leading global high-tech industry group.
II. Analysis of core competitiveness
In 2022, TCL upgraded its corporate culture and put forward a new mission of “leading
technology and mutually beneficial cooperation”. In the future, TCL will continue to strengthen its
investment in leading technology to create a better life for people, and build an open and mutually
beneficial industry ecosystem with partners characterized by a people-oriented approach and
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TCL Technology Group Corporation Interim Report 2022
cooperation. 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, and professional operation, is constantly
improving its core competitiveness and abilities in sustainable development.
Leading in scale: rapid growth of production capacity and improvement of value chain
layout
As a global leading enterprise in semiconductor 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; Last year, 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. TCL Huaxing has actively extended the value chain and further
enhanced its position and profitability by expanding the production capacity of internally developed
modules and acquiring the Moka Technology and Samsung module plants. The Company's core
competitive advantage based on scale and supply chain synergy will be further strengthened, while
its industry position and comprehensive competitiveness will be further enhanced. The t9 production
line has launched its first product and is ready to be put into production, while the production
expansion (t5) project of the 6-gen LTPS production line has progressed as planned. This will ensure
that the TCL CSOT's production line layout will be more balanced and the business structure will be
further optimized.
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.
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TCL Technology Group Corporation Interim Report 2022
The "National Printing and Flexible Display Innovation Center" of Guangdong Juhua under
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, 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 develop a process flow solution for Micro-LED commercial
SoP.
Leading in management: adopting extreme cost efficiency across the cycle with relative
competitiveness
While establishing market scale, technology, and ecosystems advantages, the Company has also
taken the lead in efficiency and benefit indicators. Since beginning operations in 2011, TCL CSOT
has weathered several rounds of sharp fluctuation cycles in the display industry with extreme cost
efficiency and lean management.
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. Despite the severe
industry situation in 2022, TCL CSOT will continue to improve efficiency and effectiveness
indicators across the cycle of industry development.
New strategic growth engine: seizing development opportunities in conjunction with the
rapid development of semiconductors and photovoltaics
Relying on the Company's long-term management expertise in technology- intensive, capital-
intensive, and long-term industries, TCL Zhonghuan developed its business rapidly through
institutional reform, optimizing capital structure, stimulating organizational vitality, and releasing
growth potential. Both operating revenue and profits have grown significantly
In the first half of 2022, the Company implemented a series of strategic operation measures such
as industry coordination, operation efficiency optimization, and management experience
empowerment. TCL Zhonghuan gradually enhanced its abilities in strategy, operation, and resource
allocation. Driven by the factors of high industry prosperity and rapid expansion of production
capacity, TCL Zhonghuan has further consolidated its leading position in the industry, realized high-
quality and rapid growth performance, and gradually grown into one of the main engines for
performance growth of TCL Technology. With an inexhaustible source of development power, the
17
TCL Technology Group Corporation Interim Report 2022
two tracks converge to make the Company a leader in the development of the global science and
technology industry.
Upgrading of organizational culture: The mission of “leading technology and mutually
beneficial cooperation” drives the Company into a new development stage
At the beginning of 2022, the Company put forward the mission of “leading technology and
mutually beneficial cooperation” in the new period. Guided by this mission, the Company is
committed to creating an organizational culture of "reform, innovation, responsibility, and
excellence”, and continues to deepen its team building and the construction of a corporate culture.
TCL Technology will continue to invest in fields closely related to human life (such as intelligence,
health, carbon reduction, and energy saving), and build its leading advantages in technology and
products to deliver a wonderful experience and better life to people. We will uphold the concept of
sustainable development based on a people-oriented approach, while promoting mutually beneficial
development. We are dedicated to the environmental friendliness, employee engagement, social trust,
as well as the harmonious development between humanity, nature, and society. We will also work
with stakeholders to build an open and mutually beneficial industry ecosystem and value healthy
competition and integrated development on a basis of open cooperation and mutually beneficial
development with partners.
III. Core Business Analysis
Overview
Whether it is the same as the disclosure of the main business of the Company during the reporting period
√ Yes □ No
See relevant contents in “I. Main businesses of the Company during the reporting period”.
Year-on-year changes in key financial data:
Unit: RMB
H1 2022 H1 2021 Change (%) Reason for change
Revenue 84,522,181,128 74,405,849,039 13.60%
Primarily due to the
increase in the scale of
Cost of sales 76,522,943,519 58,068,971,004 31.78%
TCL Zhonghuan's
operating revenue
Selling expenses 1,053,369,277 901,175,676 16.89%
Administrative
1,716,379,375 2,023,367,685 -15.17%
expenses
Financial expenses 1,720,157,252 1,818,982,875 -5.43%
Primarily due to the
decrease in tax payments
Income tax expense -88,397,544 1,416,496,913 -106.24% as the semiconductor
display business affected
by the industry cycle
R&D investments 5,252,157,387 5,067,168,130 3.65%
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TCL Technology Group Corporation Interim Report 2022
Primarily due to the
decrease in operating
Net cash generated
cash flows as the
from operating 9,016,635,743 13,895,714,157 -35.11%
semiconductor display
activities
business affected by the
industry cycle
Net cash used in
-17,613,551,791 -20,963,137,286 15.98%
investing activities
Net cash generated
from financing 9,930,162,074 13,396,966,630 -25.88%
activities
Primarily due to the year-
Net increase in cash on-year decrease in
1,594,616,564 6,285,295,538 -74.63%
and cash equivalents operating cash flows and
financing cash flows
Significant changes to the profit structure or sources of the Company during the Reporting Period:
□ Applicable √ Not applicable
No significant changes to the profit structure or sources of the Company during the Reporting Period.
Breakdown of revenue:
Unit: RMB
H1 2022 H1 2021
As % of total As % of total Change (%)
Amount Amount
revenue (%) revenue (%)
Total 84,522,181,128 100% 74,405,849,039 100% 13.60%
By operating division
Semi-conductor display 37,262,161,646 44.09% 40,863,496,897 54.92% -8.81%
New energy
31,698,336,741 37.50% 17,644,418,986 23.71% 79.65%
photovoltaic
Distribution business 14,728,215,432 17.43% 14,450,787,001 19.42% 1.92%
Other businesses and
internally offset 833,467,309 0.98% 1,447,146,155 1.95% -42.41%
accounts
By product category
Semi-conductor display
37,262,161,646 44.09% 40,863,496,897 54.92% -8.81%
devices
New energy
photovoltaic & semi- 31,698,336,741 37.50% 17,644,418,986 23.71% 79.65%
conductor materials
Distribution of
14,728,215,432 17.43% 14,450,787,001 19.42% 1.92%
electronics
Other businesses and 833,467,309 0.98% 1,447,146,155 1.95% -42.41%
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TCL Technology Group Corporation Interim Report 2022
internally offset
accounts
By operating segment
Mainland China 57,379,449,518 67.89% 48,121,871,530 64.67% 19.24%
Overseas (including
27,142,731,610 32.11% 26,283,977,509 35.33% 3.27%
Hong Kong)
Operating division, product category or region contributing over 10% of revenue or operating profit
√ Applicable □ Not applicable
Unit: RMB
Change in
Gross gross
Change in Change in cost
Revenue Cost of sales profit profit
revenue (%) of sales (%)
margin margin
(%)
By operating division
Semi-conductor display 37,262,161,646 35,813,110,134 3.89% -8.81% 23.66% -25.24%
New energy photovoltaic 31,698,336,741 26,089,723,845 17.69% 79.65% 86.33% -2.95%
Distribution business 14,728,215,432 14,126,968,965 4.08% 1.92% 0.98% 0.89%
By product category
Semi-conductor display
37,262,161,646 35,813,110,134 3.89% -8.81% 23.66% -25.24%
devices
New energy photovoltaic &
31,698,336,741 26,089,723,845 17.69% 79.65% 86.33% -2.95%
semi-conductor materials
Distribution of electronics 14,728,215,432 14,126,968,965 4.08% 1.92% 0.98% 0.89%
By operating segment
Mainland China 57,379,449,518 51,272,091,919 10.64% 19.24% 27.65% -5.89%
Overseas (including Hong
27,142,731,610 25,250,851,600 6.97% 3.27% 41.04% -24.92%
Kong)
Core business data in the recent term restated according to the changed methods of measurement that occurred in the Reporting Period
□ Applicable √ Not applicable
IV. Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
As % of gross
Amount Source Sustainability
profit
Asset Primarily due to falling price of inventory write-
1,010,286,547 54.96% No
impairment offs in line with market
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TCL Technology Group Corporation Interim Report 2022
Non-operating
596,539,618 32.45% Primarily government grants and others No
income
Non-operating
52,391,546 2.85% Not applicable No
expense
V. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
End of the Reporting Period December 31, 2021 Notes on
Change in
Proportion of significant
As % of total percentage
Amount total assets Amount changes
assets (%)
Ratio
Monetary No significant
33,795,516,751 10.23% 31,393,692,485 10.16% 0.07%
assets change
Accounts No significant
19,085,232,924 5.78% 18,238,782,247 5.90% -0.12%
receivable change
No significant
Contract assets 275,287,800 0.08% 233,528,786 0.08% 0.00%
change
No significant
Inventories 14,025,004,131 4.25% 14,083,356,918 4.56% -0.31%
change
Investment No significant
793,033,485 0.24% 761,902,236 0.25% -0.01%
property change
Long-term
No significant
equity 26,665,070,350 8.07% 25,640,578,245 8.30% -0.23%
change
investments
No significant
Fixed assets 116,788,925,376 35.35% 113,723,758,876 36.81% -1.46%
change
Construction in No significant
43,418,950,154 13.14% 37,029,504,222 11.98% 1.16%
progress change
Right-of-use No significant
2,094,665,349 0.63% 2,426,911,208 0.79% -0.16%
assets change
Optimization of
Short-term
14,811,740,495 4.48% 9,341,426,543 3.02% 1.46% the debt
borrowings
structure
Contract No significant
4,367,690,585 1.32% 2,593,882,004 0.84% 0.48%
liabilities change
Long-term Increase in
96,482,487,828 29.21% 87,279,081,955 28.25% 0.96%
borrowings financings
Lease No significant
1,156,827,073 0.35% 1,102,071,813 0.36% -0.01%
liabilities change
2. Major Assets Overseas
□ Applicable √ Not applicable
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TCL Technology Group Corporation Interim Report 2022
3. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Amount
Gain/loss on fair- Impairment
Cumulative fair- purchased in Amount sold in
Beginning value changes in allowances
Item value changes the Reporting the Reporting Other changes Ending amount
amount the Reporting established in the
recorded in equity Period Period
Period Reporting Period
Amount
Financial assets
1. Held-for-trading financial
assets (excluding derivative 10,305,293,789 -139,785,390 0 6,366,157,772 6,428,042,157 10,103,624,014
financial assets)
2. Derivative financial assets 70,928,566 -1,176,116 57,779,395 360,895,990 488,427,835
3. Receivables financing 2,217,638,736 6,210,141 2,223,848,877
4. Investments in other equity
927,319,447 -9,967,351 5,640,000 1,356,500 5,899,966 927,535,562
instruments
Subtotal of financial assets 13,521,180,538 -140,961,506 47,812,044 6,371,797,772 6,429,398,657 373,006,097 13,743,436,288
Financial liabilities 947,240,307 -255,456,349 216,143,583 1,456,380,469 1,385,671,352 442,164,057 1,420,800,715
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
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TCL Technology Group Corporation Interim Report 2022
4. Restricted Asset Rights as at the Period-End
Restricted assets Carrying amount (RMB’0,000) Reason for restriction
Monetary assets 43,209 Deposited in the central bank as the required reserve
Monetary assets 168,711 Other restricted monetary assets
Notes receivable 27,856 Pledge
Fixed assets 8,603,286 As collateral for loan
Intangible assets 318,405 As collateral for loan
Held-for-trading financial
3,473 Put in pledge for loan
assets
Right-of-use assets 2,826 As collateral for lease
Accounts receivable 101,812 Pledge
Contract assets 15,038 Pledge
Total 9,284,615 --
VI. Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount in the Total investment amount in the same
Change (%)
Reporting Period (RMB) period of last year (RMB)
21,824,233,385 18,214,544,743 19.82%
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
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TCL Technology Group Corporation Interim Report 2022
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB'0,000
Gain/loss The
on fair- Cumulativ Amount “Reportin
Purchase Ending
Initial Beginnin value e fair-value sold in g Period”, Fundin
Securit Securities Measuremen d in the carryin Accounting
Securities code investmen g carrying changes changes the “current g
y type Abbreviation t method Reporting g title
t cost amount in the recorded in Reportin period” source
Period amount
Reportin equity g Period Profit and
g Period loss
Other non-
DK Electronic current Self-
Stocks 300842.SZ 2,430 Fair value 48,644 -5,972 0 0 0 -5,972 42,672
Materials, Inc. financial funded
assets
Other non-
current Self-
Stocks 688728.SH Galaxycore Inc. 4,284 Fair value 19,692 -615 0 0 0 -615 19,077
financial funded
assets
Investment
s in other Self-
Stocks 0860.HK Wesolutions Inc. 18,926 Fair value 10,131 0 -2,124 0 0 0 8,008
equity funded
instruments
Held-for-
VEDANTA
USG9328DAM2 trading Self-
Bonds RESOURCES 7,757 Fair value 9,341 -133 0 1,198 2,881 258 7,960
3 financial funded
LTD
assets
Held-for-
INDIKA ENERGY trading Self-
Bonds USY39690AA30 2,788 Fair value - -204 0 7,343 2,342 -16 4,949
CAPITAL IV financial funded
assets
Held-for-
MN
trading Self-
Bonds USG61759AA70 MINING/ENERG 3,391 Fair value 4,321 -956 0 1,094 0 -655 4,691
financial funded
Y RESOURC
assets
Held-for-
ANTON
trading Self-
Bonds XS2082380515 OILFIELD SERV 6,645 Fair value 4,794 -296 0 498 631 -101 4,605
financial funded
GRP/
assets
REPUBLIC OF Held-for- Self-
Bonds XS0240295575 3,254 Fair value 4,221 -488 0 0 0 -26 3,939
IRAQ trading funded
24
TCL Technology Group Corporation Interim Report 2022
financial
assets
Held-for-
EHI CAR trading Self-
Bonds XS2335327388 5,396 Fair value 7,742 -1,718 0 0 2,622 -2,116 3,673
SERVICES LTD financial funded
assets
Held-for-
VLL
trading Self-
Bonds XS2205566206 INTERNATIONA 3,691 Fair value 3,434 -137 0 0 0 -19 3,473
financial funded
L INC
assets
Other securities investments held at the period-end 406,113 -- 155,576 -7,041 32 193,520 264,643 -11,484 72,478 -- --
Total 464,676 -- 267,895 -17,559 -2,092 203,653 273,118 -20,746 175,524 -- --
Disclosure date of the board announcement
April 28, 2022
approving the securities investments
Disclosure date of the general meeting
announcement approving the securities investments May 20, 2022
(if any)
25
TCL Technology Group Corporation Interim Report 2022
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB'0,000
Funding source Mostly foreign-currency revenue
Legal matters involved (if
Not applicable
applicable)
Disclosure date of the board
announcement approving the April 28, 2018
derivative investments (if any)
Disclosure date of the general
meeting announcement
Not applicable
approving the 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;
2. Liquidity risk: the derivatives business carried out by the Group is an over-the-counter
transaction operated by a financial institution, and there is a risk of loss due to paying fees to the
bank for liquidating or selling the derivatives below the buying prices;
3. Performance risk: the Group conducts the derivative business based on rolling budgets for risk
management, and there is a risk of performance failure due to deviation between the 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, promptly 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
Analysis of risks and control
therefrom.
measures associated with
Measures taken for risk control:
derivative investments held in
1. Basic management principles: the Group strictly follows the hedging principle mainly for the
Reporting Period (including but
purposes of fixing costs and avoiding risks. It is required that the financial derivatives business to
not limited to market risk,
be carried out align with the variety, size, direction and duration of spot goods, and no speculative
liquidity risk, credit risk,
trading should be involved. In the selection of hedging instruments, only simple financial
operational risk, legal risk, etc.)
derivatives that are closely related to the main business operation and meet the requirements of
hedge accounting treatment should be selected, and complex business beyond the prescribed
business scope or difficult to recognize in terms of risk and pricing shall be avoided;
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 fair value impairment of the Company's traded derivatives and the changes
in the value of assets (if any) used for risk hedging results in a total loss or floating loss amount to
reach 10% of the Company's audited net profit attributable to the shareholders of the listed company
in the latest year and the absolute amount exceeds RMB10 million, the Company shall disclose it
in a timely manner.
Changes in market prices or fair With the rapid expansion of overseas sales, the Company keeps following the above rules in
value of derivative investments in the operation of forward foreign exchange contracts, interest rate swap contracts and futures
26
TCL Technology Group Corporation Interim Report 2022
Reporting Period (fair value contracts to avoid and hedge foreign exchange risks arising from operation and financing. The
analysis should include profit and loss during the reporting period was RMB69.09 million. The fair value of derivatives is
measurement method and related determined by real-time quoted price of the foreign exchange market, based on the difference
assumptions and parameters) between the contractual price and the forward exchange rate quoted immediately in the foreign
exchange market on the balance sheet date.
Major changes in accounting
policies and specific accounting
principles adopted for derivative No significant change
investments in 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, which helps to
reduce risk control costs and improve company competitiveness. Risks are effectively controlled
as the Company has taken series of measures such as conducting a rigorous internal evaluation for
Opinion of independent directors the operation of financial derivatives business, establishing a corresponding regulatory mechanism,
on derivative investments and formulating reasonable accounting policies and specific accounting principles, setting limits for
risk control risk exposure management, and operating simple financial derivatives. The contracting agent for
financial derivatives business of the 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 the
first half of 2022 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 net
Type of contract
Reporting assets
Contractual Actual Contractual Actual Period Contractual Actual
amount amount amount amount amount amount
1. Forward forex contracts 1,736,175 61,406 2,242,211 82,261 18.82 0.69
6,909
2. Interest rate swaps 415,696 12,471 353,691 13,127 2.97 0.11
Total 2,151,871 73,877 2,595,901 95,388 6,909 21.79 0.8
5. Use of Funds Raised
□ Applicable √ Not applicable
The Company did not use the funds raised during the Reporting Period.
VII. Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VIII. Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB'0,000
Compan
Company y type Principal Registered Operating
Total assets Net assets Revenue Net profit
Name Type of activity capital profit
change
TCL China
Star Semi-
Subsidiar RMB30.468
Optoelectroni conducto 21,866,768 7,551,717 3,242,988 -317,069 -263,195
y billion
cs r display
Technology
27
TCL Technology Group Corporation Interim Report 2022
Co., Ltd.
New
energy
TCL
photovolt
Zhonghuan
Subsidiar aic & RMB3.232
New Energy 8,871,483 4,480,907 3,169,834 349,581 322,490
y semi- billion
Technology
conducto
Co., Ltd.
r
materials
Highly
Distributi
Information Subsidiar RMB0.412
on 822,883 133,717 1,472,822 16,680 11,826
Industry Co., y billion
business
Ltd.
Acquisition and disposal of subsidiaries in the reporting period
√ Applicable □ Not applicable
How subsidiary was obtained or disposed Effects on overall operations and
Company Name
of in the Reporting Period operating performance
Zhonghuan Advanced Semiconductor
Newly incorporated No significant effect
(Tianjin) Co., Ltd.
Huanou (Wuxi) New Energy Materials
Newly incorporated No significant effect
Co., Ltd.
Huaian Municipal Huanxin New Energy
Newly incorporated No significant effect
Co., Ltd.
Lingwu Huanju New Energy Co., Ltd. Newly incorporated No significant effect
Inner Mongolia Zhonghuan Electronic
Newly incorporated No significant effect
Materials Co., Ltd.
Tianjin Zhonghuan Industrial Park Co.,
Newly incorporated No significant effect
Ltd.
Tianjin Huanrui Technology Co., Ltd. Newly incorporated No significant effect
Shaanxi Huanyu Green New Energy Co.,
Newly incorporated No significant effect
Ltd.
Shaanxi Huanshuo Green New Energy
Newly incorporated No significant effect
Co., Ltd.
Xi'an Shangpai Technology Co., Ltd. Newly incorporated No significant effect
Tongliao Guangdong New Energy Co.,
De-registered No significant effect
Ltd.
Description of Principal Subsidiaries and Joint Stock Companies
Affected by the panel industry cycle, TCL CSOT, a subsidiary of the Company, experienced a significant year-on-year decline in its
performance. For details, please refer to "Section III Management Discussion and Analysis".
IX. Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
28
TCL Technology Group Corporation Interim Report 2022
X. Risks Facing the Company and Countermeasures
1. Risk of Macroeconomic Fluctuations
In recent years, changes to the global trade, technology, and financial environment have
impacted the development of China's economy and enterprises, as well as the global economy. The
Russia-Ukraine war has raised the risk of a split in the global economy, which may lead to multiple
geopolitical groups with different technical standards, cross-border payment systems, and reserve
currencies. The macroeconomic situation of both China and the world has grown increasingly
uncertain as a result of a series of unfavorable factors, such as the Russia-Ukraine war, the COVID-
19 pandemic, the slowdown of global economy, and intensified inflation.
In this context, the Company will continue to carry out conduct in-depth research on
macroeconomic trends and their impact. Based on China’s idea of a new “development pattern in
which domestic economic cycle plays a leading role while international economic cycle remains its
extension and supplement”, the Company will keep focusing on the professional operation strategies
for the main business, endeavor to consolidate advantages and improve disadvantages, improve
abilities, and catch up. The Company will drive the rapid development of its new energy and
semiconductor business to minimize the negative impact of macroeconomic factors on the basis of
maintaining the global leading advantages of TCL CSOT's balanced market development, optimized
product portfolio, and rich customer structure.
2. Risk of Industry Climate Fluctuations
Due to the impact of the COVID-19 pandemic and the Russia-Ukraine war, the recovery of
global consumption demand has remained sluggish. The impact has been further transmitted to the
upstream, which has had a significant impact on panel demand and shipments. The panel industry is
in a downward cycle, and the development of the panel industry will remain stagnant.
The Company will analyse in depth the trends of changes in industry supply and demand
relations, predict production capacity allocation in advance, and increase R&D investment so as to
create high barriers to competition and broaden the business moat through the continuous
improvement of products’ technological content and added value as well as the constant expansion of
the Company’s scale and benefit advantages. The Company will also increase its investments in new
energy photovoltaics and semiconductors to effectively reduce the impact of economic fluctuations
in the panel industry and further consolidate its leading position.
3. Risks Caused by Changes in Consumer Demand
The application scenarios of end consumers are also changing. For example, the aging
population continues to grow worldwide, and the needs of the elderly for the differentiated scenarios
of smart products are getting more attention. Under the consensus of "carbon neutrality", a new
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TCL Technology Group Corporation Interim Report 2022
demand trend for low-carbon concepts such as paperless and recyclable electronic products has been
shaped. If the Company cannot keep creating new products in line with the demand of downstream
applications, its business growth may also be hindered.
The Company will continue to focus on the needs of the industry and end customers, conduct
in-depth research on mainstream customers in the industry, continuously increase R&D investment,
and use product technology innovation as the core driving force to optimize business structures and
enhance product competitiveness. Based on more thorough research and analysis of market segments,
the Company will explore more emerging fields, actively make arrangements regarding emerging
market segments, and develop new driving forces for growth.
4. Intellectual Property Risks
Competition has become increasingly fierce in the semiconductor display and materials industry.
As the Company keeps expanding its business scale and technological layout, patent disputes may
arise from time to time, and intellectual property risks become increasingly obvious.
The Company will continue to maintain high-intensity R&D investment, continuously enhance
the professional capabilities of the core technical team, and continuously improve the patent layout
of key technologies and products through the model of “independent research + cooperative R&D.
The Company also will keep perfecting the intellectual property management and protection
mechanism, and strengthen risk-involved patent investigation, enhance patent risk early warning,
reduce risk-involved patent threats, and comprehensively mitigate intellectual property risks through
strategic cooperation with external professional institutions on intellectual property.
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TCL Technology Group Corporation Interim Report 2022
Part IV Corporate Governance
I. Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor
Date of the
Meeting Type participation Date of disclosure Resolutions of the meeting
meeting
ratio
All proposals were adopted.
The First Please refer to the Notice on the
Extraordinary Extraordinary 1st Extraordinary General
General general 22.26% April 29, 2022 April 30, 2022 Meeting of Shareholders in 2022
Meeting of meeting disclosed on www.cninfo.com.cn
2022 on April 30, 2022 (Notice No.:
2022-045)
All proposals were adopted.
The 2021 Please refer to the Notice on
Annual Annual general Resolutions of General Meeting of
22.12% May 19, 2022 May 20, 2022
General meeting Shareholders in 2021 disclosed on
Meeting www.cninfo.com.cn on May 20,
2022 (Notice No.: 2022-051)
Note: The above investor participation ratio is the share proportions of investors who attended the meeting to the Company’s total
shares (excluding the treasury shares that have been repurchased).
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
II. Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Type of
Name Office title Date of change Reason for change
change
Non-executive Resigned as a non-executive director of the Company due to
Liu Kun Former April 12, 2022
Director job adjustment
Non-executive Nominated by Wuhan Optics Valley Industrial Investment Co.,
Lin Feng Elected April 29, 2022
Director Ltd., a shareholder with an >3% stake in the Company
III. Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
IV. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
√ Applicable □ Not applicable
1. Equity Incentives
□ Applicable √ Not applicable
2. Implementation of Employee Stock Ownership Plan
√ Applicable □ Not applicable
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TCL Technology Group Corporation Interim Report 2022
All the valid employee stock ownership plans during the Reporting Period
Proportion to Funding source
Scope of Number of Total amount of total share for
Name Changes
employees employees shares held capital of listed implementing
companies the plan
The Company's
The Company's
The Third middle and senior
43,859,649 special
Global Partner management and 1,800 Not applicable 0.31%
shares incentive fund
Plan outstanding key
for 2020
staff
2021-2023 The Company's
The Company's
Employee middle and senior
113,143,154 special
Stock management and 3,600 Not applicable 0.81%
shares incentive fund
Ownership Plan outstanding key
for 2021
(Phase I) staff
Shareholdings of Directors, Supervisors and Senior Management under the Employee Stock Ownership Plan during the Reporting
Period
Proportion to
Beginning amount
Ending amount in the total share
Name Office title in the Reporting
Reporting Period capital of listed
Period
companies
Li Dongsheng Chairman of the Board and CEO
Du Juan Director
Jin Xuzhi Director, Senior Vice President
Director, Board Secretary and
Liao Qian
Senior Vice President 24,656,600 shares 22,729,900 shares 0.16%
Wang Cheng COO
Li Jian CFO
Yan Xiaolin Senior Vice President, CTO
Mao Tianxiang Employee Supervisor
Changes of asset management institutions during the Reporting Period
□ Applicable √ Not applicable
Changes of equity caused by the holder’s disposal share during the Reporting Period
□ Applicable √ Not applicable
3. Other Employee Incentives
□ Applicable √ Not applicable
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TCL Technology Group Corporation Interim Report 2022
Part V Environmental and Social Responsibility
I. Major Environmental Issues
Whether the listed company and its subsidiaries are major polluters announced by the environmental protection department
√ Yes □ No
Approved
Governing
Name of the Number of Distribution Discharge Total total
Major Way of discharge Excessive
Company or discharge of discharge concentration discharge discharge
pollutants discharge standards discharge
subsidiary outlets outlets (mg/L) (metric ton) (metric
(mg/L)
tons/year)
Shenzhen Not
COD Southeast 70mg/L 110mg/L 306.6t /
China Star applicable
1 corner of the
Optoelectroni Ammonia Intermittently Not
plant 4mg/L 30mg/L 17.52t /
cs nitrogen discharged to applicable
Semiconduct Guangming Beside the Not
COD 70/L 110mg/L 255.5t /
or Display Sewage Plant East No.2 applicable
1
Technology Ammonia gate of the Not
5mg/L 30mg/L 18.25t /
Co., Ltd. nitrogen plant applicable
Wuhan China Southwestern
Intermittently Not
Star COD 1 corner of the 40 mg/L 400 mg/L 128.83t 353.55t
discharged applicable
Optoelectroni plant
cs Southwestern
Ammonia Intermittently Not
Technology 1 corner of the 2.4 mg/L 30 mg/L 12.88t 35.36t
nitrogen discharged applicable
Co., Ltd. plant
Wuhan China Northeastern
Intermittently Not
Star COD 1 corner of the 33 mg/L 400 mg/L 121.74t 570.8t
discharged applicable
Optoelectroni plant
cs
Semiconduct Northeastern
Ammonia Intermittently Not
or Display 1 corner of the 2.8 mg/L 30 mg/L 12.17t 57.1t
nitrogen discharged applicable
Technology plant
Co., Ltd.
Wastewater:
COD,
ammonia
nitrogen,
other
TianJin characteristic DB12/356-
Zhonghuan pollutants 2018
General As per
Advanced (total Comprehensi Not Not
Organized 1 discharge emission Standard
Material&Tec nitrogen, total ve Sewage exceeding applicable
outlet standard
hnology Co., phosphorus, Discharge
Ltd. pH value, Standard
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Tianjin Wastewater: DB12/356-
Huan'Ou COD, 2018
General As per
Semiconduct ammonia Comprehensi Not Not
Organized 1 discharge emission Standard
or nitrogen, ve Sewage exceeding applicable
outlet standard
Material&Tec other Discharge
hnology Co., characteristic Standard
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TCL Technology Group Corporation Interim Report 2022
Ltd. pollutants
(total
nitrogen, total
phosphorus,
pH value,
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Waste gas:
Particulate
matter,
nitrogen
oxides, GB16297-
VOCs, 1996
fluoride Comprehensi
Wastewater: ve Air
Inner General
COD, Pollutant
Mongolia discharge
ammonia As per Emission
Zhonghuan Organized, outlet, plant Not Not
nitrogen, Multiple emission Standard, Standard
Solar unorganized area, and roof exceeding applicable
other standard GB8978-
Material Co., of production
characteristic 1996
Ltd. workshop
pollutants Comprehensi
(total ve Sewage
phosphorus, Discharge
pH, Standard
suspended
matter,
BOD5,
fluoride)
Wastewater:
GB/T 31962
COD,
Water Quality
ammonia
Standard for
nitrogen,
Sewage
other
Zhonghuan Discharged
characteristic
Advanced General As per into Urban
pollutants Not Not
Semiconduct Organized 1 discharge emission Sewers Standard
(fluoride, exceeding applicable
or Materials outlet standard GB8978-
total nitrogen,
Co., Ltd. 1996
total
Comprehensi
phosphorus,
ve Sewage
suspended
Discharge
matter, pH,
Standard
BOD5)
Wastewater:
COD,
ammonia
nitrogen, GB 30484-
other 2013
Huansheng
characteristic General Discharged Discharge
Solar Not Not
pollutants Organized 1 discharge according to Standard for Standard
(Jiangsu) Co., exceeding applicable
(fluoride, outlet the standard Battery
Ltd.
total nitrogen, Industry
total Pollutants
phosphorus,
suspended
matter, pH)
Wuxi Wastewater: Organized 1 General Discharged GB 30484- Not Standard Not
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TCL Technology Group Corporation Interim Report 2022
Zhonghuan COD, discharge according to 2013 exceeding applicable
Applied ammonia outlet the standard Discharge
Materials nitrogen, Standard for
Co., Ltd. other Battery
characteristic Industry
pollutants Pollutants
(total
nitrogen, total
phosphorus,
suspended
matter, pH)
Construction and operation of facilities for preventing pollution:
During the 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;
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 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, and promptly reports the operation situation to the provincial and municipal
environmental protection regulatory authorities.
Emergency Response Plan for Environmental Incidents
The Company has prepared an environmental emergency response plan, which has been filed with the local environmental
protection administration in accordance with relevant government laws and regulations, and has set up an environmental incident
emergency organization led by the senior management. In addition, regularly staff training and emergency drills are delivered for
accurately and promptly responding to environmental incidents according to the plan.
Environmental Self-Monitoring Program
The Company has formulated an environmental self-monitoring program in accordance with government regulations, and
monitors the discharge of pollutants by automatic monitoring or manual monitoring performed by a qualified third-party agency. The
monitoring plans and annual monitoring reports can be checked on the key environmental monitoring information platform managed
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TCL Technology Group Corporation Interim Report 2022
by local environmental authorities or subsidiary websites.
Administrative punishments received with respect to environmental issues in the Reporting Period:
Effects on the
Name of the Rectification
Reasons for production and
Company or Violations Punishment results measures of the
punishment operation of listed
subsidiary Company
companies
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Other environment-related information that should be disclosed
TCL Technology discloses the content of environmental information through its annual ESG report.
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 and actively respond to the national requirements of “peak carbon” and “carbon
neutrality” (the “dual carbon” goals), TCL Technology firmly adopts to the green development path and is committed to achieving
green operation, energy saving and, emission reduction in all aspects of the Company's operation. TCL Technology has effectively
reduced the carbon emissions for its business by continuously improving the energy management system, increasing the utilization of
renewable energies, building a green supply chain, and enhancing employees' low carbon awareness. TCL Technology actively expands
its green industry, and has been developing its photovoltaic new energy industry through TCL Zhonghuan in response to climate change.
In the first half of 2022, Wuhan CSOT conducted carbon calculations by employing a professional third-party agency, identified
its carbon emissions, pushed the ISO 14064 certification of greenhouse gases, formulated the Company's carbon neutrality strategic
plan, and further clarified its dual carbon goals and action path in the future. In addition, the Company has the completed commissioning
and grid connection of its photovoltaic project. It is estimated that the power generation in 2022 will reach at least 8 million KWH.
The Company has purchased 70 million KWH of clean energy (electricity) in 2022 to continuously implement carbon emission
reduction.
In order to achieve energy saving and emission reduction, TCL Zhonghuan has been focusing on the improvement, optimization,
and upgrade of production equipment and technology, along with the R&D and replacement of new materials. The Company’s
production bases use technical, management, and structural means to achieve energy conservation, and reduce power consumption and
related carbon emissions through improvement in waste heat recovery, air conditioning and refrigeration, natural resource utilization,
and improvement of equipment energy efficiency. The Company also actively invests in the construction of photovoltaic projects for
its plants and the introduction of clean energy.
In the future, all companies of TCL Technology will 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
1. Consolidating and Extending the Achievements of Poverty Alleviation and Pushing Forward Rural
Revitalization
Plan for consolidating and extending the achievements of poverty alleviation and pushing forward rural revitalization
In response to government initiatives, the Company has adopted an innovative model that integrates public welfare with high
technology, maximizing the value of public welfare through technology. TCL always shoulders social responsibilities, focuses on public
welfare education and promotes rural revitalization. Exploring an innovative model of science and technology + pubic welfare, TCL
adopts A.I. technology to accompany left-behind children. The Company fulfills its social responsibilities with practical actions and
empowers its public welfare activities to develop science and technology for good and contribute its strength to common prosperity.
The “TCL Project Hope Candlelight Award”, jointly established by the Shenzhen TCL Foundation and the China Youth
Development Foundation, rewards outstanding rural teachers and organizes offline training. The Shenzhen TCL Foundation works with
TCL Industrial Technology Research Institute to initiate the “A.I. Go Home” project. An “Eagle” storytelling robot is developed and
designed with professional technology and AI technology. The robot is designed to imitate parents’ voices and tell stories for children
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TCL Technology Group Corporation Interim Report 2022
when they are away from their parents, so as to strengthen the parent-child relationship. In 2022, the “A.I. Go Home” project is upgraded
again, and the “Eagle Audiobook” WeChat Mini Program V2.0 is launched. The Shenzhen TCL Foundation and the Education
Foundation of the Central Conservatory of Music jointly launch the “Little Music +” project and develop the “Xiao Xue” music robot.
These efforts provide musical resources to children, bring them famous Chinese and foreign musical masterpieces , which diversify
music teaching resources for rural primary schools, and encourage every child to stay positive and optimistic with the power of music.
The Candlelight Micro-Loan Project, a targeted micro-loan project jointly provided by the Shenzhen TCL Foundation and TCL Finance
Group for rural teachers, aims to support those rural teachers and their families in need of help in such aspects as healthcare for major
diseases, daily consumption, and skill training. The Company continues to invest in education aids and sponsor projects such as the
“TCL Young Scholars Program” and the “TCL Science and Technology Innovation Fund”. The TCL Photovoltaic Sunshine Campus
contributes to the development of rural education by building photovoltaic power generation systems for rural schools to improve the
school teaching environment and providing financial assistance for underprivileged students. The TCL Smart Classroom Project and
Photoelectric Laboratory Project are aimed at bringing more educational resources to children and promoting education equity.
Annual summary of consolidating and extending the achievements of poverty alleviation and pushing forward rural
revitalisation
In the first half of 2022, the eighth "TCL Project Hope Candlelight Award" was recommended by the China Youth Development
Foundation to solicit excellent teachers from 194 counties and districts in 14 provinces that serve as the key counties in the National
Rural Revitalization and the pairing support areas of Shenzhen. An online final evaluation meeting was held to select 400 excellent
teachers. Each of the winners received a personal award worth RMB9,500, including a cash reward and 7-day offline "candlelight
class" training.
In 2022, the "Eagle Storytelling Robot” under "A.I. Go Home" project was upgraded and optimized in functionality, packaging,
and quality control. The “Eagle Story Club” gathered children together through the “Eagle Storytelling Robot” to popularize famous
classical literature from both at home and abroad. In March 2022, the Shenzhen TCL Foundation began the recruitment of the fourth
batch of pilot schools for the "Eagle Story Club", receiving submissions from a total of 74 rural schools across the country. Five schools
were selected, and a total of 19 story boxes and 38 "Eagle Storytelling Robots" were distributed, benefiting a total of 324 students. The
“Eagle Audiobook” WeChat Mini Program has added a new poetry section with Poems for Children wrote by Bei Dao. As of present,
the mini program has more than 1,400 active users, and more than 230 people have completed recordings.
The “Little Music +” project under the "Xiao Xue Music Class” is dedicated to enhancing music teaching instruments and
professional resources in rural schools through the “Xiao Xue Music Robot". In 2022, the Company completed the upgrade of its "Xiao
Xue Music Robot, optimizing for functionality, packaging, and quality control. In the first half of 2022, the Shenzhen TCL Foundation
recruited the fourth batch of pilot schools for the "Xiao Xue Music Class”, receiving submissions from a total of 53 rural schools across
the country. Five schools were selected, and a total of 16 music boxes and 32 "Xiao Xue Music Robots" were distributed, benefiting a
total of 3,373 students.
Adopting an innovative charity + finance mode, the Candlelight Micro-Loan Project improves the quality of life for rural educators
to ensure the development of rural education. In the first half of 2022, the “Candlelight Micro-Loan Project” continued, further
expanding in influence.
In response to the “dual carbon” strategy, TCL Photovoltaic Sunshine Campus Project donated a photovoltaic roof power
generation system and 25 years of power generation income to 4 rural schools, with a system value of RMB1.19 million and donated
the photovoltaic power generation income of about RMB1.68 million. In January 2022, TCL launched the TCL Smart Classroom
Project to narrow the gap of educational resources between urban and rural areas. In March 2022, TCL launched the Optoelectronic
Laboratory Project to address the shortage of high-quality scientific and technological innovations and interactive education resources
for primary and secondary school students.
In 2022, TCL Foundation launched the "TCL Young Scholars Program" and "TCL Science and Technology Innovation Fund" for
young people and scientific education programs. These programs will serve an important model for education sponsorships in the future
to further promote educational equity.
The Shenzhen TCL Foundation helps the Company consolidate its achievements in rural revitalization through targeted assistance
projects. In 2022, in the targeted assistance and donation project in Taimei Town, Boluo County, Huizhou, TCL Foundation invested a
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TCL Technology Group Corporation Interim Report 2022
total of RMB650,000, donated learning devices with a value of RMB600,000 to the local government, and invested RMB50,000 in
supporting poverty alleviation. In June 2022, when the Bei River was hit by a once-in-a-century flood, the TCL Foundation immediately
donated RMB100,000 to Huizhou Charity Federation for the Huizhou Jiaolong Emergency Rescue Center to purchase materials
required for frontline rescue and disaster relief.
Effects of consolidating and extending the achievements of poverty alleviation and pushing forward rural revitalization
Index Unit Quantity/Development
I Overall Situation
1. Fund RMB 5,063,985
II Specific investments
1. Education
1.1 Amount of investment to improve the RMB 4,313,985
educational resources in poverty-stricken areas
2. Society
2.1 Amount of public welfare fund investment RMB 750,000
Subsequent plans for extending the achievements of poverty alleviation and pushing forward rural revitalization
In the second half of 2022, the Company will continue to drive rural education development through the "TCL Project Hope
Candlelight Award" program. The project will expand the influence of award evaluation and promotion to strengthen media
communication and Internet publicity to retain public attention.
In the future, the Company will continue to promote the "A.I. Go Home" project, strengthen the promotion and use of the "Eagle
Audiobook" Wechat Mini Program, further optimize the functions of the mini program, and plan to update the 2.0 version of the mini
program in the second half of the year to further strengthen the relationship between parents and children and provide emotional support.
The Company will also complete the identification of a fourth batch of pilot schools for the project. The "Eagle Storytelling Robot"
will accompany children in story lessons every month, and is expected to serve more than 3,800 students. In the second half of 2022,
"Little Music +" will continue to focus on the music education for rural children, and identify a fourth batch of pilot schools under the
"Xiao Xue Music Class” program to expand its coverage of rural school students.
The Company will select sites for TCL Photovoltaic Sunshine Campus Project in Hohhot, Inner Mongolia; Huizhou, Guangdong;
Zhangjiakou, Hebei; and other locations. In the future, the project will cover more schools in need to further implement the "dual
carbon" development concept and drive the development of rural education. The TCL Smart Classroom project is expected to be
completed and commissioned in the second half of 2022, contributing to the sharing of educational resources and promoting education
equity. The Optoelectronic Laboratory Project is expected to officially confirmed in the second half of 2022, and will serve to stimulate
the scientific interest and innovation of young people.
In the future, it is expected that the Company will invest RMB1.8 million each year to support young outstanding talents through
the TCL Young Scholars Program. The Company expects to make donations for 10 consecutive years from 2022 through the TCL
Science and Technology Innovation Fund to promote science and technology innovation from the source and train more young scientific
research talents for society. The total donation amount is expected to be RMB40 million.
2．Production safety
Production safety supervision system
TCL Technology upholds "people-oriented, safety first" principles, continuously improves the management of employee health
and production safety, ensures a safe production environment through various occupational health management mechanisms and
measures, and carries out a series of training programs to ensure the health and safety of employees. In accordance with safety laws
and regulations, the Company has improved its production safety responsibility system from the aspects of management, equipment
and facilities, and employee safety awareness.
In order to ensure the effective implementation of production safety management, TCL Technology has formulated regulations
such as the Production Safety Management Practices, Management Practices for Production Safety Performance Evaluation,
Emergency Response Plan for Production Safety Accidents, and others. In terms of management, TCL Technology has established a
Work Safety Administration Committee and the Office of the Work Safety Administration Committee to preside over the its production
safety management and guarantee system. TCL Technology has established a management system for regularly screening hidden
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TCL Technology Group Corporation Interim Report 2022
hazards in various industries. In each plant, safety management personnel at all levels carry out safety inspection in each area on a
daily, weekly, monthly, and quarterly basis (including holidays), along with follow-up rectification measures.
In response to the Group's action, TCL CSOT promulgated various security management regulations, and has pegged security
management with performance review for middle management. Security accountability is implemented and security awareness is
strengthened based on a dual communication mechanism (i.e. key contact personnel and contact points), in which contact points are
responsible for auditing the performance of the mechanism. TCL CSOT has developed the CSOT Security Management Improvement
Scheme to enhance security management from the perspectives of personnel, machines, materials, processing, and environmental
protection. TCL Zhonghuan has formulated a safety management manual and corporate management regulations with target safety
production goals, adopted the process method, ensured effective system operations, and continued improvement through monitoring
and measuring of the system.
Development of production safety standards
TCL Technology continuously improves measures for production safety in various segments, optimizes safety equipment and
facilities in workspaces, and carries out lean management and control over production safety. Subsidiaries under TCL CSOT have
domestically and internationally leading safety equipment and facilities in place (such as automatic fire alarm systems CO2 automatic
fire extinguishing systems, VESDA systems, and TGMS systems), and provide employees with safe and reliable personal protective
equipment. TCL CSOT adopts the HAZOP, SFMEA, and other risk identification instruments to analyze the risks arising from
manufacturing, and develops lean management and control measures accordingly, along with proactive engagement in risk visualization
management. TCL Zhonghuan has launched an information-based management platform for production safety featuring interfaces
classified by group, geographic location, segment, and company, for a total of 10 management modules, 38 sub-modules, and 80
specific tasks, enabling visualization of the fundamental management information about production safety standards. The platform can
plan and push tasks in real time with simultaneous trajectory throughout the process, a risk database is established with risk
identification and control specialization, hidden hazards are screened and special operations are managed dynamically, the system
collects dynamic safety information in real time and establishes a large database, and the expert team regularly identifies production
safety laws, regulations, and standards. A safety database has been created with these six functions, which solve key and difficult
problems such as real-time safety supervision and data analysis for hidden hazards across different plants.
Production safety process
Product safety is not only a basic requirement of customers for TCL Technology brand, technology, and services, but also one of
social responsibilities borne by the Company. TCL Technology and its various segments strictly conform to related laws and regulations,
with 100% product inspection and testing coverage, to ensure products are in compliance with safety requirements. TCL Technology
has also passed the CB, UL, and other international safety certifications, and formulated a response plan for product safety incidents
to strictly control product safety compliance.
TCL CSOT adopts an intelligent energy system to realize real-time monitoring over the status of equipment, energy consumption,
and products. TCL CSOT introduces deep learning algorithms, realizes fault prediction through equipment and process parameters,
effectively improves processing efficiency, introduces ADC image recognition technology, realizes panel AI intelligent detection, and
independently develops a visual detection algorithm to meet the needs of plants. The Company continuously optimizes and improves
FDC, yield efficiency, multi-factor analysis, and other analysis-based modeling systems, realizing real-time monitoring and alert on
equipment and quality status. As a result, concentrated abnormalities can be located in a rapid manner. TCL CSOT also introduces a
comprehensive AI-based automatic diagnosis system for AI identification, learning, decision-making, and implementation to reduce
costs while ensuring safety and scaling of production efficiency. TCL Zhonghuan continuously improves the "formulation" chip
manufacturing process and the "Deep Blue" AI learning model by using digital, automatic, and intelligent solutions. Through the “Deep
Blue” intelligent manufacturing model and the new generation of intelligent plants, TCL Zhonghuan works to develop 4.0 intelligent
plants to improve intelligent manufacturing.
Production safety education and training
TCL Technology focuses on the fundamentals of work safety education to consolidate its work safety management and improve
the safety awareness of employees through all kinds of activities. During the reporting period, the Company actively facilitated various
segments to carry out safety education activities and monthly events for safety and fire protection to improve the corporate safety
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TCL Technology Group Corporation Interim Report 2022
culture. The Company has organized a variety of safety training measures to increase the production safety awareness and skills of
employees with an aim to establish a culture of safety.
Safety inspections carried out by competent authorities during the Reporting Period
TCL Technology always complies with related laws and regulations, takes the initiative to support and accept safety inspections
by competent authorities, and fulfills its production safety commitment to the society.
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TCL Technology Group Corporation Interim Report 2022
Part VI Significant Events
I. 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
Commitment
Commitment Commitment
Commitment Promisor Type of Details of commitment Fulfillment
Time Term
change
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
The largest business of TCL Group and its
shareholder affiliated enterprises.
of the 3. If I/this partnership and the
During the
listed enterprises controlled by me/this
period of
company About partnership obtain the
Commitments being the There is no
and person avoiding opportunity to engage in new December 7,
made in asset largest violation of
acting in horizontal business, which constitutes or 2018
restructuring shareholder commitment
concert competition may constitute horizontal
of TCL
(Mr. Li competition with the main
Group
Dongsheng business of TCL Group and its
and Jiutian affiliated enterprises. I/this
Liancheng) partnership will, when it is
possible, try my/our best to make
this business opportunity
available to TCL Group or its
affiliated enterprises in the first
place based on reasonable and
fair terms and conditions.
4. If the business of mine/this
partnership and the enterprises
controlled by me/this partnership
coincides or may constitute
horizontal competition with TCL
Group’s business due to my/this
partnership’s investment demand
or TCL Group’s business
development, I/this partnership
and the enterprises controlled by
me/this partnership agree to
solve the resulting horizontal
competition within a specific
time limit since as it is
41
TCL Technology Group Corporation Interim Report 2022
determined.
5. During the period of being the
largest shareholder of TCL
Group, the aforementioned
commitment is unconditional and
irrevocable. If I/this partnership
violate the aforementioned
commitments, I/this partnership
will make comprehensive, timely
and full joint and several
compensation for the losses to
TCL Group caused thereby.
1. I/this partnership will
minimize the related party
transactions between me/this
partnership and the enterprises
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 fairness of the related
party transaction price, and will
The largest
perform the decision-making
shareholder
procedures for related party
of the
transactions according to the law, During the
listed Commitments
to ensure that the related party period of
company on reducing
transactions will not be used to being the There is no
and person and December 7,
illegally transfer TCL Group’s largest violation of
acting in regulating 2018
funds or to damage the legitimate shareholder commitment
concert related party
rights and interests of TCL of TCL
(Mr. Li transactions
Group and its shareholders. Group
Dongsheng
3. I/this partnership and the
and Jiutian
enterprises controlled by me/this
Liancheng)
partnership will not ask TCL
Group and its affiliated
enterprises to give more
favorable conditions than those
that can be offered to an
independent third party in any
fair market transaction.
4. During the period of being the
largest shareholder of TCL
Group, the aforementioned
commitment is unconditional and
irrevocable. If I/this partnership
violate the aforementioned
commitments, I/this partnership
will make comprehensive, timely
and full joint and several
compensation for the losses to
TCL Group caused thereby.
The largest After this transaction, I/this
shareholder Commitments partnership will continue to During the
of the on exercise shareholder’s rights period of
listed maintaining according to laws, regulations being the There is no
December 7,
company the and the Articles of Association of largest violation of
2018
and person independence TCL Group, and maintain the shareholder commitment
acting in of listed independence of TCL Group in of TCL
concert companies terms of assets, personnel, Group
(Mr. Li finance, business and
42
TCL Technology Group Corporation Interim Report 2022
Dongsheng institutions. I/this partnership
and Jiutian will ensure:
Liancheng) (I) The independence of TCL
Group personnel.
I/this partnership promise(s) to
maintain personnel independence
with TCL Group. TCL 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
enterprises.
(III) The financial independence
of TCL Group.
1. TCL Group establishes an
independent financial department
and an independent financial
accounting system.
2. TCL Group has a standardized
and independent financial
accounting system.
3. TCL Group opens an
independent bank account and
does not share a bank account
with me/this partnership.
4. The financial personnel of
TCL Group shall not work part-
time in my/this partnership’s
subordinate enterprises.
5. TCL Group can make
independent financial decisions,
and I/this partnership shall not
interfere with the use of TCL
Group’s funds.
(IV) The institutional
independence of TCL
Corporation.
1. TCL Group has an
independent and complete
organization which can operate
independently.
2. TCL Group’s office and
premises for production and
operations are separated from my
subordinate enterprises/this
43
TCL Technology Group Corporation Interim Report 2022
partnership.
3. The Board of Directors, Board
of Supervisors and various
functional departments of TCL
Group operate independently,
and have no subordinate
relationship with this
partnership’s functional
departments.
(V) The business independence
of TCL Group.
1. I/this partnership promise(s) to
maintain the business
independence of TCL Group
after this transaction.
2. TCL Group has the assets,
personnel, qualifications and
ability to independently carry out
business activities, and has the
ability to operate independently
in the market.
If TCL Group suffers losses due
to the violation of commitments
under the letter of commitment
by me/this partnership or my/this
partnership’s subordinate
enterprises, I/this partnership will
bear the corresponding
compensation liability according
to the law.
1) I shall avoid horizontal
competition between the
companies, enterprises or other
business organizations that I
own, control, control with others,
About During the
have significant influence on and
horizontal tenure of the
Commitments the Company with its
competition, Company’s There is no
made upon Mr. Li subsidiaries; and 2) I shall reduce August 30,
related-party director, violation of
IPO or Dongsheng and control transactions of 2013
transaction supervisor or commitment
refinancing related parties between the
and capital senior
companies, enterprises or other
occupation management
business organizations that I
own, control, control with others,
or have significant influence on
and the Company with its
subsidiaries.
Fulfilled on
Yes
time
Specific
reasons for
failing to
fulfill
Not applicable
commitments
on time and
plans for next
steps
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.
44
TCL Technology Group Corporation Interim Report 2022
IV. Engagement and Disengagement of Independent Auditor
Whether the semi-annual financial report has been audited
□ Yes √ No
The interim financial statements are unaudited.
V. Explanation of the Board of Directors and Board of Supervisors on the “Non-Standard
Auditor’s Report”
□ Applicable √ Not applicable
VI. Explanation of the Board of Directors on the “Non-Standard Auditor’s Report” for the
Previous Year
□ Applicable √ Not applicable
VII. Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII. Lawsuits
Significant lawsuits and arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other lawsuit matters
□ Applicable √ Not applicable
IX. Punishments and Rectifications
□ Applicable √ Not applicable
Description of rectifications
□ Applicable √ Not applicable
No significant punishments or rectifications in the Reporting Period.
X. Credit Quality of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XI. 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
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
45
TCL Technology Group Corporation Interim Report 2022
Amounts receivable due to related parties
Capital
Amount of
occupati Amount of
recovered Interest in
on for Beginning new grants Ending
Relationsh grants in current
Related non- balance in current Coupo balance
ip with the Source current period
parties operatin (RMB’0,00 period n rate (RMB’0,00
Company period (RMB’0,00
g 0) (RMB’0,00 0)
(RMB’0,00 0)
purposes 0)
0)
or not
TCL
Industri Sale of
Related
es equity
corporatio No 0 96,000 48,960 0.00% 0 47,040
Holding investme
n
s Co., nts
Ltd.
The Company sold 100% held equity of Chongqing Zhongxin Rongxin to TCL Industries Holdings Inc. in
The Influence of order to further optimize its business structure and focus resources on the development of its primary high-
Amounts Due to tech business in line with the government policy guidance and in accordance with the needs of the
Related Parties on the Company’s announced financing projects. According to the agreement signed by both parties, TCL
Company’s Operating Industries Holdings Inc. shall pay 51% of the equity transfer price (i.e. RMB489.6 million) to the Company
Results and Financial before June 30, 2022. The remaining equity transfer price will be paid before June 30, 2023. Refer to the
Status Announcement on the Disposal of Equity Interests in Partnership Enterprise and the Related-Party
Transactions disclosed by the Company on http://www.cninfo.com.cn dated June 27, 2022.
5. Transactions with Related Finance Companies
□ Applicable √ Not applicable
6. Transactions Between the Financial Company Controlled by the Company and Related Companies
√ Applicable □ Not applicable
Deposits:
Amount incurred in the current
period
Relationship Daily deposit Beginning Ending
Range of Total deposit Total withdrawal
Related parties with the ceiling balance balance
interest amount in amount in
Company (RMB’0,000) (RMB’0,000) (RMB’0,000)
current period current period
(RMB’0,000) (RMB’0,000)
Subsidiary of
TCL Industries Related
600,000.00 0.01-1.15% 2,127.79 226,780.06 228,878.05 29.80
Holdings Co., corporation
Ltd.
Loans:
Amount incurred in the current
period
Relationship Beginning Total
Range of Total loan Ending balance
Related parties with the Loan limit balance repayment
interest amount in (RMB’0,000)
Company (RMB’0,000) amount in
current period
current period
(RMB’0,000)
(RMB’0,000)
The balance of
Subsidiary of comprehensive credit
TCL Industries Related on any one day
- - - - -
Holdings Co., corporation (including loans) shall
Ltd. not exceed RMB6
billion
Credit or other financial business:
Relationship
Ending balance
Related parties with the Business type Total
(RMB’0,000)
Company
Subsidiary of TCL Industries Holdings Related Credit granting (bill The balance of
93,652.04
Co., Ltd. corporation discount) comprehensive credit on
46
TCL Technology Group Corporation Interim Report 2022
Subsidiary of TCL Industries Holdings Related Credit granting (bill any one day shall not
65,645.09
Co., Ltd. corporation acceptance) exceed RMB6 billion
7. Other Major Related-Party Transactions
√ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Announcement on the Disposal of Equity Interests in Partnership
June 27, 2022
Enterprises and the Related-Party Transaction
Announcement on the Expected Continuing Related-Party
April 28, 2022
Transactions for 2022
Announcement on the Launch of Accounts Receivable Factoring and
April 28, 2022
the Related-party Transaction
Announcement on the Related-party Transactions with Shenzhen Jucai
April 28, 2022
Supply Chain Technology Co., Ltd. in 2022 http://www.cninfo.com.cn
Announcement of TCL Technology Group Finance Co., Ltd. on
Continuing to Provide Financial Services to Related Parties and April 28, 2022
Renewing the Financial Service Agreement
Announcement on Progress of Additional Placement and Share Issue
March 22, 2022
in Subsidiaries and the Related-Party Transaction
Announcement on Additional Placement and Share Issue in
January 24, 2022
Subsidiaries and the Related-Party Transaction
XII. 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
Notes to Contracting
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
Notes to leases:
There were no lease projects that brought profits and losses to the Company reaching more than 10% of the Company’s total profits in
the Reporting Period.
2. Major Guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure Guara Guara
date of the ntee Counter ntee
Actual Actual Collat
guarantee Guarantee Type guarante Term of Expired for
Obligor occurren guarantee eral (if
line Limit of e (if guarantee or not related
ce date amount any)
announceme chang any) parties
nt e or not
Joint
Counter
TCL King Electrical liabilit
April 28, August guarante 3.6-5
Appliances 327,138 12,464 y / No Yes
2022 29, 2019 e years
(Huizhou) Co., Ltd. guaran
provide
tee
d by
Joint
TCL
TCL King Electrical liabilit
April 28, Industri
Appliances 51,653 - - y / - Yes Yes
2022 al
(Chengdu) Co., Ltd. guaran
Holding
tee
47
TCL Technology Group Corporation Interim Report 2022
Joint Co.,
Huizhou TCL
liabilit Ltd.
Mobile April 28,
212,507 - - y / - Yes Yes
Communication 2022
guaran
Co., Ltd.
tee
Joint
TCL Mobile
liabilit
Communication April 28,
29,225 - - y / - Yes Yes
(HK) Company 2022
guaran
Limited
tee
Joint
TCL Home liabilit
April 28, March
Appliances (Hefei) 68,280 4,968 y / 1-2 years No Yes
2022 2, 2021
Co., Ltd. guaran
tee
Joint
TCL Home
liabilit
Appliances April 28,
4,929 - - y / - Yes Yes
(Zhongshan) Co., 2022
guaran
Ltd.
tee
Joint
TCL Air-
liabilit
Conditioner April 28, March 0.37-3
80,991 33,771 y / No Yes
(Zhongshan) Co., 2022 13, 2020 years
guaran
Ltd.
tee
Joint
TCL Air liabilit
April 28,
Conditioner 13,480 - - y / - Yes Yes
2022
(Wuhan) Co., Ltd. guaran
tee
Joint
Zhongshan TCL liabilit
April 28,
Refrigeration 31,749 - - y / - Yes Yes
2022
Equipment Co., Ltd. guaran
tee
Joint
Guangdong TCL
liabilit
Smart Heating & April 28,
2,522 - - y / - Yes Yes
Ventilation 2022
guaran
Equipment Co., Ltd.
tee
Joint
TCL Home liabilit
April 28,
Appliances 10,000 - - y / - Yes Yes
2022
(Huizhou) Co., Ltd. guaran
tee
Joint
TCL Air- liabilit
April 28,
Conditioner 5,488 - - y / - Yes Yes
2022
(Jiujiang) Co., Ltd. guaran
tee
Joint
liabilit
Tonly Technology April 28, April
39,496 37,519 y / 3 years No Yes
Co., Ltd. 2022 23, 2021
guaran
tee
Joint
TCL Very Lighting liabilit
April 28,
Technology 1,034 - - y / - Yes Yes
2022
(Huizhou) Co., Ltd. guaran
tee
Joint
SHIFENDAOJIA liabilit
April 28,
Online Service Co., 77 - - y / - Yes Yes
2022
Ltd. guaran
tee
Guangzhou TCL Decemb Joint
April 28,
Science and 84,700 er 27, 80,465 liabilit / 13 years No Yes
2022
Technology 2018 y
48
TCL Technology Group Corporation Interim Report 2022
Development Co., guaran
Ltd. tee
Joint
TCL Industries liabilit
April 28, April
Holdings (HK) 514,629 376,323 y / 1-3 years No Yes
2022 14, 2020
Limited guaran
tee
Joint
Techigh Circuit liabilit
April 28,
Technology 499 - - y / - Yes No
2022
(Huizhou) Co., Ltd. guaran
tee
Shenzhen Qianhai Joint
With
Sailing International Decemb liabilit
April 28, counter-
Supply Chain 40,000 er 27, 2,360 y / 189 days No Yes
2022 guarante
Management Co., 2021 guaran
e
Ltd. tee
Joint
With
Qihang liabilit
April 28, counter-
Import&Export 6,000 - - y / - No No
2022 guarante
Limited guaran
e
tee
Shenzhen Qianhai Joint
With
Sailing International Septemb liabilit
April 28, counter- 50 days-1
Supply Chain 110,000 er 1, 28,153 y / No No
2022 guarante years
Management Co., 2021 guaran
e
Ltd. tee
Guarant
ee in
Joint
Aijiexu New proporti
liabilit
Electronic Display April 28, April on to
80,000 25,889 y / 8 years No No
Glass (Shenzhen) 2022 28, 2020 sharehol
guaran
Co., Ltd. ding
tee
percenta
ge
Joint
With
Qihang liabilit
April 28, counter-
International Import 50,000 - 1,678 y / 1 year No No
2022 guarante
& Export Limited guaran
e
tee
Huizhou Zhongkai Joint
With
TCL Zhirong Septemb liabilit
May 22, counter-
Technology 45,500 er 29, 15,000 y / 1 year No Yes
2021 guarante
Microcredit Co., 2021 guaran
e
Ltd. tee
Total actual amount
Total approved line for such of such guarantees
1,764,397 57,880
guarantees in Reporting Period (A1) in Reporting Period
(A2)
Total actual balance
Total approved line for such
of such guarantees
guarantees at the end of the 1,809,897 618,588
at end of Reporting
Reporting Period (A3)
Period (A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure Guara Guara
date of the ntee Counter ntee
Actual Actual Collat
guarantee Guarantee Type guarante Term of Expired for
Obligor occurren guarantee eral (if
line Limit of e (if guarantee or not related
ce date amount any)
announceme chang any) parties
nt e or not
Joint
Wuhan China Star
liabilit
Optoelectronics April 28, July 26, 22 days-3
1,600,000 413,940 y / / No No
Technology Co., 2022 2019 years
guaran
Ltd.
tee
Shenzhen China April 28, April Joint 1 month -
1,550,000 1,183,090 / / No No
Star Optoelectronics 2022 28, 2018 liabilit 8 years
49
TCL Technology Group Corporation Interim Report 2022
Semiconductor y
Display Technology guaran
Co., Ltd. tee
Joint
TCL China Star
Septemb liabilit
Optoelectronics April 28, 13 days-3
679,500 er 29, 35,190 y / / No No
Technology Co., 2022 years
2019 guaran
Ltd.
tee
Wuhan China Star Joint
Optoelectronics Decemb liabilit
April 28, 3 month -
Semiconductor 2,000,000 er 22, 989,901 y / / No No
2022 8 years
Display Technology 2017 guaran
Co., Ltd. tee
Joint
Huizhou China Star
liabilit
Optoelectronics April 28, January 3 month -
1,150,000 637,589 y / / No No
Technology Co., 2022 1, 2021 8 years
guaran
Ltd.
tee
Joint
China Star
liabilit
Optoelectronics April 28,
500,000 - - y / / - No No
International (HK) 2022
guaran
Limited
tee
Joint
China Display
liabilit
Optoelectronics April 28, July 28, 43 days-
150,000 47,037 y / / No No
Technology 2022 2021 7.39 years
guaran
(Huizhou) Co., Ltd.
tee
Wuhan China Joint
Display Februar liabilit
April 28,
Optoelectronics 50,000 y 14, 197 y / / 2-3 years No No
2022
Technology Co., 2020 guaran
Ltd. tee
Joint
Guangdong Juhua
liabilit
Printed Display April 28, May 31,
40,000 4,324 y / / 15 months No No
Technology Co., 2022 2022
guaran
Ltd.
tee
Joint
TCL Technology Gr liabilit
April 28, January 95-409
oup Finance Co., Lt 300,000 59,863 y / / No No
2022 25, 2022 days
d. guaran
tee
Joint
liabilit
Highly Information April 28, April 1, 1 days-2.5
480,000 358,000 y / / No No
Industry Co., Ltd. 2022 2020 years
guaran
tee
Joint
Beijing Hecheng liabilit
April 28, July 23,
Nuoxin Technology 10,000 5,000 y / / 1 year No No
2022 2021
Co., Ltd. guaran
tee
Joint
Beijing Lingyun liabilit
April 28, July 29, 86-364
Data Technology 131,500 38,390 y / / No No
2022 2021 days
Co., Ltd. guaran
tee
Joint
Beijing Sunpiestore liabilit
April 28, July 23,
Technology Co., 140,000 83,000 y / / 1 year No No
2022 2021
Ltd. guaran
tee
Joint
Shaanxi Titi
liabilit
Electronic April 28, July 23,
10,000 3,000 y / / 1 year No No
Technology Co., 2022 2021
guaran
Ltd.
tee
50
TCL Technology Group Corporation Interim Report 2022
Joint
TCL Technology liabilit
April 28, April
Park (Huizhou) Co., 172,600 99,500 y / / 1-10 years No No
2022 24, 2020
Ltd. guaran
tee
Joint
liabilit
TCL Technology April 28, July 14,
400,000 201,342 y / / 5 years No No
Investments Limited 2022 2020
guaran
tee
Joint
liabilit
Ningbo TCL Equity April 28,
50,000 - - y / / - No No
Investment Ltd. 2022
guaran
tee
Joint
TCL Moka liabilit
April 28, May 20,
International 176,000 40,268 y / / 1 year No No
2022 2022
Limited guaran
tee
Joint
Huizhou Moka
liabilit
Technology April 28,
55,000 - - y / / - No No
Development Co., 2022
guaran
Ltd.
tee
Joint
Moka Technology Decemb liabilit
April 28, 1-8
(Guangdong) Co., 700,000 er 31, 121,182 y / / No No
2022 months
Ltd. 2021 guaran
tee
Guangzhou China Joint
Star Optoelectronics liabilit
April 28, March
Semiconductor 1,750,000 730,703 y / / 1-8 years No No
2022 4, 2022
Display Technology guaran
Co., Ltd. tee
Joint
Suzhou China Star liabilit
April 28,
Optoelectronics 265,000 - - y / / - No No
2022
Display Co., Ltd. guaran
tee
Joint
Suzhou China Star
liabilit
Optoelectronics April 28,
57,000 - - y / / - No No
Technology Co., 2022
guaran
Ltd.
tee
Joint
Highly (Tianjin) liabilit
April 28, May 9, 40-61
Technology Co., 50,000 21,737 y / / No No
2022 2021 days
Ltd. guaran
tee
Joint
liabilit
Highly (Tianjin) E- April 28,
5,000 - - y / / - No No
Commerce Co., Ltd. 2022
guaran
tee
Joint
Qingdao Blue liabilit
April 28,
Business Consulting 5,000 - - y / / - No No
2022
Co., Ltd. guaran
tee
Joint
liabilit
Tianjin Printronics April 28,
100,000 - - y / / - No No
Circuit Corporation 2022
guaran
tee
TCL Technology Joint
April 28,
Group (Tianjin) Co., 200,000 - - liabilit / / - No No
2022
Ltd.* y
51
TCL Technology Group Corporation Interim Report 2022
guaran
tee
Joint
Tianjin
liabilit
WanfangNuoxin April 28,
5,000 - - y / / - No No
Technology Co., 2022
guaran
Ltd. *
tee
Total actual amount
Total approved line for such
of such guarantees
guarantees in the Reporting Period 12,781,600 1,476,775
in the Reporting
(B1)
Period (B2)
Total actual balance
Total approved line for such of such guarantees
guarantees at the end of the 12,781,600 at the end of the 5,073,254
Reporting Period (B3) Reporting Period
(B4)
Guarantees provided between subsidiaries
Disclosure Guara Guara
date of the ntee Counter ntee
Guarant Actual Actual Collat
guarantee Type guarante Term of Expired for
Obligor ee occurrenc guarantee eral (if
line of e (if guarantee or not related
Limit e date amount any)
announceme chang any) parties
nt e or not
Joint
Huhehaote Huanju
liabilit
New Energy November December
24,529 24,529 y / / 9.5 years No No
Development Co., 26, 2014 11, 2015
guaran
Ltd.*
tee
Joint
Zhonghuan Energy liabilit
June 24, July 21,
(Inner Mongolia) 11,800 11,800 y / / 15 years No No
2017 2017
Co., Ltd. guaran
tee
Joint
Otog Banner liabilit
June 24, August
Huanju New Energy 19,816 19,816 y / / 10 years No No
2017 30, 2017
Co., Ltd. guaran
tee
Joint
November
Qinhuangdao liabilit
11, 2017 January 10-12
Tianhui Solar 22,829 22,829 y / / No No
September 19, 2018 years
Energy Co., Ltd. guaran
6, 2018
tee
Joint
Guyuan Shengju liabilit
September October 8,
New Energy Co., 10,119 10,119 y / / 11 years No No
6, 2018 2018
Ltd. guaran
tee
Joint
Zhangjiakou liabilit
September October 8,
Shengyuan New 13,790 13,790 y / / 11 years No No
6, 2018 2018
Energy Co., Ltd. guaran
tee
Joint
Zhonghuan Hong liabilit
March 22, March 26,
Kong Holding 65,000 52,994 y / / 3 years No No
2021 2021
Limited guaran
tee
Joint
March 22,
Inner Mongolia liabilit
2021 April 30,
Zhonghuan Crystal 602,500 432,500 y / / 7 years No No
May 26, 2021
Materials Co., Ltd. guaran
2022
tee
Joint
Huansheng Solar March 22, April 1,
53,900 53,900 liabilit / / 5 years No No
(Jiangsu) Co., Ltd. 2021 2021
y
52
TCL Technology Group Corporation Interim Report 2022
guaran
tee
Joint
Tianjin Huanzhi
liabilit
New Energy January 21, July 20,
131,500 56,011 y / / 7 years No No
Technology Co., 2021 2021
guaran
Ltd.
tee
Joint
Ningxia Zhonghuan liabilit
January 23, May 30,
Solar Material Co., 748,000 133,000 y / / 7 years No No
2022 2022
Ltd. guaran
tee
Joint
Wuxi Zhonghuan liabilit
May 26, June 30,
Applied Materials 190,000 10,000 y / / 7 years No No
2022 2022
Co., Ltd. guaran
tee
TCL Zhonghuan’s Joint
guarantee for liabilit
May 26,
subsidiaries within 620,000 - - y / / - No No
2022
the consolidated guaran
scope (retained) tee
Shenzhen China Joint
Star Optoelectronics liabilit
April 28, 2,612,50 April 28,
Semiconductor 2,394,858 y / / 5-8 years No No
2022 0 2018
Display Technology guaran
Co., Ltd.* tee
PANEL Joint
OPTODISPLAY liabilit
April 28, April 22,
TECHNOLOGY 8,200 825 y / / 2 years No No
2022 2022
PRIVATE guaran
LIMITED tee
Joint
TCL Moka liabilit
April 28, April 29, 26-87
International 214,500 41,557 y / / No No
2022 2022 days
Limited guaran
tee
Joint
China Star
liabilit
Optoelectronics April 28, November
500,000 167,785 y / / 3 years No No
International (HK) 2022 24, 2020
guaran
Limited
tee
Total actual amount
Total approved line for such
of such guarantees
guarantees in the Reporting Period 5,083,200 386,398
in the Reporting
(C1)
Period (C2)
Total actual balance
Total approved line for such of such guarantees
guarantees at the end of the 5,848,984 at the end of the 3,446,314
Reporting Period (C3) Reporting Period
(C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total actual
Total guarantee line approved in the guarantee amount in
19,629,197 1,921,053
Reporting Period (A1+B1+C1) the Reporting Period
(A2+B2+C2)
Total actual
Total approved guarantee line at the guarantee balance at
end of the Reporting Period 20,440,481 the end of the 9,138,156
(A3+B3+C3) Reporting Period
(A4+ B4+ C4)
Total actual guarantee amount (A4+B4+C4) as % of the
234.17%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, the actual
562,869
controller and their related parties (D)
53
TCL Technology Group Corporation Interim Report 2022
Balance of debt guarantees provided directly or indirectly for
2,663,958
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of
7,186,951
the Company’s net assets (F)
Total of the three above amounts (D+E+F) 7,186,951
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)
Note: ①The guarantee period in the above table is the occurrence period of the principal debt. The actual guarantee is valid for
two or three years from the expiration date of the principal debt, which is subject to the single contract.
② During the Reporting Period, the Company adjusts the guarantee limit to its controlling subsidiaries based on their demands.
The details are outlined as follows:
(1) The guarantee limit amounting to RMB2 billion offered to Suzhou China Star Optoelectronics Technology Co., Ltd. was
transferred to TCL Technology Group (Tianjin) Co., Limited, another controlling subsidiary.
(2) The guarantee limit amounting to RMB50 million offered to Beijing Sunpiestore Technology Co., Ltd. was transferred to
Tianjin Wanfang Nuoxin Technology Co., Ltd., a wholly-owned subsidiary of the Company.
In respect of the guarantee adjustment above, the Company has completed internal deliberation procedures and the debt/asset
ratio of subsidiaries subject to guarantee limit increment does not exceed 70%, which complied with the related requirements in the
Rules Governing the Guarantees Provided for External Parties, and the 2022 Proposals on Guarantee Provided to Subsidiaries passed
on the 2021 general meeting held on May 19, 2022.
③ In the table above, Shenzhen China Star Optoelectronics Semiconductor Display Technology Co., Ltd., a subsidiary
controlled by the Company, was jointly guaranteed by the Company and its subsidiary TCL China Star Optoelectronics Technology
Co., Ltd. in an external syndicated loan, in which the Company provided certain percentage of guarantee, while TCL China Star
Optoelectronics Technology Co., Ltd. provided full guarantee.
As at the end of the Reporting Period, the debt portion under joint guarantee amounted to RMB10.7457534 billion. The joint
guarantee has been filled in the “Company’s Guarantee for Subsidiaries” and “Guarantee Among Subsidiaries”, respectively. The
“total guarantee accrued at the end of the reporting period” and “total balance of guarantee accrued at the end of the Reporting Period”
including the debt portion under the joint guarantee amounted to RMB10.7457534 billion.
④ The Company provided guarantee to the syndicated loan of Wuhan China Star Optoelectronics Semiconductor Display
Technology Co., Ltd. for its “Project For Expanding the G6 Semiconductor Display Component Production Line” under joint and
several liability of no more than RMB7.5 billion. The guarantee is within the limit of 2022 Proposal on Providing Guarantee to
Subsidiaries passed on the 18th of the Seventh Session Board of Directors and 2021 general meeting. As at the end of the Reporting
Period, the Company had not executed any specific guarantee contract. The actual guarantee limit will be subject to the specific
contract.
⑤ In the “guarantee among subsidiaries”, the guaranteed entity and Huhehaote Huanju New Energy Development Co., Ltd.
were provided with the guarantee under joint and several liability by TCL Technology Group (Tianjin) Co., Ltd. And TCL Zhonghuan
New Energy Technology Co., Ltd.
54
TCL Technology Group Corporation Interim Report 2022
3. Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Unit: RMB'0,000
Impairment allowance for
Unrecovered
unrecovered overdue
Type Funding source Amount Undue amount overdue
amount of wealth
amount
management products
Bank’s wealth - -
Self-funded 629,001.00 625,900.00
management product
Securities firm’s - -
wealth management Self-funded 100,962.99 100,962.99
product
Trust plan Self-funded 100,000.00 60,000.00 - -
Other Self-funded 19,219.11 19,219.11 - -
Total 849,183.10 806,082.10 - -
High-risk wealth management transactions with a significant single amount, low liquidity and no principal guarantee:
□ Applicable √ Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII. Other Significant Events
√ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Announcement on Resignation and Appointment of
4/14/2022
Non-executive Directors
http://www.cninfo.com.cn
Report on the Repurchase of Certain Public Shares in
3/21/2022
2022
XIV. Significant Events of Subsidiaries
√ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Announcement on Additional Placement and Share
1/24/2022 http://www.cninfo.com.cn
Issue in Subsidiaries and the Related-Party Transaction
55
TCL Technology Group Corporation Interim Report 2022
Part VII Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Increase/decrease in the Reporting
Prior to changes After changes
Period (+/-)
Shares Percentage Others Subtotal Shares Percentage
I. Restricted
612,110,488 4.36% 1,445,002 1,445,002 613,555,490 4.37%
Shares
Shares held
by other
611,718,990 4.36% 1,270,579 1,270,579 612,989,569 4.37%
domestic
investors
Of which:
Shares held
611,718,990 4.36% 1,270,579 1,270,579 612,989,569 4.37%
by domestic
individuals
Shares held
by foreign 391,498 0.0028% 174,423 174,423 565,921 0.0040%
entities
Of which:
Shares held
391,498 0.0028% 174,423 174,423 565,921 0.0040%
by foreign
individuals
II. Non-
restricted 13,418,531,933 95.64% -1,445,002 -1,445,002 13,417,086,931 95.63%
shares
Ordinary
shares in 13,418,531,933 95.64% -1,445,002 -1,445,002 13,417,086,931 95.63%
RMB
III. Total
14,030,642,421 100% 0 0 14,030,642,421 100%
shares
Statement on the changes in shares
During the Reporting Period, locked-up shares held by senior management increased by 1,445,002 shares, as non-restricted shares
decreased by the same amount.
Approval of changes in shares
□ Applicable √ Not applicable
Transfer of share ownership
√ Applicable □ Not applicable
On June 1, 2021, the Company issued the Announcement on Planned Allocation and Equity Ownership Under the Global
Partnership Phase III Scheme, which specifies that, in accordance with Global Partnership Phase III Scheme (Draft), the share holders
under the scheme may sell 50% of corresponding shares held based on current market conditions at their discretion, or transfer 50% of
corresponding shares held to the scheme holder’s account through non-trading transfer subject to the support of Shenzhen Stock
Exchange and the Depository and Clearing Corporation, after 12 months upon the vesting date of the underlying shares; the share
holders under the scheme may sell the remained 50% of corresponding shares or transfer the remained 50% of corresponding shares to
the scheme holder’s account through non-trading transfer subject to Shenzhen Stock Exchange and the Depository and Clearing
56
TCL Technology Group Corporation Interim Report 2022
Corporation after 24 months upon the vesting date of the underlying shares.
During the Reporting Period, parts of shares under the Scheme had been transferred to the securities account of scheme holders
through non-trading transfer in June. A total of 21,054,347 shares were transferred, including 1,926,671 shares transferred to directors,
supervisors and senior management through non-trading transfer and 19,127,676 shares transferred to other holders through non-trading
transfer.
Progress on any share repurchase
√ Applicable □ Not applicable
During the Reporting Period, the Company repurchased 106,484,364 shares through centralized bidding from the special securities
account for repurchase from March 23, 2022 to June 24, 2022, accounting for 0.76% of the total share capital of the Company. The
highest and lowest trading price was RMB5.01 per share and RMB4.34 per share, respectively, and the total payment approximated to
RMB502.62 million (excluding transaction fees).
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
Effects of changes in shares 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
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
Unlocked in Increase in Ending
Name of Beginning Reason for
Reporting Reporting restricted Date of unlocking
shareholder restricted shares restriction
Period Period shares
Directors, Removal of lock-
Locked-up
supervisors, up restriction
shares of
and 612,110,488 0 1,445,002 613,555,490 based on related
senior
executives of laws and
management
the Company regulations
Total 612,110,488 0 1,445,002 613,555,490 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of ordinary Total number of preference shareholders with
shareholders by the end of the 761,967 resumed voting rights by the end of the reporting 0
reporting period period (if any)
Shareholdings of ordinary shareholders with more than 5% or the top 10 shareholders of ordinary shares
Number of Shares in pledge, marked or
Number of Number of
Shareholding Increase/decrease Non- frozen
Name of Nature of shares held at restricted
percentage during the restricted
shareholder Shareholder the period- ordinary
(%) Reporting Period ordinary Status Shares
end shares held
shares held
Li Put in
Dongsheng Domestic pledge by Li 179,338,800
and his individual/Domestic 8.26% 1,159,085,019 485,626 610,545,821 548,539,198 Dongsheng
acting-in- general legal entity Put in
238,620,000
concert party pledge by
57
TCL Technology Group Corporation Interim Report 2022
Jiutian
Liancheng
Huizhou
Investment State-owned legal
5.30% 743,139,840 0 0 743,139,840
Holding Co., entity
Ltd.
Wuhan
Optics
Valley State-owned legal
3.95% 554,770,496 -3,781,900 0 554,770,496 Pledge 255,754,475
Industrial entity
Investment
Co., Ltd.
Hong Kong
Securities
Clearing Foreign legal entity 2.68% 376,447,862 -71,400,149 0 376,447,862
Company
Limited
China
Securities
Domestic general
Finance 2.66% 373,231,553 0 0 373,231,553
legal entity
Corporation
Limited
Tibet
Tianfeng
Domestic general
Enterprise 1.54% 215,582,406 -30,986,432 0 215,582,406
legal entity
Management
Co., Ltd.
TCL
Technology
Group
Corporation
- 2021 to Fund, wealth
2023 management 0.81% 113,143,154 0 0 113,143,154
Employee product, etc.
Stock
Ownership
Plan (Phase
I)
Sinatay Life
Insurance Fund, wealth
Co., Ltd. - management 0.74% 104,190,172 0 0 104,190,172
Conventional product, etc.
Product
ICBC Credit
Suisse Fund
-
Agricultural
Bank of
China - Fund, wealth
ICBC Credit management 0.53% 74,761,500 0 0 74,761,500
Suisse China product, etc.
Securities
Financial
Asset
Management
Plan
Southern Fund, wealth
Asset management 0.53% 74,761,500 0 0 74,761,500
Management product, etc.
58
TCL Technology Group Corporation Interim Report 2022
-
Agricultural
Bank of
China -
Southern
China
Securities
Financial
Asset
Management
Plan
Strategic investor or general legal
entity becoming top-10 ordinary
Not applicable
shareholders due to private
placement of new shares (if any)
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became persons
Note on the above shareholders’
acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,019 shares in total and becoming
associations or concerted actions
the largest shareholder of the Company.
Explain if any of the shareholders
above was involved in
Not applicable
entrusting/being entrusted with
voting rights or waiving voting rights
There is a special repurchase account “TCL Technology Group Corporation’s special securities account for
Explanation on repurchase account
repurchase” among the top 10 Shareholders, which are not outlined in the top 10 shareholders above. As of the end of
among top 10 shareholders
the Reporting Period, this repurchase account held 399,900,216 shares.
Top 10 non-restricted ordinary shareholders
Type of shares
Name of shareholder Number of non-restricted ordinary shares held at the end of the reporting period
Type Shares
Huizhou Investment Holding Co., RMB-
Ltd. denominated
743,139,840 743,139,840
ordinary
shares
Wuhan Optics Valley Industrial RMB-
Investment Co., Ltd. denominated
554,770,496 554,770,496
ordinary
shares
RMB-
Li Dongsheng and his acting-in- denominated
548,539,198 548,539,198
concert party ordinary
shares
Hong Kong Securities Clearing RMB-
Company Limited denominated
376,447,862 376,447,862
ordinary
shares
China Securities Finance RMB-
Corporation Limited denominated
373,231,553 373,231,553
ordinary
shares
Tibet Tianfeng Enterprise RMB-
Management Co., Ltd. denominated
215,582,406 215,582,406
ordinary
shares
TCL Technology Group Corporation RMB-
- 2021 to 2023 Employee Stock denominated
113,143,154 113,143,154
Ownership Plan (Phase I) ordinary
shares
Sinatay Life Insurance Co., Ltd. - 104,190,172 RMB- 104,190,172
59
TCL Technology Group Corporation Interim Report 2022
Conventional Product denominated
ordinary
shares
ICBC Credit Suisse Fund - RMB-
Agricultural Bank of China - ICBC denominated
74,761,500 74,761,500
Credit Suisse China Securities ordinary
Financial Asset Management Plan shares
Southern Asset Management - RMB-
Agricultural Bank of China - denominated
74,761,500 74,761,500
Southern China Securities Financial ordinary
Asset Management Plan shares
Related or acting-in-concert parties
among top 10 non-restricted ordinary
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became
shareholders, as well as between top
persons acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,019 shares in total and
10 non-restricted ordinary
becoming the largest shareholder of the Company.
shareholders and top 10 ordinary
shareholders
1. Wuhan Optics Valley Industrial Investment Co., Ltd., a shareholder of the Company, conducted share-based
securities lending business for “TCL Technology”. At the end of the Reporting Period, 3,781,900 shares of securities
Explanation on the top 10 ordinary
were lent out.
shareholders participating in
2, Tibet Tianfeng Enterprise Management Co., Ltd., a shareholder of the Company, holds 117,343,814 shares through
securities margin trading
the general securities account, and holds 98,238,592 shares through the credit securities account, with a total of
215,582,406 shares actually held.
Indicate whether any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
IV. Change in Shareholdings of Directors, Supervisors, and Senior Management
√ Applicable □ Not applicable
Number Number
Number
of of
Decrease of
Increase of restricted restricted
Number of of shares Number of restricted
shares shares shares
shares held at during shares held at shares
Name Position Postion Status during the granted at granted
the beginning the the end of the granted
Reporting the at the
of the year Reporting year during
Period beginning end of
Period the
of the the
period
period period
Chairman of
Li
the Board and Incumbent 813,575,470 485,626 0 814,061,096 0 0 0
Dongsheng
CEO
Vice
Liang
Charmian of Incumbent 0 0 0 0 0 0 0
Weihua
the Board
Du Juan Director Incumbent 417,730 374,237 0 791,967 0 0 0
Director,
Jin Xuzhi Senior Vice Incumbent 521,997 232,564 0 754,561 0 0 0
President
Director,
Shen
Senior Vice Incumbent 0 0 0 0 0 0 0
Haoping
President
Director,
Board
Liao Qian Secretary and Incumbent 229,596 251,710 0 481,306 0 0 0
Senior Vice
President
Lin Feng Director Incumbent 0 0 0 0 0 0 0
Independent
Gan Yong Incumbent 0 0 0 0 0 0 0
director
Independent
Chen Shiyi Incumbent 0 0 0 0 0 0 0
director
Wan Independent
Incumbent 0 0 0 0 0 0 0
Liangyong director
Independent
Liu Xunci Incumbent 0 0 0 0 0 0 0
director
60
TCL Technology Group Corporation Interim Report 2022
Chairman of
He the
Incumbent 0 0 0 0 0 0 0
Zhuohui Supervisory
Committee
Qiu
Supervisor Incumbent 0 0 0 0 0 0 0
Haiyan
Mao Employee
Incumbent 128,979 100,604 0 229,583 0 0 0
Tianxiang Supervisor
Wang
COO Incumbent 157,661 0 0 157,661 0 0 0
Cheng
Li Jian CFO Incumbent 97,709 196,804 0 294,513 0 0 0
Senior Vice
Yan
President, Incumbent 1,018,176 285,126 0 1,303,302 0 0 0
Xiaolin
CTO
Previous
Liu Kun Former 0 0 0 0 0 0 0
director
Total -- -- 816,147,318 1,926,671 0 818,073,989 0 0 0
V. Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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TCL Technology Group Corporation Interim Report 2022
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 Value Outstanding Coupon
Bond name Abbr. Maturity repayment and Place of trading
Code issuance date balance rate
interest
payment
TCL
Corporation Interest payable
Corporate annually and
Bonds Publicly October 17, October October principal Shenzhen Stock
19TCL03 112983 200,000 4.20%
Offered in 2019 2019 21, 2019 21, 2024 repayable in Exchange
to Qualified full upon
Investors maturity
(Tranche 3)
TCL
Corporation Interest payable
Corporate annually and
Bonds Publicly July 19, July 23, July 23, principal Shenzhen Stock
19TCL02 112938 100,000 4.30%
Offered in 2019 2019 2019 2024 repayable in Exchange
to Qualified full upon
Investors maturity
(Tranche 2)
TCL
Corporation Interest payable
Corporate annually and
Bonds Publicly May 17, May 20, May 20, principal Shenzhen Stock
19TCL01 112905 100,000 3.15%
Offered in 2019 2019 2019 2024 repayable in Exchange
to Qualified full upon
Investors maturity
(Tranche 1)
TCL
Corporation Interest payable
Corporate annually and
Bonds Publicly August 17, August August principal Shenzhen Stock
18TCL02 112747 200,000 3.55%
Offered in 2018 2018 20, 2018 20, 2023 repayable in Exchange
to Qualified full upon
Investors maturity
(Tranche 2)
TCL
Corporation Interest payable
Corporate annually and
Bonds Publicly June 5, June 6, June 6, principal Shenzhen Stock
18TCL01 112717 17,001.90 4.00%
Offered in 2018 2018 2018 2023 repayable in Exchange
to Qualified full upon
Investors maturity
(Tranche 1)
TCL Interest payable
Corporation annually and
July 7, July 7, Shenzhen Stock
Corporate 17TCL02 112542 July 6, 2017 15,700 3.45% principal
2017 2022 Exchange
Bonds Publicly repayable in
Offered in 2017 full upon
62
TCL Technology Group Corporation Interim Report 2022
to Qualified maturity
Investors
(Tranche 2)
Investor eligibility (if any) For qualified investors / For professional investors
Applicable trading mechanism Not applicable
Risk of termination of listing and
trading (if any) and None
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 2019 to Qualified Investors (Tranche 1), the bondholders of 19TCL01 elected to sell back all or part of their 19TCL01 to TCL
Technology Group Corporation during the sell-back registration period (April 19, 2022 to April 25, 2022) at the sell-back price of
RMB100/bond (excluding interest). The coupon rate decreased from 4.33% to 3.15% two years after the existence period, and the sell-
back fund was released on May 20, 2022. According to the data provided by the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited, the number of 19TCL01 sold back during the sell-back registration period was 10,000,000, and the sell-
back amount was RMB1,000,000,000 (excluding interest). As indicated in the Announcement on Sell-back Declaration Results, the
Company would resell the sold-back bonds from May 23, 2022 to June 20, 2022, and the number of bonds proposed to be resold would
be no more than 10,000,000. The number of bonds resold in this tranche was 10,000,000, and the average resale price was
RMB100.2534/bond, and all of which had been resold through manual transfer. Upon the completion of the resales, no bonds pending
for resales remain, and there are 10,000,000 bonds of 19TCL01 outstanding in depositary.
3. Adjustments to credit ratings in the Reporting Period
□ Applicable √ Not applicable
4. Execution and changes of guarantees, repayment plans and other repayment guarantee measures in the
Reporting Period, as well as the impact on the equity of bond investor
□ Applicable √ Not applicable
III. Debt Financing Instruments of a Non-Financial Enterprise
√ Applicable □ Not applicable
1. General information of debt financing instruments of a non-financial enterprise:
Unit: RMB100 million
Way of
Name of Code of principal
Date of Outstanding Place of
debt Abbr. debt Value date Maturity Interest rate repayment
issuance balance trading
instrument instrument and interest
payment
2022 Mid- Interest
Term Green payable
Notes of annually
TCL 22TCL- April 25, April 27, April 27, and Inter-bank
132280040 15.00 3.30%
Technology GN002 2022 2022 2025 principal market
Group repayable in
Corporation full upon
(Tranche 2) maturity
Interest
2022 Mid- payable
Term Notes annually
of TCL 22TCL- January 12, January 14, January 14, and Inter-bank
102280089 20.00 3.45%
Technology MTN001 2022 2022 2025 principal market
Group repayable in
Corporation full upon
(Tranche 1) maturity
2021 Mid- 21TCL- Interest
Term Notes MTN001 May 10, May 12, May 12, payable Inter-bank
102100966 20.00 4.15%
of TCL (High- 2021 2021 2024 annually market
Technology Growth and
63
TCL Technology Group Corporation Interim Report 2022
Group Bonds) principal
Corporation repayable in
(Tranche full upon
1)(High- maturity
Growth
Bonds)
Interest
2020 Mid- payable
Term Notes annually
of TCL 20TCL- March 25, March 27, March 27, and Inter-bank
102000509 30.00 3.60%
Technology MTN001 2020 2020 2023 principal market
Group repayable in
Corporation full upon
(Tranche 1) maturity
Investor eligibility (if any) Not applicable
Applicable trading mechanism Not applicable
Risk of termination of listing and
None
trading (if 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
3. Adjustments to credit ratings in the Reporting Period
□ Applicable √ Not applicable
4. Execution and changes of guarantees, repayment plans and other repayment guarantee measures in the
Reporting Period, as well as the impact on the equity of bond investor
□ Applicable √ Not applicable
IV. Convertible Corporate Bonds
√ Applicable □ Not applicable
1. Adjustments and Rectification of Transfer Prices
Price before adjustment Start date for the
Name Adjusted price (RMB/share)
(RMB/share) adjustment
TCL Directional Transfer 2 (CB No.:
7.88 7.73 June 2, 2022
124017)
TCL Directional Transfer 2 (CB No.:
7.73 4.10 July 25, 2022
124017)
2. Cumulative bond-to-stock conversions
□ Applicable √ Not applicable
3. Top 10 holders of convertible corporate bonds
Number of
Amount of
convertible Proportion of convertible
Nature of convertible corporate
No. Name of holder corporate bonds bonds held at the end of
holder bonds held at the
held at the the period
period-end (RMB)
period-end
Domestic
1 GF Securities Co., Ltd. general legal 3,900,000 390,000,000 15.46%
entity
Guosen Securities Co., State-owned
2 3,000,000 300,000,000 11.89%
Ltd. legal entity
Western Securities Co., State-owned
3 1,700,000 170,000,000 6.74%
Ltd. legal entity
China Life Pension
Hongxin Fixed Income
Fund, wealth
Pension Product -
4 management 1,300,000 130,000,000 5.15%
Industrial and
product, etc.
Commercial Bank of
China Limited
64
TCL Technology Group Corporation Interim Report 2022
China Life Pension
Sustaining Fixed Income Fund, wealth
5 Pension Product No. 9 - management 1,300,000 130,000,000 5.15%
China Merchants Bank product, etc.
Co., Ltd.
Domestic
Shenwan Hongyuan
6 general legal 1,000,000 100,000,000 3.96%
Group Co., Ltd.
entity
Zheshang Securities Co., State-owned
7 1,000,000 100,000,000 3.96%
Ltd. legal entity
China Life Insurance
(Group) Company Fund, wealth
8 Enterprise Annuity Plan- management 1,000,000 100,000,000 3.96%
Agricultural Bank Of product, etc.
China Limited
China Life Yongfeng
Enterprise Annuity Fund, wealth
9 Collective Plan- management 1,000,000 100,000,000 3.96%
Agricultural Bank Of product, etc.
China Limited
Taipingyang Investment
Strategy Co., Ltd. – Foreign legal
10 800,000 80,000,000 3.17%
Security Investment Fund entity
of China
Note: The table above was filled in based on the data of holders delivered by the Shenzhen Branch of China Securities Depository
and Clearing Corporation Limited.
4. Significant changes to the profitability, assets and credit standing of the guarantor
□ Applicable √ Not applicable
5. Liabilities and change in credit of the Company at the end of the Reporting Period, as well as future cash
arrangements for repayment
For details on financial indicators, including asset/liability ratio, interest coverage ratio, and loan repayment
rate, refer to the “Key accounting data and financial indicators of the Company for the past two years as at the end
of the Reporting Period” in this section.
The company issued targeted convertible bonds without debt rating.
V. Consolidated loss of the Reporting Period Exceeding 10% of Net Assets of the last year-end
□ Applicable √ Not applicable
VI. Key Accounting Data and Financial Indicators of the Company for the past two years as
at the end of the Reporting Period
End of the
Item December 31, 2021 Change
Reporting Period
Current ratio 1.03 1.08 -4.63%
Debt/asset ratio 63.9% 61.2% 2.74%
Quick ratio 0.8 0.8 -3%
H1 2022 H1 2021 Change
Net profit after non-recurring profit or
54,269 778,670 -93.03%
loss (in RMB10,000)
Debt to EBITDA ratio 6.99% 10.70% -3.71%
Interest coverage ratio 1.46 5.12 -71.48%
Cash coverage ratio 4.90 7.23 -32.23%
EBITDA coverage ratio 6.45 8.57 -24.74%
Debt repayment ratio 100% 100% 0.00
65
TCL Technology Group Corporation Interim Report 2022
Interest payment ratio 100% 100% 0.00
66
TCL Technology Group Corporation Interim Report 2022
Part IX Financial Report
(For the period from January 1, 2022 to June 30, 2022)
I. Auditor’s Report
Whether the 2022 semi-annual report has been audited or not?
□ Yes √ No
The Company’s 2022 semi-annual financial report has not yet been audited.
II. Financial Statements
The unit of the notes to the financial report is: RMB1,000.
TCL Technology Group Corporation
Consolidated Balance Sheet
___________(RMB’000)_____________
Note V June 30, 2022 January 1, 2022
Current assets
Monetary assets 1 33,795,517 31,393,692
Held-for-trading financial assets 2 8,975,013 7,601,256
Derivative financial assets 3 488,428 70,929
Notes receivable 4 772,065 776,202
Accounts receivable 5 19,085,233 18,238,782
Receivables financing 6 2,223,849 2,217,639
Prepayments 7 4,038,913 2,306,325
Other receivables 8 4,172,848 4,458,621
Inventories 9 14,025,004 14,083,357
Contract assets 10 275,288 233,529
Other current assets 11 4,160,806 5,802,960
Total current assets 92,012,964 87,183,292
Non-current assets
Debt investments 12 20,136 -
Long-term receivables 13 639,690 651,118
Long-term equity investments 14 26,665,070 25,640,578
Investments in other equity instruments 15 927,536 927,319
Other non-current financial assets 16 1,128,611 2,704,038
Investment property 17 793,033 761,902
Fixed assets 18 116,788,925 113,723,759
Construction in progress 19 43,418,950 37,029,504
Right-of-use assets 20 2,094,665 2,426,911
Intangible assets 21 16,169,914 14,000,546
Development costs 22 2,643,417 2,540,199
Goodwill 23 9,158,841 9,158,841
Long-term deferred expenses 24 2,469,122 2,640,530
Deferred income tax assets 25 2,816,973 2,150,423
Other non-current assets 26 12,608,680 7,449,009
Total non-current assets 238,343,563 221,804,677
Total assets 330,356,527 308,987,969
Person-in-
charge 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.
1
TCL Technology Group Corporation
Consolidated Balance Sheet (Continued)
___________(RMB’000)_____________
Liabilities and shareholder equity: Note V June 30, 2022 January 1, 2022
Current liabilities
Short-term borrowings 27 14,811,740 9,341,427
Borrowings from the Central Bank 28 728,744 1,437,062
Customer deposits and deposits from
other banks and financial institutions 29 265,745 666,056
Held-for-trading financial liabilities 30 989,803 925,035
Derivative financial liabilities 31 430,997 22,205
Notes payable 32 5,426,352 3,275,296
Accounts payable 33 24,185,474 24,297,860
Advances from customers 34 6,067 5,794
Contract liabilities 35 4,367,691 2,593,882
Employee compensation payable 36 2,575,269 3,311,933
Taxes and levies payable 37 744,597 1,238,849
Other payables 38 21,623,916 19,386,888
Current portion of non-current
liabilities due within a one-year period 39 11,957,256 13,006,765
Other current liabilities 40 1,530,424 1,269,887
Total current liabilities 89,644,075 80,778,939
Non-current liabilities
Long-term borrowings 41 96,482,488 87,279,082
Bonds payable 42 13,499,159 13,066,281
Lease liabilities 43 1,156,827 1,102,072
Long-term payables 44 723,672 671,344
Long-term employee compensation
36
payable 872,205 669,931
Deferred income 45 5,115,596 2,361,205
Deferred income tax liabilities 25 3,724,221 3,158,986
Total non-current liabilities 121,574,168 108,308,901
Total liabilities 211,218,243 189,087,840
Share capital 46 14,030,642 14,030,642
Other equity instruments 47 194,401 200,334
Capital reserves 48 4,185,575 6,079,267
Less: Treasury stock 49 2,311,664 1,885,557
Other comprehensive income 70 (764,462) (409,447)
Surplus reserves 50 2,550,173 2,550,173
Specific reserves 51 3,468 1,549
General risk reserve 52 8,934 8,934
Retained earnings 53 21,127,030 22,527,686
Total equity attributable to shareholders of
the parent company 39,024,097 43,103,581
Non-controlling interests 80,114,187 76,796,548
Total shareholders’ equity 119,138,284 119,900,129
Total liabilities and shareholder equity 330,356,527 308,987,969
Person-in-
charge 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.
2
TCL Technology Group Corporation
Consolidated Income Statement
___________(RMB’000)_____________
Note V January - June 2022 January - June 2021
1. Total revenue 84,560,760 74,479,982
Including: Revenue 54 84,522,181 74,405,849
Interest income 55 38,579 74,133
Less: Cost of sales 54 76,522,944 58,068,971
Interest expenditures 55 14,292 12,564
Taxes and levies 56 289,081 294,310
Selling expenses 57 1,053,369 901,176
Administrative expenses 58 1,716,379 2,023,368
R&D expenses 59 4,451,764 3,402,959
Financial expenses 60 1,720,157 1,818,983
Including: Interest expenses 2,031,269 2,160,434
Interest income 325,439 187,547
Plus: Other income 61 1,643,110 810,034
Return on investments 62 1,780,515 2,788,205
Including: Return on investment in
1,757,650 1,315,184
joint ventures and associates
Exchange gain 55 24,351 964
Gain on changes in fair value 63 114,495 (314,196)
Credit impairment loss 64 (27,157) (11,445)
Asset impairment loss 65 (1,010,287) (797,519)
Asset disposal income 66 (23,631) 24,327
2. Operating profit 1,294,170 10,458,021
Plus: Non-operating income 67 596,540 267,948
Less: Non-operating expenses 68 52,392 11,987
3. Gross profit 1,838,318 10,713,982
Less: Income tax expenses 69 (88,398) 1,416,497
4. Net profit 1,926,716 9,297,485
(1) Classification by business continuity
1. Net profit from continuing operations 1,926,716 9,239,189
2. Net profit from discontinued operations - 58,296
(2) Classification by ownership
1. Net profits attributable to the owners of
the parent company 663,521 6,802,218
2. Net profit attributable to non-controlling
interests 1,263,195 2,495,267
5. Other comprehensive income, net of tax 70 (372,997) (217,489)
5.1 Other comprehensive income that
cannot be reclassified into profit or loss (13,285) (184,359)
5.2 Other comprehensive income that may
subsequently be reclassified into profit or loss
upon satisfaction of prescribed condition (359,712) (33,130)
6. Total comprehensive income 1,553,719 9,079,996
Total comprehensive income attributable to
the shareholders of the parent company 308,506 6,566,398
Total comprehensive income attributable to
non-controlling interests 1,245,213 2,513,598
7. Earnings per share 71
7.1 Basic earnings per share (RMB yuan) 0.0489 0.5040
7.2 Diluted earnings per share (RMB yuan) 0.0485 0.4848
Person-in-
Person-in- charge of the
Legal charge accounting
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 January - June January - June
V 2022 2021
I. Cash flow from operations activities:
Proceeds from sale of commodities and rendering of
services 65,932,012 60,061,126
Net increase/(decrease) in customer deposits and deposits
from other banks and financial institutions (400,311) (602,777)
Net increase/(decrease) in borrowings from central bank (708,318) 634,916
Cash received from interest, handling charge and
commission 38,579 74,133
Tax and levy rebates 7,032,417 2,530,415
Cash generated from other operating activities 72 5,538,379 5,032,866
Sub-total of cash generated from operating activities 77,432,758 67,730,679
Payments for commodities and services (54,309,690) (42,679,165)
Net (increase)/decrease in loans and advances to customers (40,873) (720,348)
Net (increase)/decrease in deposits in central bank and
other banks and financial institutions (73,909) (309,934)
Cash paid to and for employees (6,631,511) (4,424,050)
Taxes and levies paid (1,689,737) (2,179,393)
Cash used in other operating activities 73 (5,670,402) (3,522,074)
Sub-total of cash used in operating activities (68,416,122) (53,834,964)
Net cash generated from operating activities 78 9,016,636 13,895,715
II. Cash flow from investing activities:
Proceeds from disinvestments 22,017,628 13,223,437
Proceeds from return on investments 254,501 945,622
Net proceeds from disposal of fixed assets, intangible
assets and other long-term assets 10,504 127,405
Net cash received from disposal of subsidiaries and other
business units - 511,576
Cash received from other related investing activities 74 73,748 7,079
Sub-total of cash generated from investment activities 22,356,381 14,815,119
Payments for the acquisition and construction of fixed
assets, intangible assets and other long-term assets (18,251,636) (13,684,031)
Cash paid for investments (21,384,892) (17,853,045)
Net cash paid for acquiring subsidiaries and other business
units - (4,139,505)
Cash used in other investing activities 75 (333,406) (101,676)
Subtotal of cash used in investing activities (39,969,934) (35,778,257)
Net cash used in investing activities (17,613,553) (20,963,138)
Person-in-
Person-in-charge charge of
Legal of financial the 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.
4
TCL Technology Group Corporation
Consolidated Cash Flow Statement (Continued)
___________(RMB’000)_____________
Note V January - June 2022 January - June 2021
III. Cash flow generated from financing activities:
Capital contributions received 5,365,010 8,413,591
Including: Cash received from minority shareholders
of subsidiaries 5,365,010 8,413,591
Borrowings raised 37,672,460 34,898,543
Net proceeds from issuance of bonds 4,500,000 2,499,800
Cash generated from other financing activities 76 6,000 249,287
Sub-total of cash generated from financing activities 47,543,470 46,061,221
Cash paid for debt repayment (28,355,640) (25,245,482)
Cash paid for dividend and profit distribution or
repayment of interests (4,802,831) (4,358,673)
Including: Dividends and profit paid by subsidiaries to
minority shareholders (289,774) (219,635)
Cash used in other financing activities 77 (4,454,836) (3,060,099)
Subtotal of cash used in financing activities (37,613,307) (32,664,254)
Net cash generated from financing activities 9,930,163 13,396,967
IV. Effect of exchange rate changes on cash and cash
equivalents 261,370 (44,249)
V. Net increase in cash and cash equivalents 1,594,616 6,285,295
Add: Balance of cash and cash equivalents at the beginning
of the year 30,081,705 18,208,417
VI. Closing balance of cash and cash equivalents 79 31,676,321 24,493,712
Person-in-
charge 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.
5
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity
___________(RMB’000)_____________
January - June 2022
Equity attributable to shareholders of the Company as the parent
Appropriation
Other Other Non- Shareholder
Share Capital Treasury Specific Surplus to Undistributed
equity comprehensive controlling equity
capital reserves stock Reserves reserves general profit
instruments income interests Total
reserve
1. Balance as at the end
of the prior year 14,030,642 200,334 6,079,267 (1,885,557) 1,549 (409,447) 2,550,173 8,934 22,458,340 76,611,057 119,645,292
Add: Adjustment for
change in accounting
policy - - - - - - - - 69,346 185,491 254,837
2. Balance as at the
beginning of the period 14,030,642 200,334 6,079,267 (1,885,557) 1,549 (409,447) 2,550,173 8,934 22,527,686 76,796,548 119,900,129
3. Increase/decrease in
the period - (5,933) (1,893,692) (426,107) 1,919 (355,015) - - (1,400,656) 3,317,639 (761,845)
3.1 Total comprehensive
income - - - - - (355,015) - - 663,521 1,245,213 1,553,719
3.2 Capital increased
and reduced by
shareholders - (5,933) (1,893,692) (426,107) - - - - - 4,249,509 1,923,777
1. Capital increased by
shareholders - - - - - - - - - 4,735,695 4,735,695
2. Capital increased by
holders of other equity
instruments - (5,933) 3,902 - - - - - - - (2,031)
3. Share-based
payments included in
owner equity - - 492 76,664 - - - - - - 77,156
4. Others - - (1,898,086) (502,771) - - - - - (486,186) (2,887,043)
3.3 Profit distribution - - - - 1,919 - - - (2,050,003) (2,177,083) (4,225,167)
1. Appropriation of
surplus reserves - - - - - - - - - - -
2. Appropriation of
general risk reserves - - - - 1,919 - - - - - 1,919
3. Appropriation to
shareholders - - - - - - - - (2,050,003) (2,177,083) (4,227,086)
4. Others - - - - - - - - - - -
(4) Others - - - - - - - - (14,174) - (14,174)
4. Balance as at the end
of the period 14,030,642 194,401 4,185,575 (2,311,664) 3,468 (764,462) 2,550,173 8,934 21,127,030 80,114,187 119,138,284
Person-in-charge of the
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian financial department: 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 Shareholders’ Equity (Continued)
___________(RMB’000)_____________
2021
Equity attributable to shareholders of the Company as the parent
Appropriation Non-controlli Shareholder
Other Other
Share Capital Treasury Specific Surplus to Undistributed ng equity
equity comprehensive
capital reserves stock Reserves reserves general profit interests Total
instruments 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 period 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 8,518,192 20,847,276 - 29,843,062
3.1 Total comprehensive income - - - - - - - - (141,053) - - - - 10,126,790 5,106,886 - 15,092,623
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. Others - - 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 risk
reserves - - - - - - - 1,338 - - - - 8,548 (8,548) - - 1,338
3. Appropriation to shareholders - - - - - - - - - - - - - (1,625,590) (287,220) - (1,912,810)
4. Others - - - - - - - - - - - - - - (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 22,527,686 76,796,548 - 119,900,129
Person-in-charge of the
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian financial 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
___________(RMB’000)_____________
assets Note XV June 30, 2022 January 1, 2022
Current assets
Monetary assets 14,893,969 10,467,962
Held-for-trading financial assets 5,516,389 4,372,557
Derivative financial assets 3,792 -
Accounts receivable 1 136,918 93,566
Prepayments 121,790 47,333
Other receivables 2 29,868,004 13,819,512
Inventories 23,395 41,029
Other current assets 24,343 15,011
Total current assets 50,588,600 28,856,970
Non-current assets
Long-term equity investments 3 73,567,164 71,303,126
Investments in other equity
4
instruments 5,000 5,000
Other non-current financial assets 5 126,644 1,051,536
Investment property 82,906 84,795
Fixed assets 33,569 37,402
Construction in progress 1,360 1,360
Right-of-use assets 440,425 452,398
Intangible assets 88,136 93,324
Long-term deferred expenses 25,163 26,079
Deferred income tax assets - 12
Total non-current assets 74,370,367 73,055,032
Total assets 124,958,967 101,912,002
Person-in-
charge 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.
8
TCL Technology Group Corporation
Balance Sheet of the Parent Company (Continued)
___________(RMB’000)_____________
Liabilities and shareholder equity: Note XV June 30, 2022 December 31, 2021
Current liabilities
Short-term borrowings 3,500,281 1,250,989
Accounts payable 128,836 141,877
Contract liabilities 78,650 23,823
Employee compensation payable 170,041 294,653
Taxes and levies payable 68,075 13,076
Other payables 47,315,655 38,597,139
Current portion of non-current liabilities
due within a one-year period 7,176,374 4,843,348
Other current liabilities 713 4,284
Total current liabilities 58,438,625 45,169,189
Non-current liabilities
Long-term borrowings 14,490,000 12,898,000
Bonds payable 11,491,205 11,159,524
Lease liabilities 6,648 13,365
Long-term employee compensation
payable 207,213 108,384
Deferred income 58,638 60,198
Total non-current liabilities 26,253,704 24,239,471
Total liabilities 84,692,329 69,408,660
Share capital 14,030,642 14,030,642
Other equity instruments 194,401 200,334
Capital reserves 9,900,366 9,900,679
Less: Treasury stock 2,311,664 1,885,557
Other comprehensive income (108,127) (112,194)
Surplus reserves 2,348,109 2,348,109
Retained earnings 16,212,911 8,021,329
Total shareholders’ equity 40,266,638 32,503,342
Total liabilities and shareholder equity 124,958,967 101,912,002
Person-in-
Person-in-charge charge 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 parent company
___________(RMB’000)_____________
Note XV January - June 2022 January - June 2021
1. Revenue 6 589,571 773,672
Less: Cost of sales 6 412,401 635,555
Taxes and levies 1,961 9,370
Selling expenses 31,939 14,403
Administrative expenses 136,116 228,082
R&D expenses 78,136 64,151
Financial expenses 876,773 840,141
Including: Interest expenses 1,271,057 1,232,115
Interest income 391,725 411,290
Plus: Other income 2,901 1,757
Return on investments 7 10,607,557 1,851,151
Including: Gains on investment in joint ventures and
associates 7 690,201 627,705
Gain on changes in fair value 24,470 41,889
Credit impairment loss 26 19
Asset disposal income 987 -
2. Operating profit 9,688,186 876,786
Plus: Non-operating income 574,945 206,554
Less: Non-operating expenses 7,360 1,965
3. Gross profit 10,255,771 1,081,375
Less: Income tax expenses 12 -
4. Net profit 10,255,759 1,081,375
5. Other comprehensive income 4,068 (152,039)
6. Total comprehensive income 10,259,827 929,336
Person-in-
Person-in-charge charge 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 January - June 2022 January - June 2021
I. Cash flow from operations activities:
Proceeds from sale of commodities and
rendering of services 421,044 618,146
Tax and levy rebates 1,714 -
Cash generated from other operating activities 1,592,522 21,091,888
Sub-total of cash generated from operating
activities 2,015,280 21,710,034
Payments for commodities and services (453,962) (487,959)
Cash paid to and for employees (141,860) (97,433)
Taxes and levies paid (36,637) (133,486)
Cash used in other operating activities (407,266) (1,102,683)
Sub-total of cash used in operating activities (1,039,725) (1,821,561)
Net cash generated from operating activities 8 975,555 19,888,473
II. Cash flow from investment activities:
Proceeds from disinvestments 6,242,022 7,176,816
Proceeds from return on investments 70,898 1,855,032
Net proceeds from disposal of fixed assets,
intangible assets and other long-term
assets 24 -
Sub-total of cash generated from investment
activities 6,312,944 9,031,848
Payments for the acquisition and construction
of fixed assets, intangible assets and
other long-term assets (5,860) (15,930)
Cash paid for investment (6,974,584) (20,669,875)
Cash used in other investing activities - -
Subtotal of cash used in investing activities (6,980,444) (20,685,805)
Net cash used in investing activities (667,500) (11,653,957)
Person-in-
Person-in-charge charge 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 January - June 2022 January - June 2021
III. Cash flow generated from financing activities:
Capital contributions received - -
Borrowings raised 14,931,000 8,200,000
Net proceeds from issuance of bonds 4,500,000 2,499,800
Cash generated from other financing activities 106,878 -
Sub-total of cash generated from financing
activities 19,537,878 10,699,800
Cash paid for debt repayment (12,364,006) (10,571,804)
Cash paid for distribution of dividends and profits
or repayment of interests (2,625,194) (2,236,916)
Cash used in other financing activities (535,295) (409,734)
Subtotal of cash used in financing activities (15,524,495) (13,218,454)
Net cash generated from financing activities 4,013,383 (2,518,654)
IV. Effect of exchange rate changes on cash and cash
equivalents 15,223 (18,448)
V. Net increase in cash and cash equivalents 4,336,661 5,697,414
Add: Balance of cash and cash equivalents at the
beginning of the year 10,401,379 2,196,283
VI. Closing balance of cash and cash equivalents 9 14,738,040 7,893,697
Person-in-
Person-in-charge charge 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
___________(RMB’000)_____________
January - June 2022
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 14,030,642 200,334 9,900,679 (1,885,557) (112,194) 2,348,109 8,021,329 32,503,342
Add: Adjustment for change in
accounting policy - - - - - - - -
2. Balance as at the beginning 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
3. Increase/decrease in the
period - (5,933) (313) (426,107) 4,067 - 8,191,582 7,763,296
3.1 Total comprehensive income - - - - 4,067 - 10,255,759 10,259,826
3.2 Capital increased and reduced
by shareholders - (5,933) (313) (426,107) - - - (432,353)
1. Capital increased by owners - - - - - - - -
2. Capital increased by holders of
other equity instruments - (5,933) 3,902 - - - - (2,031)
3. Share-based payments included in
owner equity - - 492 76,664 - - - 77,156
4. Others - - (4,707) (502,771) - - - (507,478)
3.3 Profit distribution - - - - - - (2,050,003) (2,050,003)
1. Appropriation of surplus reserves - - - - - - - -
2. Appropriation to shareholders - - - - - - (2,050,003) (2,050,003)
3. Others - - - - - - - -
(4) Others - - - - - - (14,174) (14,174)
4. Balance as at the end of the
period 14,030,642 194,401 9,900,366 (2,311,664) (108,127) 2,348,109 16,212,911 40,266,638
Person-in-charge of
Legal Person-in-charge 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.
13
TCL Technology Group Corporation
Statement of Changes in Shareholders’ Equity of the Company (Continued)
___________(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 period 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 comprehensive income - - - - (259,690) - 978,304 718,614
3.2 Capital increased and reduced
by shareholders (146) (29,907) 53,844 27,472 - - - 51,263
1. Capital increased by owners - - - - - - - -
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) - (3,278) 118,560 - - 115,136
4. Others - - (18,339) (629,060) - - (647,399)
3.3 Profit distribution - - - - - 97,831 (1,723,421) (1,625,590)
1. Appropriation of surplus
reserves - - - - - 97,831 (97,831) -
2. Appropriation to shareholders - - - - - - (1,625,590) (1,625,590)
3. Others - - - - - - - -
3.4 Transfers within owners’
equity - - - - 5,498 (550) (4,948) -
1. Other comprehensive income
transferred into retained earnings - - - - 5,498 (550) (4,948) -
4. Balance as at 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
Legal Person-in-charge 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.
14
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
I General information
(1) 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 Company Law of the People's Republic of China (hereinafter referred to as the “Company
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 common 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 the issue, 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 common 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 the issue, 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 common 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, 2022 to June 30, 2022
___________(RMB’000)_____________
I General information (continued)
(1) 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
April 30, 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 the issue, 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.
During 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.
During 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 decreased 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).
During 2017, the Company acquired stake 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 issue, the total share
capital of the Company increased from 12,213,681,742 shares to 13,514,972,063 shares.
During 2018, the Proposal on the Grant of Restricted Stock to Awardees was approved at the 7th Meeting of
the Sixth Session of the Board of Directors, and a total of 34,676,444 shares were subscribed for under the
restricted stock 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
subject to lockup restriction. As such, the total share capital of the Company decreased from 13,549,648,507
to 13,528,438,719 shares.
During 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 Sixth Session of the 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 subject to lockup restriction. 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 a
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.
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 June 30, 2022, the total issued share capital of the Company was 14,030,642,421 shares. See note V.
16
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
46 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.
(2) 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).
(3) Authorization of publishing the financial report
These financial statements were authorized for publishing by the Company’s Board of Directors on August
26, 2022.
II Scope of consolidated financial statements
As at the end of the reporting period, for subsidiaries included in the consolidated financial statements,
please refer to Note 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, 2022 to June 30, 2022
___________(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 an accounting year is from January 1 to
December 31.
5 Operations cycle
The Company does not take the operating cycle as the criteria for liquidity classification of assets and
liabilities.
6 Functional currency for bookkeeping
Renminbi ("RMB") is both the functional currency and the presentation currency for preparation of the
financial statements. Unless otherwise specified, these financial statements shall be presented in the unit of
RMB'000.
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-by-step
combination conform to one or more of the following, accounting for multiple transactions is treated as a
package transaction:
(a) these transactions are made simultaneously or with consideration of influence on each other;
(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 at the carrying
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
carrying value of net assets acquired in the combination and that of the consideration paid for the combination
(or the total par value of shares issued) is used to adjust the 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 liabilities or assets and the settlement 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, 2022 to June 30, 2022
___________(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 owners' equity attributable to the parent company 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 at the
carrying value of the owners' 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, 2022 to June 30, 2022
___________(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 by the Company as a consideration for the business
combination are measured at fair value on the date of purchase, and the difference between the fair value and
the carrying 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
acquiree 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 acquiree gained in the combination,
and the difference is still less than the fair value of identifiable net assets of the acquiree 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 statements 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 acquiree 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 investments by the
equity method before the date of acquisition is accounted for, when the investment is disposed, on the same
basis as those the investee adopted directly to dispose of the relevant assets or liabilities.
If the equity investment held before the date of combination is accounted for by financial instrument
recognition and measurement criteria, the sum of the fair value of equity investment on the date of
combination plus the new investment cost is taken as the initial investment cost on the date of combination.
The difference between the fair value and the carrying 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 acquiree 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 acquiree 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, 2022 to June 30, 2022
___________(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 owners' equity of the subsidiary, the balance will still reduce the minority interests.
During the reporting period, if a subsidiary or business is added due to the business combination involving enterprises
under common control, the opening 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 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 a subsidiary or business is added due to a business combination involving enterprises under
non-common control, the opening balance of the consolidated balance sheet is not adjusted; the income, expenses and
profits of the subsidiary or business from the date of acquisition to the end of the reporting period are included in the
consolidated income statement; the cash flow of the subsidiary or business from the date of acquisition to the end of the
reporting period is included in the consolidated cash flow statement.
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 investee 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 owners' equity other than
profit distribution, will be transferred 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 investee or
changes in net assets.
21
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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 indicates that the joint venturers 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 joint venturers have rights to the assets,
and obligations for the liabilities, relating to the arrangement.
③ Other relevant facts and circumstances show that the joint venturers have rights to the assets, and
obligations for the liabilities, relating to the arrangement. For example, the joint venturers are eligible to
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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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 contract
holder who has suffered losses when a specific debtor fails to pay the debt in accordance with the original or
modified terms of the debt instrument. Financial guarantee contracts that are not financial liabilities
designated as measured at fair value through profit or loss are measured after initial recognition according to
the loss reserve amount and of the initial recognition amount, less the accumulated amortization amount
during the guarantee period, whichever is higher.
(3) Derecognition of financial assets and liabilities
(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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 economic
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, 2022 to June 30, 2022
___________(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
(b)
the 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, 2022 to June 30, 2022
___________(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, 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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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 or 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 acquiree 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 acquiree 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, 2022 to June 30, 2022
___________(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 owners' 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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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:
Estimated Service Annual
Asset Category
Life Depreciation Rate
Houses and buildings 20-50 years 2.22%-5%
Machinery equipment 5-10 years 11.11%-20%
Office and electronic equipment 2-5 years 22.22%-50%
Transportation equipment 3-5 years 22.22%-33.33%
Power stations 20-25 years 4.44%-5%
Others 4-5 years 22.22%-25%
Fixed assets renovation is amortized evenly over the benefit period.
All fixed assets are subject to depreciation, except for fixed assets that have been fully depreciated and
continue to be used, and the land that is priced and recorded separately. Fixed assets are depreciated on a
monthly basis. Fixed assets added are not depreciated in the current month when being added but from the
following month; fixed assets reduced are still depreciated in the current month when being reduced, and no
depreciation is made from the following month. Fixed assets that are not profitable for the Company or not
used temporarily (other than seasonally deactivated) are recognized as idle fixed assets. The estimated life
expectancy and depreciation rate of idle fixed assets should be re estimated, and depreciation is directly
included in the current profit and loss.
42
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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 recognized as the
amount of capitalization. When a general loan is occupied for the purpose of purchasing, constructing or
producing assets satisfied the capitalization conditions, the amount of capitalization is determined according
to the weighted average of the accumulated asset expenditure exceeding the special loan portion multiplied by
the capitalization rate of the general loan occupied; the capitalization rate is determined based on the
weighted average interest rate of general borrowings.
43
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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 years
Land use rights
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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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 fixed
(a)
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 owners' equity after the vesting date.
49
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(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, 2022 to June 30, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
40 Leases
From the effectiveness date of a contract, the Company assesses whether the contract is a lease or includes
any lease. If a party to the contract transfers the right allowing the control over the use of one or more assets
that have been identified within a certain period, in exchange for a consideration, such contract is a lease or
includes a lease.
(1) Lease contract split
If a contract contains multiple single leases at the same time, the Company will split the contract, and conduct
accounting treatment of each single lease respectively.
If a contract contains both lease and non-lease parts at the same time, the Company will split the lease and
non-lease parts, conduct accounting treatment of the lease part in accordance with the accounting standards
governing leases, and conduct accounting treatment of the non-lease part in accordance with other applicable
corporate accounting standards.
(2) Lease contract combination
With regard to two or multiple contracts containing leases concluded by the Company with the same
counterparty or its related parties at the same or a similar time, when any of the following conditions is met,
the contracts are combined into one contract for accounting treatment:
Two or multiple contracts are concluded based on an overall business purpose and 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 depends 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 straightline basis or according to other
systemic and reasonable methods.
Item Simplified leased asset type
Short-term lease A lease whose lease term does not exceed 12 months from the commencement date
of the lease term
Low-value asset lease An asset lease with a value of less than RMB40,000 or its foreign currency
equivalents
55
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
40 Leases (continued)
(3) Accounting treatment with the Company as lessee (continued)
The Company recognises the right-of-use assets and lease liabilities for short-term leases and low-value asset
leases other than those mentioned above.
The accounting policies for right-of-use assets and lease liabilities are detailed in Note III, 26 and Note III,
(b)
34.
(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.
56
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
40 Leases (continued)
(4) Accounting treatment with the Company as lessor (continued)
(c) Accounting treatment of operating leases
For each period of the lease term, the Company adopts the straight-line method or other systematic and
reasonable methods to recognize the lease receipts of the operating lease as rental income; the Company
capitalizes the initial direct expenses incurred in connection with the operating lease, amortizes them over the
lease term on the same basis as that for the recognition of the rental income, and includes them in the current
profit and loss by stage; the Company includes the variable lease payments, obtained in connection with the
operating lease that are not included in the lease receipts, in the current profit and loss when actually incurred.
(5) Sale and leaseback
(a) The Company as seller and lessee
If the asset transfer in a sale and leaseback transaction is a sale, the Company will measure the right-of-use
assets formed by the sale and leaseback based on the portion of the original asset’s carrying 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.
41 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.
57
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
42 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.
43 Changes to major accounting policies and estimates
(1) Change of accounting policy
Impact of the adoption of the Interpretation to Accounting Standards for Business Enterprises No. 15 on the
(a)
Company
On December 31, 2021, the Ministry of Finance issued the Interpretation to Accounting Standards for
Business Enterprises No. 15(Cai Kuai [2021] No. 35, hereinafter referred to as the "Interpretation No. 15").
Interpretation No. 15 outlined that "the accounting treatment of the external sales of products or by-products
produced before the fixed assets reach the intended serviceable state or during the R&D process" (hereinafter
referred to as "trial sales") and "the judgment on loss-making contracts", effective from January 1, 2022.
①Accounting treatment of the external sales of products or by-products produced before the fixed assets
reach the intended serviceable state or during the R&D process
For trial sales that occurred between the beginning of the period (i.e. January 1, 2021) and the implementation
date of the Interpretation (January 1, 2022), the Company has made retroactive adjustments in accordance
with Interpretation No. 15.
According to the provisions of Interpretation No. 15, the Company adjusted the relevant items of the balance
sheet as follows:
December 31, 2021
Accumulated amount
Balance Sheet items
Before the Change impacted before After the Change
change
Fixed assets 113,579,297 144,462 113,723,759
Construction in
progress 36,965,885 63,619 37,029,504
Intangible assets 13,982,647 17,899 14,000,546
Development costs 2,508,419 31,780 2,540,199
Deferred income tax
assets 2,153,346 -2,923 2,150,423
Retained earnings 22,458,340 69,346 22,527,686
Non-controlling
interests 76,611,057 185,491 76,796,548
58
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
43 Changes to Major Accounting Policies and Estimates (continued)
(1) Changes to Accounting Policies (continued)
The Company adjusted the relevant items presented in the income statement and the cash flow statement as
follows:
January - June 2021
Items presented in the
Accumulated amount
income statement and
Before the Change impacted before After the Change
cash flow statement
change
Revenue 74,298,647 107,202 74,405,849
Cost of sales 57,984,972 83,999 58,068,971
R&D expenses 3,428,197 (25,238) 3,402,959
Income tax expense 1,413,574 2,923 1,416,497
② Judgment on onerous contracts
The Company has not fulfilled all obligations when it first implemented Interpretation No. 15 (January 1,
2022), and the implementation of this provision has no significant impact on the Company's financial
statements for comparable periods.
Changes to
(2) accounting
estimates
No change occurred to the major accounting estimates in the reporting period.
44 Correction of previous accounting errors
No previous accounting errors were identified and corrected in the reporting period.
59
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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.
60
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax
The corporate income tax rate for the Company was 15% in the current period.
According to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, a reduced corporate income
tax rate of 15% is applied to important high-tech enterprises that the government supports.
The following subsidiaries are entitled to tax preferences, overseas subsidiaries adopt the local 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., 15% High-tech enterprise
Ltd.
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.
Suzhou China Star Optoelectronics Technology Co., 15% High-tech enterprise
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 15% High-tech enterprise
Material&Technology Co., Ltd.
TianJin Zhonghuan 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
Inner Mongolia Zhonghuan Crystal Materials Co.,
15% High-tech enterprise
Ltd.
Tianjin Huanzhi New Energy Technology 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
Shenzhen Qianhai Maojia Software Technology Co.,
15% High-tech enterprise
Ltd.
Inner Mongolia Zhonghuan Crystal Materials Co., High-tech enterprise, encouraged business in
15%
Ltd. West China
Ningxia Zhonghuan Solar Material Co., Ltd. 15% Encouraged business in West China
Phase I and Phase II projects of Hohhot Huanju New 15% State-supported public infrastructure project,
Energy Development Co., Ltd. 7.5% encouraged business in West China
Inner Mongolia Zhonghuan Advanced
12.5%
Semiconductor Material Co., Ltd. Encouraged business in West China
Yixing Huanxing New Energy Co., Ltd. 12.5% State-supported public infrastructure project
Guyuan Shengju New Energy Co., Ltd. 12.5% State-supported public infrastructure project
Shangqiu Yaowei Photovoltaic Power Generation 12.5%
Co., Ltd. State-supported public infrastructure project
Tianjin Huanyu Yangguang New Energy Technology 12.5%
Co., Ltd. State-supported public infrastructure project
61
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
Huludao Zhongrun Energy Technology Co., State-supported public infrastructure
12.5%
Ltd. project
State-supported public infrastructure
Qinhuangdao Tianhui Solar Energy Co., Ltd. 12.5%
project
Huludao Xincheng New Energy Technology State-supported public infrastructure
12.5%
Co., Ltd. project
State-supported public infrastructure
Zhangjiakou Shengyuan New Energy Co., Ltd. 12.5%
project
State-supported public infrastructure
Dushan Anju Photovoltaic Technology Co., 7.5% project, encouraged business in West
Ltd. China
State-supported public infrastructure
Sonid Left Banner Huanxin New Energy Co., 7.5% project, encouraged business in West
Ltd. 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 Huanyu Yangguang New 7.5% project, encouraged business in West
Energy Technology Co., Ltd. China
State-supported public infrastructure
Gengma Huanxing New Energy Co., Ltd. 7.5% project, encouraged business in West
China
State-supported public infrastructure
Shaanxi Runhuan Tianyu Technology Co., Ltd. Tax-free project, encouraged business in West
China
Tianjin Binhai Huanneng New Energy Co., State-supported public infrastructure
Tax-free
Ltd. project
Gaoqing Huanyuan Energy Technology Co., State-supported public infrastructure
Tax-free
Ltd. project
Gaoqing Chengguang Energy Technology Co., State-supported public infrastructure
Tax-free
Ltd. project
State-supported public infrastructure
Ningjin Jinchen New Energy Co., Ltd. Tax-free
project
State-supported public infrastructure
Ongniud Banner Guangrun New Energy Co., 7.5% project, encouraged business in West
Ltd. China
State-supported public infrastructure
Tuquan Guanghuan New Energy Co., Ltd. 7.5% project, encouraged business in West
China
State-supported public infrastructure
Dangxiong Youhao New Energy Development 7.5% project, encouraged business in West
Co., Ltd. China
62
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
Shangqiu Suoguang Energy Technology Co., 2.5% ~ 10% Small low-profit business
Ltd.
Shangqiu Suoyuan Energy Technology Co., 2.5% ~ 10% Small low-profit business
Ltd.
Inner Mongolia Zhonghuan Construction 2.5% ~ 10% Small low-profit business
Management Co., Ltd.
Inner Mongolia Environmental Energy 2.5% ~ 10% Small low-profit business
Resources Development Co., Ltd.
Ulanqab Dishengsheng Energy Co., Ltd. 5.0% Small low-profit business
Tongliao Guangdong New Energy Co., Ltd. 5.0% Small low-profit business
Alxa League Huanju New Energy Co., Ltd. 5.0% Small low-profit business
Jinxiang Haotian New Energy Co., Ltd. 5.0% Small low-profit business
Inner Mongolia Zhonghuan Asset 5.0% Small low-profit business
Management Co., Ltd.
Inner Mongolia Huanya Hotel Management 5.0% Small low-profit business
Co., Ltd.
Shangqiu Suoneng Energy Technology Co., 2.5% Small low-profit business
Ltd.
Tianjin Zhonghuan Zhongda Technology Co., 2.5% 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 Zhonghuan Hengda Technology Co., Small low-profit business
2.5%
Ltd.
Tianjin Yingtuo Computer Control Small low-profit business
2.5%
Technology Co., Ltd.
Tianjin Zhongdian High Tech Co., Ltd. 2.5% Small low-profit business
Tianjin Zhonghuan Electronic Instrument Small low-profit business
2.5%
Co., Ltd.
According to the Notice on Implementing Inclusive Tax Reduction and Exemption Policies for Small and
Micro Enterprises (Cai Shui [2019] No. 13) issued by the Ministry of Finance and the State Administration of
Taxation on January 17, 2019 and the Announcement on Implementing Preferential Income Tax Policies for
Small and Micro Enterprises and Individual Industrial and Commercial Households(Announcement No. 12
[2021] of the Ministry of Finance and State Administration of Taxation) issued by the Ministry of Finance and
the State Administration of Taxation on April 2, 2021, the annual taxable income of a small low-profit
enterprise that is not less than RMB1 million shall be included in its taxable income at the reduced rate of
25%, and shall be eligible to halve its corporate income tax after it pays corporate income tax with tax rate of
20% thereafter for the period from January 1, 2021 to December 31, 2022.
According to the Announcement on Further Implementing Preferential Income Tax Policies for Small and
Micro Enterprises issued by the Ministry of Finance and the State Administration of Taxation on March 14,
2022 (Announcement No. 13 [2022] of the Ministry of Finance and the State Administration of Taxation),
from January 1, 2022 to December 31, 2024, the annual taxable income of small and low-profit enterprises
exceeding RMB1 million but at no more than 3 million yuan will be included in the taxable income at a
reduced rate of 25%, and the enterprise income tax will be paid at the rate of 20%. .
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.
63
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements
1 Monetary assets
June 30, 2022 December 31, 2021
Cash on hand 601 789
Bank deposits 30,617,093 29,049,850
Deposits with the central bank 433,812 481,162
Interest receivable on deposits 196,410 64,825
Other monetary assets 2,547,601 1,797,066
33,795,517 31,393,692
Note Monetary assets with restricted use rights
June 30, 2022 December 31, 2021
TCL Tech Finance's statutory reserve deposits with the
central bank 432,087 358,178
Interest receivable on deposits 196,410 64,825
Other restricted monetary assets 1,490,699 888,984
2,119,196 1,311,987
On June 30, 2022, the Company's bank deposits of RMB432,087 thousand (At the end of 2021:
RMB358,178 thousand) were statutory deposit reserves deposited with the Central Bank by TCL Technology
Group Finance Co., Ltd., a subsidiary of the Company.
On June 30, 2022, the Company’s monetary assets offshore amounted to RMB3,059,740 thousand (At the
end of 2021: RMB2,817,430 thousand), all of which were owned by the overseas subsidiaries of the
Company.
64
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
June 30, 2022 December 31, 2021
Financial assets at fair value through profit or loss 8,975,013 7,601,256
Including: Debt instrument investments 8,715,145 7,288,741
Equity instrument investments 259,868 312,515
8,975,013 7,601,256
3 Derivative financial assets
June 30, 2022 December 31, 2021
Foreign exchange forwards 377,658 59,063
Interest rate swaps 110,407 11,866
Others 363 -
488,428 70,929
4 Notes receivable
(1) Notes receivable by category
June 30, 2022 December 31, 2021
Bank acceptance notes 502,406 775,423
Letter of credit 268,962 -
Trade acceptance notes 697 779
772,065 776,202
65
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
4 Notes receivable (continued)
(1) Notes receivable by category (continued)
June 30, 2022 December 31, 2021
Gross amount Allowance Gross amount Allowance
Carrying Carrying
Ratio Ratio
Amount Amount Percentage amount Amount Amount Percentage amount
(%) (%)
Notes receivable for
which the allowance for
doubtful accounts were
established on the
grouping basis 772,065 100% - - 772,065 776,202 100% - - 776,202
Including: group with no
recovery risk 771,368 99.91% - - 771,368 775,423 99.90% - - 775,423
By aging analysis 697 0.09% - - 697 779 0.10% - - 779
772,065 100% - - 772,065 776,202 100% - - 776,202
(2) On June 30, 2022, notes receivable in pledge were RMB278,564 thousand.
(3) Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were derecognized
as on June 30, 2022 amounted to RMB395,695 thousand. Endorsed or discounted notes receivable that were not
outstanding on the balance sheet date and were not derecognized as amounted to RMB103,639 thousand.
5 Accounts receivable
June 30, 2022 December 31, 2021
Accounts receivable 19,525,099 18,657,744
Less: allowance for doubtful accounts 439,866 418,962
19,085,233 18,238,782
66
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
Accounts receivable in the period from January 1, 2022 to June 30, 2022 are classified as follows by
(1) how the allowances for doubtful accounts were provisioned :
June 30, 2022
Gross amount Allowance
Lifetime
ECL rate Gross amount
Accounts receivable for which the related
allowances for doubtful accounts were
established on the individual basis 209,909 100% 209,903
Of which:
Accounts receivable 209,909 100% 209,903
Accounts receivable for which the
related allowances for doubtful accounts
were established on the grouping basis 19,315,190 1.19% 229,963
Of which:
Group 1: By aging analysis 13,841,352 1.53% 211,226
Group 2 ： by related party grouping 4,378,861 0.43% 18,737
Group 3: Group with no recovery risk 1,094,978 - -
19,525,099 439,866
(2) The aging of accounts receivable is analysed as follows:
June 30, 2022 December 31, 2021
Amount Ratio (%) Amount Ratio (%)
Within 1 year 18,102,946 92.72% 17,493,941 93.76%
1 to 2 years 535,372 2.74% 465,391 2.49%
2 to 3 years 325,706 1.67% 309,150 1.66%
Over 3 years 561,075 2.87% 389,262 2.09%
19,525,099 100% 18,657,744 100%
67
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
(3) Allowances for doubtful accounts receivable are analysed as follows:
June 30, 2022 December 31, 2021
Beginning amount 418,962 281,281
New subsidiary - 33,745
Accrued in current period 39,854 209,480
Reversal of current period (18,627) (86,588)
Write-off of current period (1,200) (12,759)
Reduced subsidiary - (5,381)
Exchange adjustment 877 (816)
Ending amount 439,866 418,962
(4) On June 30, 2022, the accounts receivable of the top five balances are as follows:
June 30, 2022 December 31, 2021
Total amount owed by the top five 8,856,242 8,922,641
Proportion of total accounts receivable 45.36% 47.82%
6 Receivables financing
June 30, 2022 December 31, 2021
Notes receivable financing 2,223,849 2,217,639
2,223,849 2,217,639
Note Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were
derecognized on June 30, 2022 amounted to RMB25,046,597 thousand.
On June 30, 2022, the Company was of the opinion that the held receivables financing did not have
significant credit risk and would not cause significant losses due to default.
68
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
June 30, 2022 December 31, 2021
Within 1 year 3,995,436 2,297,910
1-2 years 38,958 6,560
2-3 years 4,277 1,376
Over 3 years 242 479
4,038,913 2,306,325
(2) As of June 30, 2022, the prepayments of the top five balances are as follows:
June 30, 2022 December 31, 2021
Total amount owed by the top five 2,191,727 1,681,650
As % of total prepayments 54.27% 72.91%
8 Other receivables
June 30, 2022 December 31, 2021
Dividends receivable 335,077 -
Other receivables 3,837,771 4,458,621
4,172,848 4,458,621
(1) Dividends receivable
June 30, 2022 December 31, 2021
Bank of Shanghai Co., Ltd. 327,157 -
Tianjin 712 Communication & 7,777
Broadcasting Co., Ltd. -
Others 143 -
335,077 -
69
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(2) Other receivables
June 30, 2022 December 31, 2021
Other receivables 4,063,658 4,681,100
Less: allowance for
doubtful accounts 225,887 222,479
3,837,771 4,458,621
(a) Nature of other receivables is analyzed as follows:
June 30, 2022 December 31, 2021
Subsidy receivable 1,985,491 1,696,203
Equity transfer receivables 708,265 1,480,960
Receivables from external
entities 535,127 832,197
Security deposits 513,792 421,430
Others 95,096 27,831
3,837,771 4,458,621
(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 76,254 120,291 25,934 222,479
Current accrual 5,498 23 - 5,521
Reversal of current
period (3) (912) (255) (1,170)
Write-off of current
period - (652) (254) (906)
Exchange
adjustment (37) - - (37)
June 30, 2022 81,712 118,750 25,425 225,887
70
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
June 30, 2022 December 31, 2021
Carrying amount Ratio (%) Carrying amount Ratio (%)
Within 1 year 3,291,864 81.00% 3,991,248 85.26%
1 to 2 years 347,626 8.55% 292,805 6.26%
2 to 3 years 258,533 6.37% 228,974 4.89%
Over 3 years 165,635 4.08% 168,073 3.59%
4,063,658 100% 4,681,100 100%
(d) As of June 30, 2022, the other receivables of the top five balances are as follows:
June 30, 2022 December 31, 2021
Total amount owed by the top
five 2,754,201 3,381,203
As % of total other
receivables 67.78% 72.23%
(e) On June 30, 2022, there was no transfer of other receivables that did not conform to the conditions for
derecognition in the balance of this account; no transaction arrangement for asset securitization with other
receivables as the subject asset; and no financial instrument that was the subject of securitization and did not
conform to the conditions for derecognition.
71
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventories are classified as follows:
June 30, 2022 December 31, 2021
Provision for Provision for
depreciation depreciation
of of
inventories / inventories /
provision provision
for for
impairment impairment
of contract of contract Carrying
Gross performance Carrying Gross performance amount
amount costs amount amount costs
Raw
materials 4,220,419 698,908 3,521,511 4,247,095 652,265 3,594,830
Work in
progress 2,778,138 334,073 2,444,065 2,705,288 321,606 2,383,682
Finished
Goods 8,816,198 1,089,257 7,726,941 8,541,513 823,701 7,717,812
Turnover
materials 333,643 1,156 332,487 388,135 1,102 387,033
16,148,398 2,123,394 14,025,004 15,882,031 1,798,674 14,083,357
On June 30, 2022, the Company had no inventory for liabilities guarantee.
(2) Provision for depreciation of inventories / provision for impairment of contract performance costs:
January 1, Current Current Current Exchange June 30,
2022 Accrual Reversal Write-off Adjustment 2022
Raw
materials 652,265 202,134 (16,463) (139,028) - 698,908
Work in
progress 321,606 163,357 (45,359) (105,531) - 334,073
Finished
Goods 823,701 708,657 (5,472) (438,211) 582 1,089,257
Turnover
materials 1,102 54 - - - 1,156
1,798,674 1,074,202 (67,294) (682,770) 582 2,123,394
72
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
June 30, 2022 December 31, 2021
Allowance Allowance
Gross for Carrying Gross for Carrying
amount doubtful amount amount doubtful amount
accounts accounts
Electricity
charges
receivable 284,450 9,162 275,288 239,753 6,224 233,529
(2) Valuation allowances for contract assets are analyzed as follows:
Current Other
Current
Reversal or increases and
January 1, 2022 Accrual
write-off decreases June 30, 2022
Electricity
charges 6,224 2,938 - - 9,162
11 Other current assets
June 30, 2022 December 31, 2021
Short-term debt investments 279,000 571,140
VAT to be deducted, to be certified, etc. 2,455,846 3,931,095
Current portion of loans and advances to customers
(note) 1,228,727 1,169,487
Others 197,233 131,238
4,160,806 5,802,960
Note: Loans and advances due within one year are loans due within one year from TCL Technology Group
Finance Co., Ltd., a subsidiary of the Company, of which interest receivable is RMB3,387 thousand.
73
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
12 Debt Investments
June 30, 2022 December 31, 2021
National debt and secondary market debt (note) 20,136 -
13 Long-term receivables
June 30, 2022 December 31, 2021 Discount
Gross Carrying Gross Carrying rate
Allowance Allowance
amount amount amount amount Interval
Finance lease 639,690 - 639,690 651,118 - 651,118
Including:
unrealized
7.125%-
financing
8.115%
income (814,080) - (814,080) (848,837) - (848,837)
639,690 - 639,690 651,118 - 651,118
14 Long-term equity investments
June 30, 2022 December 31, 2021
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Associates
(1) 26,123,780 1,624 26,122,156 25,086,945 1,624 25,085,321
Joint
ventures
(2) 592,417 49,503 542,914 604,760 49,503 555,257
26,716,197 51,127 26,665,070 25,691,705 51,127 25,640,578
As of June 30, 2022, the Company established impairment allowances for long-term equity investments in
investees with poor management and insolvent assets.
74
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(1) Associates
Increase or decrease in current period
Investment
Other Declared
Increase/decrease gains and Other Accrued
Beginning comprehensive Cash dividends or Other increases
Name of investee in investment in losses equity Impairment
amount income profit distribution and decreases June 30, 2022
current period recognized by changes allowance
adjustment declared
equity method
Bank of Shanghai Co., Ltd. 11,919,796 - 729,672 4,068 - (327,157) - - 12,326,379
China Innovative Capital Management Limited 1,063,219 - (74,814) - - - - - 988,405
LG Electronics (Huizhou) Co., Ltd. 92,079 - 5,763 - - (13,000) - - 84,842
Shenzhen Qianhai Sailing International Supply
Chain Management Co., Ltd. 36,160 - (1,405) - - - - - 34,755
Shenzhen Jucai Supply Chain Technology Co.,
Ltd. 10,706 - 2,311 - - - - - 13,017
Shenzhen Tixiang Business Management
Technology Co., Ltd. 3,620 - (1,823) - - - - 1,797
TCL Air Conditioner (Wuhan) Co., Ltd. 38,605 - 315 - - - - 38,920
TCL Finance (Hong Kong) Co., Limited 109,317 - (9,014) - - - - 100,303
Urumqi TCL Equity Investment Management Co.,
Ltd. 71 - 675 - - - - 746
Hubei Changjiang Hezhi Equity Investment Fund
Partnership (Limited Partnership) 1,555,876 (4,304) 129,552 - - - - 1,681,124
Ningbo Dongpeng Weichuang Equity Investment
Partnership (Limited Partnership) 396,773 (4,993) 9,707 - - (44,257) - - 357,230
Deqing Puhua Equity Investment Fund Partnership
(Limited Partnership) 192,956 (41,572) (788) - - - - 150,596
75
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment
gains and Other Declared Other
Increase/decrease Other
Beginning losses comprehensive Cash dividends or Impairment increases
Name of investee in investment in equity
amount recognized income profit distribution allowance and June 30, 2022
current period changes
by equity adjustment declared decreases
method
Ningbo Dongpeng Heli Equity Investment
Partnership (Limited Partnership) 463,294 (15,690) (10,793) - - (42,218) - - 394,593
Wuxi TCL Aisikai Semi-conductor Industry
Investment Fund Partnership (Limited
Partnership) 232,764 (3,767) 63,977 6 - - - (6) 292,974
Wuxi TCL Venture Capital Partnership (Limited
Partnership) 35,580 - (6) - - - - 6 35,580
Ningbo Meishan Bonded Port Qiyu Investment
Management Partnership (Limited Partnership) 64,975 - (583) - - - - - 64,392
Shanghai Gen Auspicious Venture Capital
Partnership (Limited Partnership) 29,945 - (1,333) 145 - (571) - - 28,186
Nanjing Zijin A Dynamic Investment Partnership
(Limited Partnership) 19,725 - (2) 6 - - - - 19,729
Huizhou Kaichuang Venture Investment
Partnership (Limited Partnership) 8,700 - - - - - - 8,700
Beijing A Dynamic Venture Capital Center
(Limited Partnership) 6,415 - 3,510 - - - - - 9,925
Yixing Jiangnan Tianyuan Venture Capital
Company (Limited Partnership) 3,750 - (3) 9 - - - - 3,756
Shenzhen Chuangdong New Industry Investment
Fund Enterprise (Limited Partnership) 2,341 - - - - - - - 2,341
Hubei Changjiang Hezhi Equity Investment Fund
Management Co., Ltd. 6,006 - 919 - - - - - 6,925
Huizhou Kaimeng Angel Investment Partnership
(Limited Partnership) 2,595 - (14) - - - - - 2,581
Ningbo Jiutian Matrix Investment Management
Co., Ltd. (note) 2,851 - (106) - - - - - 2,745
Urumqi Qixinda Equity Investment Management
Co., Ltd. 1,137 - 837 - - - - - 1,974
76
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment
Other Declared
Increase/decrease gains and Other Accrued
Beginning comprehensive Cash dividends or Other increases
Name of investee in investment in losses equity Impairment
amount income profit distribution and decreases June 30, 2022
current period recognized by changes allowance
adjustment declared
equity method
Urumqi TCL Create Dynamic Equity Investment
Management Co., Ltd. 761 - (1) - - - - - 760
Beijing A Dynamic Investment Consulting Co.,
Ltd. 469 - - - - - - - 469
Shanghai Gen Auspicious Investment Management
Co., Ltd. 918 - (1,501) - - (362) - - (945)
Nanjing A Dynamic Equity Investment Fund
Management Co., Ltd. 283 - (2) - - - - - 281
Wuxi TCL Medical Imaging Technology Co., Ltd. 29,235 - (4,583) - - - - 72 24,724
Aijiexu New Electronic Display Glass (Shenzhen)
Co., Ltd. 635,360 - 63,000 - - - - - 698,360
TCL Ventures Fund L.P. 53,019 - 12,113 - - - - 2,799 67,931
Getech Ltd. 21,032 - (4,211) 199 - - - 8,401 25,421
TCL Environmental Technology Co., Ltd. 130,643 - 3,539 - - - - - 134,182
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
Industry Equity Investment Fund Partnership
(Limited Partnership) 372,976 - (5,792) - - - - - 367,184
Guangdong Utrust Emerging Industry Equity
Investment Fund Partnership (Limited
Partnership) 151,026 (279) 13,636 - - - - - 164,383
77
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment
Other Declared
Increase/decrease gains and Other Accrued
Beginning comprehensive Cash dividends or Other increases
Name of investee in investment in losses equity Impairment
amount income profit distribution and decreases June 30, 2022
current period recognized by changes allowance
adjustment declared
equity method
Shenzhen Xinhuoyicheng Recreational and Sports
Industry Co., Ltd. 1,417 - (45) - - - - - 1,372
Pride Telecom Limited - - - - - - - - -
JOLED Incorporation 869,073 80,960 (92,657) - - - - (95,560) 761,816
Sichuan Shengtian New Energy Development Co.,
Ltd. 478,264 - 15,162 - - - - - 493,426
Yanyuan Fengguang New Energy Co., Ltd. 62,528 (41,822) (4,454) - - (16,252) - - -
SunPower Systems International Limited 27,792 - 554 - - - - - 28,346
Zhonghuan Aineng (Beijing) Technology Co., Ltd. 6,843 - (1,371) - - - - - 5,472
Inner Mongolia Zhongjing Science and
Technology Research Institute Co., Ltd. 122,960 - 10,002 - - - - - 132,962
Hunan Guoxin Semiconductor Technology Co.,
Ltd. 9,758 - (330) - - - - - 9,428
Maxeon Solar Technologies, Ltd. 2,020,194 - (158,018) - - - - - 1,862,176
Xinjiang Xiexin New Energy Material Technology
Co., Ltd. 1,691,361 - 1,039,939 - - - - - 2,731,300
Ruihuan (Inner Mongolia) Solar Power Co., Ltd. 5,896 - - - - - - - 5,896
Tianjin Zhonghuan Haihe Intelligent
Manufacturing Fund Partnership (Limited
Partnership) 659,630 - 2 - - - - - 659,632
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 4,722 - 145 - - - - - 4,867
Ningbo Zhongxin Venture Capital Partnership
Tianjin Huanxin 58,278 - (289) - - - - - 57,989
78
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment
Other Declared
Increase/decrease gains and Other Accrued
Beginning comprehensive Cash dividends or Other increases
Name of investee in investment in losses equity Impairment
amount income profit distribution and decreases June 30, 2022
current period recognized by changes allowance
adjustment declared
equity method
TCL Huanxin Semi-conductor (Tianjin) Co.,
Ltd. 421,762 - (74) - - - - - 421,688
Inner Mongolia Shengou Electromechanical
Engineering Co., Ltd. 2,914 - - - - (2,289) - - 625
Inner Mongolia Huanye Material Co., Ltd. 4,109 - - - - - - - 4,109
Shenzhen Shutuo Technology Co., Ltd. 38,038 - (428) - - - - - 37,610
Shenzhen Qianhai Sailing International
Supply Chain Management Co., Ltd. 49,964 - 3,020 - - - - - 52,984
Wuhan Guochuangke Optoelectronic
Equipment Co., Ltd. 24,744 - (539) - - - - - 24,205
TCL Intelligent Technology (Ningbo) Co., - - - - - - - - -
Ltd.
Zhihui Xinyuan Commercial (Huizhou) Co., - - - - - - - - -
Ltd.
Purplevine Holdings Limited - 3,789 9,200 - - - - (5,142) 7,849
Hubei Consumer Finance Co., Ltd. 168,654 - 6,091 - - - - (14,174) 160,572
Tianjin 712 Communication & Broadcasting
Co., Ltd. 661,442 (88,084) 21,332 - - (7,777) - (64,342) 522,569
25,085,321 (115,762) 1,769,994 4,434 - (453,883) - (167,948) 26,122,156
Note: Tianjin Huanxin Technology & Development Co., Ltd. Was renamed as TCL Huanxin Semi-conductor (Tianjin)
Co., Ltd in April 2022.
79
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(2) Joint ventures
Increase or decrease in current period
Increase/de Declared
Investment gains Other
crease in Cash dividends Accrued Other
Beginning and losses comprehens Other equity
Name of investee investment or profit Impairment increases and
amount recognized by ive income changes June 30, 2022
in current distribution allowance decreases
equity method adjustment
period declared
TCL Huizhou City, Kai Enterprise
Management Limited 1,329 - 11 - - - - - 1,340
Huizhou TCL Human Resources Service Co.,
Ltd. 3,296 - 3,030 - - - - - 6,326
Zhangjiakou Qixin Equity Investment Fund
Partnership 92,681 - (757) - - - - - 91,924
Huaxia CPV (Inner Mongolia) Power Co.,
Ltd. (Note 1) - - - - - - - - -
Tianjin Huanyan Technology Co., Ltd. 144,517 - (269) - - - - - 144,248
TCL Microchip Technology (Guangdong)
Co., Ltd. 313,434 - (14,358) - - - - - 299,076
555,257 - (12,343) - - - - - 542,914
80
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
Increase Decrease
January 1, in in June 30,
Note
2022 current current 2022
period period
Pride Telecom Limited 1,624 - - 1,624 Note 1
Huaxia CPV (Inner Mongolia)
Power Co., Ltd. 49,503 - - 49,503 Note 1
51,127 - - 51,127
Note 1 Impairment allowances were established for the long-term investments in these investees at recoverable amounts
because continuous operations loss occurred to these investees with poor management.
15 Investments in other equity instruments
June 30, 2022 December 31, 2021
Stocks 88,092 109,011
Equity of unlisted companies 839,444 818,308
927,536 927,319
Reasons
Amount of Reasons for
designated as
other other
Confirmed measured at fair
comprehensive comprehensive
Dividend Accumulated Accumulated value and whose
Item name income income
income Profits losses changes are
transferred to transferred to
recognized included in other
retained retained
comprehensive
earnings earnings
income
Being held long
term for strategic Sold in current
Stocks - 4,115 (109,186) - purposes period
Being held long
Sold in current
Equity of unlisted term for strategic
period
companies - 9,033 (40,751) - purposes
Total - 13,148 (149,937) -
16 Other non-current financial assets
June 30, 2022 December 31, 2021
Equity investments 829,914 2,149,781
Debt investments 298,697 554,257
1,128,611 2,704,038
81
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
17 Investment property
Houses and
Land use rights Total
buildings
Gross amount:
January 1, 2022 896,416 92,817 989,233
Increase
Reclassified from fixed assets and
intangible assets 124,908 - 124,908
Decreases
Reclassified to fixed assets and
intangible assets (43,013) (175) (43,188)
June 30, 2022 978,311 92,642 1,070,953
Accumulated depreciation and
amortization:
January 1, 2022 165,990 8,376 174,366
Increase
Accrued in current period 16,577 1,072 17,649
Reclassified from fixed assets and
intangible assets 38,266 - 38,266
Decreases
Reclassified to fixed assets and
intangible assets (5,326) - (5,326)
June 30, 2022 215,507 9,448 224,955
Investment property, net:
June 30, 2022 762,804 83,194 845,998
January 1, 2022 730,426 84,441 814,867
Impairment allowance:
January 1, 2022 52,965 - 52,965
Increase
Increase in current period - - -
Decreases
Decrease in current period - - -
June 30, 2022 52,965 - 52,965
Investment property, carrying
amount:
June 30, 2022 709,839 83,194 793,033
January 1, 2022 677,461 84,441 761,902
82
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
18 Fixed assets
Houses Office and
and Machinery electronic Transportation Power
buildings equipment equipment equipment stations Other Total
Gross amount:
December 31, 2021 36,809,487 144,268,573 6,141,205 228,961 2,361,036 21,576 189,830,838
Change of accounting
policy - 144,462 - - - - 144,462
January 1, 2022 36,809,487 144,413,035 6,141,205 228,961 2,361,036 21,576 189,975,300
Increase
Reclassified from
investment property 43,013 - - - - - 43,013
Reclassified from
construction in
progress 1,845,051 10,576,943 72,518 10,093 391 - 12,504,996
Acquisition and
7,097 4,892,816 37,137 12,817 - 1,040 4,950,907
other
Decreases
Written down with
government grants - (77,220) - - - - (77,220)
Reclassified to
investment property (124,908) - - - - - (124,908)
Other decreases (23,670) (3,362,523) (3,686,523) (21,600) - (80) (7,094,396)
Exchange adjustment 4,412 1,184 379 193 - 412 6,580
June 30, 2022 38,560,482 156,444,235 2,564,716 230,464 2,361,427 22,948 200,184,272
Accumulated
depreciation:
December 31, 2021 6,424,323 64,912,283 2,500,253 145,498 426,922 13,504 74,422,783
Change of accounting
policy - - - - - - -
January 1, 2022 6,424,323 64,912,283 2,500,253 145,498 426,922 13,504 74,422,783
Increase
Accrual 687,481 7,531,330 114,985 17,077 43,294 999 8,395,166
Reclassified from
investment property 5,326 - - - - - 5,326
Other increases 1,246,475 1,246,475
Decreases
Reclassified to
investment property (38,266) - - - - (38,266)
Other decreases (7,116) (1,290,448) (993,165) (14,062) - - (2,304,791)
Exchange adjustment 317 1,295 209 105 - 115 2,041
June 30, 2022 7,072,065 72,400,935 1,622,282 148,618 470,216 14,618 81,728,734
Fixed assets, net:
June 30, 2022 31,488,417 84,043,300 942,434 81,846 1,891,211 8,330 118,455,538
January 1, 2022 30,385,164 79,500,752 3,640,952 83,463 1,934,114 8,072 115,552,517
December 31, 2021 30,385,164 79,356,290 3,640,952 83,463 1,934,114 8,072 115,408,055
83
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
18 Fixed assets (continued)
Houses Office and
Machinery Transportation Power
and electronic Other Total
equipment equipment stations
buildings equipment
Impairment
allowance:
January 1, 2022 771,541 653,840 338,477 2,429 62,059 412 1,828,758
Accrued in current
period
Other transfers in - 305,506 - - - - 305,506
Write-off of current
period (5,224) (153,488) (1,302) (2,131) - - (162,145)
Other transfers out - - (305,387) (119) - - (305,506)
June 30, 2022 766,317 805,858 31,788 179 62,059 412 1,666,613
Fixed assets, carrying
amount:
June 30, 2022
30,722,100 83,237,442 910,646 81,667 1,829,152 7,918 116,788,925
January 1, 2022
29,613,623 78,846,912 3,302,475 81,034 1,872,055 7,660 113,723,759
December 31, 2021
29,613,623 78,702,450 3,302,475 81,034 1,872,055 7,660 113,579,297
Please refer to Item 80 of Note V for information on fixed asset mortgage. As of June 30, 2022, the cost of the
fixed assets that the Company had fully depreciated and still continued to use amounted to RMB34,922,674
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
14,105,697 Within 2023
(Note)
Note As of June 30, 2022, the fixed assets with pending ownership certificates of the Company were 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 Zhonghuan Crystal
Material Co., Ltd., Inner Mongolia Zhonghuan Advanced Semi-conductor Material Co., Ltd., Jiangsu
Zhonghuan Enterprise Management Co., Ltd. and Tianjin Huanhai Industrial Park Co., Ltd.
19 Construction in progress
(1) Schedule of construction in progress
June 30, 2022 January 1, 2022 December 31, 2021
Construction in progress 43,564,862 37,175,664 37,112,045
Less: Impairment allowance 145,912 146,160 146,160
43,418,950 37,029,504 36,965,885
84
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
19 Construction in progress (continued)
(2) Changes to construction in progress
Project Interest
Change in input Including: capitalizat
Accounting Increase in Transfer-in in Investment Cumulative capitalized ion rate
Beginning Policy current current period Other as % of Project capitalized interest in for current
Project name Budget amount changes period Fixed assets decreases June 30, 2022 budget progress interest current period period Funding source
t7 production line of Self-funded +
LCD panel 35,337,000 3,362,350 - 1,616,903 (1,297,514) (5,024) 3,676,715 69% 69% 450,374 57,942 1.03% external-loan-funded
t5 production line of
LCD panel 12,500,000 739,416 - 1,482,131 (1,394) - 2,220,153 22% 22% - - - Self-funded
t4 production line of Self-funded +
LCD panel 35,000,000 17,226,269 - 775,811 (556,415) (14,648) 17,431,017 96% 96% 1,228,973 137,949 2.13% external-loan-funded
t9 production line of
LCD panel 31,500,000 3,916,693 - 3,068,318 (5,126) 6,979,885 22% 22% 29,852 29,852 4.37% Self-funded
Production line of 8-
12-inch semiconductor
silicon wafers for
integrated circuit 5,707,172 1,307,446 - 708,150 (742,577) (14,092) 1,258,927 71% 71% - - - Self-funded
Industrialization phase
V of monocrystalline
silicon materials for
renewable solar power
batteries and
monocrystalline silicon
wafers for ultra-thin
high-efficient solar Self-funded +
power batteries 9,125,010 955,959 - 674,972 (709,681) (311,175) 610,075 97% 97% 54,018 - - external-loan-funded
50GW (G12) solar-
grade monocrystalline
silicon material smart
factory project 10,979,740 543,611 - 2,768,844 (1,462,903) - 1,849,552 30% 30% - - - Self-funded
Not Not Not Not Not
Others Not applicable 8,914,141 63,619 8,450,250 (7,729,386) (305,998) 9,392,626 applicable applicable applicable applicable applicable Not applicable
36,965,885 63,619 19,545,379 (12,504,996) (650,937) 43,418,950
85
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
20 Right-of-use assets
Houses and Transportation Machinery Land use
Total
buildings equipment equipment rights
Gross amount:
December 31, 2021 867,511 1,164 1,982,380 13,335 2,864,390
Increase
Leased in 289,890 139 - - 290,029
Other increases - 462 - - 462
Decreases
Other decreases (13,169) (339) (585,917) - (599,425)
Exchange adjustment 1,913 (5) - - 1,908
June 30, 2022 1,146,145 1,421 1,396,463 13,335 2,557,364
Accumulated
depreciation:
December 31, 2021 101,348 522 335,526 83 437,479
Increase
New subsidiary - - - - -
Accrual 61,010 256 91,092 167 152,525
Decreases
Reduced subsidiary - - - - -
Other decreases (5,113) (110) (123,140) - (128,363)
Exchange adjustment 1,060 (2) - - 1,058
June 30, 2022 158,305 666 303,478 250 462,699
Right-of-use assets,
carrying amount:
June 30, 2022 987,840 755 1,092,985 13,085 2,094,665
December 31, 2021 766,163 642 1,646,854 13,252 2,426,911
Impairment
allowance:
December 31, 2021 - - - - -
June 30, 2022 - - - - -
Right-of-use assets,
carrying amount
June 30, 2022 987,840 755 1,092,985 13,085 2,094,665
December 31, 2021 766,163 642 1,646,854 13,252 2,426,911
86
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
21 Intangible assets
Non-patent
Land use
technologies Other Total
rights
/patents
Gross amount:
December 31, 2021 8,649,646 8,083,664 1,590,550 18,323,860
Change of accounting
policy - 17,899 - 17,899
January 1, 2022 8,649,646 8,101,563 1,590,550 18,341,759
Increase
Purchase 777,484 765,937 98,023 1,641,444
Reclassified from
construction in progress - - 60,279 60,279
Reclassified from
development costs - 1,239,973 3,208 1,243,181
Reclassified from
investment property 175 - - 175
Decreases
Sale and disposal - - (2,664) (2,664)
Exchange adjustment (26,287) 155 (26,132)
June 30, 2022 9,427,305 10,081,186 1,749,551 21,258,042
Accumulated
amortization:
December 31, 2021 802,839 2,654,155 739,490 4,196,484
Increase
Accrual 130,451 529,871 92,832 753,154
Decreases
Sale and disposal - - (520) (520)
Other decreases (4,118) - (280) (4,398)
Exchange adjustment (3,531) 89 (3,442)
June 30, 2022 929,172 3,180,495 831,611 4,941,278
Intangible assets, net：
June 30, 2022 8,498,133 6,900,691 917,940 16,316,764
December 31, 2021 7,846,807 5,429,509 851,060 14,127,376
Impairment allowance:
December 31, 2021 23,562 110,019 11,148 144,729
Accrual - 442 - 442
Exchange adjustment - 1,679 - 1,679
June 30, 2022 23,562 112,140 11,148 146,850
Intangible assets,
carrying amount:
June 30, 2022 8,474,571 6,788,551 906,792 16,169,914
January 1, 2022 7,823,245 5,337,389 839,912 14,000,546
December 31, 2021 7,823,245 5,319,490 839,912 13,982,647
As of June 30, 2022, the total book value of land use rights for which the title certificate has not been
registered properly was RMB2,076 thousand.
Please refer to Item 80 of Note V for information on collateralized intangible assets.
87
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
22 Development expenditures
Development expenditures are as follows:
June 30, 2022 January 1, 2022 December 31, 2021
Semi-conductor display 1,532,364 1,266,973 1,266,973
New energy photovoltaic & semi-
conductor materials 1,111,053 1,273,226 1,241,446
2,643,417 2,540,199 2,508,419
23 Goodwill
(1) Gross amount of goodwill
Decrease in
Name of investee or Beginning Increase in Ending
current
item incurring goodwill amount current period balance
period
TCL Medical Radiological Technology Note
28,967 - - 28,967
(Beijing) Co., Ltd. 1
Qingdao Blue Business Consulting Note
2,452 - - 2,452
Co., Ltd. 2
Tianjin Huan'Ou Semiconductor Note
214,683 - - 214,683
Material&Technology Co., Ltd. 3
Tianjin Zhonghuan Electronics Group Note
6,726,130 - - 6,726,130
Co., 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
9,187,808 - - 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 1 In 2010, the Company acquired a 51.82% interest in TCL Medical Radiological Technology (Beijing) Co.,
Ltd. (hereinafter referred to as “TCL Medical Radiological Technology”) with capital of RMB 52,319
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 the 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.
88
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
23 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 RMB10,000 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 RMB1,728,973
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
(equivalent to RMB486,603 thousand) was recorded in the Company’s goodwill.
(III) Goodwill impairment test
The Company carried out an impairment test of its goodwill on June 30, 2022. 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 adopted 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 determines the
revenue growth rate (mainly -2.83%-24.57%) and determines the EBITDA (mainly 5.9%-19.6%)
based on historical experience and forecasts of market development, combined with the Company's
future development strategic plan and adopt a specific risk discount rate (mainly 8%-13.5%) that
reflects the relevant asset group. 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.
89
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
24 Long-term prepaid expense
2021 Increase in Amortization
December 31, current in current Others
June 30, 2022
2021 period period
Improvement expense on leased fixed
assets 1,629,475 51,631 (91,874) 49 1,589,281
Others 1,011,055 671,201 (765,956) (36,459) 879,841
2,640,530 722,832 (857,830) (36,410) 2,469,122
25 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
June 30, 2022 January 1, 2022
Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deductible losses 10,513,282 1,666,877 6,739,226 1,087,993
Asset impairment
allowances 2,947,063 622,780 3,038,745 633,013
Provisions 886,303 140,655 744,189 117,497
Changes in fair value 43,692 10,074 55,287 13,230
Others 2,060,906 376,587 1,546,420 298,690
16,451,246 2,816,973 12,123,867 2,150,423
December 31, 2021
Deductible Deferred
temporary income tax
difference assets
Deductible losses 6,758,713 1,090,916
Asset impairment
allowances 3,038,745 633,013
Provisions 744,189 117,497
Changes in fair value 55,287 13,230
Others 1,546,420 298,690
12,143,354 2,153,346
90
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
25 Deferred income tax assets and deferred income tax liabilities (continued)
(2) Un-offset deferred income tax liabilities
June 30, 2022 December 31, 2021
Taxable Taxable Deferred
temporary Deferred tax temporary income tax
differences liabilities differences liabilities
Accelerated depreciation
of fixed assets 11,393,082 1,787,225 11,471,272 1,787,699
Increase in value of
assets as assessed in
business combination
not involving entities
under common control 2,479,347 532,811 2,491,577 531,018
Changes in fair value 738,029 180,103 527,471 129,006
One-off tax deduction
for fixed assets 6,369,829 967,129 3,184,144 501,290
Government grants 538,662 80,799 273,470 41,021
Others 758,088 176,154 721,284 168,952
22,277,037 3,724,221 18,669,218 3,158,986
(3) Unrecognized deferred income tax assets
June 30, 2022 December 31, 2021
Deductible temporary
difference 853,246 181,612
Deductible losses 7,393,648 5,840,378
8,246,894 6,021,990
(4) There were no deferred tax assets or liabilities presented at the net amount after offsetting.
91
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
25 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:
June 30, 2022 December 31, 2021
2021 - 178,533
2022 268,388 268,913
2023 492,734 477,404
2024 481,638 476,543
2025 468,668 464,426
2026 onwards 5,682,220 3,974,559
7,393,648 5,840,378
26 Other non-current assets
June 30, 2022 December 31, 2021
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Advance
payment for
equipment
and land use
rights (Note) 11,854,211 - 11,854,211 6,310,004 - 6,310,004
Advance
payment for
patents 339,151 - 339,151 211,606 - 211,606
Others 415,318 - 415,318 927,399 - 927,399
12,608,680 - 12,608,680 7,449,009 - 7,449,009
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.
92
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
27 Short-term borrowings
June 30, 2022 December 31, 2021
Unsecured borrowings 14,777,405 9,315,505
Borrowings secured by
pledge 21,342 22,549
Interest payable 12,993 3,373
14,811,740 9,341,427
As of June 30, 2022, the Company's short-term pledged loans were equivalent to RMB21,342 thousand
(equivalent to RMB22,549 thousand at the end of 2021), and the transaction financial assets equivalent to
RMB34,728 thousand (equivalent to RMB34,337 thousand at the end of 2021) were pledged .
As of June 30, 2022, the Company does not have any short-term borrowings that have expired and have not
been repaid.
28 Borrowings from central bank
As of June 30, 2022, the balance of the borrowings of TCL Technology Group Finance Co., Ltd. (a subsidiary
of the Company) from the central bank was RMB728,744 thousand (At the end of 2021 : RMB1,437,062
thousand).
29 Customer deposits and deposits from banks and other financial institutions
June 30, 2022 December 31, 2021
Customer deposits and deposits from other
banks and financial institutions 265,745 666,056
Customer deposits and deposits from banks and other financial institutions are the deposits of related and
nonrelated enterprises absorbed by TCL Technology Group Finance Co., Ltd., a subsidiary of the Company,
within the business scope approved by the regulatory authority.
93
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
30 Held-for-trading financial liabilities
June 30, 2022 December 31, 2021
Measured at fair value with changes
included
Financial liabilities at fair value through
profit or loss. 989,803 925,035
31 Derivative financial liabilities
June 30, 2022 December 31, 2021
Derivative financial liabilities 430,997 22,205
32 Notes payable
June 30, 2022 December 31, 2021
Bank acceptance notes 3,588,303 2,877,554
Trade acceptance notes 876,460 107,817
Letter of credit 961,589 289,925
5,426,352 3,275,296
As of June 30, 2022, the Company had no notes payable that were due but not paid.
33 Accounts payable
June 30, 2022 December 31, 2021
Amounts due to suppliers 24,185,474 24,297,860
As of June 30, 2022, there were no significant accounts payable aged over one year.
94
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
34 Advances received
June 30, 2022 December 31, 2021
Advances from customers 6,067 5,794
As of June 30, 2022, the Company had no significant accounts receivable aged over one year.
35 Contract liabilities
June 30, 2022 December 31, 2021
Advances from customers 4,367,691 2,593,882
36 Employee benefits payable and long-term employee benefits payable
(1) Employee compensation payable
June 30, 2022 December 31, 2021
Short-term employee benefits payable 2,538,796 3,274,021
Defined contribution plans payable 33,444 34,383
Dismissal benefits payable 3,029 3,529
2,575,269 3,311,933
95
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
36 Employee benefits payable and long-term employee benefits payable (continued)
(1) Employee benefits payable (continued)
(a) Short-term employee benefits payable
Increase in Decrease in
January 1, 2022 current period current period June 30, 2022
Wages, bonuses, allowances
and subsidies 2,885,187 5,319,548 (6,177,020) 2,027,715
Employee services and
benefits 27,664 202,720 (216,815) 13,569
Social insurance benefits 46,565 182,210 (190,456) 38,319
Of which:
Medical insurance
premium 44,622 165,359 (173,549) 36,432
Employment injury
insurance premium 953 8,893 (8,957) 889
Maternity insurance 990 7,958 (7,950) 998
Housing fund 30,326 204,575 (198,278) 36,623
Trade union funds and staff
education funds 27,575 76,303 (72,320) 31,558
Others 256,704 160,252 (25,944) 391,012
3,274,021 6,145,608 (6,880,833) 2,538,796
(b) Defined contribution plans
Increase in Decrease in
January 1, 2022 current period current period June 30, 2022
Basic pension insurance 32,979 375,573 (376,438) 32,114
Unemployment insurance 1,404 12,026 (12,100) 1,330
34,383 387,599 (388,538) 33,444
(2) Long-term employee compensation payable
December 31,
June 30, 2022
2021
Supplementary pension insurance 26,236 26,595
Other long-term benefits 845,969 643,336
872,205 669,931
96
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
37 Taxes and levies payable
June 30, 2022 December 31, 2021
Corporate income tax 318,718 1,020,711
Value-added tax 194,176 30,967
Individual income tax 57,282 39,920
Urban maintenance and construction tax 40,045 43,081
Education surcharges 28,630 30,800
Others 105,746 73,370
744,597 1,238,849
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.
38 Other payables
June 30, 2022 December 31, 2021
Dividends payable 1,310,885 34,607
Other payables 20,313,031 19,352,281
21,623,916 19,386,888
(1) Dividends payable
June 30, 2022 December 31, 2021
Other non-controlling interests 1,310,885 34,607
1,310,885 34,607
97
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
38 Other payables (continued)
(2) Other payables
June 30, 2022 December 31, 2021
Payables for engineering equipment 15,889,328 13,368,026
Amounts due to external entities 2,584,842 4,241,736
Unpaid expenses 1,561,662 1,531,544
Security deposits 277,199 210,975
20,313,031 19,352,281
98
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
39 Non-current liabilities due within one year
Note V June 30, 2022 December 31, 2021
Long-term borrowings due within one year
45
(Note 1) 4,736,789 6,062,928
Bonds payable due within one year (Note 2) 6,402,876 5,646,822
Current portion of lease liabilities 47 265,337 681,087
Current portion of long-term payables 156,883 168,132
Current portion of interest payable 395,371 447,796
11,957,256 13,006,765
Note 1 As of June 30, 2022, the long-term loans due within one year of the Company included credit loans equivalent
to RMB4,736,789 thousand, and the interest rate range for long-term loans due within one year of the
Company was 3.1%~4.28% (2021: 0.46%~4.15%)。
Note 2 The Company's bonds payable due within one year are mainly as follows:
Convertible corporate bonds TCL directional transfer 2: Issued in November 2020 with a term of 2 years, and
the closing balance as of June 30 was RMB2,478,256 thousand.
Medium-term note 20TCL Technology MTN001: Issued in March 2020, with a term of 3 years, the closing
balance as of June 30 was RMB2,998,231 thousand.
40 Other current liabilities
June 30, 2022 December 31, 2021
After-sales service expense (note) 901,256 792,847
Output tax to be transferred 454,217 286,384
Others 174,951 190,656
1,530,424 1,269,887
Note After-sales service expense expected to occur within 1 year is reflected in current liabilities.
99
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
41 Long-term borrowings
June 30, 2022 December 31, 2021
Borrowings secured by collateral 38,398,940 39,633,561
Borrowings secured by pledge 2,123,706 928,156
Unsecured borrowings 60,696,631 52,780,293
101,219,277 93,342,010
Including: Current portion of long-term borrowings which
matures in 1 year (4,736,789) (6,062,928)
96,482,488 87,279,082
The maturities of the Company's long-term borrowings vary from 2023 to 2037.
As of June 30, 2022, the long-term borrowings secured by collateral were equivalent to RMB38,398,940
thousand (including amounts translated from other currencies) (At the end of 2021 : RMB39,633,561
thousand), which were secured by the collaterals of the land use right, houses and buildings, machinery and
equipment of about RMB74,795,614 thousand (including amounts translated from other currencies) (At the
end of 2021: RMB66,737,167 thousand); the long-term pledged borrowings were equivalent to
RMB2,123,706 thousand (At the end of 2021: RMB928,156 thousand), which were pledged by the
collaterals of the charge use right, etc., of about RMB689,720 thousand (At the end of 2021: RMB328,069
thousand);
The interest rates of the Company’s long-term borrowing ranged from 2.4% to 5.38% in the current period
(2021: 1.3% - 5.70%).
42 Bonds payable
June 30, 2022 December 31, 2021
Corporate bonds 8,008,782 8,073,016
MTN 5,490,377 4,993,265
13,499,159 13,066,281
100
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
42 Bonds payable (continued)
(1) Movements in bonds payable
Accrued
Issued in Amortization
Issued Beginning interest as
Bond name Par value Issue date Maturity current of premium Others (note 1)
amount amount per par June 30, 2022
period or discount
value
18TCL01 1,000,000 June 6, 2018 5 1,000,000 169,162 - 3,034 248 (169,410) -
August 20,
18TCL02 2,000,000 2018 5 2,000,000 2,003,039 - 38,242 (921) - 2,002,118
19TCL01 1,000,000 May 20, 2019 5 1,000,000 998,630 - 18,370 3,821 - 1,002,451
19TCL02 1,000,000 July 23, 2019 5 1,000,000 998,568 - 21,323 277 - 998,845
October 21,
19TCL03 2,000,000 2019 5 2,000,000 1,996,860 - 41,655 554 - 1,997,414
20TCL TECH.
MTN001 3,000,000 March 27, 2020 3 3,000,000 2,997,041 - 54,444 388 (2,997,429) -
TCLTEC1 1,957,483 July 14, 2020 5 1,957,483 1,906,757 - 18,561 12,897 88,300 2,007,954
21TCL Ji MTN001
(High- Growth Debt) 2,000,000 May 10, 2021 3 2,000,000 1,996,224 - 41,386 792 - 1,997,016
January 14,
22TCL Ji MTN001 2,000,000 2022 3 2,000,000 - 2,000,000 31,759 (3,252) - 1,996,748
22TCL Ji GN002 1,500,000 April 27, 2022 3 1,500,000 - 1,500,000 8,815 (3,387) - 1,496,613
Total 17,457,483 —— —— 17,457,483 13,066,281 3,500,000 277,589 11,417 (3,078,539) 13,499,159
Note 1 Others are the current portion of bonds payable reclassified to the current portion of non-current liabilities.
101
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
43 Lease liabilities
June 30, 2022 December 31, 2021
Total lease liabilities 1,422,164 1,783,159
Less: current portion of lease liabilities 265,337 681,087
Total 1,156,827 1,102,072
44 Long-term payables
June 30, 2022 December 31, 2021
Finance lease 723,672 671,344
45 Deferred income
Increase in
Decrease in
December 31, 2021 current
current period
June 30, 2022
period
Government grants 2,361,171 5,465,012 (2,710,587) 5,115,596
Others 34 - (34) -
2,361,205 5,465,012 (2,710,621) 5,115,596
Items involving government
grants
Amount Amount
Amount
recorded in used to
New recorded in
2021 non- offset costs
grants in other Other
December operating and June 30,
current income in changes
31, 2021 income in expenses in 2022
period current
current current
period
period period
Government
grants related
to assets 1,273,978 1,349,204 (2,000) (27,555) (102,026) (89,305) 2,402,296
Government
grants related
to income 1,087,193 4,115,808 (58) (1,503,687) (974,778) (11,178) 2,713,300
2,361,171 5,465,012 (2,058) (1,531,242) (1,076,804) (100,483) 5,115,596
Note "Other changes" were deferred income offset by the carrying amounts of relevant assets.
102
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
46 Share capital
December 31, 2021 Increase or decrease in current period June 30, 2022
Amount Ratio (%) New issues Other Subtotal Amount Ratio (%)
I. Restricted Shares 612,110 4.36% - 1,445 1,445 613,555 4.37%
Ⅱ. Unrestricted shares 13,418,532 95.64% - (1,445) (1,445) 13,417,087 95.63%
III. Total shares 14,030,642 100% - - - 14,030,642 100%
As of June 30, 2022, the Company's total share capital was 14,030,642,000 shares.
Note Except for Chairman of the Board Mr. Li Dongsheng who holds restricted shares subscribed for in a private placement, none of the other incumbent directors, supervisors
or senior management hold any restricted shares from a split-share structure reform or a private placement. The shares held by these personnel will stay partially frozen as
per the Rules on the Management of Shares Held by the Directors, Supervisors and Senior Management Officers of the Company and the Changes thereof. The trading and
information disclosure in relation to these shares shall be in strict compliance with the applicable laws, regulations and rules.
103
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
47 Other equity instruments
Increase in Decrease in
December 31, 2021 current period current period June 30, 2022
Convertible bonds 200,334 - (5,933) 194,401
48 Capital reserves
Increase in
current Decrease in
December 31, 2021 period current period June 30, 2022
Share premium 6,068,268 24,515 (1,920,270) 4,172,513
Other capital reserves 10,999 10,816 (8,753) 13,062
6,079,267 35,331 (1,929,023) 4,185,575
49 Treasury Stocks
Increase in Decrease in
December 31, 2021 current period current period June 30, 2022
Treasury stock 1,885,557 502,771 (76,664) 2,311,664
Increase in the period is the result of repurchase of shares from the Company's Employee Stock Ownership
Plan. The 16th meeting of the Seventh Session of the Board of Directors held by the Company on March 18,
2022 deliberated on and approved the Repurchase Report on the Repurchase of Some Public Shares in 2022.
The repurchase of the company shares will be used for the Employee Stock Ownership Plans or equity
incentives. As of June 30, 2022, the total number of shares repurchased was 106,484 thousand shares at the
total consideration of RMB502,771 thousand.
50 Surplus reserves
Increase in
current Decrease in
December 31, 2021 period current period June 30, 2022
Statutory surplus
reserves 2,367,303 - - 2,367,303
Discretionary surplus
reserves 182,870 - - 182,870
2,550,173 - - 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.
104
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
51 Specific reserves
Decrease in
Increase in current
December 31, 2021 current period period June 30, 2022
Production safety reserve 1,549 1,919 - 3,468
52 General reserve
Decrease in
Increase in current
December 31, 2021 current period period June 30, 2022
General risk reserve 8,934 - - 8,934
As per the General Rules on Financial Affairs of Financial Enterprises and the Guide to the Implementation
of the General Rules on Financial Affairs of Financial Enterprises promulgated by the Ministry of Finance,
as well as the Articles of Association of TCL Technology Group Corporation, this subsidiary appropriated
1% of its net profit as general reserve in the previous years.
53 Retained earnings
January - June
January - June 2022 2021
Beginning retained earnings 22,458,340 14,009,494
Change in accounting policies (Note) 69,346 -
Net profit for current period 663,521 6,802,218
Decrease in current period (2,064,177) (1,509,694)
Including: Appropriated as surplus reserves -
Distribution of dividends on common stocks (2,050,003) (1,625,590)
Others (14,174) 115,896
Ending retained earnings 21,127,030 19,302,018
Due to changes in accounting policies, there were RMB69,346 thousand undistributed profits at the start of
the period (see Note III. 43 for details).
105
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
54 Revenue and cost of sales
January - June 2022 January - June 2021
Revenue Cost of sales Revenue Cost of sales
Core business 82,566,755 75,173,515 73,405,981 57,588,286
Non-core business 1,955,426 1,349,429 999,868 480,685
84,522,181 76,522,944 74,405,849 58,068,971
(1) Business by operating segment
Revenue Cost of sales Gross profit
January - January - January - January - January - January -
June 2022 June 2021 June 2022 June 2021 June 2022 June 2021
Domestic
sales 57,379,450 48,121,872 51,272,092 40,165,807 6,107,358 7,956,065
Foreign
sales 27,142,731 26,283,977 25,250,852 17,903,164 1,891,879 8,380,813
84,522,181 74,405,849 76,522,944 58,068,971 7,999,237 16,336,878
(2) The sales revenue from the top five customers combined was RMB27,189,512 thousand and RMB23,036,823
thousand respectively for January-June 2022 and January-June 2021 respectively, accounting for 32.9% and
31.4% of the core business revenue.
55 Interest income/expense and exchange gain
January - June 2022 January - June 2021
Interest income 38,579 74,133
Interest expenditures 14,292 12,564
Exchange gain/(loss) 24,351 964
The interest income, interest expense and exchange gain/(loss) above occurred with the Company's subsidiary
TCL Technology Group Finance Co., Ltd., which are presented separately herein as required for a financial
enterprise.
106
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
56 Taxes and levies
January - June 2022 January - June 2021
Property tax 131,638 105,646
Stamp tax 100,211 65,852
Urban maintenance and construction tax 21,608 58,808
Education surcharges 15,407 42,123
Land use tax 13,634 14,563
Others 6,583 7,318
289,081 294,310
The applicable tax and levy standards are detailed
in Note IV.
57 Selling expenses
January - June 2022 January - June 2021
Employee salaries and benefits 322,046 275,159
After-sales service expense 281,872 337,843
Promotional and marketing expenses 139,964 106,431
Others 309,487 181,743
1,053,369 901,176
58 Administrative expense
January - June 2022 January - June 2021
Employee salaries and benefits 759,634 809,470
Depreciation and amortization expenses 370,222 361,440
Digital development expenses 128,251 104,360
Others 458,272 748,098
1,716,379 2,023,368
107
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
59 R&D expenses
January - June 2022 January - June 2021
Depreciation and amortization expenses 1,483,845 1,231,865
Material expenses 1,859,860 1,310,368
Employee salaries and benefits 779,375 712,165
Others 328,684 148,561
4,451,764 3,402,959
60 Financial Expenses
January - June 2022 January - June 2021
Interest expenditures 2,031,269 2,160,434
Interest income (325,439) (187,547)
Exchange loss / (gain) (55,264) (201,680)
Others 69,591 47,776
1,720,157 1,818,983
61 Other income
January - June 2022 January - June 2021
R&D subsidies 1,554,890 747,743
VAT rebates on software 17,127 7,905
Over-deduction in taxable amount for VAT 589 605
Others 70,504 53,781
1,643,110 810,034
108
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
62 Return on investments
January - June 2022 January - June 2021
Gain on disposal of debt instruments at fair
value through profit or loss 141,285 390,636
Gain on disposal of debt instruments at fair
value through profit or loss (75,115) 50,360
Gain on disposal of debt instruments at fair
value through profit or loss 7,365 3,708
Gain on disposal of debt instruments at fair
value through profit or loss 35,619 107,165
Share of net income of associates 1,769,993 1,318,079
Share of net income of joint ventures (12,343) (2,895)
Net income from disposal of long-term equity
investments 491,319 849,880
Others (577,608) 71,272
1,780,515 2,788,205
63 Gain on changes in fair value
January - June 2022 January - June 2021
Held-for-trading financial assets (139,785) (20,788)
Derivative financial assets (1,176) (327,549)
Held-for-trading financial liabilities 46,194 (11,045)
Derivative financial liabilities 209,262 45,186
114,495 (314,196)
64 Credit impairment loss
January - June 2022 January - June 2021
Loss on uncollectible accounts receivable (21,227) 21,834
Loss on uncollectible other receivables (4,351) (6,171)
Other financial assets (1,579) (27,108)
(27,157) (11,445)
109
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
65 Inventory valuation loss
January - June 2022 January - June 2021
Inventory valuation loss (1,006,908) (624,164)
Loss on impairments of fixed assets - (45,424)
Others (3,379) (127,931)
(1,010,287) (797,519)
66 Asset disposal income
January - June 2022 January - June 2021
Income/(loss) from disposal of fixed assets (17,103) (2,338)
Income/(loss) from disposal of intangible assets (8,498) 27,166
Others 1,970 (501)
(23,631) 24,327
67 Non-operating income
Amount through
current non-
January - June January - June recurring gains and
2022 2021 losses
Gains on retired or damaged non-
current assets 116 - 116
Government grants and others 596,424 267,948 596,424
596,540 267,948 596,540
68 Non-operating expense
Amount through
current non-
January - June January - June recurring gains and
2022 2021 losses
Losses on retired or damaged non-
current assets 2,020 2,394 2,020
Others 50,372 9,593 50,372
52,392 11,987 52,392
110
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
69 Income tax expenses
(1) Table of income tax expenses
January - June 2022 January - June 2021
Current income tax expense 338,743 1,119,370
Deferred income tax expense (427,141) 297,127
(88,398) 1,416,497
(2) Accounting profit and income tax adjustment process
January - June 2022 January - June 2021
Gross profit 1,838,318 10,713,982
Income tax expense calculated at
statutory/applicable tax rate 275,748 2,678,496
Impact of different tax rates applied to subsidiaries 365,664 (16,420)
Impact of adjusting income tax in previous periods (51,310) (12,685)
Impact of non-taxable income (488,118) (599,904)
Impact of non-deductible costs, expenses and losses 44,556 5,418
Impact of the use of deductible losses carry forward
without recognize deferred tax assets in the (329,838) (201,562)
previous periods
Impact of unrecognized deferred tax assets of
deductible temporary differences or deductible 324,802 81,396
losses in the current period
Others (229,902) (518,241)
Income tax expense (88,398) 1,416,497
111
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
70 Other comprehensive income
(1) Other comprehensive income items, income tax effects and reclassifications to profit or loss
January - June
January - June 2022 2021
I. Items that cannot be reclassified to profit or loss
subsequently
1. Share of other comprehensive income of investees that will
388 1,270
be reclassified to profit or loss under equity method
Share of the period 388 1,270
Previous other comprehensive income reclassified to retained
earnings for current period
2. Changes in fair value of other equity instruments (13,674) (185,629)
Current gain/(loss) (9,968) (84,931)
Previous other comprehensive income reclassified to
retained earnings for current period - (115,871)
Income tax effects recorded in other comprehensive income (3,706) 15,173
II. Items that will be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will
4,046 (153,326)
be reclassified to profit or loss under equity method
Share of the period 4,046 (153,326)
Income tax effects recorded in other comprehensive income - -
2. Changes in fair value of financial assets recorded in other
comprehensive income - 487
Current gain/(loss) - 487
3. Cash flow hedges (209,875) (4,105)
Current gain/(loss) (158,364) (782)
Previous other comprehensive income reclassified to profit
for current period (48,626)
Income tax effects recorded in other comprehensive income (2,885) (3,323)
4. Differences arising from translation of foreign currency
financial statements of overseas operations (153,882) 123,814
5. Net income arising from disposal of overseas operations
through profit or loss -
(372,997) (217,489)
112
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
70 Other comprehensive income (continued)
(2) Changes in other comprehensive income items
Equity attributable to shareholders of the Company as the parent
Share of other
comprehensive Differences
income of Gain/loss arising from
investees that on translation Other
will be changes in Gain/(Loss) of foreign Fair value comprehensive
reclassified to fair value on changes currency- changes of Fair value income
Accounting profit or loss of in cash denominated other changes of transferred to Non- Total other
policy under equity financial flow financial equity other debt retained controlling comprehensive
changes method assets hedges statements instruments instruments earnings Subtotal interests income
January 1, 2021 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)
Change in H1 2022 - 4,400 - (185,753) (163,688) (9,974) - (355,015) (17,982) (372,997)
June 30, 2022 334,950 51,288 (350,569) (123,207) (402,867) (151,264) (122,793) (764,462) (17,083) (781,545)
113
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
71 Earnings per share
(1) Basic EPS
January - June 2022 January - June 2021
Net profit attributable to shareholders of the Company as the
parent 663,521 6,802,218
Weighted average outstanding common shares (in thousand
shares) 13,568,366 13,497,433
Basic earnings per share (RMB yuan/share) 0.0489 0.5040
(2) Diluted EPS
January - June 2022 January - June 2021
Net profit attributable to shareholders of the Company as the
parent 663,521 6,802,218
Adjusted weighted average number of common shares outstanding
(in thousand shares) 13,675,093 14,030,788
Diluted earnings per share (RMB yuan/share) 0.0485 0.4848
72 Cash generated from other operating activities
Other cash received in the consolidated cash flow statement of the Company related to operating activities
amounted to RMB5,538,379 thousand (RMB5,032,866 thousand for the same period of the previous year),
mainly including current accounts, government grants and special appropriations received.
73 Cash used in other operating activities
Other cash payments related to operating activities in the Company's consolidated cash flow statement
amounted to RMB5,670,402 thousand (RMB3,522,074 thousand for the same period of the previous year),
mainly for various expenses and current accounts.
74 Cash generated from other investing activities
Other cash received in the Company's consolidated cash flow statement related to investing activities amounted
to RMB73,748 thousand (the same period last year: RMB7,079 thousand), mainly due to the receipt of project
bid bonds.
75 Cash used in other investing activities
Other cash paid in the Company's consolidated cash flow statement related to investing activities amounted to
RMB333,406 thousand (RMB101,676 thousand for the same period of the previous year), mainly due to the
refund of project bid bonds.
114
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
76 Cash generated from other financing activities
Other cash received in the consolidated cash flow statement of the Company related to financing activities
amounted to RMB6,000 thousand (RMB249,287 thousand for the same period of the previous year), mainly
including deposits received.
77 Cash used in other financing activities
Other cash paid in the Company's consolidated cash flow statement related to financing activities of
RMB4,454,836 thousand (the same period of last year: RMB3,060,099 thousand), mainly for the repurchase of
minority interests in subsidiaries, repurchase of company shares, and payment of financial lease payments.
115
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
78 Supplementary information for the cash flow statement
(1) Reconciliation of net profit to net cash generated from/used in operating activities
January - June
2022 January - June 2021
Net profit 1,926,716 9,297,485
Add： Asset impairment allowance 1,037,444 808,964
Depreciation of fixed assets 9,659,290 7,148,930
Depreciation of right-of-use assets 152,525 112,734
Amortization of intangible assets 753,154 554,138
Amortization of long-term prepaid expense 857,830 631,044
Loss/(Gain) on disposal of fixed assets, intangible assets and other
(24,327)
long-lived assets 23,631
Loss on retired or damaged fixed assets 1,904 2,394
Loss/(Gain) on changes in fair value (114,495) 314,196
Financial expenses 1,965,946 1,970,354
Return on investments (1,780,515) (2,788,205)
Decrease/(Increase) in deferred income tax assets (663,627) (517,573)
Increase/(Decrease) in deferred income tax liabilities 565,235 637,970
Decrease/(Increase) in inventory (119,965) (5,690,016)
Decrease/(Increase) in operating receivables (2,029,270) (9,741,065)
Increase/(Decrease) in operating payables (2,332,939) 13,615,809
Others (886,228) (2,437,117)
Net cash generated from operating activities 9,016,636 13,895,715
(2) Net cash payments for acquisition of subsidiaries in the current
period
January - June 2022 January - June 2021
Payments of cash and cash equivalents made in current period due
- 9,768,401
to business combinations incurred in current period
Less: cash and cash equivalents held by subsidiary on acquisition
- 5,628,896
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
(3) Net cash proceeds from disposal of subsidiaries in the current
period
January - June 2022 January - June 2021
Cash or cash equivalents received in current period due to disposal
-
of subsidiary in current period 1,412,399
Less: cash and cash equivalents held by subsidiary on the date
-
when the Company’s control over the subsidiary ceased 900,823
116
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
78 Supplementary information for the cash flow statement (continued)
(3) Net cash proceeds from disposal of subsidiaries in the current period (continued)
January - June 2022 January - June 2021
Add: Cash or cash equivalents received in current period due to
disposal of subsidiaries in prior periods - -
Net proceeds from the disposal of subsidiaries - 511,576
(4) Breakdown of cash and cash equivalents
June 30, 2022 December 31, 2021
I. Cash 31,676,321 30,081,705
Including: Cash on hand 601 789
Bank deposits available for payment on demand 30,529,692 28,970,585
Other monetary assets available for payment on demand 1,144,303 987,347
Deposits with the central bank available for payment 1,725 122,984
II. Cash equivalents - -
III. Cash and cash equivalents, end of the period 31,676,321 30,081,705
79 Changes in cash and cash equivalents, net
January - June
2022 January - June 2021
Ending cash and cash equivalents 31,676,321 24,493,712
Less: Beginning cash 30,081,705 18,208,417
Net increase in cash and cash equivalents 1,594,616 6,285,295
Analysis of ending cash and cash equivalents:
Ending monetary assets 33,795,517 27,374,279
Less: Ending non-cash equivalents (note) 2,119,196 2,880,567
Ending cash and cash equivalents 31,676,321 24,493,712
Note: The ending non-cash equivalents primarily included interest receivable on bank deposits, the statutory
reserve deposits placed by TCL Technology Group Finance Co., Ltd. in the central bank and other monetary
assets, detailed in Note V, 1.
117
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
80 Assets with restricted ownership or use rights
June 30, 2022 Reason for restriction
Deposited in the central bank
Monetary assets 432,087
as the required reserve
Monetary assets 1,687,109 Other restricted monetary assets
Notes receivable 278,564 Pledge
Fixed assets 86,032,862 As collateral for loan
Intangible assets 3,184,049 As collateral for loan
Held-for-trading financial assets 34,728 Put in pledge for loan
Right-of-use assets 28,256 As collateral for lease
Accounts receivable 1,018,119 Pledge
Contract assets 150,375 Pledge
92,846,149
81 Foreign currency monetary items
June 30, 2022
Foreign currency balance Conversion rate RMB balance
Monetary assets
Including: USD 795,853 6.7114 5,341,289
HKD 341,234 0.8553 291,857
EUR 6,647 7.0047 46,558
SGD 87 4.8186 419
Accounts receivable
Including: USD 1,139,020 6.7114 7,644,419
HKD 1,471,690 0.8553 1,258,736
INR 838,682 0.0850 71,288
Accounts payable
Including: USD 245,641 6.7114 1,648,595
HKD 1,642,104 0.8553 1,404,492
JPY 2,929,364 0.0491 143,832
INR 192,757 0.0850 16,384
EUR 104.76 7.0047 733.8
118
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
81 Foreign currency monetary items (continued)
June 30, 2022
Foreign currency balance Conversion rate RMB balance
Other receivables
Including: USD 17,488 6.7114 117,369
HKD 202,857 0.8553 173,504
JPY 11,970 0.0491 588
PLN 1,688 1.5002 2,532
INR 92,416 0.0850 7,855
KRW 102,590 0.0052 530
MXN 7,950 0.3327 2,645
Other payables
Including: USD 109,675 6.7114 736,071
HKD 713,668 0.8553 610,400
JPY 6,811 0.0491 334
INR 2,042,941 0.0850 173,650
PLN 335 1.5002 503
KRW 113,015 0.0052 583
AUD 116 4.6174 536
MXN 8,929 0.3327 2,971
EUR 4 7.0047 28
Notes payable
Including: USD 56,384 6.7114 378,413
EUR 6,783 7.0047 47,510
JPY 1,677,814 0.0491 82,381
Short-term borrowings
Including: USD 198,936 6.7114 1,335,140
Long-term borrowings
Including: USD 1,281,840 6.7114 8,602,941
Receivables financing
Including: USD 97,121 6.7114 651,817
119
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
VI. Changes in consolidation scope
1 Newly consolidated entities for the period
Consolidated Reason for Registered capital Contribution
Name of investee period change (RMB) ratio
Zhonghuan Advanced Semiconductor January - June Newly
(Tianjin) Co., Ltd. 2022 incorporated RMB10,000,000 100.00%
Huanou (Wuxi) New Energy Materials February - June Newly
Co., Ltd. 2022 incorporated RMB10,000,000 100.00%
Huaian Municipal Huanxin New February - June Newly
Energy Co., Ltd. 2022 incorporated RMB1,000,000 100.00%
March - June Newly
Lingwu Huanju New Energy Co., Ltd. 2022 incorporated RMB1,000,000 100.00%
Inner Mongolia Zhonghuan Electronic April - June Newly
Materials Co., Ltd. 2022 incorporated RMB10,000,000 100.00%
Tianjin Zhonghuan Industrial Park April - June Newly
Co., Ltd. 2022 incorporated RMB39,000,000 100.00%
May - June Newly
Tianjin Huanrui Technology Co., Ltd. 2022 incorporated RMB100,000,000 100.00%
Shaanxi Huanyu Green New Energy Newly
Co., Ltd. June 2022 incorporated RMB1,000,000 100.00%
Shaanxi Huanshuo Green New Energy Newly
Co., Ltd. June 2022 incorporated RMB1,000,000 100.00%
Xi'an Shangpai Technology Co., Ltd. June 2022 Newly 100.00%
incorporated RMB100,000
2 Deconsolidated entities for current period
Time of
Name of investee deconsolidation Reason for change
Tongliao Guangdong New Energy Co., Ltd. January 2022 De-registered
120
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
VII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Place of Principal place Shareholding ratio (%) How subsidiary
Name of investee Nature of business
registration of business Direct Indirect was obtained
Manufacturin g
TCL China Star Optoelectronics Technology Co., Ltd. Shenzhen and sales Shenzhen 83.68% - Incorporated
Shenzhen China Star Optoelectronics Semiconductor Manufacturin g
Display Technology Co., Ltd. Shenzhen and sales Shenzhen - 54.31% Incorporated
Guangzhou China Ray Optoelectronic Materials Co., Research and
Ltd. Guangzhou development Guangzhou - 100% Incorporated
Wuhan China Star Optoelectronics Technology Co., Manufacturin g
Ltd. Wuhan and sales Wuhan - 93.93% Incorporated
Wuhan China Star Optoelectronics Semiconductor Manufacturin g
Wuhan Wuhan - 57.14% Incorporated
Display Technology Co., Ltd. and sales
Business
Manufacturin g combination not
Shenzhen CPT Display Technology Co., Ltd. Shenzhen Shenzhen - 100%
and sales under common
control
China Star Optoelectronics International (HK) Limited Hong Kong Sales Hong Kong - 100% Incorporated
Business
China Display Optoelectronics Technology Holdings Investment combination not
Bermuda Bermuda - 64.20%
Limited holding under common
control
China Display Optoelectronics Technology (Huizhou) Manufacturin g
Co., Ltd. Huizhou and sales Huizhou - 100% Incorporated
Wuhan China Display Optoelectronics Technology Manufacturin g
Co., Ltd. Wuhan and sales Wuhan - 100% Incorporated
Business
Suzhou China Star Optoelectronics Technology Co., Manufacturin g combination not
Suzhou Suzhou - 100%
Ltd. and sales under common
control
Business
Manufacturin g combination not
Suzhou China Star Optoelectronics Display Co., Ltd. Suzhou Suzhou - 100%
and sales under 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 Technology Group Finance Co., Ltd. Huizhou Financial Huizhou 82.00% 18.00% Incorporated
Investment
100% -
Xinjiang TCL Equity Investment Ltd. Xinjiang business Shenzhen Incorporated
121
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Shareholding ratio
Place of Principal place of How subsidiary
Name of investee Nature of business (%)
registration business was obtained
Direct Indirect
Investment
100% -
Ningbo TCL Equity Investment Ltd. Ningbo business Shenzhen Incorporated
Property
- 100%
TCL Technology Park (Huizhou) Co., Ltd. Huizhou management Huizhou Incorporated
Research and
- 100%
TCL Research America Inc. U.S. development U.S. Incorporated
TCL Industrial Technology Research Institute (Hong Research and
- 100%
Kong) Limited Hong Kong development Hong Kong Incorporated
Investment
100% -
TCL Technology Investments Limited Hong Kong business Hong Kong Incorporated
Business
TCL Zhonghuan New Energy Technology Co., Ltd. Manufacturin g combination not
Tianjin Tianjin 2.41% 27.39%
(Note) and sales under common
control
Business
Manufacturin g combination not
Tianjin Printronics Circuit Corporation Tianjin Tianjin - 26.86%
and sales under common
control
Business
Tianjin Huan'Ou Semiconductor Manufacturin g combination not
Tianjin Tianjin - 100%
Material&Technology Co., Ltd. and sales under common
control
Business
Manufacturin g combination not
Wuxi Zhonghuan Applied Materials Co., Ltd. Wuxi Wuxi - 98.08%
and sales under common
control
Business
Manufacturin g combination not
Tianjin Huanzhi New Energy Technology Co., Ltd. Tianjin Tianjin - 62.00%
and sales under common
control
Business
Manufacturin g combination not
Inner Mongolia Zhonghuan Solar Material Co., Ltd. Inner Mongolia Inner Mongolia - 100%
and sales under common
control
Business
TianJin Zhonghuan Advanced Material&Technology Manufacturin g combination not
Tianjin Tianjin - 100%
Co., Ltd. and sales under common
control
Business
Manufacturin g combination not
Huansheng Solar (Jiangsu) Co., Ltd. Wuxi Wuxi - 83.73%
and sales under common
control
Business
Tianjin Huanou International Silicon Material Co., Procurement & combination not
Tianjin Tianjin - 100%
Ltd. sales under common
control
Business
combination not
Zhonghuan Hong Kong Holding Limited Hong Kong Sales Hong Kong - 100%
under common
control
122
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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 place
Name of investee subsidiary was
registration business of business Direct Indirect
obtained
Business
combination
Procurement &
Tianjin Huanrui Electronic Technology Co., Ltd. Tianjin Tianjin - 100% not under
sales
common
control
Business
combination
Inner Mongolia Zhonghuan Xiexin Solar 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 - 58.79% 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 sale
common
control
Note: Tianjin Zhonghuan Semiconductor Co., Ltd. changed its name to TCL Zhonghuan New Energy
Technology Co., Ltd. on June 16, 2022.
(2) Subsidiaries with substantial non-controlling interests
Current period
Non-controlling Current period Ending non-controlling
profit or loss
Name of subsidiary shareholding Dividends distributed to interests
attributable to non-
ratio (%) non-controlling interests Shareholder equity
controlling interests
TCL China Star Optoelectronics Technology Co., Ltd. 16.32% (1,129,675) 1,884,536 43,910,595
TCL Zhonghuan New Energy Technology Co., Ltd. 70.20% 2,369,069 249,235 34,653,477
Highly Information Industry Co., Ltd. 33.54% 46,201 43,309 498,822
123
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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:
June 30, 2022 January 1, 2022
Current Non-current Total assets Current Non-current Total Current Non-current Total assets Current Non- Total
assets assets liabilities liabilities liabilities assets assets liabilities current liabilities
liabilities
TCL China Star
Optoelectronics 74,854,571 143,813,111 218,667,681 72,396,362 70,754,153 143,150,515 68,597,560 135,290,612 203,888,172 53,275,700 66,065,421 119,341,121
Technology Co., Ltd.
TCL Zhonghuan
New Energy 26,226,595 62,488,239 88,714,834 21,492,022 22,413,742 43,905,764 24,458,844 53,758,790 78,217,634 20,443,660 15,865,920 36,309,580
Technology Co., Ltd.
Highly Information
Industry Co., Ltd. 8,117,943 110,883 8,228,826 6,870,890 20,764 6,891,654 6,035,827 100,060 6,135,887 4,782,662 22,603 4,805,265
January - June 2022 January - June 2021
Revenue Net profit Total Net cash generate Revenue Net profit Total Net cash generate
comprehensive from/used in comprehensive from/used in operating
income operating activities income activities
TCL China Star
Optoelectronics 32,429,876 (2,631,952) (2,880,645) 10,250,591 38,948,799 6,293,405 6,285,562 14,481,000
Technology Co., Ltd.
TCL Zhonghuan New
Energy Technology 31,698,337 3,224,900 3,224,900 2,809,898 17,644,419 1,915,184 1,915,184 2,125,294
Co., Ltd.
Highly Information
Industry Co., Ltd. 14,728,215 118,259 118,259 (574,296) 14,450,787 125,103 125,103 (437,244)
124
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates
(1) Basic information about principal joint ventures and associates
Principal place of Strategic to the Shareholding
Nature of ratio (%)
Name of investee business/place of Group’s
business
registration activities or not Direct Indirect
Associate
Financial
Bank of Shanghai Co., Ltd. Shanghai Yes 5.76% -
industry
R&D, production
& sales of
Xinjiang Xiexin New polycrystalline
Energy Material Xinjiang Yes - 27%
silicon &
Technology Co., Ltd. (note) monocrystalline
silicon;
(2) Key financial information of major associates
June 30, 2022 December 31, 2021
Bank of Xinjiang Xiexin Bank of Xinjiang Xiexin
Shanghai Co., New Energy Shanghai New Energy
Ltd. Material Co., Ltd. Material
Technology Co., Technology Co.,
Ltd. Ltd.
Total assets 2,814,652,578 15,097,306 2,653,198,679 11,377,813
Total liabilities 2,602,477,696 4,994,938 2,447,430,234 5,110,841
Non-controlling interests 577,340 Not applicable 564,813 Not applicable
Equity attributable to
shareholders of the Company as 211,597,542 10,102,368 205,203,632 6,266,973
the parent
Share of equity in proportion to
12,188,018 2,727,639 11,813,895 1,692,083
the Company’s interest
Carrying amount of investment
12,326,379 2,731,300 11,919,796 1,691,361
in associate
125
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates
(2) Key financial information of major associates (continued)
January - June January - June
2022 2021
Bank of Xinjiang Xiexin Bank of Xinjiang Xiexin
Shanghai New Energy Shanghai New Energy
Co., Ltd. Material Co., Ltd. Material
Technology Technology
Co., Ltd. Co., Ltd.
Revenue 27,941,662 6,649,119 27,704,556 2,905,071
Net profit attributable to the parent
company 12,674,306 3,835,377 12,278,102 1,322,643
Dividends from associate to the
Group in current period 327,157 - 327,157 -
(3) Financial information of other joint ventures and associates combined respectively
End of June 2022/January- End of June 2021/January-
June 2022 June 2021
Joint ventures:
Aggregated carrying amount of investments 542,914 555,257
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) (12,343) (2,895)
Other comprehensive income (note)
Total comprehensive income (12,343) (2,895)
Associate:
Aggregated carrying amount of investments 11,064,477 11,474,164
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) (13,791) 320,124
Other comprehensive income (note) 366 (16)
Total comprehensive income (13,425) 320,108
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.
126
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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.
The main risks arising from the Company's financial instruments are credit risk, liquidity risk, and market risk
(mainly foreign exchange risk and interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss caused by any party of financial instruments to another party due to
the failure in fulfilling performance obligations. The Group controls the credit risk based on the specific group
classification, and credit risk mainly results from bank deposit, due from central bank, 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 June 30, 2022, 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.
As of June 30, 2022, the Group had no liquidity risk events.
127
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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.
(A) On June 30, 2022, 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 USD341,208 thousand, equivalent to RMB2,289,981 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
January - June 2022 June 30, 2022
USD/RMB 6.5058 6.7114
Assuming that other risk variables other than exchange rate remain unchanged, a 5% depreciation/appreciation
of Renminbi due to the Group’s exchange rate change of Renminbi against the U.S. dollar on June 30, 2022 will
result in an increase/decrease of both shareholders’ equity and net profit by RMB114,499 thousand.
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 June 30, 2022, the Group’s liabilities with floating interest
rates accounted for 74.50% 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.
128
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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.
Items measured at continuous level 2 fair value adopt the following valuation techniques and
3
parameters:
The Company’s receivables financing was bank acceptance notes and trade acceptance notes, of which the
market prices were determined based on the transfer or discounted amounts.
Derivative financial assets and liabilities are multiple IRS and CCS signed between the Group and financial
institutions. The Company adopts the quotations provided by the financial institution in valuation.
Items measured at continuous level 3 fair value adopt the following valuation techniques and 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.
129
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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
Note V. 2) 321,814 8,585,498 67,701 8,975,013
Derivative financial assets (see Note
V.3) - 488,428 - 488,428
Receivables financing (see Note V.6) - 2,223,849 - 2,223,849
Investments in other equity
instruments (see Note V. 15) 88,092 - 839,444 927,536
Other non-current financial assets (see
Note V. 16) 617,486 - 511,125 1,128,611
Total assets continuously measured at
fair value 1,027,392 11,297,775 1,418,270 13,743,437
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial liabilities
(see Note V, 30) 140,276 666,142 183,385 989,803
Derivative financial liabilities (see
Note V, 31) - 430,997 - 430,997
Total liabilities continuously measured
at fair value 140,276 1,097,139 183,385 1,420,800
130
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became
persons acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,000 shares in total
and becoming the largest shareholder of the Company.
As per Article 217 of the Company Law, a controlling shareholder refers to a shareholder who owns over 50%
of a limited liability company’s total capital or over 50% of a joint stock company’s total share capital; or,
despite the ownership of less than 50% of a limited liability company’s total capital or less than 50% of a joint
stock company’s total number of shares, who can still prevail in the resolution of a meeting of shareholders or a
general meeting of shareholders according to the voting rights corresponding to their interest in the limited
liability company’s total capital or the joint stock company’s total number of shares. According to the definition
above, the Company has no controlling shareholder or actual controller.
2 Related parties that do not control or are not controlled by the Company
Information about such related parties：
Company Name Relationship with the Company
Shenzhen Qianhai Sailing International Supply Chain Management Co.,
Associate
Ltd.
Shenzhen Qianhai Sailing International Supply Chain Management Co.,
Associate
Ltd.
SunPower Systems International Limited Associate
Shenzhen Jucai Supply Chain Technology Co., Ltd. Associate
Shenzhen Tixiang Business Management Technology Co., Ltd. Associate
Tianjin 712 Communication & Broadcasting Co., Ltd. Associate
Xinjiang Xiexin New Energy Material Technology Co., Ltd. Associate
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. Associate
Inner Mongolia Shengou Electromechanical Engineering Co.. Ltd. Associate
Inner Mongolia Zhongjing Science and Technology Research Institute
Associate
Co., Ltd.
Ningbo Dongpeng Weichuang Equity Investment Partnership (Limited
Associate
Partnership)
Ningbo Dongpeng Heli Equity Investment Partnership (Limited
Associate
Partnership)
Inner Mongolia Huanye Material Co., Ltd. Associate
Zhonghuan Aineng (Beijing) Technology Co., Ltd. Associate
LG Electronics (Huizhou) Co., Ltd. Associate
TCL Intelligent Technology (Ningbo) Co., Ltd. Associate
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. Associate
TCL Finance (Hong Kong) Co., Limited Associate
Huizhou TCL Human Resources Service Co., Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund Partnership
Joint venture
(Limited Partnership)
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. Joint venture
Tianjin Huanyan Technology Co., Ltd. Joint venture
SunPower Systems Sar Associate’s subsidiary
131
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related parties and related-party transactions (continued)
2 The nature of related parties without control relationship (continued)
Qihang International Import & Export Limited Associate’s subsidiary
Qihang Import&Export Limited Associate’s subsidiary
Jucai Supply Chain International (Hong Kong) Co., Ltd. Associate’s subsidiary
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. Associate’s subsidiary
Shenzhen Xirang International Network Information Technology Co., Ltd. Associate’s subsidiary
Elite Excellent Investments Limited Associate’s subsidiary
Huixing Holdings Limited Associate’s subsidiary
Marvel Paradise Limited Associate’s subsidiary
Union Dynamic Investment Limited Associate’s subsidiary
Esteem Venture Investment Limited Associate’s subsidiary
Zijinshan Investment Co., Ltd. Associate’s subsidiary
Ziteng Intellectual Property Operation (Shenzhen) Co., Ltd. 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
Moxing Semi-conductor (Guangdong) 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
Peer College Education Technology (Huizhou) Co., Ltd. Joint venture’s subsidiary
Hubei Shifen Sharing Technology Co., Ltd. Joint venture’s subsidiary
Moxun Semiconductor Technology (Shanghai) Co., Ltd. Joint venture’s subsidiary
TCl Environmental Technology Co., Ltd. and its subsidiaries Associate and its subsidiaries
Getech Ltd. and its subsidiaries Associate and its subsidiaries
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries Associate and its subsidiaries
TCL Industries Holdings Co., Ltd. and its subsidiaries Other relationships
Significantly influenced by the
CJ Speedex Logistics Co., Ltd.
Company’s senior management
132
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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
January - June 2022 January - June 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries 5,156,979 9,060,288
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 1,176,332 360,585
SunPower Systems Sar 1,031,484 642,868
Qihang International Import & Export Limited 497,015 130,212
SunPower Malaysia Manufacturing Sdn.Bhd. 171,070 -
SunPower Systems International Limited 106,752 2,511
TCl Environmental Technology Co., Ltd. and its
subsidiaries 59,645 85,317
Jiangsu Huanxin Semiconductor Co.. Ltd. 19,542 885
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 16,015 3,594
Getech Ltd. and its subsidiaries 4,704
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 4,680 -
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 2,940 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 688 791
Moxing Semi-conductor (Guangdong) Co., Ltd. 44 -
Qihang Import&Export Limited - 5,755
Shenzhen Tixiang Business Management Technology
Co., Ltd. - 17
Tianjin 712 Communication & Broadcasting Co., Ltd. - 661
CJ Speedex Logistics Co., Ltd. - -
8,247,890 10,293,484
(2) Purchasing raw materials and finished products from related parties Note 2
January - June 2022 January - June 2021
Xinjiang Xiexin New Energy Material Technology
Co., Ltd. 2,464,489 1,078,653
Aijiexu New Electronic Display Glass (Shenzhen)
Co., Ltd. 2,230,372 1,333,171
Shenzhen Jucai Supply Chain Technology Co.,
Ltd. 607,566 375,137
TCL Industries Holdings Co., Ltd. and its
subsidiaries 438,112 815,005
Shenzhen Qianhai Sailing International Supply
Chain Management Co., Ltd. 154,854 120
Inner Mongolia Shengou Electromechanical
Engineering Co., Ltd. 89,991 50,755
Inner Mongolia Zhongjing Science and
Technology Research Institute Co., Ltd. 70,157 110,776
Shenzhen Qianhai Sailing International Supply
Chain Management Co., Ltd. 32,406 3,635
Getech Ltd. and its subsidiaries 12,062 -
Qihang Import&Export Limited 15,776 -
TCl Environmental Technology Co., Ltd. and its
subsidiaries 2,308 23,155
TCL Intelligent Technology (Ningbo) Co., Ltd. 861 977
Jucai Supply Chain International (Hong Kong)
Co., Ltd. 1,126 -
6,120,080 3,791,384
133
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(3) Receiving funding from related parties Note 3
January - June 2022 January - June 2021
Shenzhen Jucai Supply Chain Technology Co., Ltd. 149,714 115,342
Ningbo Dongpeng Weichuang Equity Investment Partnership
(Limited Partnership) 56,146 86,875
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 52,452 16,528
Qihang Import&Export Limited 36,860 44,641
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 27,985 192,068
Qihang International Import & Export Limited 19,047 28,453
Shanghai Tixiang Enterprise Management Consulting Co.,
Ltd. 10,904 -
Shenzhen Xirang International Network Information
Technology Co., Ltd. 6,516 6,155
Anhui TCL Human Resources Service Co., Ltd. 6,148 5,916
Elite Excellent Investments Limited 5,412 1,989
Shanxi Shengwei Enterprise Management Co., Ltd. 3,808 -
Peer College Education Technology (Huizhou) Co., Ltd. 3,744 -
Shenzhen Tixiang Business Management Technology Co.,
Ltd. 1,494 1,724
Huixing Holdings Limited 670 674
Marvel Paradise Limited 600 586
Union Dynamic Investment Limited 397 392
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 205 236
Huizhou TCL Human Resources Service Co., Ltd. 158
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 93 400,000
Hubei Shifen Sharing Technology Co., Ltd. 85 -
Esteem Venture Investment Limited 40 49
Ningbo Dongpeng Heli Equity Investment Partnership
(Limited Partnership) 33 257,053
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 8 -
TCL Finance (Hong Kong) Co., Limited - 1,369,249
TCL Industries Holdings Co., Ltd. and its subsidiaries - 100
382,519 2,528,030
(4) Providing funding for related parties Note 3
January - June 2022 January - June 2021
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 531,312 1,279,116
TCL Industries Holdings Co., Ltd. and its subsidiaries 372,247 1,170,000
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 39,488 -
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 12,689 -
TCL Intelligent Technology (Ningbo) Co., Ltd. - 682,500
TCl Environmental Technology Co., Ltd. and its subsidiaries - 2,438
955,736 3,134,054
134
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
3 Major related-party transactions (continued)
(5) Leases
January - June 2022 January - June 2021
Rental income
TCL Industries Holdings Co., Ltd. and its subsidiaries 38,683 45,434
Asahi Glass New Electronic Display Glass (Shenzhen)
Co., Ltd. 34,756 41,998
Getech Ltd. and its subsidiaries 683 241
TCl Environmental Technology Co., Ltd. and its
subsidiaries 534 531
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 439 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 414 402
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 182 -
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 834
Huizhou TCL Real Estate Development Co., Ltd. - 241
75,691 89,681
Rental expense
TCL Industries Holdings Co., Ltd. and its subsidiaries 28,999 29,908
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 2,581 478
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 1,120 291
Shenzhen Jucai Supply Chain Technology Co., Ltd. 137 -
32,837 30,677
(6) Providing labour service for or accepting labour service from related parties
January - June 2022 January - June 2021
Providing labour service for related parties 120,933 90,804
Accepting labour service from related parties 567,820 335,790
(7) Receiving interest from or paying interest to related parties Note 3
January - June 2022 January – June 2021
Interest received 11,457 45,475
Interest paid 8,387 10,157
135
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
3 Major related-party transactions (continued)
(8) Remuneration of key management personnel
January - June 2022 January - June 2021
Remuneration of key management personnel 7,460 7,710
(9) Other related transactions
In June 2022, the Group signed a property share transfer agreement with TCL Industrial Holdings Co., Ltd. to
transfer all the property shares held by the Group in Chongqing Zhongxin Rongxin Investment Center (Limited
Partnership) to TCL Industrial Holdings Co., Ltd., with the transaction price of RMB960 million.
Note 1 Selling raw materials and finished products to related parties
The Company sells raw materials, spare parts, auxiliary materials and finished goods to its joint ventures
and associates at market prices, which are settled in the same way as non-related-party transactions. These
related-party transactions have no material impact on the Company’s net profit^ but play an important role
as to the Company’s continued operations.
Note 2 Purchasing raw materials and finished products from related parties
The Company purchases raw materials and finished goods from its joint ventures and associates at prices
similar to those paid to third-party suppliers, which are settled in the same way as non-related-party
transactions. These related-party transactions have no material impact on the Company’s net profit^ but
play an important role as to the Company’s continued operations.
Note 3 Providing funding for or receiving funding from related parties and corresponding interest received or paid
The Company set up a settlement center in 1997 and TCL Technology Group Finance Co., Ltd. in 2006
(together, the “Financial Settlement Center”). The Financial Settlement Center is responsible for the
financial affairs of the Company, including capital operation and allocation. The Center settles accounts
with the Company’s subsidiaries, joint ventures and associates and pays the interest. It also allocates the
money deposited by the subsidiaries, joint ventures and associates in it to these enterprises and charges
interest. The interest income and expense between the Company and the Center are calculated according to
the interest rates declared by the People’s Bank of China. The funding amount provided refers to the
outstanding borrowings due from the Center to related parties, while the funding amount received means
the balances of related parties’ deposits in the Center.
Note 4 The transactions between Maojia International Co., Ltd. and its subsidiaries and the Company from
January to March 2021 are included in TCL Industrial Holdings Co., Ltd. and its subsidiaries.
Note 5 The transactions between TCL Financial Holding (Guangzhou) Group Co., Ltd. and its subsidiaries and
the Company in June 2021 are included in TCL Industrial Holdings Co., Ltd. and its subsidiaries.
Note 6 The transaction between TCL Huanxin Semiconductor (Tianjin) Co., Ltd. and the Company in June 2021
is a related-party transaction.
136
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
4 Balances due from and to related parties (continued)
(1) Notes receivable
June 30, 2022 December 31, 2021
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. - 13,441
- 13,441
(2) Accounts receivable
June 30, 2022 December 31, 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries 2,715,368 2,230,056
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 1,027,582 276,090
SunPower Systems Sarl 495,948 281,163
Qihang International Import & Export Limited 413,892 235,474
SunPower Systems International Limited 53,704 119,817
Tianjin Zhonghuan Haihe Intelligent Manufacturing
Fund Partnership (Limited Partnership) 7,199 199
Jiangsu Huanxin Semiconductor Co., Ltd. 6,385 -
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 3,161 24,710
Inner Mongolia Huanye Material Co., Ltd. 2,695 -
Inner Mongolia Zhongjing Science and Technology
Research Institute Co., Ltd. 1,860 -
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 1,816 1,569
TCl Environmental Technology Co., Ltd. and its
subsidiaries 1,608 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 816 -
Getech Ltd. and its subsidiaries 800 -
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 608 -
Tianjin Huanyan Technology Co., Ltd. 162 -
Inner Mongolia Shengou Electromechanical
Engineering Co., Ltd. 157 -
Tianjin 712 Communication & Broadcasting Co., Ltd. 23 40
SunPower Malaysia Manufacturing Sdn.Bhd. 20 2,183
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 15 1
4,733,819 3,171,302
(3) Receivables financing
June 30, 2022 December 31, 2021
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. - 500
- 500
137
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(4) Accounts payable
June 30, 2022 December 31, 2021
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 537,889 552,883
TCL Industries Holdings Co., Ltd. and its subsidiaries 298,110 448,553
Shenzhen Jucai Supply Chain Technology Co., Ltd. 274,170 274,366
Getech Ltd. and its subsidiaries 39,242 10,762
Inner Mongolia Shengou Electromechanical Engineering Co..
Ltd. 29,754 30,029
TCl Environmental Technology Co., Ltd. and its subsidiaries 24,454 24,033
Qihang International Import & Export Limited 12,416 -
Inner Mongolia Huanye Material Co., Ltd. 11,725 1,457
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 9,795 2,240
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 2,901 -
Jucai Supply Chain International (Hong Kong) Co., Ltd. 2,324 6,503
Qihang Import&Export Limited 2,179 -
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. 884 5,246
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 392 -
Peer College Education Technology (Huizhou) Co., Ltd. - 38
Shenzhen Xirang International Network Information
Technology Co., Ltd. - 1,195
1,246,235 1,357,305
(5) Other receivables
June 30, 2022 December 31, 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries 576,979 1,390,733
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 12,696 -
TCl Environmental Technology Co., Ltd. and its subsidiaries 9,566 2,139
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 7,987 -
Getech Ltd. and its subsidiaries 2,198 404
Inner Mongolia Huanye Material Co., Ltd. 3,310 -
Shenzhen Xirang International Network Information
Technology Co., Ltd. 3,171 1,185
Zhonghuan Aineng (Beijing) Technology Co., Ltd. 3,099 3,099
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 2,133 663
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. 214 524
LG Electronics (Huizhou) Co., Ltd. 153 109
Jiangsu Huanxin Semiconductor Co.. Ltd. 122 -
Inner Mongolia Shengou Electromechanical Engineering Co..
Ltd. 100 64
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 4 -
TCL Intelligent Technology (Ningbo) Co., Ltd. - 3,777
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. - 8
Moxing Semi-conductor (Guangdong) Co., Ltd.
- 7
621,732 1,402,712
138
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties (continued)
(6) Other payables
June 30, 2022 December 31, 2021
Tianjin Zhonghuan Haihe Intelligent Manufacturing
Fund Partnership (Limited Partnership) 428,100 428,100
Getech Ltd. and its subsidiaries 146,637 118,911
Shenzhen Jucai Supply Chain Technology Co., Ltd. 115,765 84,988
TCL Industries Holdings Co., Ltd. and its subsidiaries 78,813 39,554
Ningbo Dongpeng Weichuang Equity Investment
Partnership (Limited Partnership) 40,703 48,969
Qihang Import&Export Limited 36,861 12,779
Qihang International Import & Export Limited 19,047 3,234
TCl Environmental Technology Co., Ltd. and its
subsidiaries 9,647 1,365
Aijiexu New Electronic Display Glass (Shenzhen) Co.,
Ltd. 9,317 1,330
Anhui TCL Human Resources Service Co., Ltd. 7,487 6,073
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 5,564 5,316
Elite Excellent Investments Limited 5,412 3,860
Shenzhen Xirang International Network Information
Technology Co., Ltd. 3,966 -
Shanxi Shengwei Enterprise Management Co., Ltd. 3,814 725
Peer College Education Technology (Huizhou) Co., Ltd. 3,753 3,624
Inner Mongolia Shengou Electromechanical Engineering
Co., Ltd. 2,841 -
Moxun Semiconductor Technology (Shanghai) Co., Ltd. 2,057 1,000
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 1,685 -
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 824 245
Huixing Holdings Limited 670 672
Marvel Paradise Limited 600 570
Union Dynamic Investment Limited 397 377
CJ Speedex Logistics Co., Ltd. 202 1,772
Shenzhen Tixiang Business Management Technology
Co., Ltd. 197 197
Huizhou TCL Human Resources Service Co., Ltd. 157 370
Hubei Shifen Sharing Technology Co., Ltd. 85 -
Ningbo Dongpeng Heli Equity Investment Partnership
(Limited Partnership) 66 33
Inner Mongolia Zhongjing Science and Technology
Research Institute Co., Ltd. 55 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 45 45
Esteem Venture Investment Limited 40 41
Xinjiang Xiexin New Energy Material Technology Co.,
Ltd. - 4
Zijinshan Investment Co., Ltd. - -
924,807 764,154
139
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
Related Parties and Related-Party Transactions
X
(Continued)
4 Balances due from and to related parties (continued)
(7) Current portion of non-current liabilities due within a one-year period
June 30, 2022 December 31, 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries 15,717 6,346
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 4,192 4,648
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 957 957
20,866 11,951
(8) Prepayments
June 30, 2022 December 31, 2021
Getech Ltd. and its subsidiaries 126,354 4,850
Xinjiang Xiexin New Energy Material Technology Co.,
Ltd. 120,347 74,672
Tianjin Huanyan Technology Co., Ltd. 39,113 -
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 16,790 -
Inner Mongolia Zhongjing Science and Technology
Research Institute Co., Ltd. 12,046 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 98
TCL Industries Holdings Co., Ltd. and its subsidiaries 775 40
Shenzhen Xirang International Network Information
Technology Co., Ltd. 550 -
TCL Intelligent Technology(Ningbo) Co., Ltd. - -
316,073 79,562
(9) Contract liabilities
June 30, 2022 December 31, 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries
5,955 10,633
TCl Environmental Technology Co., Ltd. and its
subsidiaries 3,124 2,885
Moxun Semiconductor Technology (Shanghai) Co., Ltd.
1,000 -
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. - 111
10,079 13,629
140
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(10) Lease liabilities
June 30, 2022 December 31, 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries
8,329 6,576
Huaxia CPV (Inner Mongolia) Power Co., Ltd.
3,741 6,242
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd.
275 275
12,346 13,093
(11) Deposits from related parties (note)
June 30, 2022 December 31, 2021
Shenzhen Jucai Supply Chain Technology Co., Ltd.
149,769 101,181
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 52,464 25,040
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. 27,996 45,018
Ningbo Dongpeng Weichuang Equity Investment Partnership
(Limited Partnership) 15,693 114,413
Shanghai Tixiang Enterprise Management Consulting Co.,
Ltd. 10,910 4,940
Shenzhen Xirang International Network Information
Technology Co., Ltd. 6,519 7,559
Shenzhen Tixiang Business Management Technology Co.,
Ltd. 1,495 7,873
Anhui TCL Human Resources Service Co., Ltd.
579 -
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries
205 46
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd.
93 185
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd.
8 229,154
Jiangsu Huanxin Semiconductor Co.. Ltd.
- 109,395
TCL Finance (Hong Kong) Co., Limited
- 21,241
265,731 666,045
These deposits are made by related parties in the Company’s subsidiary TCL Technology Group Finance Co., Ltd.
(12) Other current assets
June 30, 2022 December 31, 2021
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 531,312 -
TCL Industries Holdings Co., Ltd. and its subsidiaries 372,247 -
Shenzhen Qianhai Sailing International Supply Chain -
Management Co., Ltd. 39,539
943,098 -
141
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties (continued)
(13) Other non-current assets
June 30, 2022 December 31, 2021
Ziteng Intellectual Property Operation (Shenzhen) Co., -
Ltd. 233,582
Getech Ltd. and its subsidiaries 22,004 -
257,824 -
142
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XI Commitments
1 Capital commitments
June 30, 2022 December 31, 2021
Under contractual
obligations but not Note
provided for 1 28,235,439 17,764,772
Approved by Board but not
under contractual Note
obligations 2 10,346 172,384
28,245,785 17,937,156
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 June 30, 2022, apart from the disclosures above, there were no other major commitments that are
required to be disclosed.
XII Contingencies
Guarantees Provided for External Parties
External guarantees provided for related party bank loans, commercial bills, letters of credit, etc.:
RMB6,185,884 thousand.
XIII Events after Balance Sheet Date
1 The Company issued a medium-term note on July 4, 2022 with the code 22TCL Group MTN003 (Science
and Technology Notes). The issue size was RMB2 billion, the value date is July 6, 2022, with the maturity
date being 4 July, 2025. The term is 3 years, and the coupon rate is 3.45%.
In July 2022, the Company received the Approval for the Non-Public Issue of Shares by TCL Technology
Group Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1658) issued by the China Securities Regulatory
Commission, which approved the Company's non-public issue of no more than 2,806,128,484 shares. If the
2
total share capital changed due to new shares, conversion to share capital, etc., the number of shares offered
in the issue would be adjusted accordingly, and the approval would be valid within 12 months from the date
of issuance.
143
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XIV Other Important Matters
(I) Discontinued operations
In May 2021, the Company's second extraordinary general meeting reviewed and approved the proposal to
sell 100% equity of TCL Financial Holding (Guangzhou) Group Co., Ltd.: to sell 100% of the Company's
equity to TCL Industrial Holdings Co., Ltd. at RMB2,572,020 thousand. The Company completed the
closing at the end of May.
January - June 2022 January - June 2021
Revenue from discontinued operations - 168,312
Gross profit of discontinued operations - 63,259
Income tax expense of discontinued -
operations 15,502
Net profit of discontinued operations - 47,757
Add: Net gain/loss on disposal of -
discontinued operations 10,539
Total net profit of discontinued operations - 58,296
(II) Segment reporting
1 Basis for determining reporting segment and accounting policies
According to the Company’s internal organizational structure, management requirements and internal
reporting system, the Company’s business is divided into four reporting segments: the semi-conductor
display business, the new energy photovoltaic and semi-conductor materials business, the distribution
business and the other businesses. The Company's management regularly evaluates the operating results of
these reporting segments to determine the allocation of resources and evaluate their performance. The
Company’s four reporting segments are:
Semiconductor display business: mainly includes the research and development, manufacturing and sales of
(1)
semiconductor display panels and semiconductor display modules, as well as complete display processing.
New energy photovoltaic and semiconductor materials business: mainly includes the manufacture and sales
(2) of semiconductor materials, semiconductor devices, new energy materials, and new energy; development,
and operation of high-efficiency photovoltaic power station projects.
(3) Distribution business: mainly includes the sales of computers, software, tablet computers, mobile phones
and other electronic products.
(4) Other businesses: other businesses besides the above, including industrial finance and investment business,
technology development services and patent maintenance services provided by the company, etc.
Segment assets include all current assets such as tangible assets, intangible assets, other long-term assets and
receivables attributable to each segment. Segment liabilities include payables, bank loans and other long-
term liabilities attributable to each segment.
Segment operating results refer to the income generated by each segment (including external transactions
income and inter-segment transaction income), net of expenses incurred by each segment, depreciation,
amortization and impairment losses of assets attributable to each segment, gains or losses from changes in
fair value, investment income, non-operating income and income tax expenses. Transfer pricing of inter-
segment income is calculated on terms similar to other foreign transactions.
144
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XIV Other Important Matters (Continued)
(II) Segment reporting (continued)
2 Financial information of reporting segments
For the six-month period ending June 30, 2022
New energy
Semi-
photovoltaics and Distribution Other and
conductor Total
semi-conductor business offsets
display
materials business
Revenue 37,262,162 31,698,337 14,728,215 833,467 84,522,181
Gross profit (2,750,561) 3,480,014 165,175 943,690 1,838,318
Income tax
(477,736) 255,114 46,916 87,308 (88,398)
expense
Net profit (2,272,825) 3,224,900 118,259 856,382 1,926,716
Total assets 222,752,118 88,714,834 8,228,826 10,660,749 330,356,527
Total
145,828,388 43,905,764 6,891,654 14,592,438 211,218,244
liabilities
Other items
Depreciation
and 7,868,657 1,982,213 15,991 1,555,938 11,422,798
amortization
Capital
13,126,031 4,963,363 - 162,242 18,251,636
expenditure
Net interest
424,130 384,456 33,041 839,916 1,681,543
expense
For the six-month period ending June 30, 2021
Semi-
New energy
conductor
photovoltaics and Distribution Other and
display Total
semi-conductor business offsets
and materials
materials business
business
Revenue 40,863,497 17,644,419 14,450,787 1,447,146 74,405,849
Gross profit 7,676,130 2,135,060 167,885 734,909 10,713,982
Income tax
1,049,844 219,876 42,782 103,995 1,416,497
expense
Net profit 6,626,286 1,915,184 125,103 630,914 9,297,485
Total assets 199,819,530 66,067,765 5,377,523 30,986,182 302,251,000
Total
112,805,489 36,283,034 4,193,839 43,677,696 196,960,058
liabilities
Other items
Depreciation
and 6,926,888 1,411,961 8,121 99,878 8,446,848
amortization
Capital
10,616,137 3,036,386 - 31,508 13,684,031
expenditure
Net interest
668,046 382,859 23,015 837,398 1,911,318
expense
145
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XV Notes to the key items presented in the financial statements of the Company
1 Accounts receivable
June 30, 2022 December 31, 2021
Accrual
Ratio Ratio
Amount Ratio Amount
(%) (%)
Allowance (%) Allowance Percentage
Within
137,256 100% 338 0.25% 93,929 100% 363 0.39%
1 year
2 Other receivables
June 30, 2022 December 31, 2021
Dividends receivable 9,618,555 -
Other receivables 20,249,449 13,819,512
29,868,004 13,819,512
(a) Nature of other receivables is analyzed as follows:
June 30, 2022 December 31, 2021
Equity transfer receivables 471,010 1,260,290
Receivables from external entities 104,104 107,708
Security deposits 1,840 1,407
Others 19,672,495 12,450,107
20,249,449 13,819,512
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL
12-month Lifetime ECL (credit
(credit not Total
ECL impaired)
impaired)
December 31, 2021 962 - 31,966 32,928
Accrued in current
period - - - -
Reversal of current
period - - (2) (2)
Write-off of current
period - -
June 30, 2022 962 - 31,964 32,926
146
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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:
June 30, 2022 December 31, 2021
Amount Ratio (%) Amount Ratio (%)
Within 1
year 19,225,308 94.80% 12,536,263 90.50%
1 to 2
years 31,167 0.15% 363,773 2.63%
2 to 3
years 651,701 3.21% 587,773 4.24%
Over 3
years 374,199 1.84% 364,631 2.63%
20,282,375 100% 13,852,440 100%
The outstanding other receivables were mostly current accounts with related parties.
The top five other receivables of the Company amounted to approximately RMB18,121,026 thousand (At the
end of 2021: RMB12,357,035 thousand), accounting for 89.34% of the total other receivables of the
Company (At the end of 2021: 89.20%).
3 Long-term equity investments
June 30, 2022 December 31, 2021
Allowance
for Impairment
doubtful Carrying Gross allowance Carrying
Gross amount accounts amount amount amount
Associates and joint
ventures (1) 15,148,219 - 15,148,219 14,968,764 - 14,968,764
Subsidiaries (2) 58,418,945 - 58,418,945 56,334,362 - 56,334,362
73,567,164 - 73,567,164 71,303,126 - 71,303,126
As of June 30, 2022, there are no major restrictions on the realization of investment and the remittance of
return on long-term equity investments.
147
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(1) Associates and joint ventures
Increase or decrease in current period
Investment gains Other Declared Other
Increase/decrease Other June 30, 2022
Beginning and losses comprehensive cash Impairment increases
in investment in equity
amount recognized by income dividends or allowance and
current period changes
equity method adjustment profits decreases
Bank of Shanghai Co., Ltd. 11,919,796 - 729,672 4,068 - (327,157) - - 12,326,379
China Innovative Capital Management
Limited 1,063,219 - (74,814) - - - - - 988,405
LG Electronics (Huizhou) Co., Ltd. 92,079 - 5,763 - - (13,000) - - 84,842
Shenzhen Qianhai Sailing International
Supply Chain Management Co., Ltd. 36,160 - (1,405) - - - - - 34,755
Shenzhen Tixiang Business Management
Technology Co., Ltd. 3,620 - (1,823) - - - - - 1,797
Shenzhen Jucai Supply Chain Technology
Co., Ltd. 10,706 - 2,311 - - - - - 13,017
TCL Environmental Technology Co., Ltd. 122,391 - 3,539 - - - - - 125,930
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
Industry Equity Investment Fund
Partnership (Limited Partnership) 372,976 - (5,792) - - - - - 367,184
Guangdong Utrust Emerging Industry
Equity Investment Fund Partnership
(Limited Partnership) 151,026 (279) 13,636 - - - - - 164,383
Huizhou TCL Human Resources Service
Co., Ltd. 3,296 - 3,030 - - - - - 6,326
TCL Microchip Technology (Guangdong)
Co., Ltd. 313,434 - (14,358) - - - - - 299,076
Shenzhen Qianhai Sailing International
Supply Chain Management Co., Ltd. 49,964 - 3,020 - - - - - 52,984
Hubei Consumer Finance Co., Ltd. 168,654 - 6,091 - - - - (14,174) 160,571
Tianjin 712 Communication & Broadcasting
Co., Ltd. 661,443 (88,084) 21,332 - - (7,777) - (64,343) 522,570
14,968,764 (88,363) 690,202 4,068 (347,934) (78,517) 15,148,219
148
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Direct Increase in
Beginning Decrease in
shareholding current June 30,
amount current period
Ratio (%) period 2022
TCL China Star Optoelectronics
Technology Co., Ltd. 83.68% 32,700,898 268,400 - 32,969,298
TCL Technology Group Finance
Co., Ltd. 82% 1,256,003 - - 1,256,003
TCL Technology Group (Tianjin)
Co., Ltd. 100% 15,000,000 - - - 15,000,000
TCL Zhonghuan New Energy
Technology Co., Ltd. 2.41% 1,752,635 - - - 1,752,635
Wuhan China Star
Optoelectronics Technology 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% 70,826 183 71,009
(Limited Partnership) -
TCL Industrial Technology
100% 20,000 20,000
Research Institute, Ltd. (Europe) - - -
Wuhan TCL Industrial
Technology Research Institute, 100% 20,000 20,000
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
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 1,800,000 - 2,800,000
Xiamen TCL Technology
Industrial Investment Co., Ltd. 100% - 1,000 - 1,000
TCL Internet Technology
(Shenzhen) Co., Ltd. 100% - 15,000 - 15,000
Ningbo TCL Equity Investment
Ltd. 100% 300,000 - - 300,000
TCL Technology Investments
100% 2,988,293 2,988,293
Limited - -
Equity incentives of subsidiaries 10,373 - - 10,373
56,334,362 2,084,583 - 58,418,945
For the registered capital of subsidiaries and the Company's equity interests in the subsidiaries, see Note V.
149
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
4 Investments in other equity instruments
June 30, 2022 December 31, 2021
Equity of unlisted companies 5,000 5,000
5 Other non-current financial assets
June 30, 2022 December 31, 2021
Equity investments 126,644 1,051,536
6 Revenue and cost of sales
January - June 2022 January - June 2021
Revenue Cost of sales Revenue Cost of sales
Core business 339,768 333,523 618,241 606,953
Non-core business 249,803 78,878 155,431 28,602
589,571 412,401 773,672 635,555
7 Return on investment
January - June January - June
2022 2021
Gain on disposal of debt instruments at fair value through profit or
loss 140,452 62,402
Profit from holding debt instruments at fair value through profit or
loss - 19,419
Debt instruments at amortized cost through profit or loss - 877
Dividends from subsidiaries 9,292,231 378,888
Share of profit of associates for current period 701,530 629,051
Share of profit of joint ventures for current period (11,328) (1,345)
Net income from disposal of long-term investments 484,672 761,859
10,607,557 1,851,151
As of June 30, 2022, there were no significant restrictions on the collection of return on investment.
150
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(RMB’000)_____________
XV Notes to Financial Statements of the Parent Company (Continued)
8 Net cash generated from operating activities
In the cash flow statement of the Company, the net cash inflow from operating activities was RMB975,555
thousand.
9 Cash and cash equivalents, end of the period
The balance of cash and cash equivalents of the Company at the end of the period was RMB14,738,040
thousand.
10 Contingent liabilities
As of June 30, 2022, the contingent liabilities not provided for in the financial report were as follows:
June 30, 2022 December 31, 2021
Guarantees for trade notes and letters of guarantee of
subsidiaries 17,462,870 10,025,125
Guarantees for bank loans of subsidiaries 33,269,665 29,542,641
Guarantees for bank loans, trade notes, letters of credit, etc.
of related parties 6,185,884 15,991,207
151
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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
January - January -
June June
2022 2021
Gain or loss on disposal of non-current assets (inclusive of impairment
allowance write-offs) 464,268 739,340
Government grants through profit or loss (exclusive of government grants
given in the Company’s ordinary course of business at fixed quotas or 429,923 359,192
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 lower than the
- 40,300
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,
(11,164) 210,273
marketable financial liabilities and available-for-sale financial assets, except
for the effective hedging business related to the Company’s normal business
operation.
Reversal of provision for impairment of receivables that have been individually
tested for impairment 10,180 -
Non-operating income and expenses other than the above 538,585 244,570
Income tax effects (47,766) (82,886)
Non-controlling interests effects (93,634) (224,722)
Non-recurring gains and losses attributable to ordinary shareholders of the
parent company 1,290,392 1,286,067
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.
152
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1, 2022 to June 30, 2022
___________(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 Reporting EPS (RMB yuan)
period
Net profit
attributable Weighted
to the average Basic
Diluted EPS
parent return on earnings per
income
Company equity (%) share
for the
reporting
period
Net profit attributable to ordinary
shareholders of the Company 663,521 1.71% 0.0489 0.0485
Net profit attributable to ordinary
shareholders of the Company
before non-recurring gains and
losses (626,871) (1.62%) (0.0462) (0.0458)
Company Name: TCL Technology Group Corporation
Date: August 26, 2022
The financial statements and the notes thereto from page 1 to page 153 are signed by:
Person-in-
Person-in-charge charge of the
Legal Li of financial accounting
representative: Dongsheng affairs: Li Jian department: Xi Wenbo
153
