Full Text of the Annual Report 2022 of TCL Technology Group Corporation
TCL 科技集团股份有限公司
TCL Technology Group Corporation
ANNUAL REPORT 2022
March 30, 2023
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Breaking the Adversity with Strengthened Basic Competitiveness
ANNUAL REPORT 2022 Chairman's Statement
2022 was a year full of opportunities and challenges. 2022 witnessed dramatic changes in the
global political and economic situation, from the outbreak of the Russia-Ukraine war, rising inflation,
sluggish market demand, to deteriorating trade environment, and significant economic slowdown.
These multiple factors brought tremendous challenges to the development of the high-tech
manufacturing industry. Due to the fluctuation of both industrial chain and supply chain,
manufacturers worldwide had to shift their focus from efficiency to both efficiency and safety. The
global industrial pattern was restructured. Under this background, China's high-tech manufacturing
industry also faced pressure of transformation and upgrading. We have built our competitive
advantages in the fields of semiconductor display and new energy photovoltaic, and will take the
opportunities of global energy transition and strengthening high-tech industrial chain, actively
respond to risks and turn crises into opportunities. We will continue to achieve high-quality corporate
development with technological innovation and advantages of economies of scale.
Facing the complex business environment of 2022, the Company maintained its strategic focus,
built a solid bottom line, and advanced steadily. The Company achieved a revenue of RMB166.55
billion, an increase of 1.8%, a net profit of RMB1.79 billion, with the net profit of RMB260 million
attributable to the Company’s shareholders, and net operating cash inflow of RMB18.43 billion,
continuously ensured its stable operation.
Affected by the global economic downturn, the demand from the end-users weakened, the prices
of large-sized panels dropped significantly, and the operating performance of the semiconductor
display industry hit a record low during the Reporting Period. The Company achieved a year-on-year
increase in the sales area of semiconductor displays at 8.3%, and earned a revenue of RMB65.72
billion, a year-on-year decrease of 25.5%, saw a full-year loss. Facing the operational challenges,
TCL CSOT upheld its bottom-line thinking, and pushed ahead with structural changes such as
organizational changes and management optimization. With strengthened advantages and shored up
weakness parts, TCL CSOT accelerated the adjustments to product structures, actively explored
emerging areas, and promoted balanced business development. In its large-size product business,
TCL CSOT has consolidated its leading position in TV panels with a high-end product strategy, and
vigorously developed commercial displays such as interactive whiteboards, digital signs, and video
walls. TCL CSOT ranked first in the world in the field of shipment of 8K and 120HZ high-end TV
panels and interactive whiteboards. As production lines dedicated to IT products, the t9 adopted oxide
semiconductor displays kicked off its SoP in Guangzhou ahead of schedule, and the G6 LTPS
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production line in Wuhan proceeded as planned. Small and medium-sized products further
consolidated the business development, all of which would drive a new round of growth of TCL
CSOT.
With increasing transformation of global energy structure, the new energy industry has ushered
in historic opportunities. In response to the rapid development of the new energy industry, TCL
Zhonghuan continued to play its leading advantages in advanced capacity layout, technological
innovation, and cost efficiency, as well as the activation effect of institutional mechanisms. In 2022,
TCL Zhonghuan achieved a significant increase in its operating performance again, with a revenue
of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of RMB7.07 billion, a year-
on-year increase of 59.5%. Ningxia Zhonghuan Phase VI project increased its capacity, and the wafer
projects were put into production in Tianjin and Yixing successively, with the advantageous capacity
rapidly increased. TCL Zhonghuan’s capacity for photovoltaic crystalline silicon was increased to
140GW, making it the world's largest silicon wafer supplier. The highly-efficient laminated tile
module intelligent manufacturing projects in Jiangsu and Tianjin have been entered the SOP, with a
steady increase in the market share. Through deepening collaboration with Maxeon in terms of the
supply chain, production, and channels, TCL Zhonghuan has accelerated its global business layout.
Affected by the economic environment, both Highly and Tianjin Printronics experienced a slight
decline in their operating performance, but they maintained strong potentials for recovery. The
investment business continues to focus on business layout and exploration alongside the industrial
chain in support of the Company’s main businesses.
The Company took product technology innovation as the core driving force, and empowered
manufacturing transformation and upgrading with digitalization. The Company insisted on investing
in cutting-edge technology fields such as new displays, new energy, and semiconductor materials.
During the year, the Company invested RMB10.78 billion in research and development, a year -on-
year increase of 22.9%. In 2022, the Company made 659 new applications for PCT patents, and 2,244
applications for patents of technologies and material in the field of quantum dot electroluminescence,
ranking second in the world. The semiconductor display business promoted the digitalized
management in the whole production process and entire product cycle. The Company has established
an industry-leading Industry 4.0 system for the new energy photovoltaic business, leading the
manufacturing revolution in the industry.
In the future, global economic development still faces uncertain factors, and the restructuring of
the political and economic patterns will intensively affect the economic trends of China and the rest
of the world. At present, China is dedicated to high-quality economic development and independent
development of high-level technologies, which brings significant opportunities for the development
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of the high-tech industry. In the face of the complex and volatile internal and external environment,
the Company will focus on the pan-semiconductor industry that is “high-tech, asset-heavy, and long-
term” based on its goal of leading in the world, solidly achieve the pre-set strategic objectives and
business strategies, adhere to the bottom-line business thinking, ensure strong risk prevention, and
break the adversity with strengthened competitiveness.
The semiconductor display industry has moved downwards from the middle of 2021, and stayed
at the historic bottom for a long time due to the economic slowdown. Leading enterprises increasingly
focus on the supply-demand balance and industrial profits. With the industry integration, the Matthew
effect is becoming more prominent, and the industrial pattern becomes healthier and more reasonable.
The economy and demand are expected to stabilize in the near future, and the industry is expected to
rebound. The Company, guided by the 9225 Strategy, will continue to optimize the business, product,
and customer structures for its semiconductor display business. With the SoP of t9 production lines
based on medium-sized display panels featuring high added value, and the orderly progress of LTPS
6-gen production line, which mainly produces medium and small-sized display panels, TCL CSOT
will significantly improve its competitiveness in terms of business and product portfolio.
Driven by the transformation of the global energy structure and the goal of carbon peaking and
carbon neutrality, the new energy industry has entered a stage of rapid development. In terms of the
new energy photovoltaic business, the Company will further expand the technological and product
advantages of G12/N silicon wafers, accelerate the layout of advantageous capacity, and cooperate
with global partners to expand overseas markets. TCL Zhonghuan will provide an ongoing growth
engine to the Company. Several projects jointly invested by the Company and partners have been
launched, including 100 thousand tons of granular silicon, silicon-based materials and 10 thousand
tons of electronic polysilicon, which will further improve the Company’s layout in the new energy
photovoltaic and semiconductor material industry chain and enhance the stability of the Company’s
industry chain.
The manufacturing industry acts as the backbone of the national economy, while high-tech
industries represent national competitiveness. Being confident in the future development, we will
focus on core segments and drive the healthy corporate development in support of the high-quality
development of the industry and China’s manufacturing industry.
I would like to express my sincere gratitude for the trust of all our shareholders, for the support
from all our partners and users, as well as for the efforts of all employees!
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
March 30, 2023
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of TCL Technology Group Corporation (hereinafter referred to
as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this
Report and its summary, and shall be jointly and severally liable for any misrepresentations,
misleading statements or material omissions therein.
Mr. Li Dongsheng, the Chairman of the Board, Ms. Li Jian, the person-in-charge of financial
affairs (Chief Financial Officer), and Mr. Peng Pan, the person-in-charge of the financial department,
hereby guarantee that the financial statements carried in this Report are factual, accurate and
complete.
All the Company’s directors attended the Board meeting for the review of this Report and its
summary.
The future plans, development strategies or other forward-looking statements mentioned in this
Report and its summary shall NOT be considered as promises of the Company to investors. Therefore,
investors are kindly reminded to pay attention to possible investment risks.
The Board has approved a final plan for the profit distribution and conversion of the capital
reserve to the share capital as follows: based on the Company’s share capital as at March 30, 2023,
i.e., 17,071,891,607 shares, the capital reserve is to be converted into capital on a basis of 1 share for
every 10 shares to all the shareholders. After the conversion, the total share capital of the Company
will be changed to 18,779,080,767 shares. Neither cash dividends or bonus shares will be distributed
this year. Where any changes occur, before the implementation of the dividend plan, to the total share
capital of the Company due to any convertible bonds-to-stock programs, share repurchases, exercises
of equity incentives, new share issues in refinancing, etc., the dividend will be adjusted according to
the principle of “adjusting the total conversion amount under the same conversion ratio”, subject to
the actual conversion amount.
This Report and its summary has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
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Table of Contents
Part I Important Notes, Table of Contents and Definitions ............................ 6
Part II Corporate Information and Key Financial Information .................. 11
Part III Management Discussion and Analysis ............................................... 16
Part IV Corporate Governance ......................................................................... 46
Part V Environmental and Social Responsibility ........................................... 70
Part VI Significant Events .................................................................................. 77
Part VII Changes in Shares and Information about Shareholders ........... 103
Part VIII Bonds .................................................................................................. 112
Part IX Financial Report .....................................................错误!未定义书签。
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Documents Available for Reference
(I) The financial statements signed and stamped by the person-in-charge of the Company, the
Chief Financial Officer and person-in-charge of the financial department.
(II) The original of the auditor’s report with the seal of the accounting firm, and signed and
stamped by CPAs.
(III) The originals of all company documents and announcements that were disclosed to the
public during the Reporting Period.
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Definitions
Term Refers to Definition
The “Company”, the
Refers to TCL Technology Group Corporation
“Group”,“TCL”,“TCL TECH.” or “we”
The “Reporting Period”, “current period” Refers to The period from January 1, 2022 to December 31, 2022.
TCL CSOT Refers to TCL China Star Optoelectronics Technology Co., Ltd.
Zhonghuan Electronics Refers to TCL Technology Group (Tianjin) Co., Ltd.
TCL Industrial Refers to TCL Industrial Holdings Co., Ltd.
TCL Zhonghuan Renewable Energy Technology Co., Ltd., a majority-
TCL Zhonghuan Refers to owned subsidiary of the Company listed on the Shenzhen Stock Exchange
(stock code: 002129.SZ)
Tianjin Printronics Circuit Corporation, a majority-owned subsidiary of
TPC Refers to the Company listed on the Shenzhen Stock Exchange (stock code:
002134.SZ)
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)
China Display Optoelectronics Technology Holdings Limited, a majority-
CDOT Refers to owned subsidiary of the Company listed on the Hong Kong Stock
Exchange (stock code: 00334.HK)
Shenzhen China Star Optoelectronics Semiconductor Display Technology
Shenzhen CSOT Refers to
Co., Ltd.
Wuhan CSOT Refers to Wuhan China Star Optoelectronics Technology Co., Ltd.
Wuhan China Star Optoelectronics Wuhan China Star Optoelectronics Semiconductor Display Technology
Refers to
Semiconductor Co., Ltd.
Guangzhou China Star Optoelectronics Semiconductor Display
Guangzhou CSOT Refers to
Technology Co., Ltd.
Suzhou CSOT Refers to Suzhou China Star Optoelectronics Technology Co., Ltd.
Moka Technology Refers to Moka International Limited
t1 Refers to The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT
The generation 8.5 (or G8.5) TFT-LCD (including oxide semiconductor)
t2 Refers to
production line of TCL CSOT
The generation 6 (or G6) LTPS-LCD panel production line at Wuhan
t3 Refers to
CSOT
The generation 6 (or G6) flexible LTPS-AMOLED panel production line
t4 Refers to
at Wuhan CSOT
The generation 6 (or G6) of new semiconductor production line of Wuhan
Wuhan t3 production expansion project Refers to
CSOT
The generation 11 (or G11) new TFT-LCD display production line at
t6 Refers to
Shenzhen CSOT
The generation 11 (or G11) new ultra high definition display production
t7 Refers to
line at Shenzhen CSOT
t9 Refers to The generation 8.6 (or G8.6) new oxide semiconductor production line at
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Guangzhou CSOT
t10 Refers to The generation 8.5 (or G8.5) TFT-LCD production line at Suzhou CSOT
GW Refers to Gigawatt, power unit for solar cells, 1GW = 1,000 megawatts
12-inch ultra-large DW-cut solar monocrystalline silicon square wafer,
G12 Refers to size: 44,096mm diagonal line: 295mm, side length: 210mm, with its size
80.5% larger than the conventional M2
RMB Refers to Renminbin
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Part II Corporate Information and Key Financial Information
I. Corporate Information
Stock name TCL TECH. Stock code 000100
Stock abbreviation before change (if any) -
Place of listing Shenzhen Stock Exchange
Company name in Chinese TCL 科技集团股份有限公司
Abbr. TCL 科技
Company name in English (if any) TCL Technology Group Corporation
Abbr. (if any) TCL TECH.
Legal representative Li Dongsheng
TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development
Place of registration
District, Huizhou City, Guangdong Province
Zip code 516001
History of changes in the Company’s place of
-
registration
TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development
Office address
District, Huizhou City, Guangdong Province
Zip code 516001
Company website https://www.tcltech.com/
Email address ir@tcl.com
“7th Guangdong Provincial Government Quality Award”
“2022 Chinese Fortune 500”
Company honors
“Top 100 Private Enterprises with the Best CSR Practices in China”
“Top 100 Listed Enterprises with the Best ESG Practices in China”
II. Contact Information
Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001
Office address
Nanshan District, Shenzhen, Guangdong Province, China
Tel. 0755-3331 1666
Email address ir@tcl.com
III. Media for Information Disclosure and Place Where This Report is Lodged
Stock exchange website for publication of this Report http://www.cninfo.com.cn
Securities Times, China Securities Journal, Shanghai Securities
Media name and website for publication of this Report
News, Securities Daily, as well as www.cninfo.com.cn
Capital Market Department of TCL Technology Group
Place where this Report is lodged
Corporation
IV. Changes to Company Registered Information
Unified social credit code 91441300195971850Y
1. In 2019, the Company focused on semi-conductor display
Changes in main business activities of the Company since going
devices by sold smart terminal businesses such as consumer
public (if any)
electronics and household appliances and related supporting
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businesses.
2. In 2020, the Company acquired 100% equity of Tianjin
Zhonghuan Electronics through public delisting, shaping a
business structure that focused on semi-conductor display, new
energy photovoltaic and semi-conductor materials.
Changes of controlling shareholder since incorporation (if any) Not applicable
V. Other information
The independent audit firm hired by the Company
Da Hua Certified Public Accountants (Special General
Name
Partnership)
Room 1101, Building 7, No. 16 Xi Si Huan Zhong Road,
Office address
Haidian District, Beijing
Accountants writing signatures Jiang Xianmin and Xiong Xin
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period
√ Applicable □ Not applicable
Name Office address Representative Period of supervision
The period from December
Shenwan Hongyuan 19 Taipingqiao Avenue,
Ren Cheng and Mo Kai 22, 2022 to December 31,
Financing Services Co., Ltd. Xicheng District, Beijing
2023.
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period
□ Applicable √ Not applicable
VI. Key Accounting Data and Financial Indicators
Indicate whether there is any retrospectively adjusted or restated datum in the table below.
√ Yes □ No
Reason for retrospective adjustment or restatement: 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 as at the beginning of the year and the same period of the previous year. Such change in
accounting policies has no material impact on the Company’s financial position and operating results.
2022-
2021 Over-2021 2020
2022 Change
Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Revenue (RMB) 166,552,785,829 163,540,559,623 163,657,700,477 1.77% 76,677,238,079 76,677,238,079
Net profit
attributable to
the company’s 261,319,451 10,057,443,528 10,064,253,118 -97.40% 4,388,159,018 4,388,159,018
shareholders
(RMB)
Net profits
attributable to
-2,698,210,800 9,437,240,976 9,444,050,566 -128.57% 2,933,248,153 2,933,248,153
the company’s
shareholders
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before non-
recurring gains
and losses
(RMB)
Net cash
generated from
operating 18,426,376,609 32,878,450,437 32,878,450,437 -43.96% 16,698,282,775 16,698,282,775
activities
(RMB)
Basic earnings
per share 0.0191 0.7463 0.7468 -97.44% 0.3366 0.3366
(RMB/share)
Diluted earnings
per share 0.0185 0.7354 0.7359 -97.49% 0.3226 0.3226
(RMB/share)
Weighted
average return 0.52 26.46 26.48 -25.96 13.75 13.75
on equity (%)
The end of 2021 Change The end of 2020
The end of 2022 Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Total assets
359,996,232,668 308,733,133,305 308,749,696,062 16.60% 257,908,278,887 257,908,278,887
(RMB)
Owners’ equity
attributable to
the company’s 50,678,520,477 43,034,234,611 43,041,044,200 17.74% 34,107,795,454 34,107,795,454
shareholders
(RMB)
The net profit before or after the deduction of non-recurring gains and losses in the latest three accounting years, whichever is lower,
is negative and the audit report of the latest year shows the company's ability to continue as a going concern
□ Yes √ No
The net profit before or after the deduction of non-recurring gains and losses, whichever is lower, is negative
√ Yes □ No
Item 2022 2021
Revenue (RMB) 166,552,785,829 163,657,700,477
Deduction from revenue (RMB) 4,355,243,194 2,714,151,509
Revenue after deduction (RMB) 162,197,542,635 160,943,548,968
The total share capital at the end of the last trading session before the disclosure of this Report:
Total share capital at the end of the last trading session before
17,071,891,607
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
0.0153
capital above (RMB/share)
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VII. Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Differences in Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
2. Differences in Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 40,566,851,319 43,955,329,809 41,992,680,714 40,037,923,987
Net profit attributable
to the company’s 1,352,533,125 -689,010,254 -382,858,737 -19,344,683
shareholders
Net profits attributable
to the company’s
shareholders before 611,565,003 -1,238,434,388 -1,259,772,878 -811,568,537
non-recurring gains
and losses
Net cash generated
from operating 3,863,953,881 5,152,681,862 3,645,252,917 5,764,487,949
activities
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what has been
disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX. Non-Recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2022 2021 2020
Gains and losses on disposal of non-current assets (inclusive of impairment
1,757,838,745 -184,525,551 226,829,348
allowance write-offs)
Tax refund, credit and reduction arising from approval beyond authority or
without formal approval documents
Government subsidies charged to current profits and loss (except for
government subsidies closely related to the Company’s normal business
1,322,782,937 699,270,673 736,747,146
which comply with national policies and regulations and are enjoyed on an
ongoing basis according to certain standard quotas or quantities)
Fund charges against non-financial enterprises included in current profits and
losses
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Gain equal to the amount by which investment costs for the Company to
obtain subsidiaries, associates and joint ventures are lower than the
- 40,299,579 292,440,389
Company’s enjoyable fair value of identifiable net assets of investees when
making investments
Profits and losses from exchange of non-monetary assets
Profits and losses from investment or management assets entrusted to others
Provision for impairment of assets accrued due to force majeure such as
natural disasters
Profits and losses from debt restructuring
Enterprise restructuring costs, such as spin-off costs in staff arrangement,
integration, etc.
Profits and losses from transactions with significantly unfair transaction
prices that exceed the fair value
Year-to-date net profits and losses of subsidiaries arising from business
combinations of entities controlled by a same company
Profits and losses from contingencies unrelated to the normal operation of
the Company
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
-127,233,837 238,629,291 350,757,476
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
37,745,528 - -
individually tested for impairment
Profits and losses from entrusted loans externally
Profits and losses from changes in the fair value of investment property
subsequently measured under the fair value model
The impact of one-time adjustments to current profits and losses made in
accordance with tax, accounting, and other laws and regulations on current
profits and losses
Trustee fee income from entrusted operation
Non-operating income and expenses other than the above 758,599,650 275,789,900 80,764,287
Other gains and losses that meet the definition of non-recurring gain/loss - - -
Less: Corporate income tax 244,386,076 93,176,105 135,130,967
Non-controlling interests (net of tax) 545,816,696 356,085,235 97,496,814
Total 2,959,530,251 620,202,552 1,454,910,865
Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable √ Not applicable
Explanation of defining the non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss as recurring profit and loss
items
□ Applicable √ Not applicable
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Part III Management Discussion and Analysis
I. Company-related industry outlook in the reporting period
Since 2022, the international political and economic patterns have been restructured,
protectionism and geopolitics have intensified the trend of backlash against globalization, and
inflation pressures have led to tightened monetary policies in major developed economies, increasing
uncertainty in global economic development. Facing increasingly severe business environment, TCL
Tech has adhered to its strategic focus and maintained a stable operation.
During the Reporting Period, TCL Tech achieved a revenue of RMB166.55 billion, a year-on-
year increase of 1.8%; a net profit of RMB1.79 billion, a year-on-year decrease of 88.0%; and a net
profit of RMB260 million attributable to the shareholders of listed companies, and net operating cash
flow of RMB18.43 billion. The main reasons for the decline in the Company’s performance are: the
downturn in the semiconductor display industry, a significant drop of product prices. The Company
achieved a revenue of RMB65.72 billion from the semiconductor display business in 2022, a year -
on-year decrease of 25.5%, with a steady increase in shipments and the market share. The Company
firmly occupied the second largest TV panel market share in the world. The production line for oxide
semiconductor displays positioned as IT products has been put into production in Guangzhou,
supporting the accelerated growth of medium-sized product businesses. Facing the downward cycle
of the industry, TCL CSOT has increased confidence in development, actively optimized its capacity
structure, and improved its business portfolio, well prepared for future development.
New energy photovoltaics keeps sound momentum under the policy of carbon peaking and
carbon neutrality. However, industry competition was increasingly intensifying, upstream raw
material prices fluctuated, and excess earnings further concentrated in enterprises with stronger
comprehensive competitiveness. With the global industrial restructuring, China's semiconductor
industry has ushered in a golden opportunity of transformation and upgrading. TCL Zhonghuan gives
its leading advantages in product and process technologies into full play, accelerates i ndustrial
transformation, takes a lead in the innovation and upgrading of the manufacturing industry and boosts
high-quality development of China's economy. During the reporting period, TCL Zhonghua n
achieved a revenue of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of
RMB7.07 billion, a year-on-year increase of 59.5%.
The Company has always been committed to the manufacturing industry based on its strategy,
and has gradually built long-term strategic planning and management capabilities, operating
capabilities across cycles, and core competitiveness for global operations.
Strengthening the competitiveness based on core businesses, optimizing competitive
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strategies and seeking business improvement, and promoting the healthy and sustainable
development of the industry. In the face of economic downturn and intensified industrial
competition, the Company upheld the bottom-line business thinking. During the Reporting Period,
operating cash inflow was RMB18.43 billion, and the capital structure remained stable. Facing
fluctuations in demands for semiconductor displays, the Company emphasizes industry supply-
demand balance and corporate profitability to continuously optimize competitive strategies and
improve economic efficiency. In the fields of new energy photovoltaic and semiconductors, the
Company will continue to give play to the advantages of its advanced capacity and the Industry 4.0
platform, and continue to lead the high-quality development of the industry.
Technological innovation driven by forward-looking research and development,
comprehensively promoting the digital and intelligent transformation, and committed to high-
quality corporate development. The Company focuses on technological productivity and
prospective investment. In 2022, the Company invested RMB10.78 billion in R&D, a year-on-year
increase of 22.9%. The Company filed 659 new international applications for patents under the PCT,
a total of 14,741 applications filed. The Company demonstrates world-leading technological capacity
in the fields such as semiconductor display, new energy photovoltaic and semiconductor materials.
The number of its applications for patents of technologies and material in the field of quantum dot
electroluminescence has reached 2,244, ranking second in the world. The export market share of its
G12 large-sized and highly efficient N-type silicon wafers ranked first in the world. The Company
continues to lead the photovoltaic industry in terms of the process and technology upgrading of
thinning and thin wiring. The Company has deeply integrated digitalization and advanced
manufacturing, achieved dynamic management throughout the full production process of
semiconductor displays and the entire life cycle of products. The Company takes a lead in the industry
in terms of flexible manufacturing capabilities and quality consistency of new energy photovoltaics,
and continues to promote comprehensive upgrading of industry digitization and intelligence.
Based on the “dual circulation” strategy, actively exploring overseas markets, and
integrating localized operations into the global industrial chain. Facing adjustments and
restructuring of the global supply chain, the Company has strengthened its market operations in
China, while actively exploring overseas markets. From exporting products to exporting industrial
capabilities, the Company has built a global layout of industrial chains and supply chains. In the field
of semiconductor displays, the India Factory of TCL CSOT has been put into operation, and will
continue to strengthen its global strategy in the production, marketing, and research process in the
future. In the field of new energy photovoltaics, TCL Zhonghuan actively expands its global presence.
An industrial chain system is taking shape with global competitiveness through Maxeon photovoltaic
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cell and module factories built in Malaysia, the Philippines, Mexico, and other places.
In a new round of technological reform and industrial upgrading, the digital economy keeps
growing around the world, the "Carbon Peaking and Carbon Neutrality" trend accelerates the new
energy transformation, the semiconductor industry continues to see an increase of localization, and
China's technology industry ushers in a golden opportunity of rapid development. Facing the
opportunities, the Company will adhere to the bottom line of business, drive development with
innovation, and actively improve the global industrial layout. TCL Tech will continue to focus on the
national strategic industry that emphasizes high technology, heavy assets, and a long cycle. With the
mission and vision of “leading technology and mutually beneficial cooperation”, TCL Tech will meet
the requirements of "improving operational quality and efficiency, enhancing strengths to shore up
weaknesses and accelerating global expansion as well as innovation-driven development” to take a
lead in the world.
II. Main businesses of the Company during the reporting period
Based on the semiconductor display business, new energy photovoltaic and semi-conductor
materials as the main business, the Company will continue to optimize its business structure, and
further focus on its main businesses, to achieve the strategic goal of global leadership in its two core
industries.
TCL TECH
Semi-conductor New energy photovoltaic & Semi- Industrial finance & Other
display conductor materials investment
材料
Zhonghuan Zhonghuan T CL TCL Capital Highly TPC
TCL CSOT China Ray
Photovoltaic Advanced Financial
Juhua Moka T CL Xinhuan/Xi
T echnology Microchip nhua
(I) Semiconductor display business
In 2022, the global semiconductor display market experienced significant ups and downs. Due
to multiple impacts such as geopolitical conflicts and inflation, the demand from the end-users for
displays in major markets dropped significantly, product prices hit a record low, and the panel
industry suffered operating losses.
During the Reporting Period, TCL CSOT further consolidated its position in the industry,
achieved a sales area of 42.75 million square meters, an increase of 8.3% year-on-year. TCL CSOT
ranked second in the world in terms of the market share of TV panels. Affected by the decline in
prices of major display products, TCL CSOT earned a revenue of RMB65.72 billion from the
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semiconductor display business, a year-on-year decrease of 25.5%, and saw a full-year loss in 2022.
In response to the challenges, TCL CSOT actively made changes, focused on extreme cost efficiency,
improved capacities of risk control and cyclic resilience, and achieved operating cash flow of
RMB14.76 billion. TCL CSOT will accelerate the adjustments to product structures, actively explore
new customers, and become a leader of comprehensive displays in full sizes.
In its large-size product business, TCL CSOT has maintained scale leadership, and has
consolidated its leading position in TV panels with a high-end product strategy, and vigorously
developed commercial displays such as interactive whiteboards, digital signs, and video walls.
Three 8.5-generation line factories t1, t2, and t10, and two 11-generation line factories t6 and t7, have
maintained efficient operations. TCL CSOT ranked second in the world in terms of the scale of the
high-generation lines, with the market share of mainstream products leading the world. TCL CSOT
ranked first in the world in terms of the scale of 55-inch and 75-inch products, and second in the
world in terms of the share of 65-inch products. TCL CSOT played its advantages in high-generation
lines and cutting-edge technology and focused on high-end panel products, ranked top in the world
in terms of sales performance of 8K/120HZ products. TCL CSOT has become a major supplier for
leading customers in the commercial markets such as interactive whiteboards, digital signs, and video
walls. TCL CSOT ranked first in the world in terms of the market share of interactive whiteboards
and third in the world in terms of the market share of video walls. Its product and customer structures
have been continuously optimized.
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 demand, the Company has
optimized its capacity layout, improved its product series, and strengthened customer development,
achieving rapid growth in the high-end IT market. The Company ranked first in the world in terms of
the market share of e-sports displays, second in the world in terms of the market share of the LTPS
laptops, and first in the world in terms of the market share of the LTPS tablet PCs. In terms of on-
board products, the Company made breakthroughs in many key customers at home and abroad, and
the shipment volume and revenue scale maintained rapid growth. The 6-generation LTPS production
line is in orderly progress, and the Company’s overall LTPS capacity scale and comprehensive
competitiveness will rank top in the world. The production line t9 for new oxide semiconductor
displays positioned for businesses such as medium-sized IT and automotive, has been put into
production. Combined with the product technologies and customer resources previously accumulated
by the Company, the Company’s medium-sized product business strategy will further bring a new
growth engine.
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In its small-size product business, TCL CSOT focused on differentiation technologies, such
as flexible OLED folding and LTPO, while expanding VR/AR new displays to optimize its
product and customer structures. TCL CSOT ranked third in the world in terms of the shipment
volume of LTPS mobile panels from the t3 production line. It independently developed industry-
leading 1512 PPI LCD-VR screens and actively exploited new business areas. The capacity of the
second and third phases of the t4 OLED has been in progress as scheduled, with smooth technological
iteration and new product development. Several new products, such as folding products, Camera
Under Panel, and LTPO technology, have completed SoP and delivery. The shipment of medium and
high-end products has continued to increase, and the customer structure has further diversified, laying
a foundation for business improvement.
In the industry’s downward cycle over the past seven quarters, the inefficient capacity has
continued to be eliminated, bringing opportunities for industry restructuring and integration, and
further optimizing the competitive patterns. Also, leading manufacturers in the display industry have
accelerated destocking under the goal of promoting the supply-demand balance and improving
profitability. In the fourth quarter of 2022, industry inventory entered a healthy level. At present, the
prices of major products have stably rebounded. As the demand of downstream end customers for
restocking has increased, the prices of large-sized display products have risen.
Looking into the future, the global economy remains resilient, and the Company is firmly
optimistic about the development trend and industrial value of semiconductor displays as a core
information carrier and main interactive interface in the wave of the digital economy. On the other
hand, the supply side tends to stabilize. Leading enterprises continue to strengthen their technological
advantages and economies of scale, the display industry sees further increasing concentration, the
industrial chain reaches a new balance in terms of pricing, and the return on investment in
semiconductor displays will steadily recover.
Based on efficiency and effectiveness, TCL CSOT will consolidate its high-end intelligent
manufacturing capabilities through digitalization construction, and improve its comparative
competitiveness. TCL CSOT will continue to optimize its business portfolio, adhere to the high-end
product strategy, consolidate its global leading position in large-sized product businesses, improve
the layout and capacity of medium-sized products, enhance the structure and business conditions of
small-sized product customers, and accelerate its transformation and upgrading from a leader of large-
sized displays to a leading enterprise of full-sized displays. TCL CSOT will continue to increase
investment in research and development, and work with industry chain partners to jointly build an
industrial ecosystem around new display technologies such as printed OLED, Miniled, Microled, and
Silicon-based OLED micro displays.
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(II) New energy photovoltaic and semiconductor materials business
During the Reporting Period, under the background of the continuous advancement of carbon
neutrality goals and the shortage of energy caused by geopolitical conflicts, the global energy
structure continued to shift to renewable energy, and the photovoltaic industry maintained rapid
development. In response to the price fluctuation of materials on the upstream of the supply chain,
the Company improved its industrial layout, built operational barriers with its technical strength, and
grasped the initiative in the process of rapid changes of the industry. The new energy photovoltaic
business of the Company has comprehensively moved towards global leadership. During the
reporting period, TCL Zhonghuan maintained a high growth rate of performance, achieved a revenue
of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of RMB7.07 billion, a year-
on-year increase of 59.5%.
Releasing advanced capacity of photovoltaic materials, optimizing the product structure ,
and achieving a rapid growth in production and sale scales. During the Reporting Period, the
Company’s G12 advanced capacity continued to expand, and the capacity of the Phase VI 50GW
(G12) monocrystalline silicon materials in Ningxia increased capacity; the smart factory for slicing
monocrystalline silicon wafers in Tianjin (25GW) and the smart factory for slicing monocrystalline
silicon wafers in Yixing (30GW) were put into operation, comprehensively improving the advantages
of economies of scale. As at the end of the Reporting Period, the Company’s total capacity for
monocrystalline silicon increased to 140 GW, among which, the G12 advanced capacity accounted
for over 90%. During the Reporting Period, the Company ranked first in the world in terms of the
sales market share of photovoltaic silicon wafers, first in the world in terms of the market share of
G12, first in the world in terms of the sales market share of N-type silicon wafers. The production
and sales scales remained leading in the industry.
Taking a lead in products such as large-sized, thinned, and N-type silicon wafers, as well as
the development of photovoltaic materials and technologies based on R&D and process
capacity. With high-power components keeping growing on the downstream and the rapid increase
in the penetration rate of large-sized silicon wafers, the Company, as the industry leader in large-
sized and thinned wafers, continued to expand its G12 product advantages, led the industry in terms
of monthly production per furnace and the number of unit wafers produced per kilogram, and
effectively promoted cost reduction and efficiency increase in the industrial chain. With the
technological evolution of downstream cells, N-type products have entered an accelerated SoP period,
and the Company has built deep technological barriers in the field of N-type silicon materials. The
Company consolidated its leading position in the industry for many years in terms of N-type silicon
wafers sales in the global market, and excessive returns are expected from future technological
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changes.
Relying on the “G12 + Laminated Tile” dual technology platform and the leading Industry
4.0 System, transforming manufacturing modes in the photovoltaic industry, and jointly
building an intellectual property ecosystem with partners. Based on the dual technology platform
of "G12 Silicon Wafers + Laminated Tile Module", the Company's laminated tile module products
have significant performance advantages with a rapid growth in scale. The Company continues to
deepen the application of Industry 4.0 in all the industrial links, and implement automation and
intelligent management throughout the process, with labor productivity far exceeding the industry
average. The Industry 4.0 significantly improves the product quality and consistency, and
continuously enhances flexible manufacturing capabilities. The comprehensive introduction of the
Industry 4.0 System will provide the Company with comparative competitiveness in terms of
localized manufacturing worldwide. The Company will work with partners such as MAXEON to
jointly build an intellectual property ecosystem, and collaborate on innovation and expand
differentiation competitiveness, to lay a solid foundation for the global strategic layout of the
photovoltaic industry.
The transformation of the global energy structure injects long-term development vitality into the
photovoltaic industry, and the continuously improved economic efficiency of photovoltaic power
generation further stimulates market demand. The global installed photovoltaic capacity is expected
to exceed the expected capacity. Looking into the future, TCL Zhonghuan will continue to promote
technological changes related to photovoltaic materials such as large-sized, thinned, and N-type
silicon wafers, create an ecosystem of cell and module industries with differentiation strategies,
deepen the application of the Industry 4.0 System and flexible manufacturing, strengthen its core
competitive advantages globally, and consolidate its leading position in the new energy photovoltaic
industry.
TCL Tech will continue to focus on semiconductor display, new energy photovoltaic, and
semiconductor material businesses to achieve the strategic goal of global leadership.
III. Analysis of core competitiveness
Over 40 years of extraordinary development, TCL has grown from a small local enterprise to
China’s leading group in the high-tech manufacturing industry. During this time, we have
accumulated experience and confidence from continuously crossing industry cycles. The year 2022
was full of unexpected changes and challenges for TCL. We continued to focus on our strategy and
took on challenges in adverse circumstances, including economic downturns and intensified industrial
competition. We strengthened our capacity for mitigating operational risks in line with the work
requirements of “improving operational quality and efficiency, enhancing strengths to shore up
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weaknesses and accelerating global expansion as well as innovation-driven development”. Currently,
the Company has developed a business structure based on semi-conductor display devices, new
energy photovoltaic materials as well as semi-conductor materials, while its core competitiveness and
sustainable development capability have continuously improved.
Leading economies of scale: ongoing capacity growth and globally leading position across
multiple product markets
As a globally leading enterprise in semi-conductor displays, the Company 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 TV panel market; subsequently,
two 6-gen lines successfully entered the small-size panel market; in recent years, through investment
and construction of two 11-gen lines and the acquisition of the Suzhou Samsung Factory t10
production line, we have further expanded our large-size panel production capacity and maintained a
globally leading position for large-sized panels. In 2022, TCL CSOT’s Guangzhou t9 project was
launched and put into operation. The Wuhan t3 project expanded its capacity in an orderly manner,
with increased investment in medium-sized products such as high value-added IT as well as business
displays and accelerated strategic expansion for all display products. At present, the market share of
TCL CSOT TV panels by shipment area ranks second globally. LTPS laptops rank second globally,
LTPS mobile phone panels rank third globally, e-sports panels rank first globally, and IWB ranks
first in market share.
The Company will further strengthen its core competitive advantage based on economies of scale
and supply chain synergy. With an improved supply-demand relationship and an optimized
competitive landscape in the industry, TCL CSOT will usher in continuous leadership in areas of
advantage as well as rapid expansion in vulnerable areas while consolidating its industry status and
comprehensive competitiveness.
Technological and ecological leadership: Increasing investment in R&D, active expansion into
new display technologies and materials
The Company, focusing on basic materials, next-generation display materials, key equipment in
new manufacturing processes and other fields for its ecological layout, has constructed a TCL
ecosystem within the display market, so as to establish a leading advantage based on next-generation
display technology. In the display market, TCL led the establishment of two national innovation
centers. A preliminary outline for the ecosystem of next-generation display technology has taken
shape, promoting industrial technology development and assisting in the implementation of CSOT’s
technology strategies. TCL is also continuously coordinating the construction of national technology
platforms in other fields and assisting in the development of key technologies related to TCL’s
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industry segments.
In 2022, the Company ranked forefront among mainland Chinese enterprises for accumulated
patent applications with 14,741 PCT patents and ranked second globally in terms of quantum dot
patents. More than half of them are invention patents, covering 14 fields such as quantum dot
materials, backlights and panels, which provide thorough patent coverage. The Company is
committed to building a leading edge in next-generation display technology and overcoming
bottlenecks in future commercial technology applications.
Leading management: TCL CSOT aims to be a global leader and traverse cycles using
comparative competitiveness
Since SoP in 2011, TCL CSOT has weathered several rounds of large fluctuation cycles and
maintained comparative competitiveness in the display industry by relying on extreme cost efficiency
and lean management. By relying on efficient production line layout and increased capacity, the
Company has further improved the line utilization rate and product scheduling efficiency through
advantages in industrial chain integration and locking in strategic customers. The Company has
promoted end-to-end cost and expense control through refined management and extreme cost
efficiency measures, so as to build its comparative competitiveness in the industry. Despite a severe
industry downturn and ongoing price reductions of major products in 2022, TCL CSOT further played
to its advantages in management efficiency, industrial chain control, intelligent and digital
development, and relied on its advantages in core capabilities throughout the industrial development
cycle to lead the industry.
New strategic pathways: Grasping new opportunities from the rapid development of
semiconductors and photovoltaics
On the basis of enterprise development and national planning for strategic emerging industries,
the Company actively seeks new strategic development pathways that are technology-intensive and
capital-intensive with a long development cycle, so as to strengthen and fully utilize TCL’s core
competitiveness. In July 2020, the Company successfully entered the new energy photovoltaic
industry by delisting Zhonghuan. Since 2022, TCL Zhonghuan has implemented a series of strategic
operation measures such as industry coordination, optimization of operational efficiency and
empowerment through management experience. TCL Zhonghuan has gradually enhanced its abilities
in areas such as 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.
Upgrading organizational culture: The mission “Leading Technology and Mutually Beneficial
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Cooperation” leads the Company into a new development stage
Since 2022, the Company has proposed a new mission“Leading Technology and Mutually
Beneficial Cooperation” and is committed to building an organizational culture that emphasizes
“Change, Innovation, Responsibility and Excellence”. The Company continued to build the capacity
of its management team, strengthen its high-end talent pool and empower employees at the middle
and entry level by developing competent specialists, reducing personnel redundancy and optimizing
the organizational structure with quality emphasized over quantity. The Company also ensured proper
recruitment and development of international talents, strengthened the integration of overseas
organizational culture and continuously improved on building international organizational
capabilities. TCL will continue to invest in fields closely related to human life and build its leading
advantages in technology and products to deliver a wonderful experience and better life for humanity.
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.
IV. Analysis of Core Businesses
1. Overview
See “Part III Management Discussion and Analysis”.
2. Revenue and costs
(1) Breakdown of operating revenue
Unit: RMB
2022 2021
Change
As % of total As % of total
Amount Amount (%)
revenue (%) revenue (%)
Total 166,552,785,829 100% 163,657,700,477 100% 1.77%
By operating division
Semi-conductor display 65,717,154,752 39.46% 88,220,061,837 53.91% -25.51%
New energy photovoltaic 67,010,157,025 40.23% 41,104,685,049 25.12% 63.02%
Distribution business 31,847,803,417 19.12% 31,932,016,149 19.51% -0.26%
Other businesses and
1,977,670,635 1.19% 2,400,937,442 1.47% -17.63%
internally offset accounts
By product category
Semi-conductor display
65,717,154,752 39.46% 88,220,061,837 53.91% -25.51%
devices
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New energy photovoltaic &
67,010,157,025 40.23% 41,104,685,049 25.12% 63.02%
semi-conductor materials
Distribution of electronics 31,847,803,417 19.12% 31,932,016,149 19.51% -0.26%
Other businesses and
1,977,670,635 1.19% 2,400,937,442 1.47% -17.63%
internally offset accounts
By operating segment
Mainland China 119,139,823,459 71.53% 104,781,994,802 64.03% 13.70%
Overseas (including Hong
47,412,962,370 28.47% 58,875,705,675 35.97% -19.47%
Kong)
Distribution mode
Direct sales 140,148,331,286 84.15% 135,409,147,210 82.74% 3.50%
Distribution 25,652,437,925 15.40% 25,981,764,486 15.88% -1.27%
Dealer 752,016,618 0.45% 2,266,788,781 1.39% -66.82%
(2) Operating division, product category, region or sales mode contributing over 10% of the revenue or operating profit
√ Applicable □ Not applicable
Unit: RMB
Change in
Change in Change in cost
Gross profit gross profit
Revenue Cost of sales revenue year- of sales year-
margin margin year-
on-year (%) on-year (%)
on-year (%)
By operating division
Semi-conductor
65,717,154,752 65,148,141,621 0.87% -25.51% -2.05% -23.74%
display
New energy
67,010,157,025 55,066,992,255 17.82% 63.02% 71.07% -3.86%
photovoltaic
Distribution
31,847,803,417 30,574,483,912 4.00% -0.26% -0.65% 0.38%
business
By product category
Semi-conductor
65,717,154,752 65,148,141,621 0.87% -25.51% -2.05% -23.74%
display devices
New energy
photovoltaic &
67,010,157,025 55,066,992,255 17.82% 63.02% 71.07% -3.86%
semi-conductor
materials
Distribution of
31,847,803,417 30,574,483,912 4.00% -0.26% -0.65% 0.38%
electronics
By operating segment
Mainland China 119,139,823,459 108,166,269,230 9.21% 13.70% 26.39% -9.11%
Overseas
(including Hong 47,412,962,370 43,759,219,750 7.71% -19.47% -3.98% -14.89%
Kong)
Distribution mode
Direct sales 140,148,331,286 126,351,353,885 9.84% 3.50% 21.59% -13.41%
Distribution 25,652,437,925 24,967,954,738 2.67% -1.27% -1.28% 0.01%
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Dealer 752,016,618 606,180,357 19.39% -66.82% -68.83% 5.18%
(3) Whether Revenue from Product Sales is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2022 2021 Change (%)
10,000 square
Sales 4275 3949 8.25%
meters
Semi-conductor 10,000 square
Production volume 4230 4058 4.23%
display meters
10,000 square
Inventory 124 170 -26.81%
meters
Sales 10,000 sets 1299 904 43.68%
Module and
Production volume 10,000 sets 1317 941 39.87%
finished machine
Inventory 10,000 sets 66 49 36.65%
Sales 10,000 sets 1,064,653 821,234 29.64%
Photovoltaic
Production volume 10,000 sets 1,084,730 824,803 31.51%
silicon wafer
Inventory 10,000 sets 32,102 12,025 166.97%
Million square
Sales 744 752 -1.03%
inches
Other silicon Million square
Production volume 743 751 -1.05%
materials inches
Million square
Inventory 24 25 -1.61%
inches
Sales 10,000 kWh 123,105 81,031 51.92%
Energy Production volume 10,000 kWh 123,105 81,031 51.92%
Inventory 10,000 kWh
Sales MW 6,607 4,166 58.58%
Photovoltaic
Production volume MW 6,619 4,763 38.98%
module
Inventory MW 639 628 1.84%
Explanation of why any financial indicator in the table above registered a year-on-year change of over 30%
The changes are mainly caused by the increase in the scale of the Company's new energy photovoltaic business.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of operating cost
Operating division
Unit: RMB
2022 2021
Operating
Item As % of As % of Change (%)
division Amount Amount
operating cost operating cost
Materials,
Semi-conductor salary,
65,148,141,621 42.88% 66,509,502,371 50.71% -2.05%
display depreciation
etc.
New energy Materials,
55,066,992,255 36.25% 32,190,397,141 24.54% 71.07%
photovoltaic salary,
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depreciation
etc.
Distribution Finished goods
30,574,483,912 20.12% 30,775,267,445 23.46% -0.65%
business etc.
Materials,
salary,
Other 1,135,871,191 0.75% 1,681,146,797 1.28% -32.43%
depreciation
etc.
Product category
Unit: RMB
2022 2021
Product
Item As % of As % of Change (%)
category Amount Amount
operating cost operating cost
Materials,
Semi-conductor salary,
65,148,141,621 42.88% 66,509,502,371 50.71% -2.05%
display devices depreciation
etc.
Materials,
New energy salary,
55,066,992,255 36.25% 32,190,397,141 24.5% 71.07%
photovoltaic depreciation
etc.
Distribution of Finished goods
30,574,483,912 20.12% 30,775,267,445 23.5% -0.65%
electronics etc.
Materials,
salary,
Other 1,135,871,191 0.75% 1,681,146,797 1.3% -32.43%
depreciation
etc.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
For 2022, there are 36 newly-included consolidated subsidiaries (36 newly incorporated) and 5 newly-excluded consolidated
subsidiaries (4 transferred and 1 de-registered).
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major Customers
Total sales of top five customers (RMB) 50,092,171,968
Total sales of top five customers as % of total sales of the
30.88%
Reporting Period (%)
Total sales of related parties among top five customers as % of
6.54%
total sales of the Reporting Period (%)
Top five customers
Serial No. Customer Sales revenue (RMB) As % of total sales revenue
1 Customer A 14,080,676,825 8.68%
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2 Customer B 12,876,104,816 7.94%
3 Customer C 10,611,856,734 6.54%
4 Customer D 6,452,412,436 3.98%
5 Customer E 6,071,121,157 3.74%
Total -- 50,092,171,968 30.88%
Other information about major customers: For sales transactions between the Company and its related parties, see provisiona l
announcements disclosed by the Company on the designated media for information disclosure.
Major suppliers
Total purchases from top five suppliers (RMB) 37,176,674,116
Total purchases from top five suppliers as % of total purchases
25.62%
of the Reporting Period (%)
Total purchases from related parties among top five suppliers as
-
% of total purchases of the Reporting Period (%)
Top five suppliers
Purchase in the Reporting
Serial No. Supplier name As % of total purchases (%)
Period (RMB)
1 Supplier A 11,688,855,063 8.06%
2 Supplier B 7,215,847,792 4.97%
3 Supplier C 7,168,835,392 4.94%
4 Supplier D 6,322,022,992 4.36%
5 Supplier E 4,781,112,877 3.29%
Total -- 37,176,674,116 25.62%
Other information about major suppliers
□ Applicable √ Not applicable
3. Expense
Unit: RMB
2022 2021 Change (%) Main reason for change
Selling expenses 1,950,527,877 1,919,285,105 1.63%
Primarily because the
Administrative semiconductor display
3,540,610,990 4,393,319,922 -19.41%
expenses business was affected
by the industry cycle
Financial expenses 3,422,894,839 3,727,915,281 -8.18%
Primarily due to the
R&D expenses 8,633,638,171 7,236,340,804 19.31% increase in R&D
investment
4. R&D investments
√ Applicable □ Not applicable
Expected influence on
Main R&D project
Purpose Progress Preset goals the future development
name
of the Company
LCD panel ultimate In search of ultimate Realized industrial Add CSOT’s image Further enhance
framework simplification via panel transformation quality improvement IP product
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development and and overall machine to SOC to optimize competitiveness
product application design for newly system architecture of
V1.0 defined architecture compact drive chips
Propose high- Implement the "Carbon
penetration and high Peaking and Carbon
H-HVA energy image quality Improve the Neutrality" strategy,
efficiency technology, namely H- Development has been transmittance, energy commit to building a
improvement and HVA. Expand completed on several savings and emissions new ecological
qualitative change advantage in leading products. output of display industry with
development energy efficiency to devices “Ecological Priority
obtain technical and Green
leverage. Development”.
Improve CSOT’s
Develop an ultra-low Develop ultra-low
popularity and product
frequency display frequency display
Research and competitiveness in the
technology in the field technology, gain
development of the field of wearable
of wearable displays to customer recognition
0.016Hz ultra-low Already implemented displays, generate
reduce power and enter
frequency refresh interest of-customers
consumption and corresponding high-
display technology from multiple ends and
achieve longer battery end markets to earn
effectively expand the
life. greater profits.
customer base.
Committed to
investment in research
Improve product
and development of a
Research and Reduce power competitiveness,
low-frequency and Some functions have
development of consumption and maximize cost
low-power technology been delivered to the
AMOLED low- achieve effectiveness and
to meet the strong product development
frequency LTPS high/medium/low-end enhance the core
demand on mobile department for trials.
technology product differentiation. competitiveness of the
platforms for low-
Company’s products.
power display
technologies.
Develop IGZO
Investigate the IGZO
Development of the internally-compensated Open a new future
Research and internally-compensated
IGZO internally- IJP OLED folding market for AMOLED
development of the IJP OLED technology
compensated IJP laptop products with IGZO and traverse the
IJP-OLED internal based on the 17”
OLED flexible folding the potential for OLED IGZO
compensation medium-sized flexible
laptop technology has successful technology in NB-
technology platform OLED technology
been completed industrialization of MNT-TV products.
platform project.
development results.
For TV interaction, in Gesture interaction Contribute product
Flexible-control addition to remote allows users to control selling points in
Realized industrial
multimodal interactive control and voice TVs, which offsets the multimodal
transformation
applications control, intelligent shortcomings of voice applications to the
gesture control opens control in a noisy industry, improve the
30
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
up a new method of environment. It is easy Company’s own
control. The to learn, convenient to technical strength,
application uses operate and covers avoid additional
algorithms multiple scenarios. licensing fees arising
independently from third-party
developed by the algorithms and reduce
Industry Research product costs
Institute to optimize
five-finger and fist
gestures.
The intelligent
Complement
experience has been
independent-research
improved in terms of
capability of the NLP
the experience of voice
Intelligent voice The system has been and gain the ability to
assistant products, and
Conversational voice terminal equipment can launched and applied expand across vertical
the development cycle
interaction system flexibly and accurately to some end-user domains. Replace
for interactive dialog
respond to users’ needs products Baidu Solutions and
skills has been reduced
master decision-
due to the efficiency of
making in the central
technology research
voice control business.
and development
Meet the market Improve the quality of
requirements for monocrystalline
Research and Thermal field
technical indicators of silicon, meet customer
development of the optimization and Enhance the core
the type-N G12 needs, further improve
new energy process design has competitiveness of the
monocrystalline silicon efficiency, reduce costs
photovoltaic type-N been completed, and company's main
technology and and achieve an increase
G12 monocrystalline the SoP has been business
strengthen the in market share of the
silicon technology achieved
Company's core type-N G12
competitiveness monocrystalline silicon
Research and develop
Equipment upgrading
ultra-thin solar silicon
and cutting process Achieve 150μm thick
wafer cutting Enhance the core
R&D of 210 silicon design have been SoP target of silicon
technology to meet the competitiveness of the
wafer slicing completed. SoP has wafer; and complete
demand for thin film in company's main
technology been realized for 130μm thick technical
the downstream market business
150um and 130um G12 reserve of silicon wafer
and improve unit
silicon wafers.
output
Mass production has
R&D on Meet the market been realized for 12- Enhance the core
Increase the market
semiconductor 12-inch demand for large-size inch silicon wafers for competitiveness of the
share of semiconductor
silicon wafer silicon wafers of 12- power devices, logic Company's semi-
12-inch silicon wafer
technology inch integrated circuits devices and memory conductor materials
devices
R&D personnel
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
2022 2021 Change (%)
Number of R&D Employees 11,979 10,517 13.90%
As % of R&D Employees (%) 17.16% 16.14% 1.02%
Education
PhD 231 202 14.36%
Master 2,442 2,081 17.35%
Bachelor’s degree and others 9,306 8,234 13.02%
Age
Under 30 years old 7,286 5,730 27.16%
30~ 40 years old 4,280 4,394 -2.59%
Over 40 years 413 393 5.09%
R&D investments
2022 2021 Change (%)
R&D investment amount (RMB) 10,778,414,851 8,772,389,079 22.87%
R&D investments as % of total revenue (%) 6.47% 5.36% 1.11%
Capitalization amount of R&D investments (RMB) 4,287,426,803 3,813,925,123 12.42%
Capitalization amount of R&D investments as % of total
39.78% 43.48% -3.70%
revenue (%)
Reasons and impacts of major changes in the composition of R&D personnel of the Company
□ Applicable √ Not applicable
Reasons for significant changes in R&D investment as % of total revenue compared with the previous year
□ Applicable √ Not applicable
Reasons for significant changes in R&D investments capitalization and rationality explanation
□ Applicable √ Not applicable
5. Cash Flow
Unit: RMB
Item 2022 2021 Change (%)
Sub-total of cash generated
155,632,096,991 153,026,874,325 1.70%
from operating activities
Sub-total of cash used in
137,205,720,382 120,148,423,888 14.20%
operating activities
Net cash generated from
18,426,376,609 32,878,450,437 -43.96%
operating activities
Sub-total of cash generated
51,431,426,776 43,772,408,329 17.50%
from investment activities
Subtotal of cash used in
98,267,398,620 77,405,450,301 26.95%
investing activities
Net cash generated from
-46,835,971,844 -33,633,041,972 -39.26%
investing activities
Sub-total of cash generated
113,655,272,732 75,934,217,326 49.68%
from financing activities
Subtotal of cash used in
82,254,617,585 63,151,712,744 30.25%
financing activities
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Net cash generated from
31,400,655,147 12,782,504,582 145.65%
financing activities
Net increase in cash and cash
3,593,919,427 11,873,288,084 -69.73%
equivalents
Explanation of why related data has significant changes year-on-year:
Net cash generated from operating activities: Primarily because the semiconductor display business was affected by the industry cycle;
Net cash generated from investing activities: Primarily due to the increase in project investment;
Net cash generated from financing activities: Primarily due to the increase in scale of financing
Explanation of the significant difference between the net cash flow generated by the Company's operating activities and the net profit
of the current year during the reporting period
The large difference between the net cash flow generated by the Company's operations and the net profits of the current year is primarily
caused by factors such as depreciation, amortization and impairment of the Company's assets during the Reporting Period.
V. Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
As % of gross
Amount Source Sustainability
profit
Asset Falling price of inventory write-off in line with
3,486,522,865 329.84% No
impairment market
Non-operating
790,111,708 74.75% Primarily government grants and others No
income
Non-operating
152,071,435 14.39% No
expense
VI. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
The end of 2022 Beginning of 2022
Change in Main reason for
As % of total As % of total
Amount Amount percentage (%) change
assets (%) assets (%)
No significant
Monetary assets 35,378,501,261 9.83% 31,393,692,485 10.17% -0.34%
change
Accounts No significant
14,051,661,462 3.90% 18,238,782,247 5.91% -2.01%
receivable change
No significant
Contract assets 315,167,085 0.09% 233,528,786 0.08% 0.01%
change
No significant
Inventories 18,001,121,855 5.00% 14,083,356,918 4.56% 0.44%
change
Investment No significant
946,449,125 0.26% 761,902,236 0.25% 0.01%
property change
Long-term
No significant
equity 29,256,215,804 8.13% 25,640,578,245 8.30% -0.17%
change
investments
No significant
Fixed assets 132,477,671,844 36.80% 113,598,782,727 36.79% 0.01%
change
33
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Construction in No significant
52,053,833,629 14.46% 36,965,885,393 11.97% 2.49%
progress change
Right-of-use No significant
5,110,123,904 1.42% 2,426,911,208 0.79% 0.63%
assets change
Short-term No significant
10,215,910,963 2.84% 9,341,426,543 3.03% -0.19%
borrowings change
Contract No significant
2,336,008,164 0.65% 2,593,882,004 0.84% -0.19%
liabilities change
Long-term Increase in
118,603,164,839 32.95% 87,279,081,955 28.27% 4.68%
borrowings financings
No significant
Lease liabilities 4,461,382,902 1.24% 1,102,071,813 0.36% 0.88%
change
Explanation of high proportion of overseas assets
□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Impairme
nt
Gain/loss on Cumulative
allowanc
fair-value fair-value Purchased in the Amount sold in
Beginning es
Item changes in the changes Reporting the Reporting Other changes Ending amount
amount establishe
Reporting recorded in Period Period
d in the
Period equity
Reportin
g Period
Financial assets
1. Held-for-
trading financial
assets
10,305,293,789 -257,066,897 0 24,059,751,982 18,475,644,160 15,632,334,714
(excluding
derivative
financial assets)
2. Derivative
70,928,566 23,436,569 105,189,972 161,479,123 361,034,230
financial assets
3. Receivables
2,217,638,736 0 -1,114,510,972 1,103,127,764
financing
4. Other debt
0 0 0 0 0
investments
5. Investments
in other equity 927,319,447 -19,689,751 22,639,419 502,685,450 12,412,598 439,996,263
instruments
Subtotal of
13,521,180,538 -233,630,328 85,500,221 24,082,391,401 18,978,329,610 -940,619,251 17,536,492,971
financial assets
Investment
property
Productive
biological assets
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Other
Total of the
13,521,180,538 -233,630,328 85,500,221 24,082,391,401 18,978,329,610 -940,619,251 17,536,492,971
above
Financial
947,240,307 -94,386,197 13,459,465 2,104,884,136 2,358,170,985 319,619,948 932,646,673
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Carrying amount
Restricted assets Reason for restriction
(RMB'0,000)
Monetary assets 32,185 Deposited in the central bank as the required reserve
Monetary assets 138,103 Other monetary funds and restricted bank deposits
Notes receivable 26,460 Pledge
Fixed assets 9,647,955 As collateral for loan
Intangible assets 417,783 As collateral for loan
Held-for-trading financial assets 25,517 Pledge
Construction in progress 1,038,389 As collateral for loan
Right-of-use assets 1,862 As collateral for lease
Accounts receivable 160,933 Pledge
Contract assets 27,168 Pledge
Total 11,516,355
VII. Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount in the Total investment amount in the same
Change (%)
Reporting Period (RMB) period of last year (RMB)
52,419,386,966 46,434,920,794 12.89%
2. Major Equity Investments Made in the Reporting Period
Applicable Not applicable
Unit: RMB100 million
Invo
Investment lve
Shareho Date (if
Principa Investm Investm Term of Type of Estimat income/loss men Index (if any)
Name of lding Funding Progres any) of
l ent ent Partner investm product ed in the t in to disclosed
investee ratio source s disclosu
activity method amount ent s income Reporting laws information
(%) re
Period uit(s
)
Xiamen TCL Xiamen
Technology Heding
Industri
Industrial Equity Self- Duxing Not Not Not August
al Establis Not www.cninfo.c
Investment investm 9.9 99% raised Investm applica applica applica No 27,
investm hed applicable om.cn
Partnership ents funds ent ble ble ble 2022
ent
(Limited Consult
Partnership) ing
35
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Partners
hip
Jiangsu
Zhongn
eng
Inner
Polysili
Mongolia
Granula Equity Self- con Not Not Not
Xinhuan Establis Not July 7, www.cninfo.c
r silicon investm 18 40% raised Technol applica applica applica No
Silicon Energy hed applicable 2022 om.cn
projects ents funds ogy ble ble ble
Technology
Develo
Co., Ltd.
pment
Co.,
Ltd.
Jiangsu
Xinhua
Inner Semico
Mongolia Polycry nductor
Equity Self- Not Not Not
Xinhua stalline Materia Establis Not July 7, www.cninfo.c
investm 7.2 40% raised applica applica applica No
Semiconductor silicon l hed applicable 2022 om.cn
ents funds ble ble ble
Technology projects Technol
Co., Ltd. ogy
Co.,
Ltd.
Not
Total -- -- 35.1 -- -- -- -- -- -- - -- -- --
applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB'0,000
Gain/los
Cumulat
Accounti s on fair- Amount
Beginnin ive fair- Purchase Gain/los
Securities Initial ng value sold in Ending
Securitie g value d in the s in the Account
Security type Abbreviati investme measure changes the carrying Funding source
s code carrying changes Reportin Reportin ing title
on nt cost ment in the Reportin amount
amount recorded g Period g Period
method Reportin g Period
in equity
g Period
Other
DK
non-
300842. Electronic Fair
Stocks 2,430 48,644 -8,965 0 0 23,188 -3,516 25,258 current Self-funded
SZ Materials, value
financial
Inc.
assets
22
Measure
Interest- Debt
Government 220016I ment at
bearing 20,000 - 0 0 20,000 0 144 20,327 investme Self-funded
bond B amortize
governme nts
d cost
nt bond 16
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
22
Measure
Interest- Debt
Government 220016I ment at
bearing 20,000 - 0 0 20,000 0 150 20,327 investme Self-funded
bond B amortize
governme nts
d cost
nt bond 16
Other
non-
688728. Galaxycor Fair
Stocks 4,284 19,692 -1,288 0 0 0 -1,288 18,404 current Self-funded
SH e Inc. value
financial
assets
ISHARES Held-
IBOXX for-
US46428 Fair
Bonds HIGH 13,238 - -116 0 54,382 43,569 -1,283 11,025 trading Self-funded
85135 value
YLD financial
CORP assets
22
Measure
Interest- Debt
Government 220016I ment at
bearing 10,000 - 0 0 10,000 0 75 10,158 investme Self-funded
bond B amortize
governme nts
d cost
nt bond 16
22
Measure
Interest- Debt
Government 220016.I ment at
bearing 10,000 - 0 0 10,000 0 81 10,152 investme Self-funded
bond B amortize
governme nts
d cost
nt bond 16
Investm
ents in
Wesolutio Fair other
Stocks 0860.HK 18,926 10,131 0 -5,414 0 0 0 5,928 Self-funded
ns Inc. value equity
instrume
nts
Measure
22 ICBC Debt
Financial 223001.I ment at
Macau 5,000 - 0 0 5,000 0 44 5,044 investme Self-funded
bond B amortize
Bond 01 nts
d cost
Held-
for-
XS25606 LINK CB Fair
Bonds 4,455 - 326 0 4,323 0 326 4,791 trading Self-funded
62541 LTD value
financial
assets
Other securities investments held at
572,007 -- 191,472 -14,981 -27 340,906 384,599 -22,522 166,460 -- --
the period-end
Total 680,340 -- 269,938 -25,023 -5,441 464,611 451,356 -27,789 297,874 -- --
Disclosure date of the board
announcement approving the April 28, 2022
securities investments
Disclosure date of the general
meeting announcement approving May 20, 2022
the securities investments (if any)
37
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
1) Derivative investments for hedging purposes made during the Reporting Period
√ Applicable □ Not applicable
Unit: RMB'0,000
Ending contractual
Gain/loss amount as % of the
Beginning amount Ending amount
in Company’s ending net
Type of contract
Reportin assets
Contractua Transactio Contractua Transactio g Period Contractua Transactio
l amount n limit l amount n limit l amount n limit
1. Forward forex
1,736,175 61,406 2,062,172 73,441 15.61 0.56
contracts 14,870
2. Interest rate swaps 415,696 12,471 384,446 11,533 2.91 0.09
Total 2,151,871 73,877 2,446,618 84,974 14,870 18.52 0.65
Accounting policies and
specific accounting
principles for hedging
business during the
Reporting Period and a No significant change.
description of whether there
have been significant
changes from those of the
previous reporting period
During the Reporting Period, the Company had profits and losses of RMB465.80 million generated from the changes
Description of actual profits
in the fair value of the hedged items, RMB-458.27 million from the delivery of mature forward foreign exchange
and losses during the
contracts, RMB120.15 million from the valuation of immature forward foreign exchange contracts and RMB21.02
Reporting Period
million from interest rate swaps.
During the Reporting Period, the Company's main foreign exchange risk exposures include exposures of assets and
Description of the hedging liabilities denominated in foreign currencies arising from business such as outbound sales, raw material procurement
effect and financing. The uncertain risks arising from the exchange rate fluctuations were effectively hedged by derivative
contracts with the same purchase amounts and maturities in opposite directions.
Funding source Self-funded.
In order to effectively manage the exchange and interest rate risks of foreign cu rrency 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 exc hange rate and
Analysis of risks and interest rate risks. As its business scale changes subsequently, the Company will adjust the exchange rate risk
control measures associated management strategy according to the actual market conditions and business plans.
with derivative investments Risk analysis:
held in Reporting Period 1. Market risk: the financial derivatives business carried out by the Group belongs to hedging and trading business
(including but not limited to related to main business operations, and there is a market risk of loss due to the fluctuation of underlying interest
market risk, liquidity risk, and exchange rates, which lead to the fluctuation of prices of financial derivatives;
credit risk, operational risk, 2. Liquidity risk: the derivatives business carried out by the Group is an over-the-counter transaction operated by a
legal risk, etc.) 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 b udgets;
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
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 therefrom.
Measures taken for risk control:
1. Basic management principles: the Group strictly follows the hedging principle mainly for the purposes of fixin g
costs and avoiding risks. It is required that the financial derivatives business to be carried out align with the variety,
size, direction and duration of spot goods, and this should not involve any speculative trading. In the selection of
hedging instruments, only simple financial derivatives that are closely related to the main business operation and
meet the requirements of hedge accounting treatment should be selected, and avoid complex business that exceeds
the prescribed business scope or is difficult to recognize in terms of risk and pricing;
2. The Group has formulated a special risk management system tailored to the risk characteristics of the financial
derivatives business, covering all key aspects such as preemptive prevention, in -process monitoring and post-
processing. It reasonably allocates professionals for investment decision -making, business operation and risk control
as required; Personnel involved in investment are required to fully understand the risks of financial derivatives
investment and strictly implement the business operation and risk management system of derivatives. Before starting
the derivatives business, the holding company must submit to the competent department of the Group detailed
business reports including its internal approval, main product terms, operational necessity, preparations, risk
analysis, risk management strategy, fair value analysis and accounting methods, and special summary reports on
business operated. Operation is only allowed upon the approval of the functions under the Group;
3. Relevant departments should track the changes in the open market price or fair value of financial derivatives,
timely assess the risk exposure changes of invested financial derivatives, and make reports to the board of directors
on business development;
4. When the combined impairment of the fair value of the derivatives bought by the Group and changes in the value
of the assets (if any) used for risk hedging by the Group results in a total loss or floating loss amounting to 10% of
the Company's recently audited net profit attributable to shareholders of the listed company, and the absolute amount
exceeds RMB10 million, the Group will disclose it in a timely manner.
Changes in market prices or
With the rapid expansion of overseas sales, the Company continues to follow the above rules in the operation of
fair value of derivative
forward foreign exchange contracts, interest rate swap contracts and futures contracts to avoid and hedge foreign
investments in Reporting
exchange risks arising from operations and financing. During the Reporting Period, there were profits and losses of
Period (fair value analysis
RMB465.80 million from changes in the fair value of hedged items and RMB-317.10 million from derivatives. The
should include
fair value of derivatives is determined by real-time quoted price of the foreign exchange market, based on the
measurement method and
difference between the contractual price and the forward exchange rate quoted immediately in the foreign exchange
related assumptions and
market on the balance sheet date.
parameters)
Legal matters involved (if
Not applicable
applicable)
Disclosure date of the board
announcement approving
April 28, 2018
the derivative investments
(if any)
Disclosure date of the
general meeting
announcement approving Not applicable
the derivative investments
(if any)
Opinion of independent In view of the fact that certain raw materials of the core business of the Company are purchased overseas, a wide
directors on derivative range of settlement currencies is involved. The Company reduces exchange losses and locks transaction costs by
investments and risk control reasonable financial derivatives, which helps to reduce risk control costs and improve company competitiveness.
39
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Risks are effectively controlled as the Company has taken series of measures such as conducting a rigorous internal
evaluation for the operation of financial derivatives business, establishing a corresponding regulatory mechanism,
formulating reasonable accounting policies and specific accounting principles, setting limits for risk exposure
management, and operating simple financial derivatives. The contracting agent for financial derivatives business of
the 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 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.
2) Derivative investments for speculative purposes made during the Reporting Period
□ Applicable √ Not applicable
There were no derivative investments for speculative purposes made by the Company during the Reporting Period.
5. Use of the Capital Raised
√ Applicable □ Not applicable
(1) General Information about the Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB'0,000
Cumulative
Amount
Amount amount
Cumulative Purpose and being
with with
Year Total Used in amount Unused whereabouts idle for
Way of Cumulatively changed changed
of amount the current with amount of the more
raising used use in the used as %
raising raised period changed (note) unused than
reporting of total
used amount two
period amount
years
raised
Non-
public
Not Not Not Not
2022 offering 947,469.47 947,469.47 947,469.47 0 0
applicable applicable applicable applicable
of
shares
Not Not Not
Total -- 947,469.47 947,469.47 947,469.47 0 -- 0
applicable applicable applicable
Use of the Capital Raised
According to the Approval for the Non-Public Issue of Shares by TCL Technology Group Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1658) issued by
the China Securities Regulatory Commission, the Company issued no more than 2,806,128,484 shares in a non -public manner. The number of shares
actually issued in this issuance was 2,806,128,484 shares. As of December 6, 2022, the Company raised a total of RMB9,596,959,415.28, and the
amount of RMB9,471,959,415.28 raised funds was deposited into the Company's special bank account after deducting the underwriting sponsorship
fee (tax-inclusive) at RMB125,000,000.00. After deducting the issue-related fees (excluding the value-added tax) of RMB122,264,729 .1 2,
RMB9,474,694,686.16 was available for use.
Note: As at December 31, 2022, the unused amount in the raised fund account was RMB1.8195 million, which was the accumulated balance of special
account interest and account maintenance fees. Such amount was deposited in the special bank account for raised funds.
(2) Promised Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB'0,000
Total Cumulative Investment M eeting Signific
Promised project funded Project changed Adjusted Investment Time when Benefits
promised investment progress as the ant
with raised funds and or not total in the the project is derived in the
investment amount at the at the expected change
investment with over- (including investment Reporting ready for its Reporting
amount period-end period-end benefits or to
raised funds partial change) amount (1) Period intended use Period
with raised (2) (3)=(2)/(1) not project
40
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
funds feasibilit
y or not
Promised projects
24 months
1. The generation 8.6 (or
from the
G8.6) new oxide Not Not
No 900,000.00 900,000.00 900,000.00 900,000.00 100.00% commencem No
semiconductor production applicable applicable
ent date of
line
the project
2.
Not Not Not
Additional working No 47,469.47 47,469.47 47,469.47 47,469.47 100.00% No
applicable applicable applicable
capital
Subtotal of promised
-- 947,469.47 947,469.47 947,469.47 947,469.47 -- -- -- --
projects
Over-raised funds
None
Description of delayed
progress and reasons for
failure to achieve the
planned progress and
expected income Not applicable
(including the reasons for
selecting “Not applicable”
for “whether expected
benefits were met or not”)
Description of major
changes in project Not applicable
feasibility
Over-raised fund amount,
Not applicable
purpose and use progress
Location change of the
Not applicable
project with raised funds
Adjustment of project
Not applicable
implementation
Advance investments in
On December 12, 2022, the Proposal on Using Raised Funds to Swap Self-raised Funds Previously Invested in Projects that should be Funded with Raised
promised projects funded
Funds was approved at the 26th M eeting of the Company’s 7th Board of Directors. As such, raised funds were agreed to be swapped wit h the advance
with raised funds and
investments of self-raised funds in projects that should be funded with raised funds. The total swap amount was RMB9 billion.
subsequent swaps
Supplemented the
working capital with idle Not applicable
funds
Amount and reasons for
As at December 31, 2022, the balance of the unused amount of the raised fund account was RM B1,819,536.34, which was the accumulated balance of special
the balance of raised
account interest and account maintenance fees. Such amount was deposited in the special bank account for raised funds and was used according to the Company's
funds in the project
fund arrangements.
implementation
Unused fund purpose and
Not applicable
whereabouts
Problems and other
circumstances in raised Not applicable
fund use and disclosure
(3) Change of the raised fund projects
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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VIII. 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
IX. Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit
Unit: RMB'0,000
Company Principal Registered Total Net Operating
Company Name Revenue Net profit
type activity capital assets assets profit
TCL China Star
Semi-
Optoelectronics RMB32.475
Subsidiary conductor 19,255,707 7,384,957 5,625,642 -974,758 -835,283
Technology Co., billion
display
Ltd.
New energy
TCL Zhonghuan
photovoltaic
New Energy RMB3.234
Subsidiary & semi- 10,913,377 4,705,984 6,701,016 732,542 707,304
Technology Co., billion
conductor
Ltd.
materials
Highly
Distribution RMB412
Information Subsidiary 871,268 148,111 3,184,780 35,291 26,425
business million
Industry Co., 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.
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Shaanxi Huanshuo Green New Energy
Newly incorporated No significant effect
Co., Ltd.
Admiralty Harbour Investment Holding
Newly incorporated No significant effect
Limited
Zhonggang Enterprise Service
Newly incorporated No significant effect
(Shenzhen) Co., Ltd.
Huizhou Keda Tezhixian Technology
Newly acquired No significant effect
Co., Ltd.
Ningxia Huanneng New Energy Co.,
Newly incorporated No significant effect
Ltd.
Zhonghuan Advanced Semiconductor
Newly incorporated No significant effect
Japan Co., Ltd.
TCL CSOT AMERICA CORP. Newly incorporated No significant effect
Xi’an Sunpie Technology Co., Ltd. Newly incorporated No significant effect
Weinan Sunpiestore Technology Co.,
Newly incorporated No significant effect
Ltd.
Guiyang Sunpiestore Technology Co.,
Newly incorporated No significant effect
Ltd.
Lanzhou Sunpiestore Technology Co.,
Newly incorporated No significant effect
Ltd.
Urumqi Sunpiestore Technology Co.,
Newly incorporated No significant effect
Ltd.
Baoji Sunpie Sidao Technology Co., Ltd. Newly incorporated No significant effect
Urumqi Sunpie Xinhui Technology Co.,
Newly incorporated No significant effect
Ltd.
Xi’an McSunpie Technology Co., Ltd. Newly incorporated No significant effect
Shenzhen Sunpiestore Electronics Co.,
Newly incorporated No significant effect
Ltd.
Shenzhen Sunpiestore Industrial Co.,
Newly incorporated No significant effect
Ltd.
Dongguan Sunpiestore Digital Co., Ltd. Newly incorporated No significant effect
Dongguan Sunpiestore Electronics Co.,
Newly incorporated No significant effect
Ltd.
Guangzhou Sunpie Technology Co., Ltd. Newly incorporated No significant effect
Lanzhou Hongmao Sunpiestore
Newly incorporated No significant effect
Technology Co., Ltd.
Xiamen TCL Technology Industrial
Investment Partnership (Limited Newly incorporated No significant effect
Partnership)
TCL CSOT SG PTE. LTD. Newly incorporated No significant effect
Beijing Youyi Online Technology Co.,
Newly incorporated No significant effect
Ltd.
PL MOKA Sp. z o.o. Newly acquired No significant effect
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Urumqi Sunpie Zhishang Trading Co.,
Newly incorporated No significant effect
Ltd.
Urumqi Sunpie Maiqi Trading Co., Ltd. Newly incorporated No significant effect
Lanzhou Hongsheng Sunpiestore
Newly incorporated No significant effect
Electronics Technology Co., Ltd.
Tongliao Guangtong New Energy Co., De-registered No significant effect
Ltd.
Beijing Zhiqujia Technology Co., Ltd. Transferred No significant effect
Huizhou Shengyao New Energy Transferred No significant effect
Technology Co., Ltd.
Ningjin Jinchen New Energy Co., Ltd. Transferred No significant effect
Lingwu Huanju New Energy Co., Ltd. Transferred No significant effect
X. Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
XI. Prospects
Looking into 2023, the high-end high-tech industry will embrace new challenges and opportunities as global economic
transformation and industrial chain restructuring takes place. TCL Tech will seize the opportunity for industrial development, develop
global high-tech industrial core asset segments and focus on the business development of semiconductor displays, new energy
photovoltaic materials and semiconductor materials. Using technology, management, and scale advantages as fundamentals, the
Company will take into account short-term contingency response and long-term capacity building, pursue long-term high-qualit y
development, continue to improve industry chain layout and is committed to becoming a global leader in these two segments.
As one of the world’s leading semiconductor display enterprises, the Company will focus on seizing the opportunity for indust ry
integration, strengthening advantages and offsetting disadvantages, enhancing its leading advantage in large-sized products, improving
the layout of small and medium-sized products, optimizing business, product and customer structure and transforming into an industry
leader for all display sizes.
In the two strategic industries of new energy and semiconductors, TCL Zhonghuan has become one of the main engines of TCL's
scientific and technological performance growth through institutional reform, enhancing organizational vitality, releasing growth
potential and accelerating business development. With the global energy restructuring and rapid development of the information age,
TCL Zhonghuan will continue to enhance its comparative competitiveness and take a leading position in the industry.
In the future, TCL aims to become a global leader and will pool its efforts, be guided by science and technology, driven by
innovation and continue to ramp up, catch up and achieve high-quality development.
XII. Communications with the Investment Community such as Researches, Inquiries and
Interviews
√ Applicable □ Not applicable
Main
Type of Index to main
Way of Communication discussions
Date Place communication information
communication party and materials
party communicated
provided
Conference Greenwoods Log Sheet No. 2022-
March 22, Latest
Room of Asset, CMB 001 on Investor
2022 - business
TCL Tech By teleconference Institution Wealth Relations Activities
March 24, operations of
in Management, dated March 24, 2022
2022 TCL Tech
Shenzhen Tianhong Asset disclosed by the
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Management, Company at
BlackRock, etc. www.cninfo.com.cn
on March 24, 2022.
Log Sheet No. 2022-
E Funds, Harvest Performance 002 on Investor
Conference
Fund, of TCL Tech Relations Activities
Room of
April 28, By teleconference Perseverance for 2021 and dated April 28, 2022
TCL Tech Institution
2022 + p5w.net Asset the first disclosed by the
in
Management, quarter of Company at
Shenzhen
CICC, UBS, etc. 2022 www.cninfo.com.cn
on April 29, 2022.
Southern Asset Log Sheet No. 2022-
Management, 003 on Investor
Conference
China Life, Performance Relations Activities
Room of
August Perseverance of TCL Tech dated August 29, 2022
TCL Tech By teleconference Institution
29, 2022 Asset for the first disclosed by the
in
Management, half of 2022 Company at
Shenzhen
BOCOM www.cninfo.com.cn
Schroders, etc. on August 31, 2022.
Log Sheet No. 2022-
E Funds, Huaxia 004 on Investor
Conference Performance
Securities, Relations Activities
Room of of TCL Tech
October Penghua Fund, dated October 25,
TCL Tech By teleconference Institution for the third
25, 2022 Dacheng Fund, 2022 disclosed by the
in quarter of
ICBC Wealth Company at
Shenzhen 2022
Management, etc. www.cninfo.com.cn
on October 26, 2022.
Contents and
public
January - The Individuals,
Investor hotline Individuals, information,
December Company's institutions, -
(telephone) institutions, etc. etc.,
2022 office etc.
disclosed by
the Company
Contents and
public
January - The Individuals,
Individuals, information,
December Company's irm.cninfo.com.cn institutions, irm.cninfo.com.cn
institutions, etc. etc.,
2022 office etc.
disclosed by
the Company
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Part IV Corporate Governance
I General information of Corporate Governance
Since listed, in accordance with the Company Law, the Securities Law, the Code of Corporate Governance for
Listed Companies, Rules Governing the Listing of Shares on Shenzhen Stock Exchange and the Self-regulatory
Guidelines of Shenzhen Stock Exchange for Listed Companies No. 1 - Standardized Operation of Listed Companies
on the Main Board and other relevant laws and regulations, the Company has continued to improved its governance
structure and further standardized its operations to comply with the requirements of related laws and regulations.
During the Reporting Period, the Company pushed ahead with its corporate government work in many aspects.
At present, the Company has established an organizational structure in line with the Company’s business scale and
operation and management, reasonably set up departments and posts, scientifically plan responsibilities and duties
and build an internal control system that enables employees to performs their duties, assumes their responsibilities,
work and supervise each other. The Company has a complete internal audit and internal control system, especially
in terms of internal audit, with a clarified structure and clear responsibilities defined, which can effectively prevent
Group risks.
The board of directors of the Company sets up four dedicated committees: strategy committee, audit
committee, nomination committee and remuneration and appraisal committee to provide suggestions to the board
of directors and ensure the board meetings and decision-making in a professional and efficient manner. The board
of supervisors perform their duties diligently and conscientiously. The supervisors investigate issues at various sites,
take the initiative to put forward management suggestions, which effectively improve the internal governance of
the Company. The Company has continuously improved its information disclosure management and investor
relations management through innovative management system. The Company actively arranges directors,
supervisors, senior managers and heads of relevant departments to participate in the dedicated training organized
by regulators and associations, effectively promotes the management’s learning and understanding of relevant laws,
regulations and documents on the governance of listed companies, strengthens the management’s self-discipline
capacity, make them diligently perform their duties, and effectively safeguards the interests of all shareholders,
especially small and medium-sized shareholders. The Company has successively launched employee stock incentive
plans with the participation of middle and senior managers and excellent employees, further improving corporate
performance and continuous improvement of its value. The Company is devoted to public charitable undertakings
and actively participates in social public charitable donations. Thanks to these measures, the Company takes a lead
in corporate governance in the industry.
Currently, there is no difference between the actual status of the Company’s corporate governance ructure and
the standard documents on the corporate governance for listed companies published by China Securities Regulatory
Commission. The names of the policies are shown in the following table and all the policies have been published
on www.cninfo.com.cn.
Category of rules Title of rules
Articles of Association The Articles of Association of TCL Technology Group Corporation
Dividend rules The Dividend Rules of TCL Corporation
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The Shareholder Dividend Reward Plan of TCL Technology Group Corporation for the Next
Three Years (2023-2025)
The Rules Governing the Shareholdings of Directors, Supervisors and Senior Management in
TCL Corporation and Changes therein
The Rules Governing the Registration of Information Insiders of TCL Technology Group
Corporation
The Accountability Rules for Material Errors in Annual Report Disclosure of TCL Corporation
Information disclosure The Rules Governing External Users of Information of TCL Corporation
policy The Rules Governing Investor Relations of TCL Corporation
The Work Rules for Independent Directors Concerning Annual Reports of TCL Corporation
The Reception and Promotional Work Rules of TCL Corporation
The Rules Governing Internal Reporting of Significant Information of TCL Corporation
The Work Rules for the Board Secretary of TCL Corporation
The Rules Governing Information Disclosure of TCL Technology Group Corporation
The Rules of Procedure for the General Meeting of TCL Technology Group Corporation
The Rules of Procedure for the Supervisory Committee of TCL Technology Group Corporation
The Rules of Procedure for the Board of Directors of TCL Technology Group Corporation
The Work Rules for the Independent Directors of TCL Corporation
The Specific Work Rules for the CEO of TCL Corporation
The Rules of Procedure for the Audit Committee under the Board of Directors of TCL
Corporation
Governance and
The Work Procedures for the Annual Audit by the Audit Committee under the Board of Directors
operation rules
of TCL Corporation
The Rules of Procedure for the Remuneration and Appraisal Committee under the Board of
Directors of TCL Corporation
The Rules of Procedure for the Nomination Committee under the Board of Directors of TCL
Corporation
The Rules of Procedure for the Strategy Committee under the Board of Directors of TCL
Corporation
The Rules Governing Major Investments of TCL Corporation
The Rules Governing the Use of Raised Funds of TCL Technology Group Corporation
The Internal Control Rules for Venture Capital of TCL Corporation
The Rules Governing Securities Investment of TCL Technology Group Corporation
Internal control rules
The Internal Control Rules for Investment in Derivative Financial Instruments of TCL Technology
Group Corporation
The Rules Governing Securities Investment of TCL Technology Group Corporation
The Majority-Owned Subsidiary Management Measures of TCL Corporation
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The Rules Governing the Related-Party Transactions of TCL Corporation
The Rules Governing the Guarantees Provided for External Parties of TCL Techno logy Group
Corporation
The Internal Control Rules of TCL Corporation
The Internal Audit Charter of TCL Technology Group Corporation
The Internal Control Evaluation Rules of TCL Corporation
The following rules are revised during the Reporting Period and relevant rules are disclosed on www.cninfo.com.cn:
Title of rules
The Articles of Association of TCL Technology Group Corporation
The Rules Governing Information Disclosure of TCL Technology Group Corporation
Revised
The Rules Governing the Registration of Information Insiders of TCL Technology Group
Corporation
Is there any material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies
□ Yes √ No
There is no material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies.
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
□ Applicable √ Not applicable
III Horizontal Competition
□ Applicable √ Not applicable
IV. Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor Date of
Date of
Meeting Type participation the Resolutions of the meeting
disclosure
ratio meeting
All proposals were adopted. Please refer to
The First
the Notice on Resolutions of the 1st
Extraordinary Extraordinary April 29, April 30,
22.26% Extraordinary Meeting of Shareholders in
General Meeting general meeting 2022 2022
2022 disclosed on www.cninfo.com.cn on
of 2022
April 30, 2022 (Notice No.: 2022-045)
All proposals were adopted. Please refer to
the Notice on Resolutions of General Meeting
The 2021 Annual Annual general May 19, May 20,
22.12% of Shareholders in 2021 disclosed on
General Meeting meeting 2022 2022
www.cninfo.com.cn on May 20, 2022
(Notice No.: 2022-051)
All proposals were adopted. Please refer to
The Second
the Notice on the 2nd Extraordinary General
Extraordinary Extraordinary July 22, July 23,
22.18% Meeting of Shareholders in 2022 disclosed on
General Meeting general meeting 2022 2022
www.cninfo.com.cn on July 23, 2022 (Notice
of 2022
No.: 2022-081)
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2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
V. Performance of Duty by Independent Directors in the Reporting Period
1. General information
Increase Decreas
Shar Granted Other
Beginning in the e in the Ending
Position Gend End of e restricte increase/ Reason for
Name Position Age Start of tenure shareholding Reportin Reportin shareholdin
Status er tenure optio d shares decrease change
(share) g Period g Period g (share)
n (shares) (share)
(share) (share)
Chairman April 19, 2002 Non-transaction
Novemb
transfer under the
Li Dongsheng Incumbent Male 65 er 12, 813,575,470 - - - - 485,626 814,061,096
CEO June 20, 2005 employee stock
2023
ownership plan
Vice
Novemb
Charmian November 13,
Liang Weihua Incumbent Male 41 er 12, - - - - - - - Not applicable
of the 2020
2023
Board
January 9,
Director Novemb
2023
Wang Cheng Incumbent Male 48 er 12, 157,661 - - - - 157,661 Not applicable
August 9,
COO 2023
2021
November 13,
Director
2020 Novemb
Shen Haoping Senior Incumbent Male 60 er 12, - - - - - - - Not applicable
November 14,
Vice 2023
2020
President
September 1,
Director
2017 Non-transaction
Board Novemb transfer under
April 23, 2014
Liao Qian Secretary Incumbent Male 42 er 12, 229,596 - - - - 251,710 481,306 the employee
Senior 2023 stock ownership
August 27,
Vice plan
2020
President
January 9, Non-transaction
Director
2023 Novemb transfer under
Zhao Jun Senior Incumbent Male 50 er 12, - - - - - 200,482 200,482 the employee
December 23,
Vice 2023 stock ownership
2022
President plan
Novemb
Lin Feng Director Incumbent Male 37 April 29, 2022 er 12, - - - - - - - Not applicable
2023
Independ Novemb
November 13,
Gan Yong ent Incumbent Male 75 er 12, - - - - - - - Not applicable
2020
director 2023
Independ Novemb
November 13,
Chen Shiyi ent Incumbent Male 66 er 12, - - - - - - - Not applicable
2020
director 2023
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Independ Novemb
November 13,
Wan Liangyong ent Incumbent Male 43 er 12, - - - - - - - Not applicable
2020
director 2023
Independ Novemb
September 1,
Liu Xunci ent Incumbent Male 64 er 12, - - - - - - - Not applicable
2017
director 2023
Chairman
of the
Novemb
Superviso September 2,
He Zhuohui Incumbent Male 57 er 12, - - - - - - - Not applicable
ry 2015
2023
Committe
e
Novemb
Superviso Fema September 1,
Qiu Haiyan Incumbent 48 er 12, - - - - - - - Not applicable
r le 2014
2023
Non-transaction
Employee Novemb transfer under
September 1,
Mao Tianxiang Superviso Incumbent Male 42 er 12, 128,979 - - - - 100,604 229,583 the employee
2017
r 2023 stock ownership
plan
Non-transaction
Novemb transfer under
Fema August 9,
Li Jian CFO Incumbent 50 er 12, 97,709 - - - - 196,804 294,513 the employee
le 2021
2023 stock ownership
plan
Senior Non-transaction
September 1,
Vice Novemb transfer under
2014
Yan Xiaolin President Incumbent Male 56 er 12, 1,018,176 - - - - 285,126 1,303,302 the employee
December 6, 2023 stock ownership
CTO
2012 plan
Non-transaction
Decemb transfer under
Fema March 19,
Du Juan Director Former 52 er 22, 417,730 - - - - 374,237 791,967 the employee
le 2018
2022 stock ownership
plan
January 25, Non-transaction
Director
2019 Decemb transfer under
Jin Xuzhi Senior Former Male 68 er 22, 521,997 - - - - 232,564 754,561 the employee
August 13,
Vice 2022 stock ownership
2015
President plan
April 12,
Liu Kun Director Former Male 44 May 13, 2021 - - - - - - - Not applicable
2022
Total -- -- -- -- -- -- 816,147,318 - - - - 2,127,153 818,274,471 --
During the reporting period, any resignation of directors and supervisors and dismissal of senior managers during their term of office
□ Yes √ No
Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
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Resigned as a Non-
executive Director of
Liu Kun Non-executive Director Former April 12, 2022
the Company due to
job adjustment.
Election at a
Lin Feng Non-executive Director Elected April 29, 2022
shareholders’ meeting
Resigned as a Non-
executive Director of
Du Juan Non-executive Director Former December 22, 2022
the Company for
personal reasons.
Resigned as a Non-
executive Director and
Executive Director,
Jin Xuzhi Former December 22, 2022 Senior Vice President
Senior Vice President
of the Company for
personal reasons.
Election at a
Wang Cheng Executive Director Elected January 9, 2023
shareholders’ meeting
Election at a
Executive Director, shareholders’ meeting
Zhao Jun Elected and appointed January 9, 2023
Senior Vice President and appointment by the
Board
2. Positions
Professional background, major work experience and current post held in the Company of incumbent director, supervisor and senior
manager
Mr. Li Dongsheng, the founder of TCL who currently serves as TCL Tech’s Chairman and CEO; he was
elected as a delegate to China’s 16th National Congress of the CPC and a deputy to the 10th, 11th, 12th, 13th and
14th National People’s Congress. Mr. Li has held a number of prestigious positions: Former Vice Chairman of All
China Federation of Industry and Commerce (ACFIC), Vice Chairman of the China Chamber of International
Commerce, First President of the China Manufacturing Innovation Alliance, Honorary President of Guangdong
Federation of Industry&Commerce, Honorary President of South China University of Technology Education
Development Foundation, Vice President of Alumni Association South China University of Technology, Member
of the Council of South China University of Technology, Visiting Professor in Wuhan University, and Honorary
Professor in Beijing Institute of Technology.
Mr. Liang Weihua, Vice Chairman of TCL Tech. He was born in March 1981. He holds a master's degree
and is a Party member. He graduated from the Department of Sociology of the School of Government, the Sun Yat-
sen University, in July 2003 and graduated from the Economics and Management School of Wuhan University with
the MBA degree in December 2012. From July 2003 to December 2010, he worked as Assistant Manager of
Enterprise Management Department and Administration Department of Huizhou Investment Management
Company. From December 2010 to December 2011, he took the post of Executive Deputy General Manager of
Huidong County Hongyuan Water Supply Co., Ltd. From December 2011 to June 2016, he served as the General
Manager of Huidong County Hongyuan Water Supply Co., Ltd. (and participated in the Special Seminar for Young
and Middle-aged Cadres at Section Chief Rank in Huizhou City to Learn and Implement Spirit of Third Plenary
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Session of the 18th CPC Central Committee (Zhong Qing Class 2) from May to August, 2014). From June 2016 to
June 2021, he took office as Deputy General Manager of Huizhou Investment Holding Co., Ltd. (and also served as
a director of the company since August 2016). From March 2017 to March 2022, he has been a director of Huizhou
Financing Guarantee Co., Ltd.; from March 2017 to January 2023, he concurrently served as a director of Utrust
Inclusive Finance (Huizhou) Financing Guarantee Co., Ltd. From April 2017, he was a director at Truly (Huizhou)
Smart Display Limited. Since October 2019, he has been Chairman and General Manager of Huizhou New Materials
Industry Park Investment and Construction Co., Ltd. Since November 2020, he has held office as Vice Chairman
of TCL Technology Group Corporation and its consolidated subsidiaries, except where the context otherwise
requires. He became Chairman and General Manager of Huizhou Innovative Investment Co., Ltd. in November
2020; in June 2021, he was appointed as Deputy General Manager of Huizhou State-Owned Asset Investment
Group.
Mr. Wang Cheng, Executive Director and COO of TCL Tech. Born in 1974, MBA, EMBA from the
University of Texas at Arlington. Since joined TCL in 1997 and successively served in multiple management
positions at TCL multimedia overseas business, human resources director and senior vice president of TCL Group.
He once worked as the CEO of TCL Electronics from October 2017 to August 2021, and CEO of TCL Industrial
Holdings from January 2019 to August 2021. From August 2021, he was appointed as COO of TCL Tech.
Mr. Shen Haoping, Executive Director and Senior Vice President of TCL Tech. Born in 1962, he holds a
bachelor's degree. He is a Senior Engineer receiving a special allowance from the State Council. At present, he
serves as Vic Chairman and General Manager of Tianjin Zhonghuan Semiconductor Co., Ltd. and Deputy Secretary
of the Party Committee and General Manager of Tianjin Zhonghuan Electronics and Information Group Co., Ltd.
Mr. Liao Qian, Executive Director, Senior Vice President, and Secretary of the Board of Directors of TCL
Tech. He obtained a Master’s Degree and holds the Occupational Qualification Certificate of the People’s Republic
of China for Law. From August 2006 to February 2014, he worked at Guotai Junan International Holdings Co., Ltd.
and was engaged in the investment banking business in Hong Kong and Mainland China. Joining TCL Corporation
in March 2014, he is in charge of strategic planning, strategic investment and matters in relation to domestic and
overseas capital markets. He is also Chairman of Tonly Technology Co., Ltd. and CDOT (0334.HK); Vice Chairman
of the Board of Tianjin 712 Communication & Broadcasting Co., Ltd. (603712.SH), and Director of Tianjin
Zhonghuan (002129.SZ).
Mr. Zhao Jun, Executive Director and Senior Vice President of TCL Tech. He was born in Xianyang City,
Shaanxi Province in November 1972, and is a member of the Communist Party of China. He graduated from
Northwestern Polytechnical University with a master's degree of engineering in polymer materials. After graduation,
he served as vice president at Tianma Micro-Electronics Group, and currently serves as Senior Vice President of
TCL Tech and CEO of TCL CSOT. From April 1997 to January 2018, he worked with Tianma Micro-Electronics
Group, successively serving as a pre-process engineer, deputy manager of the quality department, director of
manufacturing and quality, deputy general manager, assistant president, and general manager and vice president of
the procurement center and quality center. From May 2018 to October 2019, he joined Wuhan China Star
Optoelectronics Technology Co., Ltd. as general manager and director. From October 2019 to February 2021, he
served as Vice President of TCL Tech, Senior Vice President of TCL CSOT, General Manager of TCL CSOT Large
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Size Business Group and General Manager of TV Business Department. On July 30, 2021, he was awarded the title
of “Shenzhen Top 100 Innovative Trail-blazers” in the new era. From February 2021 to December 2022, he served
as Chief Operating Officer of TCL CSOT and presided over the overall work of the CSOT. Since December 2022,
he has served as Senior Vice President of TCL Tech and CEO of TCL CSOT.
Mr. Lin Feng, Non-executive Director of TCL Tech. He graduated from Central South University of
Economics and Law in 2011 with a master’s degree in management science and engineering. From July 2011 to
January 2013, he worked for China Sanjiang Space Group Co., Ltd.; from February 2013 to May 2016, he served
as project director and deputy director of the Industrial Investment Department of Hubei Science & Technology
Investment Group Co., Ltd.; from May 2016 to May 2018, he served as deputy general manager of Wuhan Optics
Valley Industrial Investment Co., Ltd.; since May 2018, he has been appointed as general manager of Wuhan Optics
Valley Industrial Investment Co., Ltd.
Mr. Gan Yong, independent director of TCL Tech. He is a Professor Senior Engineer, metallurgist and
materials scientist, academician of the Chinese Academy of Engineering (CAE) (2001), and doctoral supervisor.
He serves as Director of the National Advisory Committee on New Materials Industry Development, Honorary
President of the Association of China Rare Earth Industry (ACREI), and President of the Chinese Society for Metals
(CSM). In June 2010, he was elected Assistant Dean of the CAE and became a member of the 12th National
Committee of the Chinese People's Political Consultative Conference (CPPCC) and Deputy Director of the
Committee of Population, Resources and Environment of the CPPCC.
Mr. Chen Shiyi, independent director of TCL Tech. He was born of Han ethnicity in Tiantai, Zhejiang in
October 1956. He started to work in July 1987. His titles include doctor of science, doctoral supervisor, academician
of the Chinese Academy of Sciences (CAS) and the World Academy of Sciences (TWAS), and second principal of
the Southern University of Science and Technology (SUSTech). Currently, he is president of the Eastern Institute
for Advanced Study, a chair professor at the Southern University of Science and Technology, a member of the 10th
National Committee of the China Association for Science and Technology, vice chairman of the 2nd Council of the
China Engineering Education Accreditation Association, vice chairman of the 11th Council of the Chinese Society
of Theoretical and Applied Mechanics, a member of the Standing Committee of the 7th Committee of the CPPCC
Shenzhen Municipal Committee, and a member of the Standing Committee of the 16th People’s Congress of Ningbo
City.
Mr. Wan Liangyong, independent director of TCL Tech. Born in 1979, he is a Party member who joined the
“National Leading Accounting Talent” of the Ministry of Finance of the People’s Republic of China. Currently, he
is a professor and a doctoral supervisor at the School of Business Administration of South China University of
Technology, and director of the Accounting Development Research Center. He is also a council member of the
Accounting Society of China (ASC), and independent director of multiple companies, including Goworld.
Mr. Liu Xunci, independent director of TCL Tech., professor, and Top Talent in Huizhou City. He was born
in Longhui County, Hunan Province, and was awarded a master’s degree. In September 1976, he became an
educated urban young man working in the countryside. In July 1983, he started to work upon graduation. He taught
at Huizhou University as a lecturer, associate professor, professor, and teaching supervisor. He is now an expert of
the Decision-making Consultative Committee of Huizhou Municipal People’s Government.
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Mr. He Zhuohui, Chairman of the Supervisory Committee of TCL Tech. Born in July 1966, he serves as Full-
time Deputy Secretary and Director in Huizhou Investment Holdings Co., Ltd. From August 1991 to June 1995, he
served as Deputy Director of the General Office and Director of the Office in China Construction Bank Huiyang
Branch; from June 1995 to August 2008, he served as Manager at Ren chengchang (Huizhou) Investment Co., Ltd.;
from August 2008 to September 2009, he served as General Manager of Huizhou Investment Holdings Asset
Management Co., Ltd.; from September 2009 to December 2012, he served as Manager of the Management and
Development Department in Huizhou Investment Holdings Co., Ltd. and Deputy General Manager and Director of
Huizhou Fairway Investment and Construction Co., Ltd.; from December 2012 till now, he serves as Full-time
Deputy Secretary at Huizhou Investment Holdings Co., Ltd.; from February 2014 till now, he serves as Director at
Huizhou Investment Holdings Co., Ltd. (during which period, he has also served as Chairman of the Fifth, Sixth,
And Seventh Supervisory Committees of TCL Technology Group Corporation since August 2015).
Ms. Qiu Haiyan, Supervisor of TCL Tech. Born in December 1975, She obtained her Bachelor’s Degree from
the Central Radio & TV University in 2011. She is an accountant and member of the Communist Party of China.
From July 1995 to March 1998, she served as a finance officer in Huizhou Zongli Real Estate Company; from
March 1998 to June 2002, she served as a finance officer at Huizhou Trust Investment Company; from June 2002
till now, she serves as accountant, deputy manager and manager of the Finance Department in Huizhou Investment
Holdings Co., Ltd.; from February 2014 till now, she serves as workers’ director in Huizhou Investment Holdings
Co., Ltd. (from June 2009 to February 2013, she concurrently served as supervisor at Huizhou Fairway Investment
and Construction Co., Ltd.; from March 2014 to March 2022, she concurrently served as an employee director of
Huizhou Investment Development Co., Ltd.; since April 2014, she has concurrently served as a Supervisor of the
Fifth, Sixth, and Seventh Supervisory Committees of the Company; and since June 2022, she has concurrently
served as a director of Huizhou Industrial Investment Development Master Fund Co., Ltd.).
Mr. Mao Tianxiang, Employee Supervisor of TCL Tech. Now, he is Deputy Secretary of the Party
Committee, Assistant President, and Head of the Audit and Supervision Department of TCL Tech. He was born in
January 1980 and graduated with a bachelor degree in July 2003. From July 2003 to June 2005, he served as
Secretary at China Telecom Guangxi Guilin Company; from July 2005 to November 2007, he served as Supervisor
of PR and Communications in the Strategic OEM Business Division and Officer in the President’s Office in the
Company; from November 2007 to August 2014, he successively served as deputy head of the Legal Section and
head of the General Section in Huizhou Auditing Bureau, the Deputy Director of the Law Enforcement
Effectiveness Supervision Office of the Huizhou Municipal Commission for Discipline Inspection, and the Director
of the Deputy Department; since September 2014, he has worked in the Company and successively served as Deputy
Director of the Party and Mass Work Department, Secretary of the Youth League Committee, Acting General
Manager of the Electronic Devices Business Department of Techne Group, General Manager of TCL Resource
Investment, Chief Auditor of TCL CSOT, etc. Since 2019, he has successively been a Supervisor of Tianjin 712
Communication & Broadcasting Co., Ltd. (603712.SH), the Chairman of the Supervisory Committee of Highly
Information Industry Co., Ltd., and the Chief Supervisor of TCL Financial Co., Ltd. Since October 2020, he has
been Chairman of the Supervisory Committee of TCL Zhonghuan New Energy Technology Co., Ltd. (002129.SZ);
since November 2020, he has been Chairman of the Supervisory Committee of Tianjin Printronics Circuit
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Corporation (002134.SZ); since December 2020, he has been Assistant President, Head of the Audit and Supervision
Department, Deputy Secretary of the Party Committee and Secretary of the Discipline Inspection Committee of
TCL Tech.
Ms. Li Jian, CFO of TCL Tech. Born in 1972, she has an MBA from MIT. Joined TCL in 2004, successively
serving as the capital director of TCL Multimedia Technology Holding Co., Ltd., the deputy general manager and
general manager of TCL Group Finance Co., Ltd., and now serves as the chairman of TCL Technology Group
Finance Co., Ltd. From August 2021, she is appointed as CFO of TCL Tech.
Mr. Yan Xiaolin, a doctor and professor senior engineer, serves as Chief Technology Officer (CTO) and
Senior Vice President of TCL Tech and Dean of the Wuhan TCL Industrial Technology Research Institute, Ltd.;
Director of TCL CSOT, and Chief Scientist of TCL CSOT; Chairman of Guangdong Juhua Printed Display
Technology Co., Ltd., Chairman of TCL Microchip Technology (Guangdong) Co., Ltd., Chairman of Xiamen
Extremely PQ Display Technology Co., Ltd., Chairman of Mostar Semiconductor (Guangdong) Co., Ltd., Director
of National Center of Technology Innovation for Display; Chairman of the IEC Technical Committee on Electronic
Display Devices, Vice Chairman and President of Asia of the Organic Printing Electronics Society, and Fellow of
the Society for Information Display (SID). He is an expert of the National Advisory Committee on New Materials
Industry Development and an initiator of the New Display Direction of the National “Key New Materials R&D and
Application Projects (2030)”, an initiator of the New Display Direction of the “National High-tech Research and
Development Plan (863 Plan)” under the “12th Five-Year Plan” of the Ministry of Science and Technology of the
People’s Republic of China, an initiator of the New Display Direction of the key research and development plan of
“Special Project for Strategic Advanced Electronic Materials” under the national “13th Five Year Plan”, an initiator
of the New Display Direction of the key research and development plan of “Key Special Project for New Display
and Strategic Electronic Materials” implementation scheme under the national “14th Five Year Plan”. He is also a
Leading Talent in Scientific and Technological Innovation of the Special Support Plan for High-level Talent of the
Organization Department of the Central Committee of the CPC and Young Expert with Outstanding Contribution
to China of the National “Hundred-Thousand-Ten Thousand Talent Project”.
Positions held at the shareholding entity
√ Applicable □ Not applicable
Any pay received
Name of shareholding Office title at the Start of End of
Name from the
entity shareholding entity tenure tenure
shareholding entity?
Ningbo Jiutian Liancheng
Representative
Equity Investment August
Li Dongsheng appointed by the Incumbent No
Partnership (Limited 2014
executive partner
Partnership)
Wuhan Optics Valley
Lin Feng Industrial Investment Co., General Manager May 2018 Incumbent Yes
Ltd.
Huizhou Investment Full-time Deputy December
He Zhuohui Incumbent Yes
Holding Co., Ltd. Secretary and Director 2012
Qiu Haiyan Huizhou Investment Workers’ Director February Incumbent Yes
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Holding Co., Ltd. 2014
Notes to positions
held at the Not applicable
shareholding entity
Positions held at other entities
√ Applicable □ Not applicable
Pay received
Office title at other Start of End of
Name Name of other entities from other
entities tenure tenure
entities
September
TCL Industrial Holdings Co., Ltd. Chairman Incumbent Yes
2018
Li Dongsheng Independent and
Tencent Holdings Limited non-executive April 2004 Incumbent Yes
director
Huizhou New Material Industrial
Chairman and October
Park Investment and Construction Incumbent No
general manager 2019
Co., Ltd
Liang Weihua Huizhou Innovation Investment Chairman and November
Incumbent No
Co., Ltd general manager 2020
Huizhou State-owned Capital Deputy General
June 2021 Incumbent Yes
Investment Group Co., Ltd Manager
TCL Microchip Technology
Director May 2021 Incumbent No
Wang Cheng (Guangdong) Co., Ltd.
Amlogic (Shanghai) Co., Ltd Director May 2020 Incumbent No
Tianjin 712 Communication & Vice Charmian of
Liao Qian June 2019 Incumbent No
Broadcasting Co., Ltd. the Board
Hubei Xiaomi Changjiang
October
Industrial Investment Fund Supervisor Incumbent No
2017
Management Co., Ltd.
Wuhan Optical Valley Fiberhome
Lin Feng August
Investment Fund Management Director Incumbent No
2018
Co., Ltd.
Wuhan Weineng Battery Assets August
Director Incumbent No
Co., Ltd. 2021
Gan Yong The Chinese Society for Metals President May 2017 Incumbent Yes
Eastern Institute for Advanced August
Chen Shiyi President Incumbent Yes
Study 2022
February
URTRUST Insurance Co., Ltd. Independent director Incumbent Yes
2020
Wan Liangyong
October
Guangdong Goworld Co., Ltd Independent director Incumbent Yes
2021
Tianjin 712 Communication &
Mao Tianxiang Supervisor June 2019 Incumbent No
Broadcasting Co., Ltd.
Li Jian Bank of Shanghai Co., Ltd. Director January Incumbent No
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2022
TCL Microchip Technology
Yan Xiaolin Chairman May 2021 Incumbent No
(Guangdong) Co., Ltd.
Notes to positions
Other major jobs or concurrently held jobs and resume
held at other entities
Punishments imposed in recent three years by the securities regulator on the incumbent directors, supervisors and senior mana gement
as well as those who left in the Reporting Period
√ Applicable □ Not applicable
For details, please refer to the relevant announcements disclosed by the Company on the designated information disclosure media
on October 29, 2022 and January 20, 2023.
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management
(I) Decision-making procedure
The allowances for directors and supervisors of the Company were reviewed and approved by the Company at the
second extraordinary general meeting in 2008 and the fourth extraordinary general meeting in 2011. The remuneration
for senior executives is subject to the Company’s remuneration rules.
(II) Determination basis and actual payment
1. Remuneration or allowance criteria for directors
The remuneration of executive directors: As the Company pays remuneration to executive directors, it shall not pay
additional allowances to them. The remuneration is determined as per the Company’s remuneration management rules.
The allowances of non-executive directors: RMB160,000/year (tax inclusive):
The allowances of independent non-executive directors: The allowance for each independent non-executive director
is RMB160,000/year (tax inclusive), and the allowance for the convener of the Audit Committee is RMB200,000/year
(tax inclusive).
The Company shall bear the travel expenses arising from the independent directors attending the Company’s board
and general meetings, as well as other expenses arising from non-executive directors and independent directors’
exercising their functions and powers as per the Company’s Articles of Association.
2. Remuneration or allowance criteria for supervisors
The allowance for the Chairman of the Supervisory Committee is RMB160,000/year (tax inclusive);
The allowance for the shareholder supervisor is RMB100,000/year (tax inclusive);
And as the Company pays remuneration to the employee supervisor, it shall not pay additional allowances to him/her.
The Company shall bear the travel expense arising from the shareholder supervisors attending the Company’s
Supervisory Committee meetings, general meetings and board meetings (as a non-voting delegate), as well as other
expenses arising from his/her exercising his/her functions and powers as per the Company’s Articles of Association.
3. Remuneration criteria for senior management
The remuneration of senior management is determined as per the Company’s Articles of Association and
remuneration management rules.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Name Position Gender Age Position Status Total before- Remuneration
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tax from any
remuneration related party or
from the not
Company
Chairman of
Li Dongsheng Male 65 Incumbent 1037.41 Yes
the Board, CEO
Vice Charmian
Liang Weihua Male 41 Incumbent 0 Yes
of the Board
Wang Cheng Director, COO Male 48 Incumbent 644.64 No
Director, Senior
Zhao Jun Male 50 Incumbent 12.19 No
Vice President
Director, Senior
Shen Haoping Male 60 Incumbent Note No
Vice President
Director, Board
Secretary and
Liao Qian Male 42 Incumbent 565.34 No
Senior Vice
President
Lin Feng Director Male 37 Incumbent 0 Yes
Independent
Gan Yong Male 75 Incumbent 0 No
director
Independent
Chen Shiyi Male 66 Incumbent 20 No
director
Wan Independent
Male 43 Incumbent 20 No
Liangyong director
Independent
Liu Xunci Male 64 Incumbent 16 No
director
Chairman of
He Zhuohui the Supervisory Male 57 Incumbent 16 Yes
Committee
Qiu Haiyan Supervisor Female 48 Incumbent 10 Yes
Employee
Mao Tianxiang Male 42 Incumbent 153.08 No
Supervisor
Li Jian CFO Female 50 Incumbent 639.60 No
Senior Vice
Yan Xiaolin Male 56 Incumbent 722.25 No
President, CTO
Du Juan Former director Female 52 Former 0 Yes
Former
Jin Xuzhi Director, Senior Male 68 Former 950.59 No
Vice President
Liu Kun Former director Male 44 Former 0 No
Total -- -- -- -- 4,807.10
Note: 1. The above amounts include fixed salaries, allowances, and performance bonuses received from the Company by the directors,
supervisors, and senior executives of the Company during their terms of office.
2. As at the end of the Reporting Period, non-executive director Mr. Liang Weihua and independent director Mr. Gan Yong had not
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received their respective allowances of RMB341.300 thousand (before tax), and independent director Mr. Chen Shiyi had not received
the allowance of RMB141.300 thousand (before tax); non-executive director Mr. Lin Feng gave up the allowance; Director Shen
Haoping received an allowance from TCL Zhonghuan. The specific data are subject to the announcements of TCL Zhonghuan.
3. In 2022, the Company took out liability insurances for all its directors, supervisors, and senior executives, with a total premium of
RMB421.8 thousand per year. The participation of the directors, supervisors, and senior executives in the Company’s employee stock
ownership plan is detailed in the relevant announcements issued by the Company.
VI. Performance of Duty by Directors in the Reporting Period
1. Board of Directors During the Reporting Period
Date of the Date of
Meeting Resolutions of the meeting
meeting disclosure
The 15th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
January 21, January 24,
the 7th Board of adopted at the 15th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on January 24, 2022 (Notice No.: 2022-002)
The 16th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
March 18, March 21,
the 7th Board of adopted at the 16th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on March 21, 2022 (Notice No.: 2022-007)
The 17th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
April 13, April 14,
the 7th Board of adopted at the 17th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on April 14, 2022 (Notice No.: 2022-017)
The 18th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
April 27, April 28,
the 7th Board of adopted at the 18th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on April 28, 2022 (Notice No.: 2022-031)
The 19th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
May 31,
the 7th Board of June 1, 2022 adopted at the 19th Meeting of the 7th Board of Directors disclosed on
2022
Directors www.cninfo.com.cn on June 1, 2022 (Notice No.: 2022-054)
The 20th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
June 24, June 27,
the 7th Board of adopted at the 20th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on June 27, 2022 (Notice No.: 2022-065)
The 21st meeting of All proposals were adopted. Please refer to the Notice on Resolutions
the 7th Board of July 6, 2022 July 7, 2022 adopted at the 21st Meeting of the 7th Board of Directors disclosed on
Directors www.cninfo.com.cn on July 7, 2022 (Notice No.: 2022-069)
The 22nd meeting All proposals were adopted. Please refer to the Notice on Resolutions
August 8, August 9,
of the 7th Board of adopted at the 22nd Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on August 9, 2022 (Notice No.: 2022-085)
The 23rd meeting of All proposals were adopted. Please refer to the Notice on Resolutions
August 12, August 13,
the 7th Board of adopted at the 23rd Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on August 13, 2022 (Notice No.: 2022-087)
The 24th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
August 26, August 27,
the 7th Board of adopted at the 24th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on August 27, 2022 (Notice No.: 2022-091)
The 25th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
October 21, October 25,
the 7th Board of adopted at the 25th Meeting of the 7th Board of Directors disclosed on
2022 2022
Directors www.cninfo.com.cn on October 25, 2022 (Notice No.: 2022-104)
The 26th meeting of December December All proposals were adopted. Please refer to the Notice on Resolutions
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the 7th Board of 12, 2022 13, 2022 adopted at the 26th Meeting of the 7th Board of Directors disclosed on
Directors www.cninfo.com.cn on December 13, 2022 (Notice No.: 2022-114)
The 27th meeting of All proposals were adopted. Please refer to the Notice on Resolutions
December December
the 7th Board of adopted at the 27th Meeting of the 7th Board of Directors disclosed on
23, 2022 24, 2022
Directors www.cninfo.com.cn on December 24, 2022 (Notice No.: 2022-119)
2. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
The director
Total number Board
Board failed to
of board Board meetings Board
meetings attend two General
meetings the meetings attended by meetings the
Director attended consecutive meetings
director attended on way of director failed
through a board attended
eligible to site telecommunic to attend
proxy meetings or
attend ation
not
Li Dongsheng 13 2 11 - - No 1
Liang Weihua 13 1 12 - - No 1
Wang Cheng - - - - - No -
Shen Haoping 13 1 12 - - No -
Liao Qian 13 2 11 - - No 3
Zhao Jun - - - - - No -
Lin Feng 9 1 8 - - No 1
Gan Yong 13 1 12 - - No -
Chen Shiyi 13 1 12 - - No -
Wan
13 1 12 - - No 3
Liangyong
Liu Xunci 13 2 11 - - No 3
Du Juan 12 2 10 - - No -
Jin Xuzhi 12 1 11 - - No -
Liu Kun 2 - 2 - - No -
Explanation for absence from the Board meetings in person for two consecutive times: None
3. Objections Raised by Directors on Matters of the Company
Whether directors raised objections on matters of the Company
□ Yes √ No
No such cases in the Reporting Period.
4. Other information about the Performance of Duty by Directors
Whether directors adopted the proposals of the Company
√ Yes □ No
Explanation for the proposal adopted by directors or not
During the reporting period, the directors of the Company diligently performed their duties and obligations in accordance wit h
the provisions of the Company Law, the Securities Law, the Listing Rules of Shenzhen Stock Exchange, the Articles of Association, the
Rules of Procedure of the Board of Directors and other laws, regulations and rules, and put forward valuable professional opinions on
the internal control and daily operation decision-making of the Company, which effectively improved the standard operation and
scientific decision-making of the Company. The independent directors of the Company performed their duties independently and
impartially in strict accordance with the Regulations on the Work of Independent Directors and relevant laws and regulations, and
issued independent and impartial opinions on major matters such as the Company’s private placement, annual profit distributio n and
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annual daily affiliated transaction forecast, effectively safeguarded the legitimate rights and interests of investors, especially small and
medium-sized investors.
VII. Performance of Duties by Dedicated Committees During the Reporting Period
Date of Other Objection
Meetings Important opinions and
Name Members the Meeting agenda duties matters (if
convened proposals raised
meeting performed any)
The audit committee
carried out its work in
strict accordance with the
1. 2021 Audit Plan for
Company Law, the
Financial Statements
regulatory rules of the
of TCL Technology
CSRC, the Articles of
January 4, Group Corporation; Not
Association and the Rules -
2022 2. 2021 Internal applicable
of Procedure of the Board
Control Plan of TCL
of Directors. Upon
Technology Group
thorough communication
Corporation.
and discussion, all
proposals were
unanimously adopted.
1. Proposal on the
2021 Annual
Financial Report of
The audit committee
the Company;
carried out its work in
2. Proposal on the
strict accordance with the
Summary Report of
Company Law, the
the Audit Committee
Wan regulatory rules of the
under the Board
Audit Liangyong, CSRC, the Articles of
3 April 26, Regarding the 2021 Not
Committee Chen Shiyi, Du Association and the Rules -
2022 Annual Audit Carried applicable
Juan of Procedure of the Board
out by Da Hua
of Directors. Upon
Certified Public
thorough communication
Accountants (Special
and discussion, all
General Partnership);
proposals were
3. Proposal on
unanimously adopted.
Renewing the
Engagement of the
Accounting Firm.
The audit committee
carried out its work in
strict accordance with the
Company Law, the
1. Proposal on the
regulatory rules of the
Text of the
August CSRC, the Articles of Not
Company’s 2022 -
26, 2022 Association and the Rules applicable
Semiannual Report
of Procedure of the Board
and Its Summary
of Directors. Upon
thorough communication
and discussion, all
proposals were
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unanimously adopted.
Proposal on the
Remuneration of the
April 27, All proposals were Not
Directors, Supervisors, -
2022 adopted upon deliberation. applicable
and Senior Executives
in 2021
1. Proposal on
Adjusting the
Company's 2021-2023
Employee Stock
Ownership Plan
Gan Yong, (Phase I) and the
Remuneration Wan Management
and Appraisal Liangyong, 2 Measures
Committee Liu Xunci, Du 2. Proposal on the
Juan May 31, Company’s 2021-2023 All proposals were Not
-
2022 Employee Stock adopted upon deliberation. applicable
Ownership Plan
(Phase II) (Draft)
3. Proposal on the
Company’s 2021-2023
Employee Stock
Ownership Plan
(Phase II) and the
Management
Measures
Proposal on
Supplementing Non-
Chen Shiyi, April 13, All proposals were Not
executive Directors to -
Wan 2022 adopted upon deliberation. applicable
the 7th Board of
Nomination Liangyong,
2 Directors.
Committee Liu Xunci,
Proposal on
Liang Weihua,
December Supplementing All proposals were Not
Liao Qian -
23, 2022 Directors to the 7th adopted upon deliberation. applicable
Board of Directors.
Proposal on the 2021
April 26, Environmental, Social All proposals were Not
-
Li Dongsheng, 2022 and Governance adopted upon deliberation. applicable
Liang Weihua, Report
Jin Xuzhi, Du Proposal on Using
Strategy
Juan, Liao 2 Raised Funds to Swap
Committee
Qian, Shen Self-raised Funds
December All proposals were Not
Haoping, Chen Previously Invested in -
11, 2022 adopted upon deliberation. applicable
Shiyi Projects that should be
Funded with Raised
Funds
VIII. Performance of Duty by the Supervisory Committee
Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□ Yes √ No
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The Supervisory Committee raised no objections in the Reporting Period.
IX. Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-services of the Company as the parent 519
Number of in-services of the Company of major subsidiaries 69,309
Total number of in-services of the Company at the end of period 69,828
Total number of paid employees in the Reporting Period 69,828
Number of retirees to whom the Company as the parent or its
1,443
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 45,409
Sales 2,341
Technical 14,458
Financial 882
Administrative 514
Management 2,149
Other 4,075
Total 69,828
Educational backgrounds
Educational background Employees
PhD 287
Master 3,958
Bachelor’s degree 14,745
Junior college and others 4,218
Total 23,208
Note : The “educational backgrounds” section excludes overseas employees and front-line operators.
2. Employee Remuneration Policy
The Company implements the remuneration management on a basis of the principle of “job-determined responsibilities and salary,
and pay for performance” Fixed income is determined based on position assessment, variable income is determined based on
performance appraisal and a remuneration distribution mechanism oriented by position and performance is established inside the
Company.
3. Employee Training Plans
On September 10, 2000, the Training Department of TCL Headquarters shifted to TCL Training Institute. On August 16, 2005,
TCL Training Institute changed its name to TCL Leadership Development Institute, which focused on cultivation of management talent
and development of leadership. In 2015, the institute has been upgraded to TCL University. In 2021, to better focus on the business
scenario, training talents for the organization, TCL University was merged into the Organizational Department of the Company,
changed its name to the Learning and Development Group.
The Learning and Development Group shoulders the mission of "empower employees and development of organization by men".
It has unswervingly implemented the “Hawk” Project for more than a decade, trained many excellent management personnel at all
levels for enterprises, and supported the development of the Company. In the meantime, to empower the strategy and business, create
an atmosphere that fosters the intensive learning and actively implement the digital transformation, the T-school online learning
platform was launched in 2020, and provided more than 2600 online courses to more than 60000 users as of the end of 2022, with a
total 760 thousand study hours. The Learning and Development Group is committed to creating an innovative experience combined
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with knowledge, functions and social culture learning.
In 2022, we continued to optimize and upgrade leadership empowerment projects, strengthen to empower the strategy and
business, create an atmosphere that fosters the intensive learning, establish a more stereoscopic training system, and build a talent pool
for the management and professional talents in line with the Company’s strategic requirements.
In the aspect of platform building, we will strengthen trainer and course management, improve T-classroom, build the knowledge
platform, upgrade user experience and provide extensive learning resources in all-round way and multiple formats.
The Learning and Development Group will continue to build a more comprehensive training system and build a management and
professional talent pool that meets the strategic requirements of the Company. In terms of long-term goals, the Learning and
Development Group is committed to increasing the talent pool (i.e. 1:2 managers: talents), both quantitatively and qualitatively, and
gradually transforming the talent structure from a pyramid shape to a spindle.
4. Labor Outsourcing
□ Applicable √ Not applicable
X. Profit Distributions to Shareholders (in the Form of Cash and/or Stock)
Formation, implementation or adjustment of profit distribution policy, especially cash dividend policy, in the Reporting Period
√ Applicable □ Not applicable
Special explanation of cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due roles
Non-controlling interests were able to fully express their
opinions and desires and their legal rights and interests were Yes
fully protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved were in compliance with Not applicable
applicable regulations and were transparent
During the Reporting Period, the Company made profits and the parent company’s profits that were eligible for profit distribution for
shareholders were positive, but no cash dividend distribution plan was put forward.
√ Applicable □ Not applicable
The reasons why the Company made profits and the parent
company’s profits that were eligible for profit distribution for The purpose and use plan of the Company’s undistributed
shareholders were positive, but no cash dividend distribution profits
plan was put forward during the Reporting Period
The Company focuses on high-tech, asset-heavy, and long-term
The final plan for the profit distribution and conversion of the capital industrial development, with semiconductor display, new energy
reserve to the share capital in 2022: based on the Company’s share photovoltaic, and semiconductor materials as its core business. In 2022,
capital as at March 30, 2023, i.e., 17,071,891,607 shares, the capital with the demand from the end-users weakened, the display industry
reserve is to be converted into capital on a basis of 1 share for every 10 continued to cyclically adjusted at the bottom, and the prices of large -
shares to all the shareholders. After the conversion, the total share capital sized display panels dropped significantly year-on-year, resulted in
of the Company will be changed to 18,779,080,767 shares. Neither cash overall operational losses. The Company is shoring up the weak
dividends nor bonus shares will be distributed this year. production capacity of medium-size products in line with recovered
demand with a more balanced business structure. In terms of the new
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energy photovoltaic industry, the Company will seize the industrial
development opportunities, continue to enhance advanced technology
and capacity advantages, and accelerate to become a global leader. To
meet the Company’s business development needs and in combination
with the its actual operating conditions, the Company’s Board of
Directors proposed for converting the capital reserve to 1 share for every
10 shares held by the shareholders, instead of cash or share distribution
for this year, to ensure the Company’s sustained, stable, and healthy
development, and better safeguard the long-term interests of all the
shareholders.
Final Dividend Plan for the Reporting Period
√ Applicable □ Not applicable
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB) (tax inclusive) 0
Bonus issue from capital reserves (share/10 shares) 1
Share base (share) 17,071,891,607
Cash dividends (RMB’0,000) (tax inclusive) 0
Cash dividends in other forms (e.g. share repurchase)
50,262
(RMB’0,000)
Total cash dividends (including those in other forms)
50,262
(RMB’0,000)
Distributable profits (RMB’0,000) 1,641,605
Total cash dividends (including those in other forms) as a
Not applicable
percentage of total profits to be distributed (%)
Cash dividend plan
Not applicable
Details of profit distribution or capital reserve fund transfer plan
In combination with the its actual operating conditions and in order to ensure the Company’s sustained, stable, and healthy d evelopment in the
future, and better safeguard the long-term interests of all the shareholders, the final plan for the profit distribution and conversion of the capital
reserve to the share capital in 2022: based on the Company’s share capital as at March 30, 2023, i.e., 17,071,891,607 shares, the capital reserve is to
be converted into capital on a basis of 1 share for every 10 shares to all the shareholders. After the conversion, the total share capital of the Company
will be changed to 18,779,080,767 shares. Neither cash dividends nor bonus shares will be distributed this year.
Where any changes occur, before the implementation of the dividend plan, to the total share capital of the Company due to any convertible
bonds-to-stock programs, share repurchases, exercises of equity incentives, new share issues in refinancing, etc., the dividend will b e adjusted
according to the principle of “adjusting the total conversion amount under the same conversion ratio”, subject to the actual conversion amount.
XI. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
√ Applicable □ Not applicable
1. Equity Incentives
□ Applicable √ Not applicable
Equity Incentives Granted to Directors and Senior Management
□ Applicable √ Not applicable
Appraisal of and Incentive for Senior Management
During the Reporting Period, the Company conducted performance appraisal and competency and quality assessment on the
managers, The Contract To Success (CTS) system was used for performance appraisal. In respect to the team led by each manager, the
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key factors of performance appraisal included phased strategic goals and operating goals of the current period (such as profits, cash
flow, products and service quality) and key projects; the comprehensive results of each accomplished goal were considered as the main
basis for motivating managers. In that way, corporate strategies were converted into internal management activities through the process
of goal setting, implementation and accomplishment to direct all systems of the Company and serve the purpose of enhancing the
overall efficiency of the Company. The management assessment consisted of four dimensions, included manager performance,
competence, experience and quality (potential, personality and aspiration/values). An annual examination report for managers was
generated through annual performance assessment, manager review and inspection, virtual assessment center, 360-degree behavior
interviews or online assessment, supported by key experience, personality or management style assessment, which served as the main
basis for appraising, appointing and dismissing leaders.
2. Implementation of Employee Stock Ownership Plan
√ Applicable □ Not applicable
All the valid employee stock ownership plans during the Reporting Period
Proportion to Funding source
Total number
Scope of Number of total share for
Name of shares held Changes
employees employees capital of listed implementing
（share）
companies the plan
The Third The Company's
Global Partner middle and The Company's
Plan senior special
1,800 21,299,502 Not applicable 0.12%
management incentive fund
and outstanding for 2020
key staff
2021-2023 The Company's
Employee middle and The Company's
Stock senior special
3,600 113,143,154 Not applicable 0.66%
Ownership Plan management incentive fund
(Phase I) and outstanding for 2021
key staff
2021-2023 The Company's
Employee middle and The Company's
Stock senior special
3,600 106,484,364 Not applicable 0.62%
Ownership Plan management incentive fund
(Phase II) and outstanding for 2022
key staff
Shareholdings of Directors, Supervisors and Senior Management under the Employee Stock Ownership Plan during the Reporting
Period
Proportion to total
Beginning amount in Ending amount in the
Name Position share capital of listed
the Reporting Period Reporting Period
companies
Chairman of the Board,
Li Dongsheng
CEO
About 10.93 million About 27.07 million
Wang Cheng Director, COO 0.16%
shares shares
Director, Board
Liao Qian
Secretary and Senior
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Vice President
Director, Senior Vice
Zhao Jun
President
Senior Vice President,
Yan Xiaolin
CTO
Li Jian CFO
Mao Tianxiang Employee Supervisor
Changes of asset management institutions during the Reporting Period
□ Applicable √ Not applicable
Changes of equity caused by the holder’s disposal share during the Reporting Period
□ Applicable √ Not applicable
Exercise of shareholder rights during the Reporting Period
□ Applicable √ Not applicable
Other relevant information and explanations of the Employee Stock Ownership Plan during the Reporting Period.
□ Applicable √ Not applicable
Changes of the members of Employee Stock Ownership Plan Management Committee
□ Applicable √ Not applicable
Financial impact of Employee Stock Ownership Plan on the Company during the Reporting Period and related accounting treatment
√ Applicable □ Not applicable
The financial, accounting treatment and taxation involved in the Company’s shareholding plan shall be implemented according
to laws and regulations and normative documents on financial systems, accounting standards, taxation systems, etc. The holder of the
shareholding plan shall pay the personal income tax generated due to the shareholding plan according to law, and can choose to sell
the corresponding amount of shares to the shareholding plan to cover personal income tax. The remaining shares will be attributed to
individuals.
Termination of Employee Stock Ownership Plan during the Reporting Period
□ Applicable √ Not applicable
3. Other Employee Incentives
□ Applicable √ Not applicable
XII. Construction and Implementation of Internal Control System During the Reporting Period
1. Construction and Implementation of Internal Control System
In accordance with the provisions of internal control standard system, the Company establishes, improves and effectively
implements internal controls, reasonably ensures the legal compliance of business management, asset security, authenticity and
integrity of financial statements and relevant information, improves business efficiency and effectiveness, and promotes the realization
of development strategy.
2. Material Internal Control Weaknesses Identified in the Reporting Period
□ Yes √ No
XIII. Management and Control of Subsidiaries by the Company During the Reporting Period
□ Applicable √ Not applicable
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XIV. Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal
Controls
1. Internal Control Self-Evaluation Report
Disclosure date of the internal control
March 31, 2023
self-evaluation report
Index to the disclosed internal control
http://www.cninfo.com.cn
self-evaluation report
Evaluated entities combined assets as a
97%
percentage of consolidated total assets
Evaluated entities combined revenue as a
97%
percentage of consolidated revenue
Identification standards for internal control weaknesses
Weaknesses in internal controls over Weaknesses in internal controls not
Category
financial reporting related to financial reporting
Material weaknesses: (1) material
violations of the country’s laws or
Material weaknesses: (1) an invalid regulations in the Company’s operating
control environment; (2) fraud of activities; (2) any material decision-
directors, supervisors and senior making error that is caused by an
management; (3) any material irrational decision-making procedure and
misstatement of financial reporting of the causes material property loss to the
current period which is identified by the Company; (3) a massive loss of the key
registered accountants but which the managerial or technical personnel; and
Company failed to report; and (4) invalid (4) frequent negative news coverage that
internal control supervision by the Audit causes great concern for the regulatory
Nature standard
Committee and the internal audit organ. administration and a material long-
Serious weaknesses: A single weakness lasting impact on the Company’s brand
or a group of weaknesses which are less and reputation.
serious than a material weakness but Serious weaknesses: A single weakness
could still cause deviation from the or a group of weaknesses which are less
control objectives serious than a material weakness but
Common weaknesses: Other internal could still cause deviation from the
control weaknesses that are neither control objectives
material nor serious Common weaknesses: Other internal
control weaknesses that are neither
material nor serious
Material weaknesses: misstatements ≥
5% of profit before tax;
Serious weaknesses: 3% of profit before
Quantitative standard tax ≤misstatements <5% of profit before Not applicable
tax;
Common weaknesses: misstatements
<3% of profit before tax
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Number of material weaknesses in
Not applicable
internal controls over financial reporting
Number of material weaknesses in
internal controls not related to financial Not applicable
reporting
Number of serious weaknesses in
Not applicable
internal controls over financial reporting
Number of serious weaknesses in
internal controls not related to financial Not applicable
reporting
2. Independent Auditor’s Report on Internal Controls
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal controls
In our opinion, TCL Technology Group Corporation maintained, in all material respects, effective internal control over financ ial
reporting as of December 31, 2022, based on the Basic Rules on Enterprise Internal Controls and other applicable rules.
The Internal Control Audit Report of TCL Technology Group
Independent auditor’s report on internal controls disclosed or not Corporation disclosed at www.cninfo.com.cn dated March 31,
2023
Disclosure date March 31, 2023
Index to such report disclosed http://www.cninfo.com.cn
Type of the auditor’s opinion Unmodified opinions
Material weaknesses in internal controls not related to financial
No
reporting
Indicate whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal controls.
□ Yes √ No
Indicate whether the independent auditor’s report on the Company’s internal controls is consistent with the internal control self-
evaluation report issued by the Company’s Board.
√ Yes □ No
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Part V Environmental and Social Responsibility
I. Major Environmental Issues
Whether the listed company and its subsidiaries are major polluters announced by the environmental protection department
√ Yes □ No
Approved
Excessiv
Name of the Number of Discharge Governing Total total
M ajor Distribution of e
Company or Way of discharge discharge concentration discharge standards discharge discharge
pollutants discharge outlets discharg
subsidiary outlets (mg/L) (mg/L) (metric ton) (metric
e
tons/year)
Intermittently
Not
discharged to North of the plant
COD 1 127 mg/L 260mg/L 884.8t / applicab
Guangming area
le
Sewage Plant
TCL China Star
Intermittently Not
Optoelectronics
COD discharged to the 1 Artificial wetland 13.5 mg/L 30mg/L 46.7t / applicab
Technology Co.,
artificial wetland le
Ltd.
Intermittently
Not
Nitrogen discharged to the
50 Plant roof 30.3 mg/M 3 120mg/NM 3 33t / applicab
oxides atmosphere in an
le
organized manner
Intermittently
Shenzhen China Not
discharged to Southeast corner
Star COD 2 70mg/L 110mg/L 91.785t / applicab
Guangming of the plant
Optoelectronics le
Sewage Plant
Semiconductor
Intermittently
Display Not
Nitrogen discharged to the
Technology Co., 10 Plant roof 5 mg/M 3 30 mg/NM 3 5.927t / applicab
oxides atmosphere in an
Ltd. le
organized manner
Not
Continuously 54.38mg/L 500mg/L 90.852t 129.6t applicab
discharged to In CSSD le
Suzhou China Star COD 2
CSSD Environmental Not
Optoelectronics
Environmental Technology 29.25mg/L 100mg/L 67.8455t 449.82t applicab
Technology Co.,
Technology Wastewater le
Ltd.
Wastewater Treatment Plant Not
Ammonia
Treatment Plant 1 0.72mg/L 6mg/L 2.2317t 22.68t applicab
nitrogen
le
Not
Continuously
COD 23.62mg/L 500mg/L 4.6954t 96.335t applicab
Suzhou China Star discharged to
South gate of the le
Optoelectronics Suzhou Industrial 1
plant area Not
Display Co., Ltd. Ammonia Park First Sewage
0.28mg/L 45mg/L 0.0565t 5.65t applicab
nitrogen Treatment Plant
le
Not
Intermittently Southwestern
Wuhan China Star COD 1 43mg/L 400mg/L 133.49t 353.55t applicab
discharged corner of the plant
Optoelectronics le
Technology Co., Not
Ammonia Intermittently Southwestern
Ltd. 1 4.6mg/L 30mg/L 20.51t 35.36t applicab
nitrogen discharged corner of the plant
le
Wuhan China Star Not
Intermittently Northeastern
Optoelectronics COD 1 37mg/L 400mg/L 249.054t 570.8t applicab
discharged corner of the plant
Semiconductor le
Display Ammonia Intermittently Northeastern Not
1 3.1mg/L 30mg/L 31.22t 57.1t
Technology Co., nitrogen discharged corner of the plant applicab
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Ltd. le
Wastewater:
COD,
ammonia
nitrogen,
other
characteristic
TianJin
pollutants DB12/356-2018
Zhonghuan Not
(total General discharge As per emission Comprehensive Not
Advanced Organized 1 Standard applicab
nitrogen, total outlet standard Sewage Discharge exceeding
M aterial&Technol le
phosphorus, Standard
ogy Co., Ltd.
pH value,
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Wastewater:
COD,
ammonia
nitrogen,
other
characteristic
Tianjin Huan'Ou pollutants DB12/356-2018
Not
Semiconductor (total General discharge As per emission Comprehensive Not
Organized 1 Standard applicab
M aterial&Technol nitrogen, total outlet standard Sewage Discharge exceeding
le
ogy Co., Ltd. phosphorus, Standard
pH value,
suspended
matter,
BOD5, flow,
fluoride,
petroleum)
Wastewater:
chemical
oxygen
demand, total
phosphorus
(calculated as
P), ammonia
nitrogen DB12/599-2015
(NH3-N), Discharge
Tianjin Huanzhi
total nitrogen Standard of Not
New Energy General discharge As per emission Not
(calculated as Organized 1 Pollutants for Standard applicab
Technology Co., outlet standard exceeding
N), pH value, Municipal le
Ltd.
suspended Wastewater
solids, Treatment Plant
petroleum,
anionic
surfactant, 5-
day
biochemical
oxygen
demand
Inner M ongolia Waste gas: Organized, General discharge As per emission GB16297-1996 Not Not
M ultiple Standard
Zhonghuan Solar Particulate unorganized outlet, plant area, standard Comprehensive Air exceeding applicab
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M aterial Co., Ltd. matter, and roof of Pollutant Emission le
nitrogen production Standard, GB8978-
oxides, workshop 1996
VOCs, Comprehensive
fluoride Sewage Discharge
Wastewater: Standard
COD,
ammonia
nitrogen,
other
characteristic
pollutants
(total
phosphorus,
pH,
suspended
matter,
BOD5,
fluoride)
Wastewater:
COD,
ammonia GB/T 31962 Water
nitrogen, Quality Standard
Zhonghuan other for Sewage
Advanced characteristic Discharged into Not
General discharge As per emission Not
Semiconductor pollutants Organized 1 Urban Sewers Standard applicab
outlet standard exceeding
M aterials Co., (fluoride, total GB8978-1996 le
Ltd. nitrogen, total Comprehensive
phosphorus, Sewage Discharge
suspended Standard
matter, pH,
BOD5)
Wastewater:
COD,
ammonia
nitrogen,
GB 30484-2013
other
Discharge Not
Huansheng Solar characteristic General discharge As per emission Not
Organized 1 Standard for Standard applicab
(Jiangsu) Co., Ltd. pollutants outlet standard exceeding
Battery Industry le
(fluoride, total
Pollutants
nitrogen, total
phosphorus,
suspended
matter, pH)
Wastewater:
COD,
ammonia
nitrogen,
GB 30484-2013
other
Wuxi Zhonghuan Discharge Not
characteristic General discharge As per emission Not
Applied M aterials Organized 1 Standard for Standard applicab
pollutants outlet standard exceeding
Co., Ltd. Battery Industry le
(total
Pollutants
nitrogen, total
phosphorus,
suspended
matter, pH)
1. Construction and operation of facilities for preventing pollution
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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, and
industrial waste water enters different treatment systems according to its characteristics, and is discharged after physical, chemical and
biochemical treatment. The concentration and total amount of waste water discharged meet the relevant national and local standards.
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 wa ste gas
treatment system, alkaline waste gas treatment system, organic waste gas treatment system, waste gas treatment system for waste water
treatment station, 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 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, ha zardous
wastes are disposed of by an authorized qualified hazardous waste disposal agency according to the regulations; general waste s 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.
2. 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.
3. Emergency Response Plan for Environmental Incidents
The Company has set up an environmental incident emergency organization led by the senior management of the enterprise and
prepared an environmental emergency response plan, which has been filed with the local environmental protection department in
accordance with relevant national laws and regulations. In addition, regularly staff trainings and emergency drills are conducted for
environmental incidents according to the plan to ensure valid and accurate treatment of environmental pollution emergencies.
4. Environmental Self-Monitoring Program
The Company has formulated an environmental self-monitoring program in accordance with government regulations, and defined
monitoring indicators, implementation standards, their limits, monitoring frequency, 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 retrieved from the major environmental monitoring information platform managed by local environmental authorities
or subsidiary websites.
Administrative punishments received with respect to environmental issues in the Reporting Period
□ Applicable √ Not applicable
Measures taken to reduce its carbon emissions and their effects during the Reporting Period
√ Applicable □ Not applicable
To meet the challenges of global climate change, TCL Technology is committed to green development, energy saving and
emission reduction in all aspects of the Company's operations. TCL technology has effectively reduced the carbon emissions for
business by continuously improving the energy management system, increasing the utilization of renewable energies, building a green
supply chain, and enhancing employee low carbon awareness. At the same time, TCL Technology actively expands its green industry,
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and is developing its photovoltaic semiconductor industry through TCL Zhonghuan’s business, which helps meet the challenges of
climate change.
In terms of energy management, a sound energy management system has been established for the main subsidiaries of TCL Tech
and passed the ISO50001 certification. Suzhou CSOT has taken energy saving measures in terms of water, electricity, and gas. It
invested more than an amount of RMB30 million in technological transformation of energy conservation throughout the year to promote
a total of 50 projects on technological transformation of energy conservation, saving 20.52 million kWh of electricity and reducing
14.4 thousand tons of carbon in the year. The units of Shenzhen CSOT have implemented a total of 249 energy-saving projects from
multiple dimensions such as process energy conservation, management energy conservation, and parameter optimization. In 2022,
TCL CDOT saved 3.47 million kWh of electricity by improving productivity and other energy management actions. In addition, TCL
Zhonghuan has carried out comprehensive energy management and energy conservation and consumption reduction, and focused on
promoting the digital construction of energy management. It directly saved 50.2145 million kWh of electricity by means of energy
conservation and efficacy enhancement in 2022. In 2022, all major segments under TCL Tech implemented ISO14064 Greenhouse
Gas Accounting and Verification, and established scientific targets of emission reduction.
Companies under TCL Tech continue to develop and utilize renewable energy. The Photovoltaic Power Generation System of
Suzhou CSOT has a total installed capacity of 12 MW. It is expected to be connected to the grid for power generation in February
2023, with an annual power generation capacity of 12 million kWh. Shenzhen CSOT followed the principle of “laying as much as
possible” to equip photovoltaics on its roofs. In 2022, it had a newly installed capacity of 3.83 MW, an annual power generation
capacity of 4 million kWh, and a total capacity of 48 MW. It can generate power of 50 million kWh every year and has been awarded
the title of “National Smart Photovoltaic Demonstration Project”. Since 2019, Huizhou CSOT has successively installed distributed
photovoltaics on the roofs of its factory premises. In 2022, it completed a newly installed capacity of 1 MW, with a total installed
capacity of 18.56 MW, and can generate power of 14.24 million kWh every year. Wuhan CSOT built a photovoltaic power generation
system in 2022 and connected it to the grid for power generation, which can generate power of 17.50 million kWh, save about 5.70
thousand tons of standard coal, and reduce carbon dioxide emissions from greenhouse gas by about 17.2 thousand tons every year. The
distributed power station built by TCL Zhonghuan can provide 37.31 million kWh of green power and a photovoltaic power station
with a capacity expected to exceed 4 GW will be built before 2027, directly supplying the production bases in Inner Mongolia and
Ningxia.
TCL Tech always adheres to green development, focuses on green products, actively deploys a layout in green industries, and
builds green cultures. The Company continuously updates green product design and production technologies, reduces photovoltaic
product costs, promotes energy transformation, and further promotes the development of the photovoltaic industry. TCL Zhonghu an
has accelerated the production and manufacturing of semiconductor materials, focusing on the development and integration of two
platforms, namely, G12 large-sized solar wafers and high-efficiency laminated tile module technology. Relying on the G12 technology
platform and flexible manufacturing capabilities, TCL Zhonghuan has launched silicon wafers of 210+ large sizes by linking the
industrial chain to respond to the market demand for large-sized and high-power products, and accelerate the construction of laminated
tile module projects. In terms of green culture, the Company continues to conduct various training, experience sharing, and themed
activities in connection with environmental protection knowledge, to publicize the Group’s green image externally, raise employees’
low-carbon awareness internally, and create a good atmosphere for energy conservation and carbon reduction.
TCL Tech companies not only strictly fulfill their responsibilities for environment protection, but also strive to integrate the
concept of environment protection in all key parts of the industrial chain. Upholding the idea of low-carbon development, they
constantly innovate and optimize all links alongside the industrial chain including procurement, logistics, warehousing, and packaging.
The Company also actively explores and implements green finance in the supply chain, and strives to promote green and sustainable
development throughout the entire chain. On April 27, 2022, TCL Tech successfully issued the first green medium-term note, which
was rated by a third-party agency as the green bond level G-1. On June 29, 2022, TCL Finance launched China’s first re-discount
business for carbon emission reduction notes within the industry, further enhancing accurate support for “low-carbon” enterprises.
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.
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Other relevant information
Not applicable
II. Social Responsibility
See TCL Technology Group Corporation ESG Report 2022.
III. Consolidating and Extending the Achievements of Poverty Alleviation and Pushing
Forward Rural Revitalisation
Plan for consolidating and extending the achievements of poverty alleviation and pushing forward rural revitalisation
TCL Tech actively responds to national calls and focuses on four major areas (i.e. science and technology, education, culture and
sports, and targeted relief), continuously strengthens investment in public charitable undertakings, integrates public charitable
resources, and contributes to promoting social equity, consolidating and expanding achievements of poverty alleviation and, and
achieving rural revitalization and common prosperity. The Company has combined its advantageous industrial resources to conduct
projects such as “TCL Photovoltaic School”, “TCL Public Charitable Smart Classroom”, “A.I. Home”, “Little Music+”, and “TCL
Hope Project Candlelight Award Plan”, to contribute to the revitalization of rural education from the perspectives such as rural school
educational resources and infrastructure.
Annual summary of consolidating and extending the achievements of poverty alleviation and pushing forward rural
revitalisation
To address the sustainable development issues for rural schools, TCL Charity Foundation cooperated with TCL Zhonghuan to
implement the TCL Photovoltaic Sunshine Campus Project, building solar photovoltaic power generation systems free of charge on
the roofs of the rural schools and donating the income from such power generation to the schools. The electricity so generated is fully
integrated into the power grid, and the power generation income is used for improving the instructional environment and funding for
students from poor families, creating a sustainable educational aid model. In 2022, the Foundation donated the first batch of roof-based
photovoltaic power generation systems and equipment and income from 25 years of power generation by such systems and equipmen t,
to a total of 10 rural schools in Xixiang County, Hanzhong City, and Lingwu City, Yinchuan City respectively. The installed power
generation capacity of the roof-based photovoltaic power generation system for each of the schools is 54 KW, and it is expected to
generate 30.11 million kWh of electricity throughout its life cycle.
To eliminate the inequity of educational resources between urban and rural areas, TCL Charity Foundation establishes TCL Public
Charitable Smart Classrooms in urban and rural schools, including smart instructional equipment, to build multimedia smart classrooms
and “urban and rural areas” tailored classes. In September 2022, the opening ceremony of TCL Public Charitable Smart Classroo m
was successfully held. In November 2022, Longsheng Experimental Middle School in Guilin, Guangxi was selected and started to
implement the Smart Classroom Project.
In 2019, TCL Charity Foundation cooperated with the TCL Industrial Research Institute to launch the "A.I. Home" project,
developed and designed the "Eagle Storytelling Machine", and delivered the "Eagle Story Club" campaign in rural schools, bringing
together children from rural schools, to improve their wellbeing and assist their growth. In 2022, the fourth and fifth batches of pilot
schools were selected for the “Eagle Story Club” project. A total of 14 schools from 6 provinces such as Shaanxi, Guangxi, and Hubei,
were selected as the “Eagle Story Club” pilot schools, and a total of 70 story boxes were distributed, benefiting 4655 students.
To provide high-quality music education resources for children, TCL Charity Foundation and the Education Foundation of the
Beijing Central Conservatory of Music launched the “Little Music+” project. Through the “Little Snow Music Machine”, the “Little
Snow Music Class” was delivered to introduce both Chinese and international famous music works to students and motivate kids to
develop positive and optimistic characters. In 2022, the fourth and fifth batches of pilot schools were selected for the “Little Snow
Music Class”. A total of 15 schools from 7 provinces such as Shaanxi, Guangxi, and Guizhou were selected as the “Little Snow Music
Class” pilot schools, and a total of 70 music boxes were distributed, benefiting 6301 students.
To promote the development of rural education, TCL Charity Foundation continues to implement the “TCL Hope Project
Candlelight Award Plan” to recruit and encourage rural teachers to stay in their jobs and contribute to rural education. The project
solicited excellent teachers from 194 counties and districts in 14 provinces that serve as the key counties in the National Rural
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Revitalization and the pairing support areas of Shenzhen. Each of the winners received a personal award worth RMB9,500, inclu ding
a cash reward and 7-day offline “Candlelight Class” training. Till now, this project has been successfully implemented for eight
sessions, with applicants from 523 counties in 23 provinces across the country. More than 3000 outstanding rural teachers from 2000
schools have won the awards. A total investment of over RMB42 million has been made in this project.
In addition, TCL Charity Foundation continues to launch projects such as targeted assistance and community charity. Through actions
such as helping the needy, and pairing assistance, it supports, consolidates and expands the poverty alleviation achievements, builds
harmonious urban and rural communities, and contributes to social equity and harmonious development. In 2022, the Foundation
launched projects such as pairing assistance donations to Taimei Town, Boluo County, Huizhou, donations to Jingjia Village,
Erwangzhuang Town, Baodi District, Tianjin, donations to Mutouwo, Lianzhuang Town, Ninghe District, Tianjin, and donations to
the Red Cross of Anlong County, Guizhou, in support of local poverty alleviation achievements, improving rural infrastructure, and
revitalizing tourism and other industries. In addition, the Company attached importance to rural population, paid attention to the
cultural-ethical development in rural areas, and launched community public charitable projects such as wedding photos for rural
women, to bridge the gap between urban and rural areas from multiple aspects.
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Part VI Significant Events
I. Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and Other Entities Fulfilled in the Reporting Period or Overdue at the Period-End
√ Applicable □ Not applicable
(1) Details of commitment
Date of
Type of Term of
Commitment Promisor Details of commitment commitment Fulfillment
commitment commitment
making
1) I shall avoid horizontal competition
between the companies, enterprises or
other business organizations that I
own, control, control with others, During the
About horizontal have significant influence on and the tenure of the
competition, Company with its subsidiaries; and 2) Company’s
August 30, In continuous
Li Dongsheng related-party I shall reduce and control transactions director,
2013 performance
transaction and of related parties between the supervisor
capital occupation companies, enterprises or other or senior
business organizations that I own, management
control, control with others, or have
significant influence on and the
Company with its subsidiaries.
Citic Securities
Company Limited,
Nuode Asset
Commitments
Management Co.,
made in
Ltd., Guotai Junan
refinancing
Securities Co., Ltd.,
Everbright Securities
Company Limited,
UBS AG, Caitong 6 months
Fund Management The shares of TCL Tech subscribed from the
About restriction December 5, In continuous
Co., Ltd., GF shall not be transferred within 6 date of
on sales of shares 2022 performance
Securities Co., Ltd., months from the date of listing. listing of the
Haitong Securities new shares
Co., Ltd.,
Perseverance Asset
Management
Partnership (Limited
Partnership) - Gaoyi
Xiaofeng No. 2 Zhixin
Fund, China Life
Asset Management
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Co., Ltd. - China Life
Asset Management -
Bank of China - China
Life Asset - PIPE2020
Insurance Asset
Management Product,
China Southern Asset
Management Co.,
Ltd., Shen Ruijin,
Dacheng Fund
Management Co.,
Ltd., Golden Eagle
Asset Management
Co., Ltd., Huaxia Life
Insurance Co., Ltd.,
Taikang Asset
Management Co., Ltd.
- Taikang Life
Insurance Co., Ltd. -
Unit Link - Industry
Configuration, Guang
Dong Zheng Yuan
Private Fund
Investment
Management Co., Ltd.
- Zhengyuan Saturday
Private Equity
Investment Fund,
Bank of
Communications
Schroder Fund
Management Co.,
Ltd., Foresight Fund
Co., Ltd.
1. Before and after this transaction,
there was no horizontal competition
The largest During the
between me/this partnership and the
shareholder of the period of
Commitments enterprises controlled by me/this
listed company and About avoiding being the
made in partnership and TCL Group and the December 7, In continuous
person acting in horizontal largest
selling major main businesses of its affiliated 2018 performance
concert (Mr. Li competition shareholder
assets enterprises.
Dongsheng and of TCL
2. After this transaction, I/this
Jiutian Liancheng) Group
partnership will take active measures
to avoid any business or activity that
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competes or may constitute
competition with the main business of
TCL Group and its affiliated
enterprises, and will urge the
enterprises controlled by me/this
partnership to avoid any business or
activity that competes or may
constitute competition with the main
business of TCL Group and its
affiliated enterprises.
3. If I/this partnership and the
enterprises controlled by me/this
partnership obtain the opportunity to
engage in new business, which
constitutes or may constitute
horizontal competition with the main
business of TCL Group and its
affiliated enterprises. I/this
partnership will, when it is possible,
try my/our best to make this business
opportunity available to TCL Group
or its affiliated enterprises in the first
place based on reasonable and fair
terms and conditions.
4. If the business of mine/this
partnership and the enterprises
controlled by me/this partnership
coincides or may constitute horizontal
competition with TCL Group’s
business due to my/this partnership’s
investment demand or TCL Group’s
business development, I/this
partnership and the enterprises
controlled by me/this partnership
agree to solve the resulting horizontal
competition within a specific time
limit since as it is determined.
5. During the period of being the
largest shareholder of TCL Group, the
aforementioned commitment is
unconditional and irrevocable. If I/this
partnership violate the
aforementioned commitments, I/this
partnership will make comprehensive,
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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 perform the decision-making
procedures for related party
transactions according to the law, to During the
ensure that the related party period of
Commitments on
transactions will not be used to being the
reducing and December 7, In continuous
illegally transfer TCL Group’s funds largest
regulating related 2018 performance
or to damage the legitimate rights and shareholder
party transactions
interests of TCL Group and its of TCL
shareholders. Group
3. I/this partnership and the
enterprises controlled by me/this
partnership will not ask TCL Group
and its affiliated enterprises to give
more favorable conditions than those
that can be offered to an independent
third party in any fair market
transaction.
4. During the period of being the
largest shareholder of TCL Group, the
aforementioned commitment is
unconditional and irrevocable. If I/this
partnership violate the
aforementioned commitments, I/this
partnership will make comprehensive,
timely and full joint and several
compensation for the losses to TCL
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Group caused thereby.
After this transaction, I/this
partnership will continue to exercise
shareholder’s rights according to
laws, regulations and the Articles of
Association of TCL Group, and
maintain the independence of TCL
Group in terms of assets, personnel,
finance, business and institutions.
I/this partnership will ensure:
(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
The largest hold positions other than directors and During the
shareholder of the supervisors in my/this partnership’s period of
Commitments on
listed company and subordinate wholly-owned, controlled being the
maintaining the December 7, In continuous
person acting in or other enterprises with actual largest
independence of 2018 performance
concert (Mr. Li control (hereinafter referred to as shareholder
listed companies
Dongsheng and “subordinate enterprises”), and shall of TCL
Jiutian Liancheng) not be paid in my/this partnership’s Group
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.
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2. TCL Group has a standardized and
independent financial accounting
system.
3. TCL Group opens an independent
bank account and does not share a
bank account with me/this
partnership.
4. The financial personnel of TCL
Group shall not work part-time in
my/this partnership’s subordinate
enterprises.
5. TCL Group can make independent
financial decisions, and I/this
partnership shall not interfere with the
use of TCL Group’s funds.
(IV) The institutional independence of
TCL Corporation.
1. TCL Group has an independent and
complete organization which can
operate independently.
2. TCL Group’s office and premises
for production and operations are
separated from my subordinate
enterprises/this partnership.
3. The Board of Directors, Board of
Supervisors and various functional
departments of TCL Group 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
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subordinate enterprises, I/this
partnership will bear the
corresponding compensation liability
according to the law.
Fulfilled on
Yes
time
Specific
reasons for
failing to
fulfill
Not applicable
commitments
on time and
plans for next
steps
(2) Fulfillment of commitments
In October 2022, the largest shareholder of the Company and his person acting in concert (Mr. Li Dongsheng and Jiutian
Liancheng) received the Decision on Administrative Supervision Measures issued by the Guangdong Office of China Securities
Regulatory Commission. It was found in the Decision that the commitments made by the largest shareholder of the Company and his
person acting in concert, upon significant asset restructuring in 2018, to reduce related party transactions and maintain the independence
of the listed company were not fully fulfilled. So the administrative supervision measures were taken to order the largest share holders
of the Company and their persons acting in concert to make rectification thereof.
The largest shareholders of the Company and their persons acting in concert attached great importance to the Decision, and based
on the actual situation, they studied and comprehensively sorted out relevant problems item by item, and formulated practical and
feasible rectification plans detailed as follows, in accordance with the Company Law, the Securities Law, the Rules for the Listing of
Stocks on the Shenzhen Stock Exchange, the Self-regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1 -
Standard Operation of Companies Listed on the Main Board, as well as other relevant laws, regulations, normative documents, and
the Articles of Association:
1. In 2020 and 2021, the total amount of daily related party transactions between TCL Tech and TCL Industrial was RMB13.226
billion and RMB 18.349 billion respectively, an increase of 157% and 218% over 2019, which indicates that the commitment to reduce
related party transactions was not fully fulfilled.
The daily related party transactions between the Company and TCL Industrial mainly involved the sales of large-sized LCD panels
and related products by a subsidiary of the Company TCL CSOT to subordinated enterprises of TCL Industrial, and the procureme nt
of components and materials by TCL CSOT from subordinated enterprises of TCL Industrial. As manufacturers from the Chinese
mainland, such as TCL CSOT, continuously put new lines into operation, the concentration of the display panel industry continued to
increase. In 2022, the global top three panel manufacturers, including TCL CSOT, had a market share of nearly 60% in the TV panel
market, among which TCL CSOT’s market share reached 18%. TCL CSOT ranked second in terms of the TV panel market share in
the world, first in terms of the market share of 55-inch and 75-inch market in the world, and second in terms of the market share of 32-
inch and 65-inch market in the world. TCL Electronics, a controlling subsidiary of TCL Industrial Holdings, is one of the global top
three TV manufacturers and a key target customer for panel companies including TCL CSOT. With the increasing concentration of the
TV industry, and changes in the competition and ecosystem of the display industry chain, it is crucial for TCL CSOT’s operations to
consolidate and enhance cooperation with the existing customers. TCL Electronics is one of the global top three TV manufacturers and
a key target customer for panel companies including TCL CSOT.
The largest shareholders of the Company and their persons acting in concert will continue to minimize the related party
transactions between the enterprises controlled by them and the Company. The transactions that are unavoidable or reasonably existing
will be transacted with related parties, based on fair market principles and normal commercial conditions to ensure the fa irness of the
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prices of such related party transactions, and the decision-making procedures for related party transactions shall be gone through in
accordance with laws. For related party transactions taken on the basis of the development trend of the industrial market and necessary
for the going concern of enterprises, the Company will strengthen the review procedure and information disclosure management in
connection with such transactions, disclose the implementation of the daily related party transactions taken with TCL Industrial in the
previous year from this year, and submit them to the Board of Directors for review. The Company will also continue to explore other
methods to supervise related party transactions that are consistent with the Company’s actual business, ensure that the Company’s
related party transactions with TCL Industrial are just and fair, without harming the interests of the Company and its shareholders,
especially those of small and medium shareholders.
In addition, the largest shareholders of the Company and their persons acting in concert have formulated plans to reduce related
party guarantees and related party financial services: TCL Tech’s related party guarantees for the target companies of TCL Industrial’s
significant asset restructuring taken in 2019 was reduced to no more than RMB5 billion as at the end of 2022, and will be further
reduced to no more than RMB3.5 billion by the end of 2023, and be liquidated by the end of 2024; The TCL Tech’s deposit loan limit
for related party transactions with TCL Industrial will drop to no more than RMB2.5 billion in 2023.
2. Some personnel of TCL Tech participated in relevant business of TCL Industrial, office systems (hereinafter referred to as OA
Systems) of TCL Tech and TCL Industrial were not completely separated, and TCL Tech, TCL Industrial, and TCL Group were not
strictly distinguished in external publicity, which indicates inadequate fulfillment of the commitment to maintain the independence of
listed companies.
In accordance with the Company Law, the Securities Law, the Governance Standards for Listed Companies, the Rules for the
Listing of Stocks on the Shenzhen Stock Exchange, the Self-regulatory Guidelines for Listed Companies on the Shenzhen Stock
Exchange No. 1 - Standard Operation of Companies Listed on the Main Board, as well as relevant rules and regulations of the China
Securities Regulatory Commission, the largest shareholders of the Company and their persons acting in concert require TCL Industrial
and advise TCL Tech to fully implement the personnel independence requirements, and conduct a comprehensive inventory on
functional responsibilities, organizational structure, business processes, and personnel of the functional lines to ensure strictly
independent staffing, management, and office, etc.
The largest shareholders of the Company and their persons acting in concert have required TCL Industrial and advised TCL Tech
to sort out the permissions of the office systems and strengthen the management of the entrusted system service companies. According
to the relevant plan, TCL Tech and TCL Industrial will comprehensively check the organizations, identity authentications, and
permissions of all the OA accounts before June 2023, to solve the problem of employee affiliation caused by untimely data update for
reasons such as legacy reasons, organizational changes, and job adjustments. TCL Tech and TCL Industrial have started to build their
own independent OA systems to be physically isolated from each other. Due to the complexity of system construction, it is planned
that this work will be completed before November 2023.
The largest shareholders of the Company and their persons acting in concert required TCL Industrial and urge TCL Tech to
strengthen the management of their external publicity platforms, develop standardized systems, identify the standard abbreviations of
legal entities and the use scenarios and explanations. The business data of TCL Tech used by TCL Industrial for publicity must be
those that have been publicly disclosed. They should continue to improve the corresponding communication management system and
process, manage and supervise the information content, entities’ use scenarios, and publication procedures throughout the process.
The Company attaches great importance to the improvement of the standardization level, and will comprehensively sort out and
complete the rectification as soon as possible in strict accordance with the requirements, and continue to maintain independe nce in
terms of aspects such as assets, personnel, finance, business, and institution in accordance with laws, regulations, and the Articles of
Association.
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still within
the forecast period, explain why the forecast has been reached for the Reporting Period.
√ Applicable □ Not applicable
Name of asset or Forecast start Forecast end Current Current Reasons for not Date of Index to original
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project with an time time forecast actual reaching the original forecast disclosure
earnings forecast performance performance forecast (if forecast
(RMB’0,00 (RMB’0,000 applicable) disclosure
0) )
Announcement on
the Acquisition of
the 100% Equity
Moka Interests of Moka
January 1, December 31, December 12,
International 24,607 51,099 Not applicable International
2021 2023 2020
Limited Limited & the
Related-Party
Transactions
(2020-166)
Commitments Made by the Company’s Shareholders and Counterparties on the Annual Operating Performance of the Report
√ Applicable □ Not applicable
According to the Announcement on the Acquisition of the 100% Equity Interests of Moka International Limited & the Related -
Party Transaction, the net profit (hereinafter referred to as “net profit”) of Moka International Limited (hereinafter referred to as “the
target company”) in the audited consolidated statements in 2021, 2022 and 2023 (hereinafter referred to as “performance commitment
period”) is not less than RMB224.43 million, RMB246.07 million, and RMB287.65 million respectively. Therefore, TCL Industries
Holdings (HK) Limited (hereinafter referred to as the “Transferor”) commits that the cumulative net profit of the target company during
the performance commitment period is not less than RMB760 million (hereinafter referred to as the “committed net profit”).
TCL Technology Investments Limited (hereinafter referred to as the “Transferee”, a wholly-owned subsidiary of the Company)
shall, within 4 months after the end of the performance commitment period, hire an accounting firm approved by the Transferor to
conduct a special audit on the achievement of the target company’s committed net profit throughout the performance commitment
period, and issue a special audit report. After auditing, if the net profit actually achieved by the target company during the performance
commitment period fails to reach the committed net profit, the Transferee shall notify the Transferor in writing within 10 working days
after the issue of the special audit report agreed herein. The Transferor shall compensate the Transferee in cash within 3 months after
receiving the written notice from the Transferee. The amount of compensation payable by the Transferor for the current period =
(committed net profit - achieved net profit) ÷committed net profit × the price of this equity transfer. Both parties further confirm that
the accumulative amount compensated by the Transferor during the performance commitment period shall not exceed the total amount
of consideration obtained by the Transferor in this equity transfer. After auditing, if the net profit actually achieved by the target
company exceeds the committed net profit during the performance commitment period, both parties agree to take 50% of the exce ss
amount as the transferor’s excess performance reward (the maximum amount of excess performance reward shall not exceed 20% of
the equity transfer price), and the Transferee shall pay this excess performance reward to the Transferor in cash within 3 months after
the issuance of the special audit report.
Achievement of Performance Commitment and Its Influence on Goodwill Impairment Tests
In 2022, the target company Moka International Limited realized a net profit of RMB510.99 million, which exceeded the estimated
amount in the Asset Evaluation Report of the TCL Technology Group Corporation to buy 100% Equity Interests of Moka International
Limited. There was no sign of goodwill impairment, so it is not necessary to make provision for goodwill impairment.
II Occupation of the Company、Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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III. Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV. Explanations Given by the Board of Directors Regarding the Latest Independent Auditor's
“Modified Opinion” on the Financial Statements
□ Applicable √ Not applicable
V. Explanations Given by the Board of Directors, the Supervisory Committee, and Independe nt
Directors (If Any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
VI. YoY Changes to the Accounting Policies and Estimates or Correction of Material
Accounting Errors
√ Applicable □ Not applicable
On December 31, 2021, the Ministry of Finance issued the Notice on Printing and Distributing the ‘Interpretation of Accounting
Standards for Business Enterprises No. 15’ (Cai Kuai [2021] No. 35) (hereinafter referred to as “Interpretation No. 15”), to specify the
accounting treatment for external sales of products or by-products produced before fixed assets reach their intended serviceable
condition or during the research and development process, the related presentation of centralized fund management, and the judgment
on onerous contracts. The Company will make adjustments to its accounting policies in accordance with the above requirements. The
Company started to implement the provisions of Interpretation No. 15 on the accounting treatment for external sales of products or by-
products produced before fixed assets reach their intended serviceable condition or during the research and development proce ss, and
the judgment on onerous contracts from January 1, 2022 and the related presentation of centralized fund management from December
31, 2021.
VII. YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
Compared with 2021, 36 subsidiaries (36 newly incorporated) are newly included in and 5 subsidiaries (4 transferred
and 1 de-registered) are excluded from the consolidation scope of 2022.
VIII. Engagement and Disengagement of Independent Auditor
Current independent auditor
Da Hua Certified Public Accountants (Special General
Name of the domestic independent auditor
Partnership)
The Company’s payment to the domestic independent auditor
381.40
(RMB’0,000)
How many consecutive years the domestic independent auditor
15 years
has provided audit services for the Company
Names of the certified public accountants from the domestic
Jiang Xianmin and Xiong Xin
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
4 years, 1 year
have provided audit services for the Company
Name of the foreign independent auditor (if any) Not applicable
The Company’s payment to the foreign independent auditor Not applicable
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(RMB’0,000) (if any)
How many consecutive years the foreign independent auditor
Not applicable
has provided audit services for the Company (if any)
Names of the certified public accountants from the foreign
independent auditor writing signatures on the auditor’s report Not applicable
(if any)
How many consecutive years the certified public accountants
Not applicable
have provided audit services for the Company (if any)
Indicate whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Indicate whether the independent auditor was changed during the Audit Period.
□ Yes √ No
CPA firm, financial advisor or sponsor hired for the audit of internal control
√ Applicable □ Not applicable
During the Reporting Period, the Company hired Da Hua Certified Public Accountants (Special General Partnership) to conduct a n
internal control audit, with an audit cost of RMB500,000.
During the Reporting Period, the Company engaged Shenwan Hongyuan Financing Services Co., Ltd. as the sponsor at a
recommendation fee of RMB3 million in connection with the non-public offering of shares.
IX. Delisting Faced After the Disclosure of the Annual Report
□ Applicable √ Not applicable
X. Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI. Significant Lawsuits and Arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII. Punishments and Rectifications
√ Applicable □ Not applicable
Type of Investigation Date of Index to disclosed
Name Reason for change Conclusion (if any)
change punishment type disclosure information
Some construction in progress
were not promptly transferred
into fixed assets and not
Administrative
depreciated, and thus caused Administrative
supervision
depreciation to be less accrued supervision
The The measures were
by the Company for 2021. measures taken by
Company Company taken to order the
Expenses of some outsourced the Guangdong October www.cninfo.com.cn
and relevant and some Company to correct
R&D projects were Office of China 29, 2022 (2022-109)
responsible senior the violations, and
inappropriately capitalized. The Securities
persons executives issue warning
provision for impairment of Regulatory
letters to relevant
large assets accrued from Commission
responsible persons
January to May 2021 was not
disclosed in a timely manner,
and it was not disclosed until
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the publication of the 2021
semi-annual report in August
2021
Description of rectifications
√ Applicable □ Not applicable
The Company attaches great importance to standard operation and high-quality development. After receiving the Decision on
Administrative Supervision Measures (hereinafter, “the Decision”), the Company comprehensively sorted out and analyzed relevant
problems, and made a comprehensive self-inspection on relevant matters, formulated practical and feasible rectification plans, and
identified responsibilities in accordance with the Governance Standards for Listed Companies, the Measures for the Administration of
Information Disclosure by Listed Companies, the Rules for the Listing of Stocks on the Shenzhen Stock Exchange, the Self-regulatory
Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1 - Standard Operation of Companies Listed on the Main Board,
and the Accounting Standards for Business Enterprises, as well as other relevant laws, regulations, normative documents, and the
Articles of Association, and made the rectifications item by item in strict accordance with the requirements of the Decision. On
December 23, 2022, the Company held the 27th meeting of the 7th Board of Directors to review and approve the Proposal on the
Reporting Rectification according to the ‘Decision on Administrative Supervision Measures’ Issued by the Guangdong Office of China
Securities Regulatory Commission, detailed in the relevant announcements disclosed by the Company on designated media. This
rectification neither had an impact on the Company’s financial statements for previous years, nor involved any adjustment to the
disclosed financial statements.
Other notes: see "Fulfillment of Commitments" under Part VI of this report for details.
XIII. Credit Quality of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XIV. Major Related-Party Transactions
1. Continuing Related-Party Transactions
During the Reporting Period, the Company’s daily related-party transactions is found in the related announcements disclosed on
www.cninfo.com.cn.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No related-party transactions regarding significant joint investments in third parties which occurred during the Company’s Reporting
Period.
4. Amounts Due to and from Related Parties
√ Applicable □ Not applicable
Indicate whether there were any amounts due to and from related parties for non-operating purposes.
√ Yes □ No
Amounts receivable due to related parties
Relationshi Capital Beginning Amount of Amount of Interest in Ending
Related
p with the Source occupation balance new grants recovered Coupon rate current balance
parties
Company for non- (RMB’0,00 in current grants in period (RMB’0,000
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operating 0) period current (RMB’0,00 )
purposes or (RMB’0,00 period 0)
not 0) (RMB’0,00
0)
TCL
Sale of
Industrial Related
equity No 126,029 96,000 174,989 0.00% 0 47,040
Holdings corporation
investments
Co., Ltd.
1. The Company sold 100% equity of Guangzhou Financial Development Service Center to TCL Industries
Holdings Inc., in order to seize the opportunity in industrial development, further optimize the business
structure, and focus resources on the development of the main business in line with the national policy
guidance, and based on the demands of the Company’s announced financing projects. According to the
agreement signed by both parties, TCL Industries Holdings Inc. shall pay 51% of the equity transfer price
to the Company within 40 days from the effective date of the agreement. The remaining 49% of the equity
The Influence of
transfer price will be paid within two years from the effective date of the agreement. Refer to the
Amounts Due to Related
Announcement on the Disposal of Equity Interests in Guangzhou Financial and the Related-party
Parties on the
Transactions disclosed by the Company on www.cninfo.com.cn dated May 22, 2021.
Company’s Operating
2. The Company sold 100% held equity of Chongqing Zhongxin Rongxin to TCL Industries Holdings Inc.
Results and Financial
in order to further optimize its business structure and focus resources on the development of its primary
Status
high-tech business in line with the government policy guidance and in accordance with the needs of the
Company’s announced financing projects. According to the agreement signed by both parties, TCL
Industries Holdings Inc. shall pay 51% of the equity transfer price to the Company before June 30, 2022.
The remaining equity transfer price will be paid before June 30, 2023. Refer to the Announcement on the
Disposal of Equity Interests in Partnership Enterprise and the Related -Party Transactions disclosed by the
Company on www.cninfo.com.cn dated June 27, 2022.
5. Transactions with Related Finance Companies
□ Applicable √ Not applicable
6. Transactions Between the Financial Company Controlled by the Company and Related Companies
√ Applicable □ Not applicable
Deposits
Amount incurred in the
current period
Total
Relationship Daily deposit Beginning Total deposit Ending
Related Range of withdrawal
with the ceiling balance amount in balance
parties interest amount in
Company (RMB’0,000) (RMB’0,000) current (RMB’0,000)
current
period
period
(RMB’0,000)
(RMB’0,000)
Subsidiary of
TCL Industries Related
600,000.00 0.01-1.83% 2,127.79 626,195.69 594,137.27 34,186.2
Holdings Co., corporation
Ltd.
Loans
Related Relationship Loan limit Range of Beginning Amount incurred in the Ending
89
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
parties with the (RMB’0,000) interest balance current period balance
Company (RMB’0,000) Total (RMB’0,000)
Total loan
repayment
amount in
amount in
current
current
period
period
(RMB’0,000)
(RMB’0,000)
The balance of
comprehensive
credit on any
one day shall
Subsidiary of
not exceed
TCL Industries Related
RMB6 billion _ _ _ _ _
Holdings Co., corporation
(including
Ltd.
loans, notes
discounting,
and notes
acceptance)
Credit or other financial business
Relationship with the Total line of credit Ending balance
Related parties Business type
Company (RMB’0,000) (RMB’0,000)
Subsidiary of TCL The balance of
Credit granting (bill
Industries Holdings Co., Related corporation comprehensive credit on 36,153.16
discount)
Ltd. any one day shall not
exceed RMB6 billion
Subsidiary of TCL
Credit granting (bill (including loans, notes
Industries Holdings Co., Related corporation 27,566.97
acceptance) discounting, and notes
Ltd.
acceptance)
7. Other Major Related-Party Transactions
Title of announcement Date of disclosure Website for disclosure
Announcement on the Subscription of Convertible Bonds of
Maxeon Solar Technologies, Ltd. by a Controlling
August 13, 2022
Subsidiary TCL Zhonghuan and the Related-Party
Transaction
Announcement on the Disposal of Equity Interests in
June 27, 2022
Partnership Enterprises and the Related-Party Transaction
www.cninfo.com.cn
Announcement on the Expected Continuing Related-Party
April 28, 2022
Transactions for 2022
Announcement on the Launch of Accounts Receivable
April 28, 2022
Factoring and the Related-party Transaction
Announcement on the Related-party Transactions with
April 28, 2022
Shenzhen Jucai Supply Chain Technology Co., Ltd. in 2022
Announcement of TCL Technology Group Finance Co., Ltd.
April 28, 2022
on Continuing to Provide Financial Services to Related
90
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Parties and Renewing the Financial Service Agreement
Announcement on Progress of Additional Placement and
March 22, 2022
Share Issue in Subsidiaries and the Related-Party Transaction
Announcement on Additional Placement and Share Issue in
January 24, 2022
Subsidiaries and the Related-Party Transaction
XV. Major Contracts and Execution Thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
(2) Contracting
□ Applicable √ Not applicable
(3) Leases
□ Applicable √ Not applicable
2. Major Guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure Guarante
date of the Actual Actual Type of Term of Expire e for
Line of Collatera Counterguarante
Obligor guarantee line occurren guarantee guarante guarante d or related
guarantee l (if any) e (if any)
announcemen ce date amount e e not parties or
t not
TCL King
Joint
Electrical
April 28, August liability 3.6-5
Appliances 327,138 10,997 / No Yes
2022 29, 2019 guarante years
(Huizhou) Co.,
e
Ltd.
TCL King
Joint
Electrical
April 28, liability
Appliances 51,653 - / - Yes Yes
2022 - guarante Counter
(Chengdu) Co.,
e guarantee
Ltd.
provided by
Huizhou TCL Joint
TCL Industrial
Mobile April 28, liability
212,507 - / Holding Co., - Yes Yes
Communication 2022 - guarante
Ltd.
Co., Ltd. e
TCL Mobile Joint
Communication April 28, liability
29,225 - / - Yes Yes
(HK) Company 2022 - guarante
Limited e
TCL Home
April 28, March 2, Joint
Appliances 68,280 3,800 / 1-2 years No Yes
2022 2021 liability
(Hefei) Co., Ltd.
91
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guarante
e
TCL Home Joint
Appliances April 28, liability
4,929 - / - Yes Yes
(Zhongshan) 2022 - guarante
Co., Ltd. e
TCL Air- Joint
Conditioner April 28, March liability 0.37-3
80,991 31,617 / No Yes
(Zhongshan) 2022 13, 2020 guarante years
Co., Ltd. e
TCL Air Joint
Conditioner April 28, liability
13,480 - / - Yes Yes
(Wuhan) Co., 2022 - guarante
Ltd. e
Zhongshan TCL Joint
Refrigeration April 28, liability
31,749 - / - Yes Yes
Equipment Co., 2022 - guarante
Ltd. e
Guangdong TCL
Joint
Smart Heating &
April 28, liability
Ventilation 2,522 - / - Yes Yes
2022 - guarante
Equipment Co.,
e
Ltd.
TCL Home Joint
Appliances April 28, liability
10,000 - / - Yes Yes
(Huizhou) Co., 2022 - guarante
Ltd. e
TCL Air- Joint
Conditioner April 28, liability
5,488 - / - Yes Yes
(Jiujiang) Co., 2022 - guarante
Ltd. e
Joint
Tonly
April 28, April 23, liability
Technology Co., 39,496 34,448 / 3 years No Yes
2022 2021 guarante
Ltd.
e
TCL Very
Joint
Lighting
April 28, liability
Technology 1,034 - / - Yes Yes
2022 - guarante
(Huizhou) Co.,
e
Ltd.
Joint
SHIFENDAOJI
April 28, liability
A Online 77 - / - Yes Yes
2022 - guarante
Service Co., Ltd.
e
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Guangzhou TCL
Joint
Science and Decemb
April 28, liability
Technology 84,700 er 27, 28,800 / 13 years No Yes
2022 guarante
Development 2018
e
Co., Ltd.
Joint
TCL Industries Decemb
April 28, liability
Holdings (HK) 514,629 er 21, 139,284 / 3 years No Yes
2022 guarante
Limited 2021
e
Techigh Circuit Joint
Technology April 28, liability
499 - / - Yes No
(Huizhou) Co., 2022 - guarante
Ltd. e
Shenzhen
Joint
Qianhai Qihang
April 28, liability With counter-
Supply Chain 40,000 - - / - Yes No
2022 guarante guarantee
Management
e
Co., Ltd.
Joint
Qihang
April 28, liability With counter-
Import&Export 6,000 - - / - Yes No
2022 guarante guarantee
Limited
e
Shenzhen
Qianhai Sailing Joint
International April 28, August liability With counter- 50 days-
110,000 20,541 / No No
Supply Chain 2022 22, 2022 guarante guarantee 1 year
Management e
Co., Ltd.
Aijiexu New
Joint Guarantee in
Electronic
April 28, April 28, liability proportion to
Display Glass 80,000 30,378 / 9 years No No
2022 2020 guarante shareholding
(Shenzhen) Co.,
e percentage
Ltd.
Qihang Joint
International April 28, January liability With counter-
50,000 13,928 / 1 year No No
Import & Export 2022 1, 2022 guarante guarantee
Limited e
Huizhou
Zhongkai TCL Joint
Zhirong liability With counter-
May 22, 2021 45,500 - - / - Yes Yes
Technology guarante guarantee
Microcredit Co., e
Ltd.
93
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Total actual
Total approved line for such amount of such
guarantees in Reporting Period 1,764,397 guarantees in 74,264
(A1) Reporting Period
(A2)
Total actual
Total approved line for such balance of such
guarantees at the end of the 1,809,897 guarantees at end 313,793
Reporting Period (A3) of Reporting Period
(A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure Guarante
date of the Actual Actual Type of Term of Expire e for
Line of Collatera Counterguarante
Obligor guarantee line occurren guarantee guarante guarante d or related
guarantee l (if any) e (if any)
announcemen ce date amount e e not parties or
t not
Wuhan China
Joint
Star
April 28, July 26, liability 20 days-
Optoelectronics 1,600,000 574,124 / / No No
2022 2019 guarante 3 years
Technology Co.,
e
Ltd.
Shenzhen China
Star
Joint
Optoelectronics
April 28, April 28, 1,126,59 liability 1 month
Semiconductor 1,550,000 / / No No
2022 2018 8 guarante - 8 years
Display
e
Technology Co.,
Ltd.
TCL China Star Joint
Optoelectronics April 28, February liability 4 days-
679,500 137,116 / / No No
Technology Co., 2022 17, 2022 guarante 10 years
Ltd. e
Wuhan China
Star
Joint
Optoelectronics Decemb
April 28, 1,051,15 liability 3 months
Semiconductor 2,000,000 er 22, / / No No
2022 6 guarante - 8 years
Display 2017
e
Technology Co.,
Ltd.
Huizhou China
Joint
Star
April 28, January liability 3 months
Optoelectronics 1,150,000 710,362 / / No No
2022 1, 2021 guarante - 8 years
Technology Co.,
e
Ltd.
94
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China Star Joint
Optoelectronics April 28, liability
500,000 - - / / - No No
International 2022 guarante
(HK) Limited e
China Display
Joint
Optoelectronics Novemb 43 days-
April 28, liability
Technology 150,000 er 19, 41,550 / / 7.39 No No
2022 guarante
(Huizhou) Co., 2021 years
e
Ltd.
Wuhan China
Joint
Display
April 28, liability
Optoelectronics 50,000 - - / / - No No
2022 guarante
Technology Co.,
e
Ltd.
Guangdong
Joint
Juhua Printed 240 days
April 28, May 31, liability
Display 40,000 1,490 / / - 15 No No
2022 2022 guarante
Technology Co., months
e
Ltd.
Joint
TCL Technology
April 28, January liability 95-409
Group Finance 300,000 60,974 / / No No
2022 25, 2022 guarante days
Co., Ltd.
e
Highly Joint
Information April 28, January liability 1 day-2.5
480,000 464,880 / / No No
Industry Co., 2022 17, 2022 guarante years
Ltd. e
Beijing Hecheng Joint
Septemb
Nuoxin April 28, liability
10,000 er 27, 5,000 / / 1 year No No
Technology Co., 2022 guarante
2022
Ltd. e
Joint
Beijing Lingyun
April 28, June 14, liability 86-364
Data Technology 131,500 70,278 / / No No
2022 2022 guarante days
Co., Ltd.
e
Beijing Joint
Sunpiestore April 28, July 19, liability
130,000 97,000 / / 1 year No No
Technology Co., 2022 2022 guarante
Ltd. e
Shaanxi Titi Joint
Septemb
Electronic April 28, liability
10,000 er 27, 3,000 / / 1 year No No
Technology Co., 2022 guarante
2022
Ltd. e
95
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Joint
TCL Technology
April 28, April 24, liability 1-10
Park (Huizhou) 172,600 99,400 / / No No
2022 2020 guarante years
Co., Ltd.
e
Joint
TCL Technology
April 28, July 14, liability
Investments 400,000 208,926 / / 5 years No No
2022 2020 guarante
Limited
e
Joint
Ningbo TCL
April 28, liability
Equity 50,000 - - / / - No No
2022 guarante
Investment Ltd.
e
Joint
TCL Moka
April 28, May 20, liability
International 176,000 43,061 / / 1 year No No
2022 2022 guarante
Limited
e
Huizhou Moka Joint
Technology April 28, liability
55,000 - - / / - No No
Development 2022 guarante
Co., Ltd. e
Moka Joint
Technology April 28, June 29, liability 1-8
700,000 85,566 / / No No
(Guangdong) 2022 2022 guarante months
Co., Ltd. e
Guangzhou
China Star
Joint
Optoelectronics
April 28, March 4, 1,006,69 liability
Semiconductor 1,750,000 / / 1-8 years No No
2022 2022 2 guarante
Display
e
Technology Co.,
Ltd.
Suzhou China Joint
Star April 28, August liability
265,000 16,444 / / 10 years No No
Optoelectronics 2022 30, 2022 guarante
Display Co., Ltd. e
Suzhou China
Joint
Star
April 28, liability
Optoelectronics 57,000 - - / / - No No
2022 guarante
Technology Co.,
e
Ltd.
Joint
Highly (Tianjin)
April 28, July 9, liability 40-61
Technology Co., 50,000 97,207 / / No No
2022 2022 guarante days
Ltd.
e
96
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Joint
Highly (Tianjin)
April 28, liability
E-Commerce 5,000 - - / / - No No
2022 guarante
Co., Ltd.
e
Qingdao Blue Joint
Business April 28, July 27, liability
5,000 395 / / 242 days No No
Consulting Co., 2022 2022 guarante
Ltd. e
Tianjin Joint
Printronics April 28, October liability
100,000 1,521 / / 8 years No No
Circuit 2022 12, 2022 guarante
Corporation e
Joint
TCL Technology
April 28, August liability
Group (Tianjin) 200,000 90,000 / / 5 years No No
2022 31, 2022 guarante
Co., Ltd.*
e
Tianjin TiTi Joint
Septemb
Yunchuang April 28, liability
5,000 er 27, 5,000 / / 1 year No No
Technology Co., 2022 guarante
2022
Ltd.* e
Tianjin Joint
Septemb
Xincheng Pilot April 28, liability
5,000 er 27, 5,000 / / 1 year No No
Technology Co., 2022 guarante
2022
Ltd.* e
Tianjin Joint
Septemb
WanfangNuoxin April 28, liability
5,000 er 27, 5,000 / / 1 year No No
Technology Co., 2022 guarante
2022
Ltd. * e
Total actual
Total approved line for such amount of such
guarantees in the Reporting 12,781,600 guarantees in the 3,880,593
Period (B1) Reporting Period
(B2)
Total actual
balance of such
Total approved line for such
guarantees at the
guarantees at the end of the 12,781,600 6,007,740
end of the
Reporting Period (B3)
Reporting Period
(B4)
Guarantees provided between subsidiaries
Disclosure Actual Actual Type of Term of Expire Guarante
Line of Collatera Counterguarante
Obligor date of the occurren guarantee guarante guarante d or e for
guarantee l (if any) e (if any)
guarantee line ce date amount e e not related
97
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announcemen parties or
t not
Huhehaote
Joint
Huanju New Decemb
November 26, liability
Energy 19,529 er 11, 19,529 / / 9.5 years No No
2014 guarante
Development 2015
e
Co., Ltd.*
Zhonghuan Joint
Energy (Inner July 21, liability
June 24, 2017 11,240 11,240 / / 15 years No No
Mongolia) Co., 2017 guarante
Ltd. e
Joint
Otog Banner
August liability
Huanju New June 24, 2017 18,324 18,324 / / 10 years No No
30, 2017 guarante
Energy Co., Ltd.
e
November 11, Joint
Qinhuangdao
2017 January liability 10-12
Tianhui Solar 21,279 21,279 / / No No
September 6, 19, 2018 guarante years
Energy Co., Ltd.
2018 e
Joint
Guyuan Shengju
September 6, October liability
New Energy 9,369 9,369 / / 11 years No No
2018 8, 2018 guarante
Co., Ltd.
e
Joint
Zhangjiakou
September 6, October liability
Shengyuan New 12,840 12,840 / / 11 years No No
2018 8, 2018 guarante
Energy Co., Ltd.
e
Joint
Zhonghuan
March 22, March liability
Hong Kong 65,000 50,000 / / 3 years No No
2021 26, 2021 guarante
Holding Limited
e
Inner Mongolia Joint
March 22,
Zhonghuan April 30, liability
2021 582,497 463,497 / / 7 years No No
Crystal Materials 2021 guarante
May 26, 2022
Co., Ltd. e
Joint
Huansheng Solar
March 22, April 1, liability
(Jiangsu) Co., 48,000 48,000 / / 5 years No No
2021 2021 guarante
Ltd.
e
Tianjin Huanzhi Joint
New Energy January 21, July 20, liability
171,500 45,283 / / 7 years No No
Technology Co., 2021 2021 guarante
Ltd. e
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Ningxia Joint
Zhonghuan Solar January 23, May 30, liability
748,000 470,000 / / 7 years No No
Material Co., 2022 2022 guarante
Ltd. e
Wuxi
Joint
Zhonghuan
June 30, liability
Applied May 26, 2022 190,000 101,589 / / 7 years No No
2022 guarante
Materials Co.,
e
Ltd.
Joint
Huansheng New Septemb
liability
Energy (Jiangsu) May 26, 2022 55,000 er 30, 31,822 / / 5 years No No
guarante
Co., Ltd. 2022
e
Tianjin Huanou Joint
Septemb
New Energy liability
May 26, 2022 115,000 er 28, 26,000 / / 7 years No No
Technology Co., guarante
2022
Ltd e
Subsidiaries Joint
within the liability
May 26, 2022 450,000 - - / / - No No
consolidated guarante
scope (retained) e
Shenzhen China
Star
Joint
Optoelectronics
April 28, April 28, 1,062,35 liability
Semiconductor 2,612,500 / / 8 years No No
2022 2018 0 guarante
Display
e
Technology Co.,
Ltd.*
PANEL
Joint
OPTODISPLAY
April 28, liability
TECHNOLOGY 8,200 - - / / - No No
2022 guarante
PRIVATE
e
LIMITED
Joint
TCL Moka
April 28, April 29, liability 26-87
International 214,500 26,046 / / No No
2022 2022 guarante days
Limited
e
China Star Joint
Novemb
Optoelectronics April 28, liability
500,000 er 24, 87,058 / / 3 years No No
International 2022 guarante
2020
(HK) Limited e
Total approved line for such Total actual
guarantees in the Reporting amount of such 898,926
5,083,200
Period (C1) guarantees in the
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Reporting Period
(C2)
Total actual
balance of such
Total approved line for such
guarantees at the
guarantees at the end of the 2,504,227
5,852,779 end of the
Reporting Period (C3)
Reporting Period
(C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total actual
Total guarantee line approved guarantee amount
in the Reporting Period in the Reporting 4,853,782
19,629,197
(A1+B1+C1) Period
(A2+B2+C2)
Total actual
Total approved guarantee line guarantee balance
at the end of the Reporting at the end of the 8,825,760
20,444,276
Period (A3+B3+C3) Reporting Period
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of
66.79%
the Company’s net assets
Of which:
Balance of guarantees provided for shareholders, the
248,946
actual controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for obligors with an over 70% debt/asset 2,769,974
ratio (E)
Amount by which the total guarantee amount exceeds
2,218,823
50% of the Company’s net assets (F)
Total of the three above amounts (D+E+F) 2,218,823
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: (1) The guarantee period in the above table is the occurrence period of the principal debt. The actual guarantee is valid for
two or three years from the expiration date of the principal debt, which is subject to the single contract.
(2) During the Reporting Period, the Company adjusts the guarantee limit to its controlling subsidiaries based on their demands.
The details are outlined as follows:
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.
②The guarantee limit amounting to RMB50 million offered to Beijing Sunpiestore Technology Co., Ltd. was transferred to
Tianjin Wanfang Nuoxin Technology Co., Ltd., Tianjin TiTi Yunchuang Technology Co., Ltd., and Tianjin Xincheng Pilot Technolo gy
100
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Co., Ltd., all of which are wholly-owned subsidiaries of the Company.
The Company has performed internal review procedures for the above-mentioned guarantee transfers, finding that they did not
violate the legal provisions on listed companies, and complied with the relevant requirements of the Proposal on Providing Guarantees
for Subsidiaries in 2022 reviewed and approved at the 2021 annual shareholders’ 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.
(4) As at the end of the Reporting Period, the debt portion under joint guarantee amounted to RMB10.6234955 billion. The join t
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 RMB10.6234955 billion.
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., both of which were subsidiaries. As at the end of the Reporting Period, the debt portion under joint
guarantee amounted to RMB195.29 million.
3. Entrusted Cash Asset Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
Impairment
allowance for
unrecovered
Unrecovered
Type Funding source Amount Undue amount overdue amount of
overdue amount
wealth
management
products
Bank’s wealth
management Self-funded 628,075.00 856,786.41 - -
product
Securities firm’s
wealth management Self-funded 236,962.99 236,962.99 - -
product
Trust plan Self-funded 110,000.00 80,000.00 - -
Other Self-funded 37,969.76 37,969.76 - -
Total 1,013,007.75 1,211,719.16 - -
High-risk wealth management transactions with a significant single amount liquidity
□ Applicable √ Not applicable
(2) Loan Entrusted for Wealth Management
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
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XVI. Other Significant Events
□ Applicable √ Not applicable
There are no other significant events that need to be explained for the Reporting Period.
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
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Part VII Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before change Increase/decrease in the Reporting Period (+/-) After change
Shares
Bonus converted
Shares Percentage New issues Others Subtotal Shares Percentage
shares from capital
reserve
I. Restricted
612,110,488 4.36% 2,806,128,484 0 0 1,981,995 2,808,110,479 3,420,220,967 20.03%
Shares
1. Shares held
by state-
0 0.00% 877,192,981 0 0 0 877,192,981 877,192,981 5.14%
owned legal
entities
2. Shares held
by other
611,718,990 4.36% 295,614,034 0 0 1,618,932 297,232,966 908,951,956 5.33%
domestic
investors
Among
which: Shares
held by 0 0.00% 187,134,502 0 0 0 187,134,502 187,134,502 1.10%
domestic legal
entities
Shares held by
domestic
611,718,990 4.36% 108,479,532 0 0 1,618,932 110,098,464 721,817,454 4.23%
natural
persons
3. Shares held
by foreign 391,498 0.003% 196,783,625 0 0 363,063 197,146,688 197,538,186 1.15%
investors
Among
which: Shares
held by 0 0.00% 196,783,625 0 0 0 196,783,625 196,783,625 1.15%
foreign legal
entities
Shares held by
foreign
391,498 0.003% 0 0 0 363,063 363,063 754,561 0.004%
natural
persons
4. Fund,
wealth
0 0.00% 1,436,537,844 0 0 0 1,436,537,844 1,436,537,844 8.41%
management
product, etc.
II. Non-
-
restricted 13,418,531,933 95.64% 235,120,702 0 0 233,138,707 13,651,670,640 79.97%
1,981,995
shares
1. RM B-
-
denominated 13,418,531,933 95.64% 235,120,702 0 0 233,138,707 13,651,670,640 79.97%
1,981,995
ordinary stock
III. Total
14,030,642,421 100.00% 3,041,249,186 0 0 0 3,041,249,186 17,071,891,607 100.00%
shares
Reasons for changes in shares
103
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
√ Applicable □ Not applicable
1. During the Reporting Period, locked-up shares held by senior management increased by 1,981,995 shares, as non-restricted shares
decreased by the same amount;
2. During the Reporting Period, part of the convertible corporate bonds “TCL Private Convertible 2” issued by the Company were
converted to shares, among which 235,120,702 shares were newly added from conversion of the bonds by investors, resulting in an
increase of 235,120,702 shares of the Company without restrictions on sale.
3. During the Reporting Period, the Company issued 2,806,128,484 RMB-denominated ordinary stock in non-public offering, resulting
in an increase of 2,806,128,484 shares of the Company with restrictions on sale.
Approval of changes in shares
√ Applicable □ Not applicable
Upon approval by the China Securities Regulatory Commission under the document Zheng Jian Xu Ke [2020] No. 2521 and with
the consent of the Shenzhen Stock Exchange, the Company issued 26,000,000 convertible corporate bonds to specific investors on
November 30, 2020, which were converted to 235,120,702 new shares by the investors. The total share capital of the Company was
increased from 14,030,642,421 shares to 14,265,763,123 shares.
Upon approval by the China Securities Regulatory Commission under the document Zheng Jian Xu Ke [2022] No. 1658, the
Company issued a non-public offering of 2,806,128,484 RMB-denominated ordinary stock to specific investors, resulting in an increase
of 2,806,128,484 shares of the Company’s total share capital, which increased from 14,265,763,123 shares to 17,071,891,607 shares.
Transfer of share ownership
□ 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
Item January - December 2022
Basic earnings per share (RMB/share) 0.0191
Diluted earnings per share (RMB/share) 0.0185
Item December 31, 2022
Net profit attributable to ordinary shareholders of the Company (RMB) 2.97
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
Number of
Number of Number of
released Number of
Name of restricted increased Reason for Date of restriction
restricted restricted shares
Shareholder shares at restricted shares restriction release
shares of the at period-end
period-begin of the period
period
CITIC Securities The shares The restriction on
0 280,701,754 0 280,701,754
Co., Ltd. were within the sale of new
Guotai Junan the lockup shares will be
Securities Co., 0 228,070,175 0 228,070,175 period of released after 6
Ltd. non-public months from the
104
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Everbright offering date of listing
Securities (shares of (December 22,
0 204,678,362 0 204,678,362
Company the 2022)
Limited Company
UBS AG 0 196,783,625 0 196,783,625 subscribed
GF Securities by investors
0 187,134,502 0 187,134,502
Co., Ltd. in non-
Haitong public
Securities Co., 0 163,742,690 0 163,742,690 offering
Ltd. shall not be
Perseverance transferred
Asset within 6
Management months from
Partnership the date of
(Limited 0 131,578,947 0 131,578,947 listing)
Partnership) -
Gaoyi Xiaofeng
No. 2 Zhixin
Fund
China Life Asset
Management -
Bank of China -
China Life Asset
0 116,959,064 0 116,959,064
- PIPE2020
Insurance Asset
Management
Product
Shen Ruijin 0 108,479,532 0 108,479,532
Huaxia Life
Insurance Co.,
0 87,719,298 0 87,719,298
Ltd. - Self-owned
funds
Other
shareholders
participating in
0 1,100,280,535 0 1,100,280,535
the non-public
offering of the
Company
Locked-up
shares of
Other 612,110,488 1,981,995 0 614,092,483 Not applicable
senior
management
Total 612,110,488 2,808,110,479 0 3,420,220,967 -- --
105
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
II. Issuance and Listing of Securities
1. Issuance of Securities (Preferred Shares Exclusive) in the Reporting Period
√ Applicable □ Not applicable
Name of Termina
stock and Issue price Number tion Index to
Listing Date of
its Issue date (or interest Issued number approved for date of disclosed
date disclosure
derivative rate) public trading transacti information
securities on
Shares
Conversion
of
Novem Not
directional November RMB November
235,120,702 ber 235,120,702 applicab
convertible 2022 4.10/share Please refer 24, 2022
2022 le
bonds to to
shares www.cninf
o.com.cn December
Non-public Decemb Not
November RMB 16, 2022,
offering of 2,806,128,484 er 22, 2,806,128,484 applicab
28, 2022 3.42/share December
A-shares 2022 le
21, 2022
Convertible corporate bonds, convertible corporate bonds with attached warrants, corporate bonds
Not applicable
Other derivative securities
Not applicable
Notes on Issuance of Securities (Preferred Shares Exclusive) in the Reporting Period
Upon approval by the China Securities Regulatory Commission under the document Zheng Jian Xu Ke [2020] No. 2521 and with
the consent of the Shenzhen Stock Exchange, the Company issued 26,000,000 convertible corporate bonds to specific investors on
November 30, 2020, which were converted to 235,120,702 new shares by the investors. The total share capital of the Company wa s
increased from 14,030,642,421 shares to 14,265,763,123 shares.
Upon approval by the China Securities Regulatory Commission under the document Zheng Jian Xu Ke [2022] No. 1658, the
Company issued a non-public offering of 2,806,128,484 RMB-denominated ordinary stock to specific investors, resulting in an increase
of 2,806,128,484 shares of the Company’s total share capital, which increased from 14,265,763,123 shares to 17,071,891,607 shares.
2. Changes in the Total Number of Shares, Shareholder Structure, and the Structure of Assets and Liabilities
√ Applicable □ Not applicable
(1) For Changes in the total number of shares and shareholder structure, see “I. Changes in Shares” in this part.
(2) The total assets and net assets increased during the Reporting Period, as some of the convertible corporate bonds “TCL Private
Convertible 2” issued by the Company were converted to shares by the investors and the funds raised through the non-public offering
of shares were received.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: share
106
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Total
number of
preference
Number of
Total number shareholders
ordinary Number of preference
of ordinary with
shareholders shareholders with resumed
shareholders resumed
731,411 at the month- 698,567 0 voting rights at the month-end 0
by the end of voting rights
end prior to prior to the disclosure of this
the reporting by the end
the disclosure Report
period of the
of this Report
reporting
period (if
any)
Shareholdings of ordinary shareholders with more than 5% or the top 10 shareholders of ordinary shares
Increase/dec Shares in pledge, marked or
Number of Number of
Shareholding Number of shares rease during frozen
Name of Nature of restricted non-restricted
percentage held at the period- the
Shareholder Shareholder ordinary ordinary shares
(%) end Reporting Status Shares
shares held held
Period
Put in
pledge by Li 143,665,800
Li Dongsheng Domestic
Dongsheng
and his acting- individual/Do
6.79% 1,159,085,019 610,545,821 548,539,198 Put in
in-concert mestic general
pledge by
party legal entity 253,620,000
Jiutian
Liancheng
Huizhou
Investment
Holding Co., State-owned
4.23% 722,144,427 0 722,144,427
Ltd. and its legal entity
acting-in-
concert parties
Hong Kong
Securities Foreign legal
2.28% 388,498,477 0 388,498,477
Clearing entity
Company Ltd.
China
Securities Domestic
Finance general legal 2.19% 373,231,553 0 373,231,553
Corporation entity
Limited
CITIC
State-owned
Securities Co., 1.71% 292,681,754 280,701,754 11,980,000
legal entity
Ltd.
Guotai Junan
State-owned
Securities Co., 1.34% 228,563,475 228,070,175 493,300
legal entity
Ltd.
Everbright
Securities State-owned
1.20% 205,004,054 204,678,362 325,692
Company legal entity
Limited
Foreign legal
UBS AG 1.15% 196,842,825 196,783,625 59,200
entity
107
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Domestic
GF Securities
general legal 1.12% 190,658,402 187,134,502 3,523,900
Co., Ltd.
entity
Haitong
State-owned
Securities Co., 0.96% 163,749,690 163,742,690 7,000
legal entity
Ltd.
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
acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,019 shares in total and becoming the
largest shareholder of the Company.
Note on the above shareholders’
Huizhou Investment Development Co., Ltd. and Huizhou Investment Holding Co., Ltd. became persons acting in concert
associations or concerted actions
due to equity relations. As at the end of the Reporting Period, there were 4,587 shares registered by Huizhou Investment
Development Co., Ltd. with the China Securities Depository and Clearing Corporation Limited and 722,139,840 shares
registered by Huizhou Investment Holding Co., Ltd. with the China Securities Depository and Clearing Corporation Limited
Explain if any of the shareholders
above was involved in
entrusting/being entrusted with Not applicable
voting rights or waiving voting
rights
Explanation on repurchase
accounts among top 10 Not applicable
shareholders (if any)
Top 10 non-restricted ordinary shareholders
Type of shares
Name of Shareholder Number of non-restricted ordinaery shares held at the end of the reporting period
Type Shares
RMB-
Huizhou Investment Holding Co.,
denominate
Ltd. and its acting-in-concert 722,144,427 722,144,427
d ordinary
parties
shares
RMB-
Li Dongsheng and his acting-in- denominate
548,539,198 548,539,198
concert party d ordinary
shares
RMB-
Hong Kong Securities Clearing denominate
388,498,477 388,498,477
Company Ltd. d ordinary
shares
RMB-
China Securities Finance denominate
373,231,553 373,231,553
Corporation Limited d ordinary
shares
RMB-
Wuhan Optics Valley Industrial denominate
128,312,396 128,312,396
Investment Co., Ltd. d ordinary
shares
TCL Technology Group RMB-
Corporation - 2021 to 2023 denominate
113,143,154 113,143,154
Employee Stock Ownership Plan d ordinary
(Phase I) shares
National Social Security Fund 113 107,093,876 RMB- 107,093,876
108
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Portfolio denominate
d ordinary
shares
TCL Technology Group RMB-
Corporation - 2021 to 2023 denominate
106,484,364 106,484,364
Employee Stock Ownership Plan d ordinary
(Phase II) shares
RMB-
Sinatay Life Insurance Co., Ltd. - denominate
104,190,172 104,190,172
Conventional Product d ordinary
shares
ICBC Credit Suisse Fund -
RMB-
Agricultural Bank of China -
denominate
ICBC Credit Suisse China 74,761,500 74,761,500
d ordinary
Securities Financial Asset
shares
Management Plan
Related or acting-in-concert Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became persons
parties among top 10 non- acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,019 shares in total and becoming the
restricted outstanding largest shareholder of the Company.
shareholders, as well as between Huizhou Investment Development Co., Ltd. and Huizhou Investment Holding Co., Ltd. became persons acting in concert
top 10 non-restricted outstanding due to equity relations. As at the end of the Reporting Period, there were 4,587 shares registered by Huizhou Investment
shareholders and top 10 Development Co., Ltd. with the China Securities Depository and Clearing Corporation Limited and 722,139,840 shares
shareholders registered by Huizhou Investment Holding Co., Ltd. with the China Securities Depository and Clearing Corporation Limited
Explanation for the top 10 As at the end of the Reporting Period, a shareholder of the Company, i.e., Huizhou Investment Holding Co., Ltd. and its
ordinary shareholders person acting in concert, i.e., Huizhou Investment Development Co., Ltd., decreased the number of shares by 66,500,000
participating in securities margin shares due to their participation in the refinancing business; the shareholder Wuhan Optical Valley Industrial Investment
trading (if any) Co., Ltd. decreased the number of shares by 430,240,000 shares due to its participation in the refinancing business.
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.
2. The Company’s Controlling Shareholders
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 1,159,085,019 shares in total and becoming the largest shareholder of
the Company.
As per Article 216 of the Company Law, a controlling shareholder refers to a shareholder who owns over 50% of a limited liabilit y
company’s total capital or over 50% of a joint stock company’s total share capital; or, despite the ownership of less than 50% of a
limited liability company’s total capital or less than 50% of a joint stock company’s total number of shares, who can still prevail in the
resolution of a meeting of shareholders or a general meeting of shareholders according to the voting rights corresponding to his interest
in the limited liability company’s total capital or the joint stock company’s total number of shares.
According to the definition above, the Company has no controlling shareholder.
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
3. Actual Controller and Its Acting-in-Concert Parties
Explanation of The Company’s Absence of Actual Controller
The “actual controller” refers to an entity which is not a shareholder of a company but actually controls the company behaviors
through investment relationship, agreement or other arrangements. According to the definition above, the Company has no actua l
controller.
109
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Whether there is any shareholder holding more than 10% of the shares at the ultimate control level of the Company
□ Yes √No
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. The cumulative number pledged shares of the Company’s controlling shareholder or the largest
shareholder and its acting-in-concert parties account for 80% of the company shares held by them.
□ Applicable √ Not applicable
5. Other Corporate Shareholders with a Holding Percentage over 10%
□ Applicable √ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV. Specific Implementation of Share Repurchase During the Reporting Period
Progress on any share repurchase
√ Applicable □ Not applicable
The
proportion
of
repurchased
Number of
Disclosure Number of shares Proportion to Amount of Proposed Purpose of shares to the
repurchased
time of the to be repurchased total share shares to be repurchase share underlying
shares
plan (shares) capital repurchased period repurchase shares
(shares)
involved in
the equity
incentive
plan (if any)
With a total Based on the The total Within 12
repurchase approximately amount of months after
amount of 68.75 million of repurchase the 16th
For
RMB450 million shares that can shall be no Meeting of
employee
to 550 million at a be repurchased, less than the
stock
March 21, repurchase price the proportion RMB450 Company’s
ownership 106,484,364 -
2022 of no more than of the million 7th Board of
plans or
RMB8.00 per repurchased (inclusive) Directors
equity
share (inclusive), shares to the and no more deliberates
incentives
it is estimated that Company’s than and
the number of total share RMB550 approves
shares that can be capital million this share
110
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
repurchased will approximately (inclusive) repurchase
be approximately equals to 0.49% plan
68.75 million
shares based on
the upper limit of
the total
repurchase
amount and the
upper limit of the
share repurchase
price
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
111
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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 repayment Place of
Bond name Abbr. Maturity
code issuance date balance rate and transaction
interest
payment
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
October October and Shenzhen
Publicly October
19TCL03 112983 17, 21, 44,000 2.95% principal Stock
Offered in 21, 2024
2019 2019 repayable Exchange
2019 to
in full
Qualified
upon
Investors
maturity
(Tranche 3)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
and Shenzhen
Publicly July 19, July 23, July 23,
19TCL02 112938 100,000 3.05% principal Stock
Offered in 2019 2019 2024
repayable Exchange
2019 to
in full
Qualified
upon
Investors
maturity
(Tranche 2)
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds May 17, May 20, May 20, and
19TCL01 112905 100,000 3.15% Stock
Publicly 2019 2019 2024 principal
Exchange
Offered in repayable
2019 to in full
Qualified upon
112
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Investors maturity
(Tranche 1)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
August August and Shenzhen
Publicly August
18TCL02 112747 17, 20, 200,000 3.55% principal Stock
Offered in 20, 2023
2018 2018 repayable Exchange
2018 to
in full
Qualified
upon
Investors
maturity
(Tranche 2)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
and Shenzhen
Publicly June 5, June 6, June 6,
18TCL01 112717 17,002 4.00% principal Stock
Offered in 2018 2018 2023
repayable Exchange
2018 to
in full
Qualified
upon
Investors
maturity
(Tranche 1)
Investor eligibility (if any) For qualified investors / For professional investors
Trading system applicable Match to trade, click to trade, inquire to trade, bid to trade, negotiate to trade
Risk of termination of listing
and trading (if any) and No
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 adjusted 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 Resale Implementation Results, the
Company resold 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.
In accordance with the provisions of the Prospectus for TCL Technology Group Corporation Corporate Bonds Publicly Offered
in 2019 to Qualified Investors (Tranche 2), the bondholders of 19TCL02 elected to sell back all or part of their 19TCL02 to TCL
113
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Technology Group Corporation during the sell-back registration period (June 27, 2022 to July 1, 2022) at the sell-back price of
RMB100/bond (excluding interest). The coupon rate adjusted from 4.30% to 3.05% two years after the existence period, and the sell-
back fund was released on July 25, 2022. According to the data provided by the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited, the number of 19TCL02 sold back during the sell-back registration period was 9,800,000, and the sell-
back amount was RMB980,000,000 (excluding interest). As indicated in the Announcement on Resale Implementation Results, the
Company resold the sold-back bonds from July 26, 2022 to August 22, 2022, and the number of bonds proposed to be resold would be
no more than 9,800,000. The number of bonds resold in this period was 9,800,000, with a net weighted average resale price of
RMB100.0000 per bond. Among them, the number of bonds resold through the “sell-back and resale” column of the Shenzhen Stock
Exchange trading system was 9,800,000. Upon the completion of the resales, no bonds pending for resales remain, and there are
10,000,000 bonds of 19TCL01 outstanding in depositary.
In accordance with the provisions of the Prospectus for TCL Technology Group Corporation Corporate Bonds Publicly Offered
in 2019 to Qualified Investors (Tranche 3), the bondholders of 19TCL03 elected to sell back all or part of their 19TCL03 to TCL
Technology Group Corporation during the sell-back registration period (September 16, 2022 to September 22, 2022) at the sell-back
price of RMB100/bond (excluding interest). The coupon rate adjusted from 4.20% to 2.95% two years after the existence period, and
the sell-back fund was released on October 21, 2022. According to the data provided by the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited, the number of 19TCL03 sold back during the sell-back registration period was
19,000,000, and the sell-back amount was RMB1,900,000,000 (excluding interest). As indicated in the Announcement on Resale
Implementation Results, the Company resold the sold-back bonds from October 24, 2022 to November 18, 2022 according to relevant
regulations, and the number of bonds to be resold would be no more than 19,000,000. The number of bonds resold in this period was
3,400,000, with a full weighted average resale price of RMB99.6724 per bond. Among them, the number of bonds resold through the
“sell-back and resale” column of the Shenzhen Stock Exchange trading system was 3,400,000. After the implementation of the resale
of the 19TCL03 bonds, the Company applied to the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited
for the cancellation of the 15,600,000 bonds that had not been resold. After the cancellation, the number of remaining 19TCL0 3
depository bonds was 4,400,000.
3. Intermediary Organizations
Name of Contact of
Name of bond Name of signing
intermediary Office address intermediary Tel.
project accountants
organization organization
18TCL01,
18TCL02, Guotai Junan 33F, One Museum
Xu Lei, Wu Lei, Li
19TCL01, Securities Co., Place, 669 Xinzha - 021 -38032198
Hongyu
19TCL02, Ltd. Road, Shanghai
19TCL03
18TCL01, Citic Office
Yang Fang, Deng
18TCL02, Tower, 48
CITIC Securities Xiaoqiang, Chen
19TCL01, Liangmaqiao - 010 -60833575
Co., Ltd. Donghui, Zhou
19TCL02, Road, Chaoyang
Junren, Shi Chunli
19TCL03 District, Beijing
18TCL01, F1-8, CDB
China
18TCL02, Building, 29 Ji Tuo, Zhao
Development
19TCL01, Fuchengmen Outer - Liang, Zhao 010 -88300907
Bank Securities
19TCL02, Avenue, Xicheng Zhipeng
Co., Ltd.
19TCL03 District, Beijing
19TCL01, TF Securities Co., 5F, 83 - Huang Yike, Liu 010 -56702804
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Name of Contact of
Name of bond Name of signing
intermediary Office address intermediary Tel.
project accountants
organization organization
19TCL02, Ltd. Deshengmen Yue
19TCL03 Outer Avenue,
Xicheng District,
Beijing
Shenwan
19TCL01, Hongyuan 19 Taipingqiao
Zhou Fan, Ouyang
19TCL02, Securities Avenue, Xicheng - 010 -88085933
Wenjian
19TCL03 Underwriting Co., District, Beijing
Ltd.
26F, China Travel
Hong Kong
Huatai United
18TCL01, Building, CBD Yu Shouxiang,
Securities Co., - 0755 -82492000
18TCL02 Central Plaza, Tian Jianrong
Ltd.
Futian District,
Shenzhen
18TCL01,
F408, Yuanyang
18TCL02,
Beijing Jia Yuan Building , 158 Wen Liangjuan,
19TCL01, - 010 -66413377
Law Offices Fuxingmen Inner Wang Ying
19TCL02,
Avenue, Beijing
19TCL03
Building 6, Galaxy
SOHO, No. 2
18TCL01,
China Chengxin Nanzhugan
18TCL02,
International Hutong,
19TCL01, - Yan Yan 010 -66428877
Credit Rating Co., Chaoyangmen
19TCL02,
Ltd. Inner Avenue,
19TCL03
Dongcheng
District, Beijing
18TCL01, Da Hua Certified Building 7, Yard
18TCL02, Public 16, West Fourth Li Bingxin, Zhang
19TCL01, Accountants Ring Middle Road, Yuanyuan, Yang Jiang Xianmin 0755 -82900734
19TCL02, (Special General Haidian District, Chunxiang
19TCL03 Partnership) Beijing
Whether the above organizations are changed in the Reporting Period
□ Yes √No
4. Use of the Capital Raised
Unit: RMB'0,000
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Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Whether
consistent with
Operation of Rectification of the purpose,
Name of bond Total amount of special fund- illegal use of usage plan and
Amount spent Unused amount
project raised funds raising account raised funds (if other
(if any) any) agreements
promised in the
prospectus
Set up a fund-
18TCL01, raising account
18TCL02, to ensure that
19TCL01, 700,000 700,000 0 the funds raised Not applicable Consistent
19TCL02, are earmarked
19TCL03 for special
purposes
The raised funds were used for construction projects
□ Applicable √ Not applicable
The Company changed the usage of above funds raised from bonds during the Reporting Period
□ Applicable √ Not applicable
5. Adjustments of credit rating results during the Reporting Period
□ Applicable √ Not applicable
6. The implementation and changes of guarantees, debt repayment plans and other safeguard measures
regarding debt repayment during the Reporting Period, and their impact on bond investor equity
□ Applicable √ Not applicable
III. Debt Financing Instruments of Non-Financial Enterprises
√ Applicable □ Not applicable
1. General information of debt financing instruments of non-financial enterprises
Unit: RMB100 million
Way of
principal
Outstandi Place of
Bond Bond Date of Value Coupon repaymen
Abbr. Maturity ng transactio
name code issuance date rate t and
balance n
interest
payment
2022 Interest
Mid- payable
22TCL Ji
Term annually
MTN003
Notes of and Inter-
(Scientifi 10228147 July 4, July 6, July 6,
TCL 20.00 3.45% principal bank
c 4 2022 2022 2025
Technolo repayable market
innovatio
gy Group in full
n notes)
Corporati upon
on maturity
116
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
(Tranche
3)
(Scientifi
c
innovatio
n notes)
2022
Mid-
Interest
Term
payable
Green
annually
Notes of
and Inter-
TCL 22TCL Ji 13228004 April 25, April 27, April 27,
15.00 3.30% principal bank
Technolo GN002 0 2022 2022 2025
repayable market
gy Group
in full
Corporati
upon
on
maturity
(Tranche
2)
2022
Mid- Interest
Term payable
Notes of annually
TCL and Inter-
22TCL Ji 10228008 January January January
Technolo 20.00 3.45% principal bank
MTN001 9 12, 2022 14, 2022 14, 2025
gy Group repayable market
Corporati in full
on upon
(Tranche maturity
1)
2021
Mid-
Term Interest
Notes of payable
TCL 21TCL- annually
Technolo MTN001 and Inter-
10210096 May 10, May 12, May 12,
gy Group (High- 20.00 4.15% principal bank
6 2021 2021 2024
Corporati Growth repayable market
on Bonds) in full
(Tranche upon
1) (High- maturity
growth
bonds)
2020 20TCL Ji 10200050 March 25, March 27, March 27, Interest Inter-
30.00 3.60%
Mid- MTN001 9 2020 2020 2023 payable bank
117
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Term annually market
Notes of and
TCL principal
Technolo repayable
gy Group in full
Corporati upon
on maturity
(Tranche
1)
Investor eligibility (if any) Not applicable
Trading system applicable Not applicable
Risk of termination of listing
and trading (if any) and No
countermeasures
Overdue bonds
□ Applicable √ Not applicable
2. Triggering and implementation of issuer or investor option clauses and investor protection clauses
□ Applicable √ Not applicable
3. Intermediary Organizations
Name of Contact of
Name of bond Name of signing
intermediary Office address intermediary Tel.
project accountants
organization organization
20TCL Ji
MTN001, 21TCL
Ji MTN001, 55 Fuxingmen
Industrial and
22TCL Ji GN002, Inner Avenue,
Commercial Bank - Dai Ying 010 -66109649
22TCL Ji Xicheng District,
of China
MTN003 Beijing
(Scientific
innovation notes)
69 Jianguomen
20TCL Ji
Agricultural Bank Inner Avenue,
MTN001, 22TCL - An Liwei 010 -85109045
of China Dongcheng
Ji MTN001
District, Beijing
21TCL Ji
MTN001, 22TCL China 25 Jinrong
Ji MTN003 Construction Bank Avenue, Xicheng - Zhou Peng 010 -67596478
(Scientific Corporation District, Beijing
innovation notes)
22TCL Ji Bank of China 1 Fuxingmen Inner
- Wang Chong 010 -66592195
MTN001 Limited Avenue, Beijing
Shanghai Pudong 12 Zhongshan East
22TCL Ji GN002 - Lin Jie 021 -61616388
Development 1st Road,
118
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
Bank Co., Ltd. Shanghai
20TCL Ji
Building 6, Galaxy
MTN001, 21TCL
SOHO, No. 2
Ji MTN001,
China Chengxin Nanzhugan
22TCL Ji
International Hutong,
MTN001, 22TCL - Yan Yan 010 -66428877
Credit Rating Co., Chaoyangmen
Ji GN002, 22TCL
Ltd. Inner Avenue,
Ji MTN003
Dongcheng
(Scientific
District, Beijing
innovation notes)
20TCL Ji
MTN001, 21TCL
Ji MTN001, Da Hua Certified Building 7, Yard
22TCL Ji Public 16, West Fourth
Qiu Junzhou and
MTN001, 22TCL Accountants Ring Middle Road, Jiang Xianmin 0755 -82900734
Jiang Xianmin
Ji GN002, 22TCL (Special General Haidian District,
Ji MTN003 Partnership) Beijing
(Scientific
innovation notes)
Whether the above organizations were changed during the Reporting Period
□ Yes √No
4. Use of the Capital Raised
Unit: RMB'0,000
Whether
consistent with
Operation of Rectification of the purpose,
Name of bond Total amount of special fund- illegal use of usage plan and
Amount spent Unused amount
project raised funds raising account raised funds (if other
(if any) any) agreements
promised in the
prospectus
20TCL Ji
MTN001,
21TCL Ji
Set up a fund-
MTN001,
raising account
22TCL Ji
to ensure that
MTN001,
1,050,000 1,050,000 0 the funds raised Not applicable Consistent
22TCL Ji
are earmarked
GN002, 22TCL
for special
Ji MTN003
purposes
(Scientific
innovation
notes)
The raised funds were used for construction projects
119
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
□ Applicable √ Not applicable
The Company changed the usage of above funds raised from bonds during the Reporting Period
□ Applicable √ Not applicable
5. Adjustments of credit ratings results during the Reporting Period
□ Applicable √ Not applicable
6. The implementation and changes of guarantees, debt repayment plans and other safeguard measures
regarding debt repayment during the Reporting Period, and their impact on bond investor equity
□ Applicable √ Not applicable
IV. Convertible Corporate Bonds
√ Applicable □ Not applicable
1. Conversion price adjustments
Name Price before adjustment Adjusted price Start date for the adjustment
(RMB/share) (RMB/share)
TCL Private Convertible 2 (convertible 8.00 7.88 May 19, 2021
bond code： 124017)
TCL Private Convertible 2 (convertible 7.88 7.73 June 2, 2022
bond code： 124017)
TCL Private Convertible 2 (convertible 7.73 4.10 July 25, 2022
bond code： 124017)
2. Cumulative bond-to-stock conversions
√ Applicable □ Not applicable
The proportion
of converted
Start and Cumulative
Total Cumulative shares to the The proportion of
Abbreviation end date of number of Unconverted
quantity Total amount amount of Company’s unconverted shares
of convertible bond-to- converted shares
issued issued (RMB) converted total issued to the total issued
bond stock shares (RMB)
(bond) shares (RMB) shares before amount
conversion (share)
the start date of
the conversion
May 31,
TCL Private 2021 to
26,000,000 2,600,000,000 2,166,999,871 528,536,554 3.767% 0 0
Convertible 2 November
29, 2022
As of November 30, 2022, TCL Private Convertible 2 has been matured and delisted, as detailed in the Announcement on Honoring
Upon Maturity and Delisting of “TCL Private Convertible 2”.
3. Top 10 holders of convertible corporate bonds
□ Applicable √ Not applicable
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
□ Applicable √ Not applicable
120
Full Text of the Annual Report 2022 of TCL Technology Group Corporation
V. Consolidated loss of the Reporting Period exceeding 10% of net assets of the last year-end
□ Applicable √ Not applicable
VI. Overdue Interest-bearing Debts Other Than Bonds at Period End
□ Applicable √ Not applicable
VII. Any Violation of Rules and Regulations During the Reporting Period
□ Applicable √ Not applicable
VIII. Key Accounting Data and Financial Indicators of the Company for the past two years as
at the end of the Reporting Period
Unit: RMB'0,000
Item End of the Reporting Period December 31, 2021 Change
Current ratio 1.09 1.08 0.93%
Debt/asset ratio 63.3% 61.2% 2.05%
Quick ratio 0.78 0.80 -3%
2022 2021 Change
Net profit before non-
-171,729 1,399,924 -112.27%
recurring gains and losses
Debt to EBITDA ratio 12.12% 20.86% -8.74%
Interest coverage ratio 0.92 4.57 -79.89%
Cash coverage ratio 4.32 8.54 -49.48%
EBITDA coverage ratio 5.17 8.39 -38.35%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
During the Reporting Period, the operating performance and profitability of the Company’s subsidiaries decreased year -on-year due to the cyclical
impact of the panel industry, resulting in large changes in the Company’s accounting data and financial indicators.
121
TCL Technology Group Corporation
Auditor’s Report
DHSZ[2023] No. 002888
大华会计师事务所(特殊普通合伙)
Da Hua Certified Public Accountants (Special General Partnership)
TCL Technology Group Corporation
Auditor’s Report and Financial Statements
(For the period from January 1, 2022 to December 31, 2022)
Content Page
I. Auditor’s Report 1-8
II. Audited Financial Statements
Consolidated Balance Sheet 1-2
Consolidated Income Statement 3
Consolidated Cash Flow Statement 4-5
Consolidated Statement of Changes in Shareholders’ Equity 6-7
Balance Sheet of the Parent Company 8-9
Income Statement of the Parent Company 10
Cash Flow Statement of the Parent Company 11-12
Statement of Changes in Shareholder Equity of the Parent 13-14
Company
Notes to Financial Statements 15-161
Auditor’s Report
DHSZ [2023] No. 002888
To all Shareholders of TCL Technology Group Corporation:
I. Opinion
We have audited the financial statements of TCL Technology Group Corporation
(TCL TECH.), which include the balance sheets of the consolidated company and
parent company (the parent company exclusive of subsidiaries) as of December 31,
2022, the statements on income, cash flow and changes in shareholders' equity of the
consolidated company and parent company for the year then ended, as well as the notes
to financial statements.
In our opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of the consolidated company and parent
company of the Company as of December 31, 2022, and the consolidated company and
parent company operations results and cash flow for the year ended December 31, 2022
in accordance with the Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese
Registered Accountants. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for Audit of Financial Statements section of
our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants, and we have fulfilled our ethical
responsibilities in accordance with the said Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our
opinions.
Page 1
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the financial statements for the current period. These
matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
And key audit matters identified in our audit are summarized as follows:
Revenue recognition
Please refer to the accounting policies as stated in 36. “Revenue recognition” under Note III to the
financial statements and 56. Operating revenue under Note V to the financial statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect to
revenue recognition include:
The Company’s revenue for the current
period was approximately RMB166.6 understand and assesd whether the management's
billion, an increase of about RMB2.9 design and operation of key internal controls in respect
billion from the revenue of RMB163.7 to revenue recognition are effective;
billion for the previous period.
As operating revenue is one of the understand and assess whether the management's
Company’s key operating indicators with selection and implementation of the policies related to
the inherent risk of the management revenue recognition complied with the Accounting
manipulating the revenue recognition Standards for Business Enterprises;
time point for the purpose of achieving a
specific objective or expectation, and the select samples of recorded transactions with revenue
revenue recognition for the current period for the year and examined relevant supporting
has a material influence on the financial documents involved during the transaction process,
statements, we have identified revenue including outbound delivery orders, customer receipt
recognition as a key audit matter. records, sale invoices, customs declarations, bills of
lading and fund receipt proofs;
select samples of the recorded transactions with
revenue around the balance sheet date and examined
outbound delivery orders and other supporting
documents to assess whether the revenue has been
recorded for the appropriate accounting period;
obtain the Company's sale list for the year and carried
out analytic review procedures on the operating
revenue to determine how reasonable changes in the
revenue and gross profit margin for the current period
were;
conduct confirmation procedures with key accounts
and inquired about the sales amount and the account
receivable balance incurred for the current period;
examine whether the information in connection with
revenue was duly presented and disclosed in the
financial statements.
Based on the audit work executed, we believe that the Company's recognition of revenue complies
with relevant requirements of the Accounting Standards for Business Enterprises.
Page 2
III. Key Audit Matters (continued)
Measurement of fixed assets and construction in progress
Please refer to the accounting policies as stated in 23. "Fixed assets" and 24. "Construction in progress"
under Note III to the financial statements and 18. "Fixed assets" and 19. "Construction in progress"
under Note V to the financial statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect to
the measurement of fixed assets and construction in progress
include:
understand and evaluate the effectiveness of the design
As of December 31, 2022, the total
of internal controls related to fixed assets and
amount of fixed assets and construction construction in progress, and test the effectiveness of
in progress presented in the Company's the implementation of key controls;
consolidated financial statements was obtain a list of new assets in the current period, and
RMB184.5 billion, accounting for carry out a spot check of procurement contracts,
payment documents, invoices and acceptance slips for
51.26% of total assets. These fixed assets
large-value assets;
mainly include machinery and equipment obtain the new settlement statements for construction
and buildings required for semiconductor in the current period, examine them against the
display products, new energy amounts recorded in the books, and review the
photovoltaic products and semiconductor accuracy and completeness of the entries;
discuss with the management and judge the accuracy of
materials. Matters such as the eligibility
the point of time when the construction in progress is
of assets for capitalization, the point of transferred to fixed assets and the reasonableness of the
time at which construction in progress is expected useful life of fixed assets;
transferred to fixed assets and inspect the construction-in-progress site when
depreciation is provisioned, and the approaching the balance sheet date, understanding and
evaluate the progress of the work and checking it
useful life and residual value of the
against the entries in the book;
respective fixed assets involve obtain the ownership certificate of fixed assets and the
management's judgment, so we identified company inventory sheet, and conduct on-site checks
the measurement of fixed assets and of important assets;
obtain the statement of depreciation provision for fixed
construction in progress as key audit
assets and recalculating whether the depreciation has
matters.
been provisioned accurately;
examine that the information in connection with fixed
assets and construction in progress has been duly
presented and disclosed in the financial statements.
Based on the audit work executed, we believe that the Company measured the fixed assets and
construction in progress in accordance with relevant requirements of the Accounting Standards for
Business Enterprises.
Page 3
III. Key Audit Matters (continued)
Related parties
Please refer to "X. Related parties and related transactions" in the notes to the financial statements.
Key Audit Matters Audit response
The important audit procedures we carried out in respect to
related transactions include:
Examine and evaluate the internal controls adopted by
management for identifying and disclosing the
In 2022, the Company's routine related
relationships between related parties and related
transactions amounted to about RMB30.1 transactions, and review the effectiveness of the design
billion, representing an increase of about and implementation of the internal controls;
1.25 % from the previous period. Acquire the statements of management on the integrity
The integrity of the disclosure of related of the relationships between related parties and related
transactions, etc., as well as the list of relationships
parties and related transactions, the
between related parties provided by the management,
authenticity of related transactions and and examined this with the information acquired from
the fairness of transaction prices will other public channels;
have an important impact on the fair examine the customers, suppliers and other
presence of the financial statements. stakeholders that deal with the Company to identify
whether there were any omissions for the related
Therefore, we identify the related balance
parties. acquire the resolutions of the board of directors
and transactions as key matters in this and the general meeting in connection with related
audit. transactions, examine the decision-making authority
and procedures of the related transactions, judged the
legality and compliance of the related transactions, and
determine whether they had been properly authorized
and approved;
compared the prices for selling goods to the related
parties with those of similar products sold to unrelated
parties to determine the fairness of the prices of related
transactions;
acquired the accrued amount and balance details of
related transactions, and examine the financial
vouchers corresponding to the transactions and the
attached contracts or orders, dispatch notes, statements,
invoices and bank documents for the selected specific
samples; conduct confirmation procedures for the
amounts and balances of the related transactions with
important related parties;
Based on audit procedures conducted, we are of the opinion that management has made reasonable
disclosure on the completeness of related party relationship, authenticity of related transactions and
faireness of consideration.
Page 4
Ⅳ. Other Information
The Company’s management is responsible for the other information. Other
information comprises all of the information included in the Company's 2022 Annual
Report other than the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover other information and we
do not express any form of assurance or conclusions thereon.
In connection with our audit on the financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the
audits or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement for other information, we are required to report that fact. We have nothing
to report in this regard.
Ⅴ. Responsibilities of Management and Those Charged with Governance
for Financial Statements
The Company's management is responsible for the preparation of the financial
statements that provide a fair view in accordance with the Accounting Standards for
Business Enterprises, and for designing, implementing and maintaining such internal
controls as the management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the management is responsible for assessing
the Company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concerns and using the going concerns as a basis of accounting unless
the management either intends to liquidate the Company or to cease operations, or have
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
Ⅵ. Auditor's Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor's report that states our opinions. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the China Independent Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with the China Independent Auditing Standards,
Page 5
we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
1. Identify and assess the risks of material misstatements in financial statements,
and whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinions. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the overriding of internal controls.
2. Obtain an understanding of internal controls relevant to the audit in order to
design audit procedures that are appropriate to the circumstances.
3. Evaluate the appropriateness of accounting policies used and determine how
reasonable accounting estimates and related disclosures made by the management are.
4. Conclude on the appropriateness of the management's use of the going concern
assumption of accounting and, based on the audit evidence obtained, and draw a
conclusion on whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required by the China
Independent Auditing Standards to draw users' attention in our auditor's report on the
related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinions. Our conclusions are based on the audit evidence obtained up to
the date of our auditor's report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the
financial statements and whether the financial statements represent the
underlying transactions and events in a manner that maintains fair
presentation.
6. Obtain sufficiently appropriate audit evidence regarding the financial
information of the entities or business activities within the Company to
express an opinion on the financial statements. We are responsible for
directing, supervising and performing the Company audits and accepting
full responsibility for audit opinions.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any noteworthy deficiencies in internal
controls that we identify during our audit.
We also provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding
independence, and communicate with them on all relationships and other
Page 6
matters that may reasonably be thought to bear an impact on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determined those matters that were of most significance in the audit of
the financial statements of the current period and these therefore constitute
the key audit matters. We describe these matters in our auditor's report
unless law or regulation precluded public disclosure about the matters or
when, in extremely rare circumstances, we determined that a matter should
not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interests of
such communication.
(There is no text below this page)
Page 7
(There is no text on this page, which is used for the signature and seal of Audit Report
DHSZ [2023] No. 002888)
Da Hua Certified Public Accountants (Special
Chinese CPA:
General Partnership)
(Engagement Partner) Jiang Xianmin
Beijing China Chinese CPA:
Xiong Xin
March 30, 2023
Page 8
TCL Technology Group Corporation
Consolidated Balance Sheet
___________(RMB’000)_____________
Note V December 31, 2022 January 1, 2022
Current assets
Monetary assets 1 35,378,501 31,393,692
Held-for-trading financial assets 2 12,703,507 7,601,256
Derivative financial assets 3 361,034 70,929
Notes receivable 4 512,849 776,202
Accounts receivable 5 14,051,661 18,238,782
Receivables financing 6 1,103,128 2,217,639
Prepayments 7 3,593,857 2,306,325
Other receivables 8 4,033,248 4,458,621
Inventories 9 18,001,122 14,083,357
Contract assets 10 315,167 233,529
Other current assets 11 5,438,936 5,802,960
Total current assets 95,493,010 87,183,292
Non-current assets
Debt investments 12 741,703 -
Long-term receivables 13 631,373 651,118
Long-term equity investments 14 29,256,216 25,640,578
Investments in other equity
15
instruments 439,996 927,319
Other non-current financial assets 16 2,928,827 2,704,038
Investment property 17 946,449 761,902
Fixed assets 18 132,477,672 113,598,783
Construction in progress 19 52,053,834 36,965,885
Right-of-use assets 20 5,110,124 2,426,911
Intangible assets 21 16,783,931 13,982,647
Development costs 22 3,179,207 2,508,419
Goodwill 23 9,161,852 9,158,841
Long-term deferred expenses 24 2,744,208 2,640,530
Deferred income tax assets 25 1,753,887 2,150,423
Other non-current assets 26 6,293,943 7,449,009
Total non-current assets 264,503,222 221,566,403
Total assets 359,996,232 308,749,695
Person-in-charge
Legal Person-in-charge of the financial
representative: Li Dongsheng of financial affairs: Li Jian department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
1
TCL Technology Group Corporation
Consolidated Balance Sheet (Continued)
___________(RMB’000)_____________
Liabilities and shareholders' equity: Note V December 31, 2022 January 1, 2022
Current liabilities
Short-term borrowings 27 10,215,911 9,341,427
Borrowings from the Central Bank 28 777,676 1,437,062
Customer deposits and deposits from
29
other banks and financial institutions 603,423 666,056
Held-for-trading financial liabilities 30 861,912 925,035
Derivative financial liabilities 31 70,735 22,205
Notes payable 32 6,365,660 3,275,296
Accounts payable 33 26,381,912 24,297,860
Advances from customers 34 1,402 5,794
Contract liabilities 35 2,336,008 2,593,882
Employee compensation payable 36 2,376,933 3,311,933
Taxes and levies payable 37 1,215,591 1,238,849
Other payables 38 24,190,352 19,386,888
Non-current liabilities due within a
39
one-year period 10,957,321 13,006,765
Other current liabilities 40 1,185,848 1,269,887
Total current liabilities 87,540,684 80,778,939
Non-current liabilities
Long-term borrowings 41 118,603,165 87,279,082
Bonds payable 42 12,006,851 13,066,281
Lease liabilities 43 4,461,383 1,102,072
Long-term payables 44 887,763 671,344
Long-term employee compensation
36
payable 472,538 669,931
Deferred income 45 2,468,145 2,361,205
Deferred income tax liabilities 25 1,319,428 3,158,986
Estimated liabilities 46 97,522 -
Total non-current liabilities 140,316,795 108,308,901
Total liabilities 227,857,479 189,087,840
Share capital 47 17,071,892 14,030,642
Other equity instruments 48 - 200,334
Capital reserves 49 12,522,793 6,079,267
Less: Treasury stock 50 1,314,581 1,885,557
Other comprehensive income 51 (811,822) (409,447)
Surplus reserves 52 3,712,273 2,550,173
Specific reserves 53 2,301 1,549
General risk reserve 54 8,934 8,934
Retained earnings 55 19,486,730 22,465,150
Total equity attributable to shareholders of
the parent company 50,678,520 43,041,045
Non-controlling interests 81,460,233 76,620,810
Total shareholders’ equity 132,138,753 119,661,855
Total liabilities and shareholders' equity 359,996,232 308,749,695
Person-in-charge Person-in-charge
Legal of financial of the financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
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 2022 2021
I. Total revenue 166,632,146 163,807,783
Including: Operating revenue 56 166,552,786 163,657,700
Interest income 57 79,360 150,083
Less: Cost of sales 56 151,925,489 131,156,314
Interest expenditures 57 23,530 34,936
Taxes and levies 58 640,302 647,935
Selling expenses 59 1,950,528 1,919,285
General and administrative expenses 60 3,540,611 4,393,320
R&D expenses 61 8,633,638 7,236,341
Financial expenses 62 3,422,895 3,727,915
Including: Interest expenses 4,468,008 4,125,399
Interest income 723,665 446,450
Add: Other income 63 2,917,794 1,967,750
Return on investment 64 4,731,394 3,904,526
Including: Return on investment in joint
ventures and associates 2,898,739 3,217,871
Exchange gain 57 17,914 (1,224)
Gain on changes in fair value 65 (139,244) (146,584)
Credit impairment loss 66 (37,653) (92,256)
Asset impairment loss 67 (3,486,523) (2,911,464)
Asset disposal income 68 (79,825) (40,434)
II. Operating profit 419,010 17,372,050
Add: Non-operating income 69 790,112 351,980
Less: Non-operating expenses 70 152,071 140,454
III. Gross profit 1,057,051 17,583,577
Less: Income tax expenses 71 (731,008) 2,608,048
IV. Net profit 1,788,059 14,975,529
(I) Classification by business continuity
1. Net profit from continuing operations 1,788,059 14,917,233
2. Net profit from discontinued operations - 58,296
(II) Classification by ownership
1. Net profits attributable to the shareholders
of the parent company 261,319 10,064,253
2. Net profit attributable to non-controlling
interests 1,526,740 4,911,276
5. Other comprehensive income, net of tax 51 (327,034) (244,003)
(I) Other comprehensive income that cannot
(18,149) (286,219)
be reclassified into profit or loss
(II) Other comprehensive income that may
subsequently be reclassified to profit or loss (308,885) 42,216
upon satisfaction of prescribed condition
VI. Total comprehensive income 1,461,025 14,731,526
Total comprehensive income attributable to
the shareholders of the parent company (141,056) 9,800,380
Total comprehensive income attributable to
non-controlling interests 1,602,081 4,931,146
VII. Earnings per share 72
(I) Basic earnings per share (RMB
yuan/share) 0.0191 0.7468
(II) Diluted earnings per share (RMB
yuan/share) 0.0185 0.7359
Person-in- Person-in-
charge charge of the
Legal of financial accounting
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
3
TCL Technology Group Corporation
Consolidated Cash Flow Statement
___________(RMB’000)_____________
Note V 2022 2021
I. Cash flow from operating activities:
Proceeds from sale of commodities and rendering of services 137,297,835 140,078,647
Net increase/(decrease) in customer deposits and deposits
(62,633) (2,184,083)
from other banks and financial institutions
Net increase/(decrease) in borrowings from central bank (659,386) 967,228
Interest, fees and commissions received 79,360 150,083
Tax and levy rebates 11,020,947 7,001,327
Cash generated from other operating activities 73 7,955,973 7,013,673
Sub-total of cash generated from operating activities 155,632,096 153,026,875
Payments for commodities and services (113,465,399) (100,881,893)
Net (increase)/decrease in loans and advances to customers 558,603 1,085,486
Net (increase)/decrease in deposits in central bank and other
36,327 (148,200)
banks and financial institutions
Cash paid to and for employees (10,696,682) (8,145,698)
Taxes and levies paid (3,916,226) (4,211,870)
Cash used in other operating activities 74 (9,722,343) (7,846,247)
Sub-total of cash used in operating activities (137,205,720) (120,148,422)
Net cash generated from operating activities 79 18,426,376 32,878,453
II. Cash flow generated from investing activities:
Proceeds from disinvestments 48,642,124 40,260,161
Proceeds from return on investments 1,100,618 2,125,675
Net proceeds from disposal of fixed assets, intangible assets
85,502 188,900
and other long-term assets
Net proceeds from disposal of subsidiaries and other business
79 1,432,795 1,164,590
units
Cash generated from other investing activities 75 170,387 33,083
Sub-total of cash generated from investment activities 51,431,426 43,772,409
Payments for the acquisition and construction of fixed assets,
(40,762,787) (30,855,133)
intangible assets and other long-term assets
Payments for investments (56,242,405) (41,931,051)
Net payments for acquiring subsidiaries and other business
79 (50,133) (4,139,505)
units
Cash used in other investing activities 76 (1,212,074) (479,761)
Subtotal of cash used in investing activities (98,267,399) (77,405,450)
Net cash used in investing activities (46,835,973) (33,633,041)
Person-in-charge Person-in-charge
Legal of financial of the financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
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 2022 2021
III. Cash flow generated from financing activities:
Capital contributions received 17,981,473 19,804,515
Including: Capital contributions by non-controlling
8,509,514 19,804,515
interests to subsidiaries
Borrowings raised 87,581,519 52,186,527
Net cash received from bonds issue 7,820,000 3,686,905
Cash generated from other financing activities 77 272,281 256,271
Sub-total of cash generated from financing activities 113,655,273 75,934,218
Cash paid for debt repayment (66,503,750) (49,819,646)
Cash paid for dividend and profit distribution or
(9,640,363) (7,296,551)
repayment of interests
Including: Dividends and profit paid by
(1,691,435) (362,852)
subsidiaries to minority shareholders
Cash used in other financing activities 78 (6,110,504) (6,035,517)
Subtotal of cash used in financing activities (82,254,617) (63,151,714)
Net cash generated from financing activities 31,400,656 12,782,504
IV. Effect of exchange rate changes on cash and cash
602,860 (154,628)
equivalents
V. Net increase in cash and cash equivalents 3,593,919 11,873,288
Add: Opening balance of cash and cash equivalents 30,081,705 18,208,417
VI. Closing balance of cash and cash equivalents 79 33,675,624 30,081,705
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
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)_____________
2022
Equity attributable to shareholders of the parent company
Appropriation
Other Other Non- Shareholder
Share Capital Treasury Special Surplus to Undistributed
equity comprehensive controlling equity
capital reserves stock Reserves reserves general risk profit
instruments income interests Total
reserve
I. Balance at the end of the prior
year 14,030,642 200,334 6,079,267 (1,885,557) 1,549 (409,447) 2,550,173 8,934 22,458,340 76,611,057 119,645,292
Add: Change in accounting policy - - - - - - - - 6,809 9,753 16,562
II. Balance 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 22,465,149 76,620,810 119,661,854
III. Movement of the period 3,041,250 (200,334) 6,443,526 570,976 752 (402,375) 1,162,100 - (2,978,420) 4,839,423 12,476,897
(I) Comprehensive income - - - - - (415,837) - - 261,319 1,602,081 1,447,564
(II) Capital contributed and
reduced by shareholders 3,041,250 (200,334) 7,822,900 570,976 - - - - - 8,109,948 19,344,740
1. Capital increased by
shareholders 3,041,250 - 6,668,566 - - - - - - 8,109,948 17,819,764
2. Share-based payments included
in owners' equity - - 26,559 76,664 - - - - - - 103,223
3. Amount of bond issuance
included in owners' equity (200,334) 1,127,775 997,083 - - - - - - 1,924,524
4. Others - - - (502,771) - - - - - - (502,771)
(III) Profit distribution - - - - 752 - 1,162,100 - (3,212,103) (2,962,104) (5,011,355)
1. Appropriation of surplus
reserves - - - - - - 1,162,100 - (1,162,100) (381,108) (381,108)
2. Appropriation of general risk
reserve - - - - 752 - - - - - 752
3. Appropriation to shareholders - - - - - - - - (2,050,003) (2,580,996) (4,630,999)
4. Others - - - - - - - - - - -
(IV) Transfers within owners’
equity - - - - - 13,461 - - (13,461) - -
1. Other comprehensive income
transferred into retained earnings - - - - - 13,461 - - (13,461) - -
(V) Others - - (1,379,374) - - - - - (14,174) (1,910,502) (3,304,050)
IV. Balance at the end of the
period 17,071,892 - 12,522,793 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,233 132,138,753
Person-in-charge of the
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian financial department: Peng Pan
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 parent company
Appropriation Shareholder
Other Other Non-controlling
Share T reasury Special to Undistributed equity
equity Capital reserves comprehensive Surplus reserves interests
capital stock Reserves general risk profit T otal
instruments income
reserve
I. Balance 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: Change in accounting policy - - - - - - - - - - - - - - - - -
II. Balance 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
III. Movement of the period (146) - (29,907) - 636,882 - 27,472 1,338 (263,874) - 97,281 - 8,548 8,455,655 20,671,538 - 29,604,787
(I) Comprehensive income - - - - - - - - (141,053) - - - - 10,064,253 4,931,148 - 14,854,348
(II) Capital contributed 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 contributed by holders of other
equity instruments - - (29,907) - 75,461 - 537,972 - - - - - - - - - 583,526
3. Share-based payments included in owners'
equity (146) - - - 2,823 - 118,559 - - - - - - - - - 121,236
4. Others - - 558,598 (629,059) - - - - - (1,878,122) (1,948,583)
(III) 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 reserve - - - - - - - 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)
(IV) T ransfers within owners’ equity - - - - - - - - (122,821) - (550) - - 123,371 - - -
1. Other comprehensive income transferred to
retained earnings - - - - - - - - (122,821) - (550) - - 123,371 - - -
IV. Balance 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 22,465,149 76,620,810 - 119,661,854
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng financial affairs: Li Jian financial department: Peng Pan
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 December 31, 2022 January 1, 2022
Current assets
Monetary assets 17,821,922 10,467,962
Held-for-trading financial
assets 5,936,208 4,372,557
Derivative financial assets 15,578 -
Accounts receivable 1 353,812 93,566
Prepayments 3,693 47,333
Other receivables 2 4,961,948 13,819,512
Inventories 5,380 41,029
Other current assets 34,838 15,011
Total current assets 29,133,379 28,856,970
Non-current assets
Long-term receivables 1,935,365 -
Long-term equity investments 3 76,360,371 71,303,126
Investments in other equity
4
instruments 5,000 5,000
Other non-current financial
5
assets 431,023 1,051,536
Investment property 81,034 84,795
Fixed assets 32,223 37,402
Construction in progress - 1,360
Right-of-use assets 428,575 452,398
Intangible assets 109,605 93,324
Long-term deferred expenses 24,069 26,079
Deferred income tax assets 7 12
Total non-current assets 79,407,272 73,055,032
Total assets 108,540,651 101,912,002
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
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)_____________
December 31,
Liabilities and shareholders' equity: Note XV January 1, 2022
2022
Current liabilities
Short-term borrowings 1,900,169 1,250,989
Accounts payable 140,563 141,877
Contract liabilities 308 23,823
Employee compensation payable 178,097 294,653
Taxes and levies payable 63,908 13,076
Other payables 22,036,683 38,597,139
Non-current liabilities due within a
one-year period 5,605,919 4,843,348
Other current liabilities 2,430 4,284
Total current liabilities 29,928,077 45,169,189
Non-current liabilities
Long-term borrowings 15,280,955 12,898,000
Bonds payable 9,922,133 11,159,524
Lease liabilities 748 13,365
Long-term employee compensation
payable 84,188 108,384
Deferred income 53,638 60,198
Total non-current liabilities 25,341,662 24,239,471
Total liabilities 55,269,739 69,408,660
Share capital 17,071,892 14,030,642
Other equity instruments - 200,334
Capital reserves 17,715,533 9,900,679
Less: Treasury stock 1,314,581 1,885,557
Other comprehensive income (128,195) (112,194)
Surplus reserves 3,510,209 2,348,109
Retained earnings 16,416,054 8,021,329
Total shareholders’ equity 53,270,912 32,503,342
Total liabilities and shareholders' equity 108,540,651 101,912,002
Person-in-
charge of
Person-in- the
charge financial
Legal of financial department
representative: Li Dongsheng affairs: Li Jian : Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
9
TCL Technology Group Corporation
Income Statement of the Company
___________(RMB’000)_____________
Note XV 2022 2021
I. Operating revenue 6 1,593,213 1,490,937
Less: Cost of sales 6 1,162,807 1,111,439
Taxes and levies 14,531 15,832
Selling expenses 54,059 35,458
General and administrative expenses 323,594 550,668
R&D expenses 171,276 171,151
Financial expenses 1,282,688 1,824,650
Including: Interest expenses 2,252,721 2,441,346
Interest income 771,483 685,498
Add: Other income 8,705 2,057
Return on investment 7 12,483,556 3,005,570
Including: Share of profit or loss of joint
ventures and associates 7 1,308,061 1,406,116
Gain on changes in fair value (24,134) 26,134
Credit impairment loss (266) (187)
Asset disposal income 1,540 36
II. Operating profit 11,053,659 815,349
Add: Non-operating income 575,077 223,830
Less: Non-operating expenses 7,737 60,875
III. Gross profit 11,620,999 978,304
Less: Income tax expenses - -
IV. Net profit 11,620,999 978,304
V. Other comprehensive income (16,001) (259,693)
VI. Total comprehensive income 11,604,998 718,611
Person-in- Person-in-
charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
10
TCL Technology Group Corporation
Cash Flow Statement of the Company
___________(RMB’000)_____________
Note
XV 2022 2021
I. Cash flow from operating activities:
Proceeds from sale of commodities and
rendering of services 1,357,318 1,286,514
Tax and levy rebates 1,781 -
Cash generated from other operating
activities 1,029,029 30,834,436
Sub-total of cash generated from operating
activities 2,388,128 32,120,950
Payments for commodities and services (1,054,192) (1,002,839)
Cash paid to and for employees (215,412) (162,489)
Taxes and levies paid (205,575) (196,647)
Cash used in other operating activities (12,757,279) (3,099,415)
Sub-total of cash used in operating
activities (14,232,458) (4,461,390)
Net cash generated from operating
8
activities (11,844,330) 27,659,560
II. Cash flow from investing activities:
Proceeds from disinvestments 14,882,100 27,292,959
Proceeds from return on investments 10,461,727 2,384,221
Net proceeds from disposal of fixed assets,
intangible assets and other long-term 24 -
assets
Sub-total of cash generated from
investment activities 25,343,851 29,677,180
Payments for the acquisition and
construction of fixed assets,
(39,001) (69,121)
intangible assets and other long-term
assets
Payments for investments (17,545,211) (35,551,461)
Cash used in other investing activities - -
Subtotal of cash used in investing activities (17,584,212) (35,620,582)
Net cash used in investing activities 7,759,639 (5,943,402)
Person-in- Person-in-
charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
11
TCL Technology Group Corporation
Cash Flow Statement of the Company (Continued)
___________(RMB’000)_____________
Note XV 2022 2021
III. Cash flow generated from financing activities:
Capital contributions received 9,471,959 -
Borrowings raised 23,388,555 11,900,000
Net cash received from bonds issue 7,820,000 3,686,905
Cash generated from other financing
activities 991,657 -
Sub-total of cash generated from financing
activities 41,672,171 15,586,905
Cash paid for debt repayment (26,733,600) (25,430,014)
Cash paid for distribution of dividends and (2,971,569)
profits or payment of interests (3,195,747)
Cash used in other financing activities (562,962) (642,381)
Subtotal of cash used in financing activities (30,492,309) (29,043,964)
Net cash generated from financing activities 11,179,862 (13,457,059)
IV. Effect of exchange rate changes on cash and
cash equivalents 73,720 (54,006)
V. Net increase in cash and cash equivalents 7,168,891 8,205,093
Add: Opening balance of cash and cash
2,196,283
equivalents 10,401,379
VI. Closing balance of cash and cash equivalents 9 17,570,270 10,401,376
Person-in- Person-in-
charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Peng Pan
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)_____________
2022
Other Total
Other equity Capital Treasury comprehensive Surplus shareholders’
Share capital instruments reserves stock income reserves Retained earnings equity
I. Balance at the end of the prior year 14,030,642 200,334 9,900,679 (1,885,557) (112,194) 2,348,109 8,021,329 32,503,342
Add: Change in accounting policy - - - - - - -
II. Balance 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
III. Movement of the period 3,041,249 (200,334) 7,810,865 570,976 (16,001) 1,162,100 8,394,725 20,763,581
(I) Comprehensive income - - - - (16,001) - 11,620,999 11,604,998
(II) Capital contributed and reduced
by shareholders 3,041,249 (200,334) 7,823,531 570,976 - - - 11,235,423
1. Capital contributed by owners 3,041,249 - 6,668,566 - - - - 9,709,816
2. Capital contributed by holders of
other equity instruments - - - - - - - -
3. Share-based payments included in
owners' equity - - 27,190 76,664 - - - 103,854
4. Amount of bond issue included in
owners' equity (200,334) 1,127,775 997,083 - - - 1,924,524
5. Others - - - (502,771) - - - (502,771)
(III) Profit distribution - - (12,666) - - 1,162,100 (3,212,103) (2,062,669)
1. Appropriation of surplus reserves - - - - - 1,162,100 (1,162,100) -
2. Appropriation to shareholders - - - - - - (2,050,003) (2,050,003)
3. Others - - (12,666) - - - - (12,666)
(IV) Others - - 3,989 - - - (14,171) (10,182)
IV. Balance at the end of the period 17,071,891 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng financial affairs: Li Jian financial department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
13
TCL Technology Group Corporation
Statement of Changes in Shareholder Equity of the Company (Continued)
___________(RMB’000)_____________
2021
Other Total
Other equity Capital Treasury comprehensive Surplus shareholders’
Share capital instruments reserves stock income reserves Retained earnings equity
I. Balance 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: Change in accounting policy - - - - - - - -
II. Balance 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
III. Movement of the
period (146) (29,907) 53,844 27,472 (254,192) 97,281 (750,065) (855,713)
(I) Comprehensive income - - - - (259,690) - 978,304 718,614
(II) Capital contributed and
reduced by shareholders (146) (29,907) 53,844 27,472 - - - 51,263
1. Capital contributed by owners - - - - - - - -
2. Capital contributed by holders
of other equity instruments - (29,907) 75,461 537,972 - - - 583,526
3. Share-based payments included
in owners' equity (146) - (3,278) 118,560 - - 115,136
4. Others - - (18,339) (629,060) - - (647,399)
(III) Profit distribution - - - - - 97,831 (1,723,421) (1,625,590)
1. Appropriation of surplus
reserves - - - - - 97,831 (97,831) -
(1,625,590
2. Appropriation to shareholders - - - - - - (1,625,590) )
3. Others - - - - - - - -
(IV) Transfers within owners’
equity - - - - 5,498 (550) (4,948) -
1. Other comprehensive income
transferred into retained earnings - - - - 5,498 (550) (4,948) -
IV. Balance 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
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng financial affairs: Li Jian financial department: Peng Pan
The attached notes to the financial statements form an integral part of the financial statements.
14
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
I General information
(I) Place of incorporation and organizational structure
TCL Technology Group Corporation (hereinafter referred to as the “Company”) is a limited liability
company incorporated in the People's Republic of China (hereinafter referred to as "China") on July
17, 1997 under the Corporate Law of the People's Republic of China (hereinafter referred to as
“Corporate Law”). As per the approval documents of YBH [2002] No. 94 and YFH [2002] No. 134
issued by the People’s Government of Guangdong Province, and YJMH [2002] No. 112 and YJMH
[2002] No. 184 issued by the Economic and Trade Commission of Guangdong Province, the Company
was changed to a joint stock limited company with a registered capital of RMB1,591,935,200, which
was approved by Guangdong Province Administration for Industry and Commerce on April 19, 2002.
The registration number is 4400001009990.
Upon approval of ZJFXZ [2004] Document No. 1 issued by the China Securities Regulatory
Commission (CSRC) on January 2, 2004, the Company was permitted to issue 590,000,000 shares to
the public on January 7, 2004 and 404,395,944 ordinary shares denominated in RMB (A shares) to all
public shareholders of TCL Communication Equipment Co., Ltd. (hereinafter referred to as " TCL
Communication Equipment") in a stock-for-stock deal, which were listed on the Shenzhen Stock
Exchange on January 30, 2004. The shares issued to the public were all priced online, with a par value
of RMB1 and an issue price of RMB4.26 per share, raising a total of RMB2,513,400,000. Upon the
completion of this deal, the registered capital of the Company increased to RMB2,586,331,144, and
on July 16, 2004, the Company was approved by the Guangdong Province Administration for Industry
and Commerce to change its business license to Business License QGYZZ No. 003362. Upon the
completion of the shareholder structure reform and the expiration of the share lockup period, the
foreign shareholding ratio in the Company was less than 10%. On September 11, 2007, the Company
was approved by Guangdong Province Administration for Industry and Commerce to change its
business license to Business License No. 440000000011990.
Upon the approval of the CSRC on January 7, 2009 with the ZJXK [2009] Document No. 12, the
Company privately placed 350,600,000 ordinary shares denominated in RMB (A shares) to designated
investors on April 23, 2009, with a par value of RMB1 and an issue price of RMB2.58 per share,
raising a total of RMB904,548,000. Upon the completion of 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 ordinary shares denominated in RMB (A shares) to
designated investors on July 26, 2010, with a par value of RMB1 and an issue price of RMB3.46 per
share, raising a total of RMB4,502,076,824.58. Upon the completion of this deal, the registered capital
of the Company increased from RMB2,936,931,144 to RMB4,238,109,417, and on September 19,
2010, the Company was approved by Guangdong Province Administration for Industry and
Commerce to change its business license to Business License No. 440000000011990.
On May 19, 2011, the Company carried out a bonus issue of 10 additional shares for every 10 shares
to all the shareholders with capital reserves, representing a total of 4,238,109,417 new shares, with a
par value of RMB1 per share. Upon the completion of this bonus issue, the registered capital of the
Company increased from RMB4,238,109,417 to RMB8,476,218,834, and on June 27, 2011, the
Company was approved by Huizhou Administration for Industry and Commerce to change its
business license to Business License No. 440000000011990.
During the years of 2013 and 2014, the exercise of 58,870,080 stock options increased the total share
capital of the Company from 8,476,218,834 shares to 8,535,088,914 shares.
15
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
I General information (continued)
(I) I Place of incorporation and organizational structure (continued)
Upon the approval of the CSRC on February 13, 2014 with the［2014］ Document No. 201,
the Company privately placed 917,324,357 ordinary shares denominated in RMB (A shares) to
designated investors on April 30, 2014, with a par value of RMB1 and an issue price of
RMB2.18 per share, raising a total of RMB1,999,767,098.26. Upon the completion of this deal,
the registered capital of the Company increased from RMB8,535,088,914 to
RMB9,452,413,271, and on June 10, 2014, the Company was approved by Huizhou
Administration for Industry and Commerce to change its business license to Business License
No. 440000000011990.
In 2015, 48,357,920 stock options were exercised under an incentive plan of the Company, and
upon approval by the CSRC on January 28, 2015 with the ZJXK [2015] Document No.151, the
Company issued 2,727,588,511 shares in a private placement. As such, the total share capital of
the Company increased from 9,452,413,271 shares to 12,228,359,702 shares.
In 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).
In 2017, the Company purchased an interest in subsidiary TCL China Star Optoelectronics
Technology Co., Ltd. by means of a new issue of 1,301,290,321 shares. Upon the completion
of this deal, the total share capital of the Company increased from 12,213,681,742 shares to
13,514,972,063 shares.
In 2018, the Proposal on the Grant of Restricted Stock to Awardees was approved at the 7th
Meeting of the 6th Board of Directors, and a total of 34,676,444 shares were subscribed for
under the restricted 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 in lockup. As such, the total share capital of the Company decreased
from 13,549,648,507 to 13,528,438,719 shares.
In 2020, the Proposal on the Intended Change of the Company’s Full Name and Stock Name
were approved respectively at the 23rd Meeting of the 6th Board of Directors and the First
Extraordinary General Meeting of 2020. The name of the Company was then changed from
“TCL Corporation” to “TCL Technology Group Corporation” (abbreviation from “TCL
CORP.” to “TCL TECH.”）since February 7, 2020, with the stock name changed from “TCL
CORP.” to “TCL TECH.”, while the stock code “000100” remained unchanged.
In July 2020, the Company repurchased and retired 9,159,308 restricted shares that had been
granted under the 2018 and 2019 Restricted Stock Incentive Plans but were still in lockup. As
such, the total share capital of the Company decreased from 13,528,438,719 to 13,519,279,411
shares.
In October 2020, the Company issued 511,508,951 new shares to acquire the non-controlling
interest in subsidiary Wuhan China Star Optoelectronics Technology Co., Ltd. Upon the
completion of this deal, the total share capital of the Company increased from 13,519,279,411
shares to 14,030,788,362 shares.
16
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
I. General information (continued)
In September 2021, the Company repurchased and retired 145,941 restricted shares that had
been granted under the 2019 Restricted Stock Incentive Plans but were still locked up. As
such, the total share capital of the Company decreased from 14,030,788,362 to
14,030,642,421 shares.
During 2022, investors of TCL Directional II Convertible bonds exercised their rights of
conversion resulting in additional issue of 235,120,702 shares, and the total share capital of
the Company increased from 14,030,642,421 shares to 14,265,763,123 shares.
In December 2022, the Company issued 2,806,128,484 ordinary shares denominated in
RMB to specific investors in a non-public offering with the approval of the ZJXK [2022]
No. 1658 issued by the China Securities Regulatory Commission, resulting in an increase
of 2,806,128,484 shares in total share capital of the Company to 17,071,891,607 shares
from 14,265,763,123 shares.
As of December 31, 2022, the total issued share capital of the Company was 17,071,891,607
shares. See note V. 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.
(II) Scope of business
The Company and its subsidiaries (collectively referred to as the “Company”) are primarily
engaged in the research, development, production and sales of semi-conductors, electronic
products and communication devices, new optoelectronic products, liquid crystal display
devices, import and export of goods and technologies (excluding goods and technologies
that are prohibited from import and export or require an administrative approval for import
and export), venture capital business and venture capital consultation, entrepreneurial
management services for start-up enterprises, participation in the initiation of venture
capital institutions and investment management advisory institutions, immovable property
leasing, IT services, conference services, computer technical services and development
service of electronic products and technologies, development and sale of software, patent
transfer, customs clearance services, consulting services, payments and settlements (where
any approval from any relevant department is required according to law, it must be obtained
before carrying out the relevant operations activities).
(III) Authorization of financial statements for issue
17
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
These financial statements were authorized for issue by the Company’s Board of Directors
on March 30, 2023.
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 "Accounting Standards for Business Enterprises - Basic
Standards" published by the Ministry of Finance and specific corporate accountin g
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.
18
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 Accounting Standards
for Business Enterprises, and truly and completely reflect the financial position, operating
results, cash flow and other relevant information of the Company during the Reporting Period.
4 Accounting period
The Company adopts the calendar year as accounting year, and its fiscal year is from January 1
to December 31 of the Gregorian calendar.
5 Operations cycle
The Company does not take the operating cycle as the criteria for liquidity classification of
assets and liabilities.
6 Functional currency for bookkeeping
The functional currency for bookkeeping and the preparation of financial statements are all
denominated in RMB, and are presented in the unit of RMB’000 in all the tables herein unless
otherwise specified.
7 Accounting treatments for business combinations involving enterprises under and not under common
control
(1) When the terms, conditions and economic influence of transactions in the process of a step-by-
step combination conform to one or more of the following, multiple transactions will be
accounted for as a package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
These transactions can only achieve a complete business outcome when they are accounted for
(b)
collectively;
The occurrence of a transaction depends on the occurrence of at least one of the other
(c)
transactions;
A transaction is uneconomical individually, but is economical when considered collectively
(d)
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 based
on the book value of assets and liabilities of the combined party on the date of combination
(including the goodwill of the ultimate controlling party resulting from the acquisition of the
combined party). The difference between the book value of net assets acquired in the
combination and 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
provision or assets, the difference between the estimated amount of liabilities or assets and the
settlement amount of subsequent contingent consideration is used to adjust the capital reserve
(capital stock premium), and when the capital reserve is insufficient, it is used to adjust the
retained earnings.
19
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under
7
common control (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 liabilit ies
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 based on the book value of the owner's equity of the combined party in the
consolidated financial statements of the ultimate controlling party.
In 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.
20
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under
7
common control (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 book value is recognized in profit or loss. Where
a future event that may affect the combination costs is agreed in the combination contract,
if the estimated future events are likely to occur on the date of purchase and the amount of
the impact on combination costs can be reliably measured, it is also included in the
combination costs.
The agency fees paid for audits, legal services, assessments and consultations and other
directly related expenses incurred in the business combination are recognized in profit or
loss during the period in which they are incurred. The transaction costs for the issuance of
equity securities for the business combination that may be directly attributed to equity
transactions can be deducted from equity;
The difference between the higher combination cost and lower fair value of net identifiable
assets of the acquired party gained in the combination is recognized as goodwill by the
Company. In case that the cost of combination is less than the fair value of the net
identifiable assets of the acquired party gained in the combination, and the difference is still
less than the fair value of net identifiable assets of the acquired party gain in the combination
after review, the difference is included in the current profit and loss by the Company.
In 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 using equity method, the sum of the book value of equity
investments of the acquired party held before the date of acquisition plus the new
investment cost on the date of acquisition is recognized as the initial cost of the investment;
the remaining comprehensive income confirmed in equity investments using equity method
before the date of acquisition is accounted for, when the investment is disposed, on the same
basis as those the invested party adopted directly to dispose of the relevant assets or
liabilities.
If the equity investment held before the date of combination is accounted for by financial
instrument recognition and measurement criteria, the sum of the fair value of equity
investment on the date of combination plus the new investment cost is taken as the initial
investment cost on the date of combination. The difference between the fair value and the
book value of the original equity interest, and the accumulated fair value changes originally
included in other comprehensive income should be transferred to return on investment in
the current period of combination date.
(b) In the consolidated financial statements, the equity of the acquired party held before the
date of acquisition is re-measured based o the fair value of the equity on the date of
acquisition. The difference between the fair value and the book value is included in the
current return on investment; if the equity of the acquired party held before the date of
acquisition involves other comprehensive income, etc. under the equity method, other
comprehensive income, etc. related to it is converted into return on investment in the current
period of the acquisition date.
21
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 those of the Company. If the accounting
policies or accounting periods adopted by the subsidiaries are inconsistent with those of the
Company, necessary adjustments will be made in accordance with the Company's accounting
policies and accounting periods when preparing consolidated financial statements. The 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 intracompany transactions between the Company and its subsidiaries, and
intracompany transactions between subsidiaries, on the consolidated balance sheet, consolidated
income statement, consolidated cash flow statement and consolidated statement of changes in
shareholders' equity is offset in the preparation of consolidated financial statements.
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 invested party due to disposal of part of the equity
investment or other reasons, the remaining equity investment after disposal will be re-measured
based on its fair value by the Company on the date of loss of control. The difference of the sum of
the consideration obtained from the disposal of the equity and the fair value of the remaining equity,
less the sum of the share of net assets and goodwill of the original subsidiary that should be enjoyed
in accordance with the original share-holding ratio since the date of acquisition or combination, is
accounted for the return on investment in the current period of loss of control. Other comprehensive
income or net profit and loss related to the original subsidiary's equity investment, other
comprehensive income and other changes in owners' equity other than profit distribution, will be
converted into current return on investment when control is lost, except for other comprehensive
gains arising from the re-measurement of net liabilities of the Benefit Plan made by the invested
party or changes in net assets.
22
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 shows that the parties have rights to the assets,
and obligations for the liabilities, relating to the arrangement.
② The contractual terms of the joint arrangement stipulates that the parties have rights to
the assets, and obligations for the liabilities, relating to the arrangement.
③ Other relevant facts and circumstances show that the parties have rights to the assets,
and obligations for the liabilities, relating to the arrangement. For example, the parties enjoy
all the output substaintially 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 method for joint operations
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.
23
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 “Retained earnings” item, are translated at
the spot exchange rate at the time of occurrence of the items. All the incurred items in the
income statement are translated at the current average exchange rate of the period in which
transactions occur.
The translation differences of foreign currency financial statement arising from the above
translation are included in other comprehensive income. When disposing of an overseas
operation, the translation differences in the foreign currency financial statements related to
the 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.
24
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
25
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 followin g
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.
26
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 initially whether similar mixed contracts need to be split, it is
substantially clear that embedded derivatives contained in them should not be split without
analysis. If the prepayment right embedded in a loan allows the holder to prepay the loan at
an amount close to the amortized cost, the prepayment right does not need to be split.
The Company carries out subsequent measurement of such financial assets at fair value,
and includes gains or losses arising from changes in fair value as well as dividends and
interest income associated with such financial assets into current profits and losses.
The Company reports such financial assets as held-for-trading financial assets and other
non-current financial assets according to their liquidity.
27
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 substance reflected by the financial instrument issued, rather than only in legal
form, in combination with the definitions of financial liabilities and equity instruments.
Financial liabilities are classified at initial recognition as measured at fair value through
profit or loss, or other financial liabilities, or derivatives designated as effective hedging
instruments.
Financial liabilities are measured at fair value upon initial recognition. For financial
liabilities at fair value through profit or loss, relevant transaction expenses are directly
included in current profits and losses; for other categories of financial liabilities, relevant
transaction expenses are included in the initial recognition amount.
Subsequent measurement of financial liabilities depends on their classification:
(a) Financial liabilities at fair value through profit or loss
Such financial liabilities include held-for-trading financial liabilities (including derivatives
falling under financial liabilities) and financial liabilities designated as measured at fair
value upon initial recognition and through profit or loss.
A financial liability is a held-for-trading financial liability if it is mainly undertaken for
recent sale or repurchase, or is part of the identifiable portfolio of financial instruments
centrally managed, and there is objective evidence that the enterprise has recently employed
a short-term profit model, or is a derivative instrument, except derivatives designated as
effective hedging instruments and derivatives conforming to financial guarantee contracts.
Held-for-trading financial liabilities (including derivatives falling under financial
liabilities) are subsequently measured at fair value. All changes in fair values except for
hedging accounting are included in current profits and losses.
The Company irrevocably designates financial liabilities as measured at fair value through
profit or loss at the time of initial recognition in order to provide more relevant accounting
information, provided:
① Such financial liabilities can eliminate or significantly reduce accounting mismatches.
② The financial liability portfolio or the portfolio of financial assets and liabilities is
managed and evaluated for performance on the basis of fair value according to the enterprise
risk management or investment strategy stated in the official written documents, and is
reported to key management personnel within the enterprise on this basis.
The Company subsequently measures such financial liabilities at fair value. Apart from
changes in fair value that are brought about by changes in the Company’s own credit risk
and included in other comprehensive income, other changes in fair value are included in
current profits and losses. Unless including such changes in other comprehensive income
will cause or expand accounting mismatch in profit or loss, the Company will include all
changes in fair value (including the amount affected by changes in its own credit risk) in
current profits and losses.
28
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 hereof, and
loan commitments that do not fall under category (1) hereof and lend at a below-market
interest rate.
Financial guarantee contracts refer to contracts that require the issuer to pay a specific
amount to the contract holder who has suffered losses when a specific debtor fails to pay
the debt in accordance with the original or modified terms of the debt instrument. Financial
guarantee contracts that are not financial liabilities designated as measured at fair value
through profit or loss are measured after initial recognition according to the loss reserve
amount and of the initial recognition amount, less the accumulated amortization amount
during the guarantee period, whichever is higher.
(3) Derecognition of financial assets and liabilities
Financial asset are derecognized, i.e. written off from its account and balance sheet if any
(a)
of the following conditions is met:
① The contractual right to receive cash flow from the financial asset is terminated; or
② The financial asset has been transferred, which meets the requirements for derecognition
of financial assets.
(b) Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part thereof) has been discharged, such
financial liability (or part thereof) is derecognized.
The existing financial liability is derecognized with a new one recognized, and the
difference between the carrying amount and the consideration paid (including transferred
non-cash assets or assumed liabilities) is included in the current profits and losses, if an
agreement is signed between the Company and the lender to replace the existing financial
liability by assuming a new one, and the contract terms of these two financial liabilities are
substantially different, or the contract terms of the existing financial liability (or part
thereof) are substantially modified.
If the Company repurchases part of a financial liability, the carrying amount of the financial
liability shall be distributed according to the proportion of the fair value of the continuing
recognition portion and the derecognition portion to the overall fair value on the repurchase
date. The difference between the carrying amount allocated to the derecognized portion and
the consideration paid (including transferred non-cash assets or liabilities assumed) shall be
included in the current profits and losses.
29
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 risks and rewards of the financial asset ownership are substantially retained, such
(b)
financial asset shall continue to be recognized.
(c) In circumstances where the Company neither transfers nor retains risks and rewards of the
financial asset ownership substantially (i.e. circumstances other than ① and ② of this
article), based on whether it retains control over such financial asset,
① the financial asset shall be derecognized, and the rights and obligations generated or
retained in the transfer shall be separately recognized as assets or liabilities if such control
is not retained; or
② the relevant financial asset shall continue to be recognized to the extent that it continues
to be involved in the transferred financial asset, and the relevant liabilities shall be
recognized accordingly if such control is retained. The extent that it continues to be involved
in the transferred financial asset refers to the extent the Company bears the risks or rewards
on changes in the value of the transferred financial asset.
When judging whether the transfer of financial assets meets the above conditions for
derecognition of financial assets, the principle of substance over form shall be adopted. The
Company divides the transfer of financial assets into overall transfer and partial transfer.
If the overall transfer of financial assets meets the conditions for derecognition, the
(a) difference between the following two amounts shall be included in the current profits and
losses:
① The carrying amount of the transferred financial asset on the date of derecognition.
② The sum of the consideration received for the transfer of financial assets and the amount
of the respective derecognized portion of the accumulated changes in fair value originally
included in other comprehensive income directly (the financial assets involved in the
transfer are financial assets at fair value through other comprehensive income).
(b) If the financial asset is partially transferred and the transferred part meets the conditions for
derecognition, the carrying amount of the financial asset before transfer shall be allocated
between the derecognition portion and the continuing recognition portion (in this case, the
retained service asset shall be regarded as the continuing recognition part of the financial
asset) according to the respective relative fair values on the transfer date, and the difference
between the following two amounts shall be included in the current profits and losses:
① The carrying amount of the derecognized portion on the derecognition date.
② The sum of the consideration received for the derecognized portion and the amount of
the corresponding derecognized portion of the accumulated changes in fair value originally
included in other comprehensive income (the financial assets involved in the transfer are
financial assets at fair value through other comprehensive income).
30
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
31
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
32
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
33
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 expected credit losses of financial instruments is assessed individually and collective ly.
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.
34
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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:
The Company has the legal right, which is currently enforceable, to offset the confirmed
(a)
amount;
The Company plans to settle on a net basis, or realize the financial assets and settle the
(b)
financial liabilities at the same time.
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.
35
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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, work in progress, finished goods,
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.
36
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(3)
inventory valuation 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 expenses of the
inventory less the estimated sales cost and relevant taxes and fees; for material inventories
that need to be processed, in the normal production and operations process, the net
realizable value is determined by the amount of the estimated selling expenses of finished
products produced less the estimated cost occurred at the time of completion, the estimated
selling expenses and related taxes; for inventories held for the execution of sales contracts
or labor contracts, the net realizable value is calculated on the basis of the contract price,
and if the quantity of inventories held is more than the quantity specified in sales contracts,
the net realizable value of excess inventories is calculated based on the general sales price.
At the end of the period, inventory valuation allowance is accrued according to individual
inventory items; but for a large number of inventories with lower unit prices, inventory
valuation allowance is accrued according to inventory category; for inventories related to
the product series produced and sold in the same region with the same or similar end use or
purpose, which is difficult to measure separately from other items, thus inventory valuation
allowance is accrued and combined with other items.
If the influencing factors of the write-down of inventory value have disappeared, the amount
written-down is recovered and reversed to the amount of inventory valuation allowance
already accrued, and the amount reversed is included in the current profit and loss.
(4) Inventory system
The Company adopts a perpetual inventory system for inventory management.
(5) Amortization method of turnover materials
The Company 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.
37
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
income tax assets, financial assets regulated by the relevant accounting standards of
financial instruments, and rights arising from insurance contracts regulated by the relevant
accounting standards of insurance contracts.
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.
38
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 shareholders' 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 net identifiable assets of the acquired party acquired in the
combination is recognized as goodwill; the difference between the lower combination cost
and higher fair value of net identifiable assets of the acquired party acquired in the
combination is included in current profits and losses after review. For business
combination involving enterprises not under common control realized step by step through
multiple transactions, the sum of the book value of equity investment held by the acquire r
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.
39
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 provision are recognized according to the estimated obligations and
included in the current investment losses.
If the investee realizes profit in the future period, the Company shall, after deducting the
unconfirmed loss share, conduct the process in the reverse order of the above to write down the
book balance of the 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.
40
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 they are accounted
for collectively;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other
transactions;
(d) A transaction is uneconomical individually, but is economical when considered
collectively with other transactions.
When an enterprise loses control over the original subsidiary due to disposal of part of the
equity investment or other reasons, if the transactions do not belong to a package
transaction, the accounting treatment of individual financial statements and consolidated
financial statements should be distinguished as follows:
(a) In the individual financial statements, the disposed equity should be accounted for in
accordance with the "Accounting Standards for Business Enterprises No. 2 - Long-term
Equity Investment"; meanwhile, the remaining equity should be recognized as long-term
equity or other related financial assets based on its 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.
41
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
42
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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, installat ion
and professional services, etc. When determining the cost of fixed assets, discard expenses
should be considered. Subsequent expenditures related to fixed assets that satisfy the
recognition criteria of fixed assets are included in the cost of fixed assets; otherwise, they
are recognized in profit and loss in the period in which they arise.
Fixed assets are depreciated by the straight-line method. The depreciation rate of various
fixed assets is determined according to the estimated service life and estimated residual
value (the estimated residual value is 0-10% of the original value). The depreciation rate of
classified fixed assets is as follows:
Annual
Estimated Service
Asset Category Deprecia
Life
tion Rate
2.22%-
Houses and buildings 20-50 years
5%
11.11%-
Machinery equipment 5-10 years
20%
22.22%-
Office and electronic equipment 2-5 years
50%
22.22%-
Transportation equipment 3-5 years
33.33%
4.44%-
Photovoltaic power stations 20-25 years
5%
22.22%-
Others 4-5 years
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.
43
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(3)
ready for the intended usable or saleable state have commenced.
When an asset satisfied the capitalization conditions is abnormally interrupted during the
process of acquisition, construction or production and the interruption period lasts for more
than three months, the capitalization of the borrowing costs is suspended and recognized
as the current expenses until the acquisition, construction or production of the assets starts
again. When an asset satisfied the capitalization conditions is ready for its intended use or
sale, the capitalization is stopped and the borrowing costs incurred in the future are included
in the current profit and loss. The period of capitalization refers to the period from the time
when the borrowing costs start to be capitalized to the point when the capitalization is
stopped, and the period in which the borrowing costs are suspended for capitalization is not
included.
During the period of capitalization, if special borrowings are made for the acquisition,
construction or production of assets eligible for capitalization, the amount of the interest
expenses actually incurred during the current period of the special borrowings, less the
amount of interest income earned by depositing unused borrowing funds in a bank or
investment income earned by temporary investment, is recognized as the amount of
capitalization. When a general loan is occupied for the purpose of purchasing, constructing
or producing assets satisfied the capitalization conditions, the amount of capitalization is
determined according to the weighted average of the accumulated asset expenditure
exceeding the special loan portion multiplied by the capitalization rate of the general loan
occupied; the capitalization rate is determined based on the weighted average interest rate
of general borrowings.
44
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
45
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Land use rights
operating years of the Company
Patents and non-patent 10 years or the shorter of service life, beneficiary
technologies years and legally valid years
Others Beneficiary period
The Company reviews the service life and amortization method of intangible assets with
limited service life at least at the end of each year, and made adjustment if necessary.
If an intangible asset is foreseen as unable to bring economic benefits to the Company, it
is regarded as an intangible asset with an indefinite service life, which will be reviewed in
each accounting period. If evidence indicates that the service life of the intangible asset is
limited, then it is converted to an intangible asset with limited service life. Intangible assets
with indefinite service lives are not amortized.
The expenditures of the Company's internal research and development projects are
classified into expenditures in the research phase and expenditures in the development
phase. Research means an original, planned survey of acquiring and understanding new
scientific or technical knowledge. Development means the application of research results
or other knowledge to a plan or design to produce new or substantially improved materials,
devices, products, etc. prior to commercial production or use.
The expenditures in the research phase of the Company's internal research and
development projects are included in the current profit and loss when incurred;
expenditures in the development phase are recognized as intangible assets only when the
following conditions are all satisfied:
(1) It is technically feasible to complete the intangible asset to enable it to be used or sold;
(2) There is intent to complete the intangible asset and use or sell it;
(3) The intangible assets can bring economic benefits;
(4) There are sufficient technical, financial and other resources to support the development of
the intangible assets as well as ability to use or sell the intangible assets;
Expenditures attributable to the development stage of the intangible asset can be measured
(5)
in a reliable way.
If the above conditions cannot be all satisfied, the expenditures are included in the current
profit and loss when incurred.
46
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
III Significant accounting policies and accounting estimates (continued)
28 Long-term deferred expenses
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.
47
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
48
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 provision.
(1) Recognition standards for provision
When an obligation related to the contingent events satisfies all the following conditions,
it is recognized by the Company as provision:
(a) The obligation is the current obligation of the Company;
The fulfillment of the obligation is likely to cause economic benefits to flow out of the
(b)
Company;
(c) The amount of the obligation can be measured in a reliable way.
(2) Measurement methods for provision
The provision 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 provision 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 provision.
49
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(a)
of substantive fixed payments;
(b) Variable lease payments that depend on indexation or ratio;
The exercise price of the purchase option, when applicable, if the Company is reasonably
(c)
certain that the option will be exercised;
(d) The amount required to be paid to exercise the option to terminate the lease if the lease
term reflects that the Company will exercise the option to terminate the lease;
The estimated amount payable based on the secured residual value provided by the
(e)
Company.
The Company calculates the interest expenses of lease liabilities for each period within the
lease term at a fixed rate of discount and includes them in profit or loss for the current
period or cost of the related assets.
Variable lease payments that are not included in the measurement of lease liabilities should
be included in profit or loss for the current period or cost of the related assets when they
are actually incurred.
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.
50
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(a)
resulting economic benefit;
The client is able to control the commodities under construction during the Company’s
(b)
fulfillment;
(c) Commodities generated from the Company’s fulfillment possess irreplaceable purpose and
the Company has the right to charge all fulfilled performance obligations within the whole
contract period; otherwise, the Company shall recognize corresponding revenue when the
client obtains the control over relevant commodities or services.
For any performance obligation with a certain period, the Company shall apply the output
method/input method to determine the appropriate fulfillment schedule based on the
specific nature of commodities and services. The output method is to determine the
fulfillment schedule according to the value of commodities transferred to the client (while
the input method is to determine the fulfillment schedule according to the Company’s input
to fulfill the performance obligation). If the fulfillment schedule cannot be reasonably
determined and the Company’s costs are predicted to be compensated, corresponding
revenue shall be recognized based on the specific cost amount until the fulfillment schedule
could be reasonably determined.
51
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
52
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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;
The cost adds various resources that can be applied by the Company to fulfill due
(b)
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.
53
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 day-to-day activities of the enterprise, the R&D and VAT -
related subsidies and the taxation, or operation-based incentive government subsidies are
included in other income; other government grants are written off against related costs
based on the substance 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.
54
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(2) in 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
(1)
amount of 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.
Deferred income tax assets and liabilities are presented on a net basis after, provided the
following conditions are met:
(1) An enterprise has the legal right to settle current income tax assets and liabilities on a net basis;
Deferred income tax assets and liabilities relate to income taxes levied by the same taxing
authority on either the same taxable entity or different taxable entities which intend to either
settle current tax assets and liabilities on a net basis, or to realize the assets and settle the
(2)
liabilities simultaneously, in each future period in which significant amounts of deferred tax
assets or liabilities are reversed.
55
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(a) constitute a package deal, and if they are not considered as a whole, the overall business
purpose cannot be understood.
The consideration amount of one contract among the two or multiple contracts depends on
(b)
the pricing or performance of other contracts.
(c) The rights to use assets transferred by the two or multiple contracts constitute one single
lease.
(3) Accounting treatment with the Company as lessee
On the commencement date of the lease term, the Company recognises the right-of-use
assets and lease liabilities for the lease, unless it is a simplified short-term lease or low-
value asset lease.
(a) Short-term leases and low-value asset leases
A short-term lease refers to a lease that does not include a purchase option and whose lease
term does not exceed 12 months. A low-value asset lease refers to a lease where the value
will be low when a single leased asset is a new asset.
The Company does not recognize the right-of-use assets or lease liabilities for the
following short-term leases and low-value asset leases. In each period within the lease
term, the relevant lease payments are included in cost of the related assets or profit or loss
for the current period on a straightline basis or according to other systemic and reasonable
methods.
Item Simplified leased asset type
Short-term lease A lease whose lease term does not exceed 12 months from the
commencement date of the lease term
Low-value asset An asset lease with a value of less than RMB40,000 or its foreign
lease currency equivalents
56
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(b)
and Note III, 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.
57
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
58
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
(a)
Enterprises No. 15 on the 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 from January 1, 2021 to the first implementation date, the
Company has made retrospective 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
Balance Sheet items Accumulated amount After the
Before the Change
impacted before change Change
Fixed assets 113,579,297 19,486 113,598,783
Deferred income tax
assets 2,153,346 (2,923) 2,150,423
Retained earnings 22,458,340 6,810 22,465,150
Non-controlling
interests 76,611,057 9,753 76,620,810
59
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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:
Items presented in 2021
the income statement Accumulated amount
After the
and cash flow Before the Change impacted before
Change
statement change
Revenue 163,540,560 117,140 163,657,700
Cost of sales 131,058,658 97,656 131,156,314
Income tax expense 2,605,125 2,923 2,608,048
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.
Impact of the adoption of Interpretation to Accounting Standards for Business Enterprises
(b)
No. 16 on the Company
On December 13, 2022, the Ministry of Finance ("MOF") issued the Interpretation No. 16
of the Accounting Standards for Business Enterprises (CK [2022] No. 31, hereinafter
referred to as the "Interpretation No. 16"), clarifying the acocunting treatment for three
items thereof:: "Accounting treatment that the deferred income taxes associated with assets
and liabilities arising from a single transaction is not subject to the initial recognition
exemption" is effective from January 1, 2023, which allows companies to implement the
exemption earlier than the year of publication, but the Company did not implement the
accounting treatment earlier than the year of publication; "Accounting treatment for the
income tax effect of dividends related to financial instruments classified as equity
instruments by the Issuer” and "Accounting treatment for the revision of cash-settled share-
based payment to equity-settled share-based payment" are effective as of the date of
publication. The Implementation Interpretation No. 16 has no significant impact on the
consolidated financial statements and the Company's financial statements.
(2) Changes to accounting estimates
No significant 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.
60
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 Property tax
Property tax is paid on the houses with property rights according to the proportion
stipulated by the state in accordance with the relevant national tax regulations and local
regulations.
61
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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.
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 RMB3 million will be included in the taxable income at a reduced rate of
25%, and the enterprise income tax will be paid at the rate of 20%.
Except for the following subsidiaries entitling to preferential tax treatment and the overseas
subsidies that adopt local applicable tax rate, other entities under the Company are subject to
the applicable tax rate of 25%, or the preferential tax rate for small and micro enterprises.
Subsidiaries entitled to tax preferences:
Preferential
Company Name Reason
tax rate
TCL China Star Optoelectronics Technology Co.,
15% High-tech enterprise
Ltd.
Shenzhen China Star Optoelectronics
15% High-tech enterprise
Semiconductor 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
15% High-tech enterprise
Material&Technology Co., Ltd.
Inner Mongolia Zhonghuan Solar Material Co., Ltd. 15% High-tech enterprise
Huansheng Solar (Jiangsu) Co., Ltd. 15% High-tech enterprise
Zhangjiakou Huan? Ou International New Energy
15% High-tech enterprise
Technology Co., Ltd.
Wuxi Zhonghuan Applied Materials Co., Ltd. 15% High-tech enterprise
Tianjin 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.
High-tech enterprise,
Inner Mongolia Zhonghuan Crystal Materials Co.,
15% encouraged business in
Ltd.
West China
62
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
Ningxia Zhonghuan Solar Material
15% Encouraged business in West China
Co., Ltd.
State-supported public infrastructure
Phase I projects of Hohhot Huanju
15% project, encouraged business in West
New Energy Development Co., Ltd.
China
Phase II and Phase III projects of State-supported public infrastructure
Hohhot Huanju New Energy 7.5% project, encouraged business in West
Development Co., Ltd. China
Inner Mongolia Zhonghuan Advanced
12.5% Encouraged business in West China
Semiconductor Material Co., Ltd.
Yixing Huanxing New Energy Co., State-supported public infrastructure
12.5%
Ltd. project
Guyuan Shengju New Energy Co., State-supported public infrastructure
12.5%
Ltd. project
Shangqiu Yaowei Photovoltaic Power State-supported public infrastructure
12.5%
Generation Co., Ltd. project
Tianjin Huanyu Yangguang New State-supported public infrastructure
12.5%
Energy Technology Co., Ltd. project
Huludao Zhongrun Energy State-supported public infrastructure
12.5%
Technology Co., Ltd. project
Phase II and Phase III projects of
State-supported public infrastructure
Qinhuangdao Tianhui Solar Energy 12.5%
project
Co., Ltd.
Huludao Xincheng New Energy State-supported public infrastructure
12.5%
Technology Co., Ltd. project
Zhangjiakou Shengyuan New Energy State-supported public infrastructure
12.5%
Co., Ltd. project
State-supported public infrastructure
Dushan Anju Photovoltaic
7.5% project, encouraged business in West
Technology Co., Ltd.
China
State-supported public infrastructure
Sonid Left Banner Huanxin New
7.5% project, encouraged business in West
Energy Co., Ltd.
China
State-supported public infrastructure
Otog Banner Huanju New Energy Co.,
7.5% project, encouraged business in West
Ltd.
China
Inner Mongolia New Huanyu State-supported public infrastructure
Yangguang New Energy Technology 7.5% project, encouraged business in West
Co., Ltd. China
State-supported public infrastructure
Gengma Huanxing New Energy Co.,
7.5% project, encouraged business in West
Ltd.
China
State-supported public infrastructure
Ongniud Banner Guangrun New
7.5% project, encouraged business in West
Energy Co., Ltd.
China
State-supported public infrastructure
Tuquan Guanghuan New Energy Co.,
7.5% project, encouraged business in West
Ltd.
China
State-supported public infrastructure
Dangxiong Youhao New Energy
7.5% project, encouraged business in West
Development Co., Ltd.
China
63
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
IV Taxes (continued)
6 Corporate income tax (continued)
Preferential
Company Name Reason
tax rate
State-supported public infrastructure
Shaanxi Runhuan Tianyu Technology
Tax-free project, encouraged business in West
Co., Ltd.
China
Tianjin Binhai Huanneng New Energy State-supported public infrastructure
Tax-free
Co., Ltd. project
Gaoqing Huanyuan Energy Technology State-supported public infrastructure
Tax-free
Co., Ltd. project
Gaoqing Chengguang Energy State-supported public infrastructure
Tax-free
Technology Co., Ltd. project
State-supported public infrastructure
Ningjin Jinchen New Energy Co., Ltd. Tax-free
project
7 Individual income tax
Individual income tax of income paid to employees by the Company is withheld by the Company
on behalf of employees in accordance with to the relevant national tax regulations.
64
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements
1 Monetary assets
December 31,
January 1, 2022
2022
Cash on hand 480 789
Bank deposits 33,161,505 29,049,850
Deposits with the central bank 381,137 481,162
Other monetary assets 1,835,379 1,861,891
35,378,501 31,393,692
Note Monetary assets with restricted use rights
December 31, 2022 January 1, 2022
TCL Tech Finance's statutory reserve deposits
with the central bank 321,852 358,178
Other restricted monetary assets 1,381,025 953,809
1,702,877 1,311,987
On December 31, 2022, the Company's bank deposits of RMB321,852,000 (December 31,
2021: RMB358,178,000) were statutory deposit reserves deposited with the Central Bank by
TCL Technology Group Finance Co., Ltd., a subsidiary of the Company.
On December 31, 2022, the Company’s monetary assets offshore amounted to
RMB2,230,135,000 (December 31, 2021: RMB2,817,430,000), all of which were owned by
the overseas subsidiaries of the Company.
65
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
December 31,
January 1, 2022
2022
Financial assets classified as measured at fair value
through profit or loss 12,703,507 7,601,256
Including: Debt instrument investments 12,483,274 7,288,741
Equity instrument investments 220,233 312,515
12,703,507 7,601,256
3 Derivative financial assets
December 31,
January 1, 2022
2022
Foreign exchange forwards 206,398 59,063
Interest rate swaps 154,636 11,866
361,034 70,929
4 Notes receivable
(1) Notes receivable by category
December 31,
January 1, 2022
2022
Bank acceptance notes 512,767 775,423
Trade acceptance notes 82 779
512,849 776,202
66
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
4 Notes receivable (continued)
(2) Presentation of provision for bad debts on notes receivable by category (continued)
December 31, 2022 January 1, 2022
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 512,849 100% - - 512,849 776,202 100% - - 776,202
Including: low-risk
portfolio 512,767 99.98% - - 512,767 775,423 99.90% - - 775,423
By aging analysis 82 0.02% - - 82 779 0.10% - - 779
512,849 100% - - 512,849 776,202 100% - - 776,202
(3) As at December 31, 2022, notes receivable in pledge were RMB264,599,000.
(4) Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were
derecognized as at December 31, 2022 amounted to RMB724,952,000. Endorsed or discounted notes
receivable that were not outstanding on the balance sheet date and were not derecognized as at
December 31, 2022 amounted to RMB148,271,000.
5 Accounts receivable
December 31, 2022 January 1, 2022
Accounts receivable 14,505,731 18,657,744
Less: allowance for doubtful accounts 454,070 418,962
14,051,661 18,238,782
67
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
Accounts receivable in the period from January 1, 2022 to December 31 are classified as
(1)
follows by how the allowances for doubtful accounts were established:
December 31, 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 257,358 99.48% 256,017
Of which:
Accounts receivable 257,358 99.48% 256,017
Accounts receivable for which the
related allowances for doubtful accounts
were established on the grouping basis 14,248,373 1.39% 198,053
Of which:
Group 1: by aging analysis 7,514,694 0.61% 45,889
Group 2: by related parties 2,787,683 0.65% 18,224
Group 3: by tariff 1,006,665 0.34% 3,470
Group 4: by photovoltaics 2,120,277 5.51% 116,795
Group 5: by semiconductor 819,054 1.67% 13,675
14,505,731 454,070
(2) The aging of accounts receivable is analysed as follows:
December 31, 2022 January 1, 2022
Amount Ratio (%) Amount Ratio (%)
Within 1 year 13,254,660 91.37% 17,493,941 93.76%
1 to 2 years 350,702 2.42% 465,391 2.49%
2 to 3 years 339,078 2.34% 309,150 1.66%
Over 3 years 561,291 3.87% 389,262 2.09%
14,505,731 100% 18,657,744 100%
68
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
(3) Allowances for doubtful accounts receivable are analysed as follows:
December 31, 2022 January 1, 2022
Balance at the beginning of the period 418,962 281,281
New subsidiary - 33,745
Accrued in current period 155,662 209,480
Reversal of current period (110,707) (86,588)
Write-off of current period (11,298) (12,759)
Reduced subsidiary - (5,381)
Exchange adjustment 1,451 (816)
Ending amount 454,070 418,962
(4) As of December 31, 2022, balance of the top five accounts receivable are as follows:
December 31, 2022 January 1, 2022
Total amount owed by the top five 5,422,959 8,922,641
Proportion of total accounts receivable 37.38% 47.82%
6 Receivables financing
December 31, 2022 January 1, 2022
Notes receivable financing 1,103,128 2,217,639
1,103,128 2,217,639
Note Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were
derecognized on December 31, 2022 amounted to RMB24,453,841,000.
As of December 31, 2022, the Company believes that financing for the receivables it held did not have
significant credit risk and will not cause significant losses due to default.
69
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
December 31, 2022 January 1, 2022
Within 1 year 3,586,208 2,297,910
1-2 years 5,556 6,560
2-3 years 1,530 1,376
Over 3 years 563 479
3,593,857 2,306,325
(2) As of December 31, 2022, balance of the top five prepayments are as follows:
December 31, 2022 January 1, 2022
Total amount owed by the top five 2,655,698 1,681,650
As % of total prepayments 73.90% 72.91%
8 Other receivables
December 31, 2022 January 1, 2022
Dividends receivable 1,226 -
Other receivables 4,032,022 4,458,621
4,033,248 4,458,621
(1) Dividends receivable
December 31, 2022 January 1, 2022
Others 1,226 -
1,226 -
70
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(2) Other receivables
December 31, 2022 January 1, 2022
Other receivables 4,259,495 4,681,100
Less: allowance for
doubtful accounts 227,473 222,479
4,032,022 4,458,621
(a) Nature of other receivables is analyzed as follows:
December 31, 2022 January 1, 2022
Subsidy receivable 1,868,634 1,696,203
Equity transfer
receivables 1,073,246 1,480,960
Security deposits 479,269 421,430
Others 610,873 860,028
4,032,022 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 13,530 15,147 201 28,878
Reversal of current
period (21,665) (652) (389) (22,706)
Write-off of
current period - - (1,173) (1,173)
Exchange
adjustment (5) - - (5)
December 31,
2022 68,114 134,786 24,573 227,473
71
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
December 31, 2022 January 1, 2022
Carrying amount Carrying
Ratio (%) amount Ratio (%)
Within 1 year 3,209,877 75.35% 3,991,248 85.26%
1 to 2 years 417,448 9.80% 292,805 6.26%
2 to 3 years 258,284 6.07% 228,974 4.89%
Over 3 years 373,886 8.78% 168,073 3.59%
4,259,495 100% 4,681,100 100%
(d) As of December 31, 2022, the other receivables of the top five balances are as follows:
December 31,
December 31, 2022 2021
Total amount owed by the
top five 2,324,850 3,381,203
As % of total other
receivables 54.58% 72.23%
(e) On December 31, 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.
72
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventories are classified as follows:
December 31, 2022 January 1, 2022
Provision for
depreciation Provision for
of inventories depreciation
/ provision of inventories
for / provision for
impairment impairment of
of contract contract Carrying
Book performance Carrying Book performance amount
balance costs amount balance costs
Raw
materials 5,604,506 979,845 4,624,661 4,247,095 652,265 3,594,830
Work in
progress 3,674,059 421,558 3,252,501 2,705,288 321,606 2,383,682
Finished
Goods 11,512,597 1,705,750 9,806,847 8,541,513 823,701 7,717,812
Turnover
materials 318,291 1,178 317,113 388,135 1,102 387,033
21,109,453 3,108,331 18,001,122 15,882,031 1,798,674 14,083,357
As of December 31, 2022, the Company had no inventory for liabilities guarantee.
(2) Provision for depreciation of inventories / provision for impairment of contract performance
costs:
December Current Current Current Exchange December
31, 2021 Accrual Reversal Write-off Adjustment 31, 2022
Raw
materials 652,265 930,055 (139,458) (462,874) (143) 979,845
Work in
progress 321,606 507,456 (69,697) (337,694) (113) 421,558
Finished
Goods 823,701 1,884,201 (28,705) (974,866) 1,419 1,705,750
Turnover
materials 1,102 76 - - - 1,178
1,798,674 3,321,788 (237,860) (1,775,434) 1,163 3,108,331
73
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
December 31, 2022 January 1, 2022
Allowance Allowance
Book for Carrying Book for Carrying
balance doubtful amount balance doubtful amount
accounts accounts
Electricity
charges
receivable 327,543 12,376 315,167 239,753 6,224 233,529
(2) Valuation allowances for contract assets are analyzed as follows:
Other
Current
Current increases
January 1, Reversal or
Accrual and December
2022 write-off
decreases 31, 2022
Electricity
charges 6,224 6,152 - - 12,376
11. Other current assets
December 31, 2022 January 1, 2022
Short-term debt investments 939,864 571,140
VAT to be deducted, to be certified, etc. 3,775,842 3,931,095
Current portion of loans and advances to
customers (note) 640,917 1,169,487
Others 82,313 131,238
5,438,936 5,802,960
Note: The loans and advances due within one year are loans due within the next year issued by
subsidiary TCL Tech Finance Co., Ltd., of which interest receivable is RMB2,281,000.
74
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
12 Debt Investments
December 31, 2022 January 1, 2022
National debt and secondary market debt 741,703 -
13 Long-term receivables
December 31, 2022 January 1, 2022 Discount
Gross Carrying Gross Carrying rate
Allowance Allowance
amount amount amount amount Interval
Finance
lease 631,373 - 631,373 651,118 - 651,118
Including:
Unrealized 7.125%-
financing 8.115%
income (781,934) - (781,934) (848,837) - (848,837)
631,373 - 631,373 651,118 - 651,118
14 Long-term equity investments
December 31, 2022 January 1, 2022
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Associates
(1) 29,065,027 329,479 28,735,548 25,086,945 1,624 25,085,321
Joint
ventures (2) 570,171 49,503 520,668 604,760 49,503 555,257
29,635,198 378,982 29,256,216 25,691,705 51,127 25,640,578
As of December 31, 2022, the Company made impairment allowances for long-term equity investments in investees with poor
management and insolvent assets.
75
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Increase/decrease in gains and Other Declared Accrued Other
Beginning Other comprehensive
Name of investee investment in current losses equity Cash Impairment increases and December 31,
amount income adjustment
period recognized by changes dividends or allowance decreases 2022
equity method profit
China Innovative Capital Management
Limited 1,063,219 - (109,998) (11,926) 3,097 - - - 944,392
LG Electronics (Huizhou) Co., Ltd. 92,079 - 10,693 (13,000) - - 89,772
Shenzhen Qianhai Qihang Supply Chain
Management Co., Ltd. 36,160 - (9,912) 1,110 - - - 27,358
Shenzhen Jucai Supply Chain Technology
Co., Ltd. 10,706 - 4,562 5 - - - 15,273
Shenzhen Tixiang Business Management
Technology Co., Ltd. 3,620 (1,500) (1,127) - - 154 1,147
TCL Air Conditioner (Wuhan) Co., Ltd. 38,605 - 2,005 - - - 40,610
TCL Finance (Hong Kong) Co., Limited 109,317 - 626 - - - 109,943
Urumqi TCL Equity Investment Management
Co., Ltd. 71 - 1,019 - - - 1,090
Hubei Changjiang Hezhi Equity Investment
Fund Partnership (Limited Partnership) 1,555,876 (93,374) (49,429) - - - 1,413,073
Ningbo Dongpeng Weichuang Equity
Investment Partnership (Limited Partnership) 396,773 (5,072) 29,651 30 (87,391) - 31,520 365,511
Deqing Puhua Equity Investment Fund
Partnership (Limited Partnership) 192,956 (3,704) (25,170) (37,869) - - 126,213
76
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Declared
Investment
Cash
Increase/decrease in gains and Other Other Other
Beginning dividends or Provision for
Name of investee investment in current losses comprehensive equity increases and December
amount profit impairment
period recognized by income adjustment changes decreases 31, 2022
distribution
equity method
declared
Ningbo Dongpeng Heli Equity Investment
Partnership (Limited Partnership) 463,294 (182,620) 143,470 - - (51,457) - - 372,687
Wuxi TCL Aisikai Semi-conductor Industry
Investment Fund Partnership (Limit ed
Partnership) 232,764 (15,730) 93,896 - - - - - 310,930
Wuxi TCL Venture Capital Partnership
(Limited Partnership) 35,580 - 1,219 51 - - - - 36,850
Ningbo Meishan Bonded Port Qiyu
Investment Management Partnership
(Limited Partnership) 64,975 - (41,633) - - - - 23,342
Shanghai Gen Auspicious Venture Capital
Partnership (Limited Partnership) 29,945 - 3,485 422 - (18,795) - - 15,057
Nanjing Zijin A Dynamic Investment
Partnership (Limited Partnership) 19,725 (401) 391 11 - - - - 19,726
Huizhou Kaichuang Venture Investment
Partnership (Limited Partnership) 8,700 - (5) - - - - 8,695
Beijing A Dynamic Venture Capital Center
(Limited Partnership) 6,415 - 3,279 (2,058) - - - - 7,636
Yixing Jiangnan Tianyuan Venture Capital
Company (Limited Partnership) 3,750 - 1,054 16 - - - - 4,820
Shenzhen Chuangdong New Industry
Investment Fund Enterprise (Limit ed
Partnership) 2,341 - (3) - - - - - 2,338
Hubei Changjiang Hezhi Equity Investment
Fund Management Co., Ltd. 6,006 - 5,547 - - - - - 11,553
Huizhou Kaimeng Angel Investment
Partnership (Limited Partnership) 2,595 - (52) - - - - - 2,543
Ningbo Jiutian Matrix Investment
Management Co., Ltd. (note) 2,851 - (254) - - - - - 2,597
Urumqi Qixinda Equity Investment
Management Co., Ltd. 1,137 - 3,365 - - - - - 4,502
77
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Declared
Investment
Cash
Increase/decrease in gains and Other Accrued Other
Beginning Other comprehensive dividends or
Name of investee investment in current losses equity Impairment increases and December 31,
amount income adjustment profit
period recognized by changes allowance decreases 2022
distribution
equity method
declared
Urumqi TCL Create Dynamic Equity
Investment Management Co., Ltd. 761 - (2) - - - - - 759
Beijing A Dynamic Investment Consulting
Co., Ltd. 469 - (2) - - - - - 467
Shanghai Gen Auspicious Investment
Management Co., Ltd. 918 - 1,956 - - (363) - - 2,511
Nanjing A Dynamic Equity Investment Fund
Management Co., Ltd. 283 - (4) - - - - - 279
Wuxi TCL Medical Imaging Technology
Co., Ltd. 29,235 7,661 (11,274) - - - - 215 25,837
Aijiexu New Electronic Display Glass
(Shenzhen) Co., Ltd. 635,360 162,003 5,383 - 77,503 - - - 880,249
TCL Ventures Fund L.P. 53,019 (45,171) 20,823 - (3,640) - 3,987 29,018
Getech Ltd. 21,032 - 889 25 61,714 - - - 83,660
TCL Environmental Technology Co., Ltd. 130,643 (103,246) 4,842 - - - - (32,239) -
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
Industry Equity Investment Fund Partnership
(Limited Partnership) 372,976 - 129,468 - - - - - 502,444
Guangdong Utrust Emerging Industry Equity
Investment Fund Partnership (Limit ed
Partnership) 151,026 (279) 17,062 - - - - - 167,809
78
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Declared
Investment
Cash
Increase/decrease in gains and Other Accrued Other
Beginning Other comprehensive dividends or
Name of investee investment in current losses equity Impairment increases and December 31,
amount income adjustment profit
period recognized by changes allowance decreases 2022
distribution
equity method
declared
Shenzhen Xinhuoyicheng Recreational and
Sports Industry Co., Ltd. 1,417 - (29) - - - - - 1,388
Pride Telecom Limited - - - - - - - - -
JOLED Incorporation 869,073 80,960 (420,741) - (318,604) (51,386) 159,302
Sichuan Shengtian New Energy 478,264 - 30,228 - - - 508,492
Development Co., Ltd.
Yanyuan Fengguang New Energy Co., Ltd. 62,528 (41,823) (4,453) - - (16,252) -
SunPower Systems International Limited 27,792 - 553 - - - 28,345
Zhonghuan Aineng (Beijing) Technology 6,843 - (2,725) - - - 4,118
Co., Ltd.
Inner Mongolia Zhongjing Science and 122,960 - 13,722 - - - 136,682
Technology Research Institute Co., Ltd.
Hunan Guoxin Semiconductor Technology 9,758 - 67 - - - 9,825
Co., Ltd.
Maxeon Solar Technologies, Ltd. 2,020,194 - (399,777) - - - 1,620,417
Xinjiang Xiexin New Energy Material 1,691,361 - 2,228,104 - - - 3,919,465
Technology Co., Ltd.
Ruihuan (Inner Mongolia) Solar Power Co., 5,896 - 3,355 - (9,251) - -
Ltd.
Tianjin Zhonghuan Haihe Intelligent 659,630 4,990 (7,005) - - - 657,615
Manufacturing Fund Partnership (Limit ed
Partnership)
Zhonghuan Feilang (Tianjin) Technology 4,722 - 403 - - - 5,125
Co., Ltd.
Ningbo Zhongxin Venture Capital 58,278 90,000 (3,310) - - - 144,968
Partnership Tianjin Huanxin
79
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 Declared
gains and Other Cash Other
Increase/decrease Other Accrued
Beginning losses comprehensive dividends increases
Name of investee in investment in equity Impairment December
amount recognized income or profit and
current period changes allowance 31, 2022
by equity adjustment distribution decreases
method declared
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd.(Note) 421,762 - (27,816) - - - 393,946
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. 2,914 - 386 (2,288) - - 1,012
Inner Mongolia Huanye Material Co., Ltd. 4,109 - 2,054 - - - 6,163
Shenzhen Shutuo Technology Co., Ltd. 38,038 - (1,202) - - 1,366 38,202
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. 49,964 - 18,692 884 - - - 69,540
Wuhan Guochuangke Optoelectronic Equipment Co., Ltd. 24,744 - 1,166 - - - 25,910
TCL Intelligent Technology (Ningbo) Co., Ltd. - - - - - - -
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. - - 3,936 - - - 3,936
Purplevine Holdings Limited - 3,789 (2,249) - - 89 1,629
Xinxin Semiconductor Technology Co., Ltd. 1,790,073 8,312 - - - - 399 1,798,784
Inner Mongolia Xinhua Semiconductor Technology Co., Ltd. 120,000 (2,114) - - - 117,886
Inner Mongolia Xinhuan Silicon Energy Technology Co., Ltd. 132,000 (4,153) - - - 127,847
Shanghai Feilihua Shichuang Technology Co., Ltd. 40,000 854 - - 200 41,054
Others 12,749,892 (237,044) 1,286,140 (6,074) - (334,934) - (194,774) 13,263,206
25,085,321 1,701,512 2,958,218 (17,504) 142,314 (549,737) (327,855) (256,721) 28,735,548
Note 1: Tianjin Huanxin Technology & Development Co., Ltd. was renamed as TCL Huanxin Semi-conductor (Tianjin) Co., Ltd in April
2022.
Note 2: Others are mainly investments in listed companies that have not yet announced their annual reports for 2022.
80
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Declared
Investment gains Other
Increase/decrease Cash dividends Accrued Other
Beginning and losses comprehensive Other equity
Name of investee in investment in or profit Impairment increases and December
amount recognized by income changes
current period distribution allowance decreases 31, 2022
equity method adjustment
declared
TCL Huizhou City, Kai Enterprise
Management Limited 1,329 - 18 - - - - - 1,347
Huizhou TCL Human Resources Service
Co., Ltd. 3,296 - 2,978 - - - - - 6,274
Zhangjiakou Qixin Equity Investment
Fund Partnership 92,681 - (5,106) - - (600) - - 86,975
Huaxia CPV (Inner Mongolia) Power Co.,
Ltd. (Note 1) - - - - - - - - -
Tianjin Huanyan Technology Co., Ltd. 144,517 - (3,724) - - - - - 140,793
TCL Microchip Technology (Guangdong)
Co., Ltd. 313,433 25,000 (53,645) - 491 - - - 285,279
555,256 25,000 (59,479) - 491 (600) - - 520,668
81
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
14 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
Decrease
Increase Other
January 1, in December
in current chang Note
2022 current 31, 2022
period es
period
Pride Telecom Limited 1,624 - - - 1,624 ote 1
Huaxia CPV (Inner
-
Mongolia) Power Co., Ltd. 49,503 - - 49,503 ote 1
OLED Incorporation - 310,730 - 7,874 318,604 ote 1
uihuan (Inner Mongolia)
Solar Power - 9,251 - - 9,251 ote 1
Co., Ltd.
51,127 319,981 - 7,874 378,982
Note Impairment allowances were established for the long-term investments in these investees at recoverable amounts because
1 continuous operations loss occurred to these investees with poor management.
15 Investments in other equity instruments
December 31, 2022 January 1, 2022
Stocks 66,706 109,011
Equity of unlisted companies 373,290 818,308
439,996 927,319
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
Sold in current
Stocks - 3,524 (142,087) - term for strategic
period
purposes
Equity of Being held long
Sold in current
unlisted 349 10,172 (19,270) (16,811) term for strategic
period
companies purposes
Total 349 13,696 (161,357) (16,811)
16 Other non-current financial assets
December 31, 2022 January 1, 2022
Equity investments 2,928,827 2,149,781
Debt investments - 554,257
2,928,827 2,704,038
82
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
Other increases 68,252 - 68,252
Reclassified from fixed assets
and intangible assets 140,311 112,816 253,127
Decreases
Reduced subsidiary (2,967) - (2,967)
Reclassified to fixed assets
and intangible assets (34,226) - (34,226)
Other decreases (307) - (307)
December 31, 2022 1,067,479 205,633 1,273,112
Accumulated depreciation and
amortization:
January 1, 2022 165,990 8,376 174,366
Increase
Accrued in current period 29,363 3,081 32,444
Reclassified from fixed assets
and intangible assets 44,290 26,945 71,235
Decreases
Reduced subsidiary (343) - (343)
Reclassified to fixed assets
and intangible assets (3,826) - (3,826)
December 31, 2022 235,474 38,402 273,876
Investment property, net:
December 31, 2022 832,005 167,231 999,236
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 (178) - (178)
December 31, 2022 52,787 - 52,787
Investment property, net:
December 31, 2022 779,218 167,231 946,449
January 1, 2022 677,461 84,441 761,902
83
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
18 Fixed assets
Office and
Houses and Machinery electronic T ransportation Power
buildings equipment equipment equipment stations Others T otal
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 - 19,486 - - - - 19,486
January 1,
2022 36,809,487 144,288,059 6,141,205 228,961 2,361,036 21,576 189,850,324
Increase
Acquisition
and other 8,122 1,968,396 122,532 33,922 1,682 4,800 2,139,454
New
subsidiary - - 414 - - - 414
Reclassified
from
investment
property 34,226 - - - - - 34,226
Reclassified
from
construction in
progress 9,006,963 28,617,693 182,497 26,054 125 932 37,834,264
Other
increases - 3,650,892 - - - - 3,650,892
Decreases
Written down
with
government
grants (721,216) (887,720) - - - - (1,608,936)
Reclassified
to investment
property (140,311) - - - - - (140,311)
Other
decreases (25,992) (2,881,363) (3,710,126) (28,258) (1,414) (909) (6,648,062)
Exchange
adjustment 8,327 (309) 712 415 - 827 9,972
December 31,
2022 44,979,606 174,755,648 2,737,234 261,094 2,361,429 27,226 225,122,237
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 1,451,233 15,537,599 238,755 37,730 87,530 2,307 17,355,154
New
subsidiary - - 223 - - - 223
Reclassified
from
investment
property 3,826 - - - - - 3,826
Other
increases - 1,902,490 - - - - 1,902,490
Decreases
Reclassified
to investment
property (44,290) - - - - - (44,290)
Other
decreases (8,804) (1,654,778) (1,013,390) (18,348) (416) (117) (2,695,853)
Exchange
adjustment 725 2,089 591 229 - 236 3,870
December 31,
2022 7,827,013 80,699,683 1,726,432 165,109 514,036 15,930 90,948,203
Fixed assets,
net:
December 31,
2022 37,152,593 94,055,965 1,010,802 95,985 1,847,393 11,296 134,174,034
January 1,
2022 30,385,164 79,375,776 3,640,952 83,463 1,934,114 8,072 115,427,541
December 31,
2021 30,385,164 79,356,290 3,640,952 83,463 1,934,114 8,072 115,408,055
84
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
18 Fixed assets (continued)
Office and
Houses and Machinery T ransportation Power
electronic Others T otal
buildings equipment equipment stations
equipment
Impairment
allowance:
December 31,
2021 771,541 653,840 338,477 2,429 62,059 412 1,828,758
Change of
accounting
policy 305,387 (305,387)
January 1,
2022 771,541 959,227 33,090 2,429 62,059 412 1,828,758
Accrued in
current period - 50,195 3,673 22 - - 53,890
Write-off of
current period (5,224) (177,249) (1,473) (2,340) - - (186,286)
Other transfers
out - - (305,387) - - - (305,387)
December 31,
2022 766,317 832,173 35,290 111 62,059 412 1,696,362
Fixed assets,
carrying
amount:
December 31,
2022 36,386,276 93,223,792 975,512 95,874 1,785,334 10,884 132,477,672
January 1,
2022 29,613,623 78,721,936 3,302,475 81,034 1,872,055 7,660 113,598,783
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 81 of Note V for information on fixed asset pledge. As of December 31, 2022,
the gross amount of the fixed assets that were fully depreciated and still in use was
RMB34,259,086,000.
Fixed assets with pending ownership certificates at the end of the current period:
Expected time of
Carrying amount obtaining ownership
certificate
Houses and Expected to be completed in
15,275,634
buildings (Note) 2023
Note As of December 31, 2022, the fixed assets with pending ownership certificates of the Company were
mainly the buildings and constructions of CSOT's t3, t4, t6, and t9 manufacturing bases, as well as
the buildings and constructions of Inner Mongolia Zhonghuan Crystal Material Co., Ltd., Inner
Mongolia Zhonghuan Advanced Semi-conductor Material Co., Ltd. and Tianjin Huanhai Industrial
Park Co., Ltd.
19 Construction in progress
(1) Schedule of construction in progress
December 31, 2022 January 1, 2022
Construction in progress 52,063,442 37,112,045
Less: Impairment allowance 9,608 146,160
52,053,834 36,965,885
85
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
19 Construction in progress (continued)
(2) Changes to construction in progress
Transfer-in in Project input Cumulative Including: Interest capitalizat
Beginning Increase in current period Other December Investment as Project capitalized capitalized interest ion rate for current
Project name Budget amount current period Fixed assets decreases 31, 2022 % of budget progress interest in current period period Funding source
Proprietary fund
t7 production line of LCD panel 35,337,000 3,362,350 6,559,254 (8,802,841) (15,022) 1,103,741 75% 75% 515,456 123,023 1.04% and loans
t5 production line of LCD panel 11,321,000 739,416 4,367,946 (2,353) (65,608) 5,039,401 80% 80% - - -
Proprietary fund
t4 production line of LCD panel 35,000,000 17,226,269 2,068,560 (2,489,529) (566,209) 16,239,091 96% 96% 295,941 295,941 2.33% and loans
Proceeds from
equity issue and
t9 production line of LCD panel 31,500,000 3,916,693 13,761,271 (7,294,072) - 10,383,892 58% 58% 144,387 144,387 3.00% loans
Huizhou modular integration Proprietary fund
project 7,066,680 620,802 1,842,898 (1,228,426) (21,916) 1,213,358 100% 100% - - - and loans
Production line of 8-12-inch
semiconductor silicon wafers for Self-financing
integrated circuit 5,707,172 1,307,446 1,049,821 (1,196,270) (28,576) 1,132,421 77% 77% - - -
50GW (G12) solar-grade
monocrystalline silicon material Self-financing
smart factory project 10,979,740 543,611 6,934,838 (3,805,653) (5,644) 3,667,152 68% 68% - - -
High-performing shingled solar
Self-financing
module intelligent plant project 3,045,000 407,609 824,398 (499,785) (2,770) 729,452 86% 86% - - -
High-performing ultra-thin silicon
solar single-crystal wafer Self-financing
intelligent plant project 1,949,870 - 883,977 - - 883,977 45% 45% - - -
Large-diameter semiconductor
Self-financing
silicon wafers for integrated circuit 5,385,000 355,184 1,624,967 (212,666) (136,980) 1,630,505 41% 41% - - -
Not
Others applicable 8,486,505 14,039,483 (12,302,669) (19 2,475) 10,030,844
36,965,885 53,957,413 (37,834,264) (1,035,200) 52,053,834
86
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
20 Right-of-use assets
Houses
Transportation Machinery Land use
and Total
equipment equipment rights
buildings
Gross amount:
January 1, 2022 867,511 1,164 1,982,380 13,335 2,864,390
Increase
Leased in 3,482,164 139 254,198 123,136 3,859,637
Other -
increases 462 - - 462
Decreases
Other
decreases (61,025) (339) (1,126,116) (1,930) (1,189,410)
Exchange
adjustment 4,474 4 - - 4,478
December 31,
2022 4,293,124 1,430 1,110,462 134,541 5,539,557
Accumulated
depreciation:
January 1, 2022 101,348 522 335,526 83 437,479
Increase
Accrual 170,477 497 139,909 11,149 322,032
Decreases
Other -
decreases (45,988) (110) (285,549) (331,647)
Exchange
adjustment 1,566 3 - - 1,569
December 31,
2022 227,403 912 189,886 11,232 429,433
Right-of-use
assets, carrying
amount:
December 31,
2022 4,065,721 518 920,576 123,309 5,110,124
January 1, 2022 766,163 642 1,646,854 13,252 2,426,911
Impairment
allowance:
January 1, 2022 - - - - -
December 31,
2022 - - - - -
Right-of-use
assets, carrying
amount
December 31,
2022 4,065,721 518 920,576 123,309 5,110,124
January 1, 2022 766,163 642 1,646,854 13,252 2,426,911
87
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
21 Intangible assets
Non-patent
Land use
technologies Others Total
rights
/patents
Gross amount:
January 1, 2022 8,649,646 8,083,664 1,590,550 18,323,860
Increase
New subsidiary - 13,358 - 13,358
Purchase 841,929 1,296,125 228,373 2,366,427
Reclassified from
construction in progress 4,715 - 185,918 190,633
Reclassified from
development costs - 1,961,331 - 1,961,331
Decreases
Sale and disposal (167,217) (39) (2,664) (169,920)
Reclassified to
investment property (112,816) - - (112,816)
Other decreases - - (6,855) (6,855)
Exchange adjustment - (3,962) 328 (3,634)
December 31, 2022 9,216,257 11,350,477 1,995,650 22,562,384
Accumulated amortization:
January 1, 2022 802,839 2,654,155 739,490 4,196,484
Increase
Accrual 257,146 1,027,834 188,124 1,473,104
New subsidiary - 891 - 891
Decreases
Sale and disposal (6,400) - (520) (6,920)
Reclassified to
investment property (26,945) - - (26,945)
Other decreases (8,233) - (850) (9,083)
Exchange adjustment - 2,618 188 2,806
December 31, 2022 1,018,407 3,685,498 926,432 5,630,337
Intangible assets, net：
December 31, 2022 8,197,850 7,664,979 1,069,218 16,932,047
January 1, 2022 7,846,807 5,429,509 851,060 14,127,376
Impairment allowance:
January 1, 2022 23,562 110,019 11,148 144,729
Accrual - 442 - 442
Exchange adjustment - 2,945 - 2,945
December 31, 2022 23,562 113,406 11,148 148,116
Intangible assets, carrying
amount:
December 31, 2022 8,174,288 7,551,573 1,058,070 16,783,931
January 1, 2022 7,823,245 5,319,490 839,912 13,982,647
As of December 31, 2022, the total book value of land use rights for which the title certificate
has not been registered properly was RMB2,076,000.
Please refer to Item 81 of Note V for information on collateralized intangible assets.
88
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
22 Development costs
Development expenditures are presented as follows:
December 31, 2022 January 1, 2022
Semi-conductor display 2,172,507 1,266,973
New energy photovoltaic & semi-
conductor materials 1,006,700 1,241,446
3,179,207 2,508,419
23 Goodwill
(1) Gross amount of goodwill
Increase in Decrease
Name of investee or January 1, December
current in current
item incurring goodwill 2022 31, 2022
period period
TCL Medical Radiologica l
28,967 - - 28,967
Technology (Beijing) Co., Ltd. Note 1
Qingdao Blue Business
2,452 - - 2,452
Consulting Co., Ltd. Note 2
Tianjin Huan'Ou Semiconductor
214,683 - - 214,683
Material&Technology Co., Ltd. Note 3
TCL Technology Group
6,726,130 - - 6,726,130
(Tianjin) Co., Ltd. Note 4
Moka International Limited Note 5 1,728,973 - - 1,728,973
Suzhou China Star
Optoelectronics Technology 486,603 - - 486,603
Co., Ltd. Note 6
Huizhou Kedate Smart Display
- 3,011 - 3,011
Technology Co., Ltd. Note 7
9,187,808 3,011 - 9,190,819
(2) Goodwill impairment allowance
Increase in Decrease in
January 1, current current December
Name of investee 2022 period period 31, 2022
TCL Medical Radiologica l
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 52,319,000. 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
net identifiable assets of TCL Medical Radiological Technology attributable to the Company on the
settlement date (equal to RMB 28,967,000) was recorded in the Company's goodwill. An impairment
allowance of RMB 28,967,000 had been made on such goodwill in 2018.
89
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
23 Goodwill (continued)
Note In October 2016, Highly Information Industry Co., Ltd., a subsidiary of the Company, acquired 60%
2 interest in Qingdao Blue Business Consulting Co., Ltd. (hereinafter referred to as “Blue Business
Consulting”) with consideration of RMB 10,000,000. Thus, the difference between the accumulated
investment of Highly Information Industry Co., Ltd. in Blue Business Consulting (corresponding to a
60% interest) and the fair value of the net identifiable assets of Blue Business Consulting attributable
to Highly Information Industry Co., Ltd. on the settlement date (equivalent to RMB2,452,000) was
recorded in the Company’s goodwill.
Note Tianjin Huan’Ou Semiconductor Material&Technology Co., Ltd. is a subsidiary of Zhonghuan
3 Electronics, which the Company has acquired in a business combination not involving entities under
common control.
Note The Company completed its acquisition of 100% stake in TCL Technology Group (Tianjin) Co., Ltd.
4 (former name: Tianjin Zhonghuan Electronic Information Group Co., Ltd.) on October 1,2020 with a
cash consideration of RMB12,500,000,000. At the date of acquisition, the Group obtained the effective
control of TCL Technology Group (Tianjin) Co., Ltd., and included such company into the consolidated
financial statements. On the date of transaction, the difference between the accumulated investment of
the Company in TCL Technology Group (Tianjin) Co., Ltd. (corresponding to the 100% interest) and
the fair value of the net identifiable assets of Zhonghuan Electronics attributable to the Company on the
settlement date (equal to RMB6,726,130,000) was recorded in the Company’s goodwill. The goodwill
mainly consists of 2 asset groups: the new energy photovoltaic and semiconductor materials and the
Tianjin Printronics Circuit Corp.
Note In April 2021, the Company acquired 100% interest in Moka International Limited with a cash
5 consideration of RMB2,800,000,000. 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
net identifiable assets of Moka International Limited attributable to the Company on the settlement date
(equal to RMB1,728,973,000) was recorded in the Company’s goodwill.
Note In April 2021, the Company acquired 60% interest in Suzhou China Star Optoelectronics Technology
6 Co., Ltd. (formerly known as “Samsung Suzhou LCD Co. Ltd.”) with a cash consideration of
RMB4,757,727,000. The difference between the accumulated investment of the Company in Suzhou
China Star Optoelectronics Technology Co., Ltd. (corresponding to the total 70% 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 RMB486,603,000) was recorded in
the Company’s goodwill.
Note In August 2022, the Company acquired in 100% interest in Huizhou Kedate Smart Display Technology
7 Co., Ltd. with a cash consideration of RMB51,000,000. As such, the difference between the investment
of the Company in Huizhou Kedate Smart Display Technology Co., Ltd. (corresponding to the 100%
interest) and the fair value of the net identifiable assets of Zhonghuan Electronics attributable to the
Company on the settlement date (equal to RMB3,011,000) was recorded in the Company’s goodwill.
(III) Goodwill impairment test
The Company carried out an impairment test of its goodwill on December 31, 2022. The recoverable
amount of the Qingdao Blue Business Consulting Co., Ltd., Tianjin Zhonghuan Advanced Materials &
Technology Co., Ltd., new energy photovoltaic and semiconductor materials, Moka International
Limited and Suzhou China Star Optoelectronics Technology Co., Ltd.’s asset groups 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% - 3%) adopted by the management was consistent with predicted data on the industry.
The management determines the revenue growth rate (mainly 1.45%-29.62%) and determines the
EBITDA (mainly 3.51%-13.30%) 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. The recoverable amount of the Tianjin
Printronics Circuit Corp asset group is determined based on the higher of the present value of the
estimated future cash flows of the asset or the fair value less costs of disposal. After the management
analyzed the recoverable amount of each asset group based on these assumptions, no provision for
impairment was required for the goodwill of any of the above asset group as of December 31, 2022.
90
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
24 Long-term deferred expenses
Increase in Amortization
January current in current Others December
1, 2022 period period 31, 2022
Improvement
expense on leased
fixed assets 1,629,475 163,652 (351,972) 110 1,441,265
Others 1,011,055 1,678,488 (1,261,335) (125,265) 1,302,943
2,640,530 1,842,140 (1,613,307) (125,155) 2,744,208
25 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
December 31,
2022 January 1, 2022
Deductible Deferred Deductible Deferred
temporary income temporary income
difference tax assets difference tax assets
Deductible losses 19,383,933 3,055,974 6,739,226 1,087,993
Asset impairment
allowances 4,132,996 785,212 3,038,745 633,013
Provisions 559,584 91,408 744,189 117,497
Changes in fair value 15,398 2,792 55,287 13,230
Others 2,120,079 230,223 1,546,420 298,690
26,211,990 4,165,609 12,123,867 2,150,423
December 31, 2021
Deductible Deferred
temporary income
difference tax 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
91
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
December 31, 2022 January 1, 2022
Taxable Deferred Taxable Deferred
temporary tax temporary income tax
differences liabilities differences liabilities
Accelerated depreciation
of fixed assets 13,198,261 2,046,374 11,471,272 1,787,699
One-off tax deduction
for fixed assets 6,818,647 1,021,284 3,184,144 501,290
Increase in value of
assets as assessed in
business combination 1,627,106 378,993 2,491,577 531,018
not involving entities
under common control
Changes in fair value 331,292 71,725 527,471 129,006
Government grants 126,141 18,921 273,470 41,021
Others 826,685 193,853 721,284 168,952
22,928,132 3,731,150 18,669,218 3,158,986
(3) There were no deferred tax assets or liabilities presented on a net basis after offsetting
Amount subject
to mutual offset
of deferred
Item income tax assets Closing balance of
against liabilities deferred income tax
at the end of the assets or liabilities after
period offset
Deferred income tax
assets (2,411,722) 1,753,887
Deferred income tax
liabilities (2,411,722) 1,319,428
(4) Unrecognized deferred income tax assets
December 31,
January 1, 2022
2022
Deductible temporary
difference 306,669 181,612
Deductible losses 10,302,065 5,840,378
10,608,734 6,021,990
92
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
25 Deferred income tax assets and deferred income tax liabilities (continued)
Deductible losses in respect of unrecognized deferred income tax assets will expire in the
(5) following years:
December 31, 2022 January 1, 2022
2021 - 178,533
2022 268,388 268,913
2023 472,917 477,404
2024 472,157 476,543
2025 440,443 464,426
2026 onwards 8,648,160 3,974,559
10,302,065 5,840,378
26 Other non-current assets
December 31, 2022 January 1, 2022
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Advance
payment for
equipment
and land use
rights (Note) 5,426,643 - 5,426,643 6,310,004 - 6,310,004
Advance
payment for
patents 273,348 - 273,348 211,606 - 211,606
Others 593,952 - 593,952 927,399 - 927,399
6,293,943 - 6,293,943 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.
93
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
27 Short-term borrowings
December 31,
2022 January 1, 2022
Unsecured borrowings 10,214,632 9,315,505
Borrowings secured by
pledge - 22,549
Interest payable 1,279 3,373
10,215,911 9,341,427
As of December 31, 2022, the Company has no pledged short-term loans.
As of December 31, 2022, the Company does not have any short-term borrowings that have
expired and have not been repaid.
28 Borrowings from the Central Bank
As of December 31, 2022, the balance of the borrowings of TCL Tech Finance Co., Ltd. (a
subsidiary of the Company) from the central bank was RMB777,676,000 (December 31,
2021: RMB1,437,062,000).
29 Customer deposits and deposits from banks and other financial institutions
December 31, 2022 January 1, 2022
Customer deposits and deposits from
other banks and financial institutions 603,423 666,056
Customer deposits and deposits from banks and other financial institutions are the deposits
of related and nonrelated enterprises absorbed by TCL Tech Finance Co., Ltd., a subsidiary
of the Company, within the business scope approved by the regulatory authority.
94
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
30 Held-for-trading financial liabilities
December 31, 2022 January 1, 2022
Measured at fair value with changes
included
Financial liabilities at fair value
through profit or loss. 861,912 925,035
31 Derivative financial liabilities
December 31, 2022 January 1, 2022
Derivative financial liabilities 70,735 22,205
32 Notes payable
December 31, 2022 January 1, 2022
Bank acceptance notes 5,731,632 2,877,554
Trade acceptance notes 634,028 397,742
6,365,660 3,275,296
As of December 31, 2022, the Company had no notes payable that were due but not paid.
33 Accounts payable
December 31, 2022 January 1, 2022
Amounts due to suppliers 26,381,912 24,297,860
As of December 31, 2022, there were no significant accounts payable aged over one year.
95
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
34 Advances from customers
December 31, 2022 January 1, 2022
Advances from customers 1,402 5,794
As of December 31, 2022, the Company had no significant accounts receivable aged over one year.
35 Contract liabilities
December 31, 2022 January 1, 2022
Advances from customers 2,336,008 2,593,882
36 Employee benefits payable and long-term employee benefits payable
(1) Employee compensation payable
December 31, 2022 January 1, 2022
Short-term employee benefits payable 2,341,429 3,274,021
Defined contribution plans payable 26,353 34,383
Dismissal benefits payable 9,151 3,529
2,376,933 3,311,933
96
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 presented
Increase in
current Decrease in December 31,
January 1, 2022 period current period 2022
Wages, bonuses,
allowances and subsidies 2,885,187 9,034,445 (9,885,394) 2,034,238
Employee services and
benefits 27,664 457,363 (485,027) -
Social insurance benefits 46,565 363,378 (371,838) 38,105
Including: medical
insurance premium 44,622 333,609 (341,480) 36,751
Employment
injury insurance
premiums 953 17,863 (18,121) 695
Maternity
insurance 990 11,906 (12,237) 659
Housing fund 30,326 328,930 (331,339) 27,917
Trade union funds and
staff education funds 27,575 186,515 (164,672) 49,418
Others 256,704 3,408 (68,361) 191,751
-
3,274,021 10,374,039 (11,306,631) 2,341,429
Defined contribution
(b)
plans
Increase in
Decrease in
current December 31,
current period
January 1, 2022 period 2022
Basic pension insurance 32,979 702,985 (710,583) 25,381
Unemployment insurance 1,404 21,162 (21,594) 972
34,383 724,147 (732,177) 26,353
(2) Long-term employee compensation payable
December 31, 2022 January 1, 2022
Supplementary pension insurance 25,101 26,595
Other long-term benefits 447,437 643,336
472,538 669,931
97
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
37 Taxes and levies payable
December 31, 2022 January 1, 2022
Corporate income tax 731,839 1,020,711
Value-added tax 211,873 30,967
Individual income tax 42,611 39,920
Urban maintenance and construction tax 60,858 43,081
Education surcharges 43,495 30,800
Others 124,915 73,370
1,215,591 1,238,849
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.
38 Other payables
December 31, 2022 January 1, 2022
Dividends payable 40,010 34,607
Other payables 24,150,342 19,352,281
24,190,352 19,386,888
(1) Dividends payable
December 31, 2022 January 1, 2022
Other non-controlling interests 40,010 34,607
40,010 34,607
98
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
38 Other payables (continued)
(2) Other payables
December 31, 2022 January 1, 2022
Payables for engineering equipment 19,130,372 13,368,026
Unpaid expenses 2,195,904 1,531,544
Security deposits 353,207 210,975
Others 2,470,859 4,241,736
24,150,342 19,352,281
99
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
39 Non-current liabilities due within one year
December 31, January 1, 2022
2022
Long-term borrowings due within one year
41
(Note 1) 4,341,300 6,062,928
Bonds payable due within one year (Note 2) 42 5,170,383 5,646,822
Current portion of lease liabilities 43 295,010 681,087
Current portion of long-term payables 179,127 168,132
Current portion of interest payable 552,181 447,796
Long-term employee compensation payable
due within one year 419,320 -
10,957,321 13,006,765
Note 1 The interest rates of the Company’s long-term borrowing ranged from 2.7% to -5.91% in the
current period (2021: 0.46% - 4.15%).
Note 2 The Company's bonds payable due within one year are mainly as follows:
①Medium-term note 20TCL Technology MTN001: Issued in March 2020, with a term of 3 years,
the closing balance as of December 31 was RMB2,999,441,000.
②Corporate bond 18TCL 01: Issued in June 2018, with a term of 5 years, the closing balance as of
December 31 was RMB169,761,000.
③Corporate bond 18TCL 02: Issued in August 2018, with a term of 5 years, the closing balance as
of December 31 was RMB2,001,181,000.
40 Other current liabilities
December 31, January 1, 2022
2022
After-sales service expense (note) 844,293 792,847
Output tax to be transferred 175,626 286,384
Others 165,929 190,656
1,185,848 1,269,887
Note After-sales service expense expected to occur within 1 year is presented in other current liabilities.
100
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
41 Long-term borrowings
December 31, 2022 January 1, 2022
Borrowings secured by collateral 42,317,366 39,633,561
Borrowings secured by pledge 6,675,371 928,156
Unsecured borrowings 73,951,728 52,780,293
122,944,465 93,342,010
Including: long-term loans due within one year (4,341,300) (6,062,928)
118,603,165 87,279,082
The maturities of the Company's long-term borrowings vary from 2023 to 2037.
As of December 31, 2022, the long-term borrowings secured by collateral were equivalent to
RMB42,317,366,000 (including amounts translated from other currencies) (December 31,
2021: RMB39,633,561,000), which were secured by the collaterals of the land use right, houses
and buildings, machinery and equipment of about RMB110,182,749,000 (including amounts
translated from other currencies) (December 31, 2021: RMB66,737,167,000); the long-term
pledged borrowings were equivalent to RMB6,675,371,000 (December 31, 2021:
RMB928,156,000), which were pledged by the collaterals of the 60% equity in Suzhou China
Star Optoelectronics Technology Co., Ltd., 100% equity in Suzhou China Star Optoelectronics
Display Co., Ltd. and 40% equity in Huansheng Solar (Jiangsu) Co., Ltd. and accounts
receivable and contract assets of about RMB757,751,000 (December 31, 2021:
RMB328,069,000).
The interest rates of the Company’s long-term borrowing ranged from 2.40% to -7.75% in the
current period (2021: 1.3% - 5.70%).
42 Bonds payable
December 31,
2022 January 1, 2022
Corporate bonds 4,518,438 8,073,016
MTN 7,488,413 4,993,265
12,006,851 13,066,281
101
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
42 Bonds payable (continued)
(1) Movements in bonds payable
Balance at Issued in Accrued Amortization
Repaid in
Bond name Par value Issue date Maturity Issued amount the beginning current interest as of premium Others (note 1) December 31,
current period
of the period period per par value or discount 2022
18TCL01 1,000,000 June 6, 2018 5 1,000,000 169,162 - 6,462 248 - (169,410) -
August 20,
18TCL02 2,000,000 2018 5 2,000,000 2,003,039 - 72,269 (1,079) - (2,001,960) -
19TCL01 1,000,000 May 20, 2019 5 1,000,000 998,630 1,000,000 34,249 1,634 (1,000,000) - 1,000,264
19TCL02 1,000,000 July 23, 2019 5 1,000,000 998,568 980,000 37,061 (2,046) (980,000) - 996,522
October 21,
19TCL03 2,000,000 2019 5 2,000,000 1,996,860 340,000 69,365 74 (1,900,000) - 436,934
March 27,
20TCL 科技 MTN001 3,000,000 2020 3 3,000,000 2,997,041 - 108,888 388 - (2,997,429) -
TCL TEC1 1,957,483 July 14, 2020 5 1,957,483 1,906,757 - 39,176 1,369 - 176,592 2,084,718
21TCL Ji MTN001 (High-
Growth Debt) 2,000,000 May 10, 2021 3 2,000,000 1,996,224 - 83,227 1,597 - - 1,997,821
January 14,
22TCL 集 MTN001 2,000,000 2022 3 2,000,000 - 2,000,000 66,542 (2,608) - - 1,997,392
April 27,
22TCL 集 GN002 1,500,000 2022 3 1,500,000 - 1,500,000 33,768 (2,783) - - 1,497,217
22TCL Group MTN003
(Science and Technology
Notes) 2,000,000 July 6, 2022 3 2,000,000 - 2,000,000 33,838 (4,017) - - 1,995,983
Total 19,457,483 —— —— 19,457,483 13,066,281 7,820,000 584,845 (7,223) (3,880,000) (4,992,207) 12,006,851
Note 1 Others are bonds payable within one year which are reclassified to non-current liabilities due within one year and exchange adjustment.
102
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
43 Lease liabilities
December 31, 2022 January 1, 2022
Total lease liabilities 4,756,393 1,783,159
Less: current portion of lease liabilities 295,010 681,087
Total 4,461,383 1,102,072
44 Long-term payables
December 31, 2022 January 1, 2022
Finance lease 887,763 671,344
45 Deferred income
Increase in Decrease in
December 31,
January 1, 2022 current current
2022
period period
Government grants 2,361,171 7,178,621 (7,071,647) 2,468,145
Others 34 - (34) -
2,361,205 7,178,621 (7,071,681) 2,468,145
Items involving government grants
Amount Amount
Amount
recorded used to
New recorded in
in non- offset costs
grants in other Other
January 1, operating and December
current income in changes
2022 income in expenses in 31, 2022
period current
current current
period
period period
Government
grants
related to
assets 1,273,978 2,351,183 (2,329) (240,723) (217,641) (2,211,426) 953,042
Government
grants
related to
income 1,087,193 4,827,438 (5,225) (2,513,186) (1,801,310) (79,807) 1,515,103
2,361,171 7,178,621 (7,554) (2,753,909) (2,018,951) (2,291,233) 2,468,145
Note "Other changes" were deferred income offset by the carrying amounts of relevant assets.
V Notes to Consolidated Financial Statements (Continued)
103
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
46 Estimated liabilities
December 31, 2022 January 1, 2022
After-sales service fee of products 27,105 -
Pending litigation 70,379 -
Onerous contract 38 -
97,522 -
104
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
47 Share capital
January 1, 2022 Increase or decrease in current period December 31, 2022
Amount Ratio (%) New issues Others Subtotal Amount Ratio (%)
I. Restricted shares 612,110 4.36% 2,806,128 1,982 2,808,110 3,420,220 20.03%
II. Unrestricted shares 13,418,532 95.64% 235,122 (1,982) 233,140 13,651,672 79.97%
III. Total shares 14,030,642 100% 3,041,250 - 3,041,250 17,071,892 100%
As of December 31, 2022, the Company's total share capital was 17,071,892 thousand shares.
Note Except for Chairman of the Board Mr. Li Dongsheng who holds restricted shares subscribed for in a private placement, none of the other incumbent directors, supervisors or
senior management hold any restricted shares from a split-share structure reform or a private placement. The shares held by these personnel will stay partially frozen as per the
Rules on the Management of Shares Held by the Directors, Supervisors and Senior Management Officers of the Company and the Changes thereof. The trading and information
disclosure in relation to these shares shall be in strict compliance with the applicable laws, regulations and rules.
105
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
48 Other equity instruments
Increase in
current Decrease in
January 1, 2022 period current period December 31, 2022
Convertible bonds 200,334 - 200,334 -
49 Capital reserves
Increase in Decrease in
current current
January 1, 2022 period period December 31, 2022
Share premium 6,068,268 8,414,593 (2,044,871) 12,437,990
Other capital reserves 10,999 90,516 (16,712) 84,803
6,079,267 8,505,109 (2,061,583) 12,522,793
50 Treasury stock
Increase in Decrease in
current current
January 1, 2022 period period December 31, 2022
Treasury stock 1,885,557 502,771 (1,073,747) 1,314,581
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 December 31, 2022, the total number of shares
repurchased was 106,484,000 shares at the total consideration of RMB502,771,000.
Decrease in this year is mainly due to reduction of RMB997,082,000 in the conversion of convertible
bond TCL fixed conversion 2, and the number of shares converted by 293,416,000.
106
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
51 Other comprehensive income
(1) Other comprehensive income items, income tax effects and reclassifications to profit or loss
2022 2021
I. Items that cannot be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will
(3,568) 1,626
be reclassified to profit or loss under equity method
Share of the period (3,568) 1,626
Previous other comprehensive income reclassified to retained
earnings for current period -
2. Changes in fair value of other equity instruments (14,581) (287,845)
Current gain/(loss) (19,688) (212,104)
Previous other comprehensive income reclassified to
retained earnings for current period 16,811 (122,821)
Income tax effects recorded in other comprehensive income (11,704) 47,080
II. Items that will be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will
(13,936) (268,688)
be reclassified to profit or loss under equity method
Share of the period (13,936) (268,688)
Income tax effects recorded in other comprehensive income -
2. Changes in fair value of financial assets recorded in other
comprehensive income - -
Current gain/(loss) - -
3. Cash flow hedges 91,730 65,566
Current gain/(loss) 163,220 77,992
Previous other comprehensive income reclassified to profit
for current period (58,996) -
Income tax effects recorded in other comprehensive income (12,494) (12,426)
4. Differences arising from translation of foreign currency
financial statements of overseas operations (386,679) 245,338
5. Net income arising from disposal of overseas operations
through profit or loss - -
(327,034) (244,003)
107
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
51 Other comprehensive income (continued)
(2) Changes in other comprehensive income items
Equity attributable to shareholders of the parent company
Share of other
comprehensive Differences
income of Gain/loss arising from
investees that on translation of Other
will be changes Gain/(Loss) foreign Fair value comprehensive
reclassified to in fair on changes currency- changes of Fair value income
Accounting profit or loss value 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)
January 1, 2022 334,950 46,888 (350,569) 62,546 (239,179) (141,290) - (122,793) (409,447) 899 (408,548)
Increase and
decrease for 2022 - (17,501) - 15,615 (397,531) (16,420) - 13,462 (402,375) 75,341 (327,034)
December 31, 2022 334,950 29,387 (350,569) 78,161 (636,710) (157,710) - (109,331) (811,822) 76,240 (735,582)
108
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
52 Surplus reserves
Increase in Decrease in
current current December 31,
January 1, 2022 period period 2022
Statutory surplus
reserves 2,367,303 1,162,100 - 3,529,403
Discretionary surplus
reserves 182,870 - - 182,870
2,550,173 1,162,100 - 3,712,273
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.
53 Specific reserves
Appropriation Decrease in
in current current December 31,
January 1, 2022 period period 2022
Production safety
reserve 1,549 752 - 2,301
54 General risk reserve
Appropriation Decrease in
in current current December 31,
January 1, 2022 period period 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, the Company's subsidiary - TCL Technology Group Corporation - appropriated 1%
of its net profit as general risk reserve in the previous years.
109
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
55 Retained earnings
2022 2021
Beginning retained earnings 22,458,340 14,009,494
Change in accounting policies (Note) 6,810 -
Net profit for current period 261,319 10,064,254
Decrease in current period (3,239,739) (1,608,598)
Including: Appropriated as surplus reserves (1,162,100) (97,831)
Distributed to ordinary shareholders as
dividends (2,050,003) (1,625,590)
Others (27,636) 114,823
Ending retained earnings 19,486,730 22,465,150
Due to changes in accounting policies, there were RMB6,810,000 undistributed profits at the
beginning of the period (see Note III. 43 for details).
56 Operating income and operating costs
2022 2021
Revenue Cost of sales Revenue Cost of sales
Core business 162,197,543 148,928,769 161,111,860 129,716,187
Non-core business 4,355,243 2,996,720 2,545,840 1,440,127
166,552,786 151,925,489 163,657,700 131,156,314
(1) Breakdown of operating income deductions
Item Amount Details of Amount Details of
incurred in the deductions incurred in the deductions
current period previous
period
Amount of operating income 166,552,786 163,657,700
Total amount of operating income
deductions 4,355,243 2,714,152.
Proportion of the total amount of
operating income deductions to
operating income 2.61 % 1.66%
(a) Business income from operations not
related to the principal activities
1) Other business income from
activities other than normal
operations. Such income consists of
income from leasing fixed assets,
intangible assets, packaging, sales of
materials, exchange of materials for
non-monetary assets, operations of 4,355,243 Note 1 2,545,840
managed business, as well as income
that is included in the revenue from
main operations but from operations
other than normal operations of the
listed company.
110
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial
Statements (Continued)
Operating income and operating costs
56
(continued)
Breakdown of operating income
(1)
deductions (continued)
Item Amount Details of Amount Details of
incurred in the deductions incurred in the deductions
current period previous
period
2) Income from unqualified financial
businesses, such as interest income
from lending funds; income from
quasi-financial businesses added in the
accounting year as well as the previous
- 168,312 Note 2
accounting year, such as guarantees,
commercial factoring, small loans,
financial leasing, pawning, except for
financial leasing business carried out
for the sale of main products.
3) Income from new trading business
in the current accounting year and the - -
previous accounting year.
4) Income from related transactions
not related to the listed company's - -
existing normal operations.
5) Income from the beginning of the
period to the merger date for
- -
subsidiaries under the common
control.
6) Income from businesses that have
not formed or are difficult to form a - -
stable business model.
Subtotal of income from the business
4,355,243 2,714,152
not related to principal activities
(b) Income without commercial substance
1) Income from transactions or events
in which risk, time distribution or
amount of future cash flows of the - Note 3 -
enterprise are not changed
significantly.
2) Income from transactions that do
not have a real business. For example,
false income realized by self-trading - -
or from transactions formed by
Internet technology or other methods.
3) Income from operations in which
the transaction price is obviously - -
unfair.
4) Income from subsidiaries or
businesses acquired through business
combination with obviously unfair - -
consideration or non-transactional
means in this accounting year.
5) Income involved in non-standard
- -
audit opinions.
111
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
56 Operating income and operating costs (continued)
Breakdown of operating income
(1)
deductions (continued)
Item Amount Details of Amount Details of
incurred in the deductions incurred in the deductions
current period previous
period
6) Income from other transactions or
events that are not commercially - -
reasonable.
Subtotal of income without
- -
commercial substance
(c) Other income that is irrelevant to the
principal activities or without - Note 4 -
commercial substance
Amount after deducting operating
162,197,5434 160,943,548
income
Note 1 TCL TECH. is mainly engaged in the production of semiconductor display, new energy photovoltaic,
semiconductor materials, and other products. Since other income from sales of raw materials, scraps, lease,
and processing are that realized from the operation other than the principal activities, it will be deducted.
Note 2 In May 2021, the second extraordinary meeting of TCL TECH. deliberated and approved the disposal
of 100% stake in TCL Financial Holding Group (Guangzhou) Co., Ltd., and the income from quasi-financial
business realized by such company in January-May 2021 was deducted.
Note 3 TCL TECH. does not have such income deductions in 2022 (2021: Nil)
Note 4 TCL TECH. exercised its duties in sales contracts, and recognized revenue when customers obtained
control of related goods or services. In 2022, all TCL TECH.’s sales contracts are of commercial substance,
and no income was without commercial substance was recognized (2021: Nil).
(2) Business by operating segment
Revenue Cost of sales Gross profit
2022 2021 2022 2021 2022 2021
Domestic
sales 119,139,823 104,781,994 108,166,269 85,584,452 10,973,554 19,197,542
Foreign
sales 47,412,963 58,875,706 43,759,220 45,571,862 3,653,743 13,303,844
166,552,786 163,657,700 151,925,489 131,156,314 14,627,297 32,501,386
(3) The sales revenue from the top five customers combined was RMB50,108,344,000 and
RMB57,063,520,000 respectively for 2022 and 2021, accounting for 30.9% and 35.4% of the core
business revenue.
112
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
56 Operating income and operating costs (continued)
(4) Revenue and costs generated from the Company's trial sales are as follows:
2022 2021
Revenue 739,823 117,141
Cost of sales 721,126 79,064
57 Interest income/expense and exchange gain
2022 2021
Interest income 79,360 150,083
Interest expenditures 23,530 34,936
Exchange gain/(loss) 17,914 (1,224)
The interest income, interest expense and exchange gain/(loss) above occurred with the Company's
subsidiary TCL Tech Finance Co., Ltd., which are presented separately herein as required for a
financial enterprise.
58 Taxes and levies
2022 2021
Property tax 265,880 221,506
Stamp tax 218,367 161,505
Urban maintenance and construction tax 68,890 126,384
Education surcharges 35,730 90,303
Land use tax 30,732 27,531
Others 20,703 20,706
640,302 647,935
The applicable tax and levy standards are
detailed in Note IV.
113
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
59 Selling expenses
2022 2021
Employee salaries and benefits 601,948 593,521
After-sales service expense 400,771 617,663
Promotional and marketing expenses 298,422 58,927
Others 649,387 649,174
1,950,528 1,919,285
60 General and administrative expense
2022 2021
Employee salaries and benefits 1,337,491 1,823,044
Depreciation and amortization expenses 792,780 737,318
Digital development expenses 315,537 254,688
Others 1,094,803 1,578,270
3,540,611 4,393,320
61 R&D expenses
2022 2021
Depreciation and amortization expenses 2,983,043 2,477,618
Material expenses 2,940,584 2,703,695
Employee salaries and benefits 1,767,546 1,421,683
Others 942,465 633,345
8,633,638 7,236,341
62 Financial expenses
2022 2021
Interest expenditures 4,468,008 4,125,399
Interest income (723,665) (446,450)
Exchange loss / (gain) (447,876) (55,357)
Others 126,428 104,323
3,422,895 3,727,915
114
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
63 Other income
2022 2021
R&D subsidies 2,454,585 1,844,420
VAT rebates on software 44,280 31,186
Over-deduction in taxable amount for VAT 1,381 1,374
Others 417,548 90,770
2,917,794 1,967,750
64 Return on investment
2022 2021
Gain on disposal of debt instruments at fair
value through profit or loss
238,803 526,862
Gain on disposal of debt instruments at fair
value through profit or loss
Gain on disposal of debt instruments at fair
value through profit or loss
(15,097) (40,149)
Gain on disposal of equity instruments at fair
value through profit or loss
Gain on disposal of debt instruments at fair
value through profit or loss
18,758 (132,695)
Gain on holding of equity instruments at fair
value through profit or loss
Gain on disposal of debt instruments at fair
value through profit or loss
69,748 263,901
Gain on holding of debt instruments at fair
value through profit or loss
Share of net income of associates 2,958,218 3,152,870
Share of net income of joint ventures (59,479) 65,001
Net income from disposal of long-term
equity investments 1,823,568 (159,433)
Others (303,125) 228,169
4,731,394 3,904,526
65 Gain on changes in fair value
2022 2021
Held-for-trading financial assets (257,067) 155,320
Derivative financial assets 23,437 (317,003)
Held-for-trading financial liabilities (1,678) 12,941
Derivative financial liabilities 96,064 2,158
(139,244) (146,584)
115
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
66 Credit impairment loss
2022 2021
Loss on uncollectible accounts receivable (44,955) (122,892)
Loss on uncollectible other receivables (6,172) (17,349)
Other financial assets 13,474 47,985
(37,653) (92,256)
67 Asset impairment loss
2022 2021
Inventory valuation loss (3,083,928) (1,924,306)
Impairment loss on long-term equity
investments (319,981) -
Loss on impairments of fixed assets (53,890) (592,497)
Impairment loss on contract assets (6,151) -
Loss on impairments of intangible assets (442) (78,909)
Loss on impairments of construction in
progress - (146,160)
Others (22,131) (169,592)
(3,486,523) (2,911,464)
68 Asset disposal income
2022 2021
Income/(loss) from disposal of fixed assets (71,718) (60,496)
Others (8,107) 20,062
(79,825) (40,434)
69 Non-operating income
Amount through
current non-
recurring gains
2022 2021 and losses
Gains on retired or damaged non-
current assets 117 259 117
Government grants and others 789,995 351,721 789,995
790,112 351,980 790,112
116
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
70 Non-operating expense
Amount through
current non-
recurring gains
2022 2021 and losses
Losses on retired or damaged non-
current assets 19,377 21,233 19,377
Donation 70,222 - 70,222
Others 62,472 119,221 62,472
152,071 140,454 152,071
71 Income tax expenses
(1) Table of income tax expenses
2022 2021
Current income tax expense 734,639 2,274,141
Deferred income tax expense (1,465,647) 333,907
(731,008) 2,608,048
(2) Accounting profit and income tax adjustment process
2022 2021
Gross profit 1,057,051 17,583,577
Income tax expense calculated at
statutory/applicable tax rate 158,558 4,395,894
Impact of different tax rates applied to
subsidiaries 383,590 (1,121,466)
Impact of adjusting income tax in previous
periods (12,613) (102,803)
Impact of non-taxable income (704,581) (340,956)
Impact of non-deductible costs, expenses and
losses 107,325 112,433
Impact of the use of deductible losses carry
forward without recognize deferred tax assets
in the previous periods (576,264) (424,609)
Impact of unrecognized deferred tax assets of
deductible temporary differences or deductible 652,219
losses in the current period 730,522
Others (817,545) (562,664)
Income tax expense (731,008) 2,608,048
117
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
72 Earnings per share
(1) Basic EPS
2022 2021
Net profit attributable to shareholders of the parent
company 261,319 10,064,253
Weighted average outstanding ordinary shares (in thousand
shares) 13,686,001 13,476,907
Basic earnings per share (RMB yuan/share) 0.0191 0.7468
(2) Diluted EPS
2022 2021
Net profit attributable to shareholders of the parent
company 261,319 10,064,253
Diluted weighted average outstanding ordinary shares (in
thousand shares) 14,144,114 13,675,916
Diluted earnings per share (RMB yuan/share) 0.0185 0.7359
73 Cash generated from other operating activities
Cash received from other related operating activities in the consolidated cash flow statement was
RMB7,955,973,000 (the same period of the previous year: RMB 7,013,673,000), which primarily
consisted of current payments received, government grants and special appropriation, etc.
74 Cash used in other operating activities
Cash paid in other operating activities in the consolidated cash flow statement was RMB
9,722,343,000 (the same period of the previous year: RMB7,846,247,000), which primarily
consisted of various expenses and current payments.
75 Cash generated from other investing activities
Cash received from other related investing activities in the Company's consolidated cash flow
statement amounted to RMB170,387,000 (the same period of the previous year: RMB33,083,000),
mainly due to the receipt of project bid bonds.
76 Cash used in other investing activities
Cash paid for other related investing activities in the Company's consolidated cash flow statement
amounted to RMB1,212,074,000 (the same period of the previous year: RMB479,761,000), mainly
due to the refund of project bid bonds and payments for foreign exchange forward delivery.
118
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
77 Cash generated from other financing activities
Cash received from other related financing activities in the consolidated cash flow statement of the
Company amounted to RMB272,281,000 (the same period of the previous year: RMB256,271,000),
mainly including deposits received.
78 Cash used in other financing activities
Cash paid for other related financing activities in the Company's consolidated cash flow statement
amounted to RMB6,110,504,000 (the same period of the previous year: RMB6,035,517,000),
mainly for the repurchase of minority interests in subsidiaries, repurchase of company shares, and
payment of financial lease payments.
79 Supplementary information for the cash flow statement
(1) Reconciliation of net profit to net cash generated from/used in operating activities
2022 2021
Net profit 1,788,059 14,975,529
Add： Asset impairment allowance 3,524,176 3,003,720
Depreciation of fixed assets 19,290,088 15,244,644
Depreciation of right-of-use assets 322,032 225,599
Amortization of intangible assets 1,473,104 1,177,003
Amortization of long-term prepaid expense 1,613,307 1,280,074
Loss/(Gain) on disposal of fixed assets, intangible assets
and other long-lived assets 79,825 40,434
Loss on retired or damaged fixed assets 19,260 20,974
Loss/(Gain) on changes in fair value 139,244 146,584
Financial expenses 4,025,748 4,106,202
Return on investment (4,731,394) (3,904,526)
Decrease/(Increase) in deferred income tax assets 399,459 (575,258)
Increase/(Decrease) in deferred income tax liabilities (1,839,558) 772,489
Decrease/(Increase) in inventory (4,643,791) (7,172,706)
Decrease/(Increase) in operating receivables 4,576,161 (8,678,460)
Increase/(Decrease) in operating receivables (7,139,434) 13,055,727
Others (469,910) (839,576)
Net cash generated from operating activities 18,426,376 32,878,453
119
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
79 Supplementary information for the cash flow statement (continued)
(2) Net cash payments for acquisition of subsidiaries in the
current period
2022 2021
Payments of cash and cash equivalents made in current
period due to business combinations incurred in current 51,000 9,768,401
period
Less: cash and cash equivalents held by subsidiary on
867 5,628,896
acquisition date
Add: Payments of cash and cash equivalents made in
current period due to business combinations incurred in - -
previous periods
Net cash payments for acquisition of subsidiaries 50,133 4,139,505
(3) Net cash proceeds from disposal of subsidiaries in the
current period
2022 2021
Cash or cash equivalents received in current period due
174,803 1,984,421
to disposal of subsidiary in current period
Less: cash and cash equivalents held by subsidiary on the
date when the Company’s control over the subsidiary 2,298 900,316
ceased
V Notes to Consolidated Financial Statements (Continued)
79 Supplementary information for the cash flow statement (continued)
(3) Net cash proceeds from disposal of subsidiaries in the current period (continued)
2022 2021
Add: Cash or cash equivalents received in current period
due to disposal of subsidiaries in prior periods 1,260,290 80,485
Net proceeds from the disposal of subsidiaries 1,432,795 1,164,590
(4) Breakdown of cash and cash equivalents
December 31,
2022 January 1, 2022
I. Cash 33,675,624 30,081,705
Including: Cash on hand 480 789
Bank deposits available for payment on demand 32,696,213 28,970,585
Other monetary assets available for payment on
demand 919,646 987,347
Deposits with the central bank available for
payment 59,285 122,984
II. Cash equivalents - -
III. Cash and cash equivalents, end of the period 33,675,624 30,081,705
120
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
80 Net changes in cash and cash equivalents
2022 2021
Ending cash and cash equivalents 33,675,624 30,081,705
Less: Beginning cash 30,081,705 18,208,417
Net increase in cash and cash equivalents 3,593,919 11,873,288
Analysis of ending cash and cash equivalents:
Ending monetary assets 35,378,501 31,393,692
Less: Ending non-cash equivalents (note) 1,702,877 1,311,987
Ending cash and cash equivalents 33,675,624 30,081,705
Note: The closing non-cash equivalents primarily included interest receivable on bank deposits, the
statutory reserve deposits placed by TCL Tech Finance Co., Ltd. in the central bank and other
monetary assets, detailed in Annex V, 1.
121
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
81 Assets with restricted ownership or use rights
December 31, 2022 Reason for restriction
Deposited in the central bank as
Monetary assets
321,852 the required reserve
Monetary assets 1,381,025 Other restricted monetary assets
Notes receivable 264,599 Pledge
Fixed assets 96,479,546 As collateral for loan
Intangible assets 4,177,833 As collateral for loan
Held-for-trading financial assets 255,173 Put in pledge for loan
Construction in progress 10,383,892 As collateral for loan
Right-of-use assets 18,617 As collateral for lease
Accounts receivable 1,609,334 Pledge
Contract assets 271,682 Pledge
115,163,553
82 Foreign currency monetary items
December 31, 2022
Foreign currency
Conversion rate RMB balance
balance
Monetary assets
Including: USD 615,534 6.9646 4,286,948
HKD 240,958 0.8933 215,248
EUR 8,787 7.4250 65,243
JPY 1,540,910 0.0526 81,052
SGD 242 5.1824 1,254
Accounts receivable
Including: USD 565,703 6.9646 3,939,895
HKD 368,734 0.8933 329,390
INR 652,819 0.0841 54,902
MXN 6,756 0.3570 2,412
Receivables financing
Including: USD 83,321 6.9646 580,297
Accounts payable
Including: USD 317,613 6.9646 2,212,047
HKD 622,434 0.8933 556,020
JPY 5,779,166 0.0526 303,984
INR 118,083 0.0841 9,931
EUR 43 7.4250 319
122
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
V Notes to Consolidated Financial Statements (Continued)
82 Foreign currency monetary items (continued)
December 31, 2022
Foreign currency
Conversion rate RMB balance
balance
Other receivables
Including: USD 24,135 6.9646 168,091
HKD 37,377 0.8933 33,389
JPY 12,574 0.0526 661
PLN 1,812 1.5886 2,879
INR 60,781 0.0841 5,112
KRW 102,590 5.4956 563,794
EUR 6 7.4250 45
MXN 7,361 0.3570 2,628
SGD 62 5.1824 321
Other payables
Including: USD 89 6.9646 620
HKD 686,511 0.8933 613,260
JPY 3,131,530 0.0526 164,718
INR 1,476,163 0.0841 124,145
PLN 350 1.5886 556
KRW 130,620 5.4956 717,835
MXN 11,730 0.3570 4,188
EUR 19 7.4250 141
Short-term borrowings
Including: USD 43,956 6.9646 306,136
Long-term borrowings
Including: USD 702,350 6.9646 4,891,587
123
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VI. Changes to Consolidation Scope
1 Newly consolidated entities for current period
Consolidated Reason for Registered capital Contribution
Name of investee period change (RMB) ratio
Zhonghuan Advanced
Semiconductor (Tianjin) Co., January - Newly
Ltd. December 2022 incorporated RMB10,000,000 100.00%
Huanou (Wuxi) New Energy February- Newly
Materials Co., Ltd. December 2022 incorporated RMB10,000,000 100.00%
Huaian Municipal Huanxin February- Newly
New Energy Co., Ltd. December 2022 incorporated RMB1,000,000 100.00%
Lingwu Huanju New Energy March- Newly
Co., Ltd. December 2022 incorporated RMB1,000,000 100.00%
Inner Mongolia Zhonghuan April - Newly
Electronic Materials Co., Ltd. December 2022 incorporated RMB10,000,000 100.00%
Tianjin Zhonghuan Industrial April - Newly
Park Co., Ltd. December 2022 incorporated RMB39,000,000 100.00%
Tianjin Huanrui Technology May-December Newly
Co., Ltd. 2022 incorporated RMB100,000,000 100.00%
Shaanxi Huanyu Green New June-December Newly
Energy Co., Ltd. 2022 incorporated RMB1,000,000 100.00%
Shaanxi Huanshuo Green June-December Newly
New Energy Co., Ltd. 2022 incorporated RMB1,000,000 100.00%
Admiralty Harbor Investment July-December Newly
Holdings Co., Ltd. 2022 incorporated HKD1,000,000 100.00%
Admiralty Harbor Enterprise July-December Newly
Services (Shenzhen) Co., Ltd. 2022 incorporated RMB2,000,000 100.00%
Huizhou Kedate Smart August- Newly
Display Technology Co., Ltd. December 2022 acquired RMB50,000,000 100.00%
Ningxia Huaneng New August- Newly
Energy Co., Ltd. December 2022 incorporated RMB1,000,000 100.00%
Zhonghuan Advanced Japan August- Newly
Co., Ltd. December 2022 incorporated JPY1,000,000 100.00%
September- Newly
TCLCSOTAMERICACORP. December 2022 incorporated US$100 100.00%
Xi'an Shangpai Technology September- Newly
Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Weinan Sunpiestore September- Newly
Technology Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Guiyang Sunpiestore September- Newly
Technology Co., Ltd. December 2022 incorporated RMB500,000 100.00%
124
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VI Changes to Consolidation Scope
Newly consolidated entities
for current period
1 (continued)
Consolidated Reason for Registered capital Contribution
Name of investee period change (RMB) ratio
Lanzhou Sunpiestore September- Newly
Technology Co., Ltd. December 2022 incorporated RMB200,000 100.00%
Urumqi Sunpiestore September- Newly
Technology Co., Ltd. December 2022 incorporated RMB500,000 100.00%
Baoji Shangpai Sidao September- Newly
Technology Co., Ltd. December 2022 incorporated RMB300,000 100.00%
Urumqi Shangpai Xinhui September- Newly
Technology Co., Ltd. December 2022 incorporated RMB500,000 100.00%
Xi'an Maike Shangpai September- Newly
Technology Co., Ltd. December 2022 incorporated RMB300,000 100.00%
Shenzhen Sunpiestore September- Newly
Electronics Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Shenzhen Sunpiestore September- Newly
Industrial Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Donguan Sunpiestore September- Newly
Digital Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Donguan Sunpiestore September- Newly
Electronics Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Guangzhou Sunpiestore September- Newly
Technology Co., Ltd. December 2022 incorporated RMB100,000 100.00%
Lanzhou Hongmao
Sunpiestore Technology September- Newly
Co., Ltd. December 2022 incorporated RMB200,000 100.00%
Xiamen TCL Technology
Industry Investment October-
Partnership (Limited December 2022 Newly
Partnership) incorporated RMB1,000,000,000 99.00%
October- Newly
TCLCSOTSGPTE.LTD. December 2022 incorporated SGD160,000 100.00%
Beijing Youyi Online October- Newly
Technology Co., Ltd. December 2022 incorporated RMB30,000,000 100.00%
November-
December 2022 Newly
PLMOKASp.zo.o. acquired USD1,000 100.00%
Urumqi Shangpai Zhishang Newly
Trading Co., Ltd. December 2022 incorporated RMB500,000 100.00%
Urumqi Shangpai Maiqi Newly
Trading Co., Ltd. December 2022 incorporated RMB500,000 100.00%
Lanzhou Hongsheng
Sunpiestore Electronic Newly
Technology Co., Ltd. December 2022 incorporated RMB200,000 100.00%
Note: Business combinations not under the common control occurred in the current period
125
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VI. Changes to Consolidation Scope (continued)
1 Newly consolidated entities in the current period (continued)
(1) Acquisition of shares in Huizhou Kedate Smart Display Technology Co., Ltd.
① The cost of acquisition and goodwill were recognized as follows:
On August 31, 2022, the Group acquired 100% equity in Huizhou Kedate Smart Display
Technology Co., Ltd. with a cash consideration of RMB51,000,000, and included such
company into the scope of consolidation.
51,0
Cash consideration 00
47,9
Less: Share of fair value of identifiable net assets acquired
89
Difference of lower goodwill / merger cost and higher share of fair value of
3,01
identifiable net assets acquired 1
② Assets and liabilities of the acquiree as at the acquisition date are presented as follows:
Fair value at acquisition Carrying value at acquisition
date date
Current assets 37,486 37,486
Non-current assets 13,549 127
Net assets 47,989 36,581
Less: non-controlling
- -
interests
Net assets acquired 47,989 36,581
③ SHENZHEN CHINA UNITED ASSETS APPRAISAL GROUP CO., LTD. has
evaluated the information above using the asset-based method, and issued an asset appraisal
report (SCUPB Zi [2022] No. 118), with an appraised value of RMB51,003,000.
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
Beijing Zhiqujia Technology Co., Ltd. December 2022 Transferred
Huizhou Shengyao New Energy Technology Co.,
Ltd. December 2022 Transferred
Ningjin Jinchen New Energy Co., Ltd. December 2022 Transferred
Lingwu Huanju New Energy Co., Ltd. December 2022 Transferred
126
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VI. Changes to Consolidation Scope (continued)
3 Subsidiaries disposed in current period
Name of subsidiary Beijing Zhiqujia Technology Co., Ltd.
Price for equity interest disposal 194,226
% equity interest disposed 100%
Way of disposal Equity transfer
Time of loss of control December 2022
Determination basis for time of loss of control Rights & obligations all transferred
Difference between the disposal price and the
Company’s share of the subsidiary’s net assets in the
186,170
consolidated financial statements relevant to the
disposed equity interest
VII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Principal Shareholding ratio How
Place of Nature of
Name of investee place of (%) subsidiary was
registration business
business Direct Indirect obtained
TCL China Star Optoelectronics Manufacturin
Technology Co., Ltd. Shenzhen g and sales Shenzhen 80.03% - Incorporated
Shenzhen China Star Optoelectronics
Semiconductor Display Technology Co., Manufacturin
Ltd. Shenzhen g and sales Shenzhen - 54.31% Incorporated
Guangzhou China Ray Optoelectronic Research and
Materials Co., Ltd. Guangzhou development Guangzhou - 100% Incorporated
Wuhan China Star Optoelectronics Manufacturin
Technology Co., Ltd. Wuhan g and sales Wuhan - 93.93% Incorporated
Wuhan China Star Optoelectronics
Manufacturin
Semiconductor Display Technology Co., Wuhan Wuhan - 57.14% Incorporated
g and sales
Ltd.
Business
combination
Shenzhen CPT Display Technology Co., Manufacturin
Shenzhen Shenzhen - 100% not under
Ltd. g and sales
common
control
China Star Optoelectronics International Hong
(HK) Limited Kong Sales Hong Kong - 100% Incorporated
Business
China Display Optoelectronics combination
Investment
Bermuda Bermuda - 64.20% not under
Technology Holdings Limited holding
common
control
China Display Optoelectronics Manufacturin
Technology (Huizhou) Co., Ltd. Huizhou g and sales Huizhou - 100% Incorporated
Wuhan China Display Optoelectronics Manufacturin
Technology Co., Ltd. Wuhan g and sales Wuhan - 100% Incorporated
127
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
Business
combination
Suzhou China Star Optoelectronics Manufacturin
Suzhou Suzhou - 100% not under
Technology Co., Ltd. g and sales
common
control
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Principal Shareholding ratio How
Place of Nature of
Name of investee place of (%) subsidiary was
registration business
business Direct Indirect obtained
Business
combination
Suzhou China Star Optoelectronics Manufacturin
Suzhou Suzhou - 100% not under
Display Co., Ltd. g and sales
common
control
Guangzhou China Star Optoelectronics
Semiconductor Display Technology Co., Manufacturin
Ltd. Guangzhou g and sales Guangzhou - 55% Incorporated
Beijing HAWK Cloud Information Internet
Technology Co., Ltd. Beijing 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
Investment
Ningbo TCL Equity Investment Ltd. 100% -
Ningbo business Shenzhen Incorporated
TCL Technology Park (Huizhou) Co., Property - 100%
Ltd. Huizhou management Huizhou Incorporated
Research and
- 100%
TCLResearchAmericaInc. U.S. development U.S. Incorporated
TCL Industrial Technology Research Hong Research and - 100%
Institute (Hong Kong) Limited Kong development Hong Kong Incorporated
Hong Investment
100% -
TCLTechnologyInvestmentsLimited Kong business Hong Kong Incorporated
Business
TCL Zhonghuan New Energy combination
Manufacturin
Tianjin Tianjin 2.41% 27.37% not under
Technology Co., Ltd. (Note) g and sales
common
control
Business
combination
Manufacturin
Tianjin Printronics Circuit Corporation Tianjin Tianjin - 26.86% not under
g and sales
common
control
Business
combination
Tianjin Huan'Ou Semiconductor Manufacturin
Tianjin Tianjin - 100% not under
Material&Technology Co., Ltd. g and sales
common
control
Business
Wuxi Zhonghuan Applied Materials Co., combination
Manufacturin
Wuxi Wuxi - 98.08% not under
Ltd. g and sales
common
control
128
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VII Interests in Other Entities (continued)
1 Interests in subsidiaries (Continued)
(1) Principal subsidiaries (Continued)
Principal Shareholding ratio How
Place of Nature of (%)
Name of investee place of subsidiary
registration business
business Direct Indirect was obtained
Business
combination
Tianjin Huanzhi New Energy Technology Co., Manufacturin
Tianjin Tianjin - 62.00% not under
Ltd. g and sales
common
control
Business
Inner Mongolia Zhonghuan Solar Material Co., combination
Inner Manufacturin Inner
- 100% not under
Ltd. Mongolia g and sales Mongolia
common
control
Business
TianJin Zhonghuan Advanced combination
Manufacturin
Tianjin Tianjin - 100% not under
Material&Technology Co., Ltd. g and sales
common
control
Business
combination
Manufacturin
Huansheng Solar (Jiangsu) Co., Ltd. Wuxi Wuxi - 83.73% not under
g and sales
common
control
Business
Tianjin Huanou International Silicon Material combination
Procurement
Tianjin Tianjin - 100% not under
Co., Ltd. & sales
common
control
Business
combination
Zhonghuan Hong Kong Holding Limited Hong Kong Sales Hong Kong - 100% not under
common
control
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 Inner Manufacturin Inner
- 59.32% not under
Co., Ltd. Mongolia g and sales Mongolia
common
control
Business
Inner Mongolia Zhonghuan Advanced combination
Inner Manufacturin Inner
- 100% not under
Semiconductor Material Co., Ltd. Mongolia g and sales Mongolia
common
control
Business
Zhonghuan Advanced Semiconductor Materials combination
Manufacturin
Wuxi Wuxi - 58.79% not under
Co., Ltd. g and sales
common
control
Business
combination
Investment
Moka International Limited BVI BVI 100% not under
holding
common
control
Business
combination
Manufacturin
Moka Technology (Guangdong) Co., Ltd. Huizhou Huizhou 100% not under
g and sales
common
control
Note: Tianjin Zhonghuan Semiconductor Co., Ltd. changed its name to TCL Zhonghuan New Energy
Technology Co., Ltd. on June 16, 2022.
129
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VII Interests in Other Entities (continued)
1 Interests in subsidiaries (Continued)
(2) Subsidiaries with substantial non-controlling interests
Current period Current period Ending non-
Non-
profit or loss Dividends controlling
controlling
Name of subsidiary attributable to distributed to interests
shareholding
non-controlling non-controlling Shareholder
ratio (%)
interests interests equity
TCL China Star
Optoelectronics Technology
Co., Ltd. 19.97% (3,592,778) 1,946,283 43,984,814
TCL Zhonghuan New
Energy Technology Co.,
Ltd. 70.22% 5,054,868 589,019 35,856,582
Highly Information Industry
Co., Ltd. 33.54% 105,734 45,309 512,656
130
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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:
December 31, 2022 January 1, 2022
Non- Current Non-current Assets Current Non- Liabilities
Current Non-current Assets Current Liabilities
current assets assets Total liabilities current Total
assets assets Total liabilities Total
liabilities liabilities
TCL China Star
Optoelectronics
40,115,151 152,441,917 192,557,068 45,523,242 73,184,255 118,707,497 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
31,829,523 77,304,246 109,133,769 23,020,082 39,053,844 62,073,926 24,458,844 53,758,790 78,217,634 20,443,660 15,865,920 36,309,580
Technology Co.,
Ltd.
Highly
Information
8,563,285 149,390 8,712,675 7,191,610 39,961 7,231,571 6,035,827 100,060 6,135,887 4,782,662 22,603 4,805,265
Industry Co.,
Ltd.
2022 2021
Total Net cash generate Total Net cash generate
comprehensive from/used in operating comprehensive from/used in operating
Revenue Net profit income activities Revenue Net profit income activities
TCL China Star
Optoelectronics 56,256,417 (8,352,833) (8,445,005) 11,012,565 80,168,858 10,127,192 10,205,670 27,060,041
Technology Co., Ltd.
TCL Zhonghuan New
Energy Technology 67,010,157 7,073,043 7,073,043 5,056,839 41,104,685 4,435,128 4,435,128 4,281,641
Co., Ltd.
Highly Information
31,847,803 264,253 264,253 (574,296) 31,932,016 272,046 272,046 (103,091)
Industry Co., Ltd.
131
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 Strategic to Shareholding
of Nature of the Group’s ratio (%)
Name of investee
business/place business activities or
Direct Indirect
of registration not
Associate
R&D,
production &
Xinjiang Xiexin New sale of
Energy Material Xinjiang polycrystalline Yes - 27%
Technology Co., Ltd. silicon &
monocrystalline
silicon;
(2) Key financial information of major associates
December 31, 2022 January 1, 2022
Xinjiang Xiexin New
Energy
Xinjiang Xiexin New Energy Material Technology Co.,
Material Technology Co., Ltd. Ltd.
Total assets 18,250,952 11,377,813
Total liabilities 3,992,915 5,110,841
Non-controlling interests Not applicable Not applicable
Equity attributable to
shareholders of the parent
company 14,258,037 6,266,973
Share of equity in proportion
to the Company’s interest 3,849,670 1,692,083
Carrying amount of
investment in associate 3,919,465 1,691,361
132
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
VII Interests in Other Entities
(Continued)
2 Interests in joint ventures and
associates (continued)
(2) Key financial information of major
associates (continued)
2022 2021
Xinjiang Xiexin New Xinjiang Xiexin New
Energy Energy
Material Technology Material Technology Co.,
Co., Ltd. Ltd.
Revenue 13,523,962 2,905,071
Net profit attributable to the parent
company 7,991,046 1,322,643
Dividends from associate to the
Group in current period - -
(3) Financial information of other joint ventures and associates combined respectively
2022 2021
Joint ventures:
Aggregated carrying amount of
investments 520,668 555,257
Aggregate of following items calculated
in proportion to the Company’s interest
Net profit (note) (59,479) 65,001
Other comprehensive income (note) - -
Total comprehensive income (59,479) 65,001
Associate:
Aggregated carrying amount of
investments 24,816,083 23,393,960
Aggregate of following items calculated
in proportion to the Company’s interest
Net profit (note) 730,114 (1,269,007)
Other comprehensive income (note) (17,504) 910,473
Total comprehensive income 712,610 (358,534)
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.
133
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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, notes receivable, accounts receivable, loans and advances to customers
and other receivables.
The Group’s bank deposits and due from central bank are mainly deposited in stated-owned banks
and other large and medium-sized listed banks. The Group considers no significant credit risk
existed and no significant loss will be caused by the counterpart’s breach of contract.
For notes receivable, accounts receivable, loans and advances to customers and other receivables,
the Group has established relevant policies to control the credit risk exposure, and will evaluate
the client’s credit qualification and determine corresponding credit period based on the client’s
financial status, the possibility of obtaining guarantees from the third party, relevant credit records
and other factors (like the current market situation). In the meantime, the Group will regularly
monitor the client's credit records. For any client with unfavorable credit records, the Group will
issue written reminders, shorten the credit period or cancel the credit period so as to keep the
Group's overall credit risk controllable.
As of December 31, 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 headquarter shall firstly summarize predictions on the cash flow of various
subsidiaries and then continuously monitor the short-term and long-term fund demand at the
Group's level so as to maintain sufficient cash reserves and negotiable securities that can be
realized at any time; meanwhile, special efforts shall also be made to continuously monitor
whether provisions stated in the loan agreement are observed and to make major financial
institutions promise to provide sufficient reserve funds so as to satisfy short-term and long-term
capital demand.
As of December 31, 2022, the Group had no liquidity risk events.
134
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 December 31, 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 USD348,049,000, equivalent to
RMB2,424,025,000 based on the spot exchange rate on the balance sheet date. The differences
arising from the translation of foreign currency financial statements were not included.
The Group applies the following exchange rate of USD against RMB:
Average exchange Exchange rate at
rate period-end
2022 December 31, 2022
USD/RMB 6.7573 6.9646
Provided that other risk variables remained unchanged except for the exchange rate, a 5%
depreciation/appreciation in RMB as a result of the changes in the exchange rate of RMB against
USD would cause an increase/decrease of RMB121,201,000 in shareholders' equity and net profit
respectively of the Group on December 31, 2022.
The above-mentioned sensitivity analysis is made based on the assumption that the exchange rate
changes on the balance sheet date, and financial instruments held by the Group on the balance sheet
date exposed to the exchange risk are re-calculated based on the changed exchange rate. The above
analysis does not include differences arising from the translation of foreign currency financial
statements.
(b) Interest risk
The Group’s interest rate risk mainly results from interest-bearing bank borrowings adopting floating
interest rates, and the Group determined the proportion of fixed interest rates and floating interest
rates based on the market environment and its risk tolerance. Up until December 31, 2022, the
Group’s liabilities with floating interest rates accounted for 69.31% 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.
135
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
3
and parameters:
The Company’s receivables financing was bank acceptance notes and trade acceptance
notes, of which the market prices were determined based on the transfer or discounted
amounts.
Derivative financial assets and liabilities are multiple IRS and CCS signed between the
Group and financial institutions. The Company adopts the quotations provided by the
financial institution in valuation.
Items measured at continuous level 3 fair value adopt the following valuation techniques
4
and parameters (nature and quantity):
Other non-current financial assets measured at continuous level 3 fair value are mainly
unlisted equity investments held by the Company. In measuring the fair value, the Company
mainly adopts the valuation technique of comparison with listed companies, taking into
account the price of similar securities and liquidity discount.
Held-for-trading financial assets measured at continuous level 3 fair value are mainly wealth
management products held by the Company. In valuation of the fair value, the Company
adopts the method of discounting future cash flows based on the agreed expected yield rate.
136
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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) 988,403 11,647,404 67,700 12,703,507
Derivative financial assets (see
Note V.3) - 361,034 361,034
Receivables financing (see Note
V.6) - 1,103,128 1,103,128
Investments in other equity
instruments (see Note V. 15) 66,706 - 373,290 439,996
Other non-current financial assets
(see Note V. 16) 1,852,623 - 1,076,204 2,928,827
Total assets continuously measured
at fair value 2,907,732 13,111,566 1,517,194 17,536,492
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial
liabilities (see Note V, 30) - 397,024 464,888 861,912
Derivative financial liabilities (see
Note V, 31) - 70,735 - 70,735
Total liabilities continuously
measured at fair value - 467,759 464,888 932,647
137
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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 1,159,085,019 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：
Relationship with the
Company Name
Company
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. Joint venture
Huizhou TCL Human Resources Service Co., Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Tianjin Huanyan Technology Co., Ltd. Joint venture
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund Partnership (Limited Joint venture
Partnership)
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
Peer College Education Technology (Huizhou) Co., Ltd. Joint venture’s subsidiary
Shanxi Shengwei Enterprise Management Co., Ltd. Joint venture’s subsidiary
Anhui Dangzhuo Enterprise Management 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
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. Associate
SunPower Systems International Limited Associate
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. Associate
Shenzhen Jucai Supply Chain Technology Co., Ltd. Associate
MAXEON SOLAR TECHNOLOGIES ,PTE.LTD Associate
Tianjin 712 Communication & Broadcasting Co., Ltd. Associate
Inner Mongolia Zhongjing Science and Technology Research Institute Co., Ltd. Associate
Shenzhen Tixiang Business Management Technology Co., Ltd. Associate
Xinjiang Xiexin New Energy Material Technology Co., Ltd. Associate
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. Associate
X X. Related parties and related-party transactions (continued)
2
2 The nature of related parties without control relationship (continued)
TCL Intelligent Technology (Ningbo) Co., Ltd. Associate
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. Associate
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. Associate
Ningbo Dongpeng Weichuang Equity Investment Partnership (Limited Partnership) Associate
Ningbo Dongpeng Heli Equity Investment Partnership (Limited Partnership) Associate
TCL Finance (Hong Kong) Co., Limited Associate
Inner Mongolia Huanye Material Co., Ltd. Associate
Ruihuan (Inner Mongolia) Solar Power Co., Ltd. Associate
Zhonghuan Aineng (Beijing) Technology Co., Ltd. Associate
LG Electronics (Huizhou) Co., Ltd. Associate
138
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
Wuxi TCL Medical Imaging Technology Co., Ltd. Associate
China Innovative Capital Management Limited Associate
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
SunPower Corporation Associate’s subsidiary
SunPower Phils.Manufacture Ltd Associate’s subsidiary
SunPower Systems Sarl Associate’s subsidiary
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
Shenzhen Xirang International Network Information Technology Co., Ltd. Associate’s subsidiary
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. Associate’s subsidiary
Elite Excellent Investments Limited Associate’s subsidiary
Esteem Venture Investment Limited Associate’s subsidiary
Shenzhen Juchuang Zhilian Information Technology Co., Ltd. Associate’s subsidiary
Huixing Holdings Limited Associate’s subsidiary
Marvel Paradise Limited Associate’s subsidiary
Union Dynamic Investment Limited Associate’s subsidiary
Dalian Tixiang Enterprise Management Consulting Co., Ltd. Associate’s subsidiary
Zijinshan Investment Co., Ltd. Associate’s subsidiary
Ziteng Intellectual Property Operation (Shenzhen) Co., Ltd. Associate’s subsidiary
Huizhou Tixiang Enterprise Management Consulting Co., Ltd. Associate’s subsidiary
SunPower Malaysia Manufacturing Sdn.Bhd. Associate's subsidiary
TCL Industries Holdings Co., Ltd. and its subsidiaries Other relationships
CJ Speedex Logistics Co., Ltd. Significantly influenced
by the Company’s senior
management
139
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
2022 2021
TCL Industries Holdings Co., Ltd. and its subsidiaries 10,460,136 15,594,088
SunPower Systems Sarl 1,912,424 1,434,224
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. 1,014,946 641,810
Qihang International Import & Export Limited 520,330 528,883
SunPower Malaysia Manufacturing Sdn.Bhd. 482,562 41,403
SunPower Systems International Limited 195,077 323,973
TCl Environmental Technology Co., Ltd. and its subsidiaries 147,016 48,858
Qihang Import&Export Limited 91,498 5,728
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 50,095 35,337
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 5,443 3,355
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 4,964 -
Getech Ltd. and its subsidiaries 4,704 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 2,658 843
MAXEON SOLAR TECHNOLOGIES ,PTE.LTD 1,691 -
Moxing Semi-conductor (Guangdong) Co., Ltd. 44 -
Tianjin 712 Communication & Broadcasting Co., Ltd. 39 671
SunPower Corporation 37 -
Sunpower Phils.Manufacture Ltd 10 -
Inner Mongolia Zhongjing Science and Technology Research Institute Co.,
Ltd. - 333
Shenzhen Tixiang Business Management Technology Co., Ltd. - 17
14,893,674 18,659,523
(2) Purchasing raw materials and finished products from related parties Note 2
2022 2021
Xinjiang Xiexin New Energy Material Technology Co., Ltd. 5,741,285 2,440,128
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 2,768,083 3,288,681
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,437,095 1,556,530
Shenzhen Jucai Supply Chain Technology Co., Ltd. 1,230,135 960,377
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. 573,491 128,872
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. 228,127 142,865
Inner Mongolia Zhongjing Science and Technology Research Institute Co.,
Ltd. 178,523 213,923
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 144,809 29,348
Qihang Import&Export Limited 48,531 -
Jucai Supply Chain International (Hong Kong) Co., Ltd. 5,142 6,951
TCl Environmental Technology Co., Ltd. and its subsidiaries 2,308 51,335
TCL Intelligent Technology (Ningbo) Co., Ltd. 1,309 1,521
12,358,838 8,820,531
140
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 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
2022 2021
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 300,000 -
Shenzhen Jucai Supply Chain Technology Co., Ltd. 132,577 101,130
Jiangsu Huanxin Semiconductor Co., Ltd. 42,552 109,384
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 41,862 40
Ningbo Dongpeng Weichuang Equity Investment Partnership
(Limited Partnership) 34,228 162,982
Qihang International Import & Export Limited 25,811 3,234
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 20,731 44,945
Shenzhen Qianhai Sailing International Supply Chain Management
Co., Ltd. 15,367 24,975
Shenzhen Xirang International Network Information Technology
Co., Ltd. 11,952 7,555
Anhui TCL Human Resources Service Co., Ltd. 9,983 5,740
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. 9,920 4,937
Qihang Import&Export Limited 9,089 12,779
Elite Excellent Investments Limited 8,762 3,860
Shenzhen Tixiang Business Management Technology Co., Ltd. 5,764 7,868
Esteem Venture Investment Limited 5,416 41
Shenzhen Juchuang Zhilian Information Technology Co., Ltd. 4,135 -
Peer College Education Technology (Huizhou) Co., Ltd. 3,881 3,410
Shanxi Shengwei Enterprise Management Co., Ltd. 3,197 725
Anhui Dangzhuo Enterprise Management Co., Ltd. 2,751 -
Huizhou TCL Human Resources Service Co., Ltd. 2,516 371
Huixing Holdings Limited 673 672
Marvel Paradise Limited 612 570
Union Dynamic Investment Limited 401 377
Hubei Shifen Sharing Technology Co., Ltd. 85 -
Dalian Tixiang Enterprise Management Consulting Co., Ltd. 46 -
Ningbo Dongpeng Heli Equity Investment Partnership (Limited
Partnership) 33 -
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 8 229,133
TCL Finance (Hong Kong) Co., Limited - 21,238
692,352 745,966
141
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(4) Leases
2022 2021
Rental income
TCL Industries Holdings Co., Ltd. and its
subsidiaries 75,322 72,763
Aijiexu New Electronic Display Glass
(Shenzhen) Co., Ltd. 66,902 80,552
Inner Mongolia Huanye Material Co., Ltd. 16,063 509
TCL Huanxin Semi-conductor (Tianjin) Co.,
Ltd. 4,323 1,949
Getech Ltd. and its subsidiaries 1,065 532
TCl Environmental Technology Co., Ltd. and
its subsidiaries 1,046 988
Shenzhen Jucai Supply Chain Technology Co.,
Ltd. 837 812
Zhihui Xinyuan Commercial (Huizhou) Co.,
Ltd. 368 350
TCL Intelligent Technology (Ningbo) Co., Ltd. 1 460
Zhonghuan Feilang (Tianjin) Technology Co.,
Ltd. - 886
Huizhou TCL Real Estate Development Co.,
Ltd. - 367
165,927 160,168
Rental expense
TCL Industries Holdings Co., Ltd. and its
subsidiaries 62,456 52,989
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 5,147 232
TCL Huanxin Semi-conductor (Tianjin) Co.,
Ltd. 1,927 834
69,530 54,055
(5) Providing labour service for or accepting labour service from related parties
2022 2021
Providing labour service for related parties 293,468 242,517
Accepting labour service from related parties 1,534,144 885,757
142
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party
Transactions (Continued)
3 Major related-party transactions (continued)
(6) Receiving interest from or paying interest to related parties Note 3
2022 2021
Interest received 22,837 81,607
Interest paid 18,040 18,244
(7) Remuneration of key management personnel
2022 2021
Remuneration of key management personnel 48,071 58,199
(8) 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 RMB960,000,000.
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 Tech 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.
143
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
Note 5 Transactions between TCL Financial Holding (Guangzhou) Group Co., Ltd. and its subsidiaries
with the Company in June 2021 are recorded into 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.
Note 7 Remuneration of key management personnel does not include share-based payment.
4 Balances due from and to related parties (continued)
(1) Notes receivable
December 31,
2022 January 1, 2022
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. - 13,441
- 13,441
(2) Accounts receivable
December
31, January 1,
2022 2022
TCL Industries Holdings Co., Ltd. and its subsidiaries 2,143,258 2,230,056
SunPower Systems Sarl 258,443 281,163
Shenzhen Qianhai Sailing International Supply Chain Manag
ement Co., Ltd. 249,860 276,090
SunPower Systems International Limited 76,749 119,817
Qihang Import&Export Limited 36,224 -
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 12,651 24,710
Inner Mongolia Huanye Material Co., Ltd. 6,398 -
Qihang International Import & Export Limited 6,163 235,474
TCl Environmental Technology Co., Ltd. and its subsidiaries 5,774 -
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 1,522 1,569
Shenzhen Jucai Supply Chain Technology Co., Ltd. 1,163 -
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. 969 -
Tianjin Huanyan Technology Co., Ltd. 289 -
Getech Ltd. and its subsidiaries 281 -
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 183 1
MAXEON SOLAR TECHNOLOGIES ,PTE.LTD 104 -
Tianjin 712 Communication & Broadcasting Co., Ltd. 44 40
Shenzhen Qianhai Qihang Supply Chain Management Co.,
Ltd. 28 -
SunPower Malaysia Manufacturing Sdn.Bhd. 2 2,183
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund
Partnership (Limited Partnership) - 199
2,800,105 3,171,302
144
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
Balances due from and to related parties
4
(continued)
(3) Receivables financing
December 31,
2022 January 1, 2022
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. - 500
- 500
(4) Accounts payable
December
31, January 1,
2022 2022
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,295,863 448,553
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 699,954 552,883
Shenzhen Jucai Supply Chain Technology Co., Ltd. 268,519 274,366
Getech Ltd. and its subsidiaries 112,831 10,762
Qihang Import&Export Limited 73,130 -
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. 63,818 5,246
Inner Mongolia Shengou Electromechanical Engineering Co.,
Ltd. 57,847 30,029
Inner Mongolia Huanye Material Co., Ltd. 25,090 1,457
Qihang International Import & Export Limited 20,058 -
TCl Environmental Technology Co., Ltd. and its subsidiaries 15,313 24,033
Shenzhen Qianhai Sailing International Supply Chain Manag
ement Co., Ltd. 9,534 -
Shenzhen Qianhai Qihang Supply Chain Management Co.,
Ltd. 7,981 2,240
Jucai Supply Chain International (Hong Kong) Co., Ltd. 3,769 6,503
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 968 -
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 10 -
Shenzhen Xirang International Network Information
Technology Co., Ltd. - 1,195
Peer College Education Technology (Huizhou) Co., Ltd. - 38
2,654,685 1,357,305
(5) Other receivables
December 31,
2022 January 1, 2022
TCL Industries Holdings Co., Ltd. and its subsidiaries 545,760 1,390,733
TCl Environmental Technology Co., Ltd. and its subsidiaries 30,642 2,139
Ruihuan (Inner Mongolia) Solar Power Co., Ltd. 20,181 -
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 7,987 -
Inner Mongolia Huanye Material Co., Ltd. 4,061 -
Getech Ltd. and its subsidiaries 3,994 404
Shenzhen Xirang International Network Information Technology Co., Ltd. 3,825 1,185
Zhonghuan Aineng (Beijing) Technology Co., Ltd. 3,101 3,099
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 2,058 663
145
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(5) Other receivables (continued)
December 31,
2022 January 1, 2022
Shenzhen Jucai Supply Chain Technology Co., Ltd. 1,725 -
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 559 -
Shenzhen Qianhai Sailing International Supply Chain Management Co.,
Ltd. 218 8
LG Electronics (Huizhou) Co., Ltd. 212 109
Inner Mongolia Zhongjing Science and Technology Research Institute Co.,
Ltd. 15 524
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 9 -
Wuxi TCL Medical Imaging Technology Co., Ltd. 6 -
TCL Intelligent Technology (Ningbo) Co., Ltd. - 3,777
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. - 64
Moxing Semi-conductor (Guangdong) Co., Ltd. - 7
624,353 1,402,712
(6) Other payables
December 31, January 1,
2022 2022
Tianjin Zhonghuan Haihe Intelligent Manufacturing
Fund Partnership (Limited Partnership) 428,100 428,100
Getech Ltd. and its subsidiaries 166,525 118,911
Shenzhen Jucai Supply Chain Technology Co., Ltd. 115,220 84,988
TCL Industries Holdings Co., Ltd. and its subsidiaries 67,456 39,554
Qihang International Import & Export Limited 25,812 3,234
Ningbo Dongpeng Weichuang Equity Investment
Partnership (Limited Partnership) 18,762 48,969
TCl Environmental Technology Co., Ltd. and its
subsidiaries 14,402 1,365
Anhui TCL Human Resources Service Co., Ltd. 11,009 6,073
Aijiexu New Electronic Display Glass (Shenzhen) Co.,
Ltd. 9,317 1,330
Qihang Import&Export Limited 9,089 12,779
Elite Excellent Investments Limited 8,762 3,860
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 5,564 5,316
Esteem Venture Investment Limited 5,416 41
Moxun Semiconductor Technology (Shanghai) Co.,
Ltd. 4,057 1,000
Peer College Education Technology (Huizhou) Co.,
Ltd. 3,881 3,624
Shenzhen Xirang International Network Information
Technology Co., Ltd. 3,124 -
Anhui Dangzhuo Enterprise Management Co., Ltd. 2,751 -
Huizhou TCL Human Resources Service Co., Ltd. 2,515 370
Jucai Supply Chain International (Hong Kong) Co.,
Ltd. 2,333 -
Shanxi Shengwei Enterprise Management Co., Ltd. 2,221 725
146
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
Related Parties and Related-Party Transactions
X
(Continued)
4 Balances due from and to related parties (continued)
(6) Other payables (continued)
December 31, January 1,
2022 2022
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 1,924 -
Inner Mongolia Shengou Electromechanical
Engineering Co., Ltd. 1,444 -
Huixing Holdings Limited 673 672
Marvel Paradise Limited 612 570
Shenzhen Qianhai Qihang Supply Chain Management
Co., Ltd. 449 245
Union Dynamic Investment Limited 401 377
CJ Speedex Logistics Co., Ltd. 102 1,772
Hubei Shifen Sharing Technology Co., Ltd. 85 -
TCL Intelligent Technology (Ningbo) Co., Ltd. 75 -
Inner Mongolia Zhongjing Science and Technology
Research Institute Co., Ltd. 55 -
Ningbo Dongpeng Heli Equity Investment Partnership
(Limited Partnership) 66 33
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 45 45
China Innovative Capital Management Limited 29 -
Shenzhen Tixiang Business Management Technology
Co., Ltd. - 197
Xinjiang Xiexin New Energy Material Technology
Co., Ltd. - 4
912,276 764,154
(7) Non-current liabilities due within a one-year period
December 31, 2022 January 1, 2022
TCL Industries Holdings Co., Ltd. and its subsidiaries 19,555 6,346
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 4,972 4,648
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 957 957
25,484 11,951
(8) Prepayments
December 31, 2022 January 1, 2022
Tianjin Huanyan Technology Co., Ltd. 30,438 -
Getech Ltd. and its subsidiaries 16,890 4,850
Xinjiang Xiexin New Energy Material
Technology Co., Ltd. 8,386 74,672
Shenzhen Qianhai Qihang Supply Chain
Management Co., Ltd. 2,633 -
Shenzhen Jucai Supply Chain Technology Co.,
Ltd. 1,446 -
147
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
Balances due from and to related parties
4
(continued)
(8) Advance payments (continued)
December 31, 2022 January 1, 2022
Shenzhen Xirang International Network
Information Technology Co., Ltd. 1,416 -
TCL Industries Holdings Co., Ltd. and its
subsidiaries 75 40
61,284 79,562
(9) Advances from customers
December 31, 2022 January 1, 2022
TCL Industries Holdings Co., Ltd. and its
subsidiaries 214 -
214 -
(10) Contract liabilities
Januar
y 1,
December 31, 202
2022 2
Shenzhen Qianhai Sailing International Supply Chain Manag
ement Co., Ltd. 148,237 111
TCL Industries Holdings Co., Ltd. and its subsidiaries 53,736 10,633
TCl Environmental Technology Co., Ltd. and its subsidiaries 3,233 2,885
205,206 13,629
(11) Lease liabilities
December 31,
2022 January 1, 2022
TCL Industries Holdings Co., Ltd. and its
subsidiaries 1,345 6,576
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 1,260 6,242
TCL Huanxin Semi-conductor (Tianjin) Co.,
Ltd. - 275
2,605 13,093
148
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
X Related Parties and Related-Party Transactions
(Continued)
4 Balances due from and to related parties
(continued)
(12) Deposits from related parties (note)
December January 1,
31, 2022 2022
Zhihui Xinyuan Commercial (Huizhou) Co., Ltd. 300,086 185
Shenzhen Jucai Supply Chain Technology Co., Ltd. 132,615 101,181
Jiangsu Huanxin Semiconductor Co., Ltd. 42,553 109,395
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 41,867 46
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 20,735 45,018
Ningbo Dongpeng Weichuang Equity Investment Partnership (Limited
Partnership) 15,722 114,413
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. 15,382 25,040
Shenzhen Xirang International Network Information Technology Co., Ltd. 11,956 7,559
Shanghai Tixiang Enterprise Management Consulting Co., Ltd. 9,923 4,940
Shenzhen Tixiang Business Management Technology Co., Ltd. 5,766 7,873
Shenzhen Juchuang Zhilian Information Technology Co., Ltd. 4,136 -
Anhui TCL Human Resources Service Co., Ltd. 1,637 -
Shanxi Shengwei Enterprise Management Co., Ltd. 978 -
Dalian Tixiang Enterprise Management Consulting Co., Ltd. 46 -
TCL Huanxin Semi-conductor (Tianjin) Co., Ltd. 8 229,154
TCL Finance (Hong Kong) Co., Limited - 21,241
603,410 666,045
These deposits are made by related parties in the Company’s subsidiary TCL Tech Finance Co., Ltd.
(13) Other non-current assets
December 31,
2022 January 1, 2022
Ziteng Intellectual Property Operation -
(Shenzhen) Co., Ltd. 216,468
Getech Ltd. and its subsidiaries 3,176 -
219,644 -
149
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XI Share-based payments
1 General conditions of share-based payment
Total amount of each equity instrument granted by the
-
Company in the current period
Total amount of each equity instrument exercised by
-
the Company in the current period
Total amount of the Company’s equity instruments that
-
expired in the current period
Range of exercise prices of the Company’s stock
options outstanding and remaining contract term at the ---
end of the period
Range of exercise prices of the Company’s other equity
instruments outstanding and remaining contract term at ---
the end of the period
According to the Proposal on the Management Measures of the Company's Employee Stock Ownership
Plan (Phase II) 2021-2023 deliberated and adopted at the Second Extraordinary Meeting 2022, and the
Proposal on the Company's Employee Stock Purchase Plan (Phase II) 2021-2023 (Draft) adopted by the
resolution of the 19th and 14th Meetings of the Seventh-term Board of Directors, the grant date of this
share incentive was July 22, 2022; the grant price was RMB4.35; 32.6211 million shares were granted to
no more than 3,600 awardees at the price of RMB4.35 on July 22,
The vesting arrangement of the restricted stock granted under this incentive plan is shown in the following
table:
Number of times Vesting period and ratio
First non-trade transfer or sale After 12 months from the date of vesting of the holder's respective
quota of the underlying shares, the Shareholding Plan may decide
whether to sell 50% of the shares or to transfer 50% of the holder's
respective shares to the account of the holder of the Shareholding
Plan, provided that such transfer and sales are then supported by the
systems of SZSE and the Registration and Settlement Corporation;
Second non-trade transfer or After 24 months from the date of vesting of the holder's corresponding
sale quota of the underlying shares, the Shareholding Plan may decide
whether to sell 50% of the shares or to transfer 50% of the holder's
corresponding shares to the account of the holder of the Shareholding
Plan provided that such transfer and sales are then supported by the
systems of SZSE and the Registration and Settlement Corporation
2 Equity-settled share-based payments
Method of determining the fair Restricted shares: The Group determined the fair value of equity
value of equity instruments on instruments on the grant date based on the fair value of shares,
the date of grant RMB4.35 per share thereon.
Basis for determining the On each balance sheet date within the vesting period, the Group
number of exercisable equity determines the best
instruments estimate based on the latest number of employees eligible to
exercise their options, and revise the estimated number of
exercisable equity instruments.
Reasons for significant
differences between current Not applicable
and previous estimates
Accumulated amount of
equity-settled share-based
RMB26,559,000
payment included in capital
reserve
Total expense recognized for
equity-settled share-based RMB26,559,000
payments in the current period
3 The Company has no cash-settled share-based payments.
4 The Company has no share-based payment modification or termination.
150
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XII Commitments
1 Capital commitments
December 31, 2022 January 1, 2022
Under contractual
obligations but not Note
provided for 1 12,563,851 17,764,772
Approved by Board but not
under contractual Note
obligations 2 3,248,000 172,384
15,811,851 17,937,156
Note The capital commitments under contractual obligations but not provided for in the current period
1 primarily consisted of such commitments for construction of investment projects and external
investments.
Note The capital commitments were approved by the Board but are not under contractual obligations in
2 the current period primarily consisting of such commitments for CSOT’s LCD panel project.
As of December 31, 2022, apart from the disclosures above, there were no other major commitments
that are required to be disclosed.
XIII Contingencies
Guarantees Provided for External Parties
The guaranteed amount for related party bank loan, commercial drafts, letters of credit, etc. is
RMB3,137,934,000.
XIV Events after Balance Sheet Date
1 From February 3 to 6, 2023, TCL TECH. completed the issue of the first phase of medium-term
notes (science and technology Notes) in 2023, with interest valued from February 7, 2023, an issue
scale of RMB1.5 billion, a term of 3 years, and a coupon rate of 4.1%.
According to 2022 profit distribution and the proposal for conversion of capital reserve to share
capital reviewed and approved by the resolution of the Company’s board of directors: Based on
17,071,891,607 share capital of the Company as of March 30, 2023, all shareholders will be issued
2
one share for every 10 shares they hold from the capital reserve, and subsequently, the total share
capital of the Company will be changed to 18,779,080,767 shares. No cash dividends and no bonus
shares are declared for the year.
Zhonghuan Advanced Semiconductor Materials Co., Ltd., a holding subsidiary of the Company,
acquired 100% equity of Xinxin Semiconductor Technology Co., Ltd. (hereinafter referred to as
"Xinxin Semiconductor") by means of newly increased registered capital (hereinafter referred to
as "the transaction"). Through deliberation and approval by the board of directors of the Company,
Zhonghuan Advanced Semiconductor Materials Co., Ltd. signed the Equity Acquisition and
3 Capital Increase Agreement with the shareholders of Xinxin Semiconductor. As of the date of
approval of these financial statements, the closing conditions of the transaction have been fulfilled
and Xinxin Semiconductor has become a wholly-owned subsidiary of Zhonghuan Advanced
Semiconductor Materials Co., Ltd. Consideration for the transaction is RMB7,756,983,000, and
after the completion of the transaction, shareholders of Xinxin Semiconductor hold a total of
32.50% equity interest in Zhonghuan Advanced Semiconductor Materials Co., Ltd. 口
151
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XV 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 RMB2,572,020,000. The
Company completed the closing at the end of May.
2022 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
(1) and sales of semiconductor display panels and semiconductor display modules, as well as
complete display processing.
New energy photovoltaic and semiconductor materials business: mainly includes the manufacture
(2) and sales 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, return on investment, non-operating income and income
tax expenses. Transfer pricing of inter-segment income is calculated on terms similar to other
foreign transactions.
152
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XIV Other Important Matters (Continued)
(II) Segment reporting (continued)
2 Financial information of reporting segments
For the 12 months ending on December 31, 2022
New energy
photovoltaics
Semi-
and semi- Distribution Other and
conductor Total
conductor business offsets
display
materials
business
Revenue 65,717,155 67,010,157 31,847,803 1,977,671 166,552,786
Gross profit (8,994,284) 7,449,331 351,040 2,250,964 1,057,051
Income tax
expense (1,330,043) 376,289 86,787 135,959 (731,008)
Net profit (7,625,065) 7,073,042 264,253 2,075,829 1,788,059
Total assets 175,429,564 109,133,768 8,712,675 66,720,225 359,996,232
Total liabilities 99,999,637 62,073,927 7,231,569 58,552,346 227,857,479
Other items
Depreciation
and
amortization 15,514,561 4,581,580 56,980 1,603,733 21,756,854
Capital
expenditure 29,340,453 11,212,723 - 209,611 40,762,787
Net interest
expense 1,215,925 951,451 88,754 1,432,383 3,688,513
For the 12 months ending on December 31, 2021
Semi- New energy
conductor photovoltaics
display and semi- Distribution Other and
Total
and conductor business offsets
materials materials
business business
Revenue 88,220,062 41,104,685 31,932,016 2,400,938 163,657,701
Gross profit 12,402,514 5,000,031 366,835 (185,801) 17,583,579
Income tax
expense 1,738,017 564,903 94,789 210,339 2,608,048
Net profit 10,664,497 4,435,128 272,046 (396,140) 14,975,531
Total assets 206,597,444 77,979,359 6,135,887 18,037,005 308,749,695
Total liabilities 120,788,713 36,309,580 4,805,264 27,184,283 189,087,840
Other items
Depreciation
and
amortization 14,307,942 2,977,409 23,292 619,270 17,927,913
Capital
expenditure 24,135,467 6,102,319 - 617,348 30,855,133
Net interest
expense 944,263 827,243 55,480 1,736,816 3,563,802
153
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI Notes to the key items presented in the financial statements of the Company
1 Accounts receivable
December 31, 2022 January 1, 2022
Accrual
Ratio Ratio
Amount Ratio Amount
(%) (%)
Allowance (%) Allowance Percentage
Within 1
353,877 100% 65 0.02% 93,929 100% 363 0.39%
year
2 Other receivables
December 31, 2022 January 1, 2022
Dividends receivable - -
Other receivables 4,961,948 13,819,512
4,961,948 13,819,512
(a) Nature of other receivables is analyzed as follows:
December 31, 2022 January 1, 2022
Equity transfer receivables 470,628 1,260,290
Receivables from external entities - 107,708
Security deposits 1,795 1,407
Others 4,489,525 12,450,107
4,961,948 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)
January 1, 2022 962 - 31,966 32,928
Accrued in
current period 113 - - 113
Reversal of
current period - - (158) (158)
Write-off of
current period - - (90) (90)
December 31,
2022 1,075 - 31,718 32,793
154
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI Notes to Financial Statements of the Parent Company (Continued)
2 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
December 31, 2022 January 1, 2022
Amount Ratio (%) Amount Ratio (%)
Within
1 year 3,944,909 78.98% 12,536,263 90.50%
1 to 2
years 23,902 0.48% 363,773 2.63%
2 to 3
years 225,690 4.52% 587,773 4.24%
Over 3
years 800,240 16.02% 364,631 2.63%
4,994,741 100% 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 RMB4,008,688,000
(December 31, 2021: RMB12,357,035,000), accounting for 80.26 % of the total other receivables
of the Company (December 31, 2021: 89.20%).
3 Long-term equity investments
December 31, 2022 January 1, 2022
Allowance
for Impairment
Gross doubtful Carrying Gross allowance Carrying
amount accounts amount amount amount
Associates and
joint ventures
(1) 17,171,275 - 17,171,275 14,968,764 - 14,968,764
Subsidiaries (2) 59,189,096 - 59,189,096 56,334,362 - 56,334,362
76,360,371 - 76,360,371 71,303,126 - 71,303,126
As of December 31, 2022, there are no major restrictions on the realization of investment and the
remittance of return on long-term equity investments.
155
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI 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
Other Declared Other December 31,
Increase/decrease gains and Other Provision
Beginning comprehensive cash increases 2022
in investment in losses equity for
amount income dividends and
current period recognized by changes impairment
adjustment or profits decreases
equity method
China Innovative Capital Management Limited 1,063,219 - (109,998) (11,926) 3,097 - - - 944,392
LG Electronics (Huizhou) Co., Ltd. 92,079 - 10,693 - - (13,000) - - 89,772
Shenzhen Qianhai Qihang Supply Chain Management Co., Ltd. 36,160 - (9,912) 1,110 - - - - 27,358
Shenzhen Tixiang Business Management Technology Co., Ltd. 3,620 (1,500) (1,127) - - - - 154 1,147
Shenzhen Jucai Supply Chain Technology Co., Ltd. 10,706 - 4,562 5 - - - - 15,273
TCL Environmental Technology Co., Ltd. 122,391 (103,246) 4,842 - - - - (23,987) -
Guangdong Innovative Lingyue Intelligent Manufacturing and Information
Technology Industry Equity Investment Fund Partnership (Limit ed
Partnership) 372,976 - 129,468 - - - - - 502,444
Guangdong Utrust Emerging Industry Equity Investment Fund Partnership
(Limited Partnership) 151,026 (279) 17,062 - - - - - 167,809
Xinxin Semiconductor Technology Co., Ltd. - 1,790,073 8,312 - - - - 399 1,798,784
Huizhou TCL Human Resources Service Co., Ltd. 3,296 - 2,978 - - - - - 6,274
TCL Microchip Technology (Guangdong) Co., Ltd. 313,434 25,000 (53,645) - 491 - - - 285,280
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd. 49,964 - 18,692 884 - - - - 69,540
Others 12,749,892 (237,044) 1,286,133 (6,074) - (334,934) - (194,772) 13,263,201
14,968,764 1,473,004 1,308,060 (16,001) 3,588 (347,934) - (218,206) 17,171,275
Note: Others are mainly investments in listed companies that have not yet announced their annual reports for 2022.
156
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Direct Increase in Decrease in
Beginning
shareholding current current December
amount
Ratio (%) period period 31, 2022
TCL China Star Optoelectronics
Technology Co., Ltd. 80.03% 32,700,898 1,079,955 - 33,780,853
TCL Technology Group Finance Co., Ltd. 82% 1,256,003 - - 1,256,003
TCL Technology Group (Tianjin) Co., 15,000,000
Ltd. 100% 15,000,000 - -
TCL Zhonghuan New Energy 1,752,635
Technology Co., Ltd. 2.41% 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% 79,500 - - 79,500
TCL Medical Radiological Technology
(Beijing) Co., Ltd. 100% 58,497 - - 58,497
Shenzhen TCL Strategic Equity
Investment Fund Partnership (Limited 100%
Partnership) 70,826 183 - 71,009
TCL Industrial Technology Research
100% 20,000 20,000
Institute, Ltd. (Europe) - -
Wuhan TCL Industrial Technology
100% 20,000 20,000
Research Institute, Ltd. - -
Shenzhen TCL High-Tech Development
Co., Ltd. 100% 20,000 - - 20,000
Beijing HAWK Cloud Information
Technology Co., Ltd. 100% 20,000 - - 20,000
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., 2,800,000
Ltd. 100% 1,000,000 1,800,000 -
Xiamen TCL Technology Industrial 211,000
Investment Co., Ltd. 100% - 211,000 -
TCL Internet Technology (Shenzhen) 15,000
Co., Ltd. 100% - 15,000 -
Ningbo TCL Equity Investment Ltd. 100% 300,000 - - 300,000
TCL Technology Investments Limited 100% 2,988,293 - - 2,988,293
Equity incentives of subsidiaries 10,373 6,223 - 16,596
56,334,362 3,112,361 (257,627) 59,189,096
For the registered capital of subsidiaries and the Company's equity interests in the subsidiaries, see Note VII.
157
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI Notes to Financial Statements of the Parent Company (Continued)
4 Investments in other equity instruments
December 31, 2022 January 1, 2022
Equity of unlisted companies 5,000 5,000
5 Other non-current financial assets
December 31, 2022 January 1, 2022
Equity investments 431,023 1,051,536
6 Operating income and operating costs
2022 2021
Revenue Cost of Revenue Cost of sales
sales
Core business 1,019,036 1,009,786 1,133,244 1,111,423
Non-core business 574,177 153,021 357,693 16
1,593,213 1,162,807 1,490,937 1,111,439
7 Return on investment
2022 2021
Gain on disposal of debt instruments at fair value through
profit or loss 244,997 253,698
Gain on disposal of equity instruments at fair value
through profit or loss - 24,321
Profit from holding debt instruments at fair value through
profit or loss - 84,124
Debt instruments at amortized cost through profit or loss - 877
Profit from holding equity instruments at fair value
through profit or loss 3,953 -
Dividends from subsidiaries 9,340,042 410,500
Share of profit of associates for current period 1,358,727 1,427,874
Share of profit of joint ventures for current period (50,667) (21,758)
Net income from disposal of long-term investments 1,586,504 825,934
12,483,556 3,005,570
As of December 31, 2022, there were no significant restrictions on the collection of return on
investment.
158
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVI Notes to Financial Statements of the Parent Company (Continued)
8 Net cash generated from operating activities
Net cash used in operating activities of the parent company was RMB11,844,330,000.
9 Cash and cash equivalents, end of the period
Cash and cash equivalents at end of the period of the Company was RMB17,570,270,000.
10 Contingent liabilities
As of December 31, 2022, the contingent liabilities not provided for in the financial report were as
follows:
December 31,
2022 January 1, 2022
Guarantees for trade notes and letters of guarantee of
subsidiaries 17,329,299 10,025,125
Guarantees for bank loans of subsidiaries 42,748,105 29,542,641
Guarantees for bank loans, trade notes, letters of credit,
etc. of related parties 3,137,934 15,991,207
159
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XVII Comparative Figures
Certain comparative data have been reclassified to comply with the presentation of the current
period.
XVIII Non-Recurring Gains and Losses
2022 2021
Gain or loss on disposal of non-current assets
(inclusive of impairment allowance write-offs) 1,757,839 (184,526)
Government subsidies charged to current profits and
loss (exclusive of government grants given in the
Company’s ordinary course of business at fixed 1,322,783 699,271
quotas or amounts as per the government’s uniform
standards)
Gain equal to the amount by which investment costs
for the Company to obtain subsidiaries, associates
and joint ventures are lower than the Company’s - 40,300
enjoyable 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
(127,234) 238,629
marketable 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 37,746 -
Non-operating income and expenses other than the
above 758,600 275,790
Income tax effects (244,386) (93,176)
Non-controlling interests effects (545,817) (356,085)
Non-recurring gains and losses attributable to
ordinary shareholders of the parent company 2,959,531 620,203
The Company recognizes non-recurring gain and loss items in accordance with the provisions
of (2008) No.43 Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Non-Recurring Gain/Loss(2008) issued by the China
Securities Regulatory Commission.
160
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to December 31, 2022
___________(RMB’000)_____________
XIX Weighted Average Return on Equity (ROE) and Earnings per Share (EPS)
The Company calculates the ROE and EPS as follows in accordance with "the Compilation
Rules No. 9 for Information Disclosure of Companies Offering Securities to the Public-
Calculation and Disclosure of Return on Equity and Earnings per Share (Revised in 2010)"
issued by the China Securities Regulatory Commission and relevant provisions of accounting
standards:
Item Reporting EPS (RMB yuan)
period
Net profit
Weighted
attributable
average
to the Basic
return on Diluted EPS
parent earnings
equity income
company per share
(%)
for the
reporting
period
Net profit attributable to
ordinary shareholders of
the Company 261,319 0.52% 0.0191 0.0185
Net profit attributable to
ordinary shareholders of
the Company before non-
recurring gains and losses (2,698,212) (5.34 %) (0.1972) (0.1908)
Company Name: TCL Technology Group Corporation
Date: March 30, 2023
The financial statements and the notes thereto from page 1 to page 161 are signed by:
Accounting
Person-in- Person-in-
charge charge of the
Legal Li of financial accounting
representative: Dongsheng affairs: Li Jian department: Peng Pan
161
