Full Text of the 2024 Interim Report of TCL Technology Group Corporation
TCL 科技集团股份有限公司
TCL Technology Group Corporation
INTERIM REPORT 2024
August 2024
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Full Text of the 2024 Interim Report 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 person-in-charge of the Company, Ms. Li Jian, the person-in-
charge of financial affairs (Chief Financial Officer), and Ms. Jing Chunmei, the person-in-
charge of the financial department, hereby guarantee that the financial statements carried in
this Interim Report are factual, accurate, and complete.
All the Company’s directors attended the Board meeting for the review of this Inte rim
Report and its summary.
The future plans, development strategies or other forward-looking statements mentione d
in this Report and its summary shall NOT be considered as promises of the Company to
investors. Therefore, investors are kindly reminded to pay attention to possible investment risks.
The Company has no interim dividend plan, either in the form of cash or stock, nor for the
conversion of capital reserve into share capital.
This Report and its summary have 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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Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 6
Part III Manage ment Discussion and Analysis ............................................................................... 9
Part IV Corporate Governance ...................................................................................................... 31
Part V Environme ntal and Social Responsibility .......................................................................... 35
Part VI Significant Events ............................................................................................................... 44
Part VII Changes in Shares and Information about Shareholders ............................................. 57
Part VIII Preferred Shares ............................................................................................................. 65
Part IX Bonds ................................................................................................................................... 66
Part X Financial Report .................................................................................................................. 69
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Documents Available for Reference
(I) The financial statements signed and stamped by the person-in-charge of the
Company, the Chief Financial Officer and person-in-charge of the financial
department.
(II) The originals of all 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 “Group”, “TCL”,
Refers to TCL Technology Group Corporation
“TCL TECH.”, or “we”
The “Reporting Period”, “current period” Refers to The period from January 1, 2024 to June 30, 2024.
TCL CSOT Refers to TCL China Star Optoelectronics Technology Co., Ltd.
TCL Zhonghuan Renewable Energy Technology Co., Ltd., a majority -owned
TZE Refers to subsidiary of the Company listed on the Shenzhen Stock Exchange (stock code:
002129.SZ)
Shenzhen CSOT Refers to Shenzhen China Star Optoelectronics Bandaoti Display Technology Co., Ltd.
Wuhan CSOT Refers to Wuhan China Star Optoelectronics Technology Co., Ltd.
Wuhan China Star Optoelectronics
Refers to Wuhan China Star Optoelectronics Bandaoti Display Technology Co., Ltd.
Bandaoti
Guangzhou CSOT Refers to Guangzhou China Star Optoelectronics Bandaoti Display Technology Co., Ltd.
Suzhou CSOT Refers to Suzhou China Star Optoelectronics Technology Co., Ltd.
t1 Refers to The generation 8.5 (or G8.5) TFT-LCD production line at TCL CSOT
t2 Refers to The generation 8.5 (or G8.5) TFT-LCD production line at TCL CSOT
t3 Refers to The generation 6 (or G6) LTPS-LCD panel production line at Wuhan CSOT
The generation 6 (or G6) flexible LTPS-AMOLED panel production line at Wuhan
t4 Refers to
CSOT
Wuhan t3 production expansion project Refers to The generation 6 (or G6) of new display production line at Wuhan CSOT
t6 Refers to The generation 11 (or G11) new TFT-LCD display production line at Shenzhen CSOT
The generation 11 (or G11) new ultra high definition display production line at
t7 Refers to
Shenzhen CSOT
t9 Refers to The generation 8.6 (or G8.6) new oxide display production line at 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, size:
G12 Refers to 44,096mm diagonal line: 295mm, side length: 210mm, with its size 80.5% larger than
the conventional M2
MAXEON SOLAR TECHNOLOGIES, LTD., a company listed on the U.S. NASDA Q
Maxeon, MAXEON Refers to
(NASDAQ: MAXN)
RMB Refers to Renminbi
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Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Part II Corporate Information and Key Financial Information
I. Corporate Information
Stock name TCL TECH. Stock code 000100
Place of listing Shenzhen Stock Exchange
Company name in Chinese TCL 科技集团股份有限公司
Abbr. TCL 科技
Company name in English TCL Technology Group Corporation
Abbr. in English TCL TECH.
Legal representative Li Dongsheng
II. Contact Information
Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001 Nanshan District, Shenzhen,
Office address
Guangdong Province, China
Tel. 0755-33311666
Email address ir@tcl.com
III. Other Information
1. Contact Information of the Company
Whether the registered address, office address and their zip codes, website address and email address of the Company changed during
the Reporting Period.
□ Applicable Not Applicable
No changes occurred to the registered address, office address and their zip codes, website address, email address and other c ontact
information of the Company during the Reporting Period. Please refer to the Annual Report 2023 for details.
2. Media for Information Disclosure and Place Where This Report is Lodged
Whether the media for information disclosure and place where this report is lodged changed during the Reporting Period.
□ Applicable Not Applicable
No changes occurred to the name and website of the stock exchange website and media on which the Company discloses its Interim
Report and the place for lodging such reports during the Reporting Period. Please refer to the Annual Report 2023 for details.
3. Other Information
Whether other information changed during the Reporting Period.
□ Applicable Not Applicable
IV. Key Accounting Data and Financial Indicators
Indicate whether there is any retrospectively adjusted or restated datum in the table below
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□Yes No
H1 2024 H1 2023 Change
Operating revenue (RMB) 80,223,736,962 85,148,725,606 -5.78%
Net profits attributable to the company’s
995,211,533 340,493,589 192.28%
shareholders (RMB)
Net profits attributable to the company’s
shareholders after non-recurring gains 558,757,061 -600,066,840 193.12%
and losses (RMB)
Net cash generated from operating
12,632,721,713 10,416,168,147 21.28%
activities (RMB)
Basic earnings per share (RMB/share) 0.0535 0.0184 190.76%
Diluted earnings per share (RMB/share) 0.0530 0.0181 192.82%
Increase by 1.2
Weighted average return on equity (%) 1.87 0.67
percentage points YoY
End of the Reporting Period December 31, 2023 Change
Total assets (RMB) 382,333,538,876 382,859,086,727 -0.14%
Owners’ equity attributable to the
52,369,539,906 52,921,867,086 -1.04%
company’s shareholders (RMB)
V. Accounting Data Differences under China Accounting Standards for Business Enterprise s
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Differences in Net Profits and Equity under CAS and IFRS
□ Applicable Not Applicable
There is no difference in net profits and net assets between the financial statements prepared in accordance with International
Accounting Standards (IAS) and Chinese Accounting Standards (CAS) for the Reporting Period of the Company.
2. Differences in Net Profits and Equity under CAS and Foreign Accounting Standards
□ Applicable Not Applicable
There is no difference in net profits and net assets between the financial statements prepared in accordance with foreign accounting
standards and Chinese Accounting Standards (CAS) for the Reporting Period of the Company.
3. Reasons for Accounting Data Differences Above
□ Applicable Not Applicable
VI. Non-Recurring Gains and Losses
Applicable □ Not applicable
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Unit: RMB
Item Amount
Gains and losses on disposal of non-current assets (inclusive of impairment allowance write-offs) 48,439,054
Public grants charged to current profits and loss (except for public grants which are closely related to
the Company's daily operations, comply with national policies, are granted based on determined 972,603,327
standards, and have a continuous impact on the Company's profits or losses)
The profits or losses generated from changes in fair value arising from financial assets and financial
liabilities held by non-financial enterprises and the profits or losses from the disposal of such financial
-3,310,350
assets and financial liabilities, except for the effective hedging business related to the company’s normal
business operations
Reversal of provision for impairment of receivables that have been individually tested for impairment 30,500,000
Non-operating income and expenses other than the above 258,630,716
Less: Amount affected by income tax 156,219,258
Amount affected by equity of minority shareholders (net of tax) 714,189,017
Total 436,454,472
Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable Not Applicable
The Company has no other profit and loss items that meet the definition of non-recurring profits and losses.
Notes on non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on Information Disclosure
for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define Recurring Gain/Loss items
□ Applicable Not Applicable
The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit and
loss items.
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Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Part III Management Discussion and Analysis
I. Company-related Industry Outlook During the Reporting Period
In the first half of 2024, political and economic unpredictability continuously increased
worldwide, with intensified geopolitical conflicts and re-balancing of international trade systems.
Meanwhile, major economies grappled with persistent inflationary pressures, resulting in heightened
policy uncertainties and subpar global economic growth. In response to the complicated challenges,
the Company focused on the development of its display business and new energy photovoltaic
business, enhanced the resilience of its business, and optimized its competitive edge in pursuit of
high-quality and sustainable development.
During the Reporting Period, TCL TECH. achieved a revenue of RMB80.224 billion; a net profit
of RMB995 million attributable to the shareholders of listed companies, which is an increase of
192.28% year-on-year; and a net operating cash flow of RMB12.633 billion. Major factors that
influenced the Company’s performance included: the positive turnaround of the supply-demand
relationship in the display industry, the steady price appreciation of mainstream products, the
Company’s proactive optimization of business strategies and business structure, and significantly
improved profitability. During the Reporting Period, the display business achieved an operating
revenue of RMB49.877 billion, with a year-on-year increase of 40.39%, and a net profit of RMB2.696
billion, with a year-on-year increase of RMB6.145 billion. The trade of the global energy transition
persisted, with increasing demand for installed capacity in the new energy photovoltaic industry.
Nonetheless, industry-wide supply-demand discrepancies resulted in a substantial year-on-year
decline in photovoltaic product prices. During the Reporting Period, TZE achieved a revenue of
RMB16.213 billion, with a year-on-year decrease of 53.54%, which resulted in TCL Technology's
net profits attributable to the parent company decreased by RMB-914 million.
The Company strengthens its competitive edge in industry scale and leadership by
enhancing its core competencies, building a solid operational foundation, and optimizing its
production capacity and product portfolio. As the competitive landscape of the display industry
continues to improve, leading manufacturers have established a significant scale advantage. During
the Reporting Period, the Company’s display segment strategically realigned its production capacity
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and product structure on the basis of incremental markets and continuously increased its market share,
with its TV panel shipments ranking No. 2 globally, MNT panel shipments jumping to No. 2 globally,
and ranking among the top 3 flexible OLED manufacturers in terms of shipments. At the end of the
Reporting Period, the Company’s monocrystalline silicon production capacity for its new energy
photovoltaic segment stood at 190GW. Cumulative shipments of photovoltaic materials during the
Reporting Period amounted to approximately 62GW, reflecting an 18.3% year-on-year increase. The
Company ranked first in the industry with a 23.5% comprehensive market share for silicon wafers.
The Company implements a strategic approach that focuses on fortifying its core
competencies and rectifying shortcomings, to bolster the competitive edge of its core business
segments, and increase both efficiency and effectiveness. The Company’s display business
capitalized on the technological capabilities of its high-gen production lines to lead the continuous
upgrading of larger-sized specification products, and to grasp the iterative demand for IT products
fueled by the AI revolution, to fill the gap in its mid-sized production capacity (e.g., the t9 production
line) and product layout. The small-sized OLED business successfully implemented a high-end and
differentiated product strategy. Relying on its advantages in leading G12 and N-type wafer
technology, Industry 4.0, and flexible manufacturing processes, the Company’s new energy
photovoltaic business played a synergistic role across the core sections along the photovoltaic value
chain, and ultimately shored up the relative advantages in cost efficiency to navigate industry cycles
through relative competitiveness.
With the implementation of its global strategy, the Company has built a globally integrated
business network anchored in the Chinese domestic market, and created a comprehensive
global industrial ecosystem. The Company’s display business improved its layout in its panel
module plant in India and in its overseas business platform, to strengthen its capacity to serve global
customers and partners and satisfy the incremental needs of markets worldwide. The Company’s new
energy photovoltaic division is pursuing a cautious yet determined globalization strategy, diligently
assessing and exploring potential industrial projects in strategic global locations. The Company will
form a strategic partnership with its Saudi Arabian counterparts to establish the largest overseas
crystalline silicon wafer manufacturing facility to date. By fully capitalizing on MAXEON’s
distinctive market advantages and technological innovations in international markets, the Company
will leverage the synergistic effects of global production and distribution channels, strengthening its
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competitive position on a global scale.
Through strategic realignment, the Company enhances its capabilities, streamline s
processes and structures, and establishes a diverse and globally integrated talent ecosystem.
The Company’s strategy sets the course for future corporate growth, while its organizational
capabilities provide the foundation for its operations. The Company has adopted a customer-centric
business model, and seamlessly integrated value creation and value realization processes. By building
a robust, agile, and flat organizational structure, it has improved decision-making efficiency and
responsiveness to customer and market demands. Furthermore, the Company has implemented a clear
accountability framework for its industrial operations, emphasizing employee development and talent
acquisition to bolster its organizational capacity. A diverse and inclusive talent ecosystem is
supporting the Company’s strategic pursuit of global leadership.
Looking ahead, as some companies shut down or divest their production capacities in the
industry, the display industry will see further optimization of its supply-side structure. Meanwhile,
such trends as large-size displays and artificial intelligence will promote steady growth of display
demand, and a sound supply-demand relationship is expected to drive continuous improvement in the
Company’s display business profitability. While the photovoltaic industry remains at the bottom of
the cycle, the Company’s new energy photovoltaic business is taking a proactive stance. By
accelerating organizational transformation, focusing on strengthening core competencies and
addressing weaknesses, and enhancing its operational resilience, the Company aims to navigate
through the industry cycles with a competitive edge. By upholding the spirit of "Venturing Midstream
and Striving to Win", the Company will firmly grasp the opportunities brought by transformations in
the technology manufacturing industry and the global energy structure, and continue to implement
the business strategies of "improving operational quality and efficiency, enhancing strengths to shore
up weaknesses, innovation-driven development as well as accelerating global expansion" in order to
achieve sustainable, high-quality development and take on a leading role in the global market.
II. Main Businesses of the Company During the Reporting Period
The Company focused on the development of the core business of displays and new energy
photovoltaics and other silicon materials, and was committed to achieving the strategic goal of global
leadership.
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TCL TECH.
Display New energy photovoltaic and other Industrial finance and investment Others
silicon materials
M oka Zhonghuan Zhonghuan
TCL CSOT Photovoltaic Advanced TCL Finance TCL Capital Highly TPC
Technology
(I) Display Business
Global TV retail sales remained sluggish in the first half of 2024, but the optimization of the
supply-side competitive landscape and the trend towards on demand production have pushed the
industry onto a trend of healthy and sustainable development. TV panels have a steady and moderate
increase in prices driven by supply-side factors, e.g. maintenance shutdowns during the Chinese New
Year, and demand-side factors, e.g. inventory buildup for sporting events and the trend toward larger-
sized TV panels. Small and medium-sized panels have experienced a rebound in sales, fueled by
hardware product innovation and replacement demands, resulting in structural price hikes.
By leveraging its strengths in terms of scale and efficiency, TCL CSOT has consistently
optimized its business and product mix with favorable price increases for key products, and
significantly boosted operating performance. During the Reporting Period, the display business
achieved a revenue of RMB49.877 billion, with a year-on-year increase of 40.39%, and a net
profit of RMB2.696 billion, with a year-on-year increase of RMB6.145 billion while recording
a profit of RMB2.157 billion in the second quarter, with a year-on-year increase of 300.19%.
The display business achieved a net cash flow from its operating activities of RMB13.2 billion,
which is an increase of 60.9% from the same period last year.
In its large-sized products business, TCL CSOT leveraged its advantages in terms of high-
gen production lines and synergy with the industry chain, and led the upgrading and high-e nd
development of large-sized TV panels. Capitalizing on the manufacturing efficiency and process
advantages of its G8.5 and G11 high-gen production lines, TCL CSOT led the way in improving
image quality and reducing energy consumption for large-sized products, and collaborated with
strategic customers to enhance the penetration of premium TVs in the market and elevate the value
of key segments alongside the industry chain. During the Reporting Period, the Company
consolidated its No. 2 position in terms of global market share of TV panels, with 81% of the shipment
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area for products above 55 inches, and 55% of the shipment area for products above 65 inches, with
the average size increased by 1.2 inches compared to the same period of the last year; meanwhile, 55-
inch and 75-inch products ranked No. 1 in the world, with the market share of 65-inch products ranked
No. 2 globally. In commercial markets such as interactive whiteboards, digital signage, and splicing
screens, the Company ranked among the top three in terms of global market share.
In the mid-size panel segment, TCL CSOT seized growth opportunities in niche
applications by deepening cooperation with new business clients in IT and vehicle -mounte d
devices, and enhancing product competitiveness and market share. Aligned with mid-sized IT
and vehicle-mounted devices, the t9 production line made steady progress in terms of product
development and customer acquisition. The Company further diversified its product portfolio with
IGZO oxide products put into SoP and shipments, and the Gen 6 LTPS line undergoing rapid product
upgrades. Riding on the worldwide e-sports market and commercial PC replacement needs in Europe
and the Americas, the Company significantly increased its monitor shipments, which are now ranked
second globally. Our gaming monitors for e-sports hold the largest market share worldwide.
Additionally, notebook and tablet shipments have shown steady growth, with our LTPS notebooks
ranked second and LTPS tablets ranked first globally. We have continued to focus on the
premiumization and large-size trends in vehicle-mounted devices, the shipment area of LTPS car
screens has ascended to the third largest in the world.
In the field of small size, TCL CSOT drives business deve lopment with technological
innovation continuously optimizing the product and customer mix, and achieving significant
growth in OLED shipments. In the first half of the year, the Company’s LTPS smartphone panel
shipments secured the second position globally. Our flexible OLED smartphone panel shipments hit
39 million units, marking a substantial 180% year-on-year growth, and our market share climbed to
third place globally. Furthermore, we ranked fourth globally in terms of foldable display shipments.
The Company has pioneered innovative technologies in flexible OLEDs, e.g. foldable displays, LTPO,
Pol-Less, and FIAA ultra-narrow bezels. As a supplier for top-tier flagship smartphone brands, we
have successfully elevated our average selling prices by increasing high-end products.
The global market for display terminals maintained a steady pace throughout the year. The
increasing demand for larger sizes will continue to fuel growth in the overall display segment. The
benign competition in the supply-side industry will further drive the balanced development of
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industrial supply and demand. Corporate profitability is recovering with reasonable business returns
under favorable circumstances.
Recently, TCL CSOT participated in the bidding of 70% of LG Display (China) Co., Ltd. and
100% of LG Display (Guangzhou) Co., Ltd., and has been chosen as the preferred bidder. This
potential acquisition will enable TCL CSOT to diversify its display production line technologies and
further consolidate the industry. TCL CSOT is committed to fostering a healthy and sustainable
industry, driving profitability, and enhancing overall industry value.
(II) New Energy Photovoltaics and Other Silicon Materials Business
In the first half of 2024, global photovoltaic terminal installations continued to grow steadily.
However, the rapid release of production capacity across the supply chain in the photovoltaic industry
has led to further supply-demand imbalances and intensified short-term competition. In the second
quarter of 2024, prices throughout the main industry chain product fell below costs, causing net
losses. At the end of June, the industry reached the bottom of the cycle, with many companies
suffering cash-cost losses and facing operational performance pressures. During the Reporting
Period, TZE achieved a revenue of RMB16.213 billion, with a year-on-year decrease of 53.54%, and
a net profit of negative RMB3.176 billion. Net cash flows from operating activities amounted to
RMB128 million.
TZE prioritizes technological innovation, cementing a leading position in G12 and N-type
photovoltaic materials technology. Through continuous cost reductions and efficiency
optimizations, the Company is actively enhancing its relative comparative competitiveness. By
leveraging technological innovation and lean manufacturing, the Company has established a
competitive edge with ongoing efforts to enhance silicon material utilization, reduce furnace costs,
and increase wafer output per kilogram, which are driving the industry’s transition to N-type and
larger-sized products. During the Reporting Period, the Company’s monocrystalline silicon capacity
expanded to 190GW, while photovoltaic material shipments grew by 18.3% year-on-year to
approximately 62GW. The Company secured a leading position in the industry with a 23.5% market
share for silicon wafers. Notably, its N-type products achieved a 42% external sales market share,
signifying a 6 percentage point increase from 2023. Although a comparably high depreciation rate
per unit caused by different investment methods, the Company’s photovoltaic material business
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maintains a cost advantage of approximately 0.033 yuan/W more cost-competitive than the industry’s
second-best player.
TZE is solidifying its Industry 4.0 smart manufacturing capabilities and resolutely
implementing a global leadership strategy. Building on its globally leading G12 silicon wafer
technology, Industry 4.0 flexible manufacturing capabilities, and a strong intellectual property
portfolio, the Company is accelerating its internationalization efforts and expanding its localized
manufacturing footprint overseas. In collaboration with RELC which is fully owned by Saudi
Arabia’s Public Investment Fund (PIF), and Vision Industries, the Company is building the world’s
largest overseas crystal wafer plant to bolster its global competitiveness. The Company aims to fully
capitalize on Maxeon’s unique competitive advantages in its core markets and its proven
technological innovation capabilities. By fostering a collaborative ecosystem between global
production and distribution channels, the Company seeks to strengthen its competitive edge in the
global marketplace (especially in North America).
In the second half of 2024, the global photovoltaic industry remains at the bottom of the cycle,
with fundamental changes in market conditions and intensifying competition. In the wake of
operational challenges, TZE will uphold its bottom line of extreme cost efficiency, accelerate
organizational restructurings and management optimizations, and enhance its comparable
competitiveness. The global renewable energy market presents ample growth opportunities, yet the
distribution of production capacity worldwide remains uneven. The Company’s management team
believes that the Matthew effect within the photovoltaic industry will contribute to a more optimized
long-term market structure and enhance profitability.
III. Analysis of Core Competitiveness
Since its establishment in 1981, TCL has consistently demonstrated resilience and adaptability,
successfully navigating through various market cycles. Through a sustained commitment to
innovation and transformation, the Company has emerged as a prominent technology manufacturing
group in China. At present, TCL TECH has established a business structure centered on displays and
new energy photovoltaics. With a well-defined development roadmap and efficient operations, the
Company has a distinctive corporate culture and is well-poised for building its core competitiveness
and sustainable development capabilities.
Leading at scale: Continuously improving our business layout and building scale
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advantages
TCL CSOT, a preeminent global display company and a pioneer in domestic display
manufacturing, has invested over RMB260 billion to establish 9 state-of-the-art panel lines and 5
module factories, serving a diverse range of global clients. The Company leverages its strategic “Twin
Star” production line layout to maximize synergies with a focus on both endogenous growth and
epitaxial mergers and acquisitions, enabling it to expand its production capacity and build leadership
through size. By establishing its own production lines and acquiring Samsung’s Suzhou plant, TCL
CSOT has gradually solidified its leading position in the global large-size panel market, actively
enhanced its value chain structure, increased module capacity, and further elevated its position along
the value chain and increased profitability. TCL CSOT has passed through several industry cycles,
transforming from a “follower” to a “peer” and then to a front-runner, which features high-quality
development by expanding its product portfolio from large-size panels to a full range of display sizes.
TZE will leverage its competitive advantages in terms of capacity, product offerings, and cost
structure, while driving technological innovations and operational transformations to bolster its
market position. The Company is committed to ongoing improvements in its flexible manufacturing
capabilities for photovoltaic silicon wafers, and is ensuring that it can meet the diverse needs of its
customers. The Company’s patented technologies enable it to develop differentiated products,
technologies, and manufacturing processes for photovoltaic cell modules.
Leading in technology and ecology: Prioritizing the growth of high-tech sectors, and
building a first-mover advantage through ecological leadership
The Company has established a strategic foothold in core technologies, e.g. displays and new
energy photovoltaics, capitalizing on its subsidiaries TCL COST and TZE. Through strategic
partnerships with upstream and downstream industry players, the Company has built a robust global
ecosystem for technology and innovation, and is steadily advancing its technological leadership in
next-generation display technologies as well as G12 and N-type photovoltaic materials. The
Company has accumulated over 70,000 patent applications and has been instrumental in developing
over 200 international and domestic technical standards, underscoring its unwavering commitment to
technological innovation and its status as a preeminent high-tech enterprise. The Company has
secured over 2,400 patents in quantum dot display technology, ranking second globally, which will
ensure the independent and controllable development of key technologies for next-generation
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displays. TCL TECH took the leads in establishing the “National Printing and Flexible Display
Innovation Center” and the “National New Display Technology Innovation Center”, with 9 national -
level enterprise open innovation platforms and 33 provincial-level innovation platforms obtaining the
relevant qualifications.
Leading in efficiency and management: navigating cycles with industry-leading efficiency
and effectiveness
TCL has leveraged its substantial scale and technological prowess to achieve industry-leading
levels of efficiency and effectiveness. Through ongoing management reforms and system upgrades,
the Company has maintained its competitive edge. TCL CSOT leverages the synergy of its twin
factories to optimize production line planning and maximize capacity expansion. Through
management reforms and process optimizations, TCL has strengthened end-to-end collaboration,
resulting in improved overall operational efficiency. By pursuing cost excellence, we have established
an end-to-end cost advantage, resulting in continuous improvements in product quality and
performance, as well as a leading competitive position in the industry. At the same time, TCL CSOT
has established proven risk mitigation capabilities which have been honed through multiple industry
cycle fluctuations. Looking ahead, TCL will make use of this core competency, and will be well-
poised to navigate future uncertainties and achieve global leadership.
Amidst the cyclical downturn in the new energy photovoltaic industry, TZE has steadfastly
adhered to its core business philosophy of “digging in”. The Company has comprehensively
implemented Industry 4.0 intelligent manufacturing systems, coupled with Operation 4.0 and Quality
4.0 management frameworks. Through the relentless optimization of production automation, labor
productivity, and operational efficiency, TZE has fortified its competitive edge in terms of efficiency
and cost, thereby positioning itself to successfully navigate the industry cycle and emerge as a leading
global player in the new energy photovoltaic sector.
Corporate culture upgrade: With the mission of “leading technology, harmonious
coexistence”, we are effectively addressing operational changes and competition
In early 2020, TCL inaugurated a new phase of corporate culture, as articulated in the strategic
document The Path to Global Leadership. The Company has adopted a core mission centered around
“leading technology, harmonious coexistence”, underpinned by the core values of “change,
innovation, accountability, and excellence”. This cultural transformation has empowered TCL
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employees to embrace change, break through limitations, and drive business optimizations and
upgrades through active exploration and innovation. Guided by a commitment to responsibility and
a relentless pursuit of excellence, TCL has dedicated itself to delivering superior products and
services to its valued customers. Amidst a complex and dynamic external business environment, TCL
employees will continue to uphold its core principles and values—“The Path to Global Leadership”.
Demonstrating unwavering courage and determination, TCL will remain at the forefront of its
industry, undeterred by competitive pressures. Through strategic adaptations and innovative
initiatives, TCL will navigate the evolving business landscape and successfully transition into a new
phase of growth.
IV. Analysis of Core Businesses
Overview
See the relevant contents in "I. Main businesses of the Company during the reporting period".
Year-on-year changes in key financial information
Unit: RMB'0,000
H1 2024 H1 2023 Change (%) Reason for change
Operating Revenue 8,022,374 8,514,873 -5.78% No significant change
Operating cost 7,038,438 7,426,760 -5.23% No significant change
Sales expenses 113,557 120,670 -5.89% No significant change
Administrative expenses 200,384 201,592 -0.60% No significant change
R&D expenses 440,157 489,235 -10.03% No significant change
Financial expenses 209,127 161,316 29.64% No significant change
Primarily due to the increase in profits
Income tax expenses 5,221 -9,980 152.32% from the display business during the
period
R&D investments 426,586 546,528 -21.95% No significant change
Net cash generated from
1,263,272 1,041,617 21.28% No significant change
operating activities
Net cash used in investing
-1,744,450 -1,954,096 10.73% No significant change
activities
Net cash generated from Mainly caused by a decrease in financing
269,747 310,146 -13.03%
financing activities activities
Mainly due to a year-on-year increase in
Net increase in cash and cash net cash inflows from operating activities
-207,327 -593,138 65.05%
equivalents and a year-on-year decrease in net cash
outflows from investing activities
Significant changes to the profit structure or sources of the Company during the Reporting Period
□ Applicable Not Applicable
No significant changes to the profit structure or sources of the Company during the Reporting Period.
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Breakdown of revenue
Unit: RMB'0,000
H1 2024 H1 2023
Change
As % of total As % of total (%)
Amount Amount
revenue (%) revenue (%)
Total revenue 8,022,374 100% 8,514,873 100% -5.78%
By operating division
Display business 4,987,706 62.17% 3,552,843 41.73% 40.39%
New energy photovoltaics and
1,621,349 20.21% 3,489,779 40.98% -53.54%
other silicon materials business
Distribution business 1,364,933 17.01% 1,381,282 16.22% -1.18%
Other and offsets 48,385 0.61% 90,968 1.07% -46.81%
By product category
Display devices 4,987,706 62.17% 3,552,843 41.73% 40.39%
New energy photovoltaics and
1,621,349 20.21% 3,489,779 40.98% -53.54%
other silicon materials
Distribution of electronics 1,364,933 17.01% 1,381,282 16.22% -1.18%
Other and offsets 48,385 0.61% 90,968 1.07% -46.81%
By operating segment
Mainland China 5,389,603 67.18% 5,881,602 69.07% -8.37%
Overseas (including Hong Kong) 2,632,771 32.82% 2,633,271 30.93% -0.02%
Operating division, product category, or region contributing over 10% of revenue or operating profit
Applicable □ Not applicable
Unit: RMB'0,000
Change in
Change in
Gross Change in gross profit
Operating operating cost
Revenue profit revenue year- margin
cost year-on-year
margin on-year (%) year-on-year
(%)
(%)
By operating division
Display business 4,987,706 4,049,818 18.80% 40.39% 20.21% 13.63%
New energy photovoltaics and
1,621,349 1,666,533 -2.79% -53.54% -37.81% -26.00%
other silicon materials business
Distribution business 1,364,933 1,316,942 3.52% -1.18% -0.93% -0.24%
By product category
Display devices 4,987,706 4,049,818 18.80% 40.39% 20.21% 13.63%
New energy photovoltaics and
1,621,349 1,666,533 -2.79% -53.54% -37.81% -26.00%
other silicon materials
Distribution of electronics 1,364,933 1,316,942 3.52% -1.18% -0.93% -0.24%
By operating segment
Mainland China 5,389,603 4,954,407 8.07% -8.37% -6.73% -1.61%
Overseas (including Hong Kong) 2,632,771 2,084,032 20.84% -0.02% -1.45% 1.15%
Core business data in the recent term restated according to the changed methods of measurement that occurred in the Reporting Period
□ Applicable Not Applicable
V. Analysis of Non-Core Businesses
Applicable □ Not applicable
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Unit: RMB'0,000
Amount As % of gross profit Source Sustainability
Mainly due to the recognition of return on
Return on
42,176 -101.40% investment from joint ventures and investment No
investment
returns on financial assets, etc
Gain/loss of fair- Mainly due to the movement in fair value of
13,295 -31.96% No
value changes financial assets during the holding period
Falling price of inventory write-offs in line with the
Asset impairment -205,965 495.18% No
market
Non-operating
22,744 -54.68% Mainly due to claim income No
income
Non-operating Mainly due to donations and losses from the
7,814 -18.79% No
expenses retirement of long-term assets
VI. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB'0,000
End of the Reporting Period December 31, 2023
Weight
As % of total As % of total Main reason for change
Amount Amount Change
assets assets
Monetary
1,958,750 5.12% 2,192,427 5.73% -0.61% No significant change
assets
Accounts
2,311,643 6.05% 2,200,365 5.75% 0.30% No significant change
receivable
Contract assets 37,157 0.10% 34,391 0.09% 0.01% No significant change
Inventories 2,018,193 5.28% 1,848,175 4.83% 0.45% No significant change
Investment
81,338 0.21% 91,168 0.24% -0.03% No significant change
property
Long-term
equity 2,490,824 6.51% 2,543,127 6.64% -0.13% No significant change
investments
Mainly due to a decrease in
Fixed assets 17,026,738 44.53% 17,642,262 46.08% -1.55%
depreciation during the year
Construction in No significant change
2,012,670 5.26% 1,700,005 4.44% 0.82%
progress
Right-of-use
606,403 1.59% 638,645 1.67% -0.08% No significant change
assets
Short-term
1,184,463 3.10% 847,358 2.21% 0.89% No significant change
borrowings
Contract
146,557 0.38% 189,947 0.50% -0.12% No significant change
liabilities
Long-term
12,030,446 31.47% 11,766,221 30.73% 0.74% No significant change
borrowings
Lease liabilities 569,959 1.49% 573,729 1.50% -0.01% No significant change
2. Major Assets Overseas
□ Applicable Not Applicable
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3. Assets and Liabilities at Fair Value
Applicable □ Not applicable
Unit: RMB'0,000
Gain/loss of Impairment
Cumulative Amount
fair-value allowances Amount
fair-value purchased
Beginning changes in established sold in the Others Ending
Item changes in the
amount the in the Reporting changes amount
recorded in Reporting
Reporting Reporting Period
equity Period
Period Period
Financial assets
1. Held-for-trading
financial assets
2,615,568 4,731 - - 3,404,415 3,113,176 10,693 2,922,232
(excluding derivative
financial assets)
2. Derivative financial - -
10,801 9,294 -7,607 - -4,586 15,509
assets
3. Receivables - - - - -
95,441 -33,545 61,896
financing
4. Investments in other - - -
38,665 - -20,643 61 38,725
equity instruments
Subtotal of financial -
2,760,475 14,025 -28,250 3,404,415 3,113,176 -38,131 3,038,362
assets
Total of the above 2,760,475 14,025 -28,250 - 3,404,415 3,113,176 -38,131 3,038,362
Financial liabilities 31,004 -731 -11,519 - 65,701 71,487 2,913 28,862
Other changed content
None
Significant changes to the measurement attributes of the major assets in the Reporting Period
□Yes No
4. Restricted Asset Rights as of the Period-End
Carrying amount
Restricted assets Reason for restriction
(RMB'0,000)
Deposited in the central bank as the required
Monetary assets 39,307
reserve
Other monetary assets and restricted bank
Monetary assets 127,088
deposits
Notes receivable 3,595 Endorsement, and attached recourse and pledge
Fixed assets 8,715,909 As collateral for loan
Intangible assets 389,966 As collateral for loan
Held-for-trading financial assets 45,420 Pledge
Construction in progress 140,140 As collateral for loan
Accounts receivable 90,649 Pledge
Contract assets 37,081 Pledge
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Investment property 960 As collateral for loan
Other non-current assets due within one year 43,747 Pledge
Total 9,633,864
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’0,000) period last year (RMB’0,000)
1,501,865 1,951,463 -23.04%
2. Major Equity Investments Made in the Reporting Period
□ Applicable Not Applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable Not Applicable
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4. Financial Assets Investments
(1) Securities Investments
Applicable □ Not applicable
Unit: RMB'0,000
Gain/loss of Cumulative
Amount Amount sold
Initial Accounting Beginning fair-value fair-value Gain/loss in Ending
purchased in in the Funding
Security type Stock Code Stock Abbr. investment measurement carrying changes in the changes the Reporting carrying Accounting title
the Reporting Reporting Source
cost method amount Reporting recorded in Period amount
Period Period
Period equity
Other non-current financial
Stocks 300842.SZ DK Electronic Materials, Inc. 2,430 Fair value 33,724 -6,223 - - 5,818 -4,631 23,276 Self-funded
assets
Other non-current financial
Stocks 688469.SH UNT 26,745 Fair value 23,408 -4,794 - - - -4,794 18,614 Self-funded
assets
Held-for-trading financial
U.S. Treasury bill US912797GB79 TREASURY BILL 1,414 Fair value - 29 14,903 29 14,932 Self-funded
assets
Measurement at
Financial bonds XS2587421681 Nanyang Commercial Bank 7,083 7,251 - - - - 261 7,295 Debt investments Self-funded
amortized cost
Held-for-trading financial
Bonds XS2560662541 LINK CB LTD 4,455 Fair value 6,064 -176 - - - -138 5,926 Self-funded
assets
Measurement at
Financial bonds 223001.IB 22 ICBC Macau Bond 01 5,000 5,044 - - - - 64 5,108 Debt investments Self-funded
amortized cost
ELECTRICITE DE FRANCE Held-for-trading financial
Bonds USF2941JAA81 2,919 Fair value 4,754 -214 - 1,611 1,114 -168 5,083 Self-funded
SA assets
Held-for-trading financial
Bonds USG98149AG59 WYNN MACAU LTD 623 Fair value 859 128 - 4,298 403 133 4,888 Self-funded
assets
Held-for-trading financial
Bonds US279158AL39 ECOPETROL SA 2,421 Fair value 4,590 1 - - -11 18 4,619 Self-funded
assets
Held-for-trading financial
Bonds USG5975LAA47 MELCO RESORTS FINANCE 1,328 Fair value 3,832 31 - 1,193 1,182 44 3,887 Self-funded
assets
Other securities investments held at the period-end 227,091 -- 176,114 3,805 -19,237 417,092 455,692 9,470 146,683
Total 281,509 -- 265,641 -7,413 -19,237 439,097 464,197 288 240,310
Disclosure date of the board announcement approving securities investments April 30, 2024
Date for disclosure and announcement on approving securities investment by
May 25, 2024
the general meeting
Note: The initial investment cost represents the initial investment cost in securities held at the end of the period.
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(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
Closing contractual amount
as a percentage
Gain/loss in
Beginning amount Ending amount of the closing net assets
the
Type of contract reported by the Company
Reporting
(%)
Period
Contractual Transaction Contractual Transaction Contractual Transaction
amount limit amount limit amount limit
1. Forward forex contracts 3,039,040 114,095 4,725,237 182,334 34.18 1.32
27,459
2. Interest rate swaps 407,686 12,231 314,600 9,438 2.28 0.07
Total 3,446,726 126,326 5,039,837 191,772 27,459 36.46 1.39
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, profit from changes in the fair value of hedged items amounted to
Description of actual
RMB124.85 million; losses from the delivery of due forward exchange contracts amounted to negative
profits and losses during
RMB58.09 million; and profit from the valuation of outstanding forward exchange contracts amounted
the Reporting Period
to RMB91.65 million.
During the Reporting Period, the Company’s main foreign exchange risk exposures include exposures of
assets and liabilities denominated in foreign currencies arising from business such as outbound sales, raw
Description of the
material procurement, and financing. The uncertain risks arising from the exchange rate fluctuations were
hedging effect
effectively hedged by using derivative contracts with the same purchase amounts and maturities in
opposite directions.
Funding source for
Self-funded.
derivative investment
Analysis of risks and In order to effectively manage the exchange and interest rate risks of foreign currency assets, liabilit ies,
control measures and cash flows, the Company, after fully analyzing the market trends and predicting operations (including
associated with derivative orders and capital plans), adopted forward foreign exchange contracts, options, and interest rate swaps to
investments held in the avoid future exchange rate and interest rate risks. As its business scale changes, the Company will adjust
Reporting Period its exchange rate risk management strategy according to the actual market conditions and business plans.
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(including but not limited Risk analysis:
to market risk, liquidity 1. Market risk: the financial derivatives business carried out by the Group is related to hedging and trading
risk, credit risk, activities associated with the main business operations. There is a market risk associated with potential
operational risk, legal losses due to fluctuations in market prices, such as underlying interest rates and exchange rates, which
risk, etc.) affect the prices of financial derivatives;
2. Liquidity risk: the derivatives business carried out by the Group is an over-the-counter transaction
operated by a financial institution, and there is a risk of incurring losses due to paying fees to the bank
for liquidating or selling the derivatives below the buying prices;
3. Performance risk: the Group conducts its derivative business based on rolling budgets for risk
management, and there is a risk of performance failure due to deviation arising between the actual
operating results and budgets;
4. Other risks: in the case of specific business operations, the failure of operational personnel to report
and obtain approvals in accordance with established procedures or to accurately, promptly, and
comprehensively record information related to financial derivative transactions may result in potential
losses or missed trading opportunities in the derivative business. Moreover, if the trading operator fails
to fully understand the terms of transaction contracts or product information, the Group may face legal
risks and transaction losses.
Risk control measures:
1. Basic management principles: the Group strictly follows the hedging principle mainly to fix costs and
avoid risks. It is necessary for the financial derivatives business to align with the variety, size, direction,
and duration of spot goods, and this should not involve any speculative trading. When selecting hedging
instruments, only simple financial derivatives that are closely related to the main business operations and
comply with the requirements of hedge accounting should be selected. Avoid engaging in complex
business activities that go beyond the established scope of operations and involve risks and pricing that
are difficult to understand;
2. The Group has formulated a special risk management system tailored to the risk characteristics of the
financial derivatives business, covering all key aspects such as preemptive prevention, in-process
monitoring, and post-processing. It reasonably allocates professionals for investment decision-making,
business operations, and risk control as required. Personnel involved in investment are required to fully
understand the risks of financial derivatives investment and strictly implement the business operations
and risk management system of derivatives. Before the holding company engages in derivative business
activities, the holding company must submit detailed business reports to the competent department of the
Group, including information about its internal approval, main product terms, operational necessity,
preparations, risk analysis, risk management strategy, fair value analysis, and accounting methods.
Additionally, a special summary report of previously conducted operations should be submitted. Only
after obtaining the opinion of the relevant professional departments within the Group may the holding
company proceed with the operations.
3. Relevant departments should track the changes in the open market price or fair value of financial
derivatives, promptly assess the risk exposure changes of invested financial derivatives, and compile
reports to the board of directors on business development;
4. The financial company should actively manage and disclose in a timely manner any confirmed gains
and losses as well as unrealized losses from futures and derivative transactions of listed companies. When
such losses account for 10% of the audited net profits attributable to the shareholders of the listed
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company in the last year and exceed RMB10 million, the financial company should make timely
disclosure thereof.
Changes in market prices
With the rapid expansion of overseas sales, the Company continued to follow the above rules in the
or fair value of derivative
operation of forward foreign exchange contracts, interest rate swap contracts, and futures contracts to
investments in the
avoid and hedge against foreign exchange risks arising from operations and financing. During the
Reporting Period (fair
Reporting Period, there were profits and losses of RMB124.85 million from changes in the fair value of
value analysis should
hedged items and negative RMB149.74 million from derivatives. The fair value of derivatives is
include the measurement
determined by the real-time quoted price of the foreign exchange market, and is based on the difference
method and related
between the contractual price and the forward exchange rate quoted immediately on the foreign exchange
assumptions and
market on the balance sheet date.
parameters)
Legal matters involved None
Disclosure date of the
board announcement
April 29, 2024
approving the derivative
investments
Disclosure date of the
general meeting
May 24, 2024
announcement approving
the derivative investments
2) Derivative investments for speculative purposes during the Reporting Period
□ Applicable Not Applicable
There were no derivative investments for speculative purposes made by the Company during the Reporting Period.
5. Use of the capital raised
Applicable □ Not applicable
(1) General Information about the Use of Raised Funds
Applicable □ Not applicable
Unit: RMB'0,000
Total
Total
amount of
amount of
Total changed- Total Purpose
changed- Amount
Total Net Used in Total amount of purpose proceeds and
Year Method of purpose left idle
amount amount the current amount changed- funds as that have location of
of raising raising funds for over
raised raised period used purpose a % of not been the unused
during the two years
funds total used amount
Reporting
amount
Period
raised
Public
issuance
Not Not Not Not
2024 of 150,000 149,595 149,595 149,595 0 0
applicable applicable applicable applicable
corporate
bonds
2024 Public 150,000 149,865 149,865 149,865 Not Not Not 0 Not 0
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issuance applicable applicable applicable applicable
of
corporate
bonds
Not Not Not
Total -- 300,000 299,460 299,460 299,460 0 -- 0
applicable applicable applicable
Use of the Capital Raised
Pursuant to the approval of the China Securities Regulatory Commission under the registration number CSRC Permit [2022] No. 1561, the Company
is authorized to issue up to RMB10 billion in corporate bonds to professional investors through a phased issuance.
The net proceeds from “Sci-Tech Innovation Corporate Bonds Publicly Offered by TCL Technology Group Corporation to Professional Investors
(Phase 1) in 2024” have been fully closed on February 1, 2024. On the date of this announcement, all proceeds raised have been fully utilized, and the
actual use of proceeds is consistent with the intended use as stated in the prospectus.
Net proceeds from “Sci-Tech Innovation Corporate Bonds Publicity Offered by TCL Technology Group Corporation Publicly Offered to Professional
Investors (Phase 2) in 2024” were fully closed on April 11, 2024. On the date of this announcement, all proceeds raised have been fully utilized, and
the actual use of proceeds is consistent with the intended use as stated in the prospectus.
(2) Promised Use of Raised Funds
□ Applicable Not Applicable
(3) Change of the raised fund projects
□ Applicable Not Applicable
No such cases in the Reporting Period.
VIII. Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable Not Applicable
The Company did not dispose of any major assets at the end of 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 profits
Unit: RMB'0,000
Company
Principal Registered Operating Net
Company name Type of Total assets Net assets Revenue
activity capital profit profits
change
TCL China Star
Optoelectronics RMB33.08
Subsidiary Display 19,657,554 7,235,770 4,409,606 249,498 247,992
Technology Co., billion
Ltd.
TCL Zhonghuan New energy
Renewable photovoltaics RMB4.04
Subsidiary 12,519,637 5,593,539 1,621,349 -338,126 -317,576
Energy and other billion
Technology Co., silicon
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Ltd. materials
business
Highly
Distribution RMB0.42
Information Subsidiary 780,162 149,117 1,364,933 8,530 6,294
business billion
Industry Co., Ltd.
Acquisition and disposal of subsidiaries in the Reporting Period
Applicable □ Not applicable
How subsidiaries were obtained or Effects on overall operations and
Company name
disposed of in the Reporting Period operating performance
Zhonghuan Advanced Korea Co., Ltd. Newly established No significant effect
MOKA TECHNOLOGY VIETNAM
Acquisition No significant effect
COMPANY LIMITED
Xi’an Maichi Technology Co., Ltd. Newly established No significant effect
Tianjin Binhai Huanxu New Energy Co.,
Newly established No significant effect
Ltd.
Yixing Huanxu New Energy Co., Ltd. Newly established No significant effect
Tianjin Huiyi Digital Technology Co.,
Newly established No significant effect
Ltd.
Yixing Huanxu Investment Management
Newly established No significant effect
Co., Ltd.
Shenzhen Zhixian Shijie Software
Newly established No significant effect
Technology Co., Ltd.
Shenzhen Zhilian Shuchuang
Newly established No significant effect
Technology Co., Ltd.
Guangzhou TCL High-Tech
Newly established No significant effect
Development Co., Ltd.
Tianjin Jincheng Internet Technology
Newly established No significant effect
Co., Ltd.
Diamond Union Ltd. Acquisition No significant effect
Huansheng New Energy (Inner
Newly established No significant effect
Mongolia) Co., Ltd.
Hangjinhouqi Guangsen New Energy
Newly established No significant effect
Co., Ltd.
Hohhot Mingfeng New Energy Co., Ltd. Newly established No significant effect
Hangjinhouqi Yusheng New Energy Co.,
Newly established No significant effect
Ltd.
Inner Mongolia Chenhe New Energy
Newly established No significant effect
Co., Ltd.
Heilongjiang Huanju New Energy Co.,
Newly established No significant effect
Ltd.
Huansheng Photovoltaic Technology
Newly established No significant effect
(Lingwu City) Co., Ltd.
Inner Mongolia Zhonghuan Construction
De-registered No significant effect
Management Co., Ltd.
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Jiangsu Mingjing Bandaoti Technology
De-registered No significant effect
Co., Ltd.
Ningxia Huanneng New Energy Co.,
Transferred No significant effect
Ltd.
Tianjin Binhai New Area Huanju New
Transferred No significant effect
Energy Co., Ltd.
Ningxia Hongmao New Energy Co., Ltd. Newly established No significant effect
Lingwu Huishun New Energy Co., Ltd. Newly established No significant effect
Huansheng Photovoltaic Technology
Newly established No significant effect
(Lingwu City) Co., Ltd.
Explanation of Principal Subsidiaries and Joint Stock Companies
None
X. Structured Bodies Controlled by the Company
□ Applicable Not Applicable
XI. Risks and Responses
1. Risk of Macroeconomic Fluctuations
The global economy has slowed down, and a series of factors are further elevating global
economic uncertainties, such as the Russia-Ukraine and Israel-Palestine geopolitical conflicts, a super
year for global elections, and the evolving landscape of trade bloc regulations. To date, global trade
has not exhibited any substantial signs of recovery. Despite a recent easing in inflation rates across
major global economies, they have yet to return to expected levels. The high-interest rate policies
persistently adopted by the United States, European countries, and others have amplified economic
and financial risks. The multifaceted risks and uncertainties outlined above are posing formidable
obstacles to enterprises' global operations. Against this backdrop, the Company will continuously
analyze macroeconomic trends and assess influential risks. It will also prioritize its core business
strategies, foster innovation, enhance its competitive advantages, and maximize commercial value
returns. Meanwhile, the Company will firmly implement its global strategy, systematically fortify its
global supply chains to mitigate risks, and leverage its industry-specific advantages to mitigate the
adverse effects of macroeconomic fluctuations.
2. Risk of Industry Prosperity Fluctuations
Despite the rebound in the panel industry in the first half of the year due to increasing demand
for larger displays and downstream applications, the industry will continue to grapple with growth
challenges due to sluggish global demand. The rapid expansion of production capacity across China’s
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photovoltaic industry has led to a notable supply-demand imbalance, making it challenging to restore
equilibrium in the near term. The Company will closely monitor shifts in industry supply and demand,
optimize capacity allocation, and foster healthy industry development. At the same time, it will
enhance its investment in R&D, and continuously expand its advantages in terms of size and
effectiveness by creating high barriers to competition and broadening its business moat.
3. Corporate Supply Risks
There is a risk of commodity price fluctuations in the second half of 2024, which are affected
by the evolving international landscape and ongoing energy transition. Some individual suppliers
may have delivery risks due to the overall economic situation and squeezed price of end-products.
The Company will develop its long-term partnerships with its suppliers through strategic cooperation
and other means, and will enhance risk control for upstream material supply, so as to promptly
identify and respond to risks.
XII. Implementation of the “Joint Improvement of Quality and Investment Return” Action
Plan
Whether the Company has disclosed the “Joint Improvement of Quality and Investment Returns” Action Plan
Announcement.
Applicable □ Not applicable
To better implement the guidance on enhancing the quality and investment value of listed
companies, the Company has developed the “Joint Improvement of Quality and Investment Returns”
Action Plan, which is based on in-depth research on industry trends and careful consideration of our
future business trajectory. For a comprehensive overview, please refer to the progress report on the
“Joint Improvement of Quality and Investment Returns” Action Plan. For more details, please see the
Joint Improvement of Quality and Investment Returns Action Plan and the progress report on the Joint
Improvement of Quality and Investment Returns Action Plan disclosed on February 28, 2024, and
May 8, 2024, respectively.
The development of the company cannot be separated from the care and support of investors.
The Company remains committed to its “investor-centric” approach, ensuring compliant and prudent
operations while safeguarding investor interests.
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Part IV Corporate Governance
I. Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor
Date of the
Meeting Type participation Date of disclosure Resolutions of the meeting
meeting
ratio
All proposals were adopted. Please
refer to the Notice on Resolutions
Annual
The 2023 Annual of General Meeting of 2023
general 20.38% May 24, 2024 May 25, 2024
General Meeting disclosed on www.cninfo.com.cn
meeting
on May 25, 2024 (Notice No.:
2024-044)
All proposals were adopted. Please
The First Extraor refer to the Notice on the 1st
Extraordinary dinary Extraordinary General Meeting of
11.24% June 17, 2024 June 18, 2024
General Meeting general 2024 disclosed on
of 2024 meeting www.cninfo.com.cn on June 18,
2024 (Notice No.: 2024-053)
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights
□Applicable Not applicable
II. Change of Directors, Supervisors and Senior Management
Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Vice Chairman of
Zhang Zuoteng
the Board
Independent
Jin Li
director
Independent The general meeting of the Company
Wang Lixiang
director deliberated and approved the proposals for
Elected May 24, 2024
Chairman of the the election of the Board of Directors and
Wu Zhiming Supervisory Supervisory Committee.
Committee
Shareholder
Zhuang Weidong Representative
Supervisor
Employee
She was elected by the workers’ congress
Zhu Wei Representative Elected May 24, 2024
of the Company.
Supervisor
Former Vice
Left office upon The general meeting of the Company
Liang Weihua Chairman of the
expiration of term deliberated and approved the proposals for
Board
the election of the Board of Directors and
Left office upon May 23, 2024
Wang Cheng Former Director Supervisory Committee. Some of the
expiration of term
former directors and supervisors left office
Former Independent Left office upon
Gan Yong after their terms of office expired.
Director expiration of term
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Former Independent Left office upon
Chen Shiyi
Director expiration of term
Former Independent Left office upon
Liu Xunci
Director expiration of term
Former Chairman of
Left office upon
Zheng Tao the Supervisory
expiration of term
Committee
Former Shareholder
Left office upon
Qiu Haiyan Representative
expiration of term
Supervisor
Former Employee
Left office upon
Mao Tianxiang Representative
expiration of term
Supervisor
III. Interim Dividend Plan and Share Capital Converted from Capital Reserve for the
Reporting Period
□ Applicable Not applicable
The Company has no interim dividend plan for profit distribution or conversion of capital reserve fund into share capital
IV. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
Applicable □ Not applicable
1. Equity Incentives
□ Applicable Not applicable
2. Implementation of Employee Stock Ownership Plan
Applicable □ Not applicable
All the valid employee stock ownership plans during the Reporting Period
Total number Proportion to total
Scope of Number of Funding source for
Name of shares held Changes share capital of
employees employees implementing the plan
（share） listed companies
2021-2023 The Company's
Employee middle and
Special incentive funds
Stock senior Less than Not
11,146,814 0.06% provisioned by the
Ownership management 3,600 applicable
Company
Plan (Phase I) and outstanding
key staff
2021-2023 The Company's
Employee middle and
Special incentive funds
Stock senior Less than Not
21,628,535 0.12% provisioned by the
Ownership management 3,600 applicable
Company
Plan (Phase II) and outstanding
key staff
The Company's
2021-2023 Employees' legitimate
middle and
Employee income, performance-
senior Less than Not
Stock 64,992,964 0.35% based bonus or other
management 3,600 applicable
Ownership distribution permitted
and outstanding
Plan (Phase III) by laws and regulations
key staff
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Note: At the end of the reporting period, 2024 Employee Stock Ownership Plan (Draft) and other related matters have been deliberated
and approved by the general meeting. The underlying shares under the ESOP have not been transferred/purchased.
Shareholdings of Directors, Supervisors and Senior Management under the Employee Stock Ownership Plan during the Reporting
Period
Beginning amount Proportion to total
Ending amount in the
Name Position in the Reporting share capital of listed
Reporting Period
Period companies
Li Dongsheng Chairman, CEO
Zhao Jun Director, Senior Vice President
Director, Board Secretary and
Liao Qian
Senior Vice President About 17.89 About 8.75 million
0.05%
Li Jian CFO million shares shares
Yan Xiaolin Senior Vice President, CTO
Employee Representative
Zhu Wei
Supervisor
Changes of asset management institutions during the Reporting Period
□ Applicable Not applicable
Changes of equity caused by the holder’s disposal of shares during the Reporting Period
□ Applicable Not applicable
For details on change in shareholdings from non-trading transfer by directors, supervisors and senior managers under the ESOP, please
see the “Change of Shareholdings of Directors, Supervisors and Senior Managers” in the report.
Exercise of shareholder rights during the Reporting Period
Applicable □ Not applicable
During the reporting period, the Company’s ESOP participants exercised their shareholder rights to receive the profit distribution for
2023, but did not participate in voting at the general meeting or exercise other shareholder rights.
Other relevant information and explanations of the Employee Stock Ownership Plan during the Reporting Period.
□ Applicable Not applicable
Changes of the members of Employee Stock Ownership Plan Management Committee
□ Applicable Not applicable
Financial impact of Employee Stock Ownership Plan on the Company during the Reporting Period and related accounting treatment
Applicable □ Not applicable
The financial, accounting treatment and taxation involved in the Company’s shareholding plan shall be implemented according to laws
and regulations and normative documents on financial systems, accounting standards, taxation systems, etc. The holder of the
shareholding plan shall pay the personal income tax generated due to the shareholding plan according to law, and can choose to sell
the corresponding amount of shares to the shareholding plan to cover personal income tax. The remaining shares will be attributed to
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individuals.
Termination of Employee Stock Ownership Plan during the Reporting Period
Applicable □ Not applicable
Based on the agreements under the Phase III Global Partner Program (Draft), the shares attributable to employees under the Program
within 2023 have been fully vested, sold and transferred to employees. In March 2024, shares attributed to the Company in the scheme
of the current period were sold.
Other instructions: none
3. Other Employee Incentives
□ Applicable Not applicable
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Part V Environmental and Social Responsibility
I Major Environmental Issues
Whether the listed company and its subsidiaries are major polluters announced by the environmental protection department
Yes □No
Policies and Industrial Standards in connection with Environmental Protection
The Company complies with a number of environmental protection policies, including: Law of the People’s Republic of China
on Environmental Protection, Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution, Law of
the People’s Republic of China on the Prevention and Control of Water Pollution , Law of the People’s Republic of China on the
Prevention and Control of Environmental Pollution by Solid Waste, Law of the People’s Republic of China on Soil Pollution Prevention,
Law of the People’s Republic of China on Noise Pollution Prevention, Law of the People’s Republic of China on the Prevention and
Control of Radioactive Pollution.
Industrial standards referred by the Company in environmental protection include: the Electronic Industry Water Pollutant
Discharge Standards, Battery Industry Pollutant Discharge Standards, Pollutant Discharge Standards for Urban Sewage Treatment
Plants, Environmental Noise Discharge Standards for Industrial Enterprise and Factories, Pollutant Discharge Standards for Urban
Sewage Treatment Plants, Hazardous Waste Storage Pollution Control Standards and Malodorous Pollutant Discharge Standards, with
the aim to ensure the continuous and stable operation of various environmental protection facilities, achieve effective treatment of
"three wastes" and meet emission standards.
Administrative License for Environmental Protection
The Company complies with the laws and regulations related to environmental protection license during its construction, carries
out environmental impact evaluation, obtains sewage discharge permits, and files with the provincial and municipal regulators for its
operation on a timely basis.
Industrial Discharge Standards, and Details on Pollutant Discharge from Production and Operation
Key
Number
Name of the pollutants Distribution Governing Approved
Major Way of of Discharge Total Excessive
Company or and types of of discharge discharge total
pollutants discharge discharge intensity discharge discharge
subsidiary specific outlets standards discharge
outlets
pollutants
Discharged to
T CL China Star North of the
COD Guangming 1 145mg/L 260mg/L 524.56t 2071.12t None
Optoelectronics Waste water plant area
Sewage Plant
T echnology Co., pollutants
Discharged to the Artificial
Ltd. COD 1 14mg/L 30mg/L 26.929t 174.89t None
artificial wetland wetland
Shenzhen China Waste water Discharged to Southeast
COD 2 39mg/L 110mg/L 130.967t 1077.8t None
Star pollutants Guangming corner of the
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Optoelectronics Sewage Plant plant
Bandaoti Display
T echnology Co.,
Ltd.
Southwest and
Indirectly northwest
COD 2 62.53mg/L 400 mg/L 42.05t 847.95t None
discharged corners of the
plant
Southwest and
Waste water Ammonia Indirectly northwest
2 13.50mg/L 30mg/L 1.3092t 85.80t None
pollutants nitrogen discharged corners of the
plant
Southwest and
Indirectly northwest
Wuhan China Ag 2 0.012mg/L 0.1 mg/L 0.00004t 0.00105t None
discharged corners of the
Star
plant
Optoelectronics
Southeast and
T echnology Co.,
Nitrogen southwest
Ltd. Directly discharged 14 94 mg/m 150 mg/m 4.91t 59.51t None
oxides corners of the
plant
Southeast and
southwest
Air pollutants VOCS Directly discharged 5 14.86 mg/m 50 mg/m 4.87t 114.319t None
corners of the
plant
Southeast and
PM
southwest
(particulate Directly discharged 11 3.5 mg/m 60 mg/m 7.99t 26.48t None
corners of the
matter)
plant
Northwest
Indirectly
COD 1 corner of the 110.54 mg/L 400 mg/L 34.57t 570.80t None
discharged
plant
Northwest
Waste water Ammonia Indirectly
1 corner of the 11.41mg/L 30 mg/L 0.92t 57.10t None
pollutants nitrogen discharged
plant
Wuhan China Northwest
Indirectly
Star Ag 1 corner of the 0.039 mg/L 0.3 mg/L 0.0049t 0.0315t None
discharged
Optoelectronics plant
Bandaoti Display Northeastern
Nitrogen
T echnology Co., Directly discharged 10 corner of the 46 mg/m 150 mg/m 11.83t 139.84t None
oxides
Ltd. plant
Northeastern
Air pollutants VOCS Directly discharged 2 corner of the 8.8 mg/m 50 mg/m 12.38t 99.785t None
plant
PM Northeastern
(particulate Directly discharged 10 corner of the 12.6 mg/m 60 mg/m 12.31t 36.70t None
matter) plant
Continuously Within the 97.7mg/L 500mg/L 62.72t 129.6t None
Suzhou China COD discharged to 2 Wastewater
6mg/L 100mg/L 6.22t 449.82t None
Star Suzhou Huaxin T reatment Plant
Waste water
Optoelectronics Environmental of Suzhou
pollutants
T echnology Co., Ammonia T echnology Co., Huaxin
1 0.289mg/L 6mg/L 0.578t 22.68t None
Ltd. nitrogen Ltd. Environmental
T echnology
Suzhou China COD Continuously 22.8mg/L 500mg/L 1.97t 96.335t None
Star Waste water discharged to South gate of
Ammonia 1
Optoelectronics pollutants Suzhou Industrial the plant area 0.298mg/L 45mg/L 1.79t 5.65t None
nitrogen
Display Co., Ltd. Park First Sewage
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T reatment Plant
DB12/356-
2018
Chemical
General Integrated
oxygen Organized 1 9.11t 700.24t None
discharge outlet Wastewater
T ianJin requirement
Discharge
Zhonghuan As per
Waste water Standard
Advanced emission
pollutants DB12/356-
Material&Techno standard
2018
logy Co., Ltd.
Ammonia General Integrated
Organized 1 0.77t 33.03t None
nitrogen discharge outlet Wastewater
Discharge
Standard
Chemical
General DB12/356-
oxygen Organized 1 32.05t 42.19t None
discharge outlet 2018
T ianjin Huan'Ou requirement As per
Bandaoti Waste water Integrated
Ammonia General emission
Material&Techno pollutants Organized 1 Wastewater 6.20t / None
nitrogen discharge outlet standard
logy Co., Ltd.
Discharge
T otal General
Organized 1 Standard 5.14t / None
nitrogen discharge outlet
Chemical DB12/599-
General
oxygen Organized 1 2015 2.19t 20.78t None
discharge outlet
requirement Pollutant
T ianjin Huanzhi T otal General As per Discharge
Waste water Organized 1 0.003t 0.23t None
New Energy
phosphorus discharge outlet emission Standards for
T echnology Co., pollutants
Ammonia General standard Urban
Ltd.
Organized 1 0.02t 4.39t None
nitrogen discharge outlet Sewage
T otal General Treatment
Organized 1 0.14t 1.48t None
nitrogen discharge outlet Plants
GB8978-1996
Chemical As per Integrated
General
oxygen Organized 1 emission Wastewater 77.59t / None
discharge outlet
requirement standard Discharge
Standard
GB8978-1996
As per Integrated
T otal General
Organized 1 emission Wastewater 1.19t / None
phosphorus discharge outlet
standard Discharge
Inner Mongolia
Waste water Standard
Zhonghuan Solar
pollutants GB8978-1996
Material Co., Ltd.
As per Integrated
Ammonia General
Organized 1 emission Wastewater 0.22t / None
nitrogen discharge outlet
standard Discharge
Standard
GB8978-1996
As per Integrated
General
Flouride Organized 1 emission Wastewater 2.51t / None
discharge outlet
standard Discharge
Standard
Zhonghuan Discharged to As per GB/T 31962
Waste water T otal DW001
Advanced centralized 2 emission Wastewater 0.24t 1.59t None
pollutants phosphorus DW003
Bandaoti industrial sewage standard Quality
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T echnology Co., treatment plant Standards for
Ltd. Discharged to Discharged to
T otal centralized DW001 Municipal
2 43.40t 157.19t None
nitrogen industrial sewage DW003 Seweers
treatment plant GB8978-1996
Discharged to Integrated
centralized DW001 Wastewater
COD 2 421.29t 1851.36t None
industrial sewage DW003 Discharge
treatment plant Standard
GB8978-1996
Integrated
Wastewater
Discharge
Discharged to
Standard
Ammonia centralized DW001
2 GB16297- 27.73t 138.26t None
nitrogen industrial sewage DW003
1996
treatment plant
Integrated
Emission
Standard of
Air Pollutants
Chemical GB 30484--
General
oxygen Organized 1 2013 6.13t 72.14t None
discharge outlet
requirement Discharge
General Standard for
Flouride Organized 1 0.57t 2.23t None
Huansheng Solar discharge outlet Discharged Battery
Waste water
(Jiangsu) Co., Ammonia General according to Industry
pollutants Organized 1 0.01t 0.20t None
Ltd. nitrogen discharge outlet the standard Pollutants
T otal General
Organized 1 0.03t 0.30t None
nitrogen discharge outlet
T otal General
Organized 1 0.00004t 0.01t None
phosphorus discharge outlet
Chemical Discharged to
General
oxygen urban sewage 1 169.90t 883.38t None
discharge outlet
requirement treatment plant GB39731-
Discharged to 2020
Ammonia General
urban sewage 1 Discharge 0.04t 2.37t None
Wuxi Zhonghuan nitrogen discharge outlet Discharged
Waste water treatment plant Standard of
Applied Materials according to
pollutants Discharged to Water
Co., Ltd. T otal General the standard
urban sewage 1 Pollutants for 4.00t 7.67t None
nitrogen discharge outlet
treatment plant Electronic
Discharged to Industry
T otal General
urban sewage 1 0.50t 0.70t None
phosphorus discharge outlet
treatment plant
Disposing of pollutants
During the Reporting Period, the pollutants generated by the Company and its subsidiaries were discharged in accordance with
the requirements of the pollutant discharge permit after treated by corresponding pollutant treatment facilities. All kinds of pollutant
treatment facilities were in normal operation, and there were no incidents of notification or punishment received from public
environmental supervision agencies. The discharge and disposal of waste water, waste gas, solid waste, and plant boundary noise
generated in the operating process complied with the laws and regulations of the country and the place where the operation was located.
The Company’s waste water includes domestic waste water and industrial waste water, of which domestic waste water is
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discharged into the local municipal sewage treatment pipe network after being pre-treated with oil separation and septic treatment;
industrial waste water enters different treatment systems according to its characteristics, and is discharged after physica l, chemical and
biochemical treatment.
The air pollutants produced by the Company are mainly process waste gas in the production process. For different types of waste
gases, the Company has constructed corresponding waste gas treatment systems, such as a waste gas stripping system, acidic waste gas
treatment system, alkaline waste gas treatment system, organic waste gas treatment system, waste gas treatment system for was te water
treatment station, etc. For the collection of waste gases through pipelines to the corresponding waste gas treatment system, where waste
gases are discharged at a high altitude after meeting relative standards. The concentration and total amount of waste water a nd exhaust
gas discharged meet the relevant national and local standards.
The solid wastes generated by the Company include general waste, hazardous waste and domestic garbage, of which, hazardous
wastes are treated by an entrusted qualified hazardous waste disposal agency according to the regulations. General wastes are recycled
and disposed of by a resource recycling manufacturer after being classified in the plant area. Domestic garbage is uniformly handled
by the municipal public. 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.
Emergency Response Plan for Environmental Incidents
The Company regularly carries out environmental risk assessment and emergency material survey, prepares an Emergency
Response Plan for Environmental Incidents and submits it to the local environmental protection department for recordation after being
reviewed by experts. The Company regularly delivers employee training on emergency plans and carries out emergency drills for
environmental emergencies to ensure timely and accurate response to environmental pollution emergencies.
The Plan shall be subject to changes in line with the actual situation and changes of various companies under the Group in a timely
manner, and shall be prepared again in case of major changes or after every 3 years.
Relevant information on investments in environmental governance and protection and payments of environmental protection
taxes
The Company pays the environmental protection taxes every quarter by the Financial Department, and the investments in
environmental protection are calculated on an annual basis.
Environmental Self-Monitoring Program
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The Company combines on-line monitoring and manual sampling and testing of various pollutants based on the environmental
impact assessment approval and pollution discharge permit, clarifies monitoring indicators, execution standards and their limits,
conducts quarterly testing of various pollution factors such as waste water/waste gas/ground water/plant boundary noise, and develops
a self-monitoring plan based on the Company's own situation, as well as regularly employing qualified third party to test various
pollution factors with the reports kept on file. In addition to self-monitoring, the local environmental protection department also
infrequently supervises the environmental testing to ensure that emissions meet standards.
Administrative punishments received with respect to environmental issues in the Reporting Period
None
Other environment information that should be publicly disclosed
None
Measures taken to reduce its carbon emissions and their effects during the Reporting Period
Applicable □ Not applicable
In order to cope with global challenges such as climate change, energy security and environmental pollution, TCL TECH.
continuously accelerated the green and low-carbon transformation of its energy structure in pursuit of the "dual carbon" goal. The
Company actively responded to the requirements of the national greenhouse gas emission reduction strategy. In order to effectively
support the implementation of the Company's climate strategy, TCL pledged to the “3050” target commitment, i.e."reaching emission
peak no later than 2030 and achieving carbon neutrality in its own operations no later than 2050" at the strategic level. In response to
these commitment targets, TCL TECH. established dedicated working groups at major business departments to address climate cha nges,
responsible for implementing specific strategies and actions. TCL comprehensively promoted its climate governance from various
aspects, such as carbon metering supervision, carbon emission reduction management, carbon asset coordination, carbon trading
services and carbon financial support, in combination with its own development status, market environment and policy orientation. In
addition, the Company also carried out the ISO 14064 Greenhouse Gas Accounting and Verification through third-party agencies,
scientifically formulated carbon emission reduction paths and related improvement measures after disassembling the Group's dual
carbon goals, as well as conducted annual self-evaluation to ensure the targets achieved.
TCL TECH. always upholds the business philosophy of green and sustainable development. TCL CSOT, its main subsidiary,
implemented a series of measures such as selection of energy-efficient equipment (100% major equipment equipped with frequency
conversion and automation equipment), smart energy system management and optimization of power supply to effectively reduce
equipment energy consumption, and recovered waste heat and ice water energy and used solar energy for power generation, thereby
reducing carbon emissions. TCL CSOT’s Wuhan Base sorted out and implemented 98 energy-saving projects in the first half of the
year, with an expected reduction of 15,991 tons of CO , and generated 15.99 million kWh of photovoltaic power. TCL CSOT’s
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Shenzhen Base has completed 36 energy-saving projects, mainly focusing on the process innovation of factory equipment while kept
production, saving about 24.5 million kWh of electricity and achieved energy-saving income of RMB13.65 million.
TZE, engaging in the new energy industry, actively explored energy saving and consumption reduction technology transformation
based on the process characteristics of different production products, and comprehensively improved the level of energy saving and
consumption reduction. During the reporting period, Ningxia Huanou adopted the technology of reusing waste heat from recyclin g
equipment and implemented the air compressor waste heat recovery project, saving approximately 2.129 million kWh of electricity.
The projects such as HVAC system and process circulating water system free cooling were implemented, utilizing environmental
natural cooling sources and other technologies, saving approximately 1.974 million kWh of electricity and effectively reducing its
dependence on conventional power energy. As of the end of the reporting period, the Company had achieved a renewable electric ity
consumption of over 1.7 million MWh through green electricity trading in the electricity market and measures such as rooftop
photovoltaic power generation, with renewable electricity consumption accounting for approximately 39% of the total electricity
consumption.
In the future, TCL TECH. will keep the sustainable development in mind, take long-term strategy as the guidance, constantly
break through the boundaries, collaborate with the upstream and downstream of the industrial chain, create a cooperative ecological
chain, and build a future-oriented open ecosystem, so as to contribute to achieve global net zero emissions and promote the
transformation of global clean energy.
Other environmental related information
None
Reasons for not disclosing other environmental information
Not applicable
Relevant information on environmental accidents occurring in the Company
None
II. Social Responsibility
TCL Tech actively responds to national calls and focuses on four major areas (i.e. science and technology,
education, culture and 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 implement projects such as “TCL Photovoltaic
Low-carbon School”, “TCL Smart Classroom”, “A.I. Home”, “Little Music+”, and “TCL Hope Project Candlelight
Award Plan”, in assistance with the revitalization of rural education from such aspect as rural school educational
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resources and infrastructure. By carrying out targeted donations for the needed, the Company consolidated and
extended the achievements of poverty alleviation and pushed forward rural revitalization.
To address the sustainable development issues for rural schools, TCL Charity Foundation cooperated with TCL
Zhonghuan to implement the TCL Photovoltaic Low-carbon School 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. From March - June 2024, the Foundation donated roof-based
photovoltaic power generation systems and income from 25 years of power generation by such equipment, to a total
of 6 schools in Xixiang County, Hanzhong City, Shaanxi Province, and Zhongkai Primary School in Huizhou,
Guangdong Province, and it is expected that the photovoltaic power generation systems in the 7 schools will
generate 10.06 million KWH of electricity throughout their life cycles. Up to now, the Foundation has donated 27
Photovoltaic Low-carbon Schools in Shaanxi, Ningxia, Inner Mongolia and Guangdong, benefiting over 30,000
students.
To address the inequity of educational resources between urban and rural areas, TCL Charity Foundation
establishes TCL Smart Classrooms in urban and rural schools, including smart instructional equipment and software,
to build multimedia smart classrooms, tailored and simultaneous classrooms between “urban and rural areas”. In
June 2024, TCL Charity Foundation started the donation for Smart Classrooms in Yuanshan Town Primary School,
Lianping County, Heyuan City. Up to now, the Foundation has donated 4 Smart Classrooms in Shenzhen,
Guangdong, Guilin, Guangxi and Heyuan, Guangdong benefiting more than 4,000 students.
In 2019, TCL Charity Foundation cooperated with the TCL Industrial Research Institute to launch the “A.I.
Home” project, developed and designed the “Eagle Storytelling Machine”, and delivered the “Eagle Story Club”
campaign in rural schools, bringing together children from rural schools, to improve their wellbeing and help them
with growing up. In 2024, TCL Charity Foundation distributed over 200 customized “Eagle Storytelling Machines”
to left-behind children and migrant children; The seventh batches of pilot schools were selected for the “Eagle Story
Club” project. A total of 20 schools from 10 provinces including Sichuan, Yunnan, Guizhou, were selected as the
“Eagle Story Club” pilot schools, and a total of 200 story boxes were distributed, benefiting 6,000 students.
To address the shortage of high-quality music education resources for children, TCL Charity Foundation and
the Education Foundation of the Beijing Central Conservatory of Music launched the "Little Music+" project,
developed and designed the "Little Snow Music Machine", and carried out “Little Snow Music Class” in the rural
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schools to introduce both Chinese and international famous music works and appreciation to children who lack
music resources and motivate kids to develop positive and optimistic characters. In 2024, the seventh batches of
pilot schools were selected for the “Little Snow Music Class” project. A total of 20 schools from 9 provinces
including Guizhou, Guangxi, Henan, were selected as the “Little Snow Music Class” pilot schools, and a total of
200 music boxes were distributed, benefiting more than 3,000 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 Revitalization and the pairing support areas of Shenzhen. Each of the
winners received a personal award worth RMB9,500, including a cash reward and 7-day offline “Candlelight Class”
training. In H1 2024, the 10th "TCL Hope Project Candlelight Award Plan" started its candidate selection, and
finally 400 outstanding rural teachers won the awards. Till now, the project applicants cover 523 counties in 23
provinces across the country. More than 3,400 outstanding rural teachers from 2,000 schools have won the awards.
A total investment of over RMB46 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 H1 2024, to enable more rural infants and young children to receive early
childhood care services and improve the development of rural infants and young children to reach the national
average level, TCL Charity Foundation supported the China Development Research Foundation with RMB 2
million to carry out the “Sunshine Starting Point: 100,000 Rural Infants and Young Children Home Care Guidance
Action Plan”. TCL Charity Foundation supported the construction project of a smart "light storage and charging"
integrated charging station in Checun Village, Taimei Town, Huizhou with RMB1 million, and donated
RMB100,000 to the Huizhou Charity Federation for rural revitalization construction in Henghe Town, Boluo
County. In addition, TCL Charity Foundation launched an employee creative competition project, encouraging
employees to lend a help hand to disadvantaged groups, and initiated innovative and socially beneficial charitable
projects in support of the community development and the rural cultural and ethical progress from multiple
dimensions.
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Part VI Significant Events
I. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Overdue at the Period-End
□ Applicable Not Applicable
During the Reporting Period, the Company has no commitments that were fully fulfilled or that are overdue and have not been fu lly
fulfilled by the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other
Entities in the Reporting Period as of the end of the period.
II. Occupation of the Company, Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable Not Applicable
No such cases in the Reporting Period.
III. Irregularities in the Provision of Guarantees
□ Applicable Not Applicable
No such cases in the Reporting Period.
IV. Engagement and Disengagement of Independent Auditor
Whether the semi-annual financial report has been audited
□Yes No
The interim financial statements are unaudited.
V. Explanation of the Board of Directors and Supervisors Committee on the “Non-Standard
Auditor’s Report”
□ Applicable Not Applicable
VI. Explanation of the Board of Directors on the “Non-Standard Auditor’s Report” for the
Previous Year
□ Applicable Not Applicable
VII. Insolvency and Reorganization
□ Applicable Not Applicable
No such cases in the Reporting Period.
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VIII. Lawsuits
Significant Lawsuits and Arbitrations
□ Applicable Not Applicable
No such cases in the Reporting Period.
IX. Punishments and Rectifications
□ Applicable Not Applicable
No significant punishments or rectifications in the Reporting Period.
X. Credit Quality of the Company as well as its Controlling Shareholder and Actual Controlle r
□ Applicable Not Applicable
XI. Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable Not Applicable
During the Reporting Period, the Company's daily related-party transactions is found in the related announcements disclosed on
www.cninfo.com.cn.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable Not Applicable
During the Reporting Period, there is no related-party major transactions regarding purchase or disposal of assets or equity investments.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable Not Applicable
No related-party major 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
During the Reporting Period, the Company has no amounts due to and from related parties for non-operating purposes.
5. Transactions with Related Finance Companies
□ Applicable Not Applicable
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6. Transactions Between the Financial Company Controlled by the Company and Related Companies
Applicable □ Not applicable
Deposits
Amount incurred in the current period
Relationship Daily deposit Beginning Total deposit Total withdrawal
Range of Ending balance
Related parties with the ceiling balance amount in current amount in current
interest (RMB’0,000)
Company (RMB’0,000) (RMB’0,000) period period
(RMB’0,000) (RMB’0,000)
Subsidiary of TCL
Related
Industries Holdings 250,000.00 0.8%-1.15% 30.3 423,929.98 416,046.86 7,913.42
corporation
Co., Ltd.
Loans
Amount incurred in the current period
Balance at
Relationship Total repayment Ending
Loan limit Range of the beginning Total loan amount
Related parties with the amount in current balance
(RMB’0,000) interest of the period in current period
Company period (RMB’0,000)
(RMB’0,000) (RMB’0,000)
(RMB’0,000)
Subsidiary of TCL
Related
Industries Holdings 250,000.00 - - - - -
corporation
Co., Ltd.
Credit or other financial business
Relationship with the Ending balance
Related parties Business type Total (RMB’0,000)
Company (RMB’0,000)
Subsidiary of TCL The balance of
Credit granting (bill
Industries Holdings Co., Related corporation comprehensive credit on 72,552.63
discount)
Ltd. any day shall not exceed
Subsidiary of TCL RMB2.5 billion (including
Credit granting (bill
Industries Holdings Co., Related corporation loans, notes discounting, 54,404.35
acceptance)
Ltd. and notes acceptance)
7. Other Major Related-Party Transactions
Applicable □ Not applicable
Related inquiries on the website for temporary disclosure of major related-party transactions
Title of announcement Date of interim disclosure Website for disclosure
Announcement on the Related-party Transactions with Shenzhen Jucai Supply
April 30, 2024
Chain Technology Co., Ltd. in 2024
Announcement on Continuing to Provide Financial Services by TCL Technology
Group Finance Co., Ltd. to Related Parties and Renewing the Financial Services April 30, 2024
Agreement for Related-party Transactions
Announcement on the Expected Continuing Related-Party Transactions for 2024 April 30, 2024 www.cninfo.com.cn
Report on the Execution of Daily Related-Party Transactions in 2023 April 30, 2024
Announcement on the Launch of Accounts Receivable Factoring and the Related -
April 30, 2024
party Transaction
Announcement on Adjustment of Daily Related-party Transaction Quotas among the
January 27, 2024
Same Controlling Entity for 2023
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XII. Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable Not Applicable
The Company has no significant entrustment in the Reporting Period.
(2) Contracting
□ Applicable Not Applicable
The Company has no significant contracting in the Reporting Period.
(3) Leases
□ Applicable Not Applicable
The Company has no significant leases in the Reporting Period.
2. Major Guarantees
Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure date of Guarantee for
Guarantee Actual Actual guarantee Type of Term of Expired
Obligor the guarantee line Collateral Counter guarantee related parties
line occurrence date amount guarantee guarantee or not
announcement or not
Counter guarantee
TCL Industries Holdings (HK) Joint liability provided by TCL
April 28, 2022 514,629 - 0 / - Yes Yes
Limited guarantee Industrial Holding Co.,
Ltd.
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Counter guarantee
TCL Air-Conditioner (Zhongshan) December 17, Joint liability provided by TCL
April 28, 2022 158,600 1,325 / 54 days No Yes
Co., Ltd. 2021 guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL King Electrical Appliances Joint liability provided by TCL
April 28, 2022 345,000 August 29, 2019 5,132 / 59 days No Yes
(Huizhou) Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
Joint liability provided by TCL
Tonly Technology Co., Ltd. April 28, 2022 40,000 - 0 / - Yes Yes
guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL King Electrical Appliance Joint liability provided by TCL
April 28, 2022 51,653 - 0 / - Yes Yes
(Chengdu) Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
Huizhou TCL Mobile Joint liability provided by TCL
April 28, 2022 212,507 - 0 / - Yes Yes
Communication Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Mobile Communication (HK) Joint liability provided by TCL
April 28, 2022 29,225 - 0 / - Yes Yes
Company Limited guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Home Appliances (Hefei) Joint liability provided by TCL
April 28, 2022 68,280 - 0 / - Yes Yes
Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
TCL Home Appliances Joint liability Counter guarantee
April 28, 2022 4,929 - 0 / - Yes Yes
(Zhongshan) Co., Ltd. guarantee provided by TCL
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Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Air Conditioner (Wuhan) Co., Joint liability provided by TCL
April 28, 2022 13,480 - 0 / - Yes Yes
Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
Zhongshan TCL Refrigeration Joint liability provided by TCL
April 28, 2022 31,749 - 0 / - Yes Yes
Equipment Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
Guangdong TCL Smart Heating & Joint liability provided by TCL
April 28, 2022 2,522 - 0 / - Yes Yes
Ventilation Equipment Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Home Appliances (Huizhou) Joint liability provided by TCL
April 28, 2022 10,000 - 0 / - Yes Yes
Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Air-Conditioner (Jiujiang) Joint liability provided by TCL
April 28, 2022 5,488 - 0 / - Yes Yes
Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
TCL Very Lighting Technology Joint liability provided by TCL
April 28, 2022 1,034 - 0 / - Yes Yes
(Huizhou) Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Counter guarantee
Shenzhen Shifen Daojia Service
Joint liability provided by TCL
Technology Co., Ltd. April 28, 2022 77 - 0 / - Yes Yes
guarantee Industrial Holding Co.,
Ltd.
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Counter guarantee
Guangzhou TCL Science and Joint liability provided by TCL
April 28, 2022 84,700 - 0 / - Yes Yes
Technology Development Co., Ltd. guarantee Industrial Holding Co.,
Ltd.
Huizhou Zhongkai TCL Zhirong Joint liability
May 22, 2021 45,500 - 0 / With counter- guarantee - Yes Yes
Technology Microcredit Co., Ltd. guarantee
Guangzhou Qihang International Joint liability
May 24, 2024 10,000 - 0 / With counter- guarantee - Yes No
Supply Chain Co., Ltd. guarantee
Shenzhen Qianhai Sailing
September 27, Joint liability 86-361
International Supply Chain May 24, 2024 46,000 42,971 / With counter- guarantee No No
2023 guarantee days
Management Co., Ltd.
Aijiexu New Electronic Display Joint liability Guarantee in proportion to
May 24, 2024 35,000 April 28, 2020 20,100 / 7.5 years No No
Glass (Shenzhen) Co., Ltd. guarantee shareholding percentage
Inner Mongolia Xinhua Bandaoti Joint liability Guarantee in proportion to
May 24, 2024 40,000 May 22, 2023 32,680 / 5.9 years No No
Technology Co., Ltd. guarantee shareholding percentage
Inner Mongolia Xinhuan Silicon Joint liability Guarantee in proportion to
May 24, 2024 180,000 June 15, 2023 148,000 / 5 years No No
Energy Technology Co., Ltd. guarantee shareholding percentage
TCL Huanxin Bandaoti (Tianjin) Joint liability Guarantee in proportion to
May 24, 2024 3,000 - 0 / - Yes No
Co., Ltd. guarantee shareholding percentage
Total approved line for such guarantees in Reporting Total actual amount of such guarantees in
314,000 88,801
Period (A1) Reporting Period (A2)
Total approved line for such guarantees at the end of the Total actual balance of such guarantees at
1,933,373 250,208
Reporting Period (A3) end of Reporting Period (A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure date of Guarantee for
Line of Actual Actual guarantee Type of Term of Expired
Obligor the guarantee line Collateral Counter guarantee related parties
guarantee occurrence date amount guarantee guarantee or not
announcement or not
TCL MOKA INTERNATIONA L Joint liability 335 days-
May 24, 2024 100,000 May 31, 2023 12,876 / / No No
LIMITED guarantee 1.9 years
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TCL Technology Investments Joint liability
May 24, 2024 220,000 July 14, 2020 213,804 / / 1 years No No
Limited guarantee
TCL China Star Optoelectronics December 22, Joint liability 274 days-
May 24, 2024 2,420,000 1,626,373 / / No No
Technology Co., Ltd. 2022 guarantee 8.5 years
TCL Technology Group (Tianjin) Joint liability
May 24, 2024 70,000 August 31, 2022 60,000 / / 3.2 years No No
Co., Ltd. guarantee
TCL Technology Group Finance Joint liability
May 24, 2024 150,000 - 0 / / - Yes No
Co., Ltd. guarantee
TTE Electronics India Private Joint liability
May 24, 2024 10,000 - 0 / / - Yes No
Limited guarantee
Beijing Hecheng Nuoxin September 9, Joint liability
May 24, 2024 10,000 10,000 / / 71 days No No
Technology Co., Ltd. 2023 guarantee
Beijing Lingyun Data Technology Joint liability 56-292
May 24, 2024 128,000 April 21, 2023 32,246 / / No No
Co., Ltd. guarantee days
Beijing Sunpiestore Technology September 4, Joint liability 66-328
May 24, 2024 135,000 121,213 / / No No
Co., Ltd. 2023 guarantee days
Guangdong Juhua Printed Display Joint liability
May 24, 2024 5,000 - 0 / / - Yes No
Technology Co., Ltd. guarantee
Guangzhou China Star
Joint liability 2 days-5.7
Optoelectronics Bandaoti Display May 24, 2024 1,750,000 March 7, 2022 1,261,297 / / No No
guarantee years
Technology Co., Ltd.
Guangzhou Zhihui Shengke Co., Joint liability
May 24, 2024 30,000 - 0 / / - Yes No
Ltd. guarantee
Highly (Tianjin) E-Commerce Co., Joint liability
May 24, 2024 10,000 April 21, 2023 6,236 / / 274 days No No
Ltd. guarantee
Highly (Tianjin) Technology Co., Joint liability
May 24, 2024 100,000 April 21, 2023 47,545 / / 274 days No No
Ltd. guarantee
Highly Information Industry Co., Joint liability 8 days-3.0
May 24, 2024 424,000 May 18, 2022 362,739 / / No No
Ltd. guarantee years
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Tianjin Huiyi Digital Technology Joint liability
May 24, 2024 3,000 June 24, 2024 3,000 / / 3 years No No
Co., Ltd. guarantee
Beijing Youyi Online Technology Joint liability
May 24, 2024 4,000 June 24, 2024 4,000 / / 3 years No No
Co., Ltd. guarantee
Xiaoyuzaixian (Beijing) Joint liability
May 24, 2024 3,000 June 24, 2024 3,000 / / 3 years No No
Technology Co., Ltd. guarantee
China Display Optoelectronics Joint liability 50-274
May 24, 2024 79,000 April 21, 2023 18,890 / / No No
Technology (Huizhou) Co., Ltd. guarantee days
Huizhou China Star
Joint liability 12 days-
Optoelectronics Technology Co., May 24, 2024 900,000 March 23, 2021 565,681 / / No No
guarantee 4.7 years
Ltd.
Huizhou Moka Technology Joint liability
May 24, 2024 20,000 - 0 / / - Yes No
Development Co., Ltd. guarantee
Moka Technology (Guangdong) Joint liability 164 days-
May 24, 2024 450,000 April 21, 2023 158,858 / / No No
Co., Ltd. guarantee 4.7 years
Qingdao Blue Business Consulting December 25, Joint liability
May 24, 2024 1,000 191 / / 55 days No No
Co., Ltd. 2023 guarantee
Shaanxi Titi Electronic September 9, Joint liability
May 24, 2024 10,000 10,000 / / 71 days No No
Technology Co., Ltd. 2023 guarantee
Shenzhen China Star
Joint liability 274 days-
Optoelectronics Bandaoti Display May 24, 2024 940,600 April 28, 2018 819,775 / / No No
guarantee 5.0 years
Technology Co., Ltd.
Suzhou China Star Optoelectronics Joint liability
May 24, 2024 92,500 August 30, 2022 50,959 / / 8 years No No
Display Co., Ltd. guarantee
Tianjin Printronics Circuit September 9, Joint liability
May 24, 2024 53,000 7,036 / / 6.2 years No No
Corporation 2022 guarantee
Tianjin TiTi Yunchuang September 9, Joint liability
May 24, 2024 5,000 5,000 / / 71 days No No
Technology Co., Ltd. 2023 guarantee
Tianjin WanfangNuoxin September 9, Joint liability
May 24, 2024 5,000 5,000 / / 71 days No No
Technology Co., Ltd. 2023 guarantee
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Tianjin Xincheng Pilot Technology September 9, Joint liability
May 24, 2024 5,000 5,000 / / 71 days No No
Co., Ltd. 2023 guarantee
Wuhan China Star Optoelectronics
Joint liability 2 days-3.7
Bandaoti Display Technology Co., May 24, 2024 1,631,600 March 1, 2018 1,085,655 / / No No
guarantee years
Ltd.
Wuhan China Star Optoelectronics Joint liability 3 day-6.2
May 24, 2024 1,670,500 August 25, 2022 1,027,496 / / No No
Technology Co., Ltd. guarantee years
Chongqing Blue Business Joint liability
May 24, 2024 7,000 - 0 / / - Yes No
Consulting Co., Ltd. guarantee
China Star Optoelectronics Joint liability
May 24, 2024 10,000 - 0 / / - Yes No
International (HK) Limited guarantee
Total guarantee line for subsidiaries approved in the Total actual amount of such guarantees for
11,452,200 2,270,954
Reporting Period (B1) subsidiaries in Reporting Period (B2)
Total balance of actual guarantees for
Total guarantees line for subsidiaries approved at the end
11,452,200 subsidiaries at the end of the Reporting 7,523,872
of the Reporting Period (B3)
Period (B4)
Guarantees provided between subsidiaries
Disclosure date of Guarantee for
Line of Actual Actual guarantee Type of Term of Expired
Obligor the guarantee line Collateral Counter guarantee related parties
guarantee occurrence date amount guarantee guarantee or not
announcement or not
Huhehaote Huanju New Energy Joint liability
November 26, 2014 2,029 August 5, 2016 2,029 / / 9.5 years No No
Development Co., Ltd. guarantee
Zhonghuan Energy (Inner Joint liability
June 24, 2017 9,560 July 21, 2017 9,560 / / 15 years No No
Mongolia) Co., Ltd. guarantee
Otog Banner Huanju New Energy Joint liability
June 24, 2017 13,733 August 30, 2017 13,733 / / 10 years No No
Co., Ltd. guarantee
Inner Mongolia Zhonghuan Crystal March 22, 2021 Joint liability
403,324 April 30, 2021 403,324 / / 7 years No No
Materials Co., Ltd. May 26, 2022 guarantee
Ningxia Zhonghuan Solar Material Joint liability
January 23, 2022 748,000 May 30, 2022 600,000 / / 7 years No No
Co., Ltd. guarantee
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Tianjin Huanzhi New Energy September 29, Joint liability
May 26, 2022 27,700 7,700 / 5 years No No
Technology Co., Ltd. 2022 guarantee
Tianjin Huanou New Energy September 28, Joint liability
May 26, 2022 115,000 44,728 / / 7 years No No
Technology Co., Ltd 2022 guarantee
Wuxi Zhonghuan Applied Joint liability
May 26, 2022 96,589 June 30, 2022 96,589 / / 7 years No No
Materials Co., Ltd. guarantee
Huansheng New Energy (Jiangsu) September 30, Joint liability
May 26, 2022 150,813 105,647 / / 5-7 years No No
Co., Ltd. 2022 guarantee
Huansheng New Energy (Tianjin) February 28, Joint liability
April 8, 2023 170,000 36,000 / / 7 years No No
Co., Ltd. 2024 guarantee
Shenzhen China Star
Joint liability 1.9-4
Optoelectronics Bandaoti Display May 24, 2024 2,351,300 April 28, 2018 1,944,518 / / No No
guarantee years
Technology Co., Ltd.
Techigh Circuit Technology Joint liability
May 24, 2024 4,590 June 27, 2024 160 / / 1 years No No
(Huizhou) Co., Ltd. guarantee
Techigh Circuit Technology Joint liability
May 24, 2024 24,225 April 23, 2024 11,828 / / 10 years No No
(Zhuhai) Co., Ltd. guarantee
TCL MOKA INTERNATIONA L Joint liability
May 24, 2024 214,500 April 30, 2024 8,110 / / 5-90 days No No
LIMITED guarantee
Total guarantee line for subsidiaries approved in the Total actual amount of such guarantees
2,594,615 99,245
Reporting Period (C1) for subsidiaries in Reporting Period (C2)
Total balance of actual guarantees for
Total guarantees line for subsidiaries approved at the end
4,331,363 subsidiaries at the end of the Reporting 3,283,926
of the Reporting Period (C3)
Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in the Reporting Period Total actual guarantee amount in the
14,360,815 2,459,000
(A1+B1+C1) Reporting Period (A2+B2+C2)
Total approved guarantee line at the end of the Reporting Total actual guarantee balance at the end
17,716,936 11,058,005
Period (A3+B3+C3) of the Reporting Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets 211.15%
Of which:
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Balance of guarantees provided for shareholders, the actual controller and their related
6,457
parties (D)
Balance of debt guarantees provided directly or indirectly for obligors with an over 70%
1,662,198
debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of the Company’s net assets
8,439,528
(F)
Total of the three above amounts (D+E+F) 8,439,528
Joint liability already borne or possibly borne with evidence in the Reporting Period for
-
outstanding guarantees
Guarantees provided in breach of prescribed procedures -
Note: (1) The guarantee period in the above table is the occurrence period of the principal debt. The actual guarantee is valid for two or three years from the expiration date of the principal
debt, which is subject to the single contract.
(2) During the Reporting Period, the Company adjusts the guarantee limit to its controlling subsidiaries based on their demands. The details are outlined as follows:
The Company transferred the guarantee limit that was formerly provided by the Company to Highly Information Industry Co., Ltd. to Tianjin Huiyi Digital Technology Co., Ltd., Beijing
Youyi Online Technology Co., Ltd., and Xiaoyu Online (Beijing) Technology Co., Ltd., which are wholly-owned subsidiaries of Highly Information Industry Co., Ltd. The guarantee limits for
the mentioned three companies are RMB30 million, RMB40 million and RMB30 million respectively after adjustment. The Company has performed internal review procedures for the above-
mentioned guarantee transfers. It's found that they did not violate the legal provisions on listed companies, and complied with the relevant requirements of the Announcement on Providing
Guarantees for Subsidiaries in 2024 reviewed and approved at the 2023 Annual General Meeting held on May 24, 2024.
(3) In the table above, Shenzhen China Star Optoelectronics Bandaoti Display Technology Co., Ltd., a subsidiary controlled by the Company, was jointly guaranteed by the Company and its
subsidiary TCL China Star Optoelectronics Technology Co., Ltd. in an external syndicated loan, in which the Company provided certain percentage of guarantee, while TCL China Star
Optoelectronics Technology Co., Ltd. provided full guarantee.
(4) As at the end of the Reporting Period, the debt portion under joint guarantee amounted to RMB19.44518 billion. The joint guarantee has been filled in the “Company’s Guarantee for
Subsidiaries” and “Guarantee Among Subsidiaries”, respectively.
In the “guarantee among subsidiaries”, the guaranteed entity and Huhehaote Huanju New Energy Development Co., Ltd. were provided with the guarantee under joint and several liability by
TCL Technology Group (Tianjin) Co., Ltd. and TCL Zhonghuan Renewable Energy Technology Co., Ltd. both of which were subsidiaries. As at the end of the Reporting Period, the debt portion
under joint guarantee amounted to RMB20.29 million.
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3. Entrusted Wealth Management
Applicable □ Not applicable
Unit: RMB'0,000
Impairment allowance for
Unrecovered
unrecovered overdue
Type Funding source Amount Undue amount overdue
amount of wealth
amount
management products
Bank’s wealth
management Self-funded 1,235,821.24 1,130,221.24 0 0
product
Securities firm's
wealth
Self-funded 582,485.17 513,080.61 0 0
management
product
Trust plan Self-funded 292,677.54 173,497.54 0 0
Other Self-funded 196,039.42 96,038.58 0 0
Total 2,307,023.37 1,912,837.97 0 0
The specific situation of high-risk entrusted financial management with a large single amount or low security, poor liquidity
□ Applicable Not Applicable
Situation in which the Company fails to recover its principal for entrusted wealth management products, or other situations that may
result in impairment
□ Applicable Not Applicable
4. Other Major Contracts
□ Applicable Not Applicable
The Company did not have any other major contracts that should be disclosed during the reporting period.
XIII. Other Significant Events
□ Applicable Not Applicable
There are no other significant events that need to be explained for the Reporting Period.
XIV. 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
New Bonus Shares converted
Shares Percentage Others Subtotal Shares Percentage
issues shares from capital reserve
I. Restricted
680,539,213 3.62% 0 0 0 413,083 413,083 680,952,296 3.63%
Shares
1. Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
state-owned
legal entities
2. Shares
held by other
679,314,082 3.62% 0 0 0 1,638,214 1,638,214 680,952,296 3.63%
domestic
investors
Among
which:
Shares held 0 0.00% 0 0 0 0 0 0 0.00%
by domestic
legal entities
Shares held
by domestic 679,314,082 3.62% 0 0 0 1,638,214 1,638,214 680,952,296 3.63%
individuals
3. Shares
held by -
1,225,131 0.007% 0 0 0 -1,225,131 0 0.00%
foreign 1,225,131
investors
Among
which:
Shares held 0 0.00% 0 0 0 0 0 0 0.00%
by foreign
legal entities
Shares held
-
by foreign 1,225,131 0.007% 0 0 0 -1,225,131 0 0.00%
1,225,131
individuals
II. Non-
restricted 18,098,541,554 96.38% 0 0 0 -413,083 -413,083 18,098,128,471 96.37%
shares
1. RMB-
denominated
18,098,541,554 96.38% 0 0 0 -413,083 -413,083 18,098,128,471 96.37%
ordinary
shares
III. Total
18,779,080,767 100.00% 0 0 0 0 0 18,779,080,767 100.00%
shares
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Reasons for changes in shares
Applicable □ Not applicable
1. On June 29, 2024, the Company disclosed the Voluntary Announcement on the Non-trading Transfer of Certain Shares of the Holders
under the Employee Stock Ownership Plan. The Company has completed the second non-trading transfer under the 2021-2023
Employee Stock Ownership Plan (Phase I) and the first non-trading transfer under the 2021-2023 Employee Stock Ownership Plan
(Phase II). Among them, 3,234,162 shares were transferred to the current directors, supervisors and senior managers of the Company
through non-trading transfer.
2. During the Reporting Period, locked-up shares held by senior management increased by 413,083 shares, as non-restricted shares
decreased by the same amount.
Approval of changes in shares
□ Applicable Not Applicable
Transfer of share ownership
Applicable □ Not applicable
On June 29, 2024, the Company disclosed the Voluntary Announcement on the Non-trading Transfer of Certain Shares of Holders
under the Employee Stock Ownership Plan. The Company has completed the second non-trading transfer under the 2021-2023
Employee Stock Ownership Plan (Phase I) and the first non-trading transfer under the 2021-2023 Employee Stock Ownership Plan
(Phase II). Among them, 3,234,162 shares were transferred to the current directors, supervisors and senior managers of the Company
through non-trading transfer, and 42,158,024 shares were transferred to other holders through non-trading transfer.
Progress on any share repurchase
Applicable □ Not applicable
During the Reporting Period, the Company repurchased a total of 117,993,100 shares of the Company through centralized bidding
from the special securities account for repurchase from June 4, 2024 to June 7, 2024, accounting for 0.63% of the total share capital of
the Company. The highest and lowest trading price were RMB4.49 per share and RMB4.26 per share, respectively, and the total
payment approximated to RMB520 million (excluding transaction fees).
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable Not Applicable
Effects of changes in shares on the basic earnings per share, diluted earnings per share, net asset per share attributable to the Company's
ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively
□ Applicable Not Applicable
Other information that the Company considers necessary or is required by the securities regulatory authorities to be disclosed
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□ 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
restricted restricted shares at Date of restriction release
shareholder shares at restricted shares restriction
shares of period-end
period-begin of the period
the
period
Locked-up shares of
Others 680,539,213 0 413,083 680,952,296 Not applicable
senior management
Total 680,539,213 0 413,083 680,952,296 -- --
II. Issuance and Listing of Securities
Applicable □ Not applicable
Name of Issue Aggregate
stocks and price number of
Issue Issue Listing Transaction Index to disclosed
their (or shares Date of disclosure
date quantity date closing date information
derivative interes permitted
securities t rate) to be traded
Stocks
Not applicable
Convertible corporate bonds, convertible corporate bonds traded separately, corporate bonds
Corporate
April April
bonds Not
9, 2.69% 15,000,000 19, 15,000,000 April 8, 2024
(24TCLK2 applicable Please refer to the
2024 2024
，148683) website:
Corporate http://www.cninfo
Januar Februa
bonds Not .com.cn/
y 30, 2.64% 15,000,000 ry 7, 15,000,000 January 29, 2024
(24TCLK1, applicable
2024 2024
148600)
Other derivative securities
Not applicable
Description of Securities Issuance during the Reporting Period
Pursuant to the approval of the China Securities Regulatory Commission under the registration number CSRC Permit [2022] No. 1561,
the Company is authorized to issue up to RMB10 billion in corporate bonds to professional investors through a phased issuance.
(1) On January 30, 2024, The Company issued Sci-Tech Innovation Corporate Bonds (Digital Economy) Publicly Offered by TCL
Technology Group Corporation to Professional Investors in 2024 (Phase 1), with bond abbreviation of “24TCLK1” and bond code of
“148600”, alongside an issuance scale of RMB1.5 billion and a coupon rate of 2.64%.
(2) On April 9, 2024, the Company issued Sci-Tech Innovation Corporate Bonds (Digital Economy) Publicly Offered by TCL
Technology Group Corporation to Professional Investors in 2024 (Phase 2), with bond abbreviation of “24TCLK2” and bond code of
59
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
“148683”, alongside an issuance scale of RMB1.5 billion and a coupon rate of 2.69%.
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of ordinary shareholders by the Total number of preferred shareholders with resumed
582,209 0
end of the reporting period voting rights by the end of the reporting period
Shareholdings of ordinary shareholders with more than 5% or the top 10 shareholders of ordinary shares (excluding the lending of shares under refinancing)
Sharehold Number of Number of non- Shares in pledge, marked or
Number of shares Increase/decreas frozen
Name of ing restricted restricted
Nature of shareholder held at the period- e during the
shareholder percentag ordinary shares ordinary shares
end reporting period
e (%) held held Status Number
Li Dongsheng
Ningbo Jiutian
Domestic
Liancheng Equity
individual/Domestic 6.74% 1,265,347,805 1,294,616 673,839,802 591,508,003
Investment In
general legal entity 293,668,015
Partnership pledge
(Limited
Partnership)
Hong Kong
Securities Clearing Foreign legal entity 3.56% 667,733,276 -369,879,267 667,733,276
Company Ltd.
Huizhou Investment
Public legal entity 3.35% 629,663,094 -187,790,730 629,663,094
Holding Co., Ltd.
Wuhan Optics
Valley Industrial In
Public legal entity 2.41% 452,866,342 -79,136,674 452,866,342 226,430,000
Investment Co., pledge
Ltd.
China Securities
Finance Domestic general
2.19% 410,554,710 - 410,554,710
Corporation legal entity
Limited
Perseverance Asset
M anagement
Partnership Fund, wealth
(Limited management product, 1.18% 222,000,000 -4,736,512 222,000,000
Partnership) - etc.
Gaoyi Xiaofeng No.
2 Zhixin Fund
Industrial and
Commercial Bank Fund, wealth
of China - Huatai- management product, 1.18% 221,615,930 81,578,200 221,615,930
Pinebridge CSI 300 etc.
ETF
Bank of China
Limited - Huatai- Fund, wealth
Pinebridge CSI management product, 1.04% 195,242,960 -8,836,800 195,242,960
Photovoltaic etc.
Industry ETF
China Foreign
Economy and Trade Fund, wealth
Trust Co., Ltd. - management product, 0.88% 166,000,000 -2,599,830 166,000,000
Foreign trade trust - etc.
Gaoyi Xiaofeng
60
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Hongyuan
Collective Fund
Trust Scheme
Strategic investor or general legal entity
becoming top-10 ordinary shareholders due to Not applicable
private placement of new shares
Among the top 10 shareholders, M r. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
Note on the above shareholders’ associations Partnership) became persons acting in concert by signing the Agreement on Concerted Action. M r. Li Dongsheng holds
or concerted actions 898,453,069 shares and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) holds 366,894,736
shares, representing 1,265,347,805 shares in total and becoming the largest shareholder of the Company.
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
Not applicable
top 10 shareholders
Shareholdings of top 10 non-restricted ordinary shareholders (excluding the lending of shares under refinancing and locked-up shares held by senior management)
Number of non-restricted ordinary shares held at the end of the Type of shares
Name of shareholder
reporting period Type of shares Quantity
Hong Kong Securities Clearing Company RM B-denominated
667,733,276 667,733,276
Ltd. ordinary shares
RM B-denominated
Huizhou Investment Holding Co., Ltd. 629,663,094 629,663,094
ordinary shares
Li Dongsheng
RM B-denominated
Ningbo Jiutian Liancheng Equity Investment 591,508,003 591,508,003
ordinary shares
Partnership (Limited Partnership)
Wuhan Optics Valley Industrial Investment RM B-denominated
452,866,342 452,866,342
Co., Ltd. ordinary shares
China Securities Finance Corporation RM B-denominated
410,554,710 410,554,710
Limited ordinary shares
Perseverance Asset M anagement Partnership
RM B-denominated
(Limited Partnership) - Gaoyi Xiaofeng No. 2 222,000,000 222,000,000
ordinary shares
Zhixin Fund
Industrial and Commercial Bank of China - RM B-denominated
221,615,930 221,615,930
Huatai-Pinebridge CSI 300 ETF ordinary shares
Bank of China Limited - Huatai-Pinebridge RM B-denominated
195,242,960 195,242,960
CSI Photovoltaic Industry ETF ordinary shares
China Foreign Economy and Trade Trust Co.,
RM B-denominated
Ltd. - Foreign trade trust - Gaoyi Xiaofeng 166,000,000 166,000,000
ordinary shares
Hongyuan Collective Fund Trust Scheme
Related or acting-in-concert parties among Among the top 10 shareholders with non-restricted shares, M r. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment
top 10 non-restricted ordinary shareholders, Partnership (Limited Partnership) became persons acting in concert by signing the Agreement on Concerted Action. M r. Li
as well as between top 10 non-restricted Dongsheng holds 224,613,267 non-restricted shares and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
ordinary shareholders and top 10 ordinary Partnership) holds 366,894,736 non-restricted shares, representing 591,508,003 non-restricted shares in total and becoming the
shareholders largest shareholder of the Company.
Explanation for the top 10 ordinary
At the end of the Reporting Period, Wuhan Optics Valley Industrial Investment Co., Ltd., among the shareholders above, held
shareholders participating in securities
certain shares of the Company through a credit security account.
margin trading
Participation of shareholders holding more than 5%, top 10 shareholders, and top 10 non-restricted shareholders in the lending of shares
under the refinancing business
Applicable □ Not applicable
61
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Unit: Share
Participation of shareholders holding more than 5%, top 10 shareholders, and top 10 non-restricted shareholders in the lending of shares under the refinancing business
Shares in the ordinary Shares lent under
Shares in the ordinary
account and credit account refinancing at the beginning Shares lent under refinancing at the end of the
account and credit account
at the beginning of the of the period that have not period that have not been returned
Name of at the end of the period
period been returned
shareholder
Proportion Proportion
(full name) Proportion to
to total Total to total Total
Total number total share Total number Proportion to total share capital
share number share number
capital
capital capital
Industrial and
Commercial
Bank of China -
140,037,730 0.75% 136,900 0.001% 221,615,930 1.18% 0 0%
Huatai-
Pinebridge CSI
300 ETF
Bank of China
Limited -
Huatai-
204,079,760 1.09% 1,602,800 0.01% 195,242,960 1.04% 193,000 0.001%
Pinebridge CSI
Photovoltaic
Industry ETF
Change in top 10 shareholders and top 10 non-restricted shareholders due to securities lending/returning under refinancing as compared
to the previous period
□ Applicable Not Applicable
Indicate whether any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.
□Yes No
No such cases in the Reporting Period.
IV. Change in Shareholdings of Directors, Supervisors, and Senior Management
Applicable □ Not applicable
Number of
restricted Number of
Number of Number of
Increase of Decrease Number of shares restricted
shares held at restricted
shares of shares shares held at granted at shares
Position the beginning shares granted
Name Position during the during the the end of the the granted
Status of the at the end of
reporting reporting reporting beginning during the
reporting the reporting
period period period of the reporting
period period
reporting period
period
Li Dongsheng Chairman, CEO Incumbent 897,158,453 1,294,616 - 898,453,069 - - -
Vice Chairman
Zhang Zuoteng Incumbent - - - - - - -
of the Board
Lin Feng Director Incumbent - - - - - - -
62
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Director, Senior
Shen Haoping Incumbent - - - - - - -
Vice President
Director, Senior
Zhao Jun Incumbent 942,854 328,684 - 1,271,538 - - -
Vice President
Director, Board
Secretary and
Liao Qian Incumbent 1,289,075 437,544 - 1,726,619 - - -
Senior Vice
President
Independent
Jin Li Incumbent - - - - - - -
director
Independent
Wan Liangyong Incumbent - - - - - - -
director
Independent
Wang Lixiang Incumbent - - - - - - -
director
Chairman of the
Wu Zhiming Supervisory Incumbent - - - -
Committee
Shareholder
Zhuang Weidong Representative Incumbent - - - - - -
Supervisor
Employee
Zhu Wei Representative Incumbent 10,000 97,704 - 107,704 - - -
Supervisor
Li Jian CFO Incumbent 968,621 607,321 - 1,575,942 - - -
Senior Vice
Yan Xiaolin Incumbent 2,342,265 468,293 - 2,810,558 - - -
President, CTO
Former Vice
Liang Weihua Chairman of the Former - - - - - - -
Board
Wang Cheng Former Director Former 333,183 416,113 - 749,296 - - -
Former
Gan Yong Independent Former - - - - - - -
Director
Former
Chen Shiyi Independent Former - - - - - - -
Director
Former
Liu Xunci Independent Former - - - - - - -
Director
Former
Chairman of the
Zheng Tao Former - - - - - - -
Supervisory
Committee
Former
Shareholder
Qiu Haiyan Former - - - - - - -
Representative
Supervisor
Former
Employee
M ao Tianxiang Former 566,575 177,354 - 743,929 - - -
Representative
Supervisor
Total -- -- 903,611,026 3,827,629 - 907,438,655 - - -
63
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Note: 1. The increase in the number of shares held by the Company's directors, supervisors, and senior management during the
Reporting Period was due to the non-trading transfer of shares corresponding to holders' shares under the 2021-2023 Employee Stock
Ownership Plan (Phase 1) and the 2021-2023 Employee Stock Ownership Plan (Phase 2) to employees' securities accounts. For details,
please refer to the Company's Announcement on the Non-Trading Transfer of Certain Shares of the Holders under the Employee Stock
Ownership Plan published on the designated media on June 29, 2024.
2. The number of shares held by directors Zhang Zuoteng, Jin Li, Wang Lixiang and supervisors Wu Zhiming, Zhuang Weidong and
Zhu Wei at the beginning of the period was the number of shares held on the date of their appointment as directors or supervisors of
the Company.
V. Change of the Controlling Shareholder or the Actual Controller
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 1,265,347,805 shares in total and
becoming the largest shareholder of the Company.
Change of the controlling shareholder in the Reporting Period
□ Applicable Not Applicable
Change of the actual controller in the Reporting Period
□ Applicable Not Applicable
64
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Part VIII Preferred Shares
□ Applicable Not Applicable
During the reporting period, the Company did not have preferred shares.
65
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
Part IX Bonds
Applicable □ Not applicable
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
Bond Date of Value Outstanding Coupon principal Place of
Bond name Abbr. Maturity
code issuance date balance rate repayment and trading
interest payment
Sci-Tech Innovation
Interest payable
Corporate Bonds (Digital
annually and Shenzhen
Economy) Publicly Offered April 9, April 11, April 11,
24TCLK2 148683 150,000 2.69% principal Stock
by TCL Technology Group 2024 2024 2029
repayable in full Exchange
Corporation to Professional
upon maturity
Investors in 2024 (Phase 2)
Sci-Tech Innovation
Interest payable
Corporate Bonds (Digital
annually and Shenzhen
Economy) Publicly Offered January February February
24TCLK1 148600 150,000 2.64% principal Stock
by TCL Technology Group 30, 2024 1, 2024 1, 2026
repayable in full Exchange
Corporation to Professional
upon maturity
Investors in 2024 (Phase 1)
Interest payable
Corporate Bonds Publicly
annually and Shenzhen
Offered by TCL October October October
19TCL03 112983 44,000 2.95% principal Stock
Corporation to Qualified 17, 2019 21, 2019 21, 2024
repayable in full Exchange
Investors in 2019 (Phase 3)
upon maturity
Interest payable
Corporate Bonds Publicly
annually and Shenzhen
Offered by TCL July 19, July 23, July 23,
19TCL02 112938 100,000 3.05% principal Stock
Corporation to Qualified 2019 2019 2024
repayable in full Exchange
Investors in 2019 (Phase 2)
upon maturity
Investor eligibility For qualified investors / for professional investors; not applicable for foreign bonds
Match to trade, click to trade, inquire to trade, bid to trade, negotiate to trade; not applicable for
Applicable trading mechanism
foreign bonds
Risk of termination of listing and trading and
No
countermeasures
Overdue bonds
□ Applicable Not Applicable
66
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
2. Triggering and implementation of issuer or investor option clauses and investor protection clauses
□ Applicable Not Applicable
3. Adjustments of credit rating results during the Reporting Period
□ Applicable Not Applicable
4. The implementation and changes of guarantees, debt repayment plans and other safeguard measures
regarding debt repayment during the Reporting Period, and their impact on the equity of bond investors
□ Applicable Not Applicable
III. Debt Financing Instruments of Non-Financial Enterprises
Applicable □ Not applicable
1. General information of debt financing instruments of non-financial enterprises
Unit: RMB'0,000
Way of principal
Date of Bonds Coupon Place of
Bond name Abbr. Bond code Value date Maturity repayment and
issuance balance rate trading
interest payment
2023 Mid-Term Notes Interest payable
23TCL Group
of TCL Technology annually and
MTN001 (Sci- February 3, February 7, February Inter-bank
Group Corporation 102380151 150,000 4.10% principal
Tech Innovation N 2023 2023 7, 2026 market
(Phase 1) (Sci- repayable in full
otes)
Tech Innovation Notes) upon maturity
2022 Mid-Term Notes Interest payable
22TCL Group
of TCL Technology annually and
MTN003 (Sci- July 6, Inter-bank
Group Corporation 102281474 July 4, 2022 July 6, 2022 200,000 3.45% principal
Tech Innovation N 2025 market
(Phase 3) (Sci- repayable in full
otes)
Tech Innovation Notes) upon maturity
Interest payable
2022 Mid-Term Green
annually and
Notes of TCL 22TCL Group April 25, April 27, April 27, Inter-bank
132280040 150,000 3.30% principal
Technology Group GN002 2022 2022 2025 market
repayable in full
Corporation (Phase 2)
upon maturity
Interest payable
2022 Mid-Term Notes
annually and
of TCL Technology 22TCL Group January 12, January 14, January Inter-bank
102280089 200,000 3.45% principal
Group Corporation MTN001 2022 2022 14, 2025 market
repayable in full
(Phase 1)
upon maturity
Mid-term notes are issued to institutional investors in the national interbank bond market
Investor eligibility
(excluding those prohibited from purchasing by national laws and regulations)
Applicable trading mechanism Transaction inquiry, request for quotation and click to trade
Risk of termination of listing and trading 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
67
Full Text of the 2024 Interim Report of TCL Technology Group Corporation
3. Adjustments of credit rating results during the Reporting Period
□ Applicable Not Applicable
4. 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
During the reporting period, the Company did not have convertible corporate bonds.
V. Consolidated loss of the Reporting Period Exceeding 10% of Net Assets of the last year-end
□ Applicable Not Applicable
VI. 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
End of the Reporting
Item December 31, 2023 Change
Period
Current ratio 1.01 1.03 -1.94%
Debt/asset ratio 63.84% 62.06% 1.78%
Quick ratio 0.71 0.75 -5.33%
H1 2024 H1 2023 Change
Net profits after
deducting non-recurring -161,879 49,891 -424.47%
gains and losses
Debt to EBITDA ratio 6.97% 6.82% 0.15%
Interest coverage ratio 0.73 1.70 -57.06%
Cash coverage ratio 5.79 4.76 21.64%
EBITDA coverage ratio 6.43 6.01 6.99%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
68
Section X Unaudited Financial Report
(For the period from January 1, 2024 to June 30, 2024)
I. Auditor’s Report
Whether the 2024 interim report has been audited or not?
□ Yes √ No
The Company’s 2024 interim financial report has not yet been audited.
II. Financial Statements
The unit of the notes to the financial report is: RMB’000.
Content Page
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 15-169
TCL Technology Group Corporation
Consolidated Balance Sheet
(RMB’000)
Note V June 30, 2024 January 1, 2024
Current assets
Monetary assets 1 19,587,500 21,924,271
Held-for-trading financial assets 2 25,226,582 23,184,117
Derivative financial assets 3 155,087 108,008
Notes receivable 4 199,917 615,392
Accounts receivable 5 23,116,435 22,003,651
Receivables financing 6 618,962 954,410
Prepayments 7 2,676,779 2,946,288
Other receivables 8 4,400,197 5,706,855
Inventories 9 20,181,927 18,481,755
Contract assets 10 371,574 343,907
Held-for-sale assets - 162,416
Non-current assets due within one year 11 599,083 580,695
Other current assets 12 7,547,622 5,286,534
Total current assets 104,681,665 102,298,299
Non-current assets
Debt investments 13 144,853 122,349
Long-term receivables 14 698,831 720,281
Long-term equity investments 15 24,908,240 25,431,271
Investments in other equity instruments 16 387,255 386,648
Other non-current financial assets 17 3,995,736 2,971,566
Investment property 18 813,380 911,679
Fixed assets 19 170,267,383 176,422,621
Construction in progress 20 20,126,696 17,000,052
Right-of-use assets 21 6,064,032 6,386,446
Intangible assets 22 18,322,601 18,419,544
Development costs 23 2,180,888 2,541,493
Goodwill 24 10,516,742 10,516,742
Long-term deferred expenses 25 2,355,213 3,402,689
Deferred income tax assets 26 2,372,450 2,246,222
Other non-current assets 27 14,497,575 13,081,184
Total non-current assets 277,651,875 280,560,787
Total assets 382,333,540 382,859,086
Person-in-
charge of the
Legal Person-in-charge financial
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
1
TCL Technology Group Corporation
Consolidated Balance Sheet (Continued)
(RMB’000)
Liabilities and shareholders' equity: Note V June 30, 2024 January 1, 2024
Current liabilities
Short-term borrowings 28 11,844,635 8,473,582
Borrowings from the Central Bank 29 809,468 995,010
Customer deposits and deposits from other
30 366,470 270,929
banks and financial institutions
Held-for-trading financial liabilities 31 208,434 251,451
Derivative financial liabilities 32 80,185 58,591
Notes payable 33 6,014,274 5,610,802
Accounts payable 34 28,415,307 29,402,493
Advances from customers 35 857 678
Contract liabilities 36 1,465,572 1,899,468
Employee compensation payable 37 2,826,227 3,034,497
Taxes and levies payable 38 897,148 861,342
Other payables 39 22,206,210 22,171,402
Non-current liabilities due within one year 40 27,177,946 24,631,659
Other current liabilities 41 1,536,846 1,563,245
Total current liabilities 103,849,579 99,225,149
Non-current liabilities
Long-term borrowings 42 120,304,465 117,662,209
Bonds payable 43 8,627,636 9,113,848
Lease liabilities 44 5,699,585 5,737,288
Long-term payables 45 2,577,466 2,739,444
Long-term employee compensation payable 37 23,531 29,645
Deferred income 46 1,567,859 1,540,648
Deferred income tax liabilities 26 1,257,440 1,427,487
Estimated liabilities 47 189,789 117,395
Total non-current liabilities 140,247,771 138,367,964
Total liabilities 244,097,350 237,593,113
Share capital 48 18,779,081 18,779,081
Capital reserves 49 10,349,364 10,752,055
Less: Treasury share 50 919,322 1,094,943
Other comprehensive income 51 (767,601) (945,798)
Surplus reserves 52 3,874,006 3,874,006
Specific reserves 53 15,003 11,343
General risk reserve 54 8,934 8,934
Retained earnings 55 21,030,075 21,537,188
Total equity attributable to shareholders of the
52,369,540 52,921,866
parent company
Non-controlling interests 85,866,650 92,344,107
Total shareholders’ equity 138,236,190 145,265,973
Total liabilities and shareholders' equity 382,333,540 382,859,086
Person-in-
charge of the
Legal Person-in-charge financial
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
2
TCL Technology Group Corporation
Consolidated Income Statement
(RMB’000)
Note V January - June 2024 January - June 2023
I. Total revenue 80,303,409 85,190,189
Including: Operating revenue 56 80,223,737 85,148,726
Interest income 57 79,672 41,463
Less: Operating cost 56 70,384,382 74,267,599
Interest expenditures 57 14,885 9,976
Taxes and levies 58 500,128 391,897
Sales expenses 59 1,135,573 1,206,698
Administrative expenses 60 2,003,836 2,015,924
R&D expenses 61 4,401,567 4,892,354
Financial expenses 62 2,091,275 1,613,163
Including: Interest expenses 2,472,976 2,325,785
Interest income 381,577 415,285
Plus: Other income 63 1,135,393 1,199,925
Return on investment 64 421,758 2,313,775
Including: Return on investment in
joint ventures and associates
(49,289) 1,220,326
Exchange gain 57 (116) (295)
Gain on changes in fair value 65 132,946 452,401
Credit impairment loss 66 (7,269) (45,502)
Asset impairment loss 67 (2,059,648) (2,358,956)
Asset disposal income 68 39,940 (40,012)
II. Operating profit (565,233) 2,313,914
Plus: Non-operating income 69 227,436 26,030
Less: Non-operating expenses 70 78,140 49,160
III. Gross profit (415,937) 2,290,784
Less: Income tax expenses 71 52,212 (99,799)
IV. Net profits (468,149) 2,390,583
(I) Classification by business continuity
1. Net profits from continuing operations (468,149) 2,390,583
2. Net profits from discontinued operations - -
(II) Classification by ownership
1. Net profits attributable to shareholders of
the Company
995,213 340,493
2. Net profits attributable to non-controlling
interests
(1,463,362) 2,050,090
V. Other comprehensive income, net of tax 51 174,996 (451,010)
(I) Other comprehensive income that cannot
be subsequently reclassified into profit or loss
122,012 (19,415)
(II) Other comprehensive income that may
subsequently be reclassified into profit or loss 52,984 (431,595)
upon satisfaction of prescribed conditions
VI. Total comprehensive income (293,153) 1,939,573
Total comprehensive income attributable to
the shareholders of the parent company 1,173,410 (23,753)
Total comprehensive income attributable to
non-controlling interests
(1,466,563) 1,963,326
VII. Earnings per share 72
(I) Basic earnings per share (RMB yuan) 0.0535 0.0184
(II) Diluted earnings per share (RMB yuan) 0.0530 0.0181
Person-in-
charge of the
Legal Person-in-charge accounting
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
3
TCL Technology Group Corporation
Consolidated Cash Flow Statement
(RMB’000)
Note V January - June 2024 January - June 2023
I. Cash flow from operating activities:
Proceeds from sale of commodities and rendering of services 79,229,089 61,503,988
Net increase/(decrease) in deposits from customers, banks
95,348 (40,289)
and other financial institutions
Net increase/(decrease) in borrowings from the Central Bank (186,534) (50,474)
Cash received from interest, handling charge and commission 63,657 41,463
Tax and levy rebates 2,678,607 4,842,869
Cash generated from other operating activities 73 3,396,202 5,588,817
Sub-total of cash generated from operating activities 85,276,369 71,886,374
Cash paid for commodities and services (58,121,474) (48,233,115)
Net (increase)/decrease in loans and advances to customers 143,975 27,311
Net (increase)/decrease in deposits in the central bank and in
(51,978) 54,883
interbank loans granted
Cash paid to and for employees (6,676,204) (6,043,453)
Taxes and levies paid (2,603,937) (2,226,234)
Cash used in other operating activities 74 (5,334,029) (5,049,598)
Sub-total of cash used in operating activities (72,643,647) (61,470,206)
Net cash generated from operating activities 79 12,632,722 10,416,168
II. Cash flow generated from investing activities:
Proceeds from disinvestments 35,100,021 26,691,189
Proceeds from return on investments 1,844,013 1,202,097
Net proceeds from disposal of fixed assets, intangible assets
316,506 39,062
and other long-term assets
Net proceeds from disposal of subsidiaries and other business
79 - -
units
Cash generated from other investing activities 75 352,014 1,640,766
Sub-total of cash generated from investment activities 37,612,554 29,573,114
Cash paid for the acquisition and construction of fixed assets,
(12,401,270) (16,465,349)
intangible assets and other long-term assets
Cash paid for investments (42,087,664) (31,830,252)
Net payments for acquiring subsidiaries and other business
79 (4,284) (342,527)
units
Cash used in other investing activities 76 (563,835) (475,943)
Subtotal of cash used in investing activities (55,057,053) (49,114,071)
Net cash used in investing activities (17,444,499) (19,540,957)
Person-in-
charge of the
Legal Person-in-charge financial
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
4
TCL Technology Group Corporation
Consolidated Cash Flow Statement (Continued)
(RMB’000)
Note V January - June 2024 January - June 2023
III. Cash flow generated from financing activities:
Cash received from capital contributions 2,000 1,047,506
Including: Capital contributions by non-controlling
2,000 1,047,506
interests to subsidiaries
Cash received from raising borrowings 38,491,832 41,697,801
Cash received from bonds issue 3,000,000 1,500,000
Cash generated from other financing activities 77 422,120 1,895,912
Sub-total of cash generated from financing activities 41,915,952 46,141,219
Cash paid for debt repayment (32,904,575) (33,255,720)
Cash paid for distribution of dividends and profits or
(4,383,419) (3,471,466)
the repayment of interests
Including: Dividends and profits paid by subsidiaries
(71,763) (325,152)
to minority shareholders
Cash used in other financing activities 78 (1,930,490) (6,312,578)
Subtotal of cash used in financing activities (39,218,484) (43,039,764)
Net cash generated from financing activities 2,697,468 3,101,455
IV. Effect of exchange rate changes on cash and cash
41,042 91,958
equivalents
V. Net increase in cash and cash equivalents (2,073,267) (5,931,376)
Add: Opening balance of cash and cash equivalents 19,996,815 33,675,624
VI. Ending balance of cash and cash equivalents 79 17,923,548 27,744,248
Person-in-
charge of the
Legal Person-in-charge financial
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
5
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
(RMB’000)
January - June 2024
Equity attributable to shareholders of the parent company
Other
Other General Non- Shareholders'
Special comprehensiv Undistributed
Share capital equity Capital reserves Treasury share Surplus reserves risk controlling equity
Reserves e profit
instruments reserve interests Total
income
I. Balance at the end of the prior year 18,779,081 - 10,752,055 (1,094,943) 11,343 (945,798) 3,874,006 8,934 21,537,188 92,344,107 145,265,973
Add: Changes in accounting policies - - - - - - - - - - -
II. Balance at the beginning of current period 18,779,081 - 10,752,055 (1,094,943) 11,343 (945,798) 3,874,006 8,934 21,537,188 92,344,107 145,265,973
III. Movement of current period - - (402,691) 175,621 3,660 178,197 - - (507,113) (6,477,457) (7,029,783)
(I) Total comprehensive income - - - - - 178,197 - - 995,213 (1,466,563) (293,153)
(II) Capital contributed and reduced by
- - (392,181) 175,621 - - - - - (4,208,043) (4,424,603)
shareholders
1. Capital contributed by shareholders - - - - - - - - - (3,878,546) (3,878,546)
2. Share-based payments included in owners'
equity - - 96,276 696,104 - - - - - 109,652 902,032
3. Amount of bond issuance included in
- - - - - - - - - - -
owners' equity
4. Others - - (488,457) (520,483) - - - - (439,149) (1,448,089)
(III) Profit distribution - - - - - - - - (1,502,326) (802,851) (2,305,177)
1. Appropriation of surplus reserves - - - - - - - - - -
2. Appropriation of general risk reserve - - - - - - - - - - -
3. Appropriation to shareholders - - - - - - - - (1,502,326) (802,851) (2,305,177)
4. Others - - - - - - - - - - -
(IV) Internal transfer of owner's equity - - - - - - - - - - -
1. Capitalization of capital reserves into
capital (or share capital) - - - - - - - - - - -
(V) Specific reserves - - - - 3,660 - - - - - 3,660
1. Accrued in current period - - - - 17,674 - - - - - 17,674
2. Used in current period - - - - (14,014) - - - - - (14,014)
(VI) Others - - (10,510) - - - - - - - (10,510)
IV Balance as at the end of current period 18,779,081 - 10,349,364 (919,322) 15,003 (767,601) 3,874,006 8,934 21,030,075 85,866,650 138,236,190
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian Person-in-charge of the financial department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
6
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
(RMB’000)
January - June 2023
Equity attributable to shareholders of the parent company
Other Other General Non- Shareholders'
Special Undistributed
Share capital equity Capital reserves T reasury share comprehensive Surplus reserves risk controlling equity
Reserves profit
instruments income reserve interests Total
I. Balance at the end of the prior year 17,071,892 - 12,522,792 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,234 132,138,753
Add: Changes in accounting policies - - - - - - - - - - -
II. Balance at the beginning of current period 17,071,892 - 12,522,792 (1,314,581) 2,301 (811,822) 3,712,273 8,934 19,486,730 81,460,234 132,138,753
III. Movement of current period 1,707,189 - (2,097,784) 195,545 4,490 (364,246) - - 340,493 7,708,866 7,494,553
(I) Total comprehensive income - - - - - (364,246) - - 340,493 1,963,326 1,939,573
(II) Capital contributed and reduced by
- - (426,700) 219,638 - - - - - 6,011,113 5,804,051
shareholders
1. Capital contributed by shareholders - - - - - - - - - 6,657,075 6,657,075
2. Share-based payments included in owners'
equity - - 20,868 466,809 - - - - - - 487,677
3. Amount of bond issuance included in owners'
equity - - - - - - - - - - -
4. Others - - (447,568) (247,171) - - - - - (645,962) (1,340,701)
(III) Profit distribution - - - - - - - - (315,559) (315,559)
1. Appropriation of surplus reserves - - - - - - - - - - -
2. Appropriation of general risk reserve - - - - - - - - - 34,588 34,588
3. Appropriation to shareholders - - - - - - - - - (325,152) (325,152)
4. Others - - - - - - - - - (24,995) (24,995)
(IV) Internal transfer of owner's equity 1,707,189 - (1,683,096) (24,093) - - - - - - -
1. Capitalization of capital reserves into capital
1,707,189 - (1,683,096) (24,093) - - - - - - -
(or share capital)
(V) Specific reserves - - - - 4,490 - - - - - 4,490
1. Appropriation in current period - - - - 16,191 - - - - - 16,191
2. Used in current period - - - - (11,701) - - - - - (11,701)
(VI) Others - - 12,012 - - - - - - 49,986 61,998
IV. Balance as at the end of current period 18,779,081 - 10,425,008 (1,119,036) 6,791 (1,176,068) 3,712,273 8,934 19,827,223 89,169,100 139,633,306
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian Person-in-charge of the financial department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
7
TCL Technology Group Corporation
Balance Sheet of the Company
(RMB’000)
assets Note XVII June 30, 2024 January 1, 2024
Current assets
Monetary assets 2,698,582 2,646,890
Held-for-trading financial assets 17,335,697 14,178,884
Derivative financial assets 66 66
Accounts receivable 1 191,593 350,788
Prepayments 17,708 9,241
Other receivables 2 8,893,299 19,614,272
Inventories - -
Other current assets 31,068 1,629
Total current assets 29,168,013 36,801,770
Non-current assets
Long-term receivables - -
Long-term equity investments 3 80,261,168 79,664,992
Other non-current financial assets 4 1,046,615 644,300
Investment property 75,532 77,364
Fixed assets 31,238 34,806
Construction in progress - -
Right-of-use assets 430,132 435,915
Intangible assets 89,711 96,319
Long-term deferred expenses 30,004 33,005
Deferred income tax assets 7 7
Other non-current assets 1,500,000 -
Total non-current assets 83,464,407 80,986,708
Total assets 112,632,420 117,788,478
Person-in-
charge of the
Legal Person-in-charge financial
representative: Li Dongsheng of financial affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
8
TCL Technology Group Corporation
Balance Sheet of the Parent Company (Continued)
(RMB’000)
Liabilities and shareholders' equity: Note XVII June 30, 2024 January 1, 2024
Current liabilities
Short-term borrowings 2,402,033 2,124,045
Accounts payable 93,742 202,691
Contract liabilities 3,987 6,750
Employee compensation payable 163,871 184,320
Taxes and levies payable 7,115 12,415
Other payables 21,211,108 26,818,710
10,864,418 6,167,442
Non-current liabilities due within one year
Other current liabilities 9,164 3,656
Total current liabilities 34,755,438 35,520,029
Non-current liabilities
Long-term borrowings 16,584,755 19,963,555
Bonds payable 6,491,666 6,992,012
Lease liabilities 18,636 20,816
Long-term employee compensation payable 20,101 26,215
Deferred income 53,147 53,147
Total non-current liabilities 23,168,305 27,055,745
Total liabilities 57,923,743 62,575,774
Share capital 18,779,081 18,779,081
Capital reserves 16,190,416 16,127,030
Less: Treasury share 919,322 1,094,943
Other comprehensive income 1,239 (142,055)
Surplus reserves 3,671,942 3,671,942
Retained earnings 16,985,321 17,871,649
Total shareholders’ equity 54,708,677 55,212,704
Total liabilities and shareholders' equity 112,632,420 117,788,478
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
9
TCL Technology Group Corporation
Income Statement of the Company
(RMB’000)
Note XVII January - June 2024 January - June 2023
I. Operating revenue 5 699,303 736,414
Less: Operating cost 5 449,606 504,204
Taxes and levies 4,191 8,793
Sales expenses 18,060 17,908
Administrative expenses 164,415 165,184
R&D expenses 51,723 22,282
Financial expenses 500,159 390,668
Including: Interest expenses 777,950 807,654
Interest income 194,975 321,244
Plus: Other income 1,179 4,995
Return on investment 6 895,659 1,788,747
Of which: Investment income from joint 505,600 682,026
ventures and associates 6
Gain on changes in fair value 211,802 117,382
Credit impairment loss (3,811) 10
Asset disposal income 11 1,093
II. Operating profit 615,989 1,539,602
Plus: Non-operating income 18 15
Less: Non-operating expenses 9 6,321
III. Gross profit 615,998 1,533,296
Less: Income tax expenses - -
IV. Net profits 615,998 1,533,296
V. Other comprehensive income 143,295 32,333
VI. Total comprehensive income 759,293 1,565,629
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
10
TCL Technology Group Corporation
Cash Flow Statement of the Company
(RMB’000)
Note XVII January - June 2024 January - June 2023
I. Cash flow from operating activities:
Proceeds from sale of commodities and rendering
805,134 687,718
of services
Tax and levy rebates 1,427 1
Cash generated from other operating activities 5,677,470 420,249
Sub-total of cash generated from operating
activities 6,484,031 1,107,968
Cash paid for commodities and services (505,721) (397,613)
Cash paid to and for employees (84,865) (114,193)
Taxes and levies paid (61,246) (77,503)
Cash used in other operating activities (322,436) (5,065,900)
Sub-total of cash used in operating activities (974,268) (5,655,209)
Net cash generated from operating activities 7 5,509,763 (4,547,241)
II. Cash flow from investing activities:
Proceeds from disinvestments 17,413,365 8,180,269
Proceeds from return on investments 1,327,458 1,131,472
Net proceeds from disposal of fixed assets,
- -
intangible assets and other long-term assets
Sub-total of cash generated from investment
activities 18,740,823 9,311,741
Cash paid for the acquisition and construction of
fixed assets, intangible assets and other long-term (1,146) (6,631)
assets
Cash paid for investments (22,881,623) (12,791,025)
Cash used in other investing activities - -
Subtotal of cash used in investing activities (22,882,769) (12,797,656)
Net cash used in investing activities (4,141,946) (3,485,915)
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
11
TCL Technology Group Corporation
Cash Flow Statement of the Company (Continued)
(RMB’000)
Note XVII January - June 2024 January - June 2023
III. Cash flow generated from financing
activities:
Cash received from capital contributions - -
Cash received from raising borrowings 8,630,000 11,780,000
Cash received from bonds issue 3,000,000 1,500,000
Cash generated from other financing 425,625 54,267
activities
Sub-total of cash generated from financing 12,055,625 13,334,267
activities
Cash paid for debt repayment (10,397,600) (9,203,619)
Cash paid for distribution of dividends and
(2,178,628) (715,827)
profits or repayment of interests
Cash used in other financing activities (812,165) (269,708)
Subtotal of cash used in financing activities (13,388,393) (10,189,154)
Net cash generated from financing activities (1,332,768) 3,145,113
IV. Effect of exchange rate changes on cash and
293 (53,755)
cash equivalents
V. Net increase in cash and cash equivalents 35,342 (4,941,798)
Add: Opening balance of cash and cash
2,642,115 17,570,270
equivalents
VI. Ending balance of cash and cash equivalents 8 2,677,457 12,628,472
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs: Li Jian department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
12
TCL Technology Group Corporation
Statement of Changes in Shareholders’ Equity of the Company
(RMB’000)
January - June 2024
Other Total
Other equity comprehensive Surplus Retained shareholders’
Share capital instruments Capital reserves Treasury share income reserves earnings equity
I. Balance at the end of the prior year 18,779,081 - 16,127,030 (1,094,943) (142,055) 3,671,942 17,871,649 55,212,704
Add: Change in accounting policies - - - - - - - -
II. Balance at the beginning of current period 18,779,081 - 16,127,030 (1,094,943) (142,055) 3,671,942 17,871,649 55,212,704
III. Movement of current period - - 63,386 175,621 143,294 - (886,328) (504,027)
(I) Total comprehensive income - - - - 143,294 - 615,998 759,292
(II) Capital contributed and reduced by - 63,406 175,621
- - - - 239,027
shareholders
1. Capital contributed by owners - - - - - - - -
2. Capital contributed by holders of other equity
- - - - - - - -
instruments
3. Share-based payments included in owners'
- - 63,406 696,104 - - - 759,510
equity
4. Amount of bond issue included in owners'
- - - - - - - -
equity
5. Others - - - (520,483) - - - (520,483)
(III) Profit distribution - - - - - - (1,502,326) (1,502,326)
1. Appropriation of surplus reserves - - - - - - - -
2. Appropriation to shareholders - - - - - - (1,502,326) (1,502,326)
3. Others - - - - - - - -
(IV) Internal transfer of owner's equity - - - - - - - -
1. Capitalization of capital reserves into capital
(or share capital) - - - - - - - -
(V) Others - - (20) - - - - (20)
IV Balance as at the end of current period 18,779,081 - 16,190,416 (919,322) 1,239 3,671,942 16,985,321 54,708,677
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian Person-in-charge of the financial department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
13
TCL Technology Group Corporation
Statement of Changes in Shareholder Equity of the Company (Continued)
(RMB’000)
January - June 2023
Other Total
Other equity comprehensive Surplus Retained shareholders’
Share capital instruments Capital reserves Treasury share income reserves earnings equity
I. Balance at the end of the prior year 17,071,892 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
Add: Change in accounting policies - - - - - - - -
II. Balance at the beginning of current period 17,071,892 - 17,715,533 (1,314,581) (128,195) 3,510,209 16,416,054 53,270,912
III. Movement of current period 1,707,189 - (1,685,569) 195,545 32,332 - 1,533,297 1,782,794
(I) Total comprehensive income - - - - 32,332 - 1,533,297 1,565,629
(II) Capital contributed and reduced by
- - 17,836 219,638 - - - 237,474
shareholders
1. Capital contributed by owners - - - - - - - -
2. Capital contributed by holders of other equity
- - - - - - - -
instruments
3. Share-based payments included in owners'
- - 17,836 466,809 - - - 484,645
equity
4. Amount of bond issue included in owners'
- - - - - - - -
equity
5. Others - - - (247,171) - - - (247,171)
(III) Profit distribution - - - - - - - -
1. Appropriation of surplus reserves - - - - - - - -
2. Appropriation to shareholders - - - - - - - -
3. Others - - - - - - - -
(IV) Internal transfer of owner's equity 1,707,189 - (1,683,096) (24,093) - - - -
1. Capitalization of capital reserves into capital
(or share capital) 1,707,189 - (1,683,096) (24,093) - - - -
(V) Others - - (20,308) - - - - (20,308)
IV Balance as at the end of current period 18,779,081 - 16,029,964 (1,119,036) (95,863) 3,510,209 17,949,351 55,053,706
Legal representative: Li Dongsheng Person-in-charge of financial affairs: Li Jian Person-in-charge of the financial department: Jing Chunmei
The attached notes to the financial statements form an integral part of the financial statements.
14
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
I General information
TCL Technology Group Corporation (hereinafter referred to as "the Company") is a limited liability
company established in Huizhou on July 17, 1997. It was changed to a limited liability company as a
whole in 2002 and was listed on the Shenzhen Stock Exchange in January 2004. After years of new
share placements, non-public reissuances, conversion into share capital, exercise of options and
repurchase and cancellation of shares, etc., the registered capital and share capital of the Company were
RMB 18,779,080,767 as at June 30, 2024.
The main business structure of the Company and its subsidiaries consists of display, new energy
photovoltaic and other silicon materials, industrial finance and other businesses. The relevant
information of the Company's subsidiaries is detailed in Note VIII.
The registered address of the Company is: TCL TECH Building, 17 Huifeng Third Road, Zhongkai Hi-
Tech Development District, Huizhou City, Guangdong Province.
Approval and issue: These financial statements were authorized for issue by the Company’s
Board of Directors on August 26, 2024.
II Scope of consolidated financial statements
As at the end of the Reporting Period, for subsidiaries included in the consolidated financial statements,
please refer to Note VIII, 1, (1) "Breakdown of important subsidiaries". For the changes to the scope
of the consolidated financial statements of the Reporting Period, see Note VII.
15
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates
1 Basis for the preparation of financial statements
The preparation of financial statements of the Company is based on the actual transactions and
events in accordance with the "Accounting Standards for Business Enterprises - Basic Standards"
published by the Ministry of Finance and specific corporate accounting standards, application
guidelines for corporate accounting standards, corporate accounting standards interpretations and
other relevant regulations (hereinafter collectively referred to as "corporate accounting standards")
for confirmation and measurement, combining the provisions of "Regulations on Information
Disclosure and Compilation of Companies Offering Securities to the Public No. 15 - General
Provisions on Financial Reports" (revised in 2023) published by CSRC.
2 Going concern basis
The Company has evaluated the ability to continue as a going concern for 12 months from the end
of the Reporting Period and has not identified any issues or circumstances that result in significant
doubts about its ability to continue as a going concern. Therefore, the financial statements have been
prepared on a going concern basis.
3 Accounting Basis and Measurement Basis
The Company’s accounting treatment is based on the accrual basis. Except certain financial
instruments measured at fair value, the financial statements are measured at historical cost. If an
asset is impaired, provision for impairment will be made accordingly based onrelevant rules.
4 Statement of compliance with corporate accounting standards
The financial statements are in compliance with the requirements of the Accounting Standards for
Business Enterprises, and truly and completely reflect the financial position, operating results, cash
flow and other relevant information of the Company during the Reporting Period.
5 Accounting period
The Company adopts the calendar year as an accounting period, and its fiscal year is from January
1 to December 31 of the Gregorian calendar.
6 Operations cycle
An operations cycle refers to a period from the purchase of assets by an enterprise for processing to
the realization of cash or cash equivalents. The Company takes a 12 months’ period as an operations
cycle and take the operating cycle as the criteria for liquidity classification of assets and liabilities.
7 Functional currency for bookkeeping
The Company uses RMB as its functional currency. Its overseas subsidiaries use the currencies of
the main economic environment in which they operate as their respective functional currencies and
their financial statements are converted into RMB and presented in RMB thousands unless otherwise
specified.
16
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
8 Method and selection basis for determining importance criteria
Item Importance criteria
The recovery, reversal and actual write-off
of bad debt provisions for important The amount of an individual item is greater than
receivables with bad debt provisions accrued RMB 50 million.
on an individual basis
The ending carrying amount of an individual item
Important construction in progress
exceeds RMB 10 billion.
The total asset of non-wholly-owned subsidiaries
exceeds 10% of that of the Group or the total
Important non-wholly-owned subsidiaries
revenue of non-wholly-owned subsidiaries
exceeds 10% of that of the Group.
The carrying amount of long-term equity
Important joint ventures or associates investments in a single investee exceeds 5% of the
total asset of the Group.
Important prepayments, contract liabilit ies,
The amount of an individual item exceeds 0.5% of
accounts payable and other payables are
the total asset of the Group.
aged for more than 1 year
The cumulative expenditure of an individual
Important capitalized research and
project exceeds 0.5% of the total asset of the
development projects
Group.
17
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
9 Accounting treatments for business combinations involving enterprises under and not under
common control
(1) When the terms, conditions and economic influence of transactions in the process of a step-by-step
combination conform to one or more of the following, accounting for multiple transactions is treated as a
package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
(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;
A transaction is uneconomical individually, but is economical when considered collectively with other
(d)
transactions.
(2) Business combinations involving enterprises under common control
A combination of enterprises that are ultimately controlled by the same party or parties before and after the
combination on a non-temporary basis constitutes a business combination under common control.
Assets and liabilities acquired by the Company in business combination are measured at the carrying amounts
of assets and liabilities of the acquired party in the consolidated financial statements of the ultimate controlling
party as at the date of combination (including the goodwill resulting from the acquisition of the acquired party
by the ultimate controlling party). The difference between the carrying amount of net assets acquired in the
combination and that of the consideration paid for the combination (or the total par value of shares issued) is
used to adjust the share capital premium in the capital reserve, and when the share capital premium in the
capital reserve is insufficient for offset, it is used to adjust the retained earnings. If there is a contingent
consideration and it is necessary to confirm estimated liabilities or assets, the difference between the amounts
of the estimated liabilities or assets and the settlement amount of subsequent contingent consideration is used
to adjust the capital reserve (capital premium or share capital premium), and when the capital reserve is
insufficient, it is used to adjust the retained earnings.
For a business combination that is ultimately realized through multiple transactions, if it is a package
transaction, each transaction is treated as a transaction that acquires control; if it is not a package transaction,
on the date of acquisition of control, the difference between the initial cost of long-term equity investments
and the carrying amount of long-term equity investments before the combination plus the carrying amount of
the newly paid considerations on the date of combination is used to adjust the capital reserve; and when the
capital reserve is insufficient for offset, it is used to adjust the retained earnings. For equity investments held
prior to the date of combination, no accounting treatment is carried out for other comprehensive gains
recognized by equity accounting or financial instrument confirmation and measurement standards, and up to
the disposal of the investment, the accounting treatment shall be based on the same basis as the direct disposal
of the assets or liabilities of the invested entity; other changes in the owner’s equity other than net profits or
loss, other comprehensive income or profit distribution of net assets of the invested company recognized as
equity are not subject to accounting, and will be transferred to the current profit and loss until disposal of the
investment.
(3) Business combination not under common control
A combination of enterprises that are not ultimately controlled by the same party or parties before and after
the combination constitutes a business combination not under common control.
18
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under
9
common control (continued)
(3) Business combination not under common control (continued)
Assets paid and liabilities incurred or assumed by the Company as a consideration for the business
combination are measured at fair value on the date of purchase, and the difference between the fair
value and their carrying amount is recognized in current profits and losses.
The difference between the higher combination cost and lower share in the fair value of net
identifiable assets of the acquired party gained in the combination is recognized as goodwill. If the
combination cost is lower than the share in the fair value of net identifiable assets of the acquired
party gained in the combination, the fair values of the identifiable assets, liabilities and contingent
liabilities of the acquired party gained and the measurement of the combination cost are first
reviewed; and if it is reviewed that the combination cost is lower than the share in the fair value of
net identifiable assets of the acquired party gained in the combination, the difference between the
lower combination cost and higher share in the fair value of net identifiable assets of the acquired
party gained in the combination is included in current profits and losses.
In the case where a business combination not under common control is realized through multiple
exchanges and transactions, if it is a package transaction, each transaction will be accounted for as
a transaction for acquiring control; in the case it is not a package transaction, if the equity investment
held before the date of combination is accounted for using equity method, the sum of the carrying
amount of equity investments of the acquired party held before the date of acquisition, plus the new
investment cost on the date of acquisition will be recognized as the initial cost of the investment;
the remaining comprehensive income recognized in equity investments using equity method before
the date of acquisition will be recorded, when the investment is disposed of on the same basis as
those the investee adopted directly to dispose of the relevant assets or liabilities. If the equity
investment held before the date of combination is accounted for by financial instrument recognition
and measurement criteria, the sum of the fair value of equity investment on the date of combination
plus the new investment cost is taken as the initial investment cost on the date of combination. The
difference between the fair value and the carrying amount of the original equity, and the accumulated
fair value changes originally included in other comprehensive income should be transferred to return
on investment in the current period which matches the combination date.
(4) Expenses incurred from combination
The agency fees paid for audits, legal services, assessments and consultations and other directly
related expenses incurred in the business combination are recognized in profit or loss during the
period in which they are incurred. The transaction costs for the issuance of equity securities for the
business combination that may be directly attributed to equity transactions can be deducted from
equity;
19
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements
(1) Criteria for judging control
Control means having the power of control over the investee, enjoying variable returns by
participating in the relevant activities of the investee, and having the ability to use the power over
the investee to influence the amount of returns.
The Company judges whether it controls the investee based on comprehensive consideration of all
relevant facts and circumstances. Once any change in relevant facts and circumstances causes the
relevant elements involved in the definition of control to be changed, the Company will conduct a
reassessment. The relevant facts and circumstances mainly include:
① The purpose for which the investee is established;
② The relevant activities of the investee and how to make decisions on such activities;
③ Whether the rights enjoyed by the investor enable it to currently lead the relevant activities of
the investee;
④ Whether the investor is entitled to variable returns by participating in the relevant activities of
the investee;
⑤ Whether the investor has the ability to exercise its power over the investee to affect the amount
of return;
⑥ The relationship between the investor and other parties.
(2) Consolidation scope
The scope of consolidation of the Company’s consolidated financial statements is determined on the
basis of control, and all subsidiaries (including separate entities controlled by the Company) are
included into the consolidated financial statements.
(3) Consolidation procedure
The Company prepares the consolidated financial statements based on the financial statements of
itself and its subsidiaries and other relevant information. The Company prepares the consolidated
financial statements in a manner that the whole group will be treated as an accounting entity to
reflect the financial position, operating results, and cash flow of the group as a whole under unifie d
accounting policies, in accordance with the recognition, measurement and presentation requirements
of relevant accounting standards for business enterprises.
The accounting policies and accounting periods adopted by all subsidiaries included in the
consolidated financial statements are consistent with those of the Company. If the accounting
policies or accounting periods adopted by the subsidiaries are inconsistent with those of the
Company, necessary adjustments will be made in accordance with the Company's accounting
policies and accounting periods when preparing consolidated financial statements.
20
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements (continued)
(3) Consolidation procedure (continued)
The impact of intracompany transactions between the Company and its subsidiaries, and intracompany
transactions between subsidiaries, on the consolidated balance sheet, consolidated income statement,
consolidated cash flow statement and consolidated statement of changes in shareholders' equity is offset in the
preparation of consolidated financial statements. Where a transaction is recognized by the Company or its
subsidiaries as the transaction subject, which is different from that under the consolidated financial statement
of the group, the transaction should be adjusted at the group level.
If the current losses shared by the minority shareholders of a subsidiary exceed the share enjoyed by the
minority shareholder in the initial owners' equity of the subsidiary, the balance will still be used to offset the
equity of minority interests.
During the Reporting Period, if a subsidiary or business is added due to the business combination involving
enterprises under common control, the opening balances of the consolidated balance sheet are adjusted; the
income, expenses and profits of the subsidiary or business as from the beginning of the period of combination
to the end of the Reporting Period are included in the consolidated income statement; the cash flows of the
subsidiary or business as from the beginning of the period of combination to the end of the Reporting Period
are included in the consolidated cash flow statement, and the relevant items of the comparative statements are
adjusted as if the reporting entity after the combination had existed since the time point when the ultimate
controller began to control.
If the Company is able to exercise control over the investee under common control due to additional
investment or for other reasons, it shall be deemed that the parties participating in the combination had made
adjustments based on their current state when the ultimate controller began to control. For the equity
investment held before obtaining the control over the acquired party, relevant gains and losses, other
comprehensive income and other changes in net assets recognized between the date of obtaining the original
equity or the date when the acquiring party and the acquired party are under common control, whichever later,
and the date of combination shall be used to offset the beginning retained earnings or the profits and losses of
the comparative statement period.
During the Reporting Period, if a subsidiary or business is added due to a business combination involving
enterprises under non-common control, the opening balance of the consolidated balance sheet is not adjusted;
the income, expenses and profits of the subsidiary or business from the date of acquisition to the end of the
Reporting Period are included in the consolidated income statement; the cash flow of the subsidiary or
business from the date of acquisition to the end of the Reporting Period is included in the consolidated cash
flow statement.
If the Company is able to exercise control over the investee not under common control due to additional
investment or for other reasons, the Company shall remeasure the equity, of the purchased party held before
the purchase date, at its fair value as at the purchase date, and the difference between the fair value and its
carrying amount shall be recognized in the return on investment of the current period. If the equity of the
purchased party held before the purchase date involves other comprehensive income accounted for under the
equity method and other changes in owner’s equity other than net profits and loss, other comprehensive
income, and profit distribution, the relevant other comprehensive income and other changes in owner’s equity
shall be converted into the return on investment of the current period which matches the purchase date, except
for other comprehensive income arising from the investee’s remeasurement of the changes in net liabilities or
net assets of defined benefit plans.
During the reporting period, if the Company disposes of a subsidiary or business, the income, expenses and
profits of the subsidiary or business for the period from the beginning of the period to the disposal date are
included in the consolidated income statement; and the cash flow of the subsidiary or business for the period
from the beginning of the reporting period to the disposal date is included in the consolidated cash flow
statement.
21
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
10 Methods for judging control and preparing consolidated financial statements (continued)
(3) Consolidation procedure (continued)
When the Company loses control over the invested party due to disposal of part of the equity investment
or other reasons, the remaining equity investment after disposal will be re-measured based on its fair value
by the Company on the date of loss of control. The difference of the sum of the consideration obtained
from the disposal of the equity and the fair value of the remaining equity, less the sum of the share of net
assets and goodwill of the original subsidiary that should be enjoyed in accordance with the original share -
holding ratio since the date of acquisition or combination, is accounted for the return on investment in the
current period of loss of control. Other comprehensive income or net profits and loss related to the original
subsidiary's equity investment, other comprehensive income and other changes in owners' equity other
than profit distribution, will be converted into current return on investment when control is lost, except for
other comprehensive gains arising from the re-measurement of net liabilities of the Benefit Plan made by
the invested party or changes in net assets.
When the equity investment in a subsidiary is disposed of step by step through multiple transactions until
the loss of control, when the terms, conditions and economic influence of the transactions of the equity
investment in the subsidiary conform to one or more of the following, it usually indicates that the multiple
transaction items shall be accounted for as a transaction package:
① These transactions are made simultaneously or with consideration of influence on each other;
② These transactions can only achieve a complete business outcome when they are accounted for
collectively;
③ The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
④ A transaction is uneconomical individually, but is economical when considered collectively with other
transactions.
If transactions through which the equity investment in a subsidiary is disposed of until the loss of control
constitute a transaction package, the Company will account for such transactions as one transaction
through which the subsidiary is disposed of with the loss of control over it; provided that the difference
between the price for each disposal and the share in the net asset of the subsidiary corresponding to the
investment disposed of, before the loss of control, is recognized as other comprehensive income in the
consolidated financial statements and is transferred to the profits and losses of the current period in which
the loss of control occurs.
When transactions through which the equity investment in a subsidiary is disposed of until the loss of
control do not constitute a transaction package, such transactions shall be accounted for i) before the loss
of control, in accordance with the relevant policies for partial disposal of an equity investments in a
subsidiary without losing control; and ii) upon the loss of control, in accordance with the general
accounting method for disposing of a subsidiary.
The difference, between the long-term equity investment obtained by the Company through the purchase
of minority interests and the share in the net asset of the subsidiary calculated continuously from the
purchase date (or combination date) based on the new shareholding percentage, shall be used to adjust i)
the share capital premium under the capital reserve in the consolidated balance sheet or ii) the retained
earnings, if the share capital premium under the capital reserve is insufficient to offset,.
The difference, between the disposal price obtained from the partial disposal of a long-term equity
investment in a subsidiary without losing control and the share, corresponding to the long-term equity
investment disposed of, in the net asset of the subsidiary calculated continuously from the purchase date
or combination date, shall be used to adjust i) the share capital premium under the capital reserve in the
consolidated balance sheet or ii), the retained earnings, if the share capital premium under the capital
reserve is insufficient to offset.
22
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
11 Classification of joint arrangements and accounting treatment method for joint operations
(1) Classification of joint arrangements
The Company classifies a joint arrangement as a joint operation or a joint venture according to
factors such as the structure and legal form of the joint arrangement, the terms agreed in the joint
arrangement, other relevant facts and circumstances.
Joint arrangements not reached through independent entities are classified as joint operations;
joint arrangements reached through independent entities are usually classified as joint ventures;
however, a joint arrangement that is indicated by conclusive evidence of meeting any of the
following conditions and meeting the provisions of relevant laws and regulations is classified as
a joint operation:
① The legal form of the joint arrangement shows that the parties have rights to the assets, and
obligations for the liabilities, relating to the arrangement.
② The contractual terms of the joint arrangement stipulates that the parties have rights to the
assets, and obligations for the liabilities, relating to the arrangement.
③ Other relevant facts and circumstances show that the parties have rights to the assets, and
obligations for the liabilities, relating to the arrangement. For example, the parties enjoy all the
output substantially related to the joint arrangement, and the repayment of the liabilities relating
to the arrangement continues relying on the support of the parties.
(2) Accounting treatment for joint operation
The Company shall recognize the following items in relation to interest in the joint operation,
and carry out accounting treatment in accordance with the provisions of relevant accounting
standards for business enterprises:
① Its assets, including its share of any assets held jointly;
② Its liabilities, including its share of any liabilities incurred jointly;
③ Its revenue from the sale of its share of the output arising from the joint operations;
④ Its share of the revenue from the sale of the output by the joint operations; and
⑤ Its expenses, including its share of any expenses incurred jointly.
If investing or selling assets (except those that constitute a business), etc., into or to the joint
operation, the Company shall only recognize the part of the profit and loss arising from the
transaction attributable to other participants in the joint operation, before the assets, etc., are sold
to a third party by the joint operation. The Company will recognize in full the asset impairment
loss arising if the assets invested or sold are impaired in compliance with the Accounting
Standards for Business Enterprises No. 8 - Asset Impairment, etc.
If purchasing assets (except those that constitute a business), etc., from the joint operation, the
Company shall only recognize the part of the profit and loss arising from the transaction
attributable to other participants in the joint operation, before the assets, etc., are sold to a third
party by the Company. The Company will recognize its share of the asset impairment loss arising
if the assets purchased are impaired in compliance with the Accounting Standards for Business
Enterprises No. 8 - Asset Impairment, etc.
The Company does not enjoy joint control over the joint operations. If the Company has rights
to the assets, and obligations for the liabilities, relating to the joint operation, it shall still be
accounted for by the above principles; otherwise, it shall be accounted for by the relevant
accounting standards for business enterprises.
23
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
12 Criteria for determining cash and cash equivalents
In the preparation of the cash flow statement, the Company recognizes cash holdings and deposits that
can be used for payment at any time as cash.
The Company recognizes cash that is easily converted into known amount with short holding period
(generally due within three months from the date of purchase) and strong liquidity, and investments with
low risk of changes in value (including investments in bonds which due within three months, while
excluding equity investments), as cash equivalents.
13 Foreign currency business and translation of foreign currency statements
(1) Foreign currency transactions
Foreign currency transactions between the Company and its subsidiaries are translated into base currency
at the spot exchange rate on the transaction date.
Foreign currency monetary items are translated at the spot exchange rate on the balance sheet date, and
the exchange differences resulted therefrom, except that the exchange differences arising from special
foreign currency loans related to the acquisition and construction of assets eligible for capitalization
should be treated in accordance with the principle of capitalization of borrowing costs, are all included
in the current profit and loss. Foreign currency non-monetary items measured at historical cost are still
translated at the spot exchange rate on the transaction date, and the amount of base currency for
bookkeeping is not changed.
Foreign currency non-monetary items measured at fair value are translated at the spot exchange rates on
the date when the fair value is determined, and the exchange differences resulted therefrom are included
in current profits and loss as a change in fair value. In the case of foreign currency non-monetary items
that are at fair value through other comprehensive income, the exchange differences incurred are included
in other comprehensive income.
(2) Translation of foreign currency financial statement
When the Company translates the financial statements of overseas operations, the assets and liabilities
in the balance sheet are translated at the spot exchange rate on the balance sheet date. The owner’s
equity items, except for the "Retained earnings" item, are translated at the spot exchange rate at the time
of occurrence of the items. All the incurred items in the income statement are translated at the current
average exchange rate of the period in which transactions occur. The translation differences of foreign
currency financial statement arising from the above translation are included in other comprehensive
income.
When disposing of an overseas operation, the translation differences in the foreign currency financial
statements related to the overseas operation listed in other comprehensive income in the balance sheet
are transferred from the other comprehensive income to the profit and loss. When the disposal of a
portion of the equity investment or otherwise causes a decrease in the proportion of equity held in the
overseas operation without losing of control over the overseas operation, the translation differences in
the foreign currency statements related to the part of the overseas operation disposed of will be
attributed to minority interests, rather than to the current profits and losses. When the overseas operation
disposed of is a portion of the equity of an associate or joint venture, the translation difference of the
foreign statements related to the overseas operation should be transferred to the profit or loss for the
period in proportion to the disposal of the overseas operation.
24
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments
When the Company becomes a party to a financial instrument, it recognizes a financial asset or liability.
The effective interest method refers to the method of calculating the amortized cost of financial assets or
liabilities and allocating interest income or interest expenses into each accounting period.
The effective interest rate refers to the interest rate used to discount the estimated future cash flow of a
financial asset or financial liability during its expected duration to the book balance of the financial asset
or the amortized cost of the financial liability. When determining the effective interest rate, the expected
cash flow is estimated on the basis of considering all contract terms of financial assets or liabilities (such
as prepayment, extension, call options or other similar options), but the expected credit loss is not
considered.
The amortized cost of a financial asset or financial liability is the accumulated amortization amount formed
by deducting the repaid principal from the initial recognition amount of the financial asset or financial
liability, adding or subtracting the difference between the initial recognition amount and the maturity
amount by using the effective interest method, and then deducting the accumulated accrued loss reserve
(only applicable to financial assets).
(1) Classification and measurement of financial assets
According to the business model of the financial assets under management and the contractual cash flow
characteristics of the financial assets, the Company divides the financial assets into the following three
categories:
(a) Financial assets measured at amortized cost.
(b) Financial assets measured at fair value through other comprehensive income.
(c) Financial assets measured 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 measured at fair value through profit or loss, transaction expenses are directly
recognized in the current profit and loss. For other financial assets, transaction expenses are included in
the initial recognition amount.
Subsequent measurement of financial assets depends on their classification. All related financial assets
affected will be reclassified when and only when the Company changes its business model of managing
financial assets.
(a) Financial assets classified as those measured at amortized cost
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only the
payment of the principal and the interest on the amount of outstanding principal, and the business model
for managing the financial asset is to collect the contractual cash flow, then the Company classifies the
financial asset as measured at amortized cost. Financial assets of the Company that are classified as those
measured at amortized cost include monetary assets, notes receivable, accounts receivable, other
receivables, long-term receivables, debt investments, etc.
25
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(a) Financial assets classified as those measured at amortized cost (continued)
The Company recognizes interest income from such financial assets with the effective interest
method, and carries out subsequent measurement at amortized cost. Gains or losses arising from
impairment or derecognition or modification are included in current profits and losses. The Company
calculates and determines the interest income based on the book balance of financial assets multiplied
by the effective interest rate except for the following circumstances:
① For purchased or originated credit-impaired financial assets, the Company calculates and
determines their interest income at the amortized cost of the financial assets and the credit-adjusted
effective interest rate since the initial recognition.
② For financial assets not credit-impaired at the time of being purchased or originated but in the
subsequent period, the Company calculates and determines their interest income at the amortized cost
and the effective interest rate of the financial assets in the subsequent period. If the financial
instrument is no longer credit-impaired due to the improvement of its credit risk in the subsequent
period, the Company calculates and determines the interest income by multiplying the effective
interest rate by the book balance of the financial asset.
(b) Financial assets classified as those 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 current profits and losses.
Notes and accounts receivable measured 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.
26
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(c) Financial assets designated as measured at fair value through other comprehensive income
At the time of initial recognition, the Company may irrevocably designate non-trading equity
instrument investments as financial assets measured at fair value through other comprehensive income
on the basis of individual financial assets.
Changes in the fair value of such financial assets are included in other comprehensive income without
allowance for impairment. When the financial asset is derecognized, the accumulated gains or losses
previously included in other comprehensive income are transferred out and included in the retained
earnings. During the investment period when the Company holds the equity instrument, the dividend
income is recognized and included in the current profit and loss when the Company's right to receive
dividends has been established, the economic benefits related to dividends are likely to flow into the
Company, and the amount of dividends can be measured reliably. The Company reports such financial
assets under the item of investments in other equity instruments.
An investment in equity instruments is a financial asset measured at fair value through current profits
and losses when it is obtained mainly for recent sale, or is part of the identifiable portfolio of financial
assets centrally managed when initially recognized and objective evidence exists for a short-term
profit model in the near future, or is a derivative (except for derivatives defined as financial guarantee
contracts and designated as effective hedging instruments).
(d) Financial assets classified as those measured at fair value through profit or loss
If failing to be classified as those measured at amortized cost or at fair value through other
comprehensive income, or not designated as measured at fair value through other comprehensive
income, financial assets are all classified as those measured at fair value through profit or loss.
The Company carries out subsequent measurement of such financial assets at fair value, and includes
gains or losses arising from changes in fair value as well as dividends and interest income associated
with such financial assets into current profits and losses.
The Company reports such financial assets as held-for-trading financial assets and other non-current
financial assets according to their liquidity.
27
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
(e) Financial assets designated as measured at fair value through current profits and losses
At the time of initial recognition, the Company may irrevocably designate financial assets as measured
at fair value through current profits and losses 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 measured at fair value through current profits and losses. 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.
28
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(2) Classification and measurement of financial liabilities
The Company classifies a financial instrument or its components into financial liabilities or equity
instruments upon initial recognition according to the contract terms of and the economic substance
reflected by the financial instrument issued, rather than only in legal form, in combination with the
definitions of financial liabilities and equity instruments. Financial liabilities are classified at initial
recognition as measured at fair value through profit or loss, or other financial liabilities, or
derivatives designated as effective hedging instruments.
Financial liabilities are measured at fair value upon initial recognition. For financial liabilit ies
measured at fair value through current profits and losses, 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 measured at fair value through current profits and losses
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 current profits and losses.
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 liabilit ies
(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 current
profits and losses 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.
29
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(2) Classification and measurement of financial liabilities (continued)
(b) Other financial liabilities
The Company classifies financial liabilities except for the following items as measured at amortized cost.
Such financial liabilities are recognized by the effective interest method and subsequently measured at
amortized cost. Gains or losses arising from derecognition or amortization are included in current profits
and losses:
① Financial liabilities measured at fair value through current profits and losses.
② Financial liabilities resulting from the transfer of financial assets that do not meet the conditions for
derecognition or continue to be involved in the transferred financial assets.
③ Financial guarantee contracts that do not fall under the first two categories hereof, and loan
commitments that do not fall under category (1) hereof and lend at a below-market interest rate.
Financial guarantee contracts refer to contracts that require the issuer to pay a specific amount to the
contract holder who has suffered losses when a specific debtor fails to pay the debt in accordance with the
original or modified terms of the debt instrument. Financial guarantee contracts that are not financial
liabilities designated as measured at fair value through profit or loss are measured after initial recognition
according to the loss reserve amount and of the initial recognition amount, less the accumulated
amortization amount during the guarantee period, whichever is higher.
(3) Derecognition of financial assets and liabilities
Financial asset are derecognized, i.e. written off from its account and balance sheet if any of the following
(a)
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 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 current profits and losses.
30
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer
When a financial asset is transferred, the Company evaluates the risks and rewards retained of the financial
asset ownership:
(a) If almost all the risks and rewards of the financial asset ownership are transferred, such financial asset
shall be derecognized, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities.
If risks and rewards of the financial asset ownership are substantially retained, such financial asset shall
(b)
continue to be recognized.
(c) In circumstances where the Company neither transfers nor retains risks and rewards of the financial asset
ownership substantially (i.e. circumstances other than ① and ② of this article), based on whether it retains
control over such financial asset,
① the financial asset shall be derecognized, and the rights and obligations generated or retained in the
transfer shall be separately recognized as assets or liabilities if such control is not retained; or
② the relevant financial asset shall continue to be recognized to the extent that it continues to be involved
in the transferred financial asset, and the relevant liabilities shall be recognized accordingly if such control
is retained. The extent that it continues to be involved in the transferred financial asset refers to the extent
the Company bears the risks or rewards on changes in the value of the transferred financial asset.
When judging whether the transfer of financial assets meets the above conditions for derecognition of
financial assets, the principle of substance over form shall be adopted. The Company divides the transfer
of financial assets into overall transfer and partial transfer.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
(a)
following two amounts shall be included in the current profits and losses:
① The carrying amount of the transferred financial asset on the date of derecognition.
② The sum of the consideration received for the transfer of financial assets and the amount of the
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).
31
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer (continued)
If the transfer of a financial asset does not meet the conditions for derecognition, the financial asset
shall continue to be recognized and the consideration received shall be recognized as a financial
liability.
(5) Determination of fair value of financial assets and liabilities
The fair value of a financial asset or liability with an active market shall be determined by the quoted
price in the active market, unless the financial asset has a sell-off period for the asset itself. For the
financial assets restricted for the assets themselves, the compensation amount demanded by market
participants due to the risk of not being able to sell the financial assets on the open market within
the specified period shall be deducted from the quoted price in the active market. Quoted prices in
the active market includes those for related assets or liabilities that can be easily and regularly
obtained from exchanges, dealers, brokers, industry groups, pricing or regulatory agencies, and can
represent actual and recurring market transactions on the basis of fair trade.
Financial assets initially acquired or derived or financial liabilities assumed shall be determined on
the basis of market transaction price.
The fair value of financial assets or liabilities without an active market shall be determined by
valuation techniques. At the time of valuation, the Company adopts valuation techniques that are
applicable under the current circumstances and are supported by sufficient available data and other
information, selects input values consistent with the characteristics of relevant assets or liabilit ies
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.
Based on the expected credit loss, the Company conducts impairment accounting of financial assets
classified as those measured at amortized cost, financial assets classified as those measured at fair
value through other comprehensive income and financial guarantee contracts and recognizes loss
reserves.
32
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted
by the risk of default. Credit loss refers to the difference between all contractual cash flows discounted
at the original effective interest rate and receivable according to the contract and all cash flows expected
to be collected of the Company, i.e. the present value of all cash shortfalls. Among them, credit-impaired
purchased or originated financial assets of the Company shall be discounted at the credit-adjusted
effective interest rate of such financial assets.
For receivables arising from transactions regulated by the income criteria, the Company uses the
simplified measurement method to measure the loss reserve according to the amount equivalent to the
expected credit loss during the entire duration.
For credit-impaired purchased or originated financial assets, only the accumulated changes in the
expected credit losses during the entire duration since the initial recognition are recognized as loss
reserves on the balance sheet date. On each balance sheet date, the amount of change in the expected
credit loss during the entire duration is included in the current gains and losses as impairment losses or
gains. Even if the expected credit loss during the entire duration on the balance sheet date is less than
that reflected in the estimated cash flow upon initial recognition, the favorable change in the expected
credit loss is recognized as impairment gains.
In addition to other financial assets adopting the above simplified measurement method and other than
the credit-impaired purchased or originated ones, the Company evaluates whether the credit risk of
relevant financial instruments has increased significantly since the initial recognition, measures its loss
reserves and recognizes the expected credit loss and its changes respectively according to the following
circumstances on each balance sheet date:
(a) If the credit risk of the financial instrument has not increased significantly since its initial recognition, it
is in the first stage, and its loss reserve shall be measured according to an amount equivalent to its
expected credit loss over the next 12 months, and the interest income shall be calculated according to the
book balance and the effective interest rate.
(b) If the credit risk of the financial instrument has increased significantly since initial recognition but no
credit impairment has occurred, it is in the second stage, and its loss reserve shall be measured according
to an amount equivalent to its expected credit loss throughout its life, and the interest income shall be
calculated according to the book balance and the effective interest rate.
(c) If the financial instrument is credit-impaired since its initial recognition, it is in the third stage, and the
Company shall measure its loss reserve according to an amount equivalent to its expected credit loss
throughout its life, and calculate the interest income at the amortized cost and the effective interest rate.
The increase or reversed amount of the credit loss reserve for financial instruments shall be included in
the current profits and losses as impairment losses or gains. Except for financial assets classified as those
measured at fair value through other comprehensive income, the credit loss reserve will offset the
carrying amount of the financial assets. For financial assets classified as those measured at fair value
through other comprehensive income, the Company recognizes its credit loss reserve in other
comprehensive income without reducing its carrying amount presented in the balance sheet.
33
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
In the previous accounting period, the Company has measured the loss reserve, the amount equivalent to
the expected credit loss of the financial instruments throughout its life. However, on the balance sheet
date of the current period, the financial instrument no longer conforms to the situation of significant
increase in credit risk since initial confirmation; on the balance sheet date of the current period, the
Company has measured the loss reserve of the financial instruments, the amount equivalent to the
expected credit loss in the next 12 months, and the reversed amount of the loss reserve thus formed is
included in current profits and losses 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.
34
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
(b) Financial assets with depreciation of credit
If one or more events have adverse effects on the expected future cash flow of a financial asset, the
financial asset will become a financial asset that has suffered credit impairment. The following
observable information can be regarded as evidence of credit impairment of financial assets:
① The issuer or debtor is in serious financial difficulty;
② The debtor breaches the contract, such as default or overdue payment of interest or principal, etc.;
③ The creditor gives concessions to the debtor due to economic or contractual considerations related to
the debtor's financial difficulties; the concessions will not be made under any other circumstances;
④ There is a great possibility of bankruptcy or other financial restructuring of the debtor;
⑤ The issuer or debtor has financial difficulties, resulting in the disappearance of the active market for
the financial assets;
⑥ Purchasing or generation of a financial asset with a large discount, which reflects the fact of credit
loss.
Credit impairment of financial assets may not be caused by separately identifiable events, but may be
caused by the combined effect of multiple events.
(c) Determination of expected credit loss
The expected credit losses of financial instruments is assessed individually and collectively. During the
assessment of the expected credit losses, the Company will take into account reasonable and reliable
information about past events, the current situation and future economic situation forecast.
The Company divides financial instruments into different combinations on the basis of common credit
risk characteristics. Common credit risk characteristics adopted by the Company include: financial
instrument type, credit risk rating, aging combination, overdue aging combination, contract settlement
cycle, debtor's industry, etc. To understand the individual evaluation criteria and combined credit risk
characteristics of relevant financial instruments, please refer to the accounting policies of relevant
financial instruments for details.
The Company adopts the following methods to determine the expected credit losses of relevant financial
instruments:
① In terms of financial assets, credit loss is equivalent to the present value of the difference between
the contract cash flow that the Company shall receive and the expected cash flow.
② In terms of the financial guarantee contract, credit loss is equal to the expected amount of payment
made by the Company to the holder of the contract for credit loss incurred, less the present value of the
difference between the amount expected to be collected from the holder of the contract, the debtor or any
other party.
③ If, on the balance sheet date, a financial asset has suffered credit impairment, but one does not
purchase or generate a financial asset that has suffered credit impairment, the credit loss is equivalent to
the difference between the book balance of the financial asset and the present value of the estimated
future cash flow discounted at the original actual interest rate.
Factors reflected in the Company's method of predicting credit losses by quantitative finance tools include:
unbiased probability weighted average amount determined by evaluating a series of possible results; time
value of money; reasonable and reliable information about past events, current situation and future
economic situation forecast that can be obtained on the balance sheet date without unnecessary extra costs
or efforts.
35
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
14 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
(d) Write-off of financial assets
If the Company cannot reasonably expect the contract cash flow of the financial asset to be fully or
partially recovered, the book balance of the financial asset will be written off directly. This write -
off constitutes the derecognition of relevant financial assets.
(7) Offset of financial assets and financial liabilities
In the balance sheet, financial assets and financial liabilities are shown separately without offsetting
each other. However, if the following conditions are met at the same time, the net amount after offset
will be listed in the balance sheet:
(a) The Company has the legal right, which is currently enforceable, to offset the confirmed amount;
The Company plans to settle on a net basis, or realize the financial assets and settle the financial
(b)
liabilities at the same time.
15 Notes receivable
For the determination method and accounting treatment method of the Company's expected credit
loss on notes receivable, please refer to 14(6) of note III Impairment of financial instruments.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the level of
a single instrument, the Company will refer to the experience of historical credit loss, combine the
current situation and judgment on future economic situation, divide notes receivable into several
combinations according to the characteristics of credit risk, and calculate expected credit loss on the
basis of combinations.
16 Accounts receivable
For the determination method and accounting treatment method of the Company's expected credit
loss on accounts receivable, please refer to 14(6) of note III Impairment of financial instruments.
As for the accounts receivable, if there is objective evidence that the Company will not be able to
recover the money according to the original terms of the accounts receivable, the Company will
separately determine its credit loss.
If sufficient evidence of expected credit loss cannot be assessed at reasonable cost at the level of
single instrument, the Company will divide the accounts receivable into several combinations
according to the credit risk characteristics, and calculate the expected credit loss on the basis of the
combinations (with reference to the experience of historical credit loss, and in combination with the
current situation with the judgment of future economic situation)
36
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
17 Receivables financing
Accounts receivable classified as those measured at fair value through other comprehensive income,
with a maturity of i) less than one year (including one year) from the initial recognition date, are
listed as receivables financing; or ii) more than one year from the initial recognition date, are listed
as other debt investments. For the relevant accounting policies, please refer to 14(6) of note III
Impairment of financial instruments.
18 Other receivables
For the determination method and accounting treatment method of the Company's expected credit
loss of other receivables, please refer to 14(6) of note III Impairment of financial instruments.
For other receivables for which there is objective evidence that the Company will not be able to
recover the amount according to the original terms of the receivables, the Company will separately
determine its credit loss.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the level of
single instrument, the Company will refer to the experience of historical credit loss, combine the
current situation and judgment on future economic situation, divide other receivables into several
combinations according to the characteristics of credit risk, and calculate expected credit loss on the
basis of combinations.
19 Inventories
(1) Classification of inventories
Inventories refer to, among other things, finished products or goods held by the Company for sale
in its daily activities, work in progress in production, materials and supplies consumed in the
production or provision of labor services. Inventories mainly include but are not limited to raw
materials, work in progress, finished products, and turnover materials.
(2) Valuation method for inventories shipped in transit
When acquired, inventory is initially measured at cost, including purchase costs, processing costs,
and other costs. Inventories are shipped in transit by weighted average method.
37
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
19 Inventories (continued)
Basis for determining the net realizable value of inventories and accrual method for inventory
(3)
valuation allowance
After conducting a comprehensive counting at the end of the period, inventory valuation allowance
shall be accrued or adjusted based on whichever lower of the cost and net realizable value of the
inventory. For inventories of goods directly used for sale, such as finished goods, merchandise
inventories and materials for sale, in the normal production and operations process, the net realizable
value is determined by the amount of the estimated Sales expenses of the inventory less the estimated
sales cost and relevant taxes and fees; for material inventories that need to be processed, in the
normal production and operations process, the net realizable value is determined by the amount of
the estimated selling expenses of finished products produced less the estimated cost occurred at the
time of completion, the estimated selling expenses and related taxes; for inventories held for the
execution of sales contracts or labor contracts, the net realizable value is calculated on the basis of
the contract price, and if the quantity of inventories held is more than the quantity specified in sales
contracts, the net realizable value of excess inventories is calculated based on the general sales price.
At the end of the period, inventory valuation allowance is accrued according to individual inventory
items; but for a large number of inventories with lower unit prices, inventory valuation allowance is
accrued according to inventory category; for inventories related to the product series produced and
sold in the same region with the same or similar end use or purpose, which is difficult to measure
separately from other items, thus inventory valuation allowance is accrued and combined with other
items.
If the influencing factors of the write-down of inventory value have disappeared, the amount written-
down is recovered and reversed to the amount of inventory valuation allowance already accrued,
and the amount reversed is included in current profits and losses.
(4) Inventory system
The Company adopts a perpetual inventory system for inventory management.
(5) Amortization method of turnover materials
The Company's turnover materials are amortized by the one-time amortization method.
20 Contract assets
A contract asset shall be recognized if the Company has transferred the goods to the customer and
has the right to receive a consideration depending on other factors than the passage of time. The
right of the Company to unconditionally receive the considerations from customers (i.e., only
depending on the passage of time) is listed independently as receivables.
For the determination method and accounting treatment method of the Company’s expected credit
loss on contract assets, please refer to 14(6) of note III Impairment of financial instruments.
38
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
21 Held-for-sale non-current assets or disposal groups
(1) Criteria for classification as being held for sale
The Company recognizes non-current assets or disposal groups that meet both of the followin g
conditions as components held for sale:
① they can be sold immediately under the current status according to the practice of selling such assets
or disposal groups in similar transactions;
② The sale is likely to occur, that is, the Company has made a resolution on the sale plan, obtained the
approval from the regulatory authorities (if applicable), and obtained a confirmed purchase
commitment that the sale is expected to be completed in one year.
The confirmed purchase commitment refers to a legally binding purchase agreement concluded by and
between the Company and another party, which contains important terms such as transaction price, time
and sufficiently severe penalty for breach of contract, so that there will be little possibility of major
adjustments to or cancellation of the agreement.
(2) Accounting treatment for held-for-sale assets
The Company shall not depreciate or amortize non-current assets or disposal groups held for sale. If
the carrying amount is higher than the amount of fair value net of selling expenses, the former shall be
written down to the latter. The amount written down shall be recognized as asset impairment loss and
included in the current profit and loss, and the impairment allowance for assets held for sale shall be
accrued at the same time.
The non-current asset or disposal group classified as being held for sale on the date of acquisition shall
be initially measured at whichever initially measured amount is lower under the assumption that it is
not classified as being held for sale and the amount of fair value net of selling expenses.
The above principles are applicable to all non-current assets, except investment real estate subsequently
measured by the fair value model, biological assets measured by the amount of fair value net of selling
expenses, assets formed by employee compensation, deferred income tax assets, financial assets
regulated by the relevant accounting standards of financial instruments, and rights arising from
insurance contracts regulated by the relevant accounting standards of insurance contracts.
22 Debt Investments
For the determination method and accounting treatment methods of the Company’s expected credit
loss of debt investments, please refer to 14(6) "Impairment of financial instruments" under Note III.
23 Long-term receivables
For the determination method and accounting treatment method of the Company's expected credit loss
on long-term receivables, please refer to 14(6) of note III Impairment of financial instruments.
If sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the level of
single instrument, the Company will refer to the experience of historical credit loss, combine the current
situation and judgment on future economic situations, divide long receivables into several combinations
according to the characteristics of credit risk, and calculate expected credit loss on the basis of
combinations.
39
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments
(1) Recognition of initial investment cost
(a) Long-term equity investment formed by business combination
For details on accounting policies, please refer to Note (III), 9 accounting treatments for business
combinations involving enterprises under and not under common control.
(b) Long-term equity investment acquired by other means
For long-term equity investment acquired by cash payment, the actual acquisition price is recognized
as initial investment cost. The initial investment cost includes expenses, taxes and other necessary
expenses directly related to the acquisition of the long-term equity investment.
For long-term equity investment acquired by issuing equity securities, the fair value of equity
securities issued is recognized as initial investment cost; the transaction costs arising from issuing or
acquiring the own equity instruments of the acquirer will be offset from the equity in directly
attributable transactions.
Provided that the non-monetary asset exchange contains commercial substance and the fair value of
the assets received or assets surrendered can be reliably measured, the initial investment cost of the
long-term equity investment received with non-monetary assets is determined based on the fair value
of the assets surrendered, except that there is conclusive evidence that indicates that the fair value of
assets received is more reliable. For non-monetary assets that do not satisfy the above condition, the
carrying amount of assets surrendered and related taxes and fees payable are recognized as the initial
investment cost of the long-term equity investment.
The initial investment cost of a long-term equity investment acquired by debt restructuring is
determined on the basis of fair value.
40
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(2) Subsequent measurement and recognition of profit and loss
(a) Cost method
The long-term equity investment by which the Company exercises control over the investee is accounted
for by the cost method and measured at the initial investment cost. When the long-term equity investment
is added or recovered, its cost should be adjusted thereby.
In addition to the actual payment or the cash dividends or profits included in the consideration that have
been declared but not yet paid when acquiring the investment, the Company recognizes the investment
income for the period the investee's cash dividends or profits attributable to the Company will be recorded
in gains from investment for the period.
(b) Equity method
The long-term equity investments made by the Company in affiliates and joint ventures are accounted for
using the equity method. Among them, the portion of equity investments in affiliates, held indirectly
through venture capital, mutual funds, trusts, or similar entities, including investment-linked insurance
funds, are measured at fair value through profit or loss.
The difference between the higher initial cost of the long-term equity investment and the fair value share
of identifiable net assets of the investee enjoyed in the investment is not used to adjust the initial investment
cost of the long-term investment; the difference between the lower initial investment cost and the higher
fair value share of identifiable net assets of the investee enjoyed at the time of conducting the investment
is included in current profits and losses.
After the Company acquires a long-term equity investment, the investment income and other
comprehensive income should be recognized respectively based on the Company's share in the net profits
and loss and other comprehensive income realized by the investee, and the carrying amount of the long-
term equity investment should be adjusted accordingly; the Company's share in the profits or cash
dividends declared by the investee should be calculated, and the carrying amount of the long-term equity
investment should be reduced accordingly; the carrying amount of the long-term equity investment should
be adjusted based on changes in owners' equity of the investee other than net profits and loss, other
comprehensive income, and profit distribution, and included in owners' equity.
Before the Company recognizes its share in the net profits and loss of the investee, the net profits of the
investee is adjusted based on the fair value of the identifiable assets of the investee as at the acquisition of
the investment. Any unrealized profit and loss from internal transactions between the Company and its
affiliates or joint ventures attributed to the Company based on the Company's, will be offset, and the
investment profit and loss is recognized thereon.
When the Company recognizes its share in the losses incurred by the investee, the Company should, firstly,
offset the carrying amount of the long-term equity investment. Then, if the carrying amount of the long-
term equity investment is insufficient for the offset, the investment loss is continued to be recognized, and
the carrying amount of long-term receivable items is offset, subject to other carrying amount of the long-
term equity constitutes the net investment in the investee. Finally, after the above-mentioned treatment, if
the Company still bears additional obligations in accordance with the investment contract or agreement,
the provision are recognized according to the estimated obligations and included in the current investment
losses.
If the investee realizes profit in the future period, the Company shall, after deducting the unconfirmed loss
share, conduct the process in the reverse order of the above to write down the book balance of the
recognized liabilities and recover other long-term equity that substantially constitutes net investment of
the investee and the carrying amount of the long-term equity, and then recover the recognition of the profit
as return on investment.
41
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(3) Conversion accounting treatment of long-term equity investments
(a) Accounting treatment for the transfer from fair value measurement to equity method
For an equity investment, originally held by the Company without control, joint control or significant impact
on the investee that is accounted for based on the financial instrument recognition and measurement standards,
if as a result of additional investment or otherwise, the equity investment enables the Company to exercise
significant impact on or joint control (rather than control) over the investee, the sum of the fair value of the
originally held equity investment determined under the Accounting Standards for Business Enterprises No. 22
- Recognition and Measurement of Financial Instruments and the new investment cost should be deemed as the
initial cost of the investment accounted for using equity method.
The difference between the lower initial investment cost accounted for using equity method and the higher share
of the fair value of the identifiable net assets of the investee as at the date of the additional investment calculated
based on the new shareholding percentage after the additional investment is made, shall be used to adjust the
carrying amount of the long-term equity investment and included in the non-operating income for the period.
(b) Transfer from fair value measurement or equity method to cost method
For an equity investment, originally held by the Company without control, joint control or significant impact
on the investee that is accounted for based on the financial instrument recognition and measurement standards,
or a long-term equity investment originally held by the Company in an affiliate or joint venture, if as a result
additional investment or for other reasons, the investment enables the Company to exercise control over an
investee that is not under the common control with Company, the sum of the carrying amount of the originally
held equity investment and the new investment cost should be should be the initial cost of the investment
accounted for using cost method in preparation of the individual financial statements of the Company.
The remaining comprehensive income recognized in the equity investments using equity method before the date
of acquisition is accounted for, when the investment is disposed of, on the same basis as those the investee
adopted directly to dispose of the underlying assets or liabilities.
If the equity investment held before the acquisition date is subject to the accounting treatment under the relevant
provisions of the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments, the cumulative changes in fair value originally included in other comprehensive income
should be transferred to the profit or loss for the period when the investment is accounted for using cost method.
(c) Transfer from equity method to fair value measurement
If the Company loses joint control or significant impact on the investee due to the disposal of part of the equity
investment or otherwise, the equity remaining after the disposal should be accounted for under the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the
difference between the fair value and carrying amount as at the date of losing the joint control or significant
impact should be included in current profits and losses.
Other comprehensive income recognized for the original equity investment accounted for using equity method
should be accounted for on the same basis as the direct disposal of the underlying assets or liabilities by the
investee when the equity method is terminated.
(d) Transfer from cost method to equity method
Where the Company loses control over the investee due to the disposal of part of the equity investment or
otherwise, if the equity remaining after the disposal by which the Company can exercise joint control or
significant impact on the investee in preparation of the individual financial statements of the Company, the
investment will be accounted for using equity method, and such remaining equity will be adjusted as if it were
accounted for using equity method from the time when it is acquired.
42
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(3) Conversion accounting treatment of long-term equity investments (continued)
(e) Transfer from cost method to fair value measurement
If the Company loses control over the investee due to the disposal of part of the equity investment or
otherwise, the equity remaining after the disposal by which the Company cannot exercise joint control or
significant impact on the investee should be accounted for based on the Accounting Standards for Business
Enterprises No. 22 - Recognition and Measurement of Financial Instruments, in preparation of the
individual financial statements of the Company, and the difference between the fair value and carrying
amount as at the date of losing the control should be included in current profits and losses.
(4) Disposal of long-term equity investments
When a long-term equity investment is disposed of, the difference between the carrying amount of the
long-term equity investment and the actual acquisition price shall be included in current profits and losses.
For a long-term equity investment accounted for using equity method, when the investment is disposed of,
the part originally included in other comprehensive income should be accounted for in the corresponding
proportion and on the same basis as the direct disposal of the underlying assets or liabilities by the investee.
When the terms, conditions and economic influence of transactions of the equity investment of the
subsidiary conform to one or more of the following, accounting for multiple transactions is treated as a
package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
(b) These transactions can only achieve a complete business outcome when they are accounted for
collectively;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
(d) A transaction is uneconomical individually, but is economical when considered collectively with other
transactions.
When an enterprise loses control over the original subsidiary due to disposal of part of the equity
investment or other reasons, if the transactions do not belong to a package transaction, the accounting
treatment of individual financial statements and consolidated financial statements should be distinguished
as follows:
(a) In the individual financial statements, the disposed equity should be accounted for in accordance with the
"Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment"; meanwhile, the
remaining equity should be recognized as long-term equity or other related financial assets based on its
carrying amount. If the remaining equity after disposal can be used to exercise common control or
significant influence on the original subsidiary, it shall be accounted for in accordance with the relevant
provisions on the conversion of the cost method into the equity method.
43
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
24 Long-term equity investments (continued)
(4) Disposal of long-term equity investments (continued)
(b) In the consolidated financial statements, the remaining equity should be re-measured in accordance with
its fair value on the date of loss of control. The difference between the sum of the consideration acquired
from the disposal of the equity and the fair value of the remaining equity, less the share of net assets of the
original subsidiary that should be enjoyed in accordance with the original shareholding ratio from the date
of acquisition, is included in the current profit and loss of the period in which loss of control occurred.
Other comprehensive income related to the original subsidiary's equity investment should be converted
into current investment income when control is lost. The Company shall disclose in the notes the fair value
of the remaining equity after disposal on the date of loss of control and the amount of relevant gains or
losses arising from the disposal remeasured based on the fair value.
If the transactions of disposal of equity investment in a subsidiary until the loss of control is a package
transaction, the accounting treatment of individual financial statements and consolidated financial
statements should be distinguished as follows: :
(a) In the individual financial statements, the difference between each disposal price and the carrying amount
of the long-term equity investment corresponding to the disposed equity before the loss of control is
recognized as other comprehensive income, and transferred to the current profit and loss of the period in
which the loss of control occurred;
(b) In the consolidated financial statements, the difference between each disposal price and the disposal of
investment corresponding to the share of the net assets of the subsidiary before the loss of control is
recognized as other comprehensive income, and transferred to the current profit and loss of the period in
which the loss of control occurred.
(5) Criteria for judgment of joint control and significant impact
If the Company exerts joint control over an arrangement with other participants in accordance with the
relevant agreement, and decision on activities that has significant impact on the return of the arrangement
requires the unanimous consent of the participants sharing the control, the Company and other participants
will be deemed to have joint control over the arrangement - a joint venture arrangement.
If a joint venture arrangement is entered into through an independent entity, and the Company has right
over the net assets of the independent entity based on the relevant agreements, the independent entity shall
be deemed as a joint venture and accounted for using equity method. If based on the relevant agreement,
the Company does not have rights to the net assets of the individual entity, the individual entity shall be
deemed as a joint operation, and the items related to the share of interests in the joint operation should be
recognized and accounted for in accordance with the provisions of relevant Accounting Standards for
Business Enterprises.
Significant impact means the investor’s power to participate in the decision-making of the financial and
operating policies of the investee, but by which the investor cannot control or commonly control together
with other parties the formulation of the policies. Significant impact on the investee will be determined
based on one or more of the cases with reference to all facts and conditions:
1) Assigning a representative to the board of directors or similar authority of the investee;
2) Participating in formulation of the financial and operational policies of the investee;
3) Entering into a significant transaction with the investee;
4) Assigning an officer to the investee; or
5) Providing key technical information to the investee.
44
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
25 Investment property
The Company's investment property means the property held for the purpose of earning rent or
capital appreciation, or both, including the land use rights that have been leased, the land use rights
that are held for transfer upon appreciation, and the leased buildings. In addition, for the vacant
buildings held by the Company for the purpose of leases, if the Board of Directors makes a written
resolution that expressly indicates that the buildings will be used for leases and the intention of
holding will not change in a short-term, the building will also be reported as investment property.
An investment property of the Company will be recorded at its cost that comprises i) in case of a
purchased investment property, the purchase price, relevant taxes and other expenses directly
attributable to the asset; or ii) in case of a self-constructed investment property, the necessary
expenses incurred before the asset is constructed to reach its intended serviceable state.
The Company adopts the cost model for subsequent measurement of investment property. For the
purpose of depreciation or amortization method, the same amortization policy adopted for buildings
as fixed assets and land use rights as intangible assets are used.
When the purpose of an investment property is changed to self-use, the Company shall convert the
investment property into a fixed asset or intangible asset from the date of change. When the purpose
of a self-used property is changed to earning rent or capital appreciation, the Company will convert
the fixed asset or intangible asset into an investment property from the date of change. When such
a conversion occurs, the carrying amount before the conversion shall be used as the recorded value
after the conversion.
When an investment property is disposed of, or when it permanently withdraws from use and no
economic benefit is expected to be obtained from the disposal of it, the investment property shall be
derecognized. The disposal income from the sale, transfer, scrapping or damage of an investment
property, net of its carrying amount and related taxes and fees, is recognized in current profits and
losses.
45
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
26 Fixed assets
(1) Recognition criteria for fixed assets
Fixed assets mean tangible assets held for the purpose of producing goods, rendering of services, leases
or operation management, whose service life is more than one fiscal year. Fixed assets satisfying the
following conditions are recognized:
(a) The economic benefits associated with the fixed assets are likely to flow into the enterprise;
(b) The cost of the fixed asset can be measured in a reliable way.
The Company's fixed assets are classified into buildings, machinery and equipment, office and electronic
equipment, transportation vehicles and fixed assets renovation in line with capitalization conditions.
Where each component of a fixed asset with a different service life provides economic benefits to the
Company in different ways and applies different depreciation rates, it is recognized as a single fixed
asset.
Fixed assets are initially measured at cost. The cost of purchasing fixed assets includes the purchase
price, related taxes, and other expenses attributable to the fixed asset before it is ready for the intended
use, such as the expenses on transportation, handling, installation and professional services, etc. When
determining the cost of fixed assets, discard expenses should be considered. Subsequent expenditures
related to fixed assets that satisfy the recognition criteria of fixed assets are included in the cost of fixed
assets; otherwise, they are recognized in profit and loss in the period in which they arise.
Fixed assets are depreciated by the straight-line method. The depreciation rate of various fixed assets is
determined according to the estimated service life and estimated residual value (the estimated residual
value is 0-10% of the original value). The depreciation rate of classified fixed assets is as follows:
Asset Category Estimated Service Life Annual Depreciation Rate
Houses and buildings 20-50 years 1.8%-5%
Machinery equipment 5-15 years 6%-20%
Office and electronic equipment 2-5 years 18%-50%
Transportation equipment 3-5 years 18%-33.33%
Power stations 20-25 years 3.8%-4.75%
Others 4-5 years 18%-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.
The methods for impairment testing and accrual of impairment provisions of fixed assets are detailed in
31 "Long-term Asset Impairment" under Note III.
46
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
27 Construction in progress
Construction in progress refers to the necessary expenses incurred by the Company for the purchase and
construction of fixed assets or investment property before being ready for the expected usable status,
including engineering materials costs, labor costs, related taxes and fees, borrowing costs that should be
capitalized and indirect costs that should be apportioned. Construction in progress is accounted for separately
according to individual projects.
After the construction in progress is ready for its intended use, it must be transferred to fixed assets or
investment property, whether the final accounting procedures are completed or not.
The methods for impairment testing and accrual of impairment provisions of construction in progress are
detailed in 31 "Long-term Asset Impairment" under Note III.
28 Borrowing costs
Borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,
including interest on borrowings, amortization of discounts or premiums, ancillary expenses, and exchange
differences arising from foreign currency borrowings.
Borrowing costs that can be directly attributable to the acquisition, construction or production of assets eligible
for capitalization are capitalized and included in the relevant asset cost. Other borrowing costs are recognized
as expenses in the period in which they are incurred, and are included in the current profit and loss. Assets
eligible for capitalization refer to fixed assets, investment property and inventories and other assets that require
a substantial period of acquisition, construction or production activities to get ready for the intended use or
sale status.
Borrowing costs become capitalized when:
The asset expenditure has occurred, including expenditure incurred in the form of cash payments, transfer of
(1) non-cash assets, or assuming interest-bearing debts for the purpose of acquisition, construction or production
of assets that are eligible for capitalization;
(2) Borrowing costs have occurred;
The acquisition, construction or production activities necessary to enable the assets to be ready for the intended
(3)
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.
47
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
29 Right-of-use assets
The Company initially measures right-of-use assets at cost. Such cost includes:
(1) The initial measurement amount of lease liabilities;
(2) Lease payments made on or before the commencement date of the lease term (if a lease incentive
exists, net of the amount related to the lease incentive already taken);
(3) Initial direct costs incurred by the Company;
(4) Costs expected to be incurred by the Company to disassemble and remove the leased asset(s), restore
the premises where the leased asset(s) is/are located, or restore the leased asset(s) to the condition
agreed upon under the terms of the lease (excluding costs incurred to produce inventory).
After the commencement date of the lease term, the Company uses the cost model for subsequent
measurement of right-of-use assets.
If it is reasonably certain that ownership of the leased asset(s) will be obtained at the end of the lease
term, the Company depreciates the leased asset(s) over its/their remaining service life. If it is not
reasonably certain that ownership of the leased asset(s) will be obtained at the end of the lease term,
the Company depreciates the leased asset(s) over the lease term or the remaining service life of the
leased asset(s), whichever is shorter. Right-of-use assets for which impairment reserves have been
accrued are depreciated in future periods at their carrying amount net of impairment reserves, with
reference to the above principles.
In accordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Asset
Impairment, the Company determines whether right-of-use assets have been impaired and accounts
for the recognized impairment losses, as detailed in 31 "Long-term Asset Impairment" under Note
III.
48
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
30 Intangible assets
Intangible assets refer to the identifiable non-monetary assets, owned or controlled by the Company,
without physical form, including land use rights, intellectual property rights, and non-patented
technologies, etc.
Intangible assets are recorded at the actual cost at the time of acquisition. The service life of intangible
assets is analyzed and judged at the time of acquisition. Intangible assets with a finite service life are
amortized on the shortest of the estimated service lives, the beneficial period of the contract and the
effective period specified by law from the time when the intangible assets are available for use. The
amortization period is as follows:
Category Amortization years
The shorter of the years of the land use rights and the operating
Land use rights
years of the Company
Patents and non-patent 10 years or the shorter of service life, beneficiary years and legally
technologies valid years
Others Beneficiary period
The Company reviews the service life and amortization method of intangible assets with limited service
life at least at the end of each year, and made adjustment if necessary.
The methods for impairment testing and accrual of impairment provisions of intangible assets are
detailed in 31 "Long-term Asset Impairment" under Note III.
If an intangible asset is foreseen as unable to bring economic benefits to the Company, it is regarded as
an intangible asset with an indefinite service life, which will be reviewed in each accounting period. If
evidence indicates that the service life of the intangible asset is limited, then it is converted to an
intangible asset with limited service life. Intangible assets with indefinite service lives are not amortized.
The expenditures of the Company's internal research and development projects are classified into
expenditures in the research phase and expenditures in the development phase. Research means an
original, planned survey of acquiring and understanding new scientific or technical knowledge.
Development means the application of research results or other knowledge to a plan or design to produce
new or substantially improved materials, devices, products, etc. prior to commercial production or use.
The expenditures in the research phase of the Company's internal research and development projects are
included in the current profit and loss when incurred; expenditures in the development phase are
recognized as intangible assets only when the following conditions are all satisfied:
(1) It is technically feasible to complete the intangible asset to enable it to be used or sold;
(2) There is intent to complete the intangible asset and use or sell it;
(3) The intangible assets can bring economic benefits;
(4) There are sufficient technical, financial and other resources to support the development of the intangible
assets as well as ability to use or sell the intangible assets;
Expenditures attributable to the development stage of the intangible asset can be measured in a reliable
(5)
way.
If the above conditions cannot be all satisfied, the expenditures are included in the current profit and loss
when incurred.
49
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
31 Impairment of long-term assets
The Company determines whether there is any sign of possible impairment of the long-term assets on
the balance sheet date. If there is any sign of impairment in a long-term asset, the Company estimates
the recoverable amount thereof based on the individual asset. If it is difficult to estimate the recoverable
amount of the individual asset, the recoverable amount of the asset is determined based on the asset group
to which the asset belongs.
The recoverable amount of an asset is determined based on the net amount of fair value of the asset less
the disposal expenses, or the present value of estimated future cash flows of the asset, whichever is
higher.
If the measurement results of the recoverable amount indicate that the recoverable amount of the long-
term investment is lower than its carrying amount, the carrying amount of the long-term investment is
written off to the recoverable amount, and the amount written by is recognized as asset impairment losses,
which is included in current profits and losses, while provision for asset impairment is made. Once the
asset impairment loss is confirmed, it cannot be reversed in the future accounting period.
After the asset impairment loss is recognized, the depreciation or amortization expense of the impaired
assets will be adjusted accordingly in the future periods, so that the adjusted carrying amount of the asset
(deducting the expected net residual value) will be systematically amortized over the remaining service
life of the asset.
For the goodwill formed by business combination and the intangible assets with indefinite service life,
impairment test is carried out every year regardless of whether there is any indication of impairment.
In the impairment test of goodwill, the carrying amount of goodwill is apportioned to the asset group or
asset group portfolio expected to benefit from the synergy of the business combination. When impairment
tests are conducted on underlying asset groups or asset group portfolios that contain goodwill,
impairment tests will be first conducted on the asset groups or asset group portfolios that do not contain
goodwill, provided there is any sign of impairment in the asset groups or asset group portfolios related
to the goodwill, and the recoverable amount will be calculated, and compared with the relevant carrying
amount to recognize the corresponding impairment loss. Further impairment tests will be conducted on
asset groups or asset group portfolios that contain goodwill, by comparing the carrying amount of such
underlying asset groups or asset group portfolios (including the part of the carrying amount of the
allocated goodwill) with their recoverable amount. If the recoverable amount of the underlying asset
group or asset group portfolio is lower than its carrying amount, the impairment loss shall be recognized
for goodwill.
32 Long-term deferred expenses
Long-term deferred expenses refer to various expenses that the Company has paid, should be amortized
over the current and future periods, and whose period of amortization is more than one year, such as the
improvement expenses incurred in renting fixed assets by operating leases. Long-term deferred expenses
are amortized on a straight-line basis within the beneficial period of the expense items.
33 Contract liabilities
The Company recognizes as contract liabilities the part of the obligation to transfer the goods to the
customer due to received or receivable consideration from the customer.
50
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
34 Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, termination benefits
and other long-term employee benefits provided in various forms of consideration in exchange for service
rendered by employees or compensations for the termination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances and subsidies, staff
welfare, premiums or contributions on medical insurance, work injury insurance and maternity insurance,
housing funds, union running costs and employee education costs, and short-term paid absences. During
the accounting period when employees provide services, the Company recognizes the actual short-term
remuneration as liabilities, and includes it in current profits and losses or related asset costs according to
the beneficiaries of the services provided by employees. 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 current profits and losses, at the time when the Company cannot unilaterally withdraw the
termination of the labor relationship plan or redundancies proposal, or the time when the cost associated
with reorganization involving payment of termination benefits is confirmed, whichever is earlier.
(d) Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except short-term employment benefits,
post-employment benefits and termination benefits.
For other long-term employee benefits that meet the conditions of a defined contribution plan, the amount
to be contributed shall be recognized as a liability during the accounting period when the employee
provides services to the Company, and shall be included in profit or loss for the period or the underlying
asset costs. For long-term employee benefits other than those mentioned above, on the balance sheet date,
the benefit obligations arising from the defined benefit plan shall be attributed to the periods during which
the employee provides services, and shall be included in profit or loss for the period or the underlying asset
costs.
51
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
35 Estimated liabilities
(1) Recognition standards for estimated liabilities
An obligation related to product quality assurance, loss contracts, restructuring and other
contingencies shall be recognized as provision, if i) it is a current obligation of the Company, ii) the
fulfillment of this obligation is likely to result in an outflow of economic benefits, and iii) the amount
of this obligation can be reliably measured.
(2) Measurement methods for estimated liabilities
The estimated liabilities of the Company are initially measured on the basis of the best estimate of
the expenditure required to perform the relevant current obligations.
When determining the best estimate, the Company considers factors such as risks, uncertainties and
time value of money related to contingent events. Where the time value of money has a significant
impact, the best estimate is determined by discounting the relevant future cash outflows.
The best estimates are handled as follows:
In case there is a continuous range (or interval) of required expenditures, within which the possibility
of occurrence of various results is the same, the best estimate is determined by the average of the
middle value of the range, that is, the average of the upper and lower limits.
In case there is no continuous range (or interval) of required expenditures, or there is a continuous
range but the possibility of various results in the range is different, if the contingency involves a
single item, the best estimate is determined based on the most probable amount; if a continge ncy
involves multiple items, the best estimate is determined based on various possible outcomes and
associated probabilities.
If all or part of the expenses required by the Company to settle the estimated liabilities are expected
to be compensated by a third party, the compensation amount is separately recognized as an asset
when it is basically confirmed to be received, and the recognized compensation amount should not
exceed the carrying amount of the estimated liabilities.
52
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
36 Lease liabilities
The Company initially measures lease liabilities at the present value of the lease payments outstanding
on the commencement date of the lease term. When calculating the present value of lease payments, the
Company uses the interest rate implicit in lease as the rate of discount. If the implicit interest rate of the
lease cannot be determined, the incremental loan interest rate of the Company shall be used as the
discount rate. Lease payments include:
The amount of fixed payments, net of amounts related to lease incentives, and the amount of substantive
(a)
fixed payments;
(b) Variable lease payments that depend on indexation or ratio;
The exercise price of the purchase option, when applicable, if the Company is reasonably certain that the
(c)
option will be exercised;
(d) The amount required to be paid to exercise the option to terminate the lease if the lease term reflects that
the Company will exercise the option to terminate the lease;
(e) The estimated amount payable based on the secured residual value provided by the Company.
The Company calculates the interest expenses of lease liabilities for each period within the lease term at
a fixed rate of discount and includes them in profit or loss for the current period or cost of the related
assets.
Variable lease payments that are not included in the measurement of lease liabilities should be included
in profit or loss for the current period or cost of the related assets when they are actually incurred.
37 Share-based payments
The share-based payments of the Company are mainly equity-settled share-based payments, and only
allow to be exercised by employees after the completion of their services in the waiting period. On each
balance sheet date in the waiting period, based on the best estimate of the number of vesting equity
instruments, the services obtained in the current period are included in the relevant costs or expenses and
capital reserve based on the fair value at the grant date of the equity instruments.
The fair value of equity instruments is determined by the external appraiser or management based on the
binomial distribution method. The best estimate of the vesting equity instrument is determined by the
management based on historical statistics on the vesting weights and turnover rates on the balance sheet
date.
Equity-settled share-based payments are measured based on the fair value of the equity instruments
granted to employees. In case that the vesting right is available immediately after the grant, it is included
in relevant cost or expense based on the fair value of the equity instrument on the grant date, and the
capital reserve is increased accordingly. In case that the vesting right is available after the completion of
services in the waiting period or satisfaction of stipulated performance conditions, on each balance sheet
day during the waiting period, the services acquired in the current period are included into the relevant
costs or expenses and capital reserve on the basis of the best estimate of the number of feasible equity
instruments and at the fair value of the date on which the equity instruments are granted. No adjustments
are made to the identified related costs or expenses or total owners' equity after the vesting date.
53
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition
(1) General principles applied to revenue recognition
The Company shall recognize the revenue according to the transaction price assigned to the
performance obligation when any due performance obligation is fulfilled (namely when the client
obtains the control over relevant commodities or services). Performance Obligation means that, under
the contract, the Company promises to transfer commodities or services that can be clearly
distinguished to the client. "Obtain the control over relevant commodities or services" refers to the
ability to completely dominate the use of commodities and obtain almost all economic benefits. From
the contract’s effectiveness date, the Company shall evaluate the contract, recognize each single
performance obligation included and determine whether each performance obligation is fulf illed
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 according to the
performance schedule:
While fulfilling the due obligation in the Company, the client obtains and consumes the resulting
(a)
economic benefit;
(b) The client is able to control the commodities under construction during the Company’s fulfillment;
(c) Commodities generated from the Company’s fulfillment possess irreplaceable purpose and the
Company has the right to charge all fulfilled performance obligations within the whole contract
period; otherwise, the Company shall recognize corresponding revenue when the client obtains the
control over relevant commodities or services.
For any performance obligation with a certain period, the Company shall apply the output
method/input method to determine the appropriate fulfillment schedule based on the specific nature
of commodities and services. The output method is to determine the fulfillment schedule according to
the value of commodities transferred to the client (while the input method is to determine the
fulfillment schedule according to the Company’s input to fulfill the performance obligation). If the
fulfillment schedule cannot be reasonably determined and the Company’s costs are predicted to be
compensated, corresponding revenue shall be recognized based on the specific cost amount until the
fulfillment schedule could be reasonably determined.
54
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition (continued)
(2) Specific revenue recognition method
(a) Product sales contract
According to the contract terms, for the selling of products subject to performance obligation fulfillment
conditions at a time point and other products, the Company shall recognize the realization of sales revenues
when the client obtains the control over relevant commodities or services according to the delivery condition
agreed in the sales contract upon signed by the client after commodities are received.
(b) Technical service contract
If revenues are recognized within a certain period based on the technical service contract, corresponding
revenues shall be recognized according to the performance schedule.
(c) Royalty income
Accounted for according to the time and method of charging as stipulated in the relevant contract or agreement.
(d) Revenue from photovoltaic power stations
a. Centralized power stations: Power stations are combined to the grid. The revenue is recognized based on the
documents on power supply provided by the business departments of the Company, after the duration of
continuous and trouble-free operation specified by the electric power company is met. b. Distributed power
stations: Power stations are combined to the grid. The revenue is recognized based on the documents on
settlement provided by the business departments of the Company.
(3) Principles of handling revenues from specific transactions
(a) For the contract containing the sales return article: When the client obtains the control over relevant
commodities, corresponding revenue shall be recognized according to the consideration amount (excluding the
amount predicted to be returned due to sales return) predicted to be duly charged from transferring commodities
to the client, and corresponding liabilities shall be recognized based on the amount predicted to be returned due
to sales return. Meanwhile, when commodities are sold, the balance through deducting the predicted cost for
taking back commodities from the carrying amount of commodities predicted to be returned (including the
impairment of value of returned commodities) shall be accounted for under "Returned Commodities Cost
Receivable".
(b) For the contract containing the quality assurance article: it’s required to evaluate whether the quality assurance
involves any separable service except for the promise (to the client) that commodities conform to established
standards. If the Company provides additional service, it shall be deemed as a single performance obligation
and subject to the accounting treatment according to relevant revenue criteria provisions; otherwise, the quality
assurance liability shall be subject to the accounting treatment according to the accounting criteria provisions
on Contingency.
(c) For the sales contract containing the client’s additional purchase option: the Company shall evaluate whether
the option provides the client with any significant right. If any, it shall be deemed as a single performance
obligation and the transaction price shall be apportioned to the performance obligation, and c orresponding
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.
55
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
38 Revenue recognition (continued)
(3) Principles of handling revenues from specific transactions (continued)
(d) The contract licensing the IP right to the client: It’s required to evaluate whether the IP right license
constitutes any single performance obligation; if any, it is necessary to determine whether the performance
obligation fulfillment is fulfilled within a certain period or at a time point. If any IP right license is granted
to the client and royalties are charged based on the client’s actual sales or usage, corresponding revenues
shall be recognized at a later time between the following dates: the day when the client’s subsequent selling
or usage occurs; the day when the Company fulfills relevant performance obligations.
(e) Major responsible person and agent: Based on whether the Company has control over the goods or service
before transferring it to the customer, it is determined whether the Company is the major responsible person
or an agent in the transactions. If the Company is able to control the goods or service before transferring it
to the customer, the Company shall be deemed as major responsible person and the revenue shall be
recognized at the total amount of the consideration received or receivable; otherwise the Company shall
be deemed as an agent and the revenue shall be recognized at the amount of the commission or handling
fee to which it expects to be entitled. The amount of the commission or handling fee is determined by
deducting the amount payable to other relevant parties from the total amount of consideration received or
receivable.
39 Contract costs
(1) Contract performance cost
For the cost resulting from performing the contract which is not included in other ASBE except the
revenue standards and meets the following conditions, the Company shall recognize it as an asset:
(a) The cost is directly related to a current or predicted contract, including the direct labor, direct material
and manufacturing expenses (or similar expenses), the cost borne by the client and other costs resulting
from the contract;
The cost adds various resources that can be applied by the Company to fulfill due performance
(b)
obligations; and
(c) The cost is predicted to be recovered.
The asset shall be presented and reported in inventory or other non-current assets, which depends on
whether the amortization period exceeds a normal operating cycle during the initial recognition.
(2) Contract acquisition cost
If the increment cost resulting from the Company’s acquisition of contract is predicted to be recovered,
it shall be recognized as an asset as the contract acquisition cost. Increment Cost refers to the cost which
only results from the contract acquisition, like the sales commission. If the amortization period is less
than one year, it shall be included in current profit and loss.
(3) Contract cost amortization
The asset related to the contract cost shall, by adopting the same basis for the recognition of commodities
or services revenues related to the asset, be amortized during the period of fulfilling the performance
obligation or according to the fulfillment schedule and be included into current profit and loss.
56
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
39 Contract costs (continued)
(4) Impairment of contract costs
For the asset related to the contract cost as mentioned above, if the carrying amount is higher than the
difference between the residual consideration predicted to be obtained from the Company’s transfer of
commodities related to the asset and the cost to be incurred due to such transfer, depreciation reserves
shall be calculated and withdrawn for the surplus which shall also be recognized as the asset impairment
loss.
After the provision for impairment is made, if changes in depreciation factors during previous periods
have made the above difference higher than the asset’s carrying amount, it shall be restituted to previously
established asset impairment allowances and included in current profit and loss. However, the carrying
amount of restituted assets shall not exceed the carrying amount of the asset on the date of restitution
without establishing impairment allowances.
40 Public grants
(1) Type of change
Public grants are transfers of monetary or non-monetary assets from the public to the Group at nil
consideration. According to the grants targets stipulated in the relevant public documents, public grants
are classified into public grants related to assets and public grants related to income.
(2) Recognition of public grants
If a public grant is a monetary asset, it is measured at the amount received or receivable. If a public grant
is a non-monetary asset, it is measured at fair value. If the fair value cannot be obtained in a reliable way,
it is measured at the nominal amount (RMB 1). Public grants measured at nominal amounts are
recognized directly in the current profits and losses.
(3) Accounting treatment
Public grants related to assets offset the carrying amount of the underlying assets.
If the public grants related to income are used to compensate related costs or losses in the subsequent
period, it is recognized as deferred income and included in the current profit and loss or offset costs in
the period in which the related costs or losses are recognized; public grants used to compensate costs or
losses incurred by the enterprise shall be directly included in current profits and losses or offset related
costs. For public grants related to the day-to-day activities of the enterprise, the R&D and VAT-related
subsidies and the taxation, or operation-based incentive public subsidies are included in other income;
other public grants are written off against related costs based on the substance of economic activities.
Public grants not related to daily activities of the Company are included in the non-operating income and
expenditure. For preferential loans for policy discount, if the public finance department appropriates the
discounted funds to the lending bank, the borrowing cost is accounted for according to the principal of
the loan and the policy preferential interest rate, with the amount actually received as the entry value of
the loan. If the public finance department directly appropriates the interest grant funds to the Company,
the grants shall offset the related borrowing costs.
In case that a recognized public grant is required to be returned, the carrying amount of the asset is
adjusted if the carrying amount of relevant assets is offset at the initial recognition; if there is related
deferred income, the book balance of deferred income is offset, and the excess is included in the current
profit and loss; and in case of other circumstances, it is directly included in current profits and losses.
57
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
41 Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities shall be recognized based on the
difference (temporary difference) between the tax basis and carrying amount of the underlying
assets or liabilities. On the balance sheet date, the deferred income tax assets and deferred income
tax liabilities are measured based on the tax rate applicable during the period when it is expected
to recover the assets or pay off the liabilities.
(1) Basis for recognition of deferred income tax assets
The Company recognizes deferred income tax assets arising from deductible temporary
differences to the extent that it is likely to acquire taxable income that can be used to offset the
deductible temporary differences, deductible losses that can be carried forward to future years and
tax credits. However, deferred income tax assets arising from the initial recognition of assets or
liabilities in a transaction with all the following characteristics shall not be recognized: (1) the
transaction is not a business combination; and (2) the occurrence of the transaction does not affect
accounting profits or taxable income or deductible losses.
For a deductible temporary difference related to investments in affiliates, the corresponding
deferred income tax asset will be recognized if the following criteria are met simultaneously: the
temporary difference is likely to be reversed in the foreseeable future and it is likely to obtain
taxable income that can be used to offset the deductible temporary difference in the future.
(2) Basis for recognition of deferred income tax liabilities
The Company recognizes the taxable temporary differences that should be paid but not paid for
the current and previous periods as deferred income tax liabilities. But deferred tax liabilities do
not include:
(a) Temporary differences arising from the initial recognition of goodwill;
Temporary differences arising from transactions or events that are not formed by a business
(b) combination and do not affect accounting profits or taxable income (or deductible losses) upon
their occurrence;
For taxable temporary differences related to investments in subsidiaries and associates, the timing
(c) of the reversal of the temporary differences can be controlled and the temporary differences are
unlikely to be reversed in the foreseeable future.
Deferred income tax assets and liabilities are presented on a net basis after, provided the following
(3)
conditions are met:
(a) 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
(b) tax assets and liabilities on a net basis, or to realize the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are reversed.
58
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
42 Leases
From the effectiveness date of a contract, the Company assesses whether the contract is a lease or includes
any lease. If a party to the contract transfers the right allowing the control over the use of one or more assets
that have been identified within a certain period, in exchange for a consideration, such contract is a lease or
includes a lease.
(1) Lease contract split
If a contract contains multiple single leases at the same time, the Company will split the contract, and
conduct accounting treatment of each single lease respectively.
If a contract contains both lease and non-lease parts at the same time, the Company will split the lease and
non-lease parts, conduct accounting treatment of the lease part in accordance with the accounting standards
governing leases, and conduct accounting treatment of the non-lease part in accordance with other applicable
corporate accounting standards.
(2) Lease contract combination
With regard to two or multiple contracts containing leases concluded by the Company with the same
counterparty or its related parties at the same or a similar time, when any of the following conditions is
met, the contracts are combined into one contract for accounting treatment:
Two or multiple contracts are concluded based on an overall business purpose and constitute a package
(a)
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 the pricing or
(b)
performance of other contracts.
(c) The rights to use assets transferred by the two or multiple contracts constitute one single lease.
(3) Accounting treatment with the Company as lessee
On the commencement date of the lease term, the Company recognises the right-of-use assets and lease
liabilities for the lease, unless it is a simplified short-term lease or low-value asset lease.
(a) Short-term leases and low-value asset leases
A short-term lease refers to a lease that does not include a purchase option and whose lease term does
not exceed 12 months. A low-value asset lease refers to a lease where the value will be low when a single
leased asset is a new asset.
The Company does not recognize the right-of-use assets or lease liabilities for the following short-term
leases and low-value asset leases. In each period within the lease term, the relevant lease payments are
included in cost of the related assets or profit or loss for the current period on a straightline basis or
according to other systemic and reasonable methods.
Item Simplified leased asset type
A lease whose lease term does not exceed 12 months from the
Short-term lease
commencement date of the lease term
An asset lease with a value of less than RMB 40,000 or its foreign currency
Low-value asset lease
equivalents
59
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
42 Leases (continued)
(3) Accounting treatment with the Company as lessee (continued)
The Company recognises the right-of-use assets and lease liabilities for short-term leases and low-value asset
leases other than those mentioned above.
The accounting policies for right-of-use assets and lease liabilities are detailed in Note III, 29 and Note III,
(b)
36.
(4) Accounting treatment with the Company as lessor
(a) Lease classification:
The Company classifies leases into finance leases and operating leases at the inception of leases. A finance
lease refers to a lease where almost all the risks and rewards, related to the ownership of the leased asset(s),
are substantially transferred, regardless of whether the ownership is transferred eventually. An o perating 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 profits and losses for the current period when they are actually incurred.
60
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
42 Leases (continued)
(4) Accounting treatment with the Company as lessor (continued)
(c) Accounting treatment of operating leases
For each period of the lease term, the Company adopts the straight-line method or other systematic and
reasonable methods to recognize the lease receipts of the operating lease as rental income; the Company
capitalizes the initial direct expenses incurred in connection with the operating lease, amortizes them
over the lease term on the same basis as that for the recognition of the rental income, and includes them
in the current profit and loss by stage; the Company includes the variable lease payments, obtained in
connection with the operating lease that are not included in the lease receipts, in current profits and losses
when they actually incurred.
(5) Sale and leaseback
(a) The Company as seller and lessee
If the asset transfer in a sale and leaseback transaction is a sale, the Company will measure the right-of-
use assets formed by the sale and leaseback based on the portion of the original asset’s carrying amount
that is related to the use right acquired by the leaseback, and recognize related gains or losses only for
the right transferred to the lessor. If the fair value of the sales consideration is different from the fair
value of the asset, or if the lessor does not charge the rent at the market price, the Company will conduct
accounting treatment with the sales consideration amount below the market price as the prepaid rent, or
the amount above the market price as the additional financing provided by the lessor to the lessee; at the
same time, the relevant sales gains or losses will be adjusted based on the fair value.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company will continue to
recognise the transferred asset and at the same time recognise a financial liability equivalent to the
transfer income.
(b) The Company as buyer and lessor
If the asset transfer in a sale and leaseback transaction is a sale, the Company will conduct corresponding
accounting treatment for asset purchase and apply the accounting standards governing leases to the
accounting treatment of the asset lease. If the fair value of the sales consideration is different from the
fair value of the asset, or if the Company does not charge the rent at the market price, the Company will
conduct accounting treatment with the sales consideration amount below the market price as the pre-
collected rent, or the amount above the market price as the additional financing provided by the Company
to the lessee; at the same time, the rental receipt will be adjusted based on the market price.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company will recognise a
financial asset equivalent to the transfer income.
43 Related parties
If one party controls, commonly controls or exerts a significant influence on the other party, and two or
more parties are under the control, common control or significant influence of the other party, they
constitute related parties. Enterprises that are solely controlled by the state and do not have any other
related party relationship shall not be deemed as related parties.
61
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
44 Discontinued operations
The Company will recognize a component that meets one of the following conditions, has been disposed
of or classified as being held for sale, and can be separately identified, as a component of discontinued
operation:
(1) This component represents an independent main business or a separate main operation region.
(2) This component is part of a related plan to dispose of an independent main business or a separate main
operation region.
(3) This component is a subsidiary acquired for the sole purpose of resale.
Operating profit and loss, such as impairment losses for discontinued operations and the amount reversed,
and disposal profit and loss are presented in the income statement as profit and loss of discontinued
operations.
In the balance sheet, the Company presents, independently from other assets, the held-for-sale non-current
assets or assets in held-for-sale disposal groups, and presents, independently from other liabilities, the
liabilities in held-for-sale disposal groups. The held-for-sale non-current assets or assets in held-for-sale
disposal groups and the liabilities in held-for-sale disposal groups shall not offset each other, but shall be
presented as current assets and current liabilities respectively. In the income statement, the Company
presents the profits and losses from going concern and the profits and losses from discontinued
operations. For the discontinued operations reported in the current period, the Company represents in the
financial statements for the current period, the information, previously presented as the profits and losses
from going concern, as the profits and losses from discontinued operations for the comparable accounting
period. If the discontinued operations are no longer eligible for being classified as held-for-sale
categories, the Company will represent in the financial statements for the current period, the information,
previously presented as the profits and losses from discontinued operations, as the profits and losses from
going concern for the comparable accounting period.
45 Hedge Accounting
Hedge is classified as fair value hedge, cash flow hedge or net foreign investment hedge based on the
hedging relationship.
(1) A hedging relationship qualifies for hedge accounting only if all of the following criteria are met:
(a) The hedging relationship consists only of eligible hedging
instruments and eligible hedged items.
(b) At the inception of the hedging relationship, there is formal designation of hedging instruments and
hedged items, and documentation of the hedging relationship and the Company’s risk management
strategies and objectives for undertaking the hedge have been prepared.
62
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(1) A hedging relationship qualifies for hedge accounting only if all of the following criteria are met
(continued)
(c) The hedging relationship meets the hedge effectiveness requirements.
The hedging relationship meets the hedge effectiveness requirements only if all of the following criteria
are met:
1) There is an economic relationship between the hedged item and the hedging instrument. This economic
relationship causes opposite changes in the value of the hedging instrument and the hedged item in face
of the identical hedged risk.
2) The effect of credit risk does not dominate the value changes that result from that economic
relationship.
3) The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the
hedged item that the Company actually hedges and the quantity of the hedging instrument that the
Company actually uses to hedge that quantity of hedged item. However, that designation shall not
reflect an imbalance between the weightings of the hedged item and the hedging instrument that would
create hedge ineffectiveness that could result in an accounting outcome that would be inconsistent with
the purpose of hedge accounting.
(2) Fair value hedge accounting
(a) Gain or loss on the hedging instrument shall be recognised in profit or loss. If the hedging instrument
hedges a non-trading equity instrument (or a component thereof) that the Company has elected to be
measured at fair value through other comprehensive income, the hedging gain or loss generated by the
hedging instrument shall be recognized in other comprehensive income.
(b) Gain or loss generated by the hedged item due to the hedged risk exposure shall be recognized in profit
or loss, and shall adjust the carrying amount of the recognized hedged item that is not measured at fair
value. If the hedged item is a financial asset (or a component thereof) measured at fair value through
other comprehensive income, the hedging gain or loss on the hedged item shall be recognized in profit
or loss, and will not be required for adjustment since the carrying amount has been measured at fair
value. However, if the hedged item is a non-trading equity instrument (or a component thereof) that the
Company has elected to be measured at fair value through other comprehensive income, the hedging
gain or loss on the hedged item shall be recognized in other comprehensive income, and will not be
required for adjustment, since the carrying amount has been measured at fair value.
When a hedged item represents a defined commitment that has not been unrecognized (or a component
thereof), the cumulative change in the fair value of the hedged item subsequent to its designation caused
by the hedge relationship is recognized as an asset or a liability with a corresponding gain or loss
recognized in profit or loss. When a defined commitment is made to acquire an asset or assume a liability,
the initial carrying amount of the asset or the liability is adjusted to include the cumulative change in the
fair value of the hedged item that has been recognized.
(c) If the hedged item is a financial instrument (or a component thereof) measured at amortized cost, the
adjustment made to the carrying amount of the hedged item shall be amortized based on the effective
interest rate recalculated on the amortization commencement date, and recognized in current profits and
losses. This amortization can commence from the adjustment date, but not later than the time when the
hedging gain or loss adjustment is made for the termination of the hedged item. If the hedged item is a
financial asset (or a component thereof) measured at fair value through other comprehensive income, the
cumulative recognized hedging gain or loss shall be amortized in the same manner and recognized in the
profit or loss, but the carrying amount of the financial asset (or a component thereof) shall not be adjusted.
63
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(3) Accounting treatment of cash flow hedges
(a) The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e.,
the portion that is offset by the change in the cash flow hedge reserve) shall be recognized in other
comprehensive income. The amount of cash flow hedging reserves shall be determined based on the
lower of the absolute amount of the following two items:
1) The cumulative gain or loss on the hedging instrument since the commencement of the hedge;
2) The cumulative change in the present value of expected future cash flows of the hedged item since the
commencement of the hedge. The amount of cash flow hedging reserves recognized in other
comprehensive income for each period is the change in cash flow hedging reserves for the period.
(b) The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge
(i.e., other gain or loss after deducting that recognized in other comprehensive income) shall be
recognized in current profits and losses.
(c) The amount that has been accumulated in the cash flow hedge reserve shall be accounted for as follows:
1) if any hedged item as an expected transaction, and the expected transaction subsequently results in the
recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-
financial asset or a non-financial liability becomes a defined commitment for which fair value hedge
accounting treatment is applied, the Company shall remove that amount from the cash flow hedge reserve
previously recognized in other comprehensive income and include it in the initial cost of the asset or the
liability.
2) for cash flow hedges other than those covered by 1), that amount from the cash flow hedge reserve
previously recognized in other comprehensive income shall be reclassified from the cash flow hedge
reserve to current profits and losses in the same period or the period during which the hedged expected
future cash flows affect profit or loss.
3) however, if that amount from the cash flow hedge reserve previously recognized in other
comprehensive income is a loss and the Company expects that all or a portion of that loss will not be
recovered in one or more future periods, it shall immediately reclassify the amount that is not expected
to be recovered from other comprehensive income to current profits and losses.
(4) Hedges of a net investment in a foreign operation
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted
for as part of the net investment shall be accounted for similarly to cash flow hedges:
(a) The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall
be recognized in other comprehensive income.
When disposing of all or part of the foreign operation, the gain or loss on the hedging instrument
recognized in other comprehensive income shall be correspondingly transferred out and recognized in
current profits and losses.
(b) The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge
shall be recognized in current profits and losses.
64
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
45 Hedge Accounting (continued)
(5) Termination of hedge accounting
Hedge accounting will be terminated if one of the following situations occurs:
(a) The hedging relationship no longer meets the risk management objectives due to changes in risk
management objectives.
(b) The hedging instrument has expired or been sold, or the contract has been terminated or has been
exercised.
(c) The economic relationship no longer exists between the hedged item and the hedging instrument, or
the effect of credit risk start to dominate the value changes that result from that economic
relationship.
(d) The hedging relationship no longer meets other conditions for applying hedging accounting
stipulated in this standard. In case that the rebalancing of the hedging relationship is applied, the
Company shall first consider the rebalancing of the hedging relationship, and then evaluate whether
the hedging relationship meets the conditions for applying hedging accounting stipulated in this
standard.
Termination of hedge accounting may affect the whole or a portion of the hedging relationship, and
when only a portion thereof is affected, hedge accounting remain applicable to the remaining
unaffected portion.
(6) Fair value selection of credit risk exposure
When credit derivative instruments measured at fair value through current profits and losses are
used to manage the credit risk exposure of a financial instrument (or a component thereof), the
financial instrument (or a component thereof) can be designated as a financial instrument measured
at fair value through current profits and losses during its initial recognition, subsequent
measurement, or when not yet recognized, with written records made simultaneously, provided that
the following criteria are met:
(a) The subject (such as the borrower or the loan commitment holder) of the credit risk exposure of the
financial instrument is consistent with the subject involved in the credit derivative;
(b) The reimbursement level of the financial instrument is consistent with that of the instrument required
to be delivered under the terms of the credit derivative.
65
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
III Significant accounting policies and accounting estimates (continued)
46 Changes to major accounting policies and estimates
(1) Change of accounting policies
Impact of the adoption of the Interpretation to Accounting Standards for Business Enterprises No.
17 on the Company
On October 25, 2023, the Ministry of Finance issued the Corporate Accounting Standards
Interpretation No. 17 (Cai Kuai [2023] No. 21, hereinafter referred to as "Interpretation No. 17").
The Company has adopted the "Accounting for Sale and Leaseback Transactions" since January 1,
2024, and the adoption of the Interpretation No. 17 has had no significant impact on the consolidated
and the Company's financial statements.
(2) Changes to accounting estimates
No significant change occurred to the major accounting estimates in the Reporting Period.
47 Correction of previous accounting errors
No previous accounting errors were identified and corrected in the Reporting Period.
66
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(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% during the reporting period.
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.
67
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
IV Taxes (continued)
5 Corporate income tax
The corporate income tax rate for the Company was 15% in the current period.
According to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, a reduced corporate income tax rate
of 15% is applied to important high-tech enterprises that the public supports.
According to the relevant provisions of the Announcement on the Preferential Income Tax Policies for Small and Micro Enterprises
and Self-employed Businesses (Announcement No. 6 [2023] of the Ministry of Finance and the State Taxation Administration)
and the Announcement of the Ministry of Finance and the State Taxation Administration on Tax Policies for Further Supporting
the Development of Small and Micro Enterprises and Self -employed Businesses (Announcement No. 12 [2023] of the Ministry of
Finance and the State Taxation Administration), issued by the Ministry of Finance and the State Taxation Administration in 2023,
from January 1, 2023 to December 31, 2027, the annual taxable income of small and low-profit enterprises not exceeding RMB1
million will be included in the taxable income at a reduced rate of 25%, and the enterprise income tax will be paid at the rate of
20%.
Except for the following subsidiaries entitling to preferential tax treatment and the overseas subsidies that adopt local applicable
tax rate, other entities under the Company are subject to the applicable tax rate of 25%, or the preferential tax rate for small and
micro enterprises.
Subsidiaries entitled to tax preferences:
Company Name Preferential tax rate Reason
TCL China Star Optoelectronics Technology Co.,
15.00% High-tech enterprise
Ltd.
Wuhan China Star Optoelectronics Technology Co.,
15.00% High-tech enterprise
Ltd.
Shenzhen China Star Optoelectronics Bandaoti
15.00% High-tech enterprise
Display Technology Co., Ltd.
Wuhan China Star Optoelectronics Bandaoti
15.00% High-tech enterprise
Display Technology Co., Ltd.
Suzhou China Star Optoelectronics Technology
15.00% High-tech enterprise
Co., Ltd.
Huizhou Kedate Smart Display Technology Co.,
15.00% High-tech enterprise
Ltd.
China Display Optoelectronics Technology
15.00% High-tech enterprise
(Huizhou) Co., Ltd.
Shenzhen Qianhai Maojia Software Technology
15.00% High-tech enterprise
Co., Ltd.
Qingdao Blue Business Consulting Co., Ltd. 15.00% High-tech enterprise
Tianjin Huanbo Science and Technology Co., Ltd. 15.00% High-tech enterprise
Tianjin Printronics Circuit Corporation 15.00% High-tech enterprise
Techigh Circuit Technology (Huizhou) Co., Ltd. 15.00% High-tech enterprise
Shenzhen TCL High-Tech Development Co., Ltd. 15.00% High-tech enterprise
TCL Financial Technology (Shenzhen) Co., Ltd. 15.00% High-tech enterprise
Corporate income tax is levied at a reduced rate of
Suzhou China Star Environmental Protection
15.00% 15% on eligible third-party enterprises, engaged in
Technology Co., Ltd. pollution prevention and control
A high-tech enterprise; an integrated circuit
materials enterprise exempt from corporate income
tax for the first two years starting from the tax year
in which the first production and operation income
Zhonghuan Advanced Bandaoti Technology Co., is obtained, and subject to a 50% reduction in
12.50% corporate income tax for the three years followin g
Ltd. such two years, namely being exempt fro m
corporate income tax between 2021 and 2022 and
subject to 50% reduction in corporate income tax
between 2023 and 2025; and an integrated circuit
enterprise
Tianjin Huan'Ou Bandaoti Material&Technology
15.00% High-tech enterprise
Co., Ltd.
Tianjin Zhonghuan Advanced
15.00% High-tech enterprise
Material&Technology Co., Ltd.
68
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
IV Taxes (continued)
5 Corporate income tax (continued)
Company Name Preferential tax rate Reason
Inner Mongolia Zhonghuan Solar Material Co.,
15.00% High-tech enterprise
Ltd.
Tianjin Huanzhi New Energy Technology Co.,
15.00% High-tech enterprise
Ltd.
Huansheng New Energy (Jiangsu) Co., Ltd. 15.00% High-tech enterprise
Xuzhou Jingrui Bandaoti Equipment Technology
15.00% High-tech enterprise
Co., Ltd.
Tianjin Huanou New Energy Technology Co.,
15.00% High-tech enterprise
Ltd
Huansheng New Energy (Tianjin) Co., Ltd. 15.00% High-tech enterprise
Wuxi Zhonghuan Applied Materials Co., Ltd. 15.00% High-tech enterprise
Inner Mongolia Zhonghuan Crystal Materials High-tech enterprise, and encouraged
15.00%
Co., Ltd. business in West China
Inner Mongolia Zhonghuan Advanced Bandaoti
15.00% High-tech enterprise
Material Co., Ltd.
Ningxia Zhonghuan Solar Material Co., Ltd. 15.00% Encouraged business in West China
Huhehaote Huanju New Energy Development
15.00% Encouraged business in West China
Co., Ltd.
Sonid Left Banner Huanxin New Energy Co.,
15.00% Encouraged business in West China
Ltd.
Otog Banner Huanju New Energy Co., Ltd. 15.00% Encouraged business in West China
Ongniud Banner Guangrun New Energy Co.,
15.00% Encouraged business in West China
Ltd.
Tuquan Guanghuan New Energy Co., Ltd. 15.00% Encouraged business in West China
Inner Mongolia New Huanyu Yangguang New
15.00% Encouraged business in West China
Energy Technology Co., Ltd.
Ningxia Zhonghuan New Energy Co., Ltd. 15.00% Encouraged business in West China
Ningxia Huanou New Energy Technology Co.,
15.00% Encouraged business in West China
Ltd.
Inner Mongolia TCL Photoelectric Technology
15.00% Encouraged business in West China
Co., Ltd.
Shaanxi Huanshuo Green New Energy Co., Ltd. 15.00% Encouraged business in West China
Tianjin Binhai New Area Huanju New Energy State-supported public infrastruc ture
Co., Ltd. Tax-exempt project
State-supported public infrastruc ture
Tianjin Zhonghuan New Energy Co., Ltd. Tax-exempt and 12.5%
project
State-supported public infrastruc ture
Tianjin Binhai Huanxu New Energy Co., Ltd. Tax-exempt project
State-supported public infrastruc ture
Hohhot Shuguang New Energy Co., Ltd. Tax-exempt project, and encouraged business in West
China
State-supported public infrastruc ture
Ningxia Huanneng New Energy Co., Ltd. Tax-exempt project, and encouraged business in West
China
State-supported public infrastruc ture
Dangxiong Youhao New Energy Development
7.50% project, and encouraged business in West
Co., Ltd.
China
State-supported public infrastruc ture
Shaanxi Runhuan Tianyu Technology Co., Ltd. 7.50% project, and encouraged business in West
China
69
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements
1 Monetary assets
June 30, 2024 January 1, 2024
Cash on hand 556 583
Bank deposits 17,650,332 19,807,150
Deposits with the central bank 398,920 397,191
Other monetary assets 1,537,692 1,719,347
19,587,500 21,924,271
Note Monetary assets with restricted use rights
June 30, 2024 January 1, 2024
TCL Tech Finance's statutory reserve deposits with
393,069 341,091
the central bank
Other restricted monetary assets 1,270,883 1,586,365
1,663,952 1,927,456
On June 30, 2024, the Company’s bank deposits of RMB393,069,000 (December 31, 2023:
RMB341,091,000) were statutory deposit reserves deposited with the Central Bank by TCL Technology
Group Finance Co., Ltd., a subsidiary of the Company.
On June 30, 2024, the Company’s monetary assets offshore amounted to RMB2,564,865,000 (December
31, 2023: RMB1,533,937,000), all of which were owned by the overseas subsidiaries of the Company.
70
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
June 30, 2024 January 1, 2024
Financial assets classified as those measured at fair value
25,226,582 23,184,117
through profit or loss
Including: Debt instrument investments 25,182,899 23,131,691
Equity instrument investments 43,683 52,426
25,226,582 23,184,117
3 Derivative financial assets
June 30, 2024 January 1, 2024
Foreign exchange forwards and foreign exchange swaps 155,087 73,645
Interest rate swaps - 34,363
155,087 108,008
4 Notes receivable
(1) Notes receivable by category
June 30, 2024 January 1, 2024
Bank acceptance notes 197,052 615,059
Trade acceptance notes 2,865 333
199,917 615,392
71
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(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
June 30, 2024 January 1, 2024
Gross amount Bad-debt Allowance Gross amount Bad-debt Allowance
Carrying Carrying
Ratio Accrual Ratio Accrual
Amount Amount amount Amount Amount amount
(%) percentage (%) percentage
Notes receivable for which
the allowance for doubtful
199,917 100% - - 199,917 615,392 100% - - 615,392
accounts were established on
the grouping basis
Including: low-risk portfolio 199,917 100% - - 199,917 615,392 100% - - 615,392
199,917 100% - - 199,917 615,392 100% - - 615,392
(3) As at June 30, 2024, notes receivable in pledge were RMB 22,933,000.
(4) As at June 30, 2024, endorsed or discounted notes receivable that were outstanding and derecognized amounted to
RMB 87,000,000 and endorsed or discounted notes receivable that were outstanding and not derecognized amounted
to RMB 13,020,000.
5 Accounts receivable
June 30, 2024 January 1, 2024
Accounts receivable 23,482,100 22,362,875
Less: allowance for doubtful accounts 365,665 359,224
23,116,435 22,003,651
72
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
Accounts receivable as at June 30, 2024 are classified as follows by how the doubtful debts were
(1) provisioned:
June 30, 2024
Gross amount Bad-debt Allowance
Lifetime
ECL rate Gross amount
Accounts receivable for which the
related allowances for doubtful accounts 201,379 87.10% 175,402
were established on the individual basis
Of which:
Accounts receivable 201,379 87.10% 175,402
Accounts receivable for which the
related allowances for doubtful accounts 23,280,721 0.82% 190,263
were established on the grouping basis
Of which:
Group 1: by aging analysis 16,946,902 0.44% 74,597
Group 2: by tariff 942,874 0.01% 71
Group 3: by photovoltaics 4,556,136 2.24% 102,031
Group 4: other silicon materials 834,809 1.62% 13,564
23,482,100 365,665
(2) The aging of accounts receivable is analysed as follows:
June 30, 2024 January 1, 2024
Amount Ratio (%) Amount Ratio (%)
Within 1 year 21,833,601 92.98% 21,061,059 94.18%
1 to 2 years 774,701 3.30% 489,084 2.19%
2 to 3 years 233,622 0.99% 193,256 0.86%
Over 3 years 640,176 2.73% 619,476 2.77%
23,482,100 100.00% 22,362,875 100.00%
73
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
(3) Allowances for doubtful accounts receivable are analysed as follows:
June 30, 2024
Beginning amount 359,224
New subsidiary -
Accrued in the period 60,275
Reversal of current period (51,686)
Write-off of current period (2,323)
Reduced subsidiary -
Exchange adjustment 175
Ending amount 365,665
(4) On June 30, 2024, the accounts receivable of the top five balances are as follows:
June 30, 2024 January 1, 2024
Total amount owed by the top five 10,308,494 10,129,405
Proportion of total accounts receivable 43.90% 45.30%
(5) Accounts receivable derecognized due to transfer
of financial assets
Methods of transfer of Amount derecognized for Gain or loss on
Item financial assets the period derecognition
Accounts Factoring without
3,636,232 (6,648)
receivable recourse
6 Receivables financing
June 30, 2024 January 1, 2024
Notes receivable financing 463,152 954,410
Receivable financing 155,810 -
618,962 954,410
Note As at June 30, 2024, endorsed or discounted receivables financing that were outstanding and derecognized
on the balance sheet date amounted to RMB 14,588,309,000.
As of June 30, 2024, the Company believes that receivables financing it held did not have significant credit
risks and will not cause significant losses due to default.
74
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
June 30, 2024 January 1, 2024
Within 1 year 2,543,100 2,798,957
1-2 years 87,239 138,561
2-3 years 40,480 7,423
Over 3 years 5,960 1,347
2,676,779 2,946,288
(2) As of June 30, 2024, the prepayments of the top five balances are as follows:
June 30, 2024 January 1, 2024
Total amount owed by the top five 1,341,544 1,790,548
As % of total prepayments 50.12% 60.77%
8 Other receivables
June 30, 2024 January 1, 2024
Dividends receivable 681,036 1,381,490
Other receivables 3,719,161 4,325,365
4,400,197 5,706,855
(1) Dividends receivable
June 30, 2024 January 1, 2024
Xinjiang Goens Energy Technology
698,082 1,398,344
Co., Ltd.
Tianjin Binhai Huanneng New Energy
- 192
Co., Ltd.
Less: allowance for doubtful accounts 17,046 17,046
681,036 1,381,490
75
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(1) Dividends receivable (continued)
(a) Presentation of provision for bad debts on dividends receivable by category
June 30, 2024 January 1, 2024
Gross amount Bad-debt Allowance Gross amount Bad-debt Allowance
Carrying Carrying
Category Ratio Accrual amount Ratio Accrual amount
Amount Amount Amount Amount
(%) percentage (%) percentage
Allowances for
bad debts
698,082 100% 17,046 2.44% 681,036 1,398,536 100% 17,046 1.22% 1,381,490
accrued on an
individual basis
698,082 100% 17,046 2.44% 681,036 1,398,536 100% 17,046 1.22% 1,381,490
(2) Other receivables
June 30, 2024 January 1, 2024
Other receivables 4,082,141 4,691,149
362,980 365,784
Less: allowance for doubtful accounts
3,719,161 4,325,365
(a) Nature of other receivables is analyzed as follows:
June 30, 2024 January 1, 2024
Subsidy receivables 1,662,166 2,342,535
Equity transfer receivables 573,469 618,752
Security and deposits 502,740 497,819
Others 980,786 866,259
3,719,161 4,325,365
76
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(2) Other receivables (continued)
(b) Presentation of provision for bad debts on other receivables by category
June 30, 2024 January 1, 2024
Gross amount Bad-debt Allowance Gross amount Bad-debt Allowance
Carrying Carrying
Category Ratio Accrual Accrual
Amount Amount amount Amount Ratio (%) Amount amount
(%) percentage percentage
Allowances for
bad debts
360,251 8.83% 289,184 80.27% 71,067 426,084 9.08% 293,600 68.91% 132,484
accrued on an
individual basis
Provisions for
bad debts
3,721,890 91.17% 73,796 1.98% 3,648,094 4,265,065 90.92% 72,184 1.69% 4,192,881
accrued on a
portfolio basis
4,082,141 100% 362,980 8.89% 3,719,161 4,691,149 100% 365,784 7.80% 4,325,365
(c) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL Lifetime ECL
12-month (credit not (credit
ECL impaired) impaired) Total
January 1, 2024 62,322 28,965 274,497 365,784
Current accrual 5,231 181 - 5,412
Increase of new
- - - -
subsidiaries
Reversal of current
(3,103) - (30) (3,133)
period
Write-off of current
- - (27) (27)
period
Decrease due to
disposal of - - (5,000) (5,000)
subsidiaries
Exchange adjustment (56) - - (56)
June 30, 2024 64,394 29,146 269,440 362,980
77
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(d) The aging of other receivables is analyzed as follows:
June 30, 2024 January 1, 2024
Carrying amount Ratio (%) Carrying amount Ratio (%)
Within 1 year 2,168,310 53.11% 3,192,635 68.05%
1 to 2 years 1,102,900 27.02% 785,690 16.75%
2 to 3 years 386,450 9.47% 371,464 7.92%
Over 3 years 424,481 10.40% 341,360 7.28%
4,082,141 100.00% 4,691,149 100.00%
(e) As of June 30, 2024, the other receivables of the top five balances are as follows:
June 30, 2024 January 1, 2024
Total amount owed by the top five 2,204,659 3,006,544
As % of total other receivables 54.01% 64.09%
(f) On June 30, 2024, 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.
78
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventories are classified as follows:
June 30, 2024 January 1, 2024
Provision
for
Provision for
depreciation
depreciation of
of
inventories /
inventories / Carrying
Carrying provision for Carrying Carrying
provision amount
balance impairment of amount balance
for
contract
impairment
performance
of contract
costs
performance
costs
Raw 5,569,025 584,753 4,984,272 6,605,273 636,587 5,968,686
materials
Work in 3,411,368 763,962 2,647,406 3,656,706 659,073 2,997,633
progress
Finished 13,763,489 1,629,919 12,133,570 10,640,524 1,536,291 9,104,233
Goods
Turnover 418,056 1,377 416,679 412,583 1,380 411,203
materials
23,161,938 2,980,011 20,181,927 21,315,086 2,833,331 18,481,755
As of June 30, 2024, the Company had no inventory for liabilities guarantee.
(2) Provision for depreciation of inventories / provision for impairment of contract performance costs:
Amount of increase in the
current period Amount of decrease in the current period
January 1, Reversal
Accrued in Write-off of June 30, 2024
2024 Others of current Others
the period current period
period
Raw
636,587 223,068 - (56,533) (218,497) 128 584,753
materials
Work in
659,073 753,666 - (82,360) (566,419) 2 763,962
progress
Finished
1,536,291 1,427,415 - (267,082) (1,066,905) 200 1,629,919
Goods
Turnover
1,380 2 - (5) - - 1,377
materials
2,833,331 2,404,151 - (405,980) (1,851,821) 330 2,980,011
79
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
June 30, 2024 January 1, 2024
Carrying Impairment Carrying Carrying Impairment Carrying
balance allowance amount balance allowance amount
Electricity charges 394,432 22,858 371,574 362,058 18,151 343,907
receivable
(2) Valuation allowances for contract assets are analyzed as follows:
Current Current Other increases
January 1, 2024 Accrual Reversal or write-off and decreases June 30, 2024
Electricity
18,151 4,707 - - 22,858
charges
11 Non-current assets due within one year
June 30, 2024 January 1, 2024
Other non-current assets due within one year 470,114 461,179
Debt investments due within one year 128,969 119,516
599,083 580,695
12 Other current assets
June 30, 2024 January 1, 2024
VAT to be deducted, to be certified, etc. 5,412,552 4,244,948
Loans and advances to customers 705,389 845,764
Others (note) 1,429,681 195,822
7,547,622 5,286,534
Note: Others mainly include fixed income large-amount certificates of deposit that are subsequently measured
at amortized cost.
80
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
13 Debt Investments
June 30, 2024 January 1, 2024
Treasury bonds and corporate bonds 144,853 122,349
14 Long-term receivables
June 30, 2024 January 1, 2024
Discount
Gross Bad-debt Carrying Gross Bad-debt Carrying rate
amount Allowance amount amount Allowance amount
Finance lease 698,831 - 698,831 720,281 - 720,281
Including:
Unrealized
(488,379) - (488,379) (518,000) - (518,000)
financing 8.115%
income
698,831 - 698,831 720,281 - 720,281
15 Long-term equity investments
June 30, 2024 January 1, 2024
Gross Impairment Carrying Impairment Carrying
Gross amount
amount allowance amount allowance amount
Associates (1) 25,864,741 1,452,985 24,411,756 26,404,102 1,452,985 24,951,117
Joint ventures (2) 545,987 49,503 496,484 529,657 49,503 480,154
26,410,728 1,502,488 24,908,240 26,933,759 1,502,488 25,431,271
As of June 30, 2024, the Company made impairment allowances for long-term equity investments in investees with poor management
and insolvent assets.
81
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(1) Associates
Increase or decrease in current period
Investment
Increase/ Other
gains and Declared Other
decrease in comprehen Other Accrued
losses Cash increases
Name of investee January 1, 2024 investment sive equity Impairment June 30, 2024
recognized dividends or and
in current income changes allowance
by equity profit decreases
period adjustment
method
China Innovative Capital Management
970,300 - (66,750) - - - - - 903,550
Limited
LG Electronics (Huizhou) Co., Ltd. 89,810 - 6,241 - - (13,400) - - 82,651
Shenzhen Jucai Supply Chain
19,642 - 2,881 1 797 - - - 23,321
Technology Co., Ltd.
Shenzhen Tixiang Business Management
1,375 - (285) - - - - - 1,090
Technology Co., Ltd.
TCL Air Conditioner (Wuhan) Co., Ltd. 40,982 - (9,007) - - - - - 31,975
TCL Finance (Hong Kong) Co., Limited 111,096 - (20,243) - - - - - 90,853
Urumqi TCL Equity Investment
1,087 - (30) - - - - - 1,057
Management Co., Ltd.
Hubei Changjiang Hezhi Equity
Investment Fund Partnership (Limited 1,159,319 (219,966) (32,314) - - - - - 907,039
Partnership)
Ningbo Dongpeng Weichuang Equity
Investment Partnership (Limited 425,471 (3,474) (4,359) 2 - - (1,856) - - 415,784
Partnership)
Deqing Puhua Equity Investment Fund
149,118 - (28,581) - - - - - 120,537
Partnership (Limited Partnership)
82
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Other Declared
Increase/
gains and comprehe Cash
decrease in
losses nsive Other equity dividends or Provision for Other increases
Name of investee January 1, 2024 investment
recognized income changes profit impairment and decreases June 30, 2024
in current
by equity adjustme distribution
period
method nt declared
Ningbo Dongpeng Heli Equity Investment
274,943 (1,499) (36,716) - - - - 1 236,729
Partnership (Limited Partnership)
Wuxi TCL Aisikai Bandaoti Industry
Investment Fund Partnership (Limited 278,753 (28,606) (7,924) - - - - - 242,223
Partnership)
Wuxi TCL Venture Capital Partnership (Limited
36,842 - 99 9 - - - - 36,950
Partnership)
Ningbo Meishan Bonded Port Qiyu Investment
32,183 - (8,216) - - - - - 23,967
Management Partnership (Limited Partnership)
Shanghai Gen Auspicious Venture Capital
15,766 - (4,187) 74 - (3,426) - - 8,227
Partnership (Limited Partnership)
Nanjing Zijin A Dynamic Investment
20,862 (8,851) 615 1 - - - - 12,627
Partnership (Limited Partnership)
Huizhou Kaichuang Venture Investment
8,903 - 2 - - - - - 8,905
Partnership (Limited Partnership)
Beijing A Dynamic Venture Capital Center
4,138 - 38 - - - - - 4,176
(Limited Partnership)
Yixing Jiangnan Tianyuan Venture Capital
4,212 (273) (694) 1 - - - - 3,246
Company (Limited Partnership)
Shenzhen Chuangdong New Industry
Investment Fund Enterprise (Limited 2,335 - - - - - - - 2,335
Partnership)
Hubei Changjiang Hezhi Equity Investment
10,127 - (232) - - - - 9,895
Fund Management Co., Ltd.
Huizhou Kaimeng Angel Investment
2,490 - (14) - - - - - 2,476
Partnership (Limited Partnership)
Ningbo Jiutian Matrix Investment Management
9,852 - 2,636 - - (4,094) - - 8,394
Co., Ltd.
Urumqi Qixinda Equity Investment Management
5,375 - (247) - - - - - 5,128
Co., Ltd.
83
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Declared
Increase/ Other
gains and Cash Other
decrease in comprehen Other Accrued
losses dividends or increases
Name of investee January 1, 2024 investment sive equity Impairment June 30, 2024
recognized profit and
in current income changes allowance
by equity distribution decreases
period adjustment
method declared
Urumqi TCL Create Dynamic Equity
758 - (1) - - - - - 757
Investment Management Co., Ltd.
Beijing A Dynamic Investment Consulting
463 - - - - - - - 463
Co., Ltd.
Shanghai Gen Auspicious Investment
735 - 272 - - - - - 1,007
Management Co., Ltd.
Nanjing A Dynamic Equity Investment
277 - - - - - - - 277
Fund Management Co., Ltd.
Wuxi TCL Medical Imaging Technology
18,005 - (1,510) - - - - 23 16,518
Co., Ltd.
Aijiexu New Electronic Display Glass
857,073 - 43,989 - (15,935) - - - 885,127
(Shenzhen) Co., Ltd.
Getech Ltd. 82,095 - (23,889) (8) - - - - 58,198
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information
870,274 - (83,343) - - - - - 786,931
Technology Industry Equity Investment
Fund Partnership (Limited Partnership)
Guangdong Utrust Emerging Industry
Equity Investment Fund Partnership 180,833 - (8,780) - - - - - 172,053
(Limited Partnership)
84
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment Declared
Increase/ Other
gains and Cash Other
decrease in comprehen Other Accrued
losses dividends or increases
Name of investee January 1, 2024 investment sive equity Impairment June 30, 2024
recognized profit and
in current income changes allowance
by equity distribution decreases
period adjustment
method declared
Shenzhen Xinhuoyicheng Recreational and
1,276 - (8) - - - - - 1,268
Sports Industry Co., Ltd.
Sichuan Shengtian New Energy
531,804 - 16,913 - - (5,905) - - 542,812
Development Co., Ltd.
SunPower Systems International Limited 30,206 - - - - - - - 30,206
Zhonghuan Aineng (Beijing) Technology
2,493 - (396) - - - - - 2,097
Co., Ltd.
Inner Mongolia Zhongjing Science and
136,325 - (829) - - - - - 135,496
Technology Research Institute Co., Ltd.
Hunan Guoxin Bandaoti Technology Co.,
9,889 - 27 - - - - - 9,916
Ltd.
Maxeon Solar Technologies, Ltd. 622,768 29,430 (241,053) - - - - - 411,145
Tianjin Zhonghuan Haihe Intelligent
Manufacturing Fund Partnership (Limited 727,700 14,970 (10,180) - - (2,705) - - 729,785
Partnership)
Zhonghuan Feilang (Tianjin) Technology
4,267 - 695 - - - - - 4,962
Co., Ltd.
Ningbo Zhongxin Venture Capital
142,311 - (1,260) - - - - - 141,051
Partnership (Limited Partnership)
85
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investment
Increase/ Declared
gains and Other
decrease in Other Cash dividends Accrued
losses comprehensi Other increases
Name of investee January 1, 2024 investment equity or profit Impairment June 30, 2024
recognized ve income and decreases
in current changes distribution allowance
by equity adjustment
period declared
method
TCL Huanxin Bandaoti (Tianjin) Co., Ltd. 431,134 - (28,565) - - - - - 402,569
Inner Mongolia Shengou
1,487 - - - - - - - 1,487
Electromechanical Engineering Co., Ltd.
Inner Mongolia Huanye Material Co., Ltd. 7,222 - - - - - - - 7,222
Shenzhen Shutuo Technology Co., Ltd. 39,247 - (294) - - - - - 38,953
Shenzhen Qianhai Sailing International
28,137 - (3,282) 30 - - - - 24,885
Supply Chain Management Co., Ltd.
Wuhan Guochuangke Optoelectronic
49,901 - (1,818) - - - - - 48,083
Equipment Co., Ltd.
Zhihui Xinyuan Commercial (Huizhou)
10,391 (5,500) (601) - - - - - 4,290
Co., Ltd.
Purplevine Holdings Limited 10,395 - 2,504 - 1,752 - - 72 14,723
Inner Mongolia Xinhua Bandaoti
549,139 40,000 (1,938) - 543 - - - 587,744
Technology Co., Ltd.
Inner Mongolia Xinhuan Silicon Energy
1,745,617 - (195,180) - (59) - - - 1,550,378
Technology Co., Ltd.
Shanghai Feilihua Shichuang Technology
49,792 - 115 - 94 (531) - - 49,470
Co., Ltd.
Jiangsu Jixin Bandaoti Silicon Material
12,415 - (234) - - - - - 12,181
Research Institute Co., Ltd.
Xi’an Simovi New Material Co., Ltd. 30,873 - 1,033 20 - - - - 31,926
Guangdong TCL New Technology Co.,
1,767 - - - - - - - 1,767
Ltd.
Hubei Consumer Finance Co., Ltd. 179,409 - 8,192 - - - - - 187,601
Tianjin Qiyier Communication &
183,483 (19,979) 4,726 - 46 (1,390) - (21,442) 145,444
Broadcasting Co., Ltd.
Others 13,726,174 - 696,932 143,264 (311) (376,230) - - 14,189,829
24,951,116 (203,748) (35,050) 143,394 (13,073) (409,537) - (21,346) 24,411,756
86
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(2) Joint ventures
Increase or decrease in current period
Increase/ Declared
Other
decrease in Investment gains and Cash dividends Accrued Other
comprehens Other equity
Name of investee January 1, 2024 investment losses recognized by or profit Impairment increases and June 30, 2024
ive income changes
in current equity method distribution allowance decreases
adjustment
period declared
Zhangjiakou Qixin Equity Investment
51,686 - (9) - - - - - 51,677
Fund Partnership
Tianjin Huanyan Technology Co., Ltd. 139,983 - (79) - - - - - 139,904
TCL Huizhou City, Kai Enterprise
1,359 - (15) - - - - - 1,344
Management Limited
Huizhou TCL Human Resources
8,930 - 3,445 - 228 - - - 12,603
Service Co., Ltd.
TCL Microchip Technology
278,196 30,000 (17,581) - 341 - - - 290,956
(Guangdong) Co., Ltd.
480,154 30,000 (14,239) - 569 - - - 496,484
87
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
15 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
Decrease in
Increase in current Other
January 1, 2024 current June 30, 2024 Note
period changes
period
Pride Telecom Limited 1,414 - - - 1,414 Note 1
Huaxia CPV (Inner Mongolia)
49,503 - - - 49,503 Note 1
Power Co., Ltd.
JOLED Incorporation 438,148 - - - 438,148 Note 2
Maxeon Solar Technologies, Ltd. 1,013,423 - - - 1,013,423 Note 1
1,502,488 - - - 1,502,488
Note Provisions for impairment were accrued for the long-term equity investments in these investees at recoverable amounts
1 because continuous operations loss occurred to these investees with poor management.
Note This company has made an application to the Tokyo District Court for initiating a bankruptcy reorganization procedure
2 named "civil regeneration", and the Company has fully accrued provisions for impairment of long-term equity
investments at their carrying amount.
88
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
16 Investments in other equity instruments
June 30, 2024 January 1, 2024
Stocks 16,002 17,127
Equity of unlisted companies 371,253 369,521
387,255 386,648
Amount of other Reasons designated as measured
Recognized
Accumulated Accumulated comprehensive at fair value and whose changes
Item name Dividend
Profits losses income transferred are included in other
income
to retained earnings comprehensive income
Being held long term for
- 3,055 (195,424) -
Stocks strategic purposes
Equity of
unlisted 11,489 10,303 (24,361) - Being held long term for
companies strategic purposes
Total 11,489 13,358 (219,785) -
17 Other non-current financial assets
June 30, 2024 January 1, 2024
Equity investments 3,392,106 2,770,251
Debt investments 603,630 201,315
3,995,736 2,971,566
89
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
18 Investment property
Houses and
Land use rights Total
buildings
Gross amount:
January 1, 2024 1,121,480 219,676 1,341,156
6,162 6,162
Increase -
Reclassified from fixed assets
6,162 6,162
and intangible assets -
(90,516) (90,516)
Decreases -
Reclassified to fixed assets and
(84,683) (84,683)
intangible assets -
(5,833) (5,833)
Other decreases -
June 30, 2024 1,037,126 219,676 1,256,802
Accumulated depreciation and
amortization:
January 1, 2024 316,833 44,753 361,586
Increase 24,963 2,361 27,324
Accrued in the period 18,870 2,361 21,231
Reclassified from fixed assets
6,093 6,093
and intangible assets -
Decreases (13,396) - (13,396)
Reclassified to fixed assets and
(9,201) (9,201)
intangible assets -
(4,195) (4,195)
Other decreases -
June 30, 2024 328,400 47,114 375,514
Investment property, net:
June 30, 2024 708,726 172,562 881,288
January 1, 2024 804,647 174,923 979,570
Impairment allowance:
January 1, 2024 67,891 - 67,891
Increase 17 - 17
Increase in current period 17 - 17
Decreases - - -
Decrease in current period - - -
June 30, 2024 67,908 - 67,908
Investment property, net:
June 30, 2024 640,818 172,562 813,380
January 1, 2024 736,756 174,923 911,679
90
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
19 Fixed assets
Houses Office and
Machinery Transportation Power
and electronic Others Total
equipment equipment stations
buildings equipment
Gross amount:
December 31, 2023 54,954,646 228,210,600 3,256,808 306,667 2,345,600 27,937 289,102,258
Increase 1,304,274 5,184,851 116,584 10,278 18,405 1,388,841 8,023,233
Acquisition and other 66,429 645,435 44,051 7,449 - 1,335,646 2,099,010
Reclassified from
84,683 - - - - - 84,683
investment property
Reclassified from
1,153,162 4,539,416 72,533 2,829 18,405 53,195 5,839,540
construction in progress
Decreases (107,000) (1,149,108) (35,688) (3,275) (120,885) (163) (1,416,119)
Written down with
- (152,012) (323) - - - (152,335)
public grants
Reclassified to (6,162) - - - - - (6,162)
investment property
Decrease due to
- - - - (120,885) - (120,885)
disposal of subsidiaries
(100,838) (997,096) (35,365) (3,275) - (163) (1,136,737)
Other decreases
Exchange adjustment (1,855) 1,988 (808) (75) - (524) (1,274)
56,150,065 232,248,331 3,336,896 313,595 2,243,120 1,416,091 295,708,098
June 30, 2024
Accumulated
depreciation:
December 31, 2023 9,665,532 98,642,863 1,967,994 203,385 579,566 15,179 111,074,519
Increase 971,047 11,645,613 167,813 24,019 41,085 278,866 13,128,443
Accrual 961,804 11,267,724 167,793 24,019 41,085 40,910 12,503,335
Reclassified from
9,201 - - - - - 9,201
investment property
Other increases 42 377,889 20 - - 237,956 615,907
Decreases (7,324) (370,542) (24,478) (2,056) (2,469) (22) (406,891)
Reclassified to - - (6,093)
(6,093) - - -
investment property
Decrease due to
- - - - (2,469) - (2,469)
disposal of subsidiaries
Other decreases (1,231) (370,542) (24,478) (2,056) - (22) (398,329)
Exchange adjustment (813) 407 (413) (106) - (280) (1,205)
June 30, 2024 10,628,442 109,918,341 2,110,916 225,242 618,182 293,743 123,794,866
Fixed assets, net:
June 30, 2024 45,521,623 122,329,990 1,225,980 88,353 1,624,938 1,122,348 171,913,232
January 1, 2024 45,289,114 129,567,737 1,288,814 103,282 1,766,034 12,758 178,027,739
91
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
19 Fixed assets (continued)
Office and
Houses and Machinery Transportation Power
electronic Others Total
buildings equipment equipment stations
equipment
Impairment allowance:
January 1, 2024 746,611 760,715 35,210 111 62,059 412 1,605,118
Accrued in the period - 56,770 - - - - 56,770
Write-off of current
- (9,208) (6,402) - - (412) (16,022)
period
Other transfers out (17) - - - - - (17)
June 30, 2024 746,594 808,277 28,808 111 62,059 - 1,645,849
Fixed assets, carrying
amount:
June 30, 2024 44,775,029 121,521,713 1,197,172 88,242 1,562,879 1,122,348 170,267,383
January 1, 2024 44,542,503 128,807,022 1,253,604 103,171 1,703,975 12,346 176,422,621
Please refer to Item 81 of Note V for information on fixed asset pledge.
Fixed assets with pending ownership certificates at the end of the current period:
Reasons for pending ownership
Carrying amount
certificates:
Houses and buildings (Note) 18,671,434 In process
Note As at June 30, 2024, the fixed assets with pending ownership certificates of the Company were mainly the buildings and
constructions of CSOT’s t3, t5 and t9 manufacturing bases, as well as the buildings and constructions of Inner Mongolia
Zhonghuan Crystal Material Co., Ltd., Ningxia Huanou New Energy Technology Co., Ltd. and Tianjin Huanhai Industrial
Park Co., Ltd.
20 Construction in progress
(1) Schedule of construction in progress
June 30, 2024 January 1, 2024
Construction in progress 20,139,823 17,013,179
Less: Impairment allowance 13,127 13,127
20,126,696 17,000,052
92
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
20 Construction in progress (continued)
(2) Changes to construction in progress
Including: Interest
Accumulated capitalized capitalizat
investment in the
Transfer-in in Cumulative interest in ion rate for
project
Increase in current period Other June 30, Project capitalized current current
Project name Budget January 1, 2024 current period Fixed assets movements 2024 as % of budget progress interest period period Funding source
Proprietary funds,
t9 production line of LCD Under
31,500,000 363,638 939,842 (87,385) (4,507) 1,211,588 78% 300,733 26,239 3.2% proceeds from share
panel construction
offering and loans
Large-diameter Bandaoti
Under Self-funded and
silicon wafers for 5,410,520 2,987,964 476,378 (187,226) (40,005) 3,237,111 88% 23,979 3,352 3.4%
integrated circuit construction financed funds
50GW (G12) solar-grade
monocrystalline silicon Under Self-funded and
10,979,740 925,986 394,081 (714,097) (243,606) 362,364 98% 150,163 - 2.3%
material smart factory construction financed funds
project
Smart factory with an
annual output of 35GW Under Self-funded and
3,650,050 992,614 528,424 (996,695) - 524,343 50% 20,615 16,745 2.9%
high-purity solar ultra-thin construction financed funds
monocrystalline silicon
Production line of 8-12-
inch Bandaoti silicon Under Self-funded and
5,707,172 1,259,475 118,900 (426,505) (47,139) 904,731 83% 5,895 569 3.4%
wafers for integrated construction financed funds
circuit
Bandaoti silicon wafers for Under Self-funded and
10,500,000 1,183,319 703,895 (324,236) (28,741) 1,534,237 69% 385,773 - 6.2%
integrated circuit construction financed funds
Not Not Not
Others 9,287,056 6,449,396 (3,103,396) (280,734) 12,352,322
Not applicable Not applicable Not applicable applicable applicable applicable Not applicable
17,000,052 9,610,916 (5,839,540) (644,732) 20,126,696
93
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
21 Right-of-use assets
Houses and Transportation Machinery
Land use rights Total
buildings equipment equipment
Gross amount:
January 1, 2024 5,963,784 1,895 1,196,371 122,767 7,284,817
Increase 81,990 - - 124,560 206,550
Leased in 69,517 - - 45,514 115,031
Other increases 12,473 - - 79,046 91,519
Decreases (222,668) (758) (323,183) - (546,609)
Reduction due to
(7,193) - - - (7,193)
contract revision
Other decreases (215,475) (758) (323,183) - (539,416)
Exchange adjustment (15,824) (29) - - (15,853)
June 30, 2024 5,807,282 1,108 873,188 247,327 6,928,905
Accumulated depreciation:
January 1, 2024 574,227 1,244 298,732 24,168 898,371
Increase 171,632 144 56,044 10,261 238,081
Accrual 171,632 144 56,044 10,261 238,081
Decreases (148,476) (758) (119,609) - (268,843)
Other decreases (148,476) (758) (119,609) - (268,843)
Exchange adjustment (2,724) (12) - - (2,736)
June 30, 2024 594,659 618 235,167 34,429 864,873
Right-of-use assets,
carrying amount:
June 30, 2024 5,212,623 490 638,021 212,898 6,064,032
January 1, 2024 5,389,557 651 897,639 98,599 6,386,446
Impairment allowance:
January 1, 2024 - - - - -
June 30, 2024 - - - - -
Right-of-use assets,
carrying amount
June 30, 2024 5,212,623 490 638,021 212,898 6,064,032
January 1, 2024 5,389,557 651 897,639 98,599 6,386,446
94
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
22 Intangible assets
Non-patent
Land use
technologies Others Total
rights
/patents
Gross amount:
January 1, 2024 9,385,883 13,812,555 2,931,992 26,130,430
Increase 18,540 844,995 116,934 980,469
New subsidiary - - - -
Purchase 18,540 51,989 113,683 184,212
Reclassified from investment
- - - -
property
Reclassified from development costs - 793,006 - 793,006
Others - - 3,251 3,251
Decreases - (79,280) (4,715) (83,995)
Sale and disposal - - (3,902) (3,902)
Other decreases - (79,280) (813) (80,093)
Exchange adjustment - 435 (389) 46
June 30, 2024 9,404,423 14,578,705 3,043,822 27,026,950
Accumulated amortization:
January 1, 2024 1,279,847 5,049,816 1,232,516 7,562,179
Increase 127,823 754,749 159,874 1,042,446
Accrual 127,823 754,749 159,874 1,042,446
New subsidiary - - - -
Decreases (1,292) (47,544) (374) (49,210)
Sale and disposal (1,292) (374) (1,666)
Other decreases - (47,544) - (47,544)
Exchange adjustment - 207 (201) 6
June 30, 2024 1,406,378 5,757,228 1,391,815 8,555,421
Intangible assets, net：
June 30, 2024 7,998,045 8,821,477 1,652,007 18,471,529
January 1, 2024 8,106,036 8,762,739 1,699,476 18,568,251
Impairment allowance:
January 1, 2024 23,562 113,997 11,148 148,707
Accrual - - - -
Exchange adjustment - 221 - 221
June 30, 2024 23,562 114,218 11,148 148,928
Intangible assets, carrying amount:
June 30, 2024 7,974,483 8,707,259 1,640,859 18,322,601
January 1, 2024 8,082,474 8,648,742 1,688,328 18,419,544
Please refer to Item 81 of Note V for information on collateralized intangible assets.
95
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
23 Development costs
Development expenditures are presented as follows:
June 30, 2024 January 1, 2024
LCD panel projects 1,372,049 1,455,110
New energy photovoltaics and other silicon materials 808,839 1,086,383
2,180,888 2,541,493
24 Goodwill
(1) Gross amount of goodwill
Decrease in
Name of investee or January 1, Increase in June 30,
current
item incurring goodwill 2024 current period 2024
period
TCL Medical Radiological Technology
28,967 - - 28,967
(Beijing) Co., Ltd. Note 1
Qingdao Blue Business Consulting Co.,
2,452 - - 2,452
Ltd. Note 2
Tianjin Huan'Ou Bandaoti
Note 3 214,683 - - 214,683
Material&Technology Co., Ltd.
Tianjin Zhonghuan Electronic
6,726,130 - - 6,726,130
Information Group Co., Ltd. Note 4
Moka International Limited Note 5 1,728,973 - - 1,728,973
Suzhou China Star Optoelectronics
486,603 - - 486,603
Technology Co., Ltd. Note 6
Huizhou Kedate Smart Display
3,011 - - 3,011
Technology Co., Ltd. Note 7
Suzhou China Star Environmental
43,408 - - 43,408
Protection Technology Co., Ltd. Note 8
Xinxin Bandaoti Technology Co., Ltd. Note 9 1,180,005 - - 1,180,005
Techigh Circuit Technology (Huizhou)
131,477 - - 131,477
Co., Ltd. Note 10
10,545,709 - - 10,545,709
(2) Goodwill impairment allowance
Increase in Decrease
current in current
Name of investee January 1, 2024 period period June 30, 2024
TCL Medical Radiological
28,967 - - 28,967
Technology (Beijing) Co., Ltd.
96
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
24 Goodwill (continued)
Note 1 In 2010, the Company acquired a 51.82% interest in TCL Medical Radiological Technology (Beijing) Co., Ltd.
(hereinafter referred to as "TCL Medical Radiological Technology") with capital of RMB 52,319,000. Thus, the
difference between the accumulated investment of the Company in TCL Medical Radiological Technology
(corresponding to 51.82% equity) and the fair value of the net identifiable assets of TCL Medical Radiologica l
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.
Note 2 In October 2016, Highly Information Industry Co., Ltd., a subsidiary of the Company, acquired 60% interest in
Qingdao Blue Business Consulting Co., Ltd. (hereinafter referred to as "Blue Business Consulting") with
consideration of RMB 10,000,000. Thus, the difference between the accumulated investment of Highly
Information Industry Co., Ltd. in Blue Business Consulting (corresponding to a 60% interest) and the fair value
of the net identifiable assets of Blue Business Consulting attributable to Highly Information Industry Co., Ltd. on
the settlement date (equivalent to RMB 2,452,000) was recorded in this item.
Note 3 Tianjin Huan’Ou Bandaoti Material&Technology Co., Ltd. is a subsidiary of TCL Technology Group (Tianjin)
Co., Ltd., which the Company has acquired in a business combination not involving entities under common
control.
Note 4 The Company completed its acquisition of 100% stake in TCL Technology Group (Tianjin) Co., Ltd. (former
name: Tianjin Zhonghuan Electronic Information Group Co., Ltd.) on October 1, 2020 with a cash consideration
of RMB 12,500,000,000. At the date of acquisition, the Group obtained the effective control of TCL Technology
Group (Tianjin) Co., Ltd., and included such company into the consolidated financial statements. On the date of
transaction, the difference between the accumulated investment of the Company in TCL Technology Group
(Tianjin) Co., Ltd. (corresponding to the 100% equity) and the fair value of the net identifiable assets of TCL
Technology Group (Tianjin) Co., Ltd. attributable to the Company on the settlement date (equal to RMB
6,726,130,000) was recorded in this item. The goodwill mainly consists of 2 asset groups: the new energy
photovoltaic and other silicon materials and the Tianjin Printronics Circuit Corp.
Note 5 In April 2021, the Company acquired 100% interest in Moka International Limited with a cash consideration of
RMB 2,800,000,000. Thus, the difference between the accumulated investment of the Company in Moka
International Limited (corresponding to the 100% equity) and the fair value of the net identifiable assets of Moka
International Limited attributable to the Company on the settlement date (equal to RMB 1,728,973,000) was
recorded in this item.
Note 6 In April 2021, the Company acquired 60% interest in Suzhou China Star Optoelectronics Technology Co., Ltd.
(formerly known as "Samsung Suzhou LCD Co. Ltd.") with a cash consideration of RMB 4,757,727,000. The
difference between the accumulated investment of the Company in Suzhou China Star Optoelectronics
Technology Co., Ltd. (corresponding to the total 70% equity) and the fair value of the identifiable net assets o f
Suzhou China Star Optoelectronics Technology Co., Ltd. attributable to the Company on the settlement date
(equivalent to RMB 486,603,000) was recorded in this item.
Note 7 In August 2022, the Company acquired in 100% interest in Huizhou Kedate Smart Display Technology Co., Ltd.
with a cash consideration of RMB 51,000,000. As such, the difference between the investment of the Company in
Huizhou Kedate Smart Display Technology Co., Ltd. (corresponding to the 100% equity) and the fair value of the
net identifiable assets of Huizhou Kedate Smart Display Technology Co., Ltd. attributable to the Company on the
settlement date (equal to RMB 3,011,000) was recorded in this item.
Note 8 Suzhou China Star Optoelectronics Technology Co., Ltd., a subsidiary of the Company, completed the acquisition
of 100% equity of Suzhou China Star Environmental Protection Technology Co., Ltd. in May 2023 at a cash
consideration of RMB 344,942,000. As at the date of this transaction, the difference (RMB 43,408,000) between
the investment amount i.e. the 100% equity of Suzhou China Star Environmental Protection Technology Co., Ltd.
held by Suzhou China Star Optoelectronics Technology Co., Ltd. and the fair value of the identifiable net assets
of the equity was recorded in this item.
97
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
24 Goodwill (continued)
Note 9 Zhonghuan Advanced Bandaoti Technology Co., Ltd., formerly Zhonghuan Advanced Bandaoti Material
Co., Ltd., a subsidiary of the Company, completed the acquisition of 100% equity of Xinxin Bandaoti
Technology Co., Ltd. in February, 2023 at a consideration of RMB 7,399,683,000 by issuing equity
securities. As at the date of this transaction, the difference (RMB 1,180,005,000) between the investment
amount i.e. the 100% equity of Xinxin Bandaoti Technology Co., Ltd. held by Zhonghuan Advanced
Bandaoti Technology Co., Ltd. and the fair value of the identifiable net assets of the equity was recorded in
this item.
Note 10 Tianjin Printronics Circuit Corporation, a subsidiary of the Company, completed the acquisition of the equity
of and increased investment in Techigh Circuit Technology (Huizhou) Co., Ltd. in October 2023 at a
consideration of RMB 423,103,000 in cash. As at the date of this transaction, the difference (RMB
131,477,000) between the investment amount i.e. the 51% equity of Techigh Circuit Technology (Huizhou)
Co., Ltd. held by the Company and the fair value of the identifiable net assets of the equity are recognized
in this item.
(3) Goodwill impairment test
As at June 30, 2024, the asset group of Blue Business Consulting business, asset group of new energy
photovoltaic and other silicon material, asset group of Moka International Limited, asset group of Huizhou
Kedate Smart Display Technology Co., Ltd., asset group of Suzhou China Star Optoelectronics Technology
Co., Ltd., asset group of Suzhou China Star Environmental Protection Technology Co., Ltd., asset group of
Xinxin Bandaoti Technology Co., Ltd., asset group of Techigh Circuit Technology (Huizhou) Co., Ltd., and
asset group of Tianjin Printronics, including goodwill, showed no indication of impairment, and no provision
for impairment is required to be accrued for the goodwill of the above asset groups.
25 Long-term deferred expenses
Increase in Amortization
January 1, 2024 Others June 30, 2024
current period in the period
Improvement expense
1,601,156 193,047 (57,384) (1,130,946) 605,873
on leased fixed assets
Others 1,801,533 1,193,791 (1,245,980) (4) 1,749,340
3,402,689 1,386,838 (1,303,364) (1,130,950) 2,355,213
98
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
26 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
June 30, 2024 January 1, 2024
Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deductible losses 24,711,789 3,868,404 24,627,580 4,048,128
Asset impairment
2,565,037 436,831 3,817,375 629,482
allowances
Provisions 1,480,256 210,306 831,604 130,466
Changes in fair value 47,453 8,023 143,302 22,170
Lease liabilities 4,096,180 458,525 4,309,382 486,276
Others 5,683,441 903,158 2,423,324 469,382
38,584,156 5,885,247 36,152,567 5,785,904
(2) Un-offset deferred income tax liabilities
June 30, 2024 January 1, 2024
Taxable Taxable Deferred
Deferred tax
temporary temporary income tax
liabilities
differences differences liabilities
Depreciation of fixed
23,419,943 3,611,138 23,433,110 3,778,803
assets
Increase in value of
assets as assessed in
business combination 2,751,254 514,233 2,841,620 529,769
not involving entities
under common control
Changes in fair value 224,117 50,592 301,793 70,908
Right-of-use assets 4,239,013 540,656 4,083,249 472,463
Others 317,393 53,618 522,095 115,226
30,951,720 4,770,237 31,181,867 4,967,169
99
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
26 Deferred income tax assets and deferred income tax liabilities (continued)
(3) There were no deferred income tax assets or liabilities presented on a net basis after offsetting
Amount subject to mutual
Closing balance of deferred
offset of deferred income
Item income tax assets or liabilities
tax assets against liabilities
after offset
at the end of the period
Deferred income tax assets (3,512,797) 2,372,450
Deferred income tax liabilities (3,512,797) 1,257,440
Amount subject to mutual Opening balance of deferred
offset of deferred income income tax assets or liabilities
Item tax assets against liabilities after offset
at the beginning of the
period
Deferred income tax assets (3,539,682) 2,246,222
Deferred income tax liabilities (3,539,682) 1,427,487
(4) Unrecognized deferred income tax assets
June 30, 2024 January 1, 2024
Deductible temporary difference 3,652,888 1,712,962
Deductible losses 21,240,310 13,284,658
24,893,198 14,997,620
(5) Deductible losses in respect of unrecognized deferred income tax assets will expire in the following years:
June 30, 2024 January 1, 2024
2023 - 581
2024 158,859 129,992
2025 334,292 286,860
2026 928,226 952,925
2027 1,658,919 1,717,971
2028 onwards 18,160,014 10,196,329
21,240,310 13,284,658
100
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
27 Other non-current assets
June 30, 2024 January 1, 2024
Gross Impairment Carrying Impairment Carrying
amount allowance amount Gross amount allowance amount
Other non-current 13,081,184,444 - 13,081,184
14,497,575 - 14,497,575
assets
14,497,575 - 14,497,575 13,081,184 - 13,081,184
Note Other non-current assets mainly include prepayments for engineering equipment, payments for land use rights,
fixed income large-amount certificates of deposit that are subsequently measured at amortized cost and time
deposits., etc.
28 Short-term borrowings
June 30, 2024 January 1, 2024
Unsecured borrowings 11,792,095 8,437,478
Borrowings secured by pledge 43,132 19,076
Interest payable 9,408 17,028
11,844,635 8,473,582
As at June 30, 2024, the Company’s short-term pledged loans were equivalent to RMB 43,132,000, pledged with
held-for-trading financial assets equivalent to RMB 48,691,000.
As of June 30, 2024, the Company does not have any short-term borrowings that have expired and have not been
repaid.
101
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
29 Borrowings from the Central Bank
As of June 30, 2024, the balance of the borrowings of TCL Technology Group Finance Co., Ltd. (a subsidiary of
the Company) from the central bank was RMB 809,468,000 (December 31, 2023: RMB 995,010,000).
30 Customer deposits and deposits from banks and other financial institutions
June 30, 2024 January 1, 2024
Customer deposits and deposits from other
366,470 270,929
banks and financial institutions
Customer deposits and deposits from banks and other financial institutions are the deposits of related and
nonrelated enterprises absorbed by TCL Technology Group Finance Co., Ltd., a subsidiary of the Company,
within the business scope approved by the regulatory authority.
31 Held-for-trading financial liabilities
June 30, 2024 January 1, 2024
Financial liabilities measured at fair value through profit or loss. 208,434 251,451
32 Derivative financial liabilities
June 30, 2024 January 1, 2024
Derivative financial liabilities 80,185 58,591
33 Notes payable
June 30, 2024 January 1, 2024
Bank acceptance notes 5,498,276 5,518,113
Trade acceptance notes 515,998 92,689
6,014,274 5,610,802
As of June 30, 2024, the Company had no notes payable that were due but not paid.
102
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
34 Accounts payable
June 30, 2024 January 1, 2024
Amounts due to suppliers 28,415,307 29,402,493
As of June 30, 2024, there were no significant accounts payable aged over one year.
35 Advances from customers
June 30, 2024 January 1, 2024
Advances from customers 857 678
As of June 30, 2024, the Company had no significant accounts receivable aged over one year.
36 Contract liabilities
June 30, 2024 January 1, 2024
Advances from customers 1,465,572 1,899,468
As at June 30, 2024, the Company had no significant contract liability aged over one year.
37 Employee benefits payable and long-term employee benefits payable
(1) Employee compensation payable
June 30, 2024 January 1, 2024
Short-term employee benefits payable 2,814,251 3,016,708
Defined contribution plans payable 8,854 14,599
Dismissal benefits payable 3,122 3,190
2,826,227 3,034,497
103
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
37 Employee benefits payable and long-term employee benefits payable (continued)
(1) Employee benefits payable (continued)
(a) Short-term employee benefits presented
Increase in Decrease in
January 1, 2024 current period current period June 30, 2024
Wages, bonuses, allowances
2,909,014 5,676,156 (5,866,353) 2,718,817
and subsidies
Employee services and
- 224,415 (224,415) -
benefits
Social insurance benefits 32,705 204,139 (207,046) 29,798
Including: medical insurance
32,008 185,640 (188,388) 29,260
premium
Employment
injury insurance 679 11,253 (11,411) 521
premiums
Maternity
18 7,246 (7,247) 17
insurance
Housing fund 18,727 197,317 (196,882) 19,162
Trade union funds and staff
55,121 91,321 (100,475) 45,967
education funds
Other employee salaries 1,141 1,333 (1,967) 507
3,016,708 6,394,681 (6,597,138) 2,814,251
(b) Defined contribution plans
Increase in Decrease in
January 1, 2024 current period current period June 30, 2024
Basic pension insurance 14,210 394,869 (400,446) 8,633
Unemployment insurance 389 14,949 (15,117) 221
14,599 409,818 (415,563) 8,854
(2) Long-term employee compensation payable
June 30, 2024 January 1, 2024
Supplementary pension insurance 22,940 23,276
Other long-term benefits 591 6,369
23,531 29,645
104
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
38 Taxes and levies payable
June 30, 2024 January 1, 2024
Corporate income tax 348,806 406,607
Value-added tax 12,214 112,854
Individual income tax 95,882 31,238
Urban maintenance and construction tax 128,954 72,993
Education surcharges 92,127 52,134
Others 219,165 185,516
897,148 861,342
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.
39 Other payables
June 30, 2024 January 1, 2024
Dividends payable 784,741 54,251
Other payables 21,421,469 22,117,151
22,206,210 22,171,402
(1) Dividends payable
June 30, 2024 January 1, 2024
Other non-controlling interests 784,741 54,251
784,741 54,251
(2) Other payables
June 30, 2024 January 1, 2024
Payables for engineering equipment 15,590,638 16,886,446
Unpaid expenses 3,083,773 2,653,858
Security and deposits 445,749 396,797
Others 2,301,309 2,180,050
21,421,469 22,117,151
105
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
40 Non-current liabilities due within one year
June 30, 2024 January 1, 2024
Long-term borrowings due within one year
42 21,204,427 18,603,703
(Note 1)
Bonds payable due within one year (Note 2) 43 4,937,453 4,436,729
Long-term payables due within one year 358,810 377,513
Interest payable due within one year 293,180 391,958
Lease liabilities due within one year 44 366,658 520,010
Long-term employee compensation payable due
17,418 301,746
within one year
27,177,946 24,631,659
Note 1 The interest rates of the Company’s long-term borrowing due within one year ranged from 2.1% to 4.625%
in the current period (2023: from 2.3% to 4.8%).
Note 2 The Company's bonds payable due within one year are mainly as follows:
① Corporate bond 19TCL 02: Issued in July 2019, with a term of 5 years, the closing balance as at June,
30 of RMB 999,860,000.
② Corporate bond 19TCL 03: Issued in October 2019, with a term of 5 years, the closing balance as at
June, 30 of RMB 439,475,000.
③ Medium-term note 22TCL Group MTN001 (high-growth bond): Issued in January 2022, with a term of
3 years, the closing balance as at June, 30 of RMB 1,999,239,000.
④ Corporate bond 22TCL 02: Issued in April 2022, with a term of 3 years, the closing balance as at June
30 was RMB 1,498,879,000.
41 Other current liabilities
June 30, 2024 January 1, 2024
After-sales service expense (note) 1,400,579 1,311,853
Output tax to be transferred 119,179 202,571
Others 17,088 48,821
1,536,846 1,563,245
Note After-sales service expense expected to occur within 1 year is presented in other current liabilities.
106
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
42 Long-term borrowings
June 30, 2024 January 1, 2024
Borrowings secured by collateral 40,435,285 39,851,294
Borrowings secured by pledge 4,636,002 5,595,835
Unsecured borrowings 96,437,605 90,818,783
141,508,892 136,265,912
Including: long-term loans due within one year (21,204,427) (18,603,703)
120,304,465 117,662,209
The maturities of the Company's long-term borrowings vary from 2024 to 2043.
As at June 30, 2024, the long-term borrowings secured by collateral were equivalent to RMB 40,435,285,000
(December 31, 2023: RMB 39,851,294,000), which were secured by the collaterals of the land use right, houses
and buildings, machinery and equipment of about RMB 96,876,846,000 (December 31, 2023: RMB
97,095,652,000); the long-term pledged borrowings were equivalent to RMB 4,636,002,000 (December 31,
2023: RMB 5,595,835,000), which were pledged by the pledges of accounts receivable and contract assets of
about RMB 499,737,000 (December 31, 2023: RMB 505,109,000).
The interest rates of the Company’s long-term borrowing ranged from 2.1% to 4.75% in the current period
(2023: from 2.30% to 7.79%).
43 Bonds payable
June 30, 2024 January 1, 2024
Corporate bonds 2,135,971 2,121,837
MTN 6,491,665 6,992,011
8,627,636 9,113,848
107
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
43 Bonds payable (continued)
(1) Movements in bonds payable
Accrued Repaid
Issued in Amortization
Issued interest as in Others
Bond name Par value Issue date Maturity January 1, 2024 current of premium or June 30, 2024
amount per par current (note)
period discount
value period
TCL TEC 1 1,957,483 July 14, 2020 5 1,957,483 2,121,837 - 19,821 (611) 14,745 2,135,971
22TCL Group MTN001 2,000,000 January 14, 2022 3 2,000,000 1,998,540 - 34,375 699 (1,999,239) -
22TCL Group GN002 1,500,000 April 27, 2022 3 1,500,000 1,498,415 - 24,660 464 (1,498,879) -
22TCL Group MTN003 (Sci-
2,000,000 July 6, 2022 3 2,000,000 1,997,580 - 34,375 796 - 1,998,376
Tech Innovation Notes)
23TCL Group MTN001 (Sci-
1,500,000 February 7, 2023 3 1,500,000 1,497,476 - 30,639 597 1,498,073
Tech Innovation Notes) -
ZQYWKJ2402010102-
1,500,000 February 1, 2024 2 1,500,000 - 1,500,000 16,266 (1,071) 1,498,929
24TCLK1 -
ZQYWKJ2404120002-
1,500,000 April 11, 2024 5 1,500,000 - 1,500,000 8,844 (3,713) 1,496,287
24TCLK2 -
Total 11,957,483 - - 11,957,483 9,113,848 3,000,000 168,980 (2,839) (3,483,373) 8,627,636
Note Others are bonds payable within one year which are reclassified to non-current liabilities due within one year and exchange adjustment.
108
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
44 Lease liabilities
June 30, 2024 January 1, 2024
Total lease liabilities 6,066,243 6,257,298
Less: Current portion of lease liabilities 366,658 520,010
Total 5,699,585 5,737,288
45 Long-term payables
June 30, 2024 January 1, 2024
Finance lease 2,577,466 2,739,444
46 Deferred income
Increase in Decrease in
January 1, 2024 June 30, 2024
current period current period
Public grants 1,540,648 2,035,951 (2,008,740) 1,567,859
1,540,648 2,035,951 (2,008,740) 1,567,859
Items involving public grants
Amount
Amount used
New recorded in
to offset costs Other
January 1, grants in other
and expenses changes June 30, 2024
2024 current income in
in current (note)
period current
period
period
Public grants 241,180 300,377 (632) (139,799) (155,598) 245,528
related to assets
Public grants 1,299,468 1,735,574 (461,421) (1,232,249) (19,041) 1,322,331
related to income
1,540,648 2,035,951 (462,053) (1,372,048) (174,639) 1,567,859
Note "Other changes" were deferred income offset by the carrying amounts of relevant assets.
109
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
47 Estimated liabilities
June 30, 2024 January 1, 2024
After-sales service fee of products 62,493 55,426
Pending litigation 127,296 61,969
189,789 117,395
110
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
48 Share capital
January 1, 2024 Increase or decrease in current period June 30, 2024
Shares
converted from
Amount Ratio (%) New issues capital reserve Others Subtotal Amount Ratio (%)
I. Restricted Shares 680,538 3.62% - - 413 413 680,951 3.63%
II. Non-restricted shares 18,098,543 96.38% - - (413) (413) 18,098,130 96.37%
III. Total shares 18,779,081 100.00% - - - - 18,779,081 100.00%
As of June 30, 2024, the Company's total share capital was 18,779,081,000 shares.
Note
Except for Chairman of the Board Mr. Li Dongsheng who holds restricted shares subscribed for in a private placement, none of the other incumbent directors, supervisors
or senior management hold any restricted shares from a split-share structure reform or a private placement. The shares held by these personnel will stay partially frozen as
per the Rules on the Management of Shares Held by the Directors, Supervisors and Senior Management Officers of the Company and the Changes thereof. The trading
and information disclosure in relation to these shares shall be in strict compliance with the applicable laws, regulations and rule s.
111
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
49 Capital reserves
Increase in Decrease in
January 1, 2024 current period current period June 30, 2024
Share capital premium 10,489,271 56,668 (483,399) 10,062,540
Other capital reserves 262,784 65,532 (41,492) 286,824
10,752,055 122,200 (524,891) 10,349,364
50 Treasury share
Increase in Decrease in
January 1, 2024 current period current period June 30, 2024
Treasury share 1,094,943 520,482 (696,103) 919,322
Increase in the period is mainly stock repurchases for the employee stock ownership plan or the equity incentives
of the Company. On November 28, 2023, the 36th meeting of the Seven-term Board of Directors was held to
deliberate and approve the "Proposal on the Second Repurchase of Certain Shares from the Social Public in 2023".
The Company will repurchase its own shares via centralized bidding, and the Company’s shares repurchased will
be used for the employee stock ownership plans or equity incentives. As of June 30, 2024, the repurchase plan had
been fully completed, and the total number of shares repurchased was 117,993,000 shares at the total consideration
of RMB 520 million.
Decrease in the year is mainly caused by the non-trading transfer and sale of the employee portion of the employee
stock ownership plan.
112
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(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
January - June 2024 January - June 2023
I. Items that cannot be reclassified to profit or loss subsequently 122,012 (19,415)
1. Share of other comprehensive income of investees that will be
122,166 4,483
reclassified to profit or loss under equity method
Share of the period 122,166 4,483
Previous other comprehensive income reclassified to retained
-
earnings for current period
2. Changes in fair value of other equity instruments (154) (23,898)
Current gain/(loss) 119 (20,062)
Previous other comprehensive income reclassified to retained
- -
earnings for current period
Income tax effects recorded in other comprehensive income (273) (3,836)
II. Items that will be reclassified to profit or loss subsequently 52,984 (431,595)
1. Share of other comprehensive income of investees that will be
21,228 29,896
reclassified to profit or loss under equity method
Share of the period 21,228 29,896
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 1,877 (360,611)
Current gain/(loss) (13,059) (340,791)
Previous other comprehensive income reclassified to profit for
16,073 (23,262)
current period
Income tax effects recorded in other comprehensive income (1,137) 3,442
4. Differences arising from translation of foreign currency
29,879 (100,880)
financial statements of overseas operations
5. Net income arising from disposal of overseas operations
- -
through profit or loss
174,996 (451,010)
113
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(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
Differences
Share of other arising from
comprehensive translation of Other
income of investees Gain/loss on foreign comprehensive
Change of that will be changes in Gain/(Loss) currency- Fair value Fair value income
accounting reclassified to profit fair value of on changes in denominated changes of changes of transferred to Non- Total other
policies or loss under equity financial cash flow financial other equity other debt retained controlling comprehensive
method assets hedges statements instruments instruments earnings Subtotal interests income
January 1, 2023 334,950 29,387 (350,569) 78,161 (636,710) (157,710) - (109,331) (811,822) 76,240 (735,582)
Movement of 2023 - (4,422) - (49,418) (24,180) (58,699) - 2,743 (133,976) (55,244) (189,220)
January 1, 2024 334,950 24,965 (350,569) 28,743 (660,890) (216,409) - (106,588) (945,798) 20,996 (924,802)
Movement from January
- 143,396 - (9,792) 44474 119 - - 178,197 (3,201) 174,996
to June 2024
June 30, 2024 334,950 168,361 (350,569) 18,951 (616,416) (216,290) - (106,588) (767,601) 17,795 (749,806)
114
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
52 Surplus reserves
Increase in
current Decrease in
January 1, 2024 period current period June 30, 2024
Statutory surplus reserves 3,691,136 - - 3,691,136
Discretionary surplus
182,870 - - 182,870
reserves
3,874,006 - - 3,874,006
As per China's Company Law, Articles of Association for Companies, accounting standards, the Company and
several of its subsidiaries shall appropriate 10% of net profits as statutory surplus reserves until the reserve amount
reaches 50% of the registered capital. According to the aforesaid laws and regulations, part of the statutory surplus
reserves can be converted into share capital of the Company, and the remaining amount shall not be lower than
25% of the registered capital.
After the appropriation to the statutory surplus reserves, the Company may appropriate the discretionary surplus
reserves. Upon approval, the discretionary surplus reserves can be used to make up the previous loss or increase
the share capital.
53 Specific reserves
Appropriation in Decrease in
January 1, 2024 current period current period June 30, 2024
Production safety reserve 11,343 17,674 (14,014) 15,003
54 General risk reserve
Decrease in
Appropriation in current
January 1, 2024 the period period June 30, 2024
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 Finance Co., Ltd., the Company's subsidiary -
TCL Technology Group Finance Co., Ltd. - appropriated 1% of its net profit as general risk reserve in the
previous years.
115
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
55 Retained earnings
January - June 2024 January - June 2023
Retained earnings at the beginning of the year 21,537,188 19,486,730
Change of accounting policies - -
Net profits for current period 995,213 340,493
Decrease in current period (1,502,326) -
Including: Appropriation of surplus reserves - -
Distributed to ordinary shareholders as dividends (1,502,326) -
Others - -
Retained earnings at the end of the period 21,030,075 19,827,223
56 Operating revenue and operating costs
January - June 2024 January - June 2023
Operating Operating Operating Operating
revenue cost revenue cost
Core business 77,594,877 68,292,912 82,810,846 72,687,776
Non-core business 2,628,860 2,091,470 2,337,880 1,579,823
80,223,737 70,384,382 85,148,726 74,267,599
(1) Business by operating segment
Operating revenue Operating cost Gross profit
January - January - January - January - January - January -
June 2024 June 2023 June 2024 June 2023 June 2024 June 2023
Domestic
53,896,028 58,816,019 49,544,066 53,158,646 4,351,962 5,657,373
sales
Foreign sales 26,327,709 26,332,707 20,840,316 21,108,953 5,487,393 5,223,754
80,223,737 85,148,726 70,384,382 74,267,599 9,839,355 10,881,127
(2) The sales revenue from the top five customers combined was RMB 27,053,817,000 and RMB 22,802,968,000
respectively for January-June, 2024 and January-June, 2023, accounting for 34.9% and 27.5% of the core business
revenue.
116
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
56 Operating Revenue and operating costs (continued)
(3) Revenue and costs generated from the Company's trial sales are as follows:
January - June 2024 January - June 2023
Operating revenue 255,217 457,949
Operating cost 225,302 417,719
57 Interest income/expense and exchange gain
January - June 2024 January - June 2023
Interest income 79,672 41,463
Interest expenditures 14,885 9,976
Exchange gain/(loss) (116) (295)
The interest income, interest expense and exchange gain/(loss) above occurred with the Company's subsidiary
TCL Technology Group Finance Co., Ltd., which are presented separately herein as required for a financial enterprise.
58 Taxes and levies
January - June 2024 January - June 2023
Property tax 190,296 190,060
Stamp tax 94,293 119,421
Urban maintenance and construction tax 110,639 35,287
Education surcharges 68,213 18,924
Land use tax 15,703 18,063
Others 20,984 10,142
500,128 391,897
The applicable tax and levy standards are detailed in Note IV.
117
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
59 Sales expenses
January - June 2024 January - June 2023
Employee salaries and benefits 415,185 340,417
After-sales service expense 258,176 408,042
Promotional and marketing expenses 109,593 121,280
Others 352,619 336,959
1,135,573 1,206,698
60 General and administrative expense
January - June 2024 January - June 2023
Employee salaries and benefits 945,366 755,363
Depreciation and amortization expenses 389,201 391,849
Expenses for hiring intermediaries 260,367 225,762
Digital development expenses 57,650 64,244
Others 351,252 578,706
2,003,836 2,015,924
61 R&D expenses
January - June 2024 January - June 2023
Depreciation and amortization expenses 2,359,818 1,815,422
Material expenses 555,016 1,469,934
Employee salaries and benefits 1,140,394 1,053,804
Others 346,339 553,194
4,401,567 4,892,354
62 Financial expenses
January - June 2024 January - June 2023
Interest expenditures 2,472,976 2,325,785
Interest income (381,577) (415,285)
Exchange loss / (gain) (127,718) (360,345)
Others 127,594 63,008
2,091,275 1,613,163
118
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
63 Other income
January - June 2024 January - June 2023
R&D subsidies 217,272 896,801
VAT rebates on software 17,952 20,873
Over-deduction in taxable amount for VAT 586,905 1,585
Others 313,264 280,666
1,135,393 1,199,925
64 Return on investment
January - June 2024 January - June 2023
Gain on disposal of debt instruments at fair value
(8,447) 23,310
through profit or loss
Gain on disposal of debt instruments measured
15,027 703,905
at fair value through current profits and losses
Gain on holding of equity instruments measured
11,489 8,840
at fair value through current profits and losses
Gain on holding of debt instruments measured at
355,080 137,076
fair value through current profits and losses
Share of net income of associates (35,050) 1,257,953
Share of net income of joint ventures (14,239) (37,627)
Net income from disposal of long-term equity
36,917 360,377
investments
Others 60,981 (140,059)
421,758 2,313,775
65 Gain on changes in fair value
January - June 2024 January - June 2023
Held-for-trading financial assets 47,309 483,079
Derivative financial assets 92,943 37,768
Held-for-trading financial liabilities (5,672) (68,190)
Derivative financial liabilities (1,634) (256)
132,946 452,401
V Notes to Consolidated Financial Statements (Continued)
66 Credit impairment loss
119
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
January - June 2024 January - June 2023
Loss on uncollectible accounts receivable (8,589) (42,425)
Loss on uncollectible other receivables (2,279) (3,760)
Other financial assets 3,599 683
(7,269) (45,502)
67 Asset impairment loss
January - June 2024 January - June 2023
Inventory valuation loss (1,998,171) (2,217,911)
Impairment loss on long-term equity investments - (137,375)
Others (61,477) (3,670)
(2,059,648) (2,358,956)
68 Asset disposal income
January - June 2024 January - June 2023
Income/(loss) from disposal of fixed assets 17,926 (18,624)
Income/(loss) from disposal of intangible
21,683 (22,271)
assets
Others 331 883
39,940 (40,012)
69 Non-operating income
Amount through
current non-
January - June January - June recurring gains and
2024 2023 losses
Gains on retired or damaged non-current assets 6 176 6
Public grants and others 227,430 25,854 227,430
227,436 26,030 227,436
120
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
70 Non-operating expense
Amount through
current non-
recurring gains and
January - June 2024 January - June 2023 losses
Losses on retired or damaged
29,203 2,392 29,203
non-current assets
Others 48,937 46,768 48,937
78,140 49,160 78,140
71 Income tax expenses
(1) Table of income tax expenses
January - June 2024 January - June 2023
Current income tax expense 350,489 577,065
Deferred income tax expense (298,277) (676,864)
52,212 (99,799)
(2) Accounting profit and income tax adjustment process
January - June 2024 January - June 2023
Gross profit (415,937) 2,290,784
Income tax expense calculated at
(62,391) 572,696
statutory/applicable tax rate
Impact of different tax rates applied to subsidiaries 437,578 20,717
Impact of adjusting income tax in previous periods 77,334 (182,054)
Impact of non-taxable income (751,090) (344,175)
Impact of non-deductible costs, expenses and losses 58,962 31,332
Impact of the use of deductible losses carry forward
without recognizing deferred income tax assets in 29,348 (118,357)
the previous periods
Impact of unrecognized deferred income tax assets
of deductible temporary differences or deductible 368,522 384,393
losses in the current period
Others (106,051) (464,351)
Income tax expense 52,212 (99,799)
121
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
72 Earnings per share
(1) Basic earnings per share
January - June 2024 January - June 2023
Net profits attributable to shareholders of the parent company 995,213 340,493
Weighted average outstanding ordinary shares (in thousand shares) 18,588,572 18,519,475
Basic earnings per share (RMB yuan) 0.0535 0.0184
(2) Diluted earnings per share
January - June 2024 January - June 2023
Net profits attributable to shareholders of the parent company 995,213 340,493
Diluted weighted average outstanding ordinary shares (in thousand
18,779,081 18,779,081
shares)
Diluted earnings per share (RMB yuan) 0.0530 0.0181
73 Cash generated from other operating activities
Other cash received from operating activities in the consolidated cash flow statement was RMB 3,396,202,000
(year-on-year: RMB 5,588,817,000), which primarily consisted of current payments received, public grants and
special appropriation, etc.
74 Cash used in other operating activities
Other cash paid for other operating activities in the consolidated cash flow statement was RMB 5,334,029,000
(year-on-year: RMB 5,049,598,000), which primarily consisted of various expenses and current payments, etc.
75 Cash generated from other investing activities
Cash received from other related investing activities in the consolidated cash flow statement was RMB 352,014,000
(year-on-year: RMB 1,640,766,000), which primarily consisted of current payments received, etc.
76 Cash used in other investing activities
Other cash paid for investing activities in the consolidated cash flow statement was RMB 563,835,000 (year -on-
year: RMB 475,943,000), which primarily consisted of payments for foreign exchange forward delivery, etc.
122
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
77 Cash generated from other financing activities
Other cash received from financing activities in the consolidated cash flow statement was RMB 422,120,000 (year-
on-year: RMB 1,895,912,000), which primarily consisted of the sale of the Company’s stocks, etc.
78 Cash used in other financing activities
Other cash paid for financing activities in the consolidated cash flow statement was RMB 1,930,490,000 (year-
on-year: RMB 6,312,578,000), primarily consisted of the payments for the repurchase of minority interests in
subsidiaries, repurchase of the Company’s shares, and financial lease payments, etc.
79 Supplementary information for the cash flow statement
(1) Reconciliation of net profits to net cash generated from/used in operating activities
January - June 2024 January - June 2023
Net profits (468,149) 2,390,583
Add: Asset impairment allowance 2,066,917 2,404,458
Depreciation of fixed assets 12,514,781 9,763,566
Depreciation of right-of-use assets 238,081 224,847
Amortization of intangible assets 1,041,749 808,784
Amortization of long-term deferred expenses 1,303,364 1,025,787
Loss/(Gain) on disposal of fixed assets, intangible assets and other
(39,940) 40,012
long-term assets
Loss/(Gain) on retired or damaged fixed assets 29,197 2,216
Loss/(Gain) on changes in fair value (132,946) (452,401)
Financial expenses 2,360,259 1,975,711
Return on investment (421,758) (2,313,775)
Decrease/(Increase) in deferred income tax assets (126,228) (1,008,863)
Increase/(Decrease) in deferred income tax liabilities (170,047) 496,643
Decrease/(Increase) in inventory (3,698,344) (324,976)
Decrease/(Increase) in operating receivables 477,841 (8,800,043)
Increase/(Decrease) in operating payables (2,605,556) 3,073,357
Others 263,501 1,110,262
Net cash generated from operating activities 12,632,722 10,416,168
123
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(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
January - June 2024 January - June 2023
Payments of cash and cash equivalents made in current period due
23,312 350,155
to business combinations incurred in current period
Less: cash and cash equivalents held by subsidiary on acquisition
19,028 7,628
date
Add: Payments of cash and cash equivalents made in current period
- -
due to business combinations incurred in previous periods
Net cash payments for acquisition of subsidiaries 4,284 342,527
(3) Breakdown of cash and cash equivalents
June 30, 2024 January 1, 2024
I. Cash 17,923,548 19,996,815
Including: Cash on hand 556 583
Bank deposits available for payment on demand 17,650,332 19,807,150
Other monetary assets available for payment on demand 266,809 132,982
Deposits with the central bank available for payment 5,851 56,100
II. Cash equivalents - -
III. Ending balance of cash and cash equivalents 17,923,548 19,996,815
124
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
80 Net changes in cash and cash equivalents
January - June 2024 January - June 2023
Ending balance of cash and cash equivalents 17,923,548 27,744,248
Less: Cash at the beginning of the year 19,996,815 33,675,624
Net increase in cash and cash equivalents (2,073,267) (5,931,376)
Analysis of ending cash and cash equivalents:
Monetary assets at the end of the period 19,587,500 29,286,645
Less: Non-cash equivalents at the end of the period (note) 1,663,952 1,542,397
Ending balance of cash and cash equivalents 17,923,548 27,744,248
Note: The ending non-cash equivalents primarily included interest receivable on bank deposits, the statutory reserve
deposits placed by TCL Technology Group Finance Co., Ltd. in the central bank and other monetary assets,
detailed in Annex V, 1.
125
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
81 Assets with restricted ownership or use rights
Reason for
June 30, 2024
restriction
Gross carrying Carrying
amount amount
Deposited in the
Monetary assets 393,069 393,069 central bank as the
required reserve
Other monetary
funds and
Monetary assets 1,270,883 1,270,883
restricted bank
deposits
Endorsement with
Notes receivable 35,953 35,953 recourse and
pledge
As collateral for
Fixed assets 118,878,930 87,159,091
loan
As collateral for
Intangible assets 4,589,567 3,899,659
loan
Held-for-trading financial assets 454,204 454,204 Pledge
1,401,401 1,401,401
As collateral for
Construction in progress
loan
Accounts receivable 906,493 906,493 Pledge
Contract assets 393,619 370,813 Pledge
As collateral for
Investment property 9,909 9,597
loan
Other non-current assets due within 437,474 437,474 Pledge
one year
128,771,502 96,338,637
82 Foreign currency monetary items
June 30, 2024
Foreign currency balance Conversion rate RMB balance
Monetary assets
Including: USD 346,610 7.1268 2,470,220
HKD 122,141 0.9127 111,478
INR 1,223,933 0.0854 104,524
EUR 53,670 7.6193 408,928
PLN 2,528 1.7669 4,467
JPY 13,520,798 0.0442 597,619
KRW 916,323 0.0051 4,701
SGD 708 5.2445 3,713
MXN 21,871 0.3836 8,390
VND 8,115,114 0.0003 2,272
CAD 2 5.1918 10
126
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
82 Foreign currency monetary items (continued)
June 30, 2024
Foreign currency balance Conversion rate RMB balance
Accounts receivable
Including: USD 1,314,347 7.1268 9,367,088
HKD 8,870 0.9127 8,096
INR 8,077,386 0.0854 689,809
EUR 8,590 7.6193 65,450
JPY 27,775 0.0442 1,228
MXN 1,464 0.3836 562
VND 31,163,654 0.0003 8,726
Receivables financing
Including: USD 21,863 7.1268 155,810
Accounts payable
Including: USD 534,728 7.1268 3,810,900
HKD 475,955 0.9127 434,404
INR 808,920 0.0854 69,082
EUR 8,765 7.6193 66,783
JPY 16,472,718 0.0442 728,094
AUD 17 4.7215 80
VND 1,731,373 0.0003 485
Other receivables
Including: USD 23,468 7.1268 167,252
HKD 13,102 0.9127 11,958
INR 58,414 0.0854 4,989
EUR 1,590 7.6193 12,115
PLN 936 1.7669 1,654
JPY 27,047 0.0442 1,195
KRW 89,165 0.0051 457
SGD 91 5.2445 477
MXN 20,849 0.3836 7,998
VND 16,986,050 0.0003 4,756
127
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
82 Foreign currency monetary items (continued)
June 30, 2024
Foreign currency balance Conversion rate RMB balance
Other payables
Including: USD 533,745 7.1268 3,803,894
HKD 424,184 0.9127 387,153
INR 392,141 0.0854 33,489
EUR 216 7.6193 1,646
PLN 175 1.7669 309
JPY 12,979,174 0.0442 573,679
KRW 315,418 0.0051 1,618
SGD 48 5.2445 252
MXN 26,967 0.3836 10,345
TWD 839 0.2188 184
AUD 11 4.7215 52
VND 65,203,314 0.0003 18,257
Short-term borrowings
Including: USD 6,052 7.1268 43,131
Long-term borrowings
Including: USD 2,650 7.1268 18,886
Long-term borrowings due
within one year
Including: USD 299,357 7.1268 2,133,457
83 Leases
（1） The Company acting as a lessee
From January to June 2024, short-term lease rents, low-value asset rents and income obtained from
subleasing right-of-use assets, for which the Group, acting as a lessee, chose simplified accounting,
were not significant.
128
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
V Notes to Consolidated Financial Statements (Continued)
83 Leases (continued)
(2) The Company acting as a lessor
① Operating leases where the Company acts as a lessor
Including: Income related to
Item Rental income variable lease payments not
included in lease receipts
Houses and buildings 94,236 -
Machinery equipment 3,587 -
Total 97,823 -
② Finance leases where the Company acts as a lessor
Income related to variable
Financing
Item Sales gains and losses lease payments not included
income
in net lease investment
Finance lease - 30,693 -
Total - 30,693 -
Annual undiscounted lease receipts for the next five years
Annual undiscounted lease receipts
Item
Ending balance Beginning balance
Year 1 213,165 95,518
Year 2 204,761 88,031
Year 3 194,325 86,910
Year 4 184,649 86,910
Year 5 183,057 86,910
Total undiscounted lease receipts
1,716,091 904,691
after five years
129
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VI R&D expenses
1 Presentation by nature of expenses
Amount incurred in the Amount incurred in the
Item
current period previous period
Material costs 1,120,205 2,254,305
Labor costs 1,356,702 1,269,485
Depreciations and amortizations 1,229,349 1,320,351
Others 559,602 621,141
Total 4,265,858 5,465,282
Including: Expensed R&D expenses 2,868,939 3,554,646
Capitalized R&D expenses 1,396,919 1,910,636
2 Development expenses of R&D projects eligible for capitalization
Increase in current period Decrease in current period
Beginning
balance Internal Recognized as Included in Ending
Item
development Others intangible profits and Others balance
costs assets losses
Display 1,455,110 1,211,599 - (330,142) (180,394) (784,124) 1,372,049
New energy
photovoltaics
and other 1,086,383 185,320 - (462,864) - - 808,839
silicon
materials
Total 2,541,493 1,396,919 - (793,006) (180,394) (784,124) 2,180,888
3 The Company had no significant outsourced projects under research.
VII Changes to the Consolidation Scope
1 Newly consolidated entities for current period
Name of investee Reason for change Registered capital Contribution ratio
Guangzhou TCL High-Tech Development Co., New establishment
100.00%
Ltd. RMB5 million
Shenzhen Zhixian Shijie Software Technology New establishment
100.00%
Co., Ltd. RMB15 million
Shenzhen Zhilian Shuchuang Technology Co., New establishment RMB12 million
100.00%
Ltd.
Xi'an Maichi Shangpai Technology Co., Ltd. New establishment RMB300,000 100.00%
Tianjin Huiyi Digital Technology Co., Ltd. New establishment RMB30 million 100.00%
Tianjin Jincheng Internet Technology Co., Ltd. New establishment RMB10 million 100.00%
Zhonghuan Advanced Korea Co., Ltd. New establishment KRW500 million 100.00%
Tianjin Binhai Huanxu New Energy Co., Ltd. New establishment RMB1 million 100.00%
Yixing Huanxu New Energy Co., Ltd. New establishment RMB1 million 100.00%
Yixing Huanxu Investment Management Co., Ltd. New establishment RMB1 million 100.00%
130
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VII Changes to Consolidation Scope (continued)
1 Newly consolidated entities for current period (continued)
Name of investee Reason for change Registered capital Contribution ratio
Huansheng New Energy (Inner Mongolia) Co.,
New establishment RMB10 million 100.00%
Ltd.
Hangjinhou Banner Guangsen New Energy Co.,
New establishment RMB1 million 100.00%
Ltd.
Hohhot Mingfeng New Energy Co., Ltd. New establishment RMB1 million 100.00%
Hangjinhou Banner Yusheng New Energy Co.,
New establishment RMB1 million 100.00%
Ltd.
Inner Mongolia Chenhe New Energy Co., Ltd. New establishment RMB1 million 100.00%
Heilongjiang Huanju New Energy Co., Ltd. New establishment RMB1 million 100.00%
Huansheng Photovoltaic Technology (Lingwu
New establishment RMB1 million 100.00%
City) Co., Ltd.
MOKA TECHNOLOGY VIETNAM COMPANY
Acquisition USD25 million 100.00%
LIMITED
Diamond Union Ltd. Acquisition HKD4.76 million 100.00%
Note: Business combinations not under the common control occurred in the current period
(1) Acquisition of the equity of MOKA TECHNOLOGY VIETNAM COMPANY LIMITED
① The cost of acquisition and goodwill were recognized as follows:
On January 1, 2024 (the "Acquisition Date"), the Group acquired 100% equity of MOKA
TECHNOLOGY VIETNAM COMPANY LIMITED at a cash consideration of RMB 60,061,000,
and included such company into the scope of consolidation.
Cash consideration 60,061
Less: Share of fair value of identifiable net assets acquired 60,061
Goodwill amount -
② Assets and liabilities of the acquired party as at the acquisition date are presented as follows:
Fair value as at the Carrying amount as at
acquisition date the acquisition date
Total assets 83,467 73,668
Total liabilities 23,406 23,406
Net assets 60,061 50,262
Less: non-controlling interests - -
Net assets acquired 60,061 50,262
2 Deconsolidated entities for current period
Name of investee Time of deconsolidation Reason for change
Inner Mongolia Zhonghuan Construction Management De-registered
Co., Ltd. January 2024
Jiangsu Mingjing Bandaoti Technology Co., Ltd. February 2024 De-registered
Ningxia Huanneng New Energy Co., Ltd. February 2024 Transferred
Tianjin Binhai New Area Huanju New Energy Co., Ltd. February 2024 Transferred
131
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VII Changes to Consolidation Scope (continued)
3 Subsidiaries disposed in current period
Ningxia Huanneng New Tianjin Binhai New Area Huanju
Name of subsidiary
Energy Co., Ltd. New Energy Co., Ltd.
Price for equity interest disposal
% equity interest disposed 100% 100%
Way of equity disposal Sale Sale
Time of loss of control February 29, 2024 February 29, 2024
The operating risk has been The operating risk has been
Determination basis for time of loss of control
transferred transferred
Difference between the disposal price and the
Company’s share of the subsidiary’s net assets
in the consolidated financial statements (19,094) 4,645
relevant to the disposed equity interest
VIII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Shareholding ratio
Place of Nature of Principal place How subsidiary
Name of investee (%)
registration business of business was obtained
Direct Indirect
TCL China Star Optoelectronics Manufacturing
Shenzhen Shenzhen 79.78% - Incorporated
Technology Co., Ltd. and sales
Shenzhen China Star Optoelectronics Manufacturing
Shenzhen Shenzhen - 57.90% Incorporated
Bandaoti Display Technology Co., Ltd. and sales
Guangzhou China Ray Optoelectronic Research and
Guangzhou Guangzhou - 100.00% Incorporated
Materials Co., Ltd. development
Wuhan China Star Optoelectronics Manufacturing
Wuhan Wuhan 97.30% Incorporated
Technology Co., Ltd. and sales
Wuhan China Star Optoelectronics Manufacturing
Wuhan Wuhan - 57.14% Incorporated
Bandaoti Display Technology Co., Ltd. and sales
China Star Optoelectronics International
Hong Kong Sales Hong Kong - 100.00% Incorporated
(HK) Limited
Business
China Display Optoelectronics Investment combination not
Bermuda Bermuda - 64.20%
Technology Holdings Limited holding under common
control
China Display Optoelectronics Manufacturing
Huizhou Huizhou - 100.00% Incorporated
Technology (Huizhou) Co., Ltd. and sales
Wuhan China Display Optoelectronics Manufacturing
Wuhan Wuhan - 100.00% Incorporated
Technology Co., Ltd. and sales
132
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VIII 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 Manufacturi
Suzhou Suzhou - 100.00% not under
Technology Co., Ltd. ng and sales
common
control
Business
combination
Suzhou China Star Optoelectronics Manufacturi
Suzhou Suzhou - 100.00% not under
Display Co., Ltd. ng and sales
common
control
Guangzhou China Star
Manufacturi
Optoelectronics Bandaoti Display Guangzhou Guangzhou - 55.00% Incorporated
ng and sales
Technology Co., Ltd.
TCL Culture Media (Shenzhen) Co.,
Shenzhen Ad planning Shenzhen 100.00% - Incorporated
Ltd.
Product
Highly Information Industry Co., Ltd. Beijing Beijing 66.46% - Incorporated
distribution
Beijing Sunpiestore Technology Co.,
Beijing Sales Beijing - 53.45% Incorporated
Ltd.
Beijing Lingyun Data Technology - 60.00% Incorporated
Beijing Sales Beijing
Co., Ltd.
TCL Technology Group Finance Co.,
Huizhou Financial Huizhou 82.00% 18.00% Incorporated
Ltd.
Shenzhen Dongxi Jiashang
Investment 100.00% - Incorporated
Entrepreneurship Investment Co., Shenzhen Shenzhen
business
Ltd.
Investment
Ningbo TCL Equity Investment Ltd. Ningbo Shenzhen 100.00% - Incorporated
business
TCL Technology Park (Huizhou) Co., Property
Huizhou Huizhou - 100.00% Incorporated
Ltd. management
Research and
TCL Research America Inc. U.S. U.S. - 100.00% Incorporated
development
TCL Industrial Technology Research Research and
Hong Kong Hong Kong - 100.00% Incorporated
Institute (Hong Kong) Limited development
133
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VIII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Place of Nature of Principal place of Shareholding ratio (%) How subsidiary
Name of investee Direct Indirect
registration business business was obtained
Investment
TCL Technology Investments Limited Hong Kong business Hong Kong 100.00% - Incorporated
Business
TCL Zhonghuan Renewable Energy Technology Manufacturing combination not
Co., Ltd. Tianjin and sales Tianjin 2.55% 27.37% under common
control
Business
Manufacturing combination not
Tianjin Printronics Circuit Corporation Tianjin and sales Tianjin - 26.86% under common
control
Business
Inner Mongolia Zhonghuan Crystal Materials Co., Inner Mongolia Manufacturing Inner Mongolia - 59.32% combination not
Ltd. and sales under common
control
Ningxia Hui Ningxia Hui Business
Ningxia Zhonghuan Solar Material Co., Ltd. Autonomous Manufacturing Autonomous - 100.00% combination not
Region and sales Region under common
control
Business
Tianjin Huan'Ou Bandaoti Material&Technology Tianjin Manufacturing Tianjin - 100.00% combination not
Co., Ltd. and sales under common
control
Business
Wuxi Zhonghuan Applied Materials Co., Ltd. Jiangsu Manufacturing Jiangsu - 98.08% combination not
and sales under common
control
Business
Inner Mongolia Zhonghuan Solar Material Co., Manufacturing combination not
Ltd. Inner Mongolia and sales Inner Mongolia - 100.00% under common
control
Business
Tianjin Huanou International Silicon Material Co., combination not
Ltd. Tianjin Sales Tianjin - 100.00% under common
control
Business
Import and combination not
Zhonghuan Hong Kong Holding Limited Hong Kong export Hong Kong - 100.00% under common
control
Business
Zhonghuan Advanced Bandaoti Technology Co., Jiangsu Manufacturing Jiangsu 7.35% 35.30% combination not
Ltd. and sales under common
control
Business
Huansheng Solar (Jiangsu) Co., Ltd. Jiangsu Manufacturing Jiangsu - 100.00% combination not
and sales under common
control
Business
Huansheng New Energy (Jiangsu) Co., Ltd. Jiangsu Manufacturing Jiangsu - 95.75% combination not
and sales under common
control
Business
Manufacturing combination not
Huansheng New Energy (Tianjin) Co., Ltd. Tianjin and sales Tianjin - 95.5% under common
control
134
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VIII Interests in Other Entities (Continued)
1 Interests in subsidiaries (Continued)
(1) Composition of key subsidiaries (Continued)
Shareholding ratio
Place of Nature of Principal place How subsidiary
Name of investee (%)
registration business of business was obtained
Direct Indirect
Power
generation, Business
power combination not
Tianjin Zhonghuan New Energy Co., Ltd. Tianjin Tianjin - 100.00%
transmission, under common
power supply control
(distribution)
Business
Tianjin Huanrui Electronic Technology combination not
Tianjin Purchase Tianjin - 100.00%
Co., Ltd. under common
control
Business
Investment combination not
Moka International Limited BVI BVI - 100.00%
holding under common
control
Business
Manufacturing combination not
Moka Technology (Guangdong) Co., Ltd. Huizhou Huizhou - 100.00%
and sales under common
control
(2) Subsidiaries with substantial non-controlling interests
Balance of minority
Profit or loss attributable to Dividends distributed to
Non-controlling interests at the end
Name of subsidiary minority shareholders in minority shareholders
shareholding ratio (%) of the period
the current period in the current period
TCL China Star
Optoelectronics 20.22% 731,069 13,326 40,420,323
Technology Co., Ltd.
TCL Zhonghuan
Renewable Energy 70.09% (2,261,307) 735,495 43,468,734
Technology Co., Ltd.
Highly Information
33.54% 26,985 5,813 573,259
Industry Co., Ltd.
135
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VIII Interests in Other Entities (continued)
1 Interests in subsidiaries (Continued)
(2) Subsidiaries with substantial non-controlling interests (continued)
The key financial information of the above subsidiaries is as follows:
June 30, 2024 January 1, 2024
Non- Non- Non-
Current Non-current Total Current Total Current Total Current Total
current current current
assets assets assets liabilities liabilities assets assets liabilities liabilities
liabilities assets liabilities
TCL China Star
Optoelectronics 49,051,248 147,524,292 196,575,540 56,329,265 67,888,573 124,217,838 55,759,259 153,177,418 208,936,677 66,215,558 68,629,981 134,845,539
Technology Co., Ltd.
TCL Zhonghuan
Renewable Energy 33,898,400 91,297,973 125,196,373 22,725,402 46,535,581 69,260,983 34,627,478 90,435,565 125,063,043 22,324,095 42,501,836 64,825,931
Technology Co., Ltd.
Highly Information
7,623,817 177,802 7,801,619 6,281,096 29,356 6,310,452 7,086,563 179,985 7,266,548 5,807,990 24,523 5,832,513
Industry Co., Ltd.
January - June 2024 January - June 2023
Total Net cash generate Total Net cash generate
Operating Operating
Net profits comprehensive from/used in Net profit comprehensive from/used in operating
revenue revenue
income operating activities income activities
TCL China Star
Optoelectronics 44,096,058 2,479,923 2,566,892 14,129,920 30,600,624 (3,619,167) (3,976,323) 6,612,328
Technology Co., Ltd.
TCL Zhonghuan
Renewable Energy 16,213,493 (3,175,764) (3,175,713) 128,102 34,897,789 4,838,880 4,839,827 2,860,116
Technology Co., Ltd.
Highly Information
13,649,333 62,945 62,945 (611,454) 13,812,825 78,707 78,707 (605,431)
Industry Co., Ltd.
136
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
VIII Interests in Other Entities (continued)
2 Interests in joint ventures and associates
(1) Basic information about principal joint ventures and associates
Principal place of Strategic to the Shareholding ratio
Nature of (%)
Name of investee business/place of Group’s activities or
business
registration not Direct Indirect
Associate
Bank of Shanghai Co., Ltd. Shanghai Financial Yes 5.76% -
Note: As of the date of issuance of this Report, Bank of Shanghai Co., Ltd. has not announced information on
its H1 2024 report.
(2) The Company had no significant joint ventures in the Reporting Period.
137
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
IX Risks related to financial instruments
The purpose of the Company’s risk management is to achieve a right balance between the risk and the benefit and
maximally reduce the adverse impact of financial risks on the Company’s financial performance. Based on such
purpose, the Company has established various risk management policies to recognize and analyze possible risks to
be encountered by the Company, set an appropriate risk acceptable level and designed corresponding internal
control procedures so as to control the Company’s risk level. In addition, the Company will regularly review these
risk management policies and relevant internal control system in order to adapt to the market or handle various
changes in the Company’s operating activities. Meanwhile, the Company’s internal audit department will also
regularly or randomly check whether the implementation of internal control system conforms to relevant risk
management policies. In fact, the Company has applied proper diversified investment and business portfolio to
disperse various financial instrument risks and worked out corresponding risk management policies to reduce the
risk of concentrating on one single industry, specific region or specific counterpart.
The main risks arising from the Company's financial instruments are credit risk, liquidity risk, and market risk
(mainly foreign exchange risk and interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss caused by any party of financial instruments to another party due to
the failure in fulfilling performance obligations. The Group controls the credit risk based on the specific group
classification, and credit risk mainly results from bank deposit, due from central bank, notes receivable, accounts
receivable, loans and advances to customers and other receivables.
The Group’s bank deposits and due from central bank are mainly deposited in stated-owned banks and other large
and medium-sized listed banks. The Group considers no significant credit risk existed and no significant loss will
be caused by the counterpart’s breach of contract.
For notes receivable, accounts receivable, loans and advances to customers and other receivables, the Group has
established relevant policies to control the credit risk exposure, and will evaluate the client’s credit qualification
and determine corresponding credit period based on the client’s financial status, the possibility of obtaining
guarantees from the third party, relevant credit records and other factors (like the current market situation). In the
meantime, the Group will regularly monitor the client's credit records. For any client with unfavorable credit
records, the Group will issue written reminders, shorten the credit period or cancel the credit period so as to keep
the Group's overall credit risk controllable.
As of June 30, 2024, 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 June 30, 2024, the Group had no liquidity risk events.
138
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
IX Risks Related to Financial Instruments (continued)
(3) Market risk
(a) Foreign exchange risk
The Group has carried out various economic activities around the world including manufacturing, selling,
investment and financing etc., and corresponding interest rate fluctuation risks exist in the Group’s foreign
currency assets and liabilities and future foreign currency transactions.
The Group always regards "Locking the Cost and Avoiding Possible Risks" as the foreign currency risk
management goal. Through the natural hedging of settlement currency, matching with the foreign currency
liabilities, signing simple derivative products closely related to the owner's operation and meeting corresponding
hedge accounting treatment requirements and applying other management methods, the foreign currency risk
exposure can be controlled within a reasonable scope and the impact of interest rate fluctuations on the Group's
overall profit and loss will be reduced.
(a) On June 30, 2024, 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 USD269,484,000, equivalent to RMB1,920,562,000 based on the spot
exchange rate on the balance sheet date. The differences arising from the translation of foreign currency financial
statements were not included.
The Group applies the following exchange rate of USD against RMB:
Exchange rate at
Average exchange rate
period-end
January - June 2024 June 30, 2024
USD/RMB 7.1074 7.1268
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 RMB96,028,000 in shareholders’ equity and net profits respectively of the Group
on June 30, 2024.
The above-mentioned sensitivity analysis is made based on the assumption that the exchange rate changes on the
balance sheet date, and financial instruments held by the Group on the balance sheet date exposed to the
exchange risk are re-calculated based on the changed exchange rate. The above analysis does not include
differences arising from the translation of foreign currency financial statements.
(b) Interest risk
The Group’s interest rate risk mainly results from interest-bearing bank borrowings adopting floating interest
rates, and the Group determined the proportion of fixed interest rates and floating interest rates based on the
market environment and its risk tolerance. Up until June 30, 2024, the Group’s liabilities with floating interest
rates accounted for 67.27% of its total interest-bearing liabilities. And, the Group will continuously monitor the
interest rates and make corresponding adjustments according to the specific market changes so as to avoid
interest rate risk.
(4) Offset of financial assets and financial liabilities
As at the end of the reporting period, the amount offset between the financial assets and financial liabilities
139
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
recognized under executable master netting arrangements or similar agreements was RMB21,195,123,000.
X Classification of Financial Instruments and Fair Value
Fair value of financial instruments and levels
1 Fair value is divided into the following levels in measurement and disclosure:
Level 1 refers to the (unadjusted) quotation of the same type of assets or liabilities on the active
market; and the Company mainly adopts the closing price as the value of a financial asset. Financial
instruments of level 1 mainly include exchange listed stocks and bonds.
Level 2 refers to the directly or indirectly observable input of a financial asset or liability that does
not belong to level 1.
Level 3 refers to the input of a financial asset or liability determined based on variables other than the
observable market data (non-observable input).
2 Basis for determining the market value of items measured at continuous level 1 fair value
The Company adopts the active market quotation as the fair value of a level 1 financial asset.
Items measured at continuous level 2 fair value adopt the following valuation techniques and
3
parameters:
The Company’s receivables financing was bank acceptance notes and trade acceptance notes, of
which the market prices were determined based on the transfer or discounted amounts.
Derivative financial assets and liabilities are multiple IRS and CCS signed between the Group and
financial institutions. The Company adopts the quotations provided by the financial institution in
valuation.
Items measured at continuous level 3 fair value adopt the following valuation techniques and
4
parameters (nature and quantity):
Other non-current financial assets measured at continuous level 3 fair value are mainly unlisted equity
investments held by the Company. In measuring the fair value, the Company mainly adopts the
valuation technique of comparison with listed companies, taking into account the price of similar
securities and liquidity discount.
Held-for-trading financial assets measured at continuous level 3 fair value are mainly wealth
management products held by the Company. In valuation of the fair value, the Company adopts the
method of discounting future cash flows based on the agreed expected yield rate.
140
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
X Classification of Financial Instruments and Fair Value (continued)
5 Financial instruments measured in three levels of fair value
Financial assets
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial assets (see
633,276 21,169,297 3,424,009 25,226,582
Note V. 2)
Derivative financial assets (see Note V.3) - 155,087 - 155,087
Receivables financing (see Note V.6) - - 618,962 618,962
Investments in other equity instruments
16,002 - 371,253 387,255
(see Note V. 16)
Other non-current financial assets (see
356,850 300,690 3,338,196 3,995,736
Note V. 17)
Total assets continuously measured at 1,006,128 21,625,074 7,752,420 30,383,622
fair value
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial liabilities
(see Note V, 31) - 4,000 204,434 208,434
Derivative financial liabilities (see Note
V, 32) - 80,185 - 80,185
Total liabilities continuously measured
at fair value - 84,185 204,434 288,619
141
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions
1 Actual controller and its acting-in-concert parties
Explanation of The Company’s Absence of Controlling Shareholders
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became persons acting
in concert by signing the Agreement on Concerted Action, holding 1,265,347,805 shares in total and becoming the largest
shareholder of the Company.
As per Article 216 of the Company Law, a controlling shareholder refers to a shareholder who owns over 50% of a limited
liability company’s total capital or over 50% of a joint stock company’s total share capital; or, despite the ownership of less
than 50% of a limited liability company’s total capital or less than 50% of a joint stock company’s total number of shares, who
can still prevail in the resolution of a meeting of shareholders or a general meeting of shareholders according to the voting
rights corresponding to their interest in the limited liability company’s total capital or the joint stock company’s total number
of shares. According to the definition above, the Company has no controlling shareholder or actual controller.
2 Related parties that do not control or are not controlled by the Company
Information about such related parties：
Company Name Relationship with the Company
SunPower Systems International Limited Associate
LG Electronics (Huizhou) Co., Ltd. Associate
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. Associate
Inner Mongolia Xinhuan Silicon Energy Technology Co., Ltd. Associate
Inner Mongolia Shengou Electromechanical Engineering Co., Ltd. Associate
Ningbo Dongpeng Heli Equity Investment Partnership (Limited Partnership) Associate
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund Partnership (Limited
Associate
Partnership)
Zhonghuan Aineng (Beijing) Technology Co., Ltd. Associate
Inner Mongolia Xinhua Bandaoti Technology Co., Ltd. Associate
JOLED Incorporation Associate
China Innovative Capital Management Limited Associate
MAXEON SOLAR TECHNOLOGIES,PTE.LTD. and its subsidiaries Associate and its subsidiaries
Shenzhen Qianhai Sailing International Supply Chain Management Co., Ltd.
Associate and its subsidiaries
and its subsidiaries
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its subsidiaries Associate and its subsidiaries
Purplevine Holdings Limited and its subsidiaries Associate and its subsidiaries
Tianjin Qiyier Communication & Broadcasting Co., Ltd. and its subsidiaries Associate and its subsidiaries
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries Associate and its subsidiaries
Inner Mongolia Zhongjing Science and Technology Research Institute Co., Ltd.
Associate and its subsidiaries
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
Wuxi TCL Venture Capital Partnership (Limited Partnership) and its
Associate and its subsidiaries
subsidiaries
142
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
The nature of related parties without control relationship
2
(continued)
Company name Relationship with the Company
Ningbo Dongpeng Weichuang Equity Investment Partnership (Limited
Associate and its subsidiaries
Partnership) and its subsidiaries
Yixing Jiangnan Tianyuan Venture Capital Company (Limited
Associate and its subsidiaries
Partnership) and its subsidiaries
Nanjing Zijin A Dynamic Investment Partnership (Limited Partnership)
Associate and its subsidiaries
and its subsidiaries
Shanghai Gen Auspicious Venture Capital Partnership (Limited
Associate and its subsidiaries
Partnership) and its subsidiaries
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co., Ltd. and
Associate and its subsidiaries
its subsidiaries
Shenzhen Tixiang Business Management Technology Co., Ltd. and its
Associate and its subsidiaries
subsidiaries
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co., Ltd. Joint venture
Tianjin Huanyan Technology Co., Ltd. Joint venture
TCL Microchip Technology (Guangdong) Co., Ltd. and its subsidiaries Joint venture and subsidiary
Huizhou TCL Human Resources Service Co., Ltd. and its subsidiaries Joint venture and subsidiary
TCL Industries Holdings Co., Ltd. and its subsidiaries Other relationships
Thunderbird Innovation Technology (Shenzhen) Co., Ltd. and its
Other relationships
subsidiaries
Joint ventures and subsidiaries of TCL Industries Holdings Co., Ltd. and
Other relationships
its subsidiaries
143
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions
(1) Selling raw materials and finished goods (Note 1)
January - June 2024 January - June 2023
TCL Industries Holdings Co., Ltd. and its subsidiaries 10,125,470 7,423,420
MAXEON SOLAR TECHNOLOGIES,PTE.LTD. and its
713,021 1,524,583
subsidiaries
Shenzhen Qianhai Sailing International Supply Chain
98,112 677,985
Management Co., Ltd. and its subsidiaries
TCL Microchip Technology (Guangdong) Co., Ltd. and its
26,751 51,496
subsidiaries
SunPower Systems International Limited 13,026 79,537
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 4,674 3,840
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
4,065 4,647
subsidiaries
LG Electronics (Huizhou) Co., Ltd. 589 -
Purplevine Holdings Limited and its subsidiaries 71 75
Tianjin Qiyier Communication & Broadcasting Co., Ltd. and
10 16
its subsidiaries
10,985,789 9,765,599
(2) Purchasing raw materials and finished products (Note 2, Note 5)
January - June 2024 January - June 2023
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 2,320,232 2,329,164
TCL Industries Holdings Co., Ltd. and its subsidiaries 870,360 703,978
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
680,552 628,990
subsidiaries
Inner Mongolia Xinhuan Silicon Energy Technology Co.,
572,585 -
Ltd.
Shenzhen Qianhai Sailing International Supply Chain
254,202 747,306
Management Co., Ltd. and its subsidiaries
Inner Mongolia Shengou Electromechanical Engineering
152,875 172,513
Co., Ltd.
Inner Mongolia Huanye Material Co., Ltd. and its
111,848 -
subsidiaries
Inner Mongolia Zhongjing Science and Technology Research
72,702 119,831
Institute Co., Ltd. and its subsidiaries
Getech Ltd. and its subsidiaries 47,818 11,666
TCL Microchip Technology (Guangdong) Co., Ltd. and its
42,112 -
subsidiaries
Purplevine Holdings Limited and its subsidiaries 11,615 -
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 779 401
Xinjiang Goens Energy Technology Co., Ltd. - 1,890,773
5,137,680 6,604,622
144
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(3) Receiving funding (Note 3)
January - June 2024 January - June 2023
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
211,045 172,328
subsidiaries
Shenzhen Qianhai Sailing International Supply Chain
114,904 76,370
Management Co., Ltd. and its subsidiaries
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 78,790 125
Huizhou TCL Human Resources Service Co., Ltd. and its
63,758 30,005
subsidiaries
Wuxi TCL Venture Capital Partnership (Limited
5,533 5,619
Partnership) and its subsidiaries
Ningbo Dongpeng Weichuang Equity Investment
1,486 1,483
Partnership (Limited Partnership) and its subsidiaries
Yixing Jiangnan Tianyuan Venture Capital Company
614 633
(Limited Partnership) and its subsidiaries
Nanjing Zijin A Dynamic Investment Partnership (Limited
391 411
Partnership) and its subsidiaries
TCL Industries Holdings Co., Ltd. and its subsidiaries 344 350,564
Ningbo Dongpeng Heli Equity Investment Partnership
34 33
(Limited Partnership)
Shanghai Gen Auspicious Venture Capital Partnership
11 9,082
(Limited Partnership) and its subsidiaries
TCL Microchip Technology (Guangdong) Co., Ltd. and its
2 -
subsidiaries
476,912 646,653
(4) Funding
January - June 2024 January - June 2023
TCL Industries Holdings Co., Ltd. and its subsidiaries 226 -
226 -
145
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(5) Leases
January - June 2024 January - June 2023
Rental income
TCL Industries Holdings Co., Ltd. and its subsidiaries 30,934 31,218
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 22,810 30,171
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 11,519 9,668
TCL Microchip Technology (Guangdong) Co., Ltd. and its
2,996 2,752
subsidiaries
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 517 439
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
282 427
subsidiaries
Getech Ltd. and its subsidiaries 251 376
Huizhou TCL Human Resources Service Co., Ltd. and its
101 -
subsidiaries
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co., Ltd.
72 -
and its subsidiaries
Shenzhen Tixiang Business Management Technology Co., Ltd.
23 -
and its subsidiaries
Shenzhen Qianhai Sailing International Supply Chain
7
Management Co., Ltd. and its subsidiaries
69,512 75,051
Rental expense
TCL Industries Holdings Co., Ltd. and its subsidiaries 26,382 33,563
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 4,732 4,926
Tianjin Huanyan Technology Co., Ltd. 2,214 -
Inner Mongolia Zhongjing Science and Technology Research
1,673 -
Institute Co., Ltd. and its subsidiaries
TCL Microchip Technology (Guangdong) Co., Ltd. and its
1,379 703
subsidiaries
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
123 70
subsidiaries
Getech Ltd. and its subsidiaries 728 -
37,231 39,262
(6) Rendering or receipt of services
January - June 2024 January - June 2023
Rendering of services 163,883 127,756
Receipt of services 946,617 888,553
146
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(7) Receiving interest or paying interest (Note 3)
January - June 2024 January - June 2023
Interest received 7,806 7,058
Interest paid 10,358 2,319
(8) Remuneration of key management personnel (Note 4)
January - June 2024 January - June 2023
Remuneration of key management personnel 6,146 6,996
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 profits 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 profits but play an important role as
to the Company’s continued operations.
Note 3 Providing funding for or receiving funding from related parties and corresponding interest received or paid
The Company set up a settlement center in 1997 and TCL Technology Group Finance Co., Ltd. in 2006
(together, the "Financial Settlement Center"). The Financial Settlement Center is responsible for the financial
affairs of the Company, including capital operation and allocation. The Center settles accounts with the
Company’s subsidiaries, joint ventures and associates and pays the interest. It also allocates the money
deposited by the subsidiaries, joint ventures and associates in it to these enterprises and charges interest. The
interest income and expense between the Company and the Center are calculated according to the interes t rates
declared by the People’s Bank of China. The funding amount provided refers to the outstanding borrowings
due from the Center to related parties, while the funding amount received means the balances of related parties’
deposits in the Center.
Note 4 The remunerations of key management personnel include fixed salaries, allowances and performance bonuses
received from the Company by the directors, supervisors and senior executives of the Company during their
terms of office, but do not include share-based payments.
The transactions between Xinjiang Goens Energy Technology Co., Ltd. and the Group between January - June
Note 5
2023 are related party transactions.
147
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(1) Accounts receivable
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 3,869,121 3,686,514
MAXEON SOLAR TECHNOLOGIES,PTE.LTD. and its
371,113 46,949
subsidiaries
Shenzhen Qianhai Sailing International Supply Chain
155,512 144,349
Management Co., Ltd. and its subsidiaries
TCL Microchip Technology (Guangdong) Co., Ltd. and its
14,405 12,559
subsidiaries
SunPower Systems International Limited 13,640 13,163
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund
7,066 -
Partnership (Limited Partnership)
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 5,751 10,095
Inner Mongolia Zhongjing Science and Technology Research
2,732 -
Institute Co., Ltd. and its subsidiaries
Zhonghuan Feilang (Tianjin) Technology Co., Ltd. 2,586 2,500
Getech Ltd. and its subsidiaries 289 -
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co.,
100 -
Ltd. and its subsidiaries
LG Electronics (Huizhou) Co., Ltd. 191 478
Tianjin Qiyier Communication & Broadcasting Co., Ltd. and
65 54
its subsidiaries
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 30 22
Inner Mongolia Shengou Electromechanical Engineering Co.,
- 785
Ltd.
Thunderbird Innovation Technology (Shenzhen) Co., Ltd. and
- 658
its subsidiaries
4,442,601 3,918,126
148
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(2) Accounts payable
June 30, 2024 January 1, 2024
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 1,518,668 1,113,639
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,152,088 1,246,459
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries 315,624 284,721
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries 190,644 198,696
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. and its subsidiaries 60,035 49,341
Inner Mongolia Shengou Electromechanical Engineering Co.,
Ltd. 48,463 46,226
Getech Ltd. and its subsidiaries 33,073 34,963
TCL Microchip Technology (Guangdong) Co., Ltd. and its
subsidiaries 20,111 22,373
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 12,873 31,915
Joint ventures and subsidiaries of TCL Industries Holdings
Co., Ltd. and its subsidiaries 599 -
Huizhou TCL Human Resources Service Co., Ltd. and its
subsidiaries - 2,671
3,352,178 3,031,004
149
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(3) Other receivables
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 193,382 133,531
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. and its subsidiaries 21,363 13,026
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 17,046 8,120
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 7,738 7,791
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries 5,169 1,898
Getech Ltd. and its subsidiaries 5,120 5,127
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries 4,144 9,114
TCL Microchip Technology (Guangdong) Co., Ltd. and its
subsidiaries 3,619 12,335
Zhonghuan Aineng (Beijing) Technology Co., Ltd. 3,053 3,053
MAXEON SOLAR TECHNOLOGIES,PTE.LTD. and its
subsidiaries 1,243 1,105
Inner Mongolia Xinhua Bandaoti Technology Co., Ltd. 369 219
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co.,
Ltd. and its subsidiaries
293 215
Huizhou TCL Human Resources Service Co., Ltd. and its
subsidiaries 176 170
LG Electronics (Huizhou) Co., Ltd. 10 336
JOLED Incorporation - 2,823
Inner Mongolia Xinhuan Silicon Energy Technology Co., Ltd. - 1,629
262,725 200,492
150
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
X
Parties due from and to Transactions (continued)
RelatedBalances and Related-Partyrelated parties (Continued)
4
(4) Other payables
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 557,168 613,191
Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund
Partnership (Limited Partnership) 428,100 428,100
Getech Ltd. and its subsidiaries 80,009 112,086
Huizhou TCL Human Resources Service Co., Ltd. and its
subsidiaries
79,430 46,151
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries 71,742 82,487
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries
64,534 77,143
Aijiexu New Electronic Display Glass (Shenzhen) Co., Ltd. 9,317 9,317
Wuxi TCL Venture Capital Partnership (Limited Partnership) and
its subsidiaries
5,533 5,500
Inner Mongolia Shengou Electromechanical Engineering Co.,
Ltd. 4,594 2,796
TCL Microchip Technology (Guangdong) Co., Ltd. and its
subsidiaries
1,493 3,751
Tianjin Huanyan Technology Co., Ltd. 1,099 -
Ningbo Dongpeng Weichuang Equity Investment Partnership
(Limited Partnership) and its subsidiaries 936 943
Yixing Jiangnan Tianyuan Venture Capital Company (Limited
Partnership) and its subsidiaries
614 611
Thunderbird Innovation Technology (Shenzhen) Co., Ltd. and its
subsidiaries 465 401
Nanjing Zijin A Dynamic Investment Partnership (Limited
Partnership) and its subsidiaries
391 389
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. and its subsidiaries 76 118
Ningbo Dongpeng Heli Equity Investment Partnership (Limited
Partnership)
67 66
China Innovative Capital Management Limited 57 86
Huaxia CPV (Inner Mongolia) Power Co., Ltd. 45 45
Jiangsu Jixin Bandaoti Silicon Material Research Institute Co.,
Ltd. and its subsidiaries
20 20
Shanghai Gen Auspicious Venture Capital Partnership (Limited
Partnership) and its subsidiaries 11 8,892
Shenzhen Tixiang Business Management Technology Co., Ltd.
and its subsidiaries
8 -
Joint ventures and subsidiaries of TCL Industries Holdings Co.,
Ltd. and its subsidiaries 2 -
1,305,711 1,392,093
151
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
Parties due from and to Transactions (continued)
RelatedBalances and Related-Partyrelated parties (Continued)
4
(5) Non-current liabilities due within one year
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 20,860 14,042
Huaxia CPV (Inner Mongolia) Power Co., Ltd. - 2,775
20,860 16,817
(6) Prepayments
June 30, 2024 January 1, 2024
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 66,755 -
Huizhou TCL Human Resources Service Co., Ltd. and its
subsidiaries 15,092 133
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries
8,753 -
Getech Ltd. and its subsidiaries 7,539 15,695
Tianjin Huanyan Technology Co., Ltd. 6,466 6,466
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries
3,685 399
Inner Mongolia Xinhuan Silicon Energy Technology Co., Ltd. 1,747 156
TCL Industries Holdings Co., Ltd. and its subsidiaries 1,691 46,726
Xinjiang Goens Energy Technology Co., Ltd. - 152
111,728 69,727
152
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
Parties due from and to Transactions (continued)
RelatedBalances and Related-Partyrelated parties (Continued)
4
(7) Advances from customers
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 8,028 304
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries 110 110
Shenzhen Tixiang Business Management Technology Co., Ltd.
and its subsidiaries
9 -
8,147 414
(8) Contract liabilities
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 31,839 71,842
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries
1,058 1,424
TCL Microchip Technology (Guangdong) Co., Ltd. and its
subsidiaries
121 67
MAXEON SOLAR TECHNOLOGIES,PTE.LTD. and its
subsidiaries
41 46
Inner Mongolia Huanye Material Co., Ltd. and its subsidiaries 22 32
Inner Mongolia Zhongjing Science and Technology Research
Institute Co., Ltd. and its subsidiaries 4 -
33,085 73,411
(9) Lease liabilities
June 30, 2024 January 1, 2024
TCL Industries Holdings Co., Ltd. and its subsidiaries 43,473 40,772
Huaxia CPV (Inner Mongolia) Power Co., Ltd. - 8,690
43,473 49,462
153
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XI Related parties and related-party transactions (continued)
Parties due from and to Transactions (continued)
RelatedBalances and Related-Partyrelated parties (Continued)
4
(10) Deposits from related parties (note)
June 30, 2024 January 1, 2024
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries
211,200 195,470
TCL Air Conditioner (Wuhan) Co., Ltd. and its subsidiaries 78,796 98
Shenzhen Qianhai Sailing International Supply Chain
Management Co., Ltd. and its subsidiaries 67,716 60,899
Huizhou TCL Human Resources Service Co., Ltd. and its
subsidiaries
7,432 6,134
Ningbo Dongpeng Weichuang Equity Investment Partnership
(Limited Partnership) and its subsidiaries 550 547
TCL Industries Holdings Co., Ltd. and its subsidiaries 344 270
TCL Microchip Technology (Guangdong) Co., Ltd. and its
subsidiaries
2 7,505
366,040 270,923
Note: These deposits are made by related parties in the Company’s subsidiary
TCL Technology Group Finance Co., Ltd.
(11) Other non-current assets
June 30, 2024 January 1, 2024
Purplevine Holdings Limited and its subsidiaries 105,362 174,422
Getech Ltd. and its subsidiaries 12,064 4,429
TCL Industries Holdings Co., Ltd. and its subsidiaries 684 68
Shenzhen Jucai Supply Chain Technology Co., Ltd. and its
subsidiaries
297 297
118,407 179,216
154
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XII Share-based payments
1 Overall share-based payments(excluding TZE and its subsidiaries)
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 14,332
Total amount of the Company’s equity instruments that expired in the current period 2,043
Range of exercise prices of the Company’s stock options outstanding and remaining contract
-
term at the end of the period
Range of exercise prices of the Company’s other equity instruments outstanding and
-
remaining contract term at the end of the period
(1) Employee Stock Ownership Plan (Phase II) 2021-2023
According to the Proposal on the Management Measures of the Company’s Employee Stock Ownership Plan (Phase
II) 2021-2023 deliberated and adopted at the Second Extraordinary General Meeting 2022, and the Proposal on the
Company’s Employee Stock Purchase Plan (Phase II) 2021-2023 (Draft) adopted by the resolution of the of the 19th
Meeting of the Seventh-term Board of Directors and the 14th Meeting of the Seventh-term Board of Supervisors;
32.6211 million shares were granted to no more than 3,600 awardees at the price of RMB4.35 on July 22, 2022.
From January to June 2024, a total of 2,043,000 restricted shares granted by the Company became void due to the
awardees’ resignation.
(2) Employee Stock Ownership Plan (Phase III) 2021-2023
According to the Proposal on the Management Measures of the Company’s Employee Stock Ownership Plan (Phase
III) 2021-2023 deliberated and adopted at the Second Extraordinary General Meeting of 2023, and the Proposal on
the Company’s Employee Stock Purchase Plan (Phase III) 2021-2023 (Draft) adopted by the resolution of the 32nd
Meeting of the Seventh-term Board of Directors and the 21st Meeting of the Seventh-term Board of Supervisors,
64.99 million shares were granted to no more than 3,600 awardees at the price of RMB3.94 on June 16, 2023.
The vesting arrangement of the restricted stock granted under the above incentive plan is shown in the following
table:
Number of times Vesting period and ratio
After 12 months from the date of vesting of the holder's respective quota of
the underlying shares, the Shareholding Plan may decide whether to sell
50% of the shares or to transfer 50% of the holder's respective shares to the
First non-trade transfer or sale
account of the holder of the Shareholding Plan, provided that such transfer
and sales are then supported by the systems of SZSE and the Registratio n
and Settlement Corporation;
After 24 months from the date of vesting of the holder’s corresponding quota
of the underlying shares, the Shareholding Plan may decide whether to sell
50% of the shares or to transfer 50% of the holder’s corresponding shares to
Second non-trade transfer or sale
the account of the holder of the Shareholding Plan provided that such
transfer and sales are then supported by the systems of SZSE and the
Registration and Settlement Corporation.
2 Equity-settled share-based payments
The Group determined the fair value of equity
Method of determining the fair value of equity instrume nts
instruments on the grant date based on the fair
on the date of grant
value of the shares.
On each balance sheet date within the vesting
period, the Group determines the best
Basis for determining the number of exercisable equity estimate based on the latest number of employees
instruments eligible to exercise their options, and revise the
estimated number of exercisable equity
instruments.
Reasons for significant differences between current and
None
previous estimates
Accumulated amount of equity-settled share-based
payment included in capital reserve RMB 146,454,000
Total expense recognized for equity-settled share-based
payments in the current period RMB 72,595,000
3 The Company has no cash-settled share-based payments.
4 The Company has no share-based payment modification or termination.
155
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XII Share-based payments
5 Share-based payments by the controlling subsidiary TZE
（1） Stock option incentive plan
There were no options exercised during the reporting period. The remaining deadline for the exercise of the
second batch options under the stock option incentive plan 2021 is July 8, 2024. It is planned that they will be
cancelled after the expiration date.
Changes in stock options during the year
Number of stock options outstanding as at the beginning of the year 2,558
Number of stock options granted by the Company in the current period -
Number of stock options of the Company exercised in the current period -
Number of stock options of the Company voided in the current period -
Others -
Number of stock options outstanding as at the end of the year 2,558
（2） Employee stock ownership plan
(a) TZE’s employee stock ownership plan for 2022
On August 30, 2022, TZE held its second extraordinary general meeting of 2022 where the Proposal for the
Employee Stock Ownership Plan (Draft) and Its Summary for 2022 (hereinafter referred to as the "Employee
Stock Ownership Plan for 2022") was deliberated and adopted. In 2022, TZE repurchased a total of 9,515,263
shares by centralized bidding through the securities account opened specially for repurchasing shares, at an
average repurchase price of RMB 41.09 per share. Among the repurchased shares, 9,492,797 shares were used
for the Employee Stock Ownership Plan for 2022. The remaining 161,615 shares repurchased in 2021 were
also used for the Employee Stock Ownership Plan for 2022. In summary, a total of 9,654,412 shares were used
for the Employee Stock Ownership Plan for 2022. The lock up period for the shares purchased for the
Employee Stock Ownership Plan for 2022 is from September 8, 2022 to September 7, 2023. On June 30, 2023,
the Management Committee for the Employee Stock Ownership Plan for 2022 determined that the grant date
of stock quota under the Employee Stock Ownership Plan for 2022 should be July 1, 2023, and agreed to grant
a total of approximately 9,654,412 shares to employees who met the conditions of the Employee Sto ck
Ownership Plan for 2022.
(b) TZE’s employee stock ownership plan for 2023
The lock up period of the Company's 2023 Employee Stock Ownership Plan expired on June 8, 2024. As KPIs
were not met, all the 14,391,980 underlying shares corresponding to the 2023 Employee Stock Ownership
Plan (the total number of shares is 17,989,975 after the conversion into share capital in 2022) and their
corresponding dividends and other rights would belong to the Company according to the provisions of the
2023 Employee Stock Ownership Plan and would no longer belong to the holders. The management committee
for this phase of stock ownership plan would sell the shares at an appropriate time before the expiration of the
2023 Employee Stock Ownership Plan, and the proceeds will belong to the Company.
The Company held the 43rd meeting of the Six-term Board of Directors on October 25, 2023 to deliberate and
approve the "Proposal on the Scheme for the Repurchase of Corporate Shares". The Company repurchased a
total of 4,999,968 shares by centralized bidding through a dedicated securities account for share repurchase,
in order to use such shares to implement employee stock ownership plans or equity incentives.
156
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XII Share-based payments (continued)
5 Share-based payments by the controlling subsidiary TZE (continued)
（3） Equity-settled share-based payments
The Group determined the fair value of equity
Method of determining the fair value of equity
instruments on the grant date based on the fair
instruments on the date of grant
value of the shares.
On each balance sheet date within the vesting
period, the Group determines the best
Basis for determining the number of exercisable equity estimate based on the latest number of
instruments employees eligible to exercise their options, and
revise the estimated number of exercisable
equity instruments.
Reasons for significant differences between current and
None
previous estimates
Accumulated amount of equity-settled share-based
RMB 648,573,000
payment included in capital reserve
Total expense recognized for equity-settled share-based
RMB 147,738,000
payments in the current period
（4） TZE has no cash-settled share-based payments.
（5） TZE has no share-based payment modification or termination.
157
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XIII Commitments
1 Capital commitments
June 30, 2024
Contracted but not provisioned Note 1 35,628,315
Approved by Board but not contracted Note 2 502,018
36,130,333
Note 1 The capital commitments under contractual obligations but not provided for in the current period primarily
consisted of such commitments for construction of investment projects and external investments.
Note 2 The capital commitments approved by the Board but are not under contractual obligations in the curre nt period
primarily consist of such commitments for display business projects.
As of June 30, 2024, apart from the disclosures above, there were no other major commitments that are required
to be disclosed.
XIV Contingencies
Guarantees Provided for External Parties
As at June 30, 2024, the guarantee provided by the Company for the related party’s bank loans, commercial
drafts, letters of credit, etc., was RMB 2,502,078,000, as detailed below:
Actual Actual
Type of Term of Expired
Obligor guarantee occurrence
guarantee guarantee or not
amount date
December
Joint 54 days No
Subsidiary of TCL Industries 17, 2021
64,570 liability
Holdings Co., Ltd. August
guarantee 59 days No
29, 2019
Aijiexu New Electronic Joint
201,000
April
Display Glass (Shenzhen) Co., liability 7.5 No
28, 2020
Ltd. guarantee
Shenzhen Qianhai Sailing Joint
September 86-361
International Supply Chain 429,708 liability No
27, 2023 days
Management Co., Ltd. guarantee
Joint
Inner Mongolia Xinhua 326,800
May
liability 5.9 No
Bandaoti Technology Co., Ltd. 22, 2023
guarantee
Inner Mongolia Xinhuan Joint
May
Silicon Energy Technology Co., 1,480,000 liability 5 No
24, 2024
Ltd. guarantee
2,502,078
As at June 30, 2024, the amount of credit granted by the Group for the note discounting, note acceptance,
and non-financing guarantees of related parties was RMB1,291,570,000.
158
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XV Events after the Balance Sheet Date
1 In July 2024, TCL TECH completed the issuance of the 2024 Technology Innovation Corporate Bond (Digital
Economy) (Phase III), with an issuance scale of RMB 2 billion. This phase of bonds are divided into two
varieties. Among them, i) a Variety I bond has a maturity of 5 years providing the issuer with the options to
redeem at the end of the third year and adjust the coupon rate and providing the investors with put options;
the amount of Variety I bonds are RMB1 billion with a coupon rate of 2.29%; and ii) a Variety II bond has a
maturity of 5 years, with a total amount of RMB 1 billion and a coupon rate of 2.46%.
XVI Other Important Matters
(I) Segment reporting
1 Basis for determining reporting segment and accounting policies
According to the Company’s internal organizational structure, management requirements and internal reporting
system, the Company’s business is divided into four reporting segments: the display business, the new energy
photovoltaic and other silicon materials business, the distribution business and the other businesses. The
Company's management regularly evaluates the operating results of these reporting segments to determine the
allocation of resources and evaluate their performance. The Company’s four reporting segments are:
Display business: mainly includes the research and development, manufacturing and sales of display panels and
(1)
display modules, as well as complete display processing.
New energy photovoltaic and other silicon materials business: mainly includes the manufacture and sales of other
(2) silicon materials, 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.
159
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVI Other Important Matters (Continued)
(I) Segment reporting (continued)
2 Financial information of reporting segments
For the six-month period ending June 30, 2024
Other
New energy
businesses
photovoltaics and Distribution
Display and internally Total
other silicon business
offset
materials business
accounts
Operating
49,877,063 16,213,493 13,649,333 483,848 80,223,737
revenue
Net profits 2,696,011 (3,175,764) 62,945 (51,341) (468,149)
Total assets 221,429,601 125,196,373 7,801,619 27,905,947 382,333,540
Total
146,688,074 69,260,983 6,310,452 21,837,841 244,097,350
liabilities
For the six-month period ending June 30, 2023
Other
New energy
Display businesses
photovoltaics and Distribution
and materials and internally Total
other silicon business
business offset
materials business
accounts
Operating
35,528,427 34,897,789 13,812,825 909,685 85,148,726
revenue
Net profits (3,448,872) 4,838,880 78,707 921,868 2,390,583
Total assets 217,251,615 122,327,493 8,833,579 32,911,805 381,324,492
Total
144,644,005 63,920,179 7,364,037 25,762,965 241,691,186
liabilities
160
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to the key items presented in the financial statements of the Company
1 Accounts receivable
June 30, 2024 January 1, 2024
Accrual
Ratio Bad-debt Ratio Bad-debt Accrual
Amount Percenta Amount
(%) Allowance (%) Allowance Percentage
ge
Within 1
192,399 100% 806 0.42% 351,594 100% 806 0.23%
year
2 Other receivables
June 30, 2024 January 1, 2024
Dividends receivable 26,780 -
Other receivables 8,866,519 19,614,272
8,893,299 19,614,272
(a) Nature of other receivables is analyzed as follows:
June 30, 2024 January 1, 2024
Security and deposits 2,942 2,841
Others 8,863,577 19,611,431
8,866,519 19,614,272
(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, 2024 1,607 - 31,636 33,243
Accrued in the
3,819 - - 3,819
period
Reversal of current
- - (8) (8)
period
Write-off of current
- - (27) (27)
period
June 30, 2024 5,426 - 31,601 37,027
161
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
2 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
June 30, 2024 January 1, 2024
Amount Ratio (%) Amount Ratio (%)
Within 1 year 7,489,630 84.12% 17,998,302 91.61%
1 to 2 years 62,866 0.71% 673,321 3.43%
2 to 3 years 662,660 7.44% 12,776 0.06%
Over 3 years 688,390 7.73% 963,116 4.90%
8,903,546 100.00% 19,647,515 100.00%
The outstanding other receivables were mostly current accounts with related parties.
The top five other receivables of the Company amounted to approximately RMB 7,170,577,000 (December
31, 2023: RMB 18,826,190,000), accounting for 80.54% of the total other receivables of the Company
(December 31, 2023: 95.82%).
3 Long-term equity investments
June 30, 2024 January 1, 2024
Impairment Carrying Impairment Carrying
Gross amount allowance amount Gross amount allowance amount
Associates and joint
16,965,418 - 16,965,418 16,717,864 - 16,717,864
ventures (1)
Subsidiaries (2) 63,295,750 - 63,295,750 62,947,128 - 62,947,128
80,261,168 - 80,261,168 79,664,992 - 79,664,992
As of June 30, 2024, there are no major restrictions on the realization of investment and the remittance of return on long -
term equity investments.
162
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(1) Associates and joint ventures
Increase or decrease in current period
Increase/ Investment gains Other Other
Other Declared cash Provision June 30, 2024
decrease in and losses comprehensive increases
January 1, 2024 equity dividends or for
investment in recognized by income and
changes profits impairment
current period equity method adjustment decreases
China Innovative Capital Management
970,300 - (66,750) - - - - - 903,550
Limited
LG Electronics (Huizhou) Co., Ltd. 89,810 - 6,241 - - (13,400) - - 82,651
Shenzhen Tixiang Business Management
Technology Co., Ltd. 1,375 - (285) - - - - - 1,090
Shenzhen Jucai Supply Chain Technology
19,642 - 2,881 1 797 - - - 23,321
Co., Ltd.
Guangdong Innovative Lingyue
Intelligent Manufacturing and
Information Technology Industry Equity 870,274 - (83,343) - - - - - 786,931
Investment Fund Partnership (Limited
Partnership)
Guangdong Utrust Emerging Industry
Equity Investment Fund Partnership 180,833 - (8,780) - - - - - 172,053
(Limited Partnership)
Shenzhen Qianhai Sailing International
Supply Chain Management Co., Ltd. 28,137 - (3,282) 30 - - - - 24,885
(HQ)
163
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(1) Associates and joint ventures
Increase or decrease in current period
Increase/ Investment gains Other Other
January 1, 2024 Other Declared cash Provision June 30, 2024
decrease in and losses comprehensive increases
equity dividends or for
investment in recognized by income and
changes profits impairment
current period equity method adjustment decreases
Deqing Puhua Equity Investment Fund
149,118 - (28,581) - - - - - 120,537
Partnership (Limited Partnership)
Ningbo Meishan Bonded Port Qiyu
Investment Management Partnership 32,182 - (8,216) - - - - - 23,966
(Limited Partnership)
Huizhou TCL Human Resources Service
8,930 - 3,445 - 228 - - - 12,603
Co., Ltd. (HQ)
TCL Microchip Technology (Guangdong)
Co., Ltd. (HQ) 278,198 30,000 (17,581) - 341 - - - 290,958
Others 14,089,065 (19,979) 709,851 143,264 (265) (377,620) - (21,443) 14,522,873
16,717,864 10,021 505,600 143,295 1,101 (391,020) - (21,443) 16,965,418
164
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Direct Decrease
January 1, Increase in June 30,
shareholding in current
2024 current period 2024
ratio (%) period
TCL China Star Optoelectronics Technology
79.78% 34,049,253 283,977 - 34,333,230
Co., Ltd. (HQ)
TCL Technology Group Finance Co., Ltd. 82.00% 1,256,003 321 - 1,256,325
TCL Technology Group (Tianjin) Co., Ltd.
100.00% 16,200,000 - - 16,200,000
(HQ)
TCL Zhonghuan Renewable Energy
2.55% 1,929,733 - - 1,929,733
Technology Co., Ltd. (HQ)
TCL Culture Media (Shenzhen) Co., Ltd. 100.00% 361,414 - - 361,414
Shenzhen Dongxi Jiashang Entrepreneurship
100.00% 200,000 - - 200,000
Investment Co., Ltd. (HQ)
Guangdong TCL Juxiang Technology Co., Ltd. 100.00% 110,000 - - 110,000
Highly Information Industry Co., Ltd. (HQ) 66.46% 107,296 - - 107,296
TCL Communication Equipment (Huizhou) -
75.00% 79,500 - 79,500
Co., Ltd. (HQ)
TCL Medical Radiological Technology
100.00% 58,497 - - 58,497
(Beijing) Co., Ltd. (HQ)
Shenzhen TCL Strategic Equity Investment
100.00% 71,010 - 15,346 55,664
Fund Partnership (Limited Partnership)
TCL Industrial Technology Research Institute,
100.00% 20,000 - - 20,000
Ltd. (Europe)
Wuhan TCL Industrial Technology Research 9
100.00% 20,000 - 20,009
Institute, Ltd.
Shenzhen TCL High-Tech Development Co.,
100.00% 20,000 155 - 20,155
Ltd. (HQ)
Beijing HAWK Cloud Information Technology
100.00% 20,000 - - 20,000
Co., Ltd.
Huizhou Hongsheng Science and Technology
100.00% 1,000 - - 1,000
Development Co., Ltd.
Tianjin Silica Material Technology Co., Ltd. 100.00% 2,800,000 - - 2,800,000
Xiamen TCL Technology Industrial Investment
100.00% 464,397 77,500 - 541,897
Co., Ltd.
TCL Internet Technology (Shenzhen) Co., Ltd.
100.00% 15,000 - - 15,000
(HQ)
Ningbo TCL Equity Investment Ltd. 100.00% 300,000 - - 300,000
TCL Technology Investments Limited (HQ) 100.00% 2,988,293 - - 2,988,293
Huizhou Dongshen Jia’an Equity Investment
99.94% 10,000 - - 10,000
Partnership (Limited Partnership)
TCL Financial Technology (Shenzhen) Co.,
100.00% 15,036 - - 15,036
Ltd.
Zhonghuan Advanced Bandaoti Technology
7.50% 1,790,312 - - 1,790,312
Co., Ltd. (HQ)
Equity incentives of subsidiaries 60,384 2,005 - 62,389
62,947,128 424,351 (75,730) 63,295,750
For the registered capital of subsidiaries and the Company’s equity interests in the subsidiaries, see Note VIII.
165
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
4 Other non-current financial assets
June 30, 2024 January 1, 2024
Equity investments 442,985 442,985
Debt investments 603,630 201,315
1,046,615 644,300
5 Operating revenue and operating costs
January - June 2024 January - June 2023
Operating Operating Operating Operating
revenue cost revenue cost
Core business 386,446 380,021 433,463 431,097
Non-core business 312,857 69,585 302,951 73,107
699,303 449,606 736,414 504,204
6 Return on investment
January - June 2024 January - June 2023
Profit from holding debt instruments measured at fair value
176,467 104,795
throughcurrent profits and losses
Gain on disposal of derivative financial assets/liabilities - 4,637
Dividends from subsidiaries 162,097 713,047
Share of profit of associates for current period 519,736 716,859
Share of profit of joint ventures for current period (14,136) (34,833)
Net income from disposal of long-term investments 51,495 284,242
895,659 1,788,747
As of June 30, 2024, there were no significant restrictions on the collection of return on investment.
166
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XVII Notes to Financial Statements of the Parent Company (Continued)
7 Net cash generated from operating activities
Net cash used in operating activities of the Company was RMB5,509,763,000.
8 Ending balance of cash and cash equivalents
The ending balance of cash and cash equivalents of the Company was RMB 2,677,457,000.
9 Contingent liabilities
As of June 30, 2024, the contingent liabilities not provided for in the financial report were as follows:
June 30, 2024
Guarantees for bank loans of subsidiaries 50,189,223
Guarantees such as trade notes, letters of credit and letters of 25,049,495
guarantee for subsidiaries
Guarantees for bank loans, trade notes, letters of credit, etc. of
2,502,078
related parties
XVIII Comparative Figures
Certain comparative data have been reclassified to comply with the presentation of the current period.
167
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XIX Non-recurring profit and loss items and amount
January - June 2024 January - June 2023
Gain or loss on disposal of non-current assets (inclusive of
48,439 321,753
impairment allowance write-offs)
Public subsidies charged to current profits and losses (exclusive of
public grants closely related to the Company’s normal business
operations, in compliance with national policies, enjoyed according 972,603 1,267,259
to determined criteria, and with a continuous impact on the
Company’s profits and losses)
The profits or losses generated from changes in fair value arising
from financial assets and financial liabilities held by non-financial
enterprises and the profits or losses from the disposal of such
(3,310) (42,740)
financial assets and financial liabilities, except for the effective
hedging business related to the company’s normal business
operations
Reversal of provision for impairment of receivables that have been
30,500 2,500
individually tested for impairment
Non-operating income and expenses other than the above 258,631 707,421
Income tax effects (156,219) (364,522)
Non-controlling interests effects (714,189) (951,111)
Non-recurring gains and losses attributable to ordinary shareholders
436,455 940,560
of the parent company
According to the relevant provisions of the Interpretative Announcement No. 1 on Information Disclosure by
Companies Issuing Securities to the Public - Non-recurring Profits and Losses (Revised in 2023), public grants closely
related to the Company’s normal business operations, in compliance with national policies, enjoyed according to
determined criteria, and with a continuous impact on the Company’s profits and losses shall be presented as recurring
profits and losses. Public grants presented as non-recurring profits or losses for the period from January to June 2023
comprise of the public grants related to assets amounting to RMB 191,378,000, which should be classified as recurring
profits or losses in accordance with the relevant provisions of the 2023 Explanatory Announcement No. 1. The change
did not have any material impact on the Company's financial position and operation results.
168
TCL Technology Group Corporation
Notes to Financial Statements
For the period from January 1 to June 30, 2024
(RMB’000)
XX Weighted Average Return on Equity (ROE) and Earnings per Share (EPS)
The Company calculates the ROE and EPS as follows in accordance with "the Compilation Rules No. 9 for Information
Disclosure of Companies Offering Securities to the Public-Calculation and Disclosure of Return on Equity and
Earnings per Share (Revised in 2010)" issued by the China Securities Regulatory Commission and relevant provisions
of accounting standards:
Item Net profits Earnings per share (RMB yuan)
attributable to
Weighted
the parent
average
company Basic earnings Diluted earnings
return on
for the per share per share
equity (%)
reporting
period
Net profits attributable to ordinary
995,213 1.87% 0.0535 0.0530
shareholders of the Company
Net profits attributable to ordinary
shareholders of the Company before 558,758 1.05% 0.0301 0.0298
non-recurring gains and losses
Company Name: TCL Technology Group Corporation
Date: August 26, 2024
The financial statements and the notes thereto from page 1 to page 169 are signed by:
Person-in- Person-in-
charge charge of the
Legal of financial accounting
representative: Li Dongsheng affairs: Li Jian department: Jing Chunmei
169
