TCL科技:2021年半年度报告（英文版）

TCL 科技集团股份有限公司
TCL Technology Group Corporation
INTERIM REPORT 2021
10 August 2021
Table of Contents
Part I Important Notes Table of Contents and Defin... 3
Part II Corporate Information and Key Financial In... 7
Part III Management Discussion and Analysis ........ 10
Part IV Corporate Governance........................ 40
Part V Environmental and Social Responsibility ..... 43
Part VI Significant Events ......................... 49
Part VII Share Changes and Shareholder Information.. 63
Part VIII Bonds .................................... 69
Part IX Financial Statements ....................... 75
Part I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) the Supervisory Committee as well as the
directors supervisors and senior management of TCL Technology Group Corporation
(hereinafter referred to as the “Company”) hereby guarantee the factuality accuracy and
completeness of the contents of this Report and its summary and shall be jointly and
severally liable for any misrepresentations misleading statements or material omissions
therein.Mr. Li Dongsheng the Chairman of the Board Ms. Du Juan the person-in-charge of
financial affairs (Chief Financial Officer) and Mr. Xi Wenbo the person-in-charge of the
financial department hereby guarantee that the financial statements carried in this Report
are factual accurate and complete.All the Company’s directors have attended the Board meeting for the review of this
Report and its summary.Any plans development strategies or other forward-looking statements mentioned in
this Report and its summary shall NOT be considered as promises to investors. Therefore
investors are reminded to exercise caution when making investment decisions.The Company has no interim dividend plan either in the form of cash or stock.This Report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions the Chinese version shall
prevail.Definitions
Term Definition
The “Company” the “Group” “TCL” “TCL TCL Technology Group Corporation and its consolidated subsidiaries exceptTech.” or “we” where the context otherwise requires.The “Current Period” The period from 1 January 2021 to 30 June 2021.TCL Industries TCL Industries Holdings Co. Ltd.TCL CSOT TCL China Star Optoelectronics Technology Co. Ltd.Zhonghuan Electronics Tianjin Zhonghuan Electronics Group Co. Ltd.Tianjin Zhonghuan Semiconductor Co. Ltd. a majority-owned subsidiary of the
Zhonghuan Semiconductor Company listed on the SME Board of the Shenzhen Stock Exchange (stock code:
002129.SZ)
Tianjin Printronics Circuit Corporation a majority-owned subsidiary of the
TPC Company listed on the SME Board of the Shenzhen Stock Exchange (stock code:
002134.SZ)
Wuhan CSOT Wuhan China Star Optoelectronics Technology Co. Ltd.Guangdong Juhua Guangdong Juhua Printed Display Technology Co. Ltd.China Ray Guangzhou China Ray Optoelectronic Materials Co. Ltd.Highly Information Industry Co. Ltd. a majority-owned subsidiary of the
Highly Company listed on the National Equities Exchange and Quotations (stock code:
835281)
Moka International Moka International Limited
TCL Microchip TCL Microchip Technology (Guangdong) Co. Ltd.Admiralty Harbour Capital Admiralty Harbour Capital Limited
China Innovative China Innovative Capital Management Limited
Zhonghuan Advanced Zhonghuan Advanced Semiconductor Materials Co. Ltd.t1 project The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT
The generation 8.5 (or G8.5) TFT-LCD (including oxide semiconductor)
t2 project
production line of TCL CSOT
t3 project The generation 6 (or G6) LTPS-LCD panel production line of TCL CSOT
The generation 6 (or G6) flexible LTPS-AMOLED panel production line of TCL
t4 project
CSOT
t6 project The generation 11 (or G11) new TFT-LCD production line of TCL CSOT
The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD and
t7 project
AMOLED production line of TCL CSOT
The generation 8.6 (or G8.6) new oxide semiconductor production line of
t9 project
Guangzhou CSOT
The generation 8.5 (or G8.5) TFT-LCD production line of Suzhou China Star
t10 project or the Samsung Suzhou plant
Optoelectronics Technology Co. Ltd.M10 project or the Samsung Suzhou
Suzhou China Star Optoelectronics Display Co. Ltd.module plant
GW Gigawatt power unit for solar cells 1GW＝1000 megawatt
12-inch ultra-large DW-cut solar monocrystalline silicon square wafer size:
G12 44096mm2 diagonal line: 295mm side length: 210mm with its size 80.5%
larger than the conventional M2
MAXEON MAXEON SOLAR TECHNOLOGIESPTE.LTD.Documents Available for Reference
(I) The financial statements signed and stamped by the Company’s legal representative Chief Financial
Officer and person-in-charge of the financial department.(II) The originals of all the Company’s announcements and documents that were disclosed to the public
during the Reporting Period.Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name TCL Tech. Stock code 000100
Place of listing Shenzhen Stock Exchange
Company name in Chinese TCL 科技集团股份有限公司
Abbr. (if any) TCL 科技
Company name in English (if
TCL Technology Group Corporation
any)
Abbr. (if any) TCL TECH.Legal representative Li Dongsheng
II Contact Information
Board Secretary
Name Liao Qian
10/F Tower G1 International E Town TCL Science Park 1001
Office address
Nanshan District Shenzhen Guangdong Province China
Tel. 0755-3331 1666
Email address ir@tcl.com
III Other Information
1. Contact Information of the Company
No change occurred to the registered address office address and their zip codes website address and email address of the Company in
the Reporting Period. The said information can be found in the 2020 Annual Report.2. Media for Information Disclosure and Place where this Report is Lodged
No change occurred to the newspapers designated by the Company for information disclosure the website designated by the CSRC for
disclosing the Company’s periodic reports and the place for lodging such reports in the Reporting Period. The said information can be
found in the 2020 Annual Report.3. Other information
No change occurred to the other information in the Reporting Period.IV Key Financial Information
Indicate whether there is any retrospectively restated datum in the table below.□ Yes ■ No
Item H1 2021 H1 2020 Change (%)
Revenue (RMB) 74298646758 29333210856 153.29%
Net profit attributable to the company’s
6783884807 1208065986 461.55%
shareholders (RMB)
Net profit attributable to the company’s
shareholders before non-recurring gains and
5497817947 181862847 2923.06%
losses (RMB)
Net cash generated from/used in operating
13895714157 7347810779 89.11%
activities (RMB)
Basic earnings per share (RMB/share) 0.5026 0.0932 439.27 %
Diluted earnings per share (RMB/share) 0.4835 0.0893 441.43%
Up by 14.85 percentage
Weighted average return on equity (%) 18.96% 4.11 %
points
30 June 2021 31 December 2020 Change (%)
Total assets (RMB) 302205481260 257908278887 17.18%
Owners’ equity attributable to the
37557664687 34107795454 10.11%
company’s shareholders (RMB)
The total share capital at the end of the last trading session before the disclosure of this Report:
Total share capital at the end of the last trading session before14030788362
the disclosure of this Report (share)
Fully diluted earnings per share based on the latest total share capital above:
Dividends paid for preference shares N/A
Fully diluted earnings per share based on the latest total share
0.4835
capital above (RMB/share)
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable ■ Not applicable
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable ■ Not applicable
3. Reasons for Accounting Data Differences Above
□ Applicable ■ Not applicable
VI Non-Recurring Gains and Losses
■ Applicable □ Not applicable
Unit: RMB
Item Amount
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-
offs) 739340047
Government subsidies charged to current profit or loss (exclusive of government subsidies
given in the Company’s ordinary course of business at fixed quotas or amounts as per the 359192482
government’s uniform standards)
Gain equal to the amount by which investment costs for the Company to obtain
subsidiaries associates and joint ventures are lower than the Company’s enjoyable fair 40299579
value of identifiable net assets of investees when making investments
Spin-off costs in staff arrangement integration etc. -
Gain or loss on fair-value changes in held-for-trading and derivative financial assets and
liabilities & investment income from disposal of held-for-trading and derivative financial
assets and liabilities and other debt investments (exclusive of effective portion of hedges 210273097
that arise in the Company’s ordinary course of business)
Non-operating income and expense other than the above 244569559
Other gains and losses that meet the definition of non-recurring gain/loss -
Less: Corporate income tax 82885697
Non-controlling interests (net of tax) 224722207
Total 1286066860
Explanation of why the Company reclassifies as recurrent a non-recurring gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss
Items:
□ Applicable ■ Not applicable
No such cases for the Reporting Period.TC L Technology Group Corporation Interim Report 2021
Part III Management Discussion and Analysis
I Main businesses of the Company during the reporting period
Part III Management Discussion and Analysis
I Main businesses of the Company during the reporting period
Overview
The COVID-19 epidemic has yet to subside geopolitical relations have entered a new landscape and
international trade frictions pose multiple challenges to global economic development. However the
fact that international division of labor and comparative advantage determine the basis for the
allocation of production factors industrial chain and value chain distribution will remain unchanged.As a sound industrial layout and sound supply chain systems have already been established in China
the complex and volatile internal and external environment will further consolidate the strategic
direction of independent and controllable key and core technologies for scientific and technological
enterprises which will help accelerate the tackling of fundamental high-end and core technologies
fortification and will promote the upgrading of the industrial chain and manufacturing industry thus
ushering in new development opportunities for China's technology sector.Dedicated to national strategic sectors that are high-tech asset-heavy and long-cycle the Company
focused on the development of its core main businesses: semiconductor displays and semiconductor
photovoltaics and semiconductor materials. With the accelerated trend of country-by-country shifts
and concentration of leadership in the semiconductor display industry driven by operation and
management efficiency generations of production lines and scale effect the competitive advantages
of Chinese enterprises have been brought to the fore and the Company's semiconductor display
businesses have initiated a phase of overall leadership that spans from efficiency and products to
technologies and ecology. Meanwhile the Company empowered and supported by continuous reform
and innovation extreme management efficiency and global operational capacity has made remarkable
achievements in the layout of the new industrial track for semiconductor photovoltaics and
semiconductor materials businesses and has successfully created a secondary growth curve once again.During the reporting period the Company achieved operating revenue of CNY 74.3 billion a year-on-
year increase of 153.3%; net profit of CNY 9.25 billion a year-on-year increase of 765%; net profit of
TC L Technology Group Corporation Interim Report 2021
CNY 6.78 billion attributable to the shareholders of listed companies a year-on-year increase of
461.5%; comprehensively surpassing the budget. Wherein: (1) Benefiting from the upward prosperity
of the industry coupled with factors such as the fast-paced growth of its own capacity and the
improvement of product structure the Company achieved from the semiconductor display business
operating revenue of CNY 40.8 billion a year-on-year increase of 93.6% under the same conditions
and net profit of CNY 6.61 billion a year-on-year increase of CNY 6.75 billion; (2) Leveraging
advantages such as technological accumulation leading capacity improvement and supply chain
synergy through the reform of mechanisms and systems and the stimulation of organizational vitality
the Company saw significant year-on-year increases in both revenue and profit from its semiconductor
photovoltaics and semiconductor businesses. Zhonghuan Semiconductor achieved operating revenue
of CNY 17.64 billion a year-on-year increase of 104.1% and net profit of CNY 1.89 billion a year-
on-year increase of 160.6%.The Company focused on investment in the research and development of core techniques basic
technologies and new materials to enhance the technical strength of key links in value chains and
strategic control points. During the reporting period the Company invested CNY 5.09 billion in
research and development accounting for 7.0% of operating revenue a year-on-year increase of 76.9%.To date the number of PCT patent applications reached 13170 and the number of patent applications
in the field of quantum dot electroluminescence technology and materials has reached 1480 ranking
second in the world. In the field of semiconductor displays the Company focused on promoting the
development of new display technologies such as printed OLED/QLED Mini-LED and Micro-LED
achieving ecological leadership among next-generation display technologies; in the field of
semiconductor photovoltaics and semiconductor materials the Company has established advantages
in 210 mm large silicon wafers and shingled photovoltaic modules as well as the ecologies of related
technologies and is a leader in the technologies and production techniques of the 4-12-inch products
in China.Production capacity was further improved scale advantage was increased and structure of products
and customers were continuously optimized. CSOT Suzhou t10 (formerly Samsung Suzhou LCD
factory) and the supporting module factory (M10) were delivered and consolidated on April 1st ; the
Ultra High Definition (UHD) Display Project t7 ramped up as scheduled and the Company focused
on t9 investment and construction in the fields of high-end IT and commercial displays. The growth
rate of the business scale for semiconductor displays will remain the highest in the industry. The
Company has a total capacity of 70 GW for semiconductor photovoltaic materials including a capacity
of 39 GW for G12. The construction of the Ningxia Zhonghuan Phase VI Project began in March the
TC L Technology Group Corporation Interim Report 2021
Diamond Wire Cut Ultra-thin Silicon Wafer Intelligent Factory Project implemented in Tianjin and
Inner Mongolia was put into operation smoothly the Jiangsu G12 High-efficiency Shingled
Photovoltaic Modules Project has achieved a production capacity of 6 GW the G12 High-efficiency
Shingled Photovoltaic Modules Project in Tianjin has entered the construction stage and the
manufacturing capacity of the semiconductor photovoltaics industrial chain has rapidly improved. The
Company will increase investment in Zhonghuan Advanced bases in Inner Mongolia Tianjin and
Jiangsu and promote the full coverage of all kinds of power semiconductor chips and integrated circuit
chips; in addition the Company has invested in the establishment of a semiconductor investment and
operation platform in order to strengthen the synergy of industrial chains and is looking for industrial
investment and layout opportunities in related fields such as semiconductor integrated circuits.The Company has maintained a global supply chain management system and operation capabilities.The Company possesses globally unified management competencies in areas such as supply chain
management intellectual property protection risk control and compliant operations. At present the
planned capacity of the CSOT factory in India is 8 million large-sized display modules and 30 million
small and medium-sized display modules which can meet the local supporting needs of strategic
customers; Moka Technology a subsidiary of the Company has established the capacity to supply
complete machines and modules in Mexico; Zhonghuan Semiconductor has set up module factories in
Europe and Mexico and deployed battery capacity in Malaysia the Philippines and Singapore.The Company accelerated digital transformation and continued to promote the upgrading of extreme
cost efficiency and agile manufacturing. The Company continued to devote itself to cultivating the
fields of intelligent manufacturing and Industry 4.0 building TCL CSOT into an example of an
intelligent factory and established the first industrial interconnection total solution in the industry; also
Zhonghuan Semiconductor’s Industry 4.0 intelligent factory continued to promote digital and
intelligent transformation and upgrading.This year marks the 40th anniversary of TCL's founding. Over the past 40 years TCL has loyally
dedicated itself to the manufacturing industry and met the challenges brought about by change
traveling upstream along the electronics industrial chain all the way from processing trade and terminal
production to display device manufacturing new energy and core material layouts. The Company
entered the semiconductor display industry in 2009 and gradually established TCL CSOT as a leader
in efficiency profits and scale effect; in 2020 the Company by delisting Zhonghuan Electronic and
shifting its layout to the semiconductor photovoltaics and semiconductor materials track clearly
defined its strategic direction moving towards being a leading global technology group by
TC L Technology Group Corporation Interim Report 2021
coordinating its two core industries. With the accumulation of gradually deepening leading technology
advanced techniques and financial underpinnings the Company will also complete the transformation
from being a follower to becoming a leader thus guiding China's technology sector to global ecological
leadership based on a more solid foundation.Looking ahead there will be two innate characters remaining unchanged in the semiconductor display
industry which are the improvement of the supply-demand relationship and the concentration of
leadership. The cyclical weakening trend of the industry will be made clear and the relative
competitive advantage of TCL CSOT will be further strengthened; the global consensus on improving
the quality and efficiency of clean energy will drive the rapid growth of the semiconductor
photovoltaics industry; with the accelerated development of the semiconductor industry in China
historic opportunities and challenges coexist. The Company will build strategic control points in the
fields of semiconductor displays semiconductor photovoltaics and semiconductor materials adhere tothe business strategy of “Improving Business Quality and Efficiency Strengthening Advantages andMaking up for Disadvantages Accelerating Global Layout and Innovation-driven Development”
continuously improve competitiveness develop sustainably and healthily and become a global
industry leader.Operation of main businesses
The Company's main business structure consists of its semiconductor display business semiconductor
photovoltaics and semiconductor materials businesses industrial finance and investment platforms and
other businesses. The Company will continue to optimize its business structure and further concentrate
its resources on the development of its main businesses to achieve the strategic goal of being a global
leader in its two core industries: semiconductor displays and semiconductor photovoltaics and
semiconductor materials.TCL Tech
Semi-conductor Semi-conductor photovoltaic & Industrial finance &
Other
display Semi-conductor materials investment
Zhonghuan Zhonghuan TCL Financial TCL
TCL CSOT China Ray Highly TPC Photovoltaic Advanced Capital
Moka TCL
Juhua Technology Microchip
TC L Technology Group Corporation Interim Report 2021
(I) Semiconductor display business
The supply-demand relationship of the semiconductor display industry has improved industry
concentration has increased product prices have continued to rise and the overall profitability of the
industry has continued to improve. As a leading enterprise in the semiconductor display industry TCL
CSOT has fully benefited from the upward prosperity of the industry while it continues to expand its
scale through organic growth and inorganic mergers and acquisitions maintaining a leading position
of both efficiency and benefits in the global industry. During the reporting period TCL CSOT achieved
a sales area of 17.792 million square meters a year-on-year increase of 25.3% and TCL CSOT
achieved from the semiconductor display business operating revenue of CNY 40.8 billion a year-on-
year increase of 93.6% under the same conditions and net profit of CNY 6.61 billion a year-on-year
increase of CNY 6.75 billion including net profit of CNY 4.21 billion in Q2 of 2021 an increase of
76% over Q1.The business scale advantages of large-sized products were expanded and the product structure
continued to be enriched. Factories t1 t2 and t6 maintained full sales and produced at full capacity
and factory t7 ramped up as scheduled factory t10 (formerly Samsung Suzhou LCD factory) began to
be consolidated in Q2. With regard to market share the Company ranked #2 globally in terms of TV
panels ranked #1 globally in terms of 55-inch products ranked #2 globally in terms of 65-inch and
75-inch products and ranked #3 globally in terms of 32-inch products and leaped to #1 globally in
terms of 8K and 120Hz high-end TV panels; the Company seized the rapid growth opportunities in the
commercial display market and is rapidly increasing its market share in the markets of interactive
whiteboards splicing screens and advertising machines among which it ranked #1 globally in terms
of its shipment volume for interactive whiteboards. During the reporting period the structure of large-
sized products was further optimized and the proportion of non-TV screen operating revenue increased
from 16% to 22%; also the customer portfolio was further optimized.Technical capacity in terms of small-sized products business was improved and the structure of
products and customers was optimized. Factory t3 continued to optimize the product portfolio of the
LTPS production line enhanced product competitiveness accelerated the development and import of
medium-sized products increased the proportion of shipment volume of medium-sized products for
notebooks vehicle-mounted devices and tablets to 23% and maintained its position within the top four
globally in terms of the shipment volume for LTPS mobile phone panels. The Phase I flexible
AMOLED production line of Factory t4 was scheduled to produce at full capacity and the move-in of
Phase II and Phase III equipment was completed. Through differentiated technical reserves such as
folding (screens) under-screen camera placement and LTPO product development and customer
TC L Technology Group Corporation Interim Report 2021
cooperation were accelerated in the high-end market and the shipment volume more than doubled
year-on-year.Medium-sized products business grew rapidly in high-end market segments and production capacity
construction was accelerated. Through the production capacity adjustment of the existing production
lines the Company sped up the strategic layout of medium-sized products and laid the foundation for
core customer cooperation. Focusing on high-end e-sports products in the display market with the
second largest market share in the world the Company ranked #2 globally in terms of shipment volume
for LTPS notebook panels improved its ranking to #1 globally in terms of the shipment volume for
LTPS tablet PC panels and introduced a number of Chinese and foreign leading corporations as
customers into the field of vehicle-mounted products with a rapid increase in shipment volume. In
order to meet the needs of customers and resolve the production capacity bottleneck of IT products
the Company has invested in the G8.6 Oxide Semiconductor-based New Display Device Production
Line t9 Project which is expected to be put into operation in 2023.During the reporting period the financial performance of the semiconductor display business consists
of the following:
Shipment area Shipment volume Revenue Net profit
Project 10000 Year- 10000 CNY Year-Year-on- CNY 100 Year-on-year
square on-year pieces / 100 on-year
year (%) million (%)
meters (%) 10000 sets million (%)
Large-sized 131.9
1698.8 24.3% 2776.6 20.0% 282.0 71.7 1384.6%
products %
Medium-to- Loss reduced
small sized 80.4 51.1% 4898.7 25.4% 106.4 44.7% -3.5 by CNY 20
products million
Increased by
Moka
- - 229.3 -2.1% 35.6 38.1% 1.1 CNY 120
Technology (*)
million
Other and
- - - - (16.4) - (3.1) -
offsets
Increased by
Total - - - - 408 93.6% 66.1 CNY 6.75
billion
* Note: The shipment volume revenue and net profit of Moka Technology are Q2 2021 data and the year-on-year data are for reference
purposes only including Moka Technology Q2 2020 data.Looking ahead there are bright prospects for the long-term development of the semiconductor display
industry. The production capacity of mainland China's LCD display industry is highly concentrated
within the leading enterprises and the leading enterprises had significant advantages in terms of
management efficiency scale technology cost supply chain and so forth significantly increasing the
TC L Technology Group Corporation Interim Report 2021
barriers to entry; the demand for traditional displays such as those for TVs IT and mobile phones
maintained steady growth while emerging displays such as commercial displays and vehicle-mounted
LCDs developed rapidly while the growth of demand for large-sized products slowed down in the
second half of the year but in the long run the supply and demand of the LCD industry will move
towards dynamic balance. TCL CSOT will maintain its continuous growth of revenue and consolidate
the advantages of highly efficient operation and operating benefits. TCL CSOT still faces great
challenges in the OLED industry. In the first half of the year the Company focused its energy on
breaking through the bottleneck of product technology meeting the delivery needs of strategic
customers and making breakthroughs in key technologies such as foldable screens; it is expected that
the sales volume will continue to grow in the second half of the year which will gradually improve
operating benefits.In the context of the gradual stabilization of the industry landscape the growth in capacity and
structural optimization of TCL CSOT will be the main driving force for its future performance growth
and the Company will accelerate its advancement from being a global leader in the large-sized display
field to becoming a leader across all sizes centered on "Optimizing Production Line Structure and
Product Structure Improving Customer Portfolio and Perfecting Industrial Ecology".The capacity and revenue of TCL CSOT will continue to grow at a high rate. The Company will have
grown from 3 high-generation lines (2 G8.5 lines and 1 G11 line) in 2020 to 4.5 lines by the end of
the year (t10 has been consolidated and t7 Phase I has finished ramping up) and by 2025 the Company
will have 6 high-generation lines (t7 and t9 will reach their designed capacity). The capacity of TCL
CSOT high-generation lines will exceed a compound annual growth rate (CAGR) of 18% in the next
five years. Meanwhile the full-capacity production of t4 flexible OLED production lines from Phase
I to Phase III will also bring significant revenue growth. Samsung Suzhou's module factory(M10)
acquired by the Company and Moka Technology which provides integrated manufacturing of
complete modules will promote the extension of the Company's value chains to the downstream.TCL CSOT will continue to optimize its business and product structures. With the replenishment of
medium-sized product production capacity TCL CSOT will form a full-product business layout of
large medium and small-sized products with more balanced business and revenue structures resulting
in higher output value per unit area and revenue growth. Adhering to the high-end product strategy
TCL CSOT will give full play to the advantages of CSOT HVA technology and high-generation
production lines deepen cooperation with global leading brand customers continue to increase its
share in high-end markets such as oversized 8K 120Hz and curved-surface products and deepen high-
quality growth.TC L Technology Group Corporation Interim Report 2021
TCL CSOT will leverage its management advantages to remain an industry leader in efficiency and
benefits. Through its extreme management capability and industrial synergy TCL CSOT has
consistently maintained industry-leading profitability levels since it began operations. With the
expansion of capacity and the enrichment of production lines the Company will actively adjust the
layout strategies of production lines and products giving full play to the advantages of production lines
and reducing losses in capacity loss on production lines; the Company will strengthen digital and
intelligent operation improving intelligent manufacturing capability and improving the operational
efficiency of the whole industrial chain; the Company will give play to scale effect improving the
integration of supplier resources and layout of the industrial chain thus creating a more flexible and
cost-competitive supply chain. With the depreciation of the existing production lines maturing one
after another it is expected that the proportion of depreciation accounting for revenue will gradually
decline and CSOT's profitability will be further enhanced.TCL CSOT will continue to strengthen technological innovation striving to become a leader in new
display technology. Through the “National Printing and Flexible Display Innovation Center” of
Guangdong Juhua a subsidiary of the Company and JOLED of which TCL CSOT is a strategic
shareholder TCL CSOT is accelerating the research and development of mass production technology
for printed display techniques and actively promoting the development of OLED and QLED materials
under its own IP through ChinaRay Optoelectronic improving the construction of the printed display
ecology. At the same time by means of equity investment and strategic cooperation and other methods
the Company works with industrial chain partners to jointly promote the development of new display
technologies such as Mini-LED and Micro-LED leading the trend of future technology development.(II) Semiconductor photovoltaics and semiconductor materials business
As global resource consumption and ecological environment problems are becoming increasingly
prominent China's goals for “emissions peak” and “carbon neutrality” are clearly put to the fore in the
national outline of the 14th Five-Year Plan(2021-2025) and the clean energy industry has entered a
period of rapid growth. However with the gradual controlling of the COVID-19 epidemic global
economic recovery is expected to strengthen and with strong demand for industrial products pushing
up the prices of bulk raw materials the supply chain and cost management capabilities pose challenges
for enterprises. In the face of external environmental fluctuations Zhonghuan Semiconductor through
product technology improvement and capacity expansion integration of supply chain resources
management efficiency improvement and manufacturing mode transformation has improved business
quality and efficiency comprehensively improved corporate competitiveness and firmly moved
TC L Technology Group Corporation Interim Report 2021
towards the strategic goal of becoming a global leader in the photovoltaics industry and a leader in the
semiconductor silicon wafer industry in China. During the reporting period Zhonghuan
Semiconductor experienced a total operating revenue of CNY 17.64 billion a year-on-year increase of
104.1% and net profit of CNY 1.89 billion a year-on-year increase of 160.6%.1. Semiconductor photovoltaics industry
In the first half of the year as the photovoltaics industry ushered in rapid development the Company
manifested its accumulated technological advantages smoothly transformed its product structure and
continuously improved the scale of its production capacity. It continued to improve asset operation
efficiency and investment income of production lines through technological innovation process
technology transformation and Industry 4.0 application in various operation scenarios. At the same
time through strategic supply chain synergy and cooperation built up over time Zhonghuan
Semiconductor effectively responded to the pressure of a tight supply-demand relationship for
polysilicon raw materials and rapid short-term price increases improved the material storage and
supply system and strengthened its ability to deal with external risks ensuring the stable growth of
product profits. During the reporting period the operating revenue of the semiconductor photovoltaics
business reached CNY 16.53 billion a year-on-year increase of 106.9%.In terms of semiconductor photovoltaic materials Zhonghuan Semiconductor continued to promote
the improvement of the production and marketing scale and quality of 210 mm products and
synergized the upstream and downstream ecology of the industrial chain in order to effectively meet
the needs of the whole photovoltaics industry chain in terms of benefits. At the end of the reporting
period the Company's production capacity of semiconductor photovoltaic materials increased to 70
GW an increase of more than 55% compared with that of the end of 2020 (of which G12 capacity
accounted for about 56%) and market share continued to increase. During the reporting period silicon
material consumed by unit product decreased by nearly 2% year-on-year the A-class rating of silicon
wafers increased significantly and the gross profit margin per unit product continued to improve
quarter-on-quarter and the profitability continued to improve through optimization of process
technologies.In terms of semiconductor photovoltaic modules the Company continued to cooperate and innovate
with leading G12 PERC battery manufacturers in China focusing on the research and development of
shingled photovoltaic modules and implemented a differentiated competition strategy promoting the
expansion of large-sized and high-powered modules with “G12 + shingled photovoltaics” technology
thus improving the ability to win orders in China and abroad. The production capacity of the G12 High-
TC L Technology Group Corporation Interim Report 2021
Efficiency Shingled Photovoltaic Modules project in the Jiangsu Province reached 6 GW; the G12
High-Efficiency Shingled Photovoltaic Modules Project in Tianjin has officially entered the
construction stage with all equipment having entered the site simultaneously and thus overall
capacity scale is steadily improving.With the sound global layout of the Company brand benefits are emerging overseas business is
growing significantly and the Company ranks #1 globally in terms of share for export sales of silicon
wafers. Maxeon a subsidiary of the Company expanded smoothly in the North American market and
won orders for high-efficiency solar modules at the GW level from Primergy in the first half of the
year. In the future the Company will further expand its manufacturing system for batteries and
modules and the businesses of ground-mounted power stations and distributed power stations all over
the world.2. Semiconductor materials industry
As the COVID-19 epidemic continues its trend toward normalization the global demand for industrial
automotive and consumer electronics has recovered robustly coupled with the surging demand for a
variety of emerging chip applications and the continuing shortage of chips leading to a sharp rise in
the price of upstream semiconductor materials. In the context of the shortage of key materials the
progress of importing domestic Chinese semiconductor materials has noticeably accelerated and
Chinese semiconductor material enterprises have also obtained considerable market substitution space.During the reporting period the Company seized opportunities in industry upturns and domestic
Chinese market substitution accelerated the verification of semiconductor material products and
customer development received recognition from major customers worldwide rapidly expanded the
scale of production and sales and increased revenue by 65.8% year-on-year. At present the production
lines put into operation by the Company have achieved full-capacity production. During the reporting
period the Company added EPI routes to 6-inch products and began to plan its end-customer
certification continued to increase the certification of 8-inch products such as Logic and CIS for
Chinese customers accelerated the certification of new products for international customers and
comprehensively benchmarked 12-inch products against leading international products with both
product performance and quality receiving high praise by leading Chinese and foreign customers.Under the established strategic plan “9205” the company accelerated production capacity expansion
and sped up business expansion in product areas of all sizes and carried out the new investment
projects in Tianjin and Yixing factories smoothly laying the foundation for the accelerated
development of the semiconductor business. On the basis of consolidating its advantages in traditional
TC L Technology Group Corporation Interim Report 2021
power semiconductor products the Company has become a powerful participant in digital logic
products and storage products.(III) Industrial finance and investment
During the reporting period the Company's financial and treasury businesses focused on ensuring the
Company's demand for project funds and further improved its ability to actively manage industrial
funds and risks reduced costs and increased efficiency controlled corporate receivables and foreign
exchange risks and supported the Company's core main businesses to move towards global leadership.TCL Capital explored investment and deployment opportunities in key areas that drive the
development of the science and technology industry such as new display types semiconductor and
core materials and process equipment related to the industrial chain and promoted technology and
business synergy concurrently creating investment income. At the end of the reporting period the
funds managed by TCL Capital reached a scale of about CNY 9.2 billion with a total investment of
116 projects. At present TCL Capital holds shares of listed companies such as CATL DKEM
Cambricon Newtouch Software Innoviz Petro-King ZJBC Information and HyUnion Holding;
Admiralty Harbour Capital Limited achieved steady growth in its investment banking and asset
management business completing 13 capital market and financial advisory projects during the
reporting period and being approved as a member of Euroclear Bank to engage in related international
securities clearing and custody business further diversifying its business scope; China Innovative
Capital continued to focus on the industrial chain layout opportunities of the two core main businesses
of the Company investing in more than 132 listed companies with steadily growing performance.II Analysis of core competitiveness
In 2021 TCL will celebrate its 40th anniversary. For 40 years TCL has continuously been worn as a
distinctive badge of honor a label engraved so as to never forget its original intention its loyal
commitment to the manufacturing industry and its courage to make bold changes and innovations. In
2018 TCL made the most important change in its history carrying out the strategic reorganization
from diversified to specialized operation defining a strategy centered on the high-tech capital-
intensive and long-cycle development of the technology industry. The Company spun off its terminal
business and non-core businesses and focused on industrial upgrades and strategic layout committed
to becoming a leading global technology industry group. In 2020 the Company officially changed its
TC L Technology Group Corporation Interim Report 2021
name to “TCL Technology” delisted Zhonghuan Electronic in July of the same year officially entering
the fields of semiconductor photovoltaics and semiconductor materials and also acquired Samsung
Suzhou in August to consolidate its industry position and competitive advantages in the semiconductor
display industry. Thereafter the Company formed a business infrastructure based on three sectors i.e.semiconductor displays semiconductor photovoltaics and semiconductor materials and industrial
finance and investment. To date the Company with a clear development path efficient operation and
distinct culture has greatly improved its profitability under professional operation and continuously
improved its core competitiveness and ability to develop sustainably.Leading in scale: Dual driving force of global panel leadership and an upward industry cycle with
rapid performance growth
As a leading global enterprise in semiconductor displays and a pioneer in independent production line
construction in the display field in China the Company leverages a convergence effect through the
“Twin Star” production line layout and continues to expand production capacity through organic
growth and inorganic mergers and acquisitions: TCL CSOT has taken a firm foothold in the field of
TV panels through the construction of two G8.5 lines; subsequently two G6 lines successfully cut into
the small-sized panels market and the market share in terms of shipments now exceeds 10%; in recent
years TCL CSOT has further expanded its production capacity of large-sized products through its
investment into and construction of two G11 lines and the merger and acquisition of the Samsung
Suzhou t10 production line establishing its global leadership position in the large-sized panels market;
in 2021 the Company invested in the construction of the t9 production line for high value-added IT
commercial displays and other medium-sized products so as to accelerate the strategic layout of full-
sized products. At present TCL CSOT ranks #2 globally in terms of shipment area for TV panels
ranks #1 globally in terms of the market share for 55-inch TV panels and ranks #2 globally in terms
of the market share for 65-inch and 75-inch TV panels; TCL CSOT ranks #4 globally in terms of the
shipment for LTPS mobile phone panels coming off of the t3 production line; technology is rapidly
improving for high-end and new form products coming off of the t4 flexible AMOLED production
line and the Company is continuously deepening cooperation with global leading brand customers. It
is expected that the Company will rank #1 in the industry in terms of production capacity growth in
the next five years and take pole position in terms of share in multiple categories.At the same time TCL CSOT has also actively extended the value chain downward and further
improved the Company's position and profitability on the value chain by expanding the production
capacity of its independently constructed modules and by acquiring Moka Technology and Samsung's
TC L Technology Group Corporation Interim Report 2021
module factory. The Company's core competitive advantage based on scale effect and supply chain
synergy will be further strengthened and under the grand backdrop of industry prosperity recovery
and competition pattern optimization TCL CSOT will usher in a dual-development stage of rapid scale
growth and industry improvement with its industry position and comprehensive competitiveness to be
further enhanced.Leading in technology and ecology: Actively laying the groundwork for next-generation display
technologies and materials building a first-mover advantage through ecological leadership
Relying on TCL CSOT the Company accelerated the vertical layout of the industrial chain and
continuously improved its upstream capacity for technological innovation. The Company focused on
basic materials next-generation display materials key equipment in new techniques and other fields
for ecological layout has constructed a TCL ecosystem within the display field so as to form an
ecological leading advantage based on next-generation display technology.The "National Printing and Flexible Display Innovation Center" of Guangdong Juhua a subsidiary of
the Company is the only national innovation center in the display field within China and has built a
global leading public platform for G4.5 printed display R&D integrating industrial chain resources
from all links including materials techniques processes and application verification. In 2020 TCL
CSOT made a strategic investment in JOLED by contributing JPY 30 billion where through joint
R&D and patent cooperation TCL CSOT and JOLED will further accelerate the industrial mass
production of printed OLEDs from materials to equipment techniques and products thus improving
the Company's ecological construction in key links of the printed display industrial chain leading the
trend of future technological development. In addition the Company will continue to invest in Micro-
LED display technology establish a joint laboratory with San'an to focus on the development of Micro-
LED technology so as to promote the Company's ecological layout in this field from materials
techniques equipment and production line solutions to independent intellectual property and form a
process flow solution for Micro-LED commercial scale mass production.Through TCL Capital the Company has invested in large numbers of industrial chain companies to
lay the groundwork for cutting-edge technologies. At present the Company ranks #5 among Chinese
enterprises in terms of the cumulative number of PCT patent applications and ranks #2 globally in
terms of quantum dot patents and it is expected that the Company will establish a leading edge when
the next generation of display technology arrives. In addition two academicians joined the Company
as independent directors in 2020 which will also continue to promote the comprehensive innovation
of the Company.TC L Technology Group Corporation Interim Report 2021
Leading in management: TCL CSOT takes the lead in global efficiency and traverses the cycle with
relative competitiveness
While establishing market scale technology and ecological advantages the Company continues to
maintain leading efficiency and benefit indicators in the industry. Since beginning operations in 2011
TCL CSOT has weathered two rounds of sharp fluctuation cycles in the display industry with ten
consecutive years of profitability where the net margin has always been positive across the panel cycle
with extreme cost efficiency and lean management being key factors.Through the convergence effect of the "Twin Star" factories the Company gives full play to the
benefits of efficient production line layout and production capacity expansion further improving the
utilization rate of production lines and production scheduling efficiency with the advantages of
industrial chain integration and locking-in strategic customers through long-term orders and promotes
end-to-end cost and expense control through refined management and extreme efficiency cost
measures to establish its relative competitiveness in the industry. In the past several rounds of cyclical
industry fluctuations the Company has continuously maintained an industry leading level of net profit
margin and EBITDA margin making it a model of profitability within the panel industry. In the future
the Company will continue to leverage this core competency to navigate through industry development
cycles and lead industry development.New strategic track: Arranging the layout for semiconductor and photovoltaics businesses to open up
a secondary growth curve
Focusing on the enterprise development concept and the national planning of strategic emerging
industries the Company actively seeks new tracks that are technology-intensive and capital-intensive
with long development cycles that can give full play to and continue to enhance TCL's core competence.Additionally it successfully delisted the Zhonghuan mixed ownership reform project in July 2020.Located along the high-quality dual tracks of semiconductor and photovoltaics businesses Zhonghuan
Semiconductor is mainly engaged in the R&D and production of semiconductor photovoltaic materials
and semiconductor materials. As the most rudimentary material in the semiconductor industry silicon
is a perfect fit for TCL's core demand for new growth momentum in both photovoltaic energy and
semiconductor industries in which Zhonghuan is engaged.With the Company's implementation of a series of strategic and operational arrangements such as
industrial synergy and operational efficiency optimization in the first half of the year Zhonghuan
strengthened its strategic operational and resource allocation capabilities rapidly accelerated
TC L Technology Group Corporation Interim Report 2021
production expansion under industry prosperity and capacity release further consolidated its leading
position in the industry and began a transformation into sustainable and high-quality performance
results which has gradually grown into one of the main engines of TCL's scientific and technological
performance growth. With an inexhaustible source of development power the two tracks converge to
make the Company a leader in the development of the global science and technology industry.Industrial and financial synergy: Giving full play to the advantages of its industrial finance business
empowering the layout and development of the industrial chain
The Company's industrial finance and investment business has grown into an important operation
platform of the Company. By providing a stable and profitable balance panel cycle strategic
investment empowers the development of the main businesses. Industrial finance focuses on
empowering industrial development supporting business operation and investment expansion
provides resource guarantees for major investment projects and generates revenue and gains with
surplus capital. TCL Capital focuses on investing in the industrial ecological chain contributes to
industrial development and plays a positive role in building industry ecology.Industrial finance and investment businesses are conducive to the Company's industrial chain layout
centered on its core main businesses and the stable profit contribution brought in also helps balance
the impact of cyclical market fluctuations in the semiconductor display industry. The investment
venture capital funds TCL manages exceed CNY 9 billion in scale. Focusing on its core main
businesses TCL has realized the coordinated development of industry and technology and investment
opportunities for entering new businesses accumulating a number of successful cases such as
Cambricon and YEESTOR in the fields of core electronic devices basic software and high-end
general chips.Organizational and cultural guarantee: Creating a “Path to Global Leadership “ and strengtheningthe genes of corporate culture
As the corporate spirit formed during the ups and downs of TCL's development over the past 40 years
the connotation the "Spirit of an Eagle" is the concentrated embodiment of TCL's corporate values and
unique competitiveness which is the spiritual wealth and cohesion of the Company. At the beginning
of 2020 the Company resolutely put forward the strategic goal of "Fighting Uphill Catching Up and
Surpassing Global Leadership" and released the new phase of corporate culture via the Path to Global
Leadership. Guided by this goal the Company is committed to reshaping an organizational culture of
TC L Technology Group Corporation Interim Report 2021
accountability behavior and performance orientation. The Company will continue to update explore
and strengthen the connotation of the "Spirit of an Eagle" continue to deepen the construction of an
organizational team and the implementation of its corporate culture and create conditions that lead
high-level officers to be more broad-minded middle-level managers to be more aggressive and
grassroots staff to act more powerfully so as to create a more dynamic corporate organizational culture
and make the "Path to Global Leadership" a new gene for every TCL team member and a powerful
spiritual weapon for the Company to compete in the market.III Core Business Analysis
Year-on-year changes in key financial data:
Unit: RMB
Item Change H1 2021 H1 2020 Main reason for change
(%)
Increase in the business size and
acquisition of Zhonghuan
Revenue
74298646758 29333210856 153.29%
Electronics Moka and Suzhou
CSOT
Increase in the business size and
acquisition of Zhonghuan
Cost of sales
57984972335 26740893081 116.84%
Electronics Moka and Suzhou
CSOT
Increase in the business size and
acquisition of Zhonghuan
Selling expense
901175676 324665389 177.57%
Electronics Moka and Suzhou
CSOT
Increase in the business size and
acquisition of Zhonghuan
Administrative expense
2023367685 770003011 162.77%
Electronics Moka and Suzhou
CSOT
Increase in the business size and
R&D expense
3428197088 1882501102 82.11% acquisition of Zhonghuan
Electronics
Increase in financings and
Finance costs 1818982875 916022280 98.57% acquisition of Zhonghuan
Electronics
Increase in the business size and
Income tax expense
1413574073 164586735 758.86% acquisition of Zhonghuan Electronics
Increase in R&D investments and
R&D investments
5092406554 2878922049 76.89% acquisition of Zhonghuan Electronics
TC L Technology Group Corporation Interim Report 2021
Net cash generated from/used in
13895714157 7347810779 89.11% Increase in revenue and acquisition of
operating activities Zhonghuan Electronics
Net cash generated from/used in
-20963137286 -17208563956 -21.82% -
investing activities
Net cash generated from/used in
13396966630 13235850184 1.22% -
financing activities
Net increase in cash and cash Increase in net cash generated from
equivalents 6285295538 3388412372 85.49% operating activities
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable ■ Not applicable
Breakdown of revenue:
Unit:
RMB
H1 2021 H1 2020
Item
Change (%)
As % of total revenue As % of total
Revenue Revenue
(%) Revenue (%)
Total 74298646758 100% 29333210856 100% 153%
By operating division
Semi-conductor display 40756294616 54.85% 19512204757 66.52% 108.88%
Semi-conductor and
semi-conductor 17644418986 23.75% N/A N/A N/A
photovoltaic
Distribution business 14450787001 19.45% 9126805527 31.11% 58.33%
Other businesses and
internally offset 1447146155 1.95% 694200572 2.37% 108.46%
accounts
By product category
Semi-conductor display
40756294616 54.85% 19512204757 66.52% 108.88%
devices
Semi-conductor
photovoltaic and 17644418986 23.75% N/A N/A N/A
materials
Distribution of
14450787001 19.45% 9126805527 31.11% 58.33%
electronics
Other businesses and
internally offset 1447146155 1.95% 694200572 2.37% 108.46%
accounts
By operating segment
Mainland China 47092569870 63.38% 20814424616 70.96% 126.25%
Overseas (including
26206209311 35.27% 8277832855 28.22% 216.58%
Hong Kong)
Others 999867577 1.35% 240953385 0.82% 314.96%
Operating division product category or operating segment contributing over 10% of revenue or operating profit:
■ Applicable □ Not applicable
Unit: RMB
YoY change in
Item Gross profit YoY change in YoY change in Revenue Cost of sales gross profit
margin revenue (%) cost of sales (%)
margin (%)
By operating division
TC L Technology Group Corporation Interim Report 2021
Semi-conductor display 40756294616 28873834558 29.15% 108.88% 64.25% 19.25%
Semi-conductor and semi- 17644418986 14005662632 20.62% N/A N/A N/A
conductor photovoltaic
Distribution business 14450787001 13989263362 3.19% 58.33% 59.12% -0.48%
By product category
Semi-conductor display
40756294616 28873834558 29.15% 108.88% 64.25% 19.25%
devices
Semi-conductor
17644418986 14005662632 20.62% N/A N/A N/A
photovoltaic and materials
Distribution of electronics 14450787001 13989263362 3.19% 58.33% 59.12% -0.48%
By operating segment
Mainland China 47092569870 39665139690 15.77% 126.25% 105.82% 8.36%
Overseas (including Hong
26206209311 17839147339 31.93% 216.58% 140.22% 21.64%
Kong)
Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:
□ Applicable ■ Not applicable
IV Analysis of Non-Core Businesses
□ Applicable ■ Not applicable
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2021 31 December 2020
Change in
percentage Reason for any significant change
As % of As % of total
Amount Amount (%)
total assets assets
Monetary assets 27374279411 9.06% 21708904743 8.42% 0.64% Increase in cash generated from operating
activities
Accounts
18908014427 6.26% 12557614486 4.87% 1.39% Increase in revenue and acquisition of Moka
receivable and Suzhou CSOT
Contract assets 241093345 0.08% 183650278 0.07% 0.01% No significant change
Inventories 13900809796 4.60% 8834957692 3.43% 1.17% Increase in the business size and acquisition of
Moka and Suzhou CSOT
Investment
725250155 0.24% 1664201130 0.65% -0.41%
property No significant change
Long-term equity
25541631148 8.45% 24047036004 9.32% -0.87%
investments No significant change
Fixed assets 104520657883 34.59% 92829901894 35.99% -1.41% Transfer from construction in progress
Construction in
37181285719 12.30% 31508310783 12.22% 0.09% Increases in t4 t7 and Zhonghuan
progress Semiconductor
Right-of-use 1984255110 0.66% - 0.00% 0.66% Adoption of the new accounting standard
assets governing leases
Short-term 9022205021 2.99% 12263713979 4.76% -1.77% Optimization of the debt structure
borrowings
Contract 2635068426 0.87% 2004004181 0.78% 0.09% No significant change
liabilities
TC L Technology Group Corporation Interim Report 2021
Long-term
88663620256 29.34% 73589403308 28.53% 0.81% Increase in financings
borrowings
Lease liabilities 886515076 0.29% - 0.00% 0.29%
Adoption of the new accounting standard
governing leases
2. Major Assets Overseas
□ Applicable ■ Not applicable
3. Assets and Liabilities at Fair Value
■ Applicable □ Not applicable
Unit: RMB
Impairment
Gain/loss on Cumulative
allowances
fair-value fair-value Decrease in
Beginning established Increase in the Other
Item changes in the changes the Reporting Ending amount
amount in the Reporting Period changes
Reporting recorded in Period
Reporting
Period equity
Period
Financial
assets
1. Held-for-
trading
financial
assets
(excluding
8355640976 -20788107 - - 10859967803 7188105004 - 12006715668
derivative
financial
assets)
2. Derivative
financial
453578245 -327548693 -13501740 - 48482181 21613872 - 139396121
assets
3. Receivables
financing 2176743646 - - - 463483332 914749085 - 1725477893
4. Other debt
investments 152062601 - 486845 - - 60573515 - 91975931
5. Investments
in other equity
1333675630 - -185629042 - 3111150 50972771 - 1100184967
instruments
Subtotal of
financial
12471701098 -348336800 -198643937 - 11375044467 8236014248 - 15063750580
assets
Total of the
12471701098 -348336800 -198643937 - 11375044467 8236014248 - 15063750580
above
Financial
912804772 -34140376 -12719661 405900261 8211611 - 1263633385
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ■ No
4. Restricted Asset Rights as at the Period-End
Restricted assets Carrying amount (RMB’0000) Reason for restriction
Monetary assets 51991 Deposited in the central bank as the required reserve
TC L Technology Group Corporation Interim Report 2021
Monetary assets 236066 Other monetary assets
Notes receivable 16809 Put in pledge
Fixed assets 8244539 As collateral for loan
Intangible assets 239140 As collateral for loan
Held-for-trading financial assets 87412 Put in pledge for loan
Construction in progress 5646 As collateral for loan
Right-of-use assets 5827 As collateral for lease
Accounts receivable 37371 Put in pledge
Contract assets 12274 Put in pledge
Total 8937075
VI Investments Made
1. Total Investment Amount
■ Applicable □ Not applicable
Total investment amount in the Reporting Total investment amount in the same period
Change (%)
Period (RMB) of last year (RMB)
18214544743 15240085210 19.52%
2. Major Equity Investments Made in the Reporting Period
■ Applicable □ Not applicable
Unit: RMB
Type
Investment Anticipa Investment Any
Way The Fundi Term of the
progress as ted income/loss legal Date (if Index (if any) to
of Amount of Compa ng Co- of invest
Investee Principal activity of the return on in the matter any)of disclosed
invest investment ny’s sourc investor inves ee’s
balance investme Reporting involved disclosure information
ment interest e tment produ
sheet date nt Period or not
cts
Design of
Equiu
TCL integrated circuit Self- TCL
ty 10 March http://www.cn
Microc chips semi- 500000000 50% funde N/A N/A N/A N/A -1170261 Not
invest Industri 2021 info.com. cn
hip conductor power d
ment es
devices etc.TC L Technology Group Corporation Interim Report 2021
State-
owned
enterpri
se
undue
Manufacturing and the
sale of medium- coordin
size high-added- ation of
value IT displays the
(including People’
monitors s
notebooks and Govern
Equiu
Guangz tablets) vehical- Self- ment of
ty 9 April http://www.cn
hou mounted displays 9625000000 55% funde Guangz N/A N/A N/A N/A 1980173 Not
invest 2021 info.com. cn
CSOT specialized d hou
ment
displays for Munici
medical industrial pality
control aviation and
devices display Guangz
panels for hou
commercial use Develo
etc. pment
Zone
Manage
ment
Commit
tee
Total -- -- -- -- -- -- -- -- 809912 -- -- --
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable ■ Not applicable
TC L Technology Group Corporation Interim Report 2021
4. Financial Investments
(1) Securities Investments
■ Applicable □ Not applicable
Unit: RMB’0000
Gain/los
Cumulat
s on fair- Sold
Beginnin ive fair- Purchased Gain/los
Initial Measure value in the Ending Fundin
Security Security Security g value in the s in the Accountin
investmen ment changes Repor carrying g
type code name carrying changes Reporting Reportin g title
t cost method in the ting amount source
amount recorded Period g Period
Reportin Period
in equity
g Period
Linked
Bank’s structured Held-for-
Not 60000.00 - 265.42 - 60000.00 - 265.42 60265.42
wealth Fair trading Self-
applicabl deposit of
manageme value financial funded
e the Bank
nt product assets
of China
Linked
Bank’s structured Held-for-
Not
wealth 60000.00 - 265.42 - 60000.00 - 265.42 60265.42
applicabl deposit of
Fair trading Self-
manageme value financial funded
e
nt product the Bank assets
of China
Linked
structured
deposit of
Bank’s Held-for-
Not 50000.00 - 208.89 - 50000.00 - 208.89 50208.89
wealth the Bank Fair trading Self-
applicabl
manageme of China value financial funded e
nt product assets
Linked
Bank’s structured Held-for-
Not
wealth 50000.00 deposit of Fair
- 208.89 - 50000.00 - 208.89 50208.89 trading Self-
applicabl
manageme value financial funded
e
nt product the Bank assets
of China
Structured
Bank’s Held-for-
Not deposit of
wealth Fair trading Self-
applicablthe Bank
manageme 50000.00 value - 205.56 - 50000.00 - 205.56 50205.56 financial funded
e of East
nt product assets
Asia
Linked
Bank’s structured Held-for-
Not
wealth deposit of 40001.00 Fair - 169.73 - 40001.00 - 169.73 40170.73 trading Self-applicabl
manageme value financial funded
e
nt product the Bank assets
of China
Linked
Bank’s structured Held-for-
Not
wealth deposit of 39999.00 Fair - 169.72 - 39999.00 - 169.72 40168.72 trading Self-applicabl
manageme value financial funded
e
nt product the Bank assets
of China
Xingyin
Wealth
Managem
ent Gold
Snowball
Solid
Bank’s Income Held-for-Not
wealth Fair trading Self-
applicabl No. 1 B- 30000.00 - 34.37 30000.00 - 34.37 30034.37
manageme value financial funded
e
nt product type Net assets
Value
Wealth
Managem
ent
Product
(Lulufa)
Linked
Bank’s structured Held-for-
Not
wealth deposit of 25001.00 Fair - 144.90 - 25001.00 - 144.90 25145.90 trading Self-applicabl
manageme value financial funded
e
nt product the Bank assets
of China
Linked
Bank’s structured Held-for-
Not
wealth deposit of 24999.00 Fair - 144.89 - 24999.00 - 144.89 25143.89 trading Self-applicabl
manageme value financial funded
e
nt product the Bank assets
of China
- -
Other securities investments 1158941 550954 13494. 8141.7 652748.6 7905 18855. 506113.3 -- --
held at the period-end .21 .41 5 46.69 66 2
31 4
Total 1588941 -- 550954 - 11676. - 8141.7 1082748. 7905 20673. 937931.0 -- --.21 .41 54 4 65 46.69 43 8
Disclosure date of the board
announcement approving the 12 December 2020
securities investments
Disclosure date of the general
meeting announcement
29 December 2020
approving the securities
investments (if any)
(2) Investments in Derivative Financial Instruments
■ Applicable □ Not applicable
Funding source Mostly foreign-currency revenue
Legal matters involved (if applicable) Not applicable
Disclosure date of the board
announcement approving the 28 April 2018
derivative investments (if any)
Disclosure date of the general
meeting announcement approving the Not applicable
derivative investments (if any)
In order to effectively manage the exchange and interest rate risks of foreign currency assets
liabilities and cash flows the Company after fully analyzing the market trend and predicting
the operation (including orders and capital plans) adopts forward foreign exchange contracts
options and interest rate swaps to avoid future exchange rate and interest rate risks. As its
business scale changes subsequently the Company will adjust the exchange rate risk
management strategy according to the actual market conditions and business plans.Risk analysis:
1. Market risk: the financial derivatives business carried out by the Group belongs to hedging
and trading business related to main business operations and there is a market risk of loss due
to the fluctuation of underlying interest and exchange rates which lead to the fluctuation of
prices of financial derivatives;
2. Liquidity risk: the derivatives business carried out by the Group is an over-the-counter
transaction operated by a financial institution and there is a risk of loss due to paying fees to
the bank for the operations of evening up or selling the derivatives below the buying prices;
3. Performance risk: the Group conducts the derivative business based on rolling budgets for
risk management and there is a risk of performance failure due to deviation between the
actual operating results and budgets;
4. Other risks: in the case of specific business operations if the operator fails to finish the
prescribed procedures for report or approval or fails to record the financial derivative
business information accurately timely and completely it may result in loss of derivative
business or trading opportunities. Moreover if the trading operator fails to fully understand
Analysis of risks and control the terms of transaction contracts or product information the Group will face the legal risks
measures associated with derivative and transaction losses therefrom.investments held in Reporting Period Measures taken for risk control:
(including but not limited to market 1. Basic management principles: the Group strictly follows the hedging principle and the
risk liquidity risk credit risk main purpose of locking costs and avoiding risks. It is required that the financial derivatives
operational risk legal risk etc.) business to be carried out matches the variety size direction and duration of spot goods and
no speculative trading should be involved. In the selection of hedging instruments only
simple financial derivatives that are closely related to the main business operation and meet
the requirements of hedge accounting treatment should be selected and avoid complex
business that exceeds the prescribed business scope or is difficult to recognize in terms of risk
and pricing;
2. The Group has formulated a special risk management system tailored to the risk
characteristics of the financial derivatives business covering all key aspects such as pre-
emptive prevention in-process monitoring and post-processing. Professional personnel are
rationally arranged for investment decision-making business operations and risk control.Investment participants are required to fully understand the risks of financial derivatives
investment and strictly implement the business operations and risk management systems of
derivatives. Before starting the derivatives business the holding company must submit to the
management department of the Group detailed business reports including its internal
approval main product terms operational necessity preparations risk analysis risk
management strategy fair value analysis and accounting methods and special summary
reports on business operated. Operations can be implemented only after getting opinions from
the professional department of the Group;
3. Relevant departments should track the changes in the open market price or fair value of
financial derivatives timely assess the risk exposure changes of invested financial
derivatives and make reports to the board of directors on business development;
4. When the combined impairment of the fair value of derivatives and changes in the value of
the assets (if any) used for risk hedging by the Group results in a total loss or floating loss
amounting to 10% of the recently audited net assets of the Company and the absolute amount
exceeds RMB10 million the Group will disclose it in a timely manner.With the rapid expansion of overseas sales the Company keeps following the above rules in
Changes in market prices or fair value
the operation of forward foreign exchange contracts interest rate swap contracts and futures
of derivative investments in
contracts to avoid and hedge foreign exchange risks arising from operation and financing. It
Reporting Period (fair value analysis
saw a net loss of RMB65.44 million for the Reporting Period. The fair value of derivatives is
should include measurement method
determined by real-time quoted price of the foreign exchange market based on the difference
and related assumptions and
between the contractual price and the forward exchange rate quoted immediately in the
parameters)
foreign exchange market on the balance sheet date.Major changes in accounting policies
and specific accounting principles
adopted for derivative investments in No significant change
Reporting Period compared to last
reporting period
In view of the fact that certain raw materials of the core business of the Company are
purchased overseas a wide range of settlement currencies is involved. The Company reduces
exchange losses and locks transaction costs by reasonable financial derivatives which helps
to reduce risk control costs and improve company competitiveness. Risks are effectively
controlled as the Company has taken series of measures such as conducting a rigorous
internal evaluation for the operation of financial derivatives business establishing a
Opinion of independent directors on
corresponding regulatory mechanism formulating reasonable accounting policies and
derivative investments and risk
specific accounting principles setting limits for risk exposure management and operating
control
simple financial derivatives. The contracting agent for financial derivatives business of the
Company is a sound financial agent with good credit standing. We are of the opinion that the
financial derivatives transactions carried out by the Company in the first half of 2021 are
closely related to the daily operation needs of the Company with controllable risks. The
business is in line with the interests of minority shareholders of the company and the relevant
laws and regulations.Positions of derivative investments at the period-end:
Unit: RMB’0000
Ending contractual amount
Beginning amount Ending amount Gain/loss in as % of the Company’s ending
Type of contract Reporting net assets
Contractual Actual Contractual Period Contractual Actual
Actual amount
amount amount amount amount amount
1. Forward forex
1931617 59359 2212979 79744 21.03 0.76
contracts
2. Interest rate swaps 758846 22765 571719 17152 5.43 0.16
-6544
3. Currency swaps 310520 15526 32301 1615 0.31 0.02
Total 3000983 97650 2816999 98510 -6544 26.77 0.94
VII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable ■ Not applicable
No such cases in the Reporting Period.2. Sale of Major Equity Investments
■ Applicable □ Not applicable
Ratio of
Net
the net
profit
profit Equity Executed
contribut
contribut invest as ed to the
ed by the Relat Relationship schedule
Compan ment Index to
Transacti Effect on sale of ed- between the d or not;
Equity y from involve discloseTransacti Date of on price the the Pricing party transaction if not Disclosu
investme the d
on party sale (RMB’0 Compan equity principle transa party and
nt sold period- d has
give re date
informat
00) y investme ction the reasons
begin to been ion
nt to the or not Company and
the date
Compan all measures
of sale
y’s total transfe taken (RMB’0
profit
00) rred or
(%)
not
This As Mr. Li
transacti Dongsheng
on is in serves as the
line with Chairman of
the the Board in
develop both the
100% ment Based on Company
TCL equity June 257202 trend of valuation and TCL 21 May http://
Industrie interests 2021 .01 4776 the 0.1% with Yes Industries Yes Yes 2021 www.cn
s of country’ reference TCL info.co
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ou industria market a related
Financial l policy prices of corporation
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business kind the Stock
develop Listing
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direction Shenzhen
which Stock
would Exchange.have no
significa
nt
impact
on the
Compan
y’s
business
operatio
ns.VIII Principal Subsidiaries and Joint Stock Companies
■ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB’0000
Relationshi
Registered Operating
Name p with the Principal activity Total assets Net assets Revenue Net profit
capital profit
Company
TCL China Star
Optoelectronics Semi-conductor RMB30.468 20241530 8591142 3884160 725352 627684
Subsidiary
Technology Co. display devices billion
Ltd.Highly
RMB412
Information Subsidiary Distribution 537752 118368 1445079 16780 12510
million
Industry Co. Ltd.Tianjin Semi-conductor
Zhonghuan photovoltaic and RMB3.033 6603881 2975577 1764442 210057 188623
Subsidiary
Semiconductor semi-conductor billion
Co. Ltd. materials
Subsidiaries obtained or disposed in the Reporting Period:
■ Applicable □ Not applicable
How subsidiary was obtained or disposed Effects on overall operations and operating
Subsidiary
of in the Reporting Period performance
Shenzhen Huatuo Trade Technology Co.Newly incorporated No significant effect
Ltd.Xiamen Xinying Display Technology Co.Newly incorporated No significant effect
Ltd.Shaanxi Xiaoyi E-commerce Service Co.Newly incorporated No significant effect
Ltd.Highly (Tianjin) Technology Co. Ltd. Newly incorporated No significant effect
Tianjin Wanfang Nuoxin Technology Co.Newly incorporated No significant effect
Ltd.Zhonghuan Advanced Semiconductor
Newly incorporated No significant effect
(Shanghai) Co. Ltd.Yinchuan Zhonghuan Solar Material Co.Newly incorporated No significant effect
Ltd.Suzhou China Star Optoelectronics Business combination not involving No significant effect
Technology Co. Ltd. entities under common control
Suzhou China Star Optoelectronics Display Business combination not involving No significant effect
Co. Ltd. entities under common control
Moka International Limited and its
Acquired No significant effect
subsidiaries
Huizhou Shengyao New Energy
Newly incorporated No significant effect
Technology Co. Ltd.Inner Mongolia Huanya Hotel
Newly incorporated No significant effect
Management Co. Ltd.Huludao Xincheng New Energy
Acquired No significant effect
Technology Co. Ltd.Wuxi Zhonghuan Yangjie Semiconductor
Acquired No significant effect
Co. Ltd.TCL Communication Technology (HK)
De-registered No significant effect
Limited
Tianjin Huanyan Technology Co. Ltd. Transferred No significant effect
Tianjin Huan’Ou International New Energy
De-registered No significant effect
Technology Co. Ltd.Kangbao Shenghui New Energy Co. Ltd. De-registered No significant effect
Winshero Investment Limited De-registered No significant effect
Tianjin Xietong Real Estate Development
De-registered No significant effect
Co. Ltd.TCL International Distribution (HK)
De-registered No significant effect
Limited
TCL Financial Holding Group
Transferred No significant effect
(Guangzhou) Co. Ltd. and its subsidiaries
Tianjin Huanxin
Increase in non-controlling interests No significant effect
Technology&Development Co. Ltd.Tianjin Zhonghuan Xinyu Technology Co.Transferred No significant effect
Ltd.IX Structured Bodies Controlled by the Company
□ Applicable ■ Not applicable
X Risks Facing the Company and Countermeasures
1. Risk of Macroeconomic Fluctuations
In recent years deglobalisation has accelerated the restructuring of the global economic landscape.The United States (US) crackdown and blockade against China in areas related to trade technology
and financial activity has had a great impact on the Chinese economy and has also affected the global
economy. It is forecast that China’s economic growth will continue to lead the world this year.However under the suppression and sanctions imposed by the US and some Western countries the
Chinese economy and Chinese enterprises face significantly increased cost of trade with the US; many
scientific and technological projects are hindered; the development of some high-tech enterprises is
restricted. Moreover although the economic recovery of different countries continues as the COVID-
19 pandemic eases thanks to the continuous popularisation of vaccination the virus is expected to
bounce back from time to time in a long period of time. There are still uncertainties in the macro
economy of China and the rest of the world that cannot be ignored considering the combined effect
of deglobalisation and the pandemic.Against this backdrop the Company will continue its in-depth studies of the macroeconomic trendsand their impact. Based on China’s idea of a new “development pattern in which domestic economiccycle plays a leading role while international economic cycle remains its extension and supplement”
the Company will keep focusing on the professional operation strategies for the main business
endeavor to consolidate advantages and improve disadvantages improve abilities and catch up. It
will promote the vertical development of the new energy and semi-conductor tracks to minimise the
negative impact of the macro economy on the basis of maintaining the global leading advantages of
TCL CSOT’s balanced product market distribution as well as good customer quality and portfolio.2. Risk of Industry Climate Fluctuations
As the pandemic has changed people’s way of working and living downstream demand for panels
has exploded and products have entered a rapid price increase cycle. In the first half of 2021 the
LCD panel industry’s prosperity constantly improved. The price increase kept exceeding market
expectations. In the meantime it is not impossible that not only success but failure can also be
attributed to the pandemic. The pandemic may make raw material shipments fall short of expectations
may lead to economic setbacks and restrain consumer demand and may also cause delays in the exit
of production capacity in Japan and South Korea. Eventually the industry climate may fluctuate and
affect the Company’s performance.The Company will analyse in depth the trends of changes in industry supply and demand relations
predict production capacity allocation in advance and increase R&D investment so as to create high
barriers to competition and broaden the business moat through the continuous improvement of
products’ technological content and added value as well as the constant expansion of the Company’s
scale and benefit advantages. On top of that taking advantage of the synergy formed by industry-
finance integration in both the main business of semi-conductor display and the main business of
semi-conductor photovoltaic and semi-conductor materials the Company will keep improving the
upstream and downstream layout to effectively soften the impact of industry climate fluctuations and
further consolidate its leading position in the industry.3. Risks Caused by Changes in Consumer Demand
The application scenarios of end consumers are also constantly changing. For example short video
applications such as Douyin have made for the creation of auto-rotate smart screens and the COVID-
19 pandemic has facilitated the development of under-display fingerprint scanning. If the Company
cannot keep creating new products according to the demand of downstream applications its business
growth may also be hindered.The Company will continue to focus on the needs of the industry and end customers conduct in-depth
research on mainstream customers in the industry and constantly increase R&D investment. It will
optimise its business structure and enhance its product competitiveness with product technology
innovation as the main driving force. Based on more thorough research and analysis of market
segments it will explore more emerging fields actively make arrangements regarding emerging
market segments and develop new driving forces for growth.4. Management Risks Brought by Restructuring Transformation and M&A
The Company continuously intensified its efforts in horizontal and vertical expansion focusing the
restructuring on the semi-conductor display and materials business. Horizontally it promoted the
increase of high-quality production capacity to help TCL CSOT expand its scale and efficiency
advantages. Meanwhile it entered the photovoltaic industry to further optimise the Company’s
industrial structure realising the vertical development of the new energy and semi-conductor tracks.However the restructuring transformation and M&A have brought about substantial changes in
capital structure business structure management structure operations procedures and even corporate
culture which imposes extremely high requirements for the Company’s business management level.By adopting structural adjustment and process re-engineering the Company will make certain that
the new structures and new mechanisms can bring a longer-term transformation impetus and a solider
organisational guarantee to the Company. It will also reshape the responsible and performance-oriented organisational culture through the upgrade of corporate culture to plant the idea of “globalleadership” in the mind of each TCL employee ensuring that all employees will consciously set higher
management goals for various tasks take up the opportunities and challenges brought about by the
restructuring transformation and M&A with full enthusiasm and achieve long-term stable growth
with high quality.5. Intellectual Property Risks
Competition in the semi-conductor display and materials field is becoming increasingly fierce. As the
Company keeps expanding its business scale and technological layout patent disputes occur from
time to time and intellectual property risks become increasingly obvious. Ideological trends such as
“counter-globalization” are more likely to further amplify related risks. If the Company’s intellectual
property layout cannot meet the development needs of the Company at all times once the Company
is involved in any major intellectual property dispute its market competitiveness may be weakened
and its brand image may be negatively affected.The Company will continue to maintain high-intensity R&D investment continuously enhance the
professional capabilities of the core technical team and constantly improve the layout of key
technology and product patents through the “independent research + cooperative R&D” model.Meanwhile it will keep perfecting the intellectual property management and protection mechanism
and through strategic cooperation with external professional institutions on intellectual property
strengthen risk-involved patent investigation enhance patent risk early warning reduce risk-involved
patent threats and comprehensively improve the ability to defend against intellectual property risks.Part IV Corporate Governance
I Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor
Resolutions of the
Meeting Type participation Date of the meeting Date of disclosure
meeting
ratio
The 2020 Annual Annual general
General Meeting 27.24 % 30 April 2021 6 May 2021 meeting
The First
http://www.cnin
Extraordinary General Extraordinary 30.11 % 13 May 2021 14 May 2021 fo.com.cn
Meeting of 2021 general meeting
The Second
Extraordinary General Extraordinary 20.08 % 7 June 2021 8 June 2021
Meeting of 2021 general meeting
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable ■ Not applicable
II Change of Directors Supervisors and Senior Management
■ Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Nominated by Wuhan Optics Valley Industrial
Non-executive
Liu Kun Elected 13 May 2021
Director Investment Co. Ltd. a shareholder with an over-3%
stake in the Company
III Interim Dividend Plan
□ Applicable ■ Not applicable
IX Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for
Employees
■ Applicable □ Not applicable
(I) The Third Global Partner Plan
1. The Announcement on the Completion of the Non-Deal Transfer to the Third Global Partner Plan
was disclosed on 22 January 2021. The Company had received on 20 January 2021 the Securities
Transfer Confirmation issued by the Shenzhen branch of China Securities Depository and Clearing
Co. Ltd. 43859649 shares (or 0.31% of the Company’s total share capital) had been transferred in anon-deal manner on 19 January 2021 from the special securities account for repurchases to “TCLTechnology Group Corporation—the Securities Account for the Third Employee Stock OwnershipPlan”. The aforesaid number of transferred shares and relevant price were consistent with the approval
by the general meeting.The shares under this stock ownership plan would be locked up for a period of no less than 12 months
starting from the disclosure of the announcement on the completion of the transfer of target shares
i.e. from 19 January 2021 to 18 January 2022 during which these shares are not allowed for trading.2. On 1 June 2021 the Company disclosed the Announcement on the Quota Allocation and Equity
Vesting of the Third Global Partner Plan. The Third Global Partner Plan (Draft) (hereinafter referred
to as the “Third Stock Ownership Plan”) set out a company performance-related condition of a not-
lower-than-30% growth in the net profit attributable to shareholders of the Company before non-
recurring gains and losses in 2020 compared to 2019. According to the 2020 Annual Independent
Auditor’s Report for TCL Technology Group Corporation issued by Da Hua Certified Public
Accountants (Special General Partnership) the net profit attributable to shareholders of the Company
before non-recurring gains and losses in 2020 amounted to RMB 2933248153 up 1147.56% from
2019 which meant the performance-related condition for the Third Stock Ownership Plan was
satisfied.The management committee of the Third Stock Ownership Plan vested a total of approximately
43859649 shares in the holders under the Third Stock Ownership Plan by way of internal registration
based on the satisfaction of company business department and individual performance.(II) 2021-2023 Employee Stock Ownership Plan (Phase I)
1. Proposals including the Proposal on the 2021-2023 Employee Stock Ownership Plan (Phase I) of
TCL Technology Group Corporation (Draft) and the Management Methods for the 2021-2023
Employee Stock Ownership Plan (Phase I) of TCL Technology Group Corporation were approved
respectively at the Ninth Meeting of the Seventh Board of Directors on 20 June 2021 the Seventh
Meeting of the Seventh Supervisory Committee on 20 June 2021 and the Third Extraordianry General
Meeting of 2021. This stock ownership plan intended to obtain shares from the special securities
account for repurchases through a non-deal transfer.(III) The 2019 Restricted Stock Incentive Plan and the Second Global Innovation Partner Plan
1. On 20 June 2021 the Proposal on the Satisfaction of the Unlocking Conditions for the Second
Unlocking Period under the 2019 Restricted Stock Incentive Plan and the Second Global Innovation
Partner Plan was approved respectively at the Ninth Meeting of the Seventh Board of Directors and
the Seventh Meeting of the Seventh Supervisory Committee on 20 June 2021. A total of 1351316
restricted shares of 85 awardees were unlocked accounting for 0.0096% of the Company’s total share
capital. The Company’s independent directors issued their independent opinion of consent and the
Supervisosry Committee issued their supervision opinion with respect to the aforesaid matter.Meanwhile the Proposal on the Repurchase and Retirement of Restricted Shares That Have Been
Granted to Certain Awardees under the 2019 Restricted Stock Incentive Plan But Are Still in Lockup
and the Adjustment to the Repurchase Price was approved respectively at the Ninth Meeting of the
Seventh Board of Directors the Seventh Meeting of the Seventh Supervisory Committee and the
Third Extraordianry General Meeting of 2021. As such it was agreed to repurchase and retire the
145941 restricted shares that had been granted to Zhang Kun and other nine awardees under the 2019
Restricted Stock Incentive Plan but were still in lockup because they were deemed as no longer
eligible for the incentives due to reasons such as resignation. Meanwhile pursuant to the Incentive
Plan (Revised Draft) in the event of a bonus issue from capital reserves dividend payout stock split
share allotment share capital reduction etc. the repurchase price for restricted shares in lockup shall
be adjusted accordingly. Therefore the relevant repurchase price was adjusted to RMB1.64/share.2. On 24 June 2021 the Company disclosed the Reminder on the Shares Unlocked in the Second
Unlocking Period under the 2019 Restricted Stock Incentive Plan and the Second Global Innovation
Partner Plan Being Allowed for Public Trading. A total of 1351316 restricted shares were allowed
for public trading on 28 June 2021.Part V Environmental and Social Responsibility
I Major Environmental Issues
Approved
Discharge Governing
Name of the Number of Distribution Total total
Major Way of concentratio discharge Excessive
Company or discharge of discharge discharge discharge
pollutants discharge n standards discharge
subsidiary outlets outlets (metric ton) (metric
(mg/L) (mg/L)
tons/year)
COD Intermittentl 146mg/L 260mg/L 542.48t / None
y discharged Northwester
to n corner of
TCL China 1 Ammonia Guangming the plant
Star 7.78mg/L 30mg/L 28.91t / None nitrogen Sewage area
Optoelectron Plant
ics
Technology COD Continuousl Artificial 14.61mg/L 30mg/L 26.55t / None
Co. Ltd. y discharged wetland to
to 1 the north of
Ammonia
Dongkengsh the plant 0.23mg/L 1.5mg/L 0.42t / None
nitrogen
ui area
COD Discharged 36-75mg/L 400mg/L 126.73t 353.55t None
after being
Wuhan treated in
China Star the sewage Northwester
Optoelectron treatment n corner of 1
ics Ammonia the plant 0.349-
30mg/L 12.67t 35.36t None
Technology nitrogen system and area 0.387mg/L
Co. Ltd. meeting the
relevant
standards
Construction and operation of facilities for preventing pollution:
During the Reporting Period no major environmental pollution incidents occurred in either the
Company or any of its subsidiaries. For the purposes of preventing pollution and protecting the
environment an advanced sewage management system has been established for the plant of each
subsidiary and regular monitoring and supervision and inspection mechanisms have been adopted to
ensure the pollutants such as waste water waste gas solid waste and factory noises during the
production are properly treated in a way that is stricter than the requirements of the national and local
laws and regulations.The waste water of each subsidiary company includes domestic waste water and industrial waste water
of which domestic waste water is discharged into the local municipal sewage treatment pipe network
after being pre-treated by oil separation and septic treatment and industrial waste water enters
different treatment systems according to its characteristics and is discharged into the municipal
sewage system after physical and chemical and biochemical treatment. The atmospheric pollutants
produced by each subsidiary are mainly process waste gases in the production process. For different
types of waste gases each subsidiary has constructed corresponding waste gas treatment systems
such as waste gas stripping system acidic waste gas treatment system alkaline waste gas treatment
system organic waste gas treatment system waste gas treatment system for waste water treatment
station etc. for the collection of waste gases through pipelines to the corresponding waste gas
treatment system where waste gases are discharged at a high altitude after meeting relative standards.The concentration and total amount of waste water and exhaust gas discharged meet the relevant
national and local standards. The solid wastes generated by each subsidiary 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 disposed
of by a resource recycling firm after being classified in the plant area; while domestic garbage is
disposed of by the property management company by sending the garbage to qualified landfills. All
the disposals meet the regulatory requirements. The factory noise generated by each subsidiary comes
from the mechanical noises of production and power equipment including refrigerators cooling
towers air compressors fans various types of 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 factory boundary noise and
emission of all subsidiaries meet the standards in a stable manner.Environmental Impact Assessment on Construction Projects and Other Environmental
Protection Administrative Licenses
Each subsidiary complies with the laws and regulations of environmental impact assessment on
construction projects and other environmental protection administrative licenses. During the
Reporting Period every project went through the process of environmental impact assessment strictly
as required and abided by the laws and regulations with respect to administrative permit for
environmental protection with no violations during the period.Emergency Response Plan for Environmental Incidents
Each subsidiary has set up an environmental incident emergency organization led by the senior
management of the enterprise. They are required to identify and control environment-related risks and
prepare an emergency response plan for environmental incidents which has been filed with the local
environmental protection department. In addition regularly emergency drills are conducted for
environmental incidents according to the plan to ensure the validity of emergency response plan.Wuhan CSOT a subsidiary of the Company has purchased environmental pollution liability insurance
as a means of strengthening internal risk control through the risk control capacity of green insurance
while ensuring that sudden and accidental environmental pollution can be effectively tackled under
extreme special circumstances.Environmental Self-Monitoring Program
Each subsidiary has formulated an environmental self-monitoring program in accordance with
national regulations and monitors the discharge of pollutants by automatic online monitoring or
manual monitoring performed by a third-party qualified agency with the monitoring frequency and
monitored items in strict compliance with the country’s laws and regulations at all levels. The
monitoring plans and annual monitoring reports can be checked on the corporate environmental
information platform managed by local environmental authorities or subsidiary websites.Administrative punishments received with respect to environmental issues in the Reporting
Period:
No such cases in the Reporting Period.Other environment-related information that should be disclosed:
None.Other relevant information:
The Company and its subsidiaries always attach importance to social responsibility environmental
protection green and low-carbon development and other related work. Particularly in active responseto the national strategy of achieving peak levels by 2030 and carbon neutrality by 3060 (the “3060Target”) CSOT planned the establishment of CSOT carbon neutrality goals and convened major
suppliers to sign energy conservation and emission reduction commitments through open meetings
during the Current Period; Wuhan CSOT took a series of technical and management measures in the
field of water resources conservation which achieved good water-saving effects and won it the
“Water-saving Enterprise” certificate issued by the Hubei Provincial Department of Water Resources
and the Department of Economy and Information Technology of Hubei Province.II Social Responsibility
(1) Specifics of consolidating and extending the achievements of poverty alleviation and pushing
forward rural revitalisation
As part of its social responsibilities the Company actively responded to the national policy of“consolidating and extending the achievements of poverty alleviation and pushing forward all-roundrural revitalisation” by continuously promoting the consolidation of previous poverty elimination
project results and concentrating its efforts on the field of education to push forward rural
revitalisation with education.The "TCL Hope Engineering Candlelight Awards Program" jointly established by Shenzhen TCL
Public Welfare Foundation and CYDF in 2013 is one of the earliest public welfare projects for rural
teachers in the country. The investment to this project is over RMB38 million in eight years. The
purpose of the award is to demonstrate the morality and professional dreams of outstanding rural
teachers who have worked hard in the grassroots education front in poverty-stricken areas for their
posts and encourage more outstanding young teachers to take root in rural basic education and
promote rural education development.Since 2019 Shenzhen TCL Public Welfare Foundation has been promoting the “A.I. Go Home”
project it launched. In cooperation with TCL Industrial Technology Research Institute the Foundation
employed artificial intelligence technology to develop and design a storytelling robot named “Yi Ge”
which can simulate the voices of parents and tell stories to left-behind children thus strengthening the
emotional connections between parents and children. With the help of the robot children can hear the
voices of their parents more often in the process of growing up so that mental health problems and
deviant behavior of left-behind children and migrant children caused by the long-time separation from
their parents can be prevented. According to the project plan 2000 "Yi Ge" storytelling robots will
be distributed in five years to directly serve 2000 children and indirectly influence nearly 10000
people. The accumulative duration of services for left-behind children and migrant children has
exceeded 30000 hours bringing positive changes to such children.Candlelight Micro-loan is a targeted public welfare project provided by TCL Public Welfare
Foundation and TCL Financial Group for rural teachers who demand small loan assistance aiming to
address the financial needs of rural teachers and their families in serious disease treatment living
expenses and skills training among other aspects. This cross-field innovation of public welfare and
microfinance has been improving the quality of life of rural educators working on the frontline and
ensures the development of rural education.In 2019 TCL Public Welfare Foundation and the Education Foundation of the Central Conservatory
of Music jointly set up the “Little Music +” project and released the “Xiao Xue” music robot. The
Central Conservatory of Music will take advantage of its strong professional resources and organiseteachers and students of the Musicology Department to recommend 100 “Music Master WorksAppreciation” for students in rural areas write the appreciation contents for 100 famous music pieces
from a professional point of view and make audio recordings for the appreciation so as to provide
first-class and professional music education for rural students who have few opportunities to get in
touch with music enrich rural music art resources and help students in rural areas improve their music
appreciation ability and music literacy. It is planned that 2000 “Xiao Xue” robots will be distributed
in five years. These robots will accompany children to enjoy music for more than 30000 hours
directly serving 2000 children and indirectly affecting nearly 10000 people.In order to improve the schooling conditions in the mountainous areas of Jiexi County the Company
donated RMB1.32 million for the building of school basketball courts and supporting sports facilities
offering better outdoor sports venues to children in the mountainous areas. For the harmonious
development of communities CSOT cooperated with sub-districts in providing care for the elderly in
communities and actively took part in pandemic prevention and control through methods and
approaches such as community care and pandemic support with trade unions and volunteers as the
main participants.
(2) Semi-annual summary of consolidating and extending the achievements of poverty alleviation
During the Current Period (by 30 June 2021) TCL Public Welfare Foundation invested a total of
RMB7085000 in consolidating the achievements of poverty alleviation and pushing forward rural
revitalisation.A total of 400 outstanding rural teachers were selected and given the dedication innovation and
leadership awards respectively in the 2021 “TCL Project Hope Candlelight Award Programme”. For
each award the winning teachers would be granted financial assistance and offline training support
worth RMB8000 including a cash reward of RMB5000 per person and an offline “Candlelight Class”
training valued at RMB3000. The rural teachers might choose to complete the training in places such
as Shanghai and Shenzhen.In 2021 six pilot schools of the second group for the “Yi Ge Story Club” of the “A.I. Go Home”
project were established in six provinces. 25 Story Boxes were distributed covering nearly 1000
people. The 25 classes of the six pilot schools would organise once a week an activity where a teacher
leads the students to listen to contents told by a “Yi Ge” storytelling robot for approximately 15 to 20
minutes.In 2021 the “Candlelight Micro-loan” project continued providing loan support with interest lowerthan that of commercial loans for outstanding rural teachers selected in the “TCL Project HopeCandlelight Award Programme” with a view to addressing the financial needs of rural teachers and
their families in serious disease treatment living expenses and skills training among other aspects. In
the first half of the year a total of RMB100000 was loaned to two teachers for personal housing
repairs.In 2021 the “Xiao Xue Music Class” of the “Little Music +” project had the second pilot runs in six
schools in six provinces. A total of 25 Xiao Xue Music Boxes were distributed covering more than
1500 students. Teachers of the “Xiao Xue Music Class” would combine the music in the “Xiao Xue”
music robot with the music curriculum to guide students on the appreciation of world classics.Additionally in order to help students understand the connotations of the music and enhance their
imagination it is planned to visually display the appreciation copies of 100 classic songs by designing
and producing picture books of music stories.
(3) Plan for consolidating and extending the achievements of poverty alleviation in the second half of
the year
In the second half of the year the Company will maintain continuous investment in the field of poverty
alleviation through education consolidate the achievements of poverty alleviation and push forwardrural revitalisation with education. For this year’s 7th “TCL Project Hope Candlelight AwardProgramme” the Company will continue to expand the existing award scale and publicity impact.Specifically it will hold an “Award Ceremony” to commend the dedication of rural teachers; it will
continue to strengthen interaction between netizens on the Internet platform so as to maintain social
attention and attract more social groups to pay attention to rural teachers.The coverage of the “A.I. Go Home” project will keep expanding. It is expected that the customised
voice synthesis for 300 people will be completed and exclusive customised “Yi Ge” storytelling
robots will be distributed to 300 families where they will play a companion role in strengthening the
contact between parents and children with the aim of improving the mental health problems of left-
behind children. Furthermore another five to eight “Yi Ge Story Club” pilot schools will be
established in the second half of the year and more than 25 classes will join the “Yi Ge Story Club”
and drive the participation of the schools on a class basis. More than 1000 students are expected to
be covered.The coverage of the “Candlelight Micro-loan” project will be expanded. In addition to the award-
winning teachers in the “TCL Project Hope Candlelight Award Programme” all the trained teachers
of the China Youth Development Foundation’s 2021 Hope Primary School Teacher Training Office
may also apply synchronously. We hope to meet the financial needs of some rural teachers and free
rural teachers from worries through the project so that they can better serve rural education.In the second half of the year the scope of pilot schools will continue to be expanded for the “LittleMusic +” project. Expectedly eight pilot schools will be added and 50 Xiao Xue Music Boxes will be
distributed to cover 3000 students. Meanwhile we will work with artists to complete the picturebooks of music stories. These picture books will serve as a powerful supplement to the “Little Music+” project and enrich the music teaching resources for rural children.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
Date of
Type of Term of
Commitment Promisor Details of commitment commitment Fulfillment
commitment commitment
making
This organization agrees that
it will not transfer its
subscribed convertible bonds
within six months from the
date when this issuance ends
and the registration is
completed. Besides it
entrusts the Board of
About not Directors of TCL Tech. to
20 designated
reducing the apply for lockup of the
Commitments made in asset holders of 30 November Strictly abided
Company’s above subscribed convertible 6 months
restructuring convertible 2020 by
convertible bonds with China Securities
bonds
bonds Depository and Clearing
Corporation Limited (CSDC)
Shenzhen Branch so as to
ensure that the above
subscribed convertible bonds
will not be transferred within
six months from the date
when this issuance ends and
the registration is completed.II Occupation of the Company’s 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
Are the interim financial statements audited?
□ Yes ■ No
The interim financial statements are unaudited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding the
Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting
Period
□ Applicable ■ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's
“Modified Opinion” on the Financial Statements of Last Year
□ Applicable ■ Not applicable
VII Insolvency and Reorganization
□ Applicable ■ Not applicable
No such cases in the Reporting Period.VIII Legal Matters
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 Controller
□ Applicable ■ Not applicable
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable ■ Not applicable
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable ■ Not applicable
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable ■ Not applicable
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
5. Transactions with Related Finance Companies or Finance Companies Controlled by the Company
■ Applicable □ Not applicable
Deposits:
Daily deposit
Relationship with Beginning balance Deposit amount Ending balance
Related party ceiling Range of interest
the Company (RMB’0000) (RMB’0000) (RMB’0000)
(RMB’0000)
Subsidiary of
TCL Industries Related
600000.00 0.01%-2.25% 252815.49 4516182.34 176910.38
Holdings Co. corporation
Ltd.Note: HK dollar deposits with an interest rate of 0.01%.Loans:
Relationship with Loan limit Beginning balance Loan amount Ending balance
Related party Range of interest
the Company (RMB’0000) (RMB’0000) (RMB’0000) (RMB’0000)
Subsidiary of
TCL Industries Related
- 0.7%-4.5% 135823.30 202781.50 235470.70 Holdings Co. corporation
Ltd.Note: US dollar loans with an interest rate of 0.7%.Credit or other financial business:
Relationship with the Total line of credit Actual amount
Related party Business type
Company (RMB’0000) (RMB’0000)
Subsidiary of TCL Industries Holdings
Related corporation Comprehensive 600000.00 316058.75
Co. Ltd. credit
6. Other Major Related-Party Transactions
■ Applicable □ Not applicable
Index to relevant announcements:
Title of announcement Date of disclosure Website for disclosure
Announcement on TCL Tech Finance Co. Ltd.Continuing to Provide Financial Services for
TCL Industries Holdings Inc. and Extending 31 March 2021
the Financial Service Agreement between
Them and the Related-Party Transaction
Announcement on the Expected Continuing 11 March 2021
Related-Party Transactions for 2021
Announcement on the Incorporation of TCL 11 March 2021
Semiconductor Technology (Guangdong) Co. http://www.cninfo.com.cn
Ltd. and the Related-party Transaction
Announcement on the Related-party 11 March 2021
Transactions with Shenzhen Jucai Supply
Chain Technology Co. Ltd. in 2021
Announcement on the Capital Increase in 22 May 2021
Tianjin Huanxin Technology&Development
Co. Ltd. and the Related-party Transaction
Announcement on the Launch of Accounts 22 May 2021
Receivable Factoring and the Related-party
Transaction
Announcement on the Disposal of Equity 22 May 2021
Interests in Guangzhou Financial and the
Related-party Transaction
There are no other major related-party transactions in the Reporting Period.XII Major Contracts and Execution thereof
1. Entrustment Contracting and Leases
(1) Entrustment
□ Applicable ■ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable ■ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable ■ Not applicable
Notes to leases:
No significant leases in the Reporting Period.2. Major Guarantees
Unit: RMB'0000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Guara
Havin
Disclosure ntee
Actual Actual Type of Collater Counter- g
date of the Line of Term of for a
Obligor occurrenc guarantee guarante al (if guarantee expire
guarantee line guarantee guarantee related
e date amount e any) (if any) d or
announcement party
not
or not
TCL King Electrical Joint- 1 month-5
Appliances (Huizhou) 2018-12-7 2019-8- 345000 315141 Not Yes
Co. Ltd. 29
liability years
TCL
Industries
TCL King Electrical Holdings Joint-
Appliances (Chengdu) 2018-12-7 - Co. Ltd. 60000 - Not Yes liability -
Co. Ltd. provided
counter-
guarantees
Huizhou TCL Mobile
Joint- 1-6
Communication Co. 2018-12-7 450000 2021-2-1 195642 Not Yes
liability months
Ltd.TCL Communication
Joint-
Technology Holdings 2018-12-7 - - Not Yes
120000 liability -
Limited
TCL Mobile
2021-3- Joint- 90-122
Communication (HK) 2018-12-7 97814 Not Yes
248500 23 liability days
Company Limited
TCT Mobile Overseas Joint-
2018-12-7 6625 - Not Yes
Limited - liability -
Joint-
TCT Mobile (US) Inc. 2018-12-7 84500 - - Not Yes
liability -
TCT Mobile
Joint- Not Yes
International 2018-12-7 31000 - -
liability -
Limited
TCT Mobile Italy Joint- Not Yes
2018-12-7 1600 - -
S.R.L liability -
TCT MOBILE -
Joint- Not Yes
TELEFONES 2018-12-7 12000 - -
liability -
LTDA.TCL Home Appliances 2020-12- Joint- 1 month-
2018-12-7 140000 72372 Not Yes
(Hefei) Co. Ltd. 3 liability 3 years
TCL Home Appliances 2021-1- Joint- 43-246
2018-12-7 16000 6619 Not Yes
(Zhongshan) Co. Ltd. 25 liability days
TCL Air-Conditioner 2020-3- Joint- 36 days-
2018-12-7 Not Yes
(Zhongshan) Co. Ltd. 158600 13 153032 liability 3 years
TCL Air Conditioner 2021-1- Joint- 53-190
2018-12-7 Not Yes
(Wuhan) Co. Ltd. 131600 19 81445 liability days
Zhongshan TCL 2021-1- Joint- 21-360
Refrigeration 2018-12-7 Not Yes 75300 25 38181 liability
Equipment Co. Ltd. days
Guangdong TCL Smart 2021-1- Joint- 37-189
Heating & Ventilation 2018-12-7 Not Yes 7000 29 2594 liability
Equipment Co. Ltd. days
TCL Home Appliances 2021-6- Joint- 1 year
2018-12-7 Not Yes
(Huizhou) Co. Ltd. 11500 18 10000 liability
TCL Intelligent Joint-
Technology (Hefei) 2018-12-7 Not Yes 800 - - liability -
Co. Ltd.TCL Air-Conditioner 2021-1- Joint- 30-190
2018-12-7 Not Yes
(Jiujiang) Co. Ltd. 25000 25 24902 liability days
TCL Home Appliances - Joint-
2018-12-7 Not Yes
(Hong Kong) Limited 20000 - liability -
Shenzhen TCL - Joint-
Hangxiang Supply 2018-12-7 Not Yes 500 - liability -
Chain Service Co. Ltd.Zhongshan Hhappy Not Yes - Joint- -
Tree Network 2018-12-7 2000 - liability
Technology Co. Ltd.Not Yes
TCL Tonly Electronics 7777 Joint- 0.5 2015-11-
2018-12-7
(Huizhou) Co. Ltd. 40000 4 liability year—
infinite
TCL Commercial
Information - Joint- -
2018-12-7
Technology (Huizhou) 14000 - liability Not Yes
Co. Ltd.52 -
TCL Very Lighting Not Yes
2021-3- 1291 Joint-
Technology (Huizhou) 2018-12-7 130
4000 29 liability
Co. Ltd. days
-
TCL Capital (Hong Joint- Not Yes
2018-12-7 100000 - -
Kong) Limited liability
-
Huizhou Cool Friends - -
Joint-
Network Technology 2018-12-7 13000
liability Not Yes
Co. Ltd.SHIFENDAOJIA 96-113
2021-4- Joint-
Online Service Co. 2018-12-7 3000 21 Not Yes
16 liability days
Ltd.TCL Technology Park Joint-
2018-12-7
Co. Ltd. 27000 - - liability - Not Yes
Guangzhou Yunsheng
Joint-
Tianji Technology Co. 2018-12-7
110000 - - liability Ltd. - Not Yes
Guangzhou TCL
Science and 2018-12- Joint-
2018-12-7 200000 121000
Technology 18 liability 13 years Not Yes
Development Co. Ltd.Shenzhen Bao’an TCL
Haichuanggu 2018-9- Joint-
2018-12-7 20000 16200 3 years Not Yes Technology Park 25 liability
Development Co. Ltd.TCL Industries 2016-10- Joint- 1-5
2018-12-7 800000 669245 Not Yes
Holdings (HK) Limited 4 liability years
Canyon Circuit 4-5 2021-4- Joint-
Technology (Huizhou) 2018-12-7 5000 587 liability months
Not Yes14
Co. Ltd.Huizhou Shenghua Joint-
2018-12-7 9000 - -
Industrial Co. Ltd. liability - Not Yes
Taiyang Electro-optic Joint-
2018-12-7 4000 - -
(Huizhou) Co. Ltd. liability - Not Yes
Huizhou Gaoshengda Joint-
2018-12-7 9000 - - Technology Co. Ltd. liability - Not Yes
With 186-
Shenzhen Qianhai
2021-3-11 2020-12- Joint- counter- 199 Not Not Qihang Supply Chain 40000
23 39735 liability guarantee Management Co. Ltd. days
Qihang Import&Export Joint-
With
2021-3-11 6000 - -
Limited liability counter- - Not Not
guarantee
Shenzhen Qianhai
With 181
2021-3-11 Joint- Qihang Supply Chain 110000 2021-5-6 100 counter- days Not Not
liability
Management Co. Ltd. guarantee
Guarantee in
AGC New Electronic proportion to
Display Glass 2021-3-11
2020-4- Joint-
55000 29447
28 liability shareholding 8 years Not Not
(Shenzhen) Co. Ltd. percentage
Qihang Import&Export Joint- With 237
2021-3-11 50000 2021-5-8 581
Limited liability counter- days Not Not
guarantee
Huizhou Zhongkai
TCL Zhirong Joint- With
Technology 2021-5-22 45500 2020-9-4 28500 liability counter- 1 year Not Yes
Microcredit Co. Ltd. guarantee
Guangzhou TCL Joint- With
Internet Microcredit 2021-5-22 100000 20212-26 48000 liability counter- 1 year Not Yes
Co. Ltd. guarantee
Total actual amount of
Total approved line for such
such guarantees in
guarantees in Reporting Period (A1) 406500
Reporting Period (A2) 1231594
Total actual balance of
Total approved line for such such guarantees at end
guarantees at end of Reporting Period 3712025 of Reporting Period 1960228
(A3)
(A4)
Guarantees provided by the Company as the parent for its
subsidiaries
Guara
Havin
Disclosure ntee
Actual Actual Type of Collater Counter- g
date of the Line of Term of for a
Obligor occurrenc guarantee guarante al (if guarantee expire
guarantee line guarantee guarantee related
e date amount e any) (if any) d or
announcement party
not
or not
Wuhan China Star Joint- 1 month-
Optoelectronics Not Not 2021-3-11 1110000 2016-4-13 510618 liability 8 years
Technology Co. Ltd.Shenzhen China Star
Optoelectronics Joint- 3 month- Not Not
Semiconductor Display 2021-3-11 3650000 2018-4-28 1879892 liability 8 years
Technology Co. Ltd.TCL China Star Joint-
Optoelectronics 3 month-8 Not Not 2021-3-11 650800 2015-4-21 284833 liability
Technology Co. Ltd. years
Wuhan China Star 3 month-8
Optoelectronics 2021-3-11 1700000 2017-12- 1137491 Joint- years Not Not
Semiconductor Display 22 liability
Technology Co. Ltd.Huizhou China Star Joint- 1-8
Optoelectronics Not Not 2021-3-11 990000 2020-8-12 352070 liability years
Technology Co. Ltd.China Star
Optoelectronics Joint- Not Not
International (HK) 2021-3-11 220000 2020-12-5 161503 liability 3 years
Limited
China Display
Optoelectronics Joint- 43- Not Not
Technology (Huizhou) 2021-3-11 150000 2021-3-31 45877 liability 190 days
Co. Ltd.Wuhan China Display Joint- 1-5
Optoelectronics Not Not 2021-3-11 50000 2020-6-1 1271 liability years
Technology Co. Ltd.Guangdong Juhua
2021-3-11 20000 2020-11- 266 Joint- 6 Not Not
Printed Display
19 liability months
Technology Co. Ltd.TCL Tech Finance Co. - Joint- Not Not
Ltd. 2021-3-11 200000 - liability -
Highly Information Joint- 263- Not Not
Industry Co. Ltd. 2021-3-11 383000 2020-6-17 268000 liability 633
days
Beijing Hecheng - Joint- -
Nuoxin Technology Not Not 2021-3-11 5000 - liability
Co. Ltd.Beijing Lingyun Data Joint- 89-394 Not Not
Technology Co. Ltd. 2021-3-11 131500 2021-4-28 21345 liability days
Beijing Sunpiestore Joint- 89-394 Not Not
Technology Co. Ltd. 2021-3-11 87000 2020-6-19 20000 liability days
Shaanxi Titi Electronic - Joint- Not Not
Technology Co. Ltd. 2021-3-11 3000 - liability 0.00
TCL Technology Park Joint- 1-10 Not Not
(Huizhou) Co. Ltd. 2021-3-11 180000 2020-4-24 64700 liability years
TCL Technology Joint- Not Not
Investments Limited 2021-3-11 400000 2020-7-14 194100 liability 5 years
Ningbo TCL Equity - Joint- Not Not
Investment Ltd. 2021-3-11 50000 - liability -
TCL Moka - Joint-
International Not Not 2021-4-28 360000 - liability -
Limited
US Moka Limited Joint- Not Not
2021-4-28 210000 20213-31 21413 liability 90 days
Huizhou Moka - Joint- Not Not
Technology 2021-4-28 50000 - liability -
Development Co. Ltd.Moka Technology Joint- 1-6 Not Not
(Guangdong) Co. Ltd. 2021-4-28 400000 2021-1-8 106987 liability months
Guangzhou China Star
Optoelectronics - Joint- Not Not
Semiconductor Display 2021-4-10 1750000 - liability -
Technology Co. Ltd.Suzhou China Star - Joint- Not Not
Optoelectronics 50000 - liability -
Display Co. Ltd.Suzhou China Star - Joint- Not Not
Optoelectronics 10000 1400 liability 3 days
Technology Co. Ltd.Total approved line for such Total actual amount of
guarantees in the Reporting Period 12810300 such guarantees in the 1546089
(B1) Reporting Period (B2)
Total actual balance of
Total approved line for such such guarantees at the
guarantees at the end of the Reporting 12810300 end of the Reporting 5071766
Period (B3)
Period (B4)
Guarantees provided between subsidiaries
Guara
Havin
Disclosure ntee
Actual Actual Type of Collater Counter- g
date of the Line of Term of for a
Obligor occurrenc guarantee guarante al (if guarantee expire
guarantee line guarantee guarantee related
e date amount e any) (if any) d or
announcement party
not
or not
Huhehaote Huanju 2015-4- Joint- 9.5 New Energy 2014 -11 -26 Not Not 34529 13 34529 liability years Development Co. Ltd.Zhonghuan Energy Joint- 15
(Inner Mongolia) Co. 2017 -6 -24 2017-7- Not Not 12920 12920 liability years
Ltd. 21
Otog Banner Huanju Joint- 10
2017 -6 -24 2017-8- Not Not
New Energy Co. Ltd. 22828 18 22828 liability years
Qinhuangdao Tianhui Joint- 10
2017 -11 -11 2018-1- Not Not
Solar Energy Co. Ltd. 11200 19 11200 liability years
Inner Mongolia Joint- 5 years
Zhonghuan Solar 2017 -11 -29 2018-5- Not Not 145000 31 145000 liability Material Co. Ltd.Qinhuangdao Tianhui
2018 -9 -6 2019-4-
Joint- 12 Not Not
Solar Energy Co. Ltd. 13429 23 13429 liability years
Guyuan Shengju New 2018-10- Joint- 11 2018 -9 -6 Not Not
Energy Co. Ltd. 11619 8 11619 liability years
Zhangjiakou Joint- 11
Shengyuan New 2018 -9 -6 2018-10- Not Not 15690 8 15690 liability years Energy Co. Ltd.Zhonghuan Hong Kong Joint- 3 years Not Not
2018 -12 -8 2018-12-
Holding Limited 45221 45221 liability27
Zhonghuan Hong Kong Joint- 3 years Not Not
2019 -8 -22 2019-10-
Holding Limited 36460 36460 liability16
Zhonghuan Hong Kong Joint- 3 years Not Not
Holding Limited 2021-3-22 65000 2021-3-26 53124 liability
Inner Mongolia Joint- 7 years
Zhonghuan Xiexin Not Not 2021-3-22 412500 2021-4-30 341300 liability
Solar Material Co. Ltd.Huansheng Solar Joint- 5 years Not Not
(Jiangsu) Co. Ltd. 2021-3-22 60000 2021-4-1 60000 liability
Tianjin Huanzhi New Joint- -
Energy Technology Not Not 2021-1-21 131500 - liability
Co. Ltd.Total approved line for such
Total actual amount of such guarantees in
guarantees in the Reporting Period 669000 454424
the Reporting Period (C2)
(C1)
Total approved line for such
Total actual balance of such guarantees at
guarantees at the end of the Reporting 1017897 803321
the end of the Reporting Period (C4)
Period (C3)
Total guarantee amount (total of the
three kinds of guarantees above)
Total guarantee line approved in the Total actual guarantee amount in the
13885800 3232107
Reporting Period (A1+B1+C1) Reporting Period (A2+B2+C2)
Total approved guarantee line at the
Total actual guarantee balance at the end of
end of the Reporting Period 17540222 7835315
the Reporting Period (A4+B4+C4)
(A3+B3+C3)
Total actual guarantee amount (A4+B4+C4) as % of the
229.72%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders the actual1890364
controller and their related parties (D)
Balance of debt guarantees provided directly or indirectly for3327323
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of6129925
the Company’s net assets (F)
Total of the three amounts above (D+E+F) 6129925
Joint liability possibly borne or already borne in the Reporting
-
Period for outstanding guarantees (if any)
Guarantees provided in breach of prescribed procedures (if
any) -
In the Reporting Period the Company split the guarantee line for TCL China Star Optoelectronics Technology Co. Ltd. with RMB500
million for subsidiary Suzhou China Star Optoelectronics Display Co. Ltd. and RMB100 million for subsidiary Suzhou China Star
Optoelectronics Technology Co. Ltd. Upon that the gurantee line for TCL China Star Optoelectronics Technology Co. Ltd. was no
more than RMB6.508 billion.An internal review was carried out for the aforesaid split. The debt/asset ratios of both the subsidiaries with an increased line of guarantee
were not over 70% which is in compliance with the Company’s Management Rules for Guarantees for External Parties and the requirements
of the Proposal on the Provision of Gurantees for Subsidiaries in 2021 approved at the 2020 Annual General Meeting on 30 April 2021.3. Cash Entrusted for Wealth Management
□ Applicable ■ Not applicable
Unit: RMB’0000
Impairment
allowances for
Unrecovered
Type Funding source Amount Undue amount unrecovered overdue overdue amount
amount
Bank’s wealth
Self-funded 330000.00 591033.30 0 0
management product
Securities firm’s
wealth management Self-funded 26000.00 20000.00 0 0
product
Trust plan Self-funded 20000.00 0 0 0
Other Self-funded 185557.43 22855.35 0 0
Total
561557.43 633888.65 0 0
High-risk wealth management transactions with a significant single amount low liquidity and no principal protection:
□ Applicable ■ Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable ■ Not applicable
4. Significant Continuing Contracts
□ Applicable ■ Not applicable
Material difference between contract execution progress and contract stipulation with an over-30% impact of the total contract amount:
□ Applicable ■ Not applicable
5. Other Major Contracts
□ Applicable ■ Not applicable
No such cases in the Reporting Period.XIII Other Significant Events
■ Applicable □ Not applicable
Website for the disclosed relevant
Overview of the significant event Disclosure date
announcement
Announcement on the Completion of the Non-Deal
22 January 2021
Transfer under the Third Global Partner Plan
Voluntary Announcement on Increasing the Equity-
4 February 2021
holdings in Tianjin Printronics Circuit Corporation
Announcement on the Progress of the Acquisition of 60%
Equity Interests in Samsung Suzhou LCD Co. Ltd. and 8 February 2021
100% Equity Interests in Samsung Display Suzhou Co.Ltd.Voluntary Announcement on Increasing the Equity-
17 March 2021
holdings in Tianjin Printronics Circuit Corporation
Voluntary Announcement on Increasing the Equity-
18 March 2021
holdings in Tianjin Zhonghuan Semiconductor Co. Ltd.www.cninfo.com.cn
Announcement on the Settlement of the Acquisition of
60% Equity Interests in Samsung Suzhou LCD Co. Ltd.2 April 2021
and 100% Equity Interests in Samsung Display Suzhou
Co. Ltd.Preliminary Plan on 2021 Private Placement of A-
10 April 2021
shares
Announcement on the Construction of the Generation 8.6
10 April 2021
(or G8.6) New Oxide Semiconductor Production Line of
Guangzhou CSOT
Announcement on the Progress of the Acquisition of
24 April 2021
100% Equity Interests in Moka International Limited
Announcement on the Adjustment to the Stock
11 May 2021
Conversion Price of Convertible Corporate Bonds
Reminder on the Commencement of Bonds-to-Stock
28 May 2021
Conversion of “TCL Private Convertible 2”
Report on the Repurchase of Certain Public Shares in 21 June 20212021
2021-2023 Employee Stock Ownership Plan (Phase I) 21 June 2021
(Draft)
XIV Significant Events of Subsidiaries
■ Applicable □ Not applicable
Title of announcement Date of disclosure Website for disclosure
Announcement on the Construction of the
Generation 8.6 (or G8.6) New Oxide
10 April 2021
Semiconductor Production Line of
Guangzhou CSOT
Announcement on Capital Increase in TCL
22 May 2021
CSOT
Part VII Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares as
as dividen
dividen d
Percentag New Percentage
Shares d convert Other Subtotal Shares
e (%) issues (%)
convert ed from
ed from capital
profit reserve
s
1. Restricted shares 1369646802 9.76% 0 0 0 -246072950 -246072950 1123573852 8.01%
1.1 Shares held by the
0 0.00% 0 0 0 0 0 0 0.00%
state
1.2 Shares held by
state-owned legal 511508951 3.65% 0 0 0 0 0 511508951 3.65%
persons
1.3 Shares held by
other domestic 767573072 5.46% 0 0 0 -155899669 -155899669 611673403 4.36%
investors
Among which: Shares
held by domestic legal 150908441 1.08% 0 0 0 -150908441 -150908441 0 0.00%
persons
Shares held by
domestic natural
616664631 4.38% 0 0 0 -4991228 -4991228 611673403 4.36%
persons
1.4 Shares held by
90564779 0.65% 0 0 0 -90173281 -90173281 391498 0.0028%
foreign investors
Among which: Shares
held by foreign legal 90532347 0.65% 0 0 0 -90532347 -90532347 0 0.00%
persons
Shares held by foreign
natural persons 32432 0.0002% 0 0 0 359066 359066 391498 0.0028%
2. Unrestricted shares 12661141560 90.24% 0 0 0 246072950 246072950 12907214510 91.99%
2.1 RMB-denominated
12661141560 90.24% 0 0 0 246072950 246072950 12907214510 91.99%
ordinary shares
3. Total shares 14030788362 100.00% 0 0 0 0 0 14030788362 100%
Reasons for share changes:
1. During the Reporting Period locked-up shares held by senior management decreased by 3280846 restricted shares as unrestricted
shares decreased by the same number. As such the total shares of the Company remained unchanged.2. On 8 January 2021 the Company disclosed the Reminder on the Unlocking for Public Trading of Certain Restricted Shares Issued
for Asset Purchase in 2017. A total of 241440788 shares of five shareholders who obtained these restricted public shares in a private
placement were unlocked for public trading on 11 January 2021 as unrestricted shares increased by the same number. As such the total
shares of the Company remained unchanged.3. On 24 June 2021 the Company disclosed the Reminder on the Shares Unlocked in the Second Unlocking Period under the 2019
Restricted Stock Incentive Plan and the Second Global Innovation Partner Plan Being Allowed for Public Trading. A total of 1351316
restricted shares were allowed for public trading on 28 June 2021 as unrestricted shares increased by the same number. As such the
total shares of the Company remained unchanged.Approval of share changes:
□Applicable ■ Not applicable
Transfer of share ownership:
□Applicable ■ Not applicable
Progress on any share repurchase:
■Applicable □ Not applicable
The Company focuses on the development of its core business namely the semi-conductor display business and the semi-conductor
photovoltaic and semi-conductor materials business. It is committed to becoming a global leading technology group. In the pattern reshaping
driven by technological innovation scale advantages efficiency and benefits and industry chain synergy major domestic enterprises have
established comparative advantages industry concentration has increased significantly and the strategic utilisation and value contribution of
the industry chain links have gradually become prominent. Based on its confidence in the long-term development of the core business and
the continuous growth of corporate value in order to protect the interests of investors and take into account the needs of employee incentives
the Company convened the Ninth Meeting of the Seventh Board of Directors on 20 June 2021 at which the Proposal on the Repurchase of
Certain Public Shares was approved. For details see the Report on the Repurchase of Certain Public Shares in 2021 disclosed by the Company
on media designated for information disclosure.The Company implemented the share repurchase from 25 June 2021. Up to 26 July 2021 the Company has cumulatively repurchased
80663588 shares (or 0.57% of the Company’s total share capital) in its special securities account for repurchases by way of centralized
bidding with the highest trading price being RMB8.29/share and the lowest trading price being RMB7.49/share. The total transaction amount
was approximately RMB629 million. The share repurchase has been implemented in a process in compliance with the applicable regulations
including the Specific Rules of the Shenzhen Stock Exchange for Share Repurchase by Listed Companies. The actual number of shares
repurchased repurchase price and amount used were in compliance with the repurchase plan approved at the Ninth Meeting of the Seventh
Board of Directors with no difference with the disclosed Report on the Repurchase of Certain Public Shares in 2021. As such the Company
has completed the share repurchase.Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable ■ Not applicable
Effects of share changes on the basic earnings per share diluted earnings per share equity per share attributable to the Company’s ordinary
shareholders and other financial indicators of the prior year and the prior accounting period respectively:
□ Applicable ■ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable ■ Not applicable
2. Changes in Restricted Shares
■ Applicable □ Not applicable
Unit: share
Beginning Unlocked in Increase in Ending restricted Reason for
Shareholder Date of unlocking
restricted shares Reporting Period Reporting Period shares restriction
Wuhan Optics
Valley Industrial 511508951 - - 511508951 Restricted shares
Investment Co. in a share offering 2021-11-11
Ltd.Star Century
Restricted shares
Enterprises 90532347 90532347 - 0 2020-12-25 in a share offering
Limited
Ningbo Xinglian
Zhonglian 32311279 32311279 - 0
Enterprise
Restricted shares
Management
in a share offering 2020-12-25
Partnership
(Limited
Partnership)
Ningbo Xinglan
Zhonglian 42521163 42521163 - 0
Enterprise
Restricted shares
Management
in a share offering 2020-12-25
Partnership
(Limited
Partnership)
Ningbo Xingyuan
Zhonglian 37695315 37695315 - 0
Enterprise
Restricted shares
Management
in a share offering 2020-12-25
Partnership
(Limited
Partnership)
Ningbo Xingyong
Zhonglian 38380684 38380684 - 0
Enterprise
Restricted shares
Management
in a share offering 2020-12-25
Partnership
(Limited
Partnership)
Locked-up shares
Other 615199806 3280846 - 611918960 of senior 9999-99-99
management
2019 Restricted Restricted shares
Stock Incentive 1497257 1351316 - 145941 granted as 2021-6-25
Plan incentives
Total 1369646802 246072950 - 1123573852 -- --
II Issuance and Listing of Securities
■ Applicable □ Not applicable
Name of stock
Number Termination Index to
and its Issue price (or Issued Date of
Issue date Listing date approved for date of disclosed
derivative interest rate) number disclosure
public trading transaction information
securities
Type: convertible corporate bonds convertible corporate bonds with warrants corporate bonds
Corporate http://www
bonds 2021-3-25 3.65% 5000000 2 021-4-7 5000000 2021-9-25 .cninfo.com.c 2021-3-29
（21TCLK1 n149434.SZ）
III Shareholders and Their Shareholdings at the End of the Reporting Period
Unit: share
Number of preference
Number of ordinary
788420 shareholders with resumed voting -
shareholders at the period-end
rights at the period-end (if any)
5% or greater ordinary shareholders or top 10 ordinary shareholders
Shares in pledge marked or
Sharehol Increase/decr
Total ordinary Restricted Unrestricted frozen
Name of Nature of ding ease in the
shares held at ordinary ordinary
shareholder shareholder percenta Reporting
the period-end shares held shares held Status Shares
ge (%) Period
Put in pledge by
Domestic 72000000
Li Dongsheng Li Dongsheng
natural
and his acting-in- 8.26% 1158599393 0 610181602 548417791 Put in pledge by
person/general
concert party Jiutian 344899521
legal person
Liancheng
Huizhou
State-owned
Investment 5.30% 743139840 0 0 743139840
legal person
Holding Co. Ltd.Wuhan Optics
Valley Industrial State-owned
3.65% 511508951 0 511508951 0 In pledge 255754475
Investment Co. legal person
Ltd.Hong Kong
Securities Foreign legal
3.26% 457823997 -65918570 0 457823997
Clearing person
Company Ltd.China Securities
Domestic
Finance
general legal 2.66% 373231553 0 0 373231553
Corporation
person
Limited
Tibet Tianfeng
Domestic
Enterprise
general legal 1.75% 245969062 -109894653 0 245969062
Management Co.person
Ltd.Sinatay Life
Insurance Co. Fund wealth
Ltd.－ management 0.58% 81958072 3266972 0 81958072
Conventional product etc.Product
ICBC Credit
Suisse Asset
Management
－Agricultural
Bank of China- Fund wealth
ICBC Credit management 0.53% 74761500 0 0 74761500
Suisse China product etc.Securities
Financial Asset
Management
Plan
Southern Asset
Management－
Agricultural
Bank of China
Fund wealth
－Southern
management 0.53% 74761500 0 0 74761500
China product etc.Securities
Financial Asset
Management
Plan
Zhong Ou
Asset
Management-
Agricultural
Bank of China- Fund wealth
Zhong Ou management 0.53% 74761500 0 0 74761500
China product etc.Securities
Financial Asset
Management
Plan
Strategic investor or general
legal person becoming a top-
N/A
10 ordinary shareholder in a
rights issue (if any)
Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert Mr. Li
Related or acting-in-concert
Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited Partnership)
parties among the shareholders
(hereinafter referred to as “Jiutian Liancheng”) are the biggest shareholder of the Company with a
above
total of 1158.5994 million shares.Explain if any of the
shareholders above was
involved in entrusting/being N/A
entrusted with voting rights or
waiving voting rightsSpecial account for share The top 10 shareholders above do not include “The Securities Account of TCL Technology Grouprepurchases (if any) among the Corporation for Repurchases”. As of the end of the Reporting Period there were 535983451
top 10 shareholders shares in the account.Top 10 unrestricted ordinary shareholders
Shares by class
Name of shareholder Unrestricted ordinary shares held at the period-end
Class Shares
RMB-
Huizhou Investment Holding
743139840 denominated 743139840
Co. Ltd.ordinary stock
RMB-
Li Dongsheng and his acting-in-
548417791 denominated 548417791
concert party
ordinary stock
RMB-
Hong Kong Securities Clearing
457823997 denominated 457823997
Company Ltd.ordinary stock
RMB-
China Securities Finance
373231553 denominated 373231553
Corporation Limited
ordinary stock
RMB-
Tibet Tianfeng Enterprise
245969062 denominated 245969062
Management Co. Ltd.ordinary stock
RMB-
Sinatay Life Insurance Co.81958072 denominated 81958072
Ltd.－Conventional Product
ordinary stock
ICBC Credit Suisse Asset
Management RMB-
－Agricultural Bank of China- 74761500 denominated 74761500
ICBC Credit Suisse China ordinary stock
Securities Financial Asset
Management Plan
Southern Asset Management
－Agricultural Bank of China RMB-
－Southern China Securities 74761500 denominated 74761500
Financial Asset Management ordinary stock
Plan
Zhong Ou Asset Management-
Agricultural Bank of China- RMB-
Zhong Ou China Securities 74761500 denominated 74761500
Financial Asset Management ordinary stock
Plan
Bosera Funds－Agricultural
RMB-
Bank of China－Bosera
74761500 denominated 74761500
China Securities Financial ordinary stock
Asset Management Plan
Related or acting-in-concert
parties among top 10
Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert Mr. Li
unrestricted ordinary
Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited Partnership)
shareholders as well as between
(hereinafter referred to as “Jiutian Liancheng”) are the biggest shareholder of the Company with
top 10 unrestricted ordinary
a total of 1158.5994 million shares.shareholders and top 10
ordinary shareholders
Top 10 ordinary shareholders Shareholder Tibet Tianfeng Enterprise Management Co. Ltd. held 163223537 shares in the
involved in securities margin Company in its general securities account and 82745525 shares in its securities margin account
trading (if any) totaling 245969062 shares.Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.□ Yes ■ No
No such cases in the Reporting Period.IV Change in Shareholdings of Directors Supervisors and Senior Management
□ Applicable ■ Not applicable
No changes occurred to the shareholdings of the directors supervisors and senior management in the Reporting Period. See the 2020
Annual Report for more details.V Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder in the Reporting Period:
□ Applicable ■ Not applicable
Change of the actual controller in the Reporting Period:
□ Applicable ■ Not applicable
Part VIII Bonds
Enterprise Bonds
□ Applicable ■ Not applicable
No enterprise bonds in the Reporting Period.Corporate Bonds
■ Applicable □ Not applicable
General Information of Corporate Bonds
Way of
Outstanding
principal
Date of balance Coupon rate Place of
Bond name Abbr. Bond code Value date Maturity repayment
issuance (RMB’0000 (annualized) transaction
and interest
)
payment
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly 19 April 19 April
17TCL01 112518 18 April 100000 3.40% annually and Stock
Offered in 2017 2022
2017 principal Exchange
2017 to repayable in
Qualified full upon
Investors maturity
(Tranche 1)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly
17TCL02 112542 6 July 2017 annually and 7 July 2017 7 July 2022 15700 3.45% Stock
Offered in principal
Exchange 2017 to repayable in
Qualified full upon
Investors maturity
(Tranche 2)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly
18TCL01 112717 5 June 2018 6 June 2018 6 June 2023 17001.90 4.00% annually and Stock
Offered in principal
Exchange 2018 to repayable in
Qualified full upon
Investors maturity
(Tranche 1)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly 20 August 20 August
18TCL02 112747 17 August 200000 5.30% annually and Stock
Offered in 2018 2023
2018 principal Exchange
2018 to repayable in
Qualified full upon
Investors maturity
(Tranche 2)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly 20 May 20 May
19TCL01 112905 17 May 100000 4.33% annually and Stock
Offered in 2019 2024
2019 principal Exchange
2019 to repayable in
Qualified full upon
Investors maturity
(Tranche 1)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly
19TCL02 112938 19 July 2019 2 3 July 2019 23 July 2024 100000 4.30% annually and Stock
Offered in principal Exchange
2019 to repayable in
Qualified full upon
Investors maturity
(Tranche 2)
TCL
Corporation’
s Corporate Interest
Bonds payable Shenzhen
Publicly 21 October 21 October
19TCL03 112983 17 October 200000 4.20% annually and Stock
Offered in 2019 2024
2019 principal Exchange
2019 to repayable in
Qualified full upon
Investors maturity
(Tranche 3)
TCL
Technolog
y Groupo
Corporatio
n’s
Technolog
y 21TCLK1 149434 25 March 29 March 25 50000 3.65% Principal Shenzhen
Innovation 2021 2021 September repayable in Stock
Short-Term 2021 full upon Exchange
Corporate maturity
Bonds with interest
Publicly
Offered in
2021 to
Qualified
Investors
(Tranche
1)
Investor eligibility (if any) N/A
Trading system applicable N/A
Risk of termination of listing and
None
trading (if any) and countermeasures
Overdue bonds:
□ Applicable ■ Not applicable
Triggering and implementation of issuer or investor option clauses and investor protection clauses
■ Applicable □ Not applicable
In accordance with the provisions of the Prospectus for TCL Technology Group Corporation’s Corporate Bonds Publicly Offered in
2018 to Qualified Investors (Tranche 1) the bondholders of 18TCL01 elected during the sell-back registration period (11 May 2021 to
17 May 2021) to sell back all or part of their 18TCL01 to TCL Technology Group Corporation at the sell-back price of RMB100/bond
(excluding interest). The coupon rate for the last two years of the duration was adjusted from 5.48 % to 4.00% and the release date of
the sell-back payments was 7 June 2021. According to the data provided by the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited the number of 18TCL01 sold back during the sell-back registration period was 8299810 and the sell-
back amount was RMB829981000. As indicated in the Announcement on Sell-back Declaration Results the issuer would resell the
sold-back bonds from 8 June 2021 to 6 July 2021 and the number of bonds to be resold would be 8299810. Based on cost
considerations the Company decided not to resell the bonds of the tranche so the number of resold bonds of the tranche was 0. After
the implementation of the resale the Company applied to the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited for the cancellation of the 8299810 bonds not resold. After the cancellation was completed the number of remaining 18TCL01
held in trust was 1700190.Adjustments to credit ratings in the Reporting Period:
□ Applicable ■ Not applicable
Execution and changes of guarantees repayment plans and other repayment guarantee measures in the Reporting
Period and impact on bond investors’ equity :
□ Applicable ■ Not applicable
Debt financing instruments of a non-financial enterprise:
■ Applicable □ Not applicable
General information of debt financing instruments of a non-financial enterprise:
Unit: RMB’0000
Way of
Outstanding
principal
Date of balance Coupon rate Place of
Bond name Abbr. Bond code Value date Maturity repayment
issuance (RMB’0000 (annualized) transaction
and interest
)
payment
Interest
TCL
payable Inter-bank
Corporation
’s Medium- 18TCL- 101801408. 2018-11-29 2018-12-03 2021-12-03 200000 4.58%
annually and market
principal
Term Notes MTN001 IB repayable in
in 2018 full upon
(Tranche 1) maturity
TCL
Technolog
y Groupo Interest
Corporatio
102000509. 2020-03-25 2020-03-27 2023-03-27 300000 3.60% payable Inter-bank
n’s
20TCL- IB annually and market Medium-
Term Notes MTN001
principal
repayable in
in 2020 full upon
(Tranche 1) maturity
TCL
Technolog
y Groupo
Corporatio Interest 21TCL-
n’s MTN001 102100966. 2021-05-10 2021-05-12 2024-05-12 200000 4.15%
payable Inter-bank
Medium- IB annually and (High- market
Term Notes principal Growth
in 2021 repayable in Debt)
(Tranche 1) full upon
(High- maturity
Growth
Debt)
Investor eligibility (if any) N/A
Trading system applicable N/A
Risk of termination of listing and
None
trading (if any) and countermeasures
Overdue bonds:
□ Applicable ■ Not applicable
Triggering and implementation of issuer or investor option clauses and investor protection clauses
□ Applicable ■ Not applicable
Adjustments to credit ratings in the Reporting Period:
□ Applicable ■ Not applicable
Execution and changes of guarantees repayment plans and other repayment guarantee measures in the Reporting
Period and impact on bond investors’ equity :
□ Applicable ■ Not applicable
Convertible Corporate Bonds:
■ Applicable □ Not applicable
Bond-to-stock price adjustments:
Name Price before adjustment Adjusted price Commencement date for the
(RMB/share) (RMB/share) adjustmentTCL Private Convertible 1（convertible3.91 3.79 19 May 2021bond code：124016）TCL Private Convertible 2（convertible8.00 7.88 19 May 2021bond code：124017）Cumulative bond-to-stock conversions:
□ Applicable ■ Not applicable
No convertible corporate bonds were converted to shares in the Reporting Period.Top 10 holders of convertible corporate bonds:
TCL Private Convertible 1（convertible bond code：124016）:Number of
convertible Amount of convertible Percentage of convertible
Serial
Name of holder Nature of holder corporate bonds corporate bonds held at corporate bonds held at the
No.held at the period- the period-end (RMB) period-end
end
Wuhan Optics Valley
1 Industrial Investment Co. State-owned 6000000 600000000 100.00%
Ltd. legal person
TCL Private Convertible 2（convertible bond code：124017）：
Number of
convertible Amount of convertible Percentage of convertible
Serial
Name of holder Nature of holder corporate bonds corporate bonds held at corporate bonds held at the
No.held at the period- the period-end (RMB) period-end
end
Domestic general
1 GF Securities Co. Ltd. 3900000 390000000 15.00%
legal person
State-owned legal
2 Guosen Securities Co. Ltd. 3000000 300000000 11.54%
person
Fullgoal Fund Management Domestic general
3 2500000 250000000 9.62%
Co. Ltd. legal person
State-owned legal
4 Western Securities Co. Ltd. 1700000 170000000 6.54%
person
China Life Pension
5 Sustaining Fixed Income Fund wealth 1300000 130000000 5.00%
Pension Product No. 9- management
China Merchants Bank Co. product etc.Ltd.China Life Pension Hongxin
6 Fixed Income Pension Fund wealth 1300000 130000000 5.00%
Product- Industrial And management
Commercial Bank Of China product etc.Limited
7 ICBC Credit Suisse Asset Domestic general 1000000 100000000 3.85%
Management Co. Ltd. legal person
8 Shenwan Hongyuan Group Domestic general 1000000 100000000 3.85%
Co. Ltd. legal person
China Life Yongfeng
Fund wealth
9 Enterprise Annuity 1000000 100000000 3.85%
management
Collective Plan- Agricultural
product etc.Bank Of China Limited
China Life Insurance
10 Fund wealth 1000000 100000000 3.85%
(Group) Company Enterprise
management
Annuity Plan- Agricultural
product etc.Bank Of China Limited
Significant changes to the profitability assets and credit standing of the guarantor:
□ Applicable ■ Not applicable
Liability condition and credit rating changes of the Company at the end of the Reporting Period as well as future
cash arrangements for repayment:
See “Part VIII Bonds” for details.Consolidated loss of the Reporting Period over 10% of the net assets of the last year-end:
□ Applicable ■ Not applicable
Selected financial information of the Company in the past two years:
Unit: RMB
Item 30 June 2021 31 December 2020 Change
Current ratio 105.64% 92.50% 13.14%
Debt/asset ratio 65.17% 65.08% 0.09%
Quick ratio 78.66% 66.36% 12.30%
H1 2021 H1 2020 Change
Net profit before non-recurring 7741176412 -10667258 72669.51%
gains and losses
Debt/EBITDA ratio 10.68% 5.12% 5.56%
Interest cover (times) 5.12 1.22 319.02%
Cash-to-interest cover (times) 7.23 5.81 24.48%
EBITDA-to-interest cover
8.55 3.93 117.66%
(times)
Debt repayment ratio (%) 100% 100% 0.00
Interest payment ratio (%) 100% 100% 0.00
Explanation of why any financial indicator in the table above registered a year-on-year change of over 30%: In the Reporting Period
benefiting from growth in the industry in addition to the Company’s fast production ramp-up and acquisition of Zhonghuan the
Company saw a year-on-year surge in size operating performance and profitability resulting in great changes in the financial indicators
in the table above.TCL Technology Group Corporation
Part IX Unaudited Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
Contents Page
I Unaudited Financial Statements
1．Consolidated Balance Sheet 1-2
2．Consolidated Income Statement 3
3．Consolidated Cash Flow Statement 4-5
4．Consolidated Statement of Changes
in Shareholders’ Equity
5．Balance Sheet of the Company as
the Parent
6．Income Statement of the Company10
as the Parent
7．Cash Flow Statement of the
Company as the Parent
8．Statement of Changes in
Shareholders’ Equity of the Company 13-14
as the Parent
9．Notes to Financial Statements 15-161
TCL Technology Group Corporation
Consolidated Balance Sheet
(RMB’000)
Assets: Note V 30 June 2021 31 December 2020
Current assets:
Monetary assets 1 27374279 21708905
Held-for-trading financial assets 2 9548577 5300046
Derivative financial assets 3 139396 453578
Notes receivable 4 2626222 595685
Accounts receivable 5 18908014 12557614
Receivables financing 6 1725478 2176744
Prepayments 7 2439441 1355653
Other receivables 8 3523014 2793640
Inventories 9 13900810 8834958
Contract assets 10 241093 183650
Assets held for sale 11 217314 360936
Other current assets 12 8701788 9367055
Total current assets 89345426 65688464
Non-current assets:
Loans and advances to customers 13 288749 981876
Debt investments 14 - 119350
Other debt investments 15 91976 152063
Long-term receivables 16 809720 778889
Long-term equity investments 17 25541631 24047036
Investments in other equity
18 1100185 1333676
instruments
Other non-current financial assets 19 2458139 3055595
Investment property 20 725250 1664201
Fixed assets 21 104520658 92829902
Construction in progress 22 37181286 31508311
Right-of-use assets 23 1984255 -
Intangible assets 24 12430511 10054045
Development costs 25 2522995 2103995
Goodwill 26 9125489 6943265
Long-term prepaid expense 27 1565459 2536670
Deferred income tax assets 28 2095661 1578088
Other non-current assets 29 10418091 12532853
Total non-current assets 212860055 192219815
Total assets 302205481 257908279
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe 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 30 June 2021 31 December 2020
Current liabilities:
Short-term borrowings 30 9022205 12263714
Borrowings from central bank 31 1104750 469834
Customer deposits and deposits from32
other banks and financial institutions 22473622850139
Held-for-trading financial liabilities 33 1134251 527901
Derivative financial liabilities 34 129382 384904
Notes payable 35 5408824 4725612
Accounts payable 36 24863736 16468932
Advances from customers 37 41155 78597
Contract liabilities 38 2635068 2004004
Financial assets sold under repurchase39
agreements - 50080
Employee benefits payable 40 2618595 1856664
Taxes and levies payable 41 1417716 670059
Other payables 42 19599708 14869433
Current portion of non-current liabilities 43 13658542 13429670
Other current liabilities 44 695655 366971
Total current liabilities 84576949 71016514
Non-current liabilities
Long-term borrowings 45 88663620 73589403
Bonds payable 46 17663129 18040773
Lease liabilities 47 886515 -
Long-term payables 48 528172 1280300
Long-term employee benefits payable 40 27482 27858
Deferred income 49 1589724 1509867
Deferred income tax liabilities 28 3024467 2386497
Total non-current liabilities 112383109 96834698
Total liabilities 196960058 167851212
Share capital 50 14030788 14030788
Other equity instruments 51 230241 230241
Capital reserves 52 4135444 5442385
Less: Treasury stock 53 2195019 1913029
Other comprehensive income 74 (381394) (145573)
Surplus reserves 54 2452892 2452892
Specific reserve 55 667 211
General reserve 56 361 386
Retained earnings 57 19283685 14009494
Total equity attributable to shareholders of
the Company as the parent 37557665 34107795
Non-controlling interests 67687758 55949272
Total shareholders’ equity 105245423 90057067
Total liabilities and shareholders’ equity 302205481 257908279
Person-in-
charge of the
Legal Person-in-charge of financial
representative: Li Dongsheng financial affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.2
TCL Technology Group Corporation
Consolidated Income Statement
(RMB’000)
H1 2021 H1 2020 Note V
1. Total revenue
74372780 29418903
Including: Revenue 58 74298647 29333211
Interest income 59 74133 85692
Less: Cost of sales 58 57984972 26740893
Interest expense 59 12564 16278
Taxes and levies 60 294310 87284
Selling expense 61 901176 324665
Administrative expense 62 2023368 770003
R&D expense 63 3428197 1882501
Finance costs 64 1818983 916022
Including: Interest expense 2160434 1132442
Interest income 187547 250867
Add: Other income 65 810034 952416
Return on investment 66 2788205 1340665
Including: Share of profit or loss of joint ventures and associates 1315184 881503
Exchange gain 59 964 689
Gain on changes in fair value 67 (314196) 114034
Credit impairment loss 68 (11445) (1124)
Asset impairment loss 69 (797519) (328682)
Asset disposal income 70 24327 1320
2. Operating profit 10409580 760573
Add: Non-operating income 71 267948 491939
Less: Non-operating expense 72 11987 18801
3. Gross profit 10665541 1233711
Less: Income tax expense 73 1413574 164587
4. Net profit 9251967 1069124
4.1 By operating continuity
Net profit from continuing operations 9193671 1069124
Net profit from discontinued operations 58296 -
4.2 By ownership
Net profit attributable to shareholders of the Company as the parent 6783885 1208066
Net profit attributable to non-controlling interests 2468082 (138942)
5. Other comprehensive income net of tax 74 (217489)
(88940)
5.1 Other comprehensive income that will not be reclassified to profit or loss (184359) (13382)
5.2 Other comprehensive income that may subsequently be reclassified to
(33130) (75558)
profit or loss upon satisfaction of prescribed condition
6. Total comprehensive income 9034478 980184
Attributable to shareholders of the Company as the parent 6548064 1139598
Attributable to non-controlling interests 2486414 (159414)7
7. Earnings per share5
7.1 Basic earnings per share (RMB yuan/share) 0.5026 0.0932
7.2 Diluted earnings per share (RMB yuan/share) 0.4835 0.0893
Person-in-charge
Person-in-charge of of the financial
Legal representative: Li Dongsheng financial affairs： Du Juan department: Xi WenboThe 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 H1 2021 H1 2020
1. Cash flows from operating activities：
Proceeds from sale of commodities and rendering of services 60061126 30776853
Net increase/(decrease) in customer deposits and deposits from other
(602777) 2262400
banks and financial institutions
Net increase/(decrease) in borrowings from central bank 634916 831500
Net increase in loans from other financial institutions - 500000
Interest fees and commissions received 74133 85692
Tax and levy rebates 2530415 1409112
Cash generated from other operating activities 76 5032866 1133384
Subtotal of cash generated from operating activities 67730679 36998941
Payments for commodities and services (42679165) (23358384)
Net (increase)/decrease in loans and advances to customers (720348) (106115)
Net (increase)/decrease in deposits in central bank and other banks
(309934) 319970
and financial institutions
Cash paid to and for employees (4424050) (2545709)
Taxes and levies paid (2179393) (2253748)
Cash used in other operating activities 77 (3522074) (1707145)
Subtotal of cash used in operating activities (53834964) (29651131)
Net cash generated from in operating activities 82 13895715 7347810
2. Cash flows from investing activities：
Proceeds from disinvestment 13223437 10040824
Return on investment 945622 245980
Net proceeds from the disposal of fixed assets intangible
assets and other long-lived assets 127405 146
Net proceeds from the disposal of subsidiaries and other business units 511576 199303
Cash generated from other investing activities 78 7079 -
Subtotal of cash generated from investing activities 14815119 10486253
Payments for the acquisition of fixed assets intangible assets
(13684031) (12491013)
and other long-lived assets
Payments for investments (17853045) (15202884)
Net payments for the acquisition of subsidiaries and other business units (4139505) -
Cash used in other investing activities 79 (101676) (920)
Subtotal of cash used in investing activities (35778257) (27694817)
Net cash used in investing activities (20963138) (17208564)
Person-in-charge
Person-in-charge of of the financial
Legal representative: Li Dongsheng financial affairs： Du Juan department: Xi WenboThe 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 H1 2021 H1 2020
3. Cash flows from financing activities：
Capital contributions received 8413591 2262240
Including: Capital contributions by non-
8413591 2262240
controlling interests to subsidiaries
Borrowings raised 34898543 28360521
Net proceeds from issuance of bonds 2499800 4403000
Cash generated from other financing activities 80 249287 71503
Subtotal of cash generated from financing
46061221 35097264
activities
Repayment of borrowings
(25245482) (18182122)
Interest and dividends paid (4358673) (3066421)
Including: Dividends paid by subsidiaries to
(219635) (275264)
non-controlling interests
Cash used in other financing activities 81 (3060099) (612872)
Subtotal of cash used in financing activities (32664254) (21861415)
Net cash generated from financing activities 13396967 13235849
4. Effect of foreign exchange rates changes on cash and
(44249) 13317
cash equivalents
5. Net increase in cash and cash equivalents 6285295 3388412
Add: Cash and cash equivalents beginning of the period 18208417 17637743
6. Cash and cash equivalents end of the period 83 24493712 21026155
Person-in-
Person-in-charge charge of the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.5
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity
(RMB’000)
H1 2021
Equity attributable to shareholders of the Company as the parent
Total
Non-controlling
Other equit Specifi Other shareholders’
Capital Surplus General Retained interests
Share capital y instrumen Treasury stock c comprehensiv equity
reserves reserves reserve earnings
ts reserve e income
1. Balance as at the end of the prior year 14030788 230241 5442385 (1913029) 211 (145573) 2452892 386 14009494 55949272 90057067
Add: Adjustment for change in accounting
- - - - - - - - - - -
policy
2. Balance as at the beginning of the year 14030788 230241 5442385 (1913029) 211 (145573) 2452892 386 14009494 55949272 90057067
3. Increase/decrease in the period - - (1306941) (281990) 456 (235821) - (25) 5274191 11738486 15188356
3.1 Total comprehensive income - - - - (119950) - - 6783885 2486414 9150349
3.2 Capital increased and reduced by
- - (1306941) (281990) - - - - - 9503873 7914942
shareholders
3.2.1 Capital increased by shareholders - - - - - - - - - 8424541 8424541
3.2.2 Share-based payments included in
- - 122 118064 - - - - - - 118186
owners’ equity
3.2.3 Bonds included in owners’ equity - - - - - - - - - - -
3.2.4 Others - - (1307063) (400054) - - - - - 1079332 (627785)
3.3 Profit distribution - - - - 456 - - (25) (1625565) (251801) (1876935)
3.3.1 Appropriation to surplus reserves - - - - - - - - - - -
3.3.2 Appropriation to general reserve - - - - 456 - - (25) 25 - 456
3.3.3 Appropriation to shareholders - - - - - - - - (1625590) (251801) (1877391)
3.3.4 Others - - - - - - - - - - -
3.4 Transfers within owners’ equity - - - - - (115871) - - 115871 - -
3.4.1 Other comprehensive income transferred
- - - - - (115871) - - 115871 - -
to retained earnings
4. Balance as at the end of the period 14030788 230241 4135444 (2195019) 667 (381394) 2452892 361 19283685 67687758 105245423
Person-in-charge of financial Person-in-charge of the
Legal representative: Li Dongsheng affairs: Du Juan financial department: Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.6
TCL Technology Group Corporation
Consolidated Statement of Changes in Shareholders’ Equity (Continued)
(RMB’000)2020
Equity attributable to shareholders of the Company as the parent
Total
Non-controlling
Other equit Specifi Other shareholders’
Capital Surplus General Retained interests
Share capital y instrumen Treasury stock c comprehensiv equity
reserves reserves reserve earnings
ts reserve e income
1. Balance as at the end of the prior year 13528439 - 5716667 (1952957) - (534082) 2238368 361 11115150 33771198 63883144
Add: Adjustment for change in accounting
- - - - - - - - (83) (99) (182)
policy
2. Balance as at the beginning of the year 13528439 - 5716667 (1952957) - (534082) 2238368 361 11115067 33771099 63882962
3. Increase/decrease in the period 502349 230241 (274282) 39928 211 388509 214524 25 2894427 22178173 26174105
3.1 Total comprehensive income - - - - 388481 - - 4388159 696089 5472729
3.2 Capital increased and reduced by
502349 230241 (274282) 39928 - - - - - 21740157 22238393
shareholders
3.2.1 Capital increased by shareholders 511509 - 1488791 - - - - - - 3273095 5273395
3.2.2 Share-based payments included in
(9160) - (16814) 39928 - - - - - - 13954
owners’ equity
3.2.3 Bonds included in owners’ equity - 230241 - - - - - - - - 230241
3.2.4 Others - - (1746259) - - - - - - 18467062 16720803
3.3 Profit distribution - - - - 211 - 214524 25 (1493704) (258073) (1537017)
3.3.1 Appropriation to surplus reserves - - - - - - 214524 - (214524) 16983 16983
3.3.2 Appropriation to general reserve - - - - - - - 25 (25) -
3.3.3 Appropriation to shareholders - - - - - - - - (1279155) (275056) (1554211)
3.3.4 Others - - - - 211 - - - - - 211
3.4 Transfers within owners’ equity - - - - - 28 - - (28) - -
3.4.1 Other comprehensive income transferred
- - - - - 28 - - (28) - -
to retained earnings
4. Balance as at the end of the period 14030788 230241 5442385 (1913029) 211 (145573) 2452892 386 14009494 55949272 90057067
Person-in-charge of financial Person-in-charge of the
Legal representative: Li Dongsheng affairs: Du Juan financial department: Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.7
TCL Technology Group Corporation
Balance Sheet of the Company as the Parent
(RMB’000)
Assets Note XV 30 June 2021 31 December 2020
Current assets
Monetary assets 7960888 2208790
Held-for-trading financial assets 6191177 1221657
Notes receivable 9160 6000
Accounts receivable 1 292772 175787
Prepayments 53948 97963
Other receivables 2 10837350 25555924
Inventories 20092 5997
Other current assets 2064721 2333
Total current assets 27430108 29274451
Non-current assets
Long-term equity investments 3 71620969 65094459
Investments in other equity
4 15000 15000
instruments
Other non-current financial assets 5 1172821 1145022
Investment property 86718 88687
Fixed assets 41932 46012
Construction in progress 2358 11441
Right-of-use assets 463840 -
Intangible assets 56739 42311
Long-term prepaid expense 30100 469425
Deferred income tax assets 7 7
Total non-current assets 73490484 66912364
Total assets 100920592 96186815
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.8
TCL Technology Group Corporation
Balance Sheet of the Company as the Parent (Continued)
(RMB’000)
Liabilities and shareholders’ equity: Note XV 30 June 2021 31 December 2020
Current liabilities
Short-term borrowings 3286694 3670231
Derivative financial liabilities 14095 16513
Notes payable - -
Accounts payable 299910 129701
Advances from customers 1482 -
Contract liabilities 18194 1872
Employee benefits payable 264703 220510
Taxes and levies payable 12587 26071
Other payables 30769244 26377029
Current portion of non-current
6452300 6141029
liabilities
Other current liabilities 774 316
Total current liabilities 41119983 36583272
Non-current liabilities
Long-term borrowings 13022000 12087500
Bonds payable 14333447 14092345
Lease liabilities 19774 -
Long-term employee benefits payable 21618 21991
Deferred income 44258 42652
Total non-current liabilities 27441097 26244488
Total liabilities 68561080 62827760
Share capital
14030788 14030788
Other equity instruments 230241 230241
Capital reserves 9825536 9846835
Less: Treasury stock 2195019 1913029
Other comprehensive income (10041) 141998
Surplus reserves 2250828 2250828
Retained earnings 8227179 8771394
Total shareholders’ equity 32359512 33359055
Total liabilities and shareholders’ equity 100920592 96186815
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.9
TCL Technology Group Corporation
Income Statement of the Company as the Parent
(RMB’000)
Note XV H1 2021 H1 2020
1. Revenue
6 773672 486384
Less: Cost of sales 6 635555 384058
Taxes and levies 9370 4022
Selling expense 14403 11918
Administrative expense 228082 141988
R&D expense 64151 51618
Finance costs 840141 543831
Including: Interest expense 1232115 844394
Interest income 411290 303902
Add: Other income 1757 15329
Return on investment 7 1851151 1391855
Including: Share of profit or loss of joint ventures
7 627705 617216
and associates
Gain on changes in fair value 41889 98825
Credit impairment loss 19 601
Asset disposal income - -
2. Operating profit
876786 855559
Add: Non-operating income 206554 486288
Less: Non-operating expense 1965 7579
3. Gross profit Less: 1081375 1334268
Income tax expense - -
4. Net profit 1081375 1334268
5. Other comprehensive income (152039) 64718
6. Total comprehensive income 929336 1398986
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.10
TCL Technology Group Corporation
Cash Flow Statement of the Company as the Parent
(RMB’000)
Note
XV H1 2021 H1 2020
1. Cash flows from operating activities：
Proceeds from sale of commodities and rendering of services 618146 832527
Tax and levy rebates - 1073
Cash generated from other operating activities 21091888 112440
Subtotal of cash generated from operating activities 21710034 946040
Payments for commodities and services
(487959) (717268)
Cash paid to and for employees (97433) (108049)
Taxes and levies paid (133486) (19721)
Cash used in other operating activities (1102683) (964363)
Subtotal of cash used in operating activities (1821561) (1809401)
Net cash generated from operating activities 8 19888473 (863361)
2. Cash flows from investing activities：
Proceeds from disinvestment 7176816 3069748
Return on investment 1855032 4989820
Net proceeds from the disposal of fixed assets intangible assets and
- 1
other long-lived assets
Subtotal of cash generated from investing activities 9031848 8059569
Payments for the acquisition of fixed assets intangible assets and
other long-lived assets (15930) (12165)
Payments for investments (20669875)
(10584137)
Cash used in other investing activities (920) -
Subtotal of cash used in investing activities (20685805) (10597222)
Net cash used in investing activities ( 11653957) (2537653)
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe 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 as the Parent (Continued)
(RMB’000)
Note XV H1 2021 H1 2020
3. Cash flows from financing activities：
Capital contributions received - -
Borrowings raised 8200000 19360252
Net proceeds from issuance of bonds 2499800 4403000
Cash generated from other financing activities - 60000
Subtotal of cash generated from financing
10699800 23823252
activities
Repayment of borrowings (10571804) (10824628)
Interest and dividends paid (2236916) (1707229)
Cash used in other financing activities (409734) (16524)
Subtotal of cash used in financing activities (13218454) (12548381)
Net cash generated from/used in financing
(2518654) 11274871
activities
4. Effect of foreign exchange rates changes on cash and
(18448) (3269)
cash equivalents
5. Net increase in cash and cash equivalents
5697414 7870588
Add: Cash and cash equivalents beginning of the period 2196283 3941090
6. Cash and cash equivalents end of the period 9 7893697 11811678
Person-in-
charge of
Person-in-charge the
Legal of financial financial
representative: Li Dongsheng affairs： Du Juan department: Xi WenboThe attached notes to the financial statements form an integral part of the financial statements.12
TCL Technology Group Corporation
Statement of Changes in Shareholders’ Equity of the Company as the Parent
(RMB’000)
H1 2021
Other Total Other equity Capital Treasury Surplus
Share capital comprehensive Retained earnings shareholders’
instruments reserves stock reserves
income equity
1. Balance as at the end of the
14030788 230241 9846835 (1913029) 141998 2250828 8771394 33359055
prior year
Add: Adjustment for change in
- - - - - - - -
accounting policy
2. Balance as at the beginning of
14030788 230241 9846835 (1913029) 141998 2250828 8771394 33359055
the year
3. Increase/decrease in the period - - (21299) (281990) (152039) - (544215) (999543)
3.1 Total comprehensive income - - - - (152039) - 1081375 929336
3.2 Capital increased and reduced
- - (21299) (281990) - - - (303289)
by shareholders
3.2.1 Capital increased by owners - - - - - - - -
3.2.2 Share-based payments
- - (2960) 118064 - - - 115104
included in owners’ equity
3.2.3 Bonds included in owners’
- - - - - - - -
equity
3.2.4 Others - - (18339) (400054) - - - (418393)
3.3 Profit distribution - - - - - - (1625590) (1625590)
3.3.1 Appropriation to surplus
- - - - - - - -
reserves
3.3.2 Appropriation to
- - - - - - (1625590) (1625590)
shareholders
3.3.3 Others - - - - - - - -
4. Balance as at the end of the
14030788 230241 9825536 (2195019) (10041) 2250828 8227179 32359512
period
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng financial affairs: Du Juan financial department: Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.13
TCL Technology Group Corporation
Statement of Changes in Shareholders’ Equity of the Company as the Parent (Continued)
(RMB’000)2020
Other Total
Other equity Capital Treasury Surplus
Share capital comprehensive Retained earnings shareholders’
instruments reserves stock reserves
income equity
1. Balance as at the end of the
13528439 - 8382776 (1952957) 56064 2036304 8119833 30170459
prior year
Add: Adjustment for change in
- - - - - - - -
accounting policy
2. Balance as at the beginning of
13528439 - 8382776 (1952957) 56064 2036304 8119833 30170459
the year
3. Increase/decrease in the period 502349 230241 1464059 39928 85934 214524 651561 2958355
3.1 Total comprehensive income - - - - 85934 - 2145240 2231174
3.2 Capital increased and reduced
502349 230241 1464059 39928 - - - 2236577
by shareholders
3.2.1 Capital increased by owners 511509 - 1488791 - - - - 2000300
3.2.2 Share-based payments
(9160) - (20025) 39928 - - - 10743
included in owners’ equity
3.2.3 Bonds included in owners’
- 230241 - - - - - 230241
equity
3.2.4 Others - - (4707) - - - - (4707)
3.3 Profit distribution - - - - - 214524 (1493679) (1279155)
3.3.1 Appropriation to surplus
- - - - - 214524 (214524) -
reserves
3.3.2 Appropriation to
- - - - - - (1279155) (1279155)
shareholders
3.3.3 Others - - - - - - - -
4. Balance as at the end of the
14030788 230241 9846835 (1913029) 141998 2250828 8771394 33359055
period
Legal Person-in-charge of Person-in-charge of the
representative: Li Dongsheng financial affairs: Du Juan financial department: Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.14
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
I General information
(I) Place of incorporation and form of organization
TCL Technology Group Corporation (hereinafter referred to as the “Company”) is a limited liability
company incorporated in the People's Republic of China (hereinafter referred to as "China") on 17
July 1997 under the Company Law of the People's Republic of China (hereinafter referred to as the
“Company Law”). As per the approval documents of YBH [2002] No. 94 and YFH [2002] No. 134
issued by the People’s Government of Guangdong Province and YJMH [2002] No. 112 and YJMH
[2002] No. 184 issued by the Economic and Trade Commission of Guangdong Province the Company
was changed to a joint stock limited company with a registered capital of RMB1591935200 which
was approved by Guangdong Province Administration for Industry and Commerce on 19 April 2002.The registration number is 4400001009990.Upon the approval of ZJFXZ [2004] Document No. 1 issued by the China Securities Regulatory
Commission (CSRC) on 2 January 2004 the Company was allowed to issue 590000000 shares to
the public on 7 January 2004 and 404395944 ordinary shares denominated in RMB (A shares) to all
public shareholders of TCL Communication Equipment Co. Ltd. (hereinafter referred to as " TCL
Communication Equipment") in a stock-for-stock deal which were listed on the Shenzhen Stock
Exchange on 30 January 2004. The shares issued to the public were all priced online with a par value
of RMB1 and an issue price of RMB4.26 per share raising a total of RMB2513400000. Upon the
completion of this deal the registered capital of the Company increased to RMB2586331144 and
on 16 July 2004 the Company was approved by the Guangdong Province Administration for Industry
and Commerce to change its business license to Business License QGYZZ No. 003362. Upon the
completion of the shareholder structure reform and the expiration of the share lockup period the
foreign shareholding ratio in the Company was less than 10%. On 11 September 2007 the Company
was approved by Guangdong Province Administration for Industry and Commerce to change its
business license to Business License No. 440000000011990.Upon the approval of the CSRC on 7 January 2009 with the ZJXK [2009] Document No. 12 the
Company privately placed 350600000 ordinary shares denominated in RMB (A shares) to designated
investors on 23 April 2009 with a par value of RMB1 and an issue price of RMB2.58 per share
raising a total of RMB904548000. Upon the completion of this deal the registered capital of the
Company increased from RMB2586331144 to RMB2936931144 and on 2 June 2009 the
Company was approved by Guangdong Province Administration for Industry and Commerce to
change its business license to Business License No. 440000000011990.Upon the approval of the CSRC on 27 May 2010 with the ZJXK [2010] Document No. 719 the
Company privately placed 1301178273 ordinary shares denominated in RMB (A shares) to
designated investors on 26 July 2010 with a par value of RMB1 and an issue price of RMB3.46 per
share raising a total of RMB4502076824.58. Upon the completion of this deal the registered capital
of the Company increased from RMB2936931144 to RMB4238109417 and on 19 September
2010 the Company was approved by Guangdong Province Administration for Industry and
Commerce to change its business license to Business License No. 440000000011990.On 19 May 2011 the Company carried out a bonus issue of 10 additional shares for every 10 shares
to all the shareholders with capital reserves representing a total of 4238109417 new shares with a
par value of RMB1 per share. Upon the completion of this bonus issue the registered capital of the
Company increased from RMB4238109417 to RMB8476218834 and on 27 June 2011 the
Company was approved by Huizhou Administration for Industry and Commerce to change its
business license to Business License No. 440000000011990.During the years of 2013 and 2014 the exercise of 58870080 stock options increased the total share
capital of the Company from 8476218834 shares to 8535088914 shares.15
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
I General information (continued)
(I) Place of incorporation and form of organization (continued)
Upon the approval of the CSRC on 13 February 2014 with the ZJXK [2014] Document No. 201
the Company privately placed 917324357 ordinary shares denominated in RMB (A shares) to
designated investors on 30 April 2014 with a par value of RMB1 and an issue price of RMB2.18
per share raising a total of RMB1999767098.26. Upon the completion of this deal the registered
capital of the Company increased from RMB8535088914 to RMB9452413271 and on 10 June
2014 the Company was approved by Huizhou Administration for Industry and Commerce to change
its business license to Business License No. 440000000011990.In the year of 2015 48357920 stock options were exercised under an incentive plan of the
Company and upon the approval of the CSRC on 28 January 2015 with the ZJXK [2015] Document
No.151 the Company issued 2727588511 shares in a private placement. As such the total share
capital of the Company increased from 9452413271 shares to 12228359702 shares.In the year of 2016 923340 stock options were exercised under an incentive plan of the Company
and the share capital of the Company increased from 12228359702 shares to 12229283042
shares. Later 15601300 shares were repurchased and retired and the share capital of the Company
decreased from 12229283042 shares to 12213681742 shares. On 26 April 2016 the Company
was approved by Huizhou Administration for Industry and Commerce to change its business license
to Business License No. 91441300195971850Y (unified social credit code).In the year of 2017 the Company purchased an interest in subsidiary TCL China Star
Optoelectronics Technology Co. Ltd. by means of a new issue of 1301290321 shares. Upon the
completion of this deal the total share capital of the Company increased from 12213681742 shares
to 13514972063 shares.In 2018 the Proposal on the Grant of Restricted Stock to Awardees was approved at the 7th Meeting
of the 6th Board of Directors and a total of 34676444 shares were subscribed for under the restricted
stock incentive plan. Upon the completion of this deal the total share capital of the Company
increased from 13514972063 shares to 13549648507 shares.In 2019 the Company repurchased and retired 21209788 restricted shares that had been granted to
certain awardees under the 2018 Restricted Stock Incentive Plan & Global Innovation Partner Plan
but were still in lockup. As such the total share capital of the Company decreased from
13549648507 to 13528438719 shares.In 2020 the Proposal on the Intended Change of the Company’s Full Name and Stock Name was
approved respectively at the 23rd Meeting of the 6th Board of Directors and the First ExtraordinaryGeneral Meeting of 2020. As such the name of the Company has been changed from “TCLCorporation” to “TCL Technology Group Corporation” (abbreviation from “TCL CORP.” to “TCLTECH.”) since 7 February 2020 with the stock name changed from “TCL CORP.” to “TCLTECH.” and the stock code of “000100” unchanged.In July 2020 the Company repurchased and retired 9159308 restricted shares that had been granted
under the 2018 and 2019 Restricted Stock Incentive Plans but were still in lockup. As such the total
share capital of the Company decreased from 13528438719 to 13519279411 shares.In October 2020 the Company issued 511508951 new shares to acquire a non-controlling interest
in subsidiary Wuhan China Star Optoelectronics Technology Co. Ltd. As such the total share capital
of the Company increased from 13519279411 to 14030788362 shares.As at 30 June 2021 the total issued share capital of the Company were 14030788362 shares.Please refer to Note V 50 for details.The registered address of the Company is: TCL Tech Building 17 Huifeng Third Road Zhongkai
Hi-Tech Development District Huizhou City Guangdong Province.16
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
I General information (continued)
(II) Scope of businessThe Company and its subsidiaries (collectively referred to as the “Company") are primarilyengaged in the research development production and sales of semi-conductor electronic
products and communication devices new optoelectronic products liquid crystal display
devices import and export of goods and technologies (excluding goods and technologies that
are prohibited from import and export or require an administrative approval for import and
export) venture capital business and venture capital consultation entrepreneurial management
services for start-up enterprises participation in the initiation of venture capital institutions and
investment management advisory institutions immovable property leasing IT services
conference services computer technical services and development service of electronic
products and technologies development and sale of software patent transfer customs clearance
services consulting services payment and settlement (where any approval from any relevant
department is required according to law it must be obtained before carrying out the relevant
operating activities).(III Authorization of financial statements for issue
)
These financial statements were authorized for issue by the Company’s Board of Directors on
9 August 2021.II Scope of the consolidated financial statements
As at the end of the Reporting Period for subsidiaries included in the consolidated financial
statements please refer to Note VII 1 (1) Breakdown of important subsidiaries. For the changes
to the scope of the consolidated financial statements of the Reporting Period see Note VI.III Significant accounting policies and accounting estimates
1 Basis for the preparation of financial statements
The preparation of financial statements of the Company is based on the actual transactions and
events in accordance with the "Accounting Standards for Business Enterprises - Basic
Standards" published by the Ministry of Finance and specific corporate 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 the Information Disclosure and Compilation of Companies Offering Securitiesto the Public No. 15 - General Provisions on Financial Reports” (revised in 2014) published by
CSRC.2 Going concern basis
The Company has evaluated the ability to continue as a going concern for 12 months from the
end of the Reporting Period and has not identified any issues or circumstances that result in
significant doubts about its ability to continue as a going concern. Therefore the financial
statements have been prepared on a going concern basis.3 Statement of compliance with corporate accounting standards
The financial statements are in compliance with the requirements of the corporate accounting
standards and truly and completely reflect the financial status operating results cash flow and
other relevant information of the Company during the Reporting Period.17
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
4 Accounting period
The Company adopts the calendar year as accounting year and a fiscal year is from January 1
to December 31 of the Gregorian calendar.5 Operating cycle
The Company does not take the operating cycle as the criteria for liquidity classification of
assets and liabilities.6 Base currency for bookkeeping
The base currency for bookkeeping and the preparation of financial statements are all in RMB
and are presented in the unit of RMB’000 in all the tables herein unless otherwise specified.Accounting treatments for business combinations involving enterprises under and not under7
common control
(1) When the terms conditions and economic influence of transactions in the process of a step-by-
step combination conform to one or more of the following accounting for multiple transactions
is treated as a package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
(b) These transactions can only achieve a complete business outcome when treated as a whole;
The occurrence of a transaction depends on the occurrence of at least one of the other
(c)
transactions;
A transaction is uneconomical when treated alone but is economical when considered together
(d)
with other transactions.
(2) Business combinations involving enterprises under common control
(a) Individual financial statement
The assets and liabilities acquired by the Company in business combinations are measured in
accordance with the book value of assets and liabilities of the combined party on the date of
combination (including the goodwill of the ultimate controlling party resulting from the
acquisition of the combined party). The difference between the book value of net assets acquired
in the combination and the book value of the consideration paid for the combination (or the total
par value of shares issued) is used to adjust the capital stock premium in the capital reserve and
when the capital stock premium in the capital reserve is insufficient for offset it is used to adjust
the retained earnings. If there is a contingent consideration and it is necessary to confirm the
provisions or assets the difference between the estimated amount of liabilities or assets and the
settlement amount of subsequent contingent consideration is used to adjust the capital reserve
(capital stock premium) and when the capital reserve is insufficient it is used to adjust the
retained earnings.18
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under7
common control (continued)
(2) Business combinations involving enterprises under common control (continued)
(a) Individual financial statements (continued)
For a business 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 investment and the book value of long-term equity investment before the
combination plus the book value of the new paid consideration 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 owner's equity
other than net profit or loss other comprehensive income or profit distribution of net assets of
the invested company recognized by equity method are not subject to accounting and will be
transferred to the current profit and loss until the disposal of the investment.The agency fees paid for audits legal services assessments and other related expenses incurred
in the business combination are recognized in profit or loss in 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; transaction
costs directly related to the issuance of a debt instrument as a combination consideration are
treated as an initial recognized amount included in the debt instrument.If the combined party has a consolidated financial statement the initial investment cost of the
long-term equity investment is determined based on the owner's equity attributable to the
Company as the parent in the consolidated financial statements of the combined party.(b) Consolidated financial statements
The assets and liabilities acquired by the combining party in the business combination are
measured in accordance with the book value of the owner's equity of the combined party in the
consolidated financial statements of the ultimate controlling party.For the case where a business combination is finally realized through multiple transactions if it
is a package transaction each transaction is treated as a transaction for acquiring control; if it is
not a package transaction the long-term equity investment held by the combing party before the
combination the gains and losses other comprehensive income and other changes in owners'
equity have been recognized between the date of acquisition or the date of the combining party
and the combined party under the final control of the same party whichever is later and the date
of combination are used to offset the initial retained earnings or current profit and loss during
the comparative reporting period respectively.If the accounting policies adopted by the combined parties are inconsistent with those adopted
by the Company the Company shall make adjustments in accordance with the accounting
policies of the Company on the date of combination and on this basis confirm the consolidated
financial statements in accordance with the provisions of Accounting Standards for Business
Enterprises.19
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
Accounting treatments for business combinations involving enterprises under and not under7
common control (continued)
(3) Business combinations involving enterprises not under common control
The assets paid and liabilities incurred or assumed of the Company as a consideration for the
business combination are measured at fair value on the date of purchase and the difference
between the fair value and the book value is recognized in profit or loss. Where a future event
that may affect the combination costs is agreed in the combination contract if the estimated
future events are likely to occur on the date of purchase and the amount of the impact on
combination costs can be reliably measured it is also included in the combination costs.The agency fees paid for audits legal services assessments and other related expenses incurred
in the business combination are recognized in profit or loss in the period in which they are
incurred. The transaction costs for the issuance of equity securities for the business combination
that may be directly attributed to equity transactions can be deducted from equity.The difference between the higher combination cost and lower fair value of identifiable net
assets of the acquired party gained in the combination is recognized as goodwill by the
Company. In case that the cost of combination is less than the fair value of the identifiable net
assets of the acquired party gained in the combination and the difference is still less than the
fair value of identifiable net assets of the acquired party gain in the combination after review
the difference is included in the current profit and loss by the Company.For the case where a business combination involving enterprises not under common control is
finally realized through multiple transactions step by step if it is a package transaction each
transaction is treated as a transaction for acquiring control; if it is not a package transaction; if
it is not a package transaction the individual financial statements and consolidated financial
statements are distinguished for related accounting treatment.(a) In the individual financial statements if the equity investment held before the date of
combination is accounted for by equity method the sum of the book value of equity investment
of the acquired party held before the date of acquisition plus the new investment cost on the date
of acquisition is recognized as the initial cost of the investment; the other comprehensive income
confirmed by equity method before the date of acquisition is accounted for when the investment
is disposed on the same basis as those the invested party adopted directly to dispose the relevant
assets or liabilities.If the equity investment held before the date of combination is accounted for by financial
instrument recognition and measurement criteria the sum of the fair value of equity investment
on the date of combination plus the new investment cost is taken as the initial investment cost
on the date of combination. The difference between the fair value and the book value of the
original equity interest and the accumulated fair value changes originally included in other
comprehensive income should be transferred to return on investment in the current period of
combination date.(b) In the consolidated financial statements the equity of the acquired party held before the date of
acquisition is re-measured according to the fair value of the equity on the date of acquisition.The difference between the fair value and the book value is included in the current return on
investment; if the equity of the acquired party involves other comprehensive income under the
equity method etc. other comprehensive income related to it is converted into return on
investment in the current period of acquisition date.20
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
8 Method for compiling consolidated financial statements
The scope of consolidation of the Company's consolidated financial statements is determined
on the basis of control and all subsidiaries (including separate entities controlled by the
Company as the parent) are included in the consolidated financial statements.The accounting policies and accounting periods adopted by all subsidiaries included in the
consolidated financial statements are consistent with the Company. If the accounting policies or
accounting periods adopted by the subsidiaries are inconsistent with the Company necessary
adjustments will be made in accordance with the Company's accounting policies and accounting
periods when preparing consolidated financial statements. The consolidated financial statements
are based on the financial statements of the Company and its subsidiaries as well as other
relevant information and are prepared by the Company after adjusting the long-term equity
investments in the subsidiaries in accordance with the equity method based.The impact of internal transactions between the Company and its subsidiaries and internal
transactions between subsidiaries on the consolidated balance sheet consolidated income
statement consolidated cash flow statement and consolidated statement of changes in
shareholders’ equity is offset in the preparation of consolidated financial statements.If the current losses shared by the minority shareholders of a subsidiary exceed the share enjoyed
by the minority shareholder in the initial owner's equity of the subsidiary the balance will still
reduce the minority interests.During the Reporting Period if a subsidiary or business is added due to the business
combination involving enterprises under common control the opening balance of the
consolidated balance sheet is adjusted; the income expenses and profits of the subsidiary or
business from the beginning of the period of combination to the end of the Reporting Period are
included in the consolidated income statement; the cash flows of the subsidiary or business from
the beginning of the period of combination to the end of the Reporting Period are included in
the consolidated cash flow statement. If a subsidiary or business is added due to a business
combination involving enterprises under non-common control the opening balance of the
consolidated balance sheet is not adjusted; the income expenses and profits of the subsidiary or
business from the date of acquisition to the end of the Reporting Period are included in the
consolidated income statement; the cash flows of the subsidiary or business from the date of
acquisition to the end of the Reporting Period are included in the consolidated cash flow
statement.During the Reporting Period if a subsidiary or business is added due to a business combination
involving enterprises not under common control the opening balance of the consolidated
balance sheet is not adjusted; the income expenses and profits of the subsidiary and business
from the date of acquisition to the end of the Reporting Period are included in the consolidated
income statement; the cash flows of the subsidiary and business from the date of acquisition to
the end of the Reporting Period are included in the consolidated cash flow statement.During the Reporting Period if the Company disposes of a subsidiary or business the income
expenses and profits of the subsidiary or business from the beginning of the period to the
disposal date are included in the consolidated income statement; the cash flows of the subsidiary
or business from the beginning of the Reporting Period to the disposal date are included in the
consolidated cash flow statement.21
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
8 Method for compiling consolidated financial statements (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
according to its fair value by the Company on the date of loss of control. The difference of the
sum of the consideration obtained from the disposal of the equity and the fair value of the
remaining equity less the sum of the share of net assets and goodwill of the original subsidiary
that should be enjoyed in accordance with the original share-holding ratio since the date of
acquisition or combination is accounted for the return on investment in the current period of
loss of control. Other comprehensive income or net profit and loss related to the original
subsidiary's equity investment other comprehensive income and other changes in owner's
equity other than profit distribution will be converted into current return on investment when
control is lost except for other comprehensive gains arising from the re-measurement of net
liabilities of the Benefit Plan made by the invested party or changes in net assets.22
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
9 Criteria for determining cash and cash equivalents
In the preparation of the cash flow statement the Company recognizes cash holdings and
deposits that can be used for payment at any time as cash.The Company recognizes cash that is easily converted into known amount with short holding
period (generally due within three months from the date of purchase) and strong liquidity and
investments with low risk of changes in value (including investments in bonds within three
months while excluding equity investments) as cash equivalents.10 Foreign currency business and translation of foreign currency statement
(1) Foreign currency transactions
Foreign currency transactions between the Company and its subsidiaries are translated into base
currency at the spot exchange rate on the transaction date.Foreign currency monetary items are translated at the spot exchange rate on the balance sheet
date and the exchange differences resulted therefrom except that the exchange differences
arising from special foreign currency loans related to the acquisition and construction of assets
eligible for capitalization should be treated in accordance with the principle of capitalization of
borrowing costs are all included in the current profit and loss. Foreign currency non-monetary
items measured at historical cost are still translated at the spot exchange rate on the transaction
date and the amount of base currency for bookkeeping is not changed.Foreign currency non-monetary items measured at fair value are translated at the spot exchange
rates on the date when the fair value is determined and the exchange differences resulted
therefrom are included in profit or loss in the current period as a change in fair value. In the case
of foreign currency non-monetary items that are at fair value through other comprehensive
income the exchange differences incurred are included in other comprehensive income.
(2) Translation of foreign currency financial statement
When the Company translates the financial statements of overseas operations the assets and liabilities
in the balance sheet are translated at the spot exchange rate on the balance sheet date. The owner's
equity items except for the "retained earnings" items are translated at the spot exchange rate at the
time of occurrence of items. All the incurred items in the income statement are translated at the current
average exchange rate of the period in which transactions occur.The translation differences of foreign currency financial statement arising from the above translation
are included in other comprehensive income. When disposing of an overseas operation the translation
differences in the foreign currency financial statements related to the foreign operation listed in other
comprehensive income items in the balance sheet are transferred from the other comprehensive
income item to the current profit and loss. All the incurred items in the cash flow statement are
translated at the current average exchange rate of the period in which transactions occur. All the
opening balance and actual amount of the previous year are listed on the basis of the amount translated
in the previous year.23
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments
When the Company becomes a party to a financial instrument it recognizes a financial asset or
liability.The effective interest method refers to the method of calculating the amortized cost of financial assets
or liabilities and allocating interest income or interest expenses into each accounting period.The effective interest rate refers to the interest rate used to discount the estimated future cash flow of
a financial asset or financial liability during its expected duration to the book balance of the financial
asset or the amortized cost of the financial liability. When determining the effective interest rate the
expected cash flow is estimated on the basis of considering all contract terms of financial assets or
liabilities (such as prepayment extension call options or other similar options) but the expected
credit loss is not considered.The amortized cost of a financial asset or financial liability is the accumulated amortization amount
formed by deducting the repaid principal from the initial recognition amount of the financial asset or
financial liability adding or subtracting the difference between the initial recognition amount and the
maturity amount by using the effective interest method and then deducting the accumulated accrued
loss reserve (only applicable to financial assets).
(1) Classification and measurement of financial assets
According to the business model of the financial assets under management and the contractual cash
flow characteristics of the financial assets the Company divides the financial assets into the following
three categories:
(a) Financial assets at amortized cost.(b) Financial assets at fair value through other comprehensive income.(c) Financial assets at fair value through profit or loss.Financial assets are measured at fair value when initially recognized but if the accounts or notes
receivable arising from the sale of goods or the provision of services do not contain significant
financing components or do not consider financing components for no more than one year the initial
measurement shall be made at the transaction price.For financial assets at fair value through profit or loss transaction expenses are directly recognized
in the current profit and loss. For other financial assets transaction expenses are included in the initial
recognition amount.Subsequent measurement of financial assets depends on their classification. All related financial
assets affected will be reclassified when and only when the Company changes its business model of
managing financial assets.(a) Financial assets classified as measured at amortized cost
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only
the payment of the principal and the interest on the amount of outstanding principal and the business
model for managing the financial asset is to collect the contractual cash flow then the Company
classifies the financial asset as measured at amortized cost. Financial assets of the Company that are
classified as measured at amortized cost include monetary assets notes receivable accounts
receivable other receivables long-term receivables debt investments etc.24
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
The Company recognizes interest income from such financial assets with the effective interest
method and carries out subsequent measurement at amortized cost. Gains or losses arising from
impairment or derecognition or modification are included in the current profit and loss. The Company
calculates and determines the interest income based on the book balance of financial assets multiplied
by the effective interest rate except for the following circumstances:
① For purchased or originated credit-impaired financial assets the Company calculates and
determines their interest income at the amortized cost of the financial asset and the credit-adjusted
effective interest rate since the initial recognition.② For financial assets not credit-impaired at the time of being purchased or originated but in the
subsequent period the Company calculates and determines their interest income at the amortized cost
and the effective interest rate of the financial assets in the subsequent period. If the financial
instrument is no longer credit-impaired due to the improvement of its credit risk in the subsequent
period the Company calculates and determines the interest income by multiplying the effective
interest rate by the book balance of the financial asset.(b) Financial assets classified as measured at fair value through other comprehensive income
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only
the payment of the principal and the interest on the amount of outstanding principal and the business
model for managing the financial asset is both to collect contractual cash flows and for its sale then
the Company classifies the financial asset as measured at fair value through other comprehensive
income.The Company recognizes interest income from such financial assets with the effective interest
method. Except that the interest income impairment loss and exchange difference are recognized as
the current profit and loss other changes in fair value are included in other comprehensive income.When the financial asset is derecognized the accumulated gains or losses previously included in other
comprehensive income are transferred out and included in the current profit and loss.Notes and accounts receivable at fair value through other comprehensive income are reported as
receivables financing and such other financial assets are reported as other debt investments. Among
them other debt investments maturing within one year from the balance sheet date are reported as the
current portion of non-current assets and other debt investments maturing within one year are
reported as other current assets.(c) Financial assets designated as measured at fair value through other comprehensive income
At the time of initial recognition the Company may irrevocably designate non-trading equity
instrument investments as financial assets at fair value through other comprehensive income on the
basis of individual financial assets.Changes in the fair value of such financial assets are included in other comprehensive income without
allowance for impairment. When the financial asset is derecognized the accumulated gains or losses
previously included in other comprehensive income are transferred out and included in the retained
earnings. During the investment period when the Company holds the equity instrument the dividend
income is recognized and included in the current profit and loss when the Company's right to receive
dividends has been established the economic benefits related to dividends are likely to flow into the
Company and the amount of dividends can be measured reliably. The Company reports such financial
assets under the item of investments in other equity instruments.25
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(1) Classification and measurement of financial assets (continued)
An investment in equity instruments is a financial asset at fair value through profit or loss when it
is obtained mainly for recent sale or is part of the identifiable portfolio of financial assets centrally
managed and objective evidence exists for a short-term profit model in the near future when initially
recognized or is a derivative (except derivatives defined as financial guarantee contracts and
designated as effective hedging instruments).(d) Financial assets classified as measured at fair value through profit or loss
If failing to be classified as measured at amortized cost or at fair value through other comprehensive
income or not designated as measured at fair value through other comprehensive income financial
assets are all classified as measured at fair value through profit or loss.The Company carries out subsequent measurement of such financial assets at fair value and includes
gains or losses arising from changes in fair value as well as dividends and interest income associated
with such financial assets into current profits and losses.The Company reports such financial assets as held-for-trading financial assets and other non-current
financial assets according to their liquidity.(e) Financial assets designated as measured at fair value through profit or loss
At the time of initial recognition the Company may irrevocably designate financial assets as
measured at fair value through profit or loss on the basis of individual financial assets in order to
eliminate or significantly reduce accounting mismatches.If the mixed contract contains one or more embedded derivative instruments and its main contract
is not any financial asset as above the Company may designate the whole of the mixed contract as
a financial instrument at fair value through profit or loss. Except under the following circumstances:
① Embedded derivatives do not significantly change the cash flow of mixed contracts.② When determining for the first time whether similar mixed contracts need to be split it is almost
clear that embedded derivatives contained in them should not be split without analysis. If the
prepayment right embedded in a loan allows the holder to prepay the loan at an amount close to the
amortized cost the prepayment right does not need to be split.The Company carries out subsequent measurement of such financial assets at fair value and includes
gains or losses arising from changes in fair value as well as dividends and interest income associated
with such financial assets into current profits and losses.The Company reports such financial assets as held-for-trading financial assets and other non-current
financial assets according to their liquidity.26
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(2) Classification and measurement of financial liabilities
The Company classifies a financial instrument or its components into financial liabilities or equity
instruments upon initial recognition according to the contract terms of and the economic essence
reflected by the financial instrument issued rather than only in legal form in combination with the
definitions of financial liabilities and equity instruments. Financial liabilities are classified at initial
recognition as measured at fair value through profit or loss or other financial liabilities or
derivatives designated as effective hedging instruments.Financial liabilities are measured at fair value upon initial recognition. For financial liabilities at fair
value through profit or loss relevant transaction expenses are directly included in current profits
and losses; For other categories of financial liabilities relevant transaction expenses are included in
the initial recognition amount.Subsequent measurement of financial liabilities depends on their classification:
(a) Financial liabilities at fair value through profit or loss
Such financial liabilities include held-for-trading financial liabilities (including derivatives falling
under financial liabilities) and financial liabilities designated as measured at fair value upon initial
recognition and through profit or loss.The financial liability is a held-for-trading financial liability if it is mainly undertaken for recent sale
or repurchase or is part of the identifiable portfolio of financial instruments centrally managed and
there is objective evidence that the enterprise has recently employed a short-term profit model or is
a derivative instrument except derivatives designated as effective hedging instruments and
derivatives conforming to financial guarantee contracts. Held-for-trading financial liabilities
(including derivatives falling under financial liabilities) are subsequently measured at fair value. All
changes in fair values except for hedging accounting are included in current profits and losses.The Company irrevocably designates financial liabilities as measured at fair value through profit or
loss at the time of initial recognition in order to provide more relevant accounting information if:
① Such financial liabilities can eliminate or significantly reduce accounting mismatches.② The financial liability portfolio or the portfolio of financial assets and liabilities is managed and
evaluated for performance on the basis of fair value according to the enterprise risk management or
investment strategy stated in the official written documents and is reported to key management
personnel within the enterprise on this basis.The Company subsequently measures such financial liabilities at fair value. Except changes in fair
value that are brought about by changes in the Company's own credit risk are included in other
comprehensive income other changes in fair value are included in current profits and losses. Unless
including such changes in other comprehensive income will cause or expand accounting mismatch
in profit or loss the Company will include all changes in fair value (including the amount affected
by changes in its own credit risk) in current profits and losses.27
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(2) Classification and measurement of financial liabilities (continued)
(b) Other financial liabilities
The Company classifies financial liabilities except for the following items as measured at amortized
cost. Such financial liabilities are recognized by the effective interest method and subsequently
measured at amortized cost. Gains or losses arising from derecognition or amortization are included
in the current profits and losses:
① Financial liabilities at fair value through profit or loss.② Financial liabilities resulting from the transfer of financial assets that do not meet the conditions
for derecognition or continue to be involved in the transferred financial assets.③ Financial guarantee contracts that do not fall under the first two categories of this article and loan
commitments that do not fall under category (1) of this article and lend at a below-market interest
rate.Financial guarantee contracts refer to contracts that require the issuer to pay a specific amount to the
contract holder who has suffered losses when a specific debtor fails to pay the debt in accordance with
the original or modified terms of the debt instrument. Financial guarantee contracts that are not
financial liabilities designated as measured at fair value through profit or loss are measured after initial
recognition according to the loss reserve amount and of the initial recognition amount less the
accumulated amortization amount during the guarantee period whichever is higher.
(3) Derecognition of financial assets and liabilities
(a) Financial asset are derecognized i.e. written off from its account and balance sheet if:
① The contractual right to receive cash flow from the financial asset is terminated; or
② The financial asset has been transferred which meets the requirements for derecognition of
financial assets.(b) Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part thereof) has been discharged such financial
liability (or part thereof) is derecognized.The existing financial liability is derecognized with a new one recognized and the difference between
the carrying amount and the consideration paid (including transferred non-cash assets or assumed
liabilities) is included in the current profits and losses if an agreement is signed between the Company
and the lender to replace the existing financial liability by assuming a new one and the contract terms
of these two financial liabilities are substantially different or the contract terms of the existing
financial liability (or part thereof) are substantially modified.If the Company repurchases part of a financial liability the carrying amount of the financial liability
shall be distributed according to the proportion of the fair value of the continuing recognition portion
and the derecognition portion to the overall fair value on the repurchase date. The difference between
the carrying amount allocated to the derecognized portion and the consideration paid (including
transferred non-cash assets or liabilities assumed) shall be included in the current profits and losses.28
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer
When a financial asset is transferred the Company evaluates the risks and rewards retained of the
financial asset ownership:
(a) If almost all the risks and rewards of the financial asset ownership are transferred such financial asset
shall be derecognized and the rights and obligations generated or retained in the transfer shall be
separately recognized as assets or liabilities.If almost all the risks and rewards of the financial asset ownership are retained such financial asset
(b)
shall continue to be recognized.(c) In circumstances when the Company neither transfers nor retains almost all the risks and rewards of
the financial asset ownership (i.e. circumstances other than ① and ② of this article) according to
whether it retains control over such financial asset
① the financial asset shall be derecognized and the rights and obligations generated or retained in
the transfer shall be separately recognized as assets or liabilities if such control is not retained; or
② the relevant financial asset shall continue to be recognized to the extent that it continues to be
involved in the transferred financial asset and the relevant liabilities shall be recognized accordingly
if such control is retained. The extent that it continues to be involved in the transferred financial asset
refers to the extent the Company bears the risks or rewards on changes in the value of the transferred
financial asset.When judging whether the transfer of financial assets meets the above conditions for derecognition
of financial assets the principle of substance over form shall be adopted. The Company divides the
transfer of financial assets into overall transfer and partial transfer.If the overall transfer of financial assets meets the conditions for derecognition the difference between
(a)
the following two amounts shall be included in the current profits and losses:
① The carrying amount of the transferred financial asset on the date of derecognition.② The sum of the consideration received for the transfer of financial assets and the amount of the
corresponding derecognized portion of the accumulated changes in fair value originally included in
other comprehensive income directly (the financial assets involved in the transfer are financial assets
at fair value through other comprehensive income).(b) If the financial asset is partially transferred and the transferred part meets the conditions for
derecognition the carrying amount of the financial asset before transfer shall be allocated between
the derecognition portion and the continuing recognition portion (in this case the retained service
asset shall be regarded as the continuing recognition part of the financial asset) according to the
respective relative fair values on the transfer date and the difference between the following two
amounts shall be included in the current profits and losses:
① The carrying amount of the derecognized portion on the derecognition date.② The sum of the consideration received for the derecognized portion and the amount of the
corresponding derecognized portion of the accumulated changes in fair value originally included in
other comprehensive income (the financial assets involved in the transfer are financial assets at fair
value through other comprehensive income).29
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(4) Recognition basis and measurement method of financial asset transfer (continued)
If the transfer of a financial asset does not meet the conditions for derecognition the financial asset
shall continue to be recognized and the consideration received shall be recognized as a financial
liability.
(5) Determination of fair value of financial assets and liabilities
The fair value of a financial asset or liability with an active market shall be determined by the quoted
price in the active market unless the financial asset has a sell-off period for the asset itself. For the
financial assets restricted for the assets themselves the compensation amount demanded by market
participants due to the risk of not being able to sell the financial assets on the open market within
the specified period shall be deducted from the quoted price in the active market. Quoted prices in
the active market includes those for related assets or liabilities that can be easily and regularly
obtained from exchanges dealers brokers industry groups pricing or regulatory agencies and can
represent actual and recurring market transactions on the basis of fair trade.Financial assets initially acquired or derived or financial liabilities assumed shall be determined on
the basis of market transaction price.The fair value of financial assets or liabilities without an active market shall be determined by
valuation techniques. At the time of valuation the Company adopts valuation techniques that are
applicable under the current circumstances and are supported by sufficient available data and other
information selects input values consistent with the characteristics of relevant assets or liabilities
considered by market participants in the transactions thereof and gives priority to the use of relevant
observable input values whenever possible. If the relevant observable input value cannot be obtained
or be feasibly obtained the unobservable input value shall be used.30
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 Financial instruments (continued)
(6) Impairment of financial instruments
Based on the expected credit loss the Company conducts impairment accounting of financial assets
classified as measured at amortized cost financial assets classified as measured at fair value through
other comprehensive income and financial guarantee contracts and recognizes loss reserves.Expected credit loss refers to the weighted average of the credit losses of financial instruments
weighted by the risk of default. Credit loss refers to the difference between all contractual cash flows
discounted at the original effective interest rate and receivable according to the contract and all cash
flows expected to be collected of the Company i.e. the present value of all cash shortfalls. Among
them credit-impaired purchased or originated financial assets of the Company shall be discounted
at the credit-adjusted effective interest rate of such financial assets.For receivables arising from transactions regulated by the income criteria the Company uses the
simplified measurement method to measure the loss reserve according to the amount equivalent to
the expected credit loss during the entire duration.For credit-impaired purchased or originated financial assets only the accumulated changes in the
expected credit losses during the entire duration since the initial recognition are recognized as loss
reserves on the balance sheet date. On each balance sheet date the amount of change in the expected
credit loss during the entire duration is included in the current gains and losses as impairment losses
or gains. Even if the expected credit loss during the entire duration on the balance sheet date is less
than that reflected in the estimated cash flow upon initial recognition the favorable change in the
expected credit loss is recognized as impairment gains.In addition to other financial assets adopting the above simplified measurement method and other
than the credit-impaired purchased or originated ones the Company evaluates whether the credit
risk of relevant financial instruments has increased significantly since the initial recognition
measures its loss reserves and recognizes the expected credit loss and its changes respectively
according to the following circumstances on each balance sheet date:
(a) If the credit risk of the financial instrument has not increased significantly since its initial recognition
and is in the first stage its loss reserve shall be measured according to an amount equivalent to its
expected credit loss in the next 12 months and the interest income shall be calculated at the book
balance and the effective interest rate.(b) If the credit risk of the financial instrument has increased significantly since the initial recognition
but no credit impairment has occurred it is in the second stage then 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 at the book balance and the effective interest rate.(c) If the financial instrument is credit-impaired since its initial recognition it is in the third stage and
the Company shall measure its loss reserve according to an amount equivalent to its expected credit
loss throughout its life and calculate the interest income at the amortized cost and the effective
interest rate.The increase or reversed amount of the credit loss reserve for financial instruments shall be included
in the current profits and losses as impairment losses or gains. Except for financial assets classified
as measured at fair value through other comprehensive income the credit loss reserve will offset the
carrying amount of the financial assets. For financial assets classified as measured at fair value
through other comprehensive income the Company recognizes its credit loss reserve in other
comprehensive income without reducing its carrying amount presented in the balance sheet.III Significant accounting policies and accounting estimates (continued)31
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
11 Financial instruments (continued)
(6) Impairment of financial instruments (continued)
In the previous accounting period the Company has measured the loss reserve the amount of which
is equivalent to the expected credit loss of the financial instrument 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 instrument the
amount of which is equivalent to the expected credit loss in the next 12 months and the reversed
amount of the loss reserve thus formed is included in the current profit and loss as impairment profit.(a) Significant increase of 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 the actual or as expected whether the debtor's operating 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 or 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 ability to fulfill its contractual cash flow obligations in a short time;
furthermore even if there are adverse changes in the economic situation and operating environment
for a long period of time it may not necessarily reduce the borrower's ability to fulfill its contractual
cash flow obligations.32
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 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 difficulties;
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 asset;
⑥ Purchasing or originating a financial asset with a large discount which reflects the fact of credit
loss.Credit impairment of financial assets may not be caused by separately identifiable events but may be
caused by the combined effect of multiple events.(c) Determination of expected credit loss
The Company's assessment of the expected credit losses of financial instruments is based on single
items and combinations. During the evaluation the company will take into account reasonable and
reliable information about past events 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 originate a financial asset that has suffered credit impairment the credit loss is equivalent
to the difference between the book balance of the financial asset and the present value of the estimated
future cash flow discounted at the original actual interest rate.Factors reflected in the Company's method of predicting credit losses by quantitative finance tools
include: unbiased probability weighted average amount determined by evaluating a series of possible
results; time value of money; reasonable and reliable information about past events current situation
and future economic situation forecast that can be obtained on the balance sheet date without
unnecessary extra costs or efforts.33
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
11 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.12 Notes receivable
For the determination method and accounting treatment method of the Company's expected credit loss
on notes receivable please refer to 11(6) of note III Impairment of financial instruments.When 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 combines the current
situation and judgment on future economic situation divides notes receivable into several
combinations according to the characteristics of credit risk and calculates expected credit loss on the
basis of combinations.34
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
13 Accounts receivable
For the determination method and accounting treatment method of the Company's expected credit
loss on accounts receivable please refer to 11(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)
14 Other receivables
For the determination method and accounting treatment method of the Company's expected credit
loss of other receivables please refer to 11(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.15 Inventories
(1) Classification of inventories
The Company classifies inventories into raw materials in-process products development costs
and finished products goods shipped in transit turnover materials and molds with an expected
benefit period of less than one year depending on the purpose of holding the inventories. Turnover
materials include low-value consumables and packaging materials.
(2) Valuation method for inventories shipped in transit
All types of inventories are accounted for at actual cost and actual costs include purchase costs
processing costs and other costs. Inventories are shipped in transit by weighted average method.35
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
15 Inventories (continued)
Basis for determining the net realizable value of inventories and accrual method for inventory
(3)
valuation allowance
Closing inventories are measured at cost or net realizable value whichever is lower. In cases that
difference exists due to the net realizable value is less than the cost of inventories inventory
valuation allowance is made based on individual inventory item or inventory category and the
difference is recognized in the current profit and loss.For inventories of goods directly used for sale such as finished goods merchandise inventories and
materials for sale in the normal production and operation process the net realizable value is
determined by the amount of the estimated selling price of the inventory less the estimated sales
cost and relevant taxes and fees; for material inventories that need to be processed in the normal
production and operation process the net realizable value is determined by the amount of the
estimated selling price of finished products produced less the estimated cost to be 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 and that is difficult to be
measured separately from other items inventory valuation allowance is accrued combined with
other items.If the influencing factors of the write-down of inventory value have disappeared the amount written-
down is recovered and reversed to the amount of inventory valuation allowance already accrued
and the amount reversed is included in the current profit and loss.
(4) Inventory system
The Company adopts a perpetual inventory system for inventory management.
(5) Amortization method of turnover materials
The Company amortizes turnover materials by the one-off amortization method and the molds with
a benefit period of less than one year are amortized within the period of not exceeding one year
according to the expected benefit period.36
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
16 Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its
subsidiaries and the Company’s long-term equity investments in its associates and joint ventures.Subsidiaries are the investees over which the Company is able to exercise control. A joint venture is
a joint arrangement which is structured through a separate vehicle over which the Company has
joint control together with other parties and only has rights to the net assets of the arrangement based
on legal forms contractual terms and other facts and circumstances. Associates are the investees
that the Company has significant influence on their financial and operating policies.Investments in subsidiaries are presented in the Company’s financial statements using the cost
method and are adjusted to the equity method when preparing the consolidated financial statements.Investments in a joint venture and associates are accounted for using the equity method.
(1) Recognition of initial investment cost
(a) Long-term equity investment formed by business combination
For long-term equity investment acquired by business combination involving enterprises under
common control the book value of assets and liabilities of the combined party in the consolidated
financial statements of the ultimate controlling party as at the date of combination (including the
goodwill formed by the ultimate controlling party's acquisition of the combined party) is recognized
as investment cost. For long-term equity investment formed by combination the share of the book
value of shareholders’ equity of the combined party acquired on the date of combination is
recognized as initial investment cost. The difference between the initial investment cost and assets
paid as the consideration for combination the book value of liabilities incurred or assumed and the
total par value of shares issued is used to adjust capital reserve and when the capital reserve is
insufficient it is used to adjust retained earnings.For long-term equity investment acquired by business combinations involving enterprises not under
common control the combination cost is recognized as investment cost of the long-term equity
investment. The combination cost is the fair value of assets paid the liabilities incurred or assumed
and the equity securities issued to acquire the control of acquired party on the date of acquisition.The difference between the higher combination cost and lower fair value of identifiable net assets
of the acquired party acquired in the combination is recognized as goodwill; the difference between
the lower combination cost and higher fair value of identifiable net assets of the acquired party
acquired in the combination is included in the current profit and loss after review. For business
combination involving enterprises not under common control realized step by step through multiple
transactions the sum of the book value of equity investment held by the acquirer before the date of
acquisition and the new investment cost on the date of acquisition is recognized as initial investment
cost and the combination cost includes the sum of assets paid the liabilities incurred or assumed by
the acquirer and the fair value of equity securities issued.(b) Long-term equity investment acquired by other means
For long-term equity investment acquired by cash payment the actual acquisition price is
recognized as initial investment cost. The initial investment cost includes expenses taxes and other
necessary expenses directly related to the acquisition of the long-term equity investment; the
transaction costs incurred when issuing or acquiring the own equity instruments of acquirer
attributed directly to equity transactions can be deducted from the equity.For long-term equity investment acquired by issuing equity securities the fair value of equity
securities issued is recognized as initial investment cost.37
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
16 Long-term equity investments (continued)
Provided that the non-monetary asset exchange contains commercial substance and the fair value of
the assets received or assets surrendered can be reliably measured the initial investment cost of the
long-term equity investment received with non-monetary assets is determined based on the fair value
of the assets surrendered except that there is conclusive evidence indicates that the fair value of
assets received is more reliable. For non-monetary assets that do not satisfy the above condition the
book value of assets surrendered and related taxes and fees payable are recognized as the initial
investment cost of the long-term equity investment.The initial investment cost of a long-term equity investment acquired by debt restructuring is
determined on the basis of fair value.
(2) Subsequent measurement and recognition of related profit and loss
(a) Subsequent measurement
The Company adopts the cost method to account for the long-term equity investments under the
control of investee and the consolidated financial statements are adjusted in accordance with the
equity method in preparation.The Company adopts the equity method to account for the long-term equity investments in
associates and joint ventures. The difference between the higher initial investment cost and the fair
value share of identifiable net assets of the investee enjoyed in the investment is not used to adjust
the initial investment cost of the long-term investment; the difference between the lower initial
investment cost and the fair value share of identifiable net assets of the investee enjoyed at the time
of conducting the investment is included in the current profit and loss.(b) Recognition of profit and loss
Under the cost method in addition to the actual payment or the cash dividends or profits included
in the consideration that have been declared but not yet paid the Company recognizes the investment
income according to the cash dividends or profits that the investee declared to pay.Under the equity method when the investment enterprise confirms that it should enjoy the net profit
or net loss of the investee it should adjust the net profit of the investee based on the fair value of
identifiable assets of the investee at the time of conducting the investment before the confirmation
and the part of profit and loss of internal transaction between the investor and associates and joint
venture that should be attributed to the investor according to the shareholding ratio should be offset
and the investment profit and loss should be confirmed on this basis. When the Company confirms
that it should assume the loss occurred by the investee the process hereunder is followed: first the
book value of the long-term equity investment is offset. Secondly if the book value of the long-term
equity investment is insufficient for the offset the investment loss is continued to be recognized
and the book value of long-term receivable items is offset subject to other book value of the long-
term equity that substantially constitutes the net investment of the investee. Finally after the above-
mentioned treatment if the Company still bears additional obligations in accordance with the
investment contract or agreement the provisions are recognized according to the estimated
obligations and included in the current investment losses.If the investee realizes profit in the future period the Company shall after deducting the
unconfirmed loss share conduct the process in the reverse order of the above to write down the book
balance of the confirmed liabilities and recover other long-term equity that substantially constitute
net investment of the investee and the book value of the long-term equity and recognize the profit
as return on investment.Other changes in the owner's equity other than net profit or loss other comprehensive income and
profit distribution of the investee are used to adjust the book value of the long-term equity
investment and included in capital reserve. The unrealized profit and loss from internal transactions
between the Company and the investee attributed to the Company according to the shareholding
ratio is offset and the investment profit and loss is recognized on this basis. In respect of the internal
transaction losses incurred by the Company and the investee for the part recognized asset
impairment losses the corresponding unrealized losses are not offset.38
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
16 Long-term equity investments (continued)
(3) Step-by-step disposal of investment in subsidiaries
When the terms conditions and economic influence of transactions of the equity investment of the
subsidiary conform to one or more of the following accounting for multiple transactions is treated
as a package transaction:
(a) These transactions are made simultaneously or with consideration of influence on each other;
(b) These transactions can only achieve a complete business outcome as a whole;
(c) The occurrence of a transaction depends on the occurrence of at least one of the other transaction;
(d) A transaction alone is uneconomical but is economical when considered together with other
transactions.When an enterprise loses control over the original subsidiary due to disposal of part of the equity
investment or other reasons if the transactions do not belong to a package transaction the
accounting treatment of individual financial statements and consolidated financial statements should
be distinguished as follows:
(a) In the individual financial statements the disposed equity should be accounted for in accordance
with the “Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investment”;
meanwhile the remaining equity should be recognized as long-term equity or other related financial
assets based on its book value. If the remaining equity after disposal can be used to exercise common
control or significant influence on the original subsidiary it shall be accounted for in accordance
with the relevant provisions on the conversion of the cost method into the equity method.(b) In the consolidated financial statements the remaining equity should be re-measured in accordance
with its fair value on the date of loss of control. The difference between the sum of the consideration
acquired from the disposal of the equity and the fair value of the remaining equity less the share of
net assets of the original subsidiary that should be enjoyed in accordance with the original share-
holding ratio from the date of acquisition is included in the current profit and loss of the period in
which loss of control occurred. Other comprehensive income related to the original subsidiary's
equity investment should be converted into current investment income when control is lost. The
Company shall disclose in the notes the fair value of the remaining equity after disposal on the date
of loss of control and the amount of relevant gains or losses arising from the disposal remeasured
based on the fair value.If the transactions of disposal of equity investment in a subsidiary until the loss of control is a
package transaction the accounting treatment of individual financial statements and consolidated
financial statements should be distinguished as follows: :
(a) In the individual financial statements the difference between each disposal price and the book value
of the long-term equity investment corresponding to the disposed equity before the loss of control
is recognized as other comprehensive income and transferred to the current profit and loss of the
period in which the loss of control occurred;
(b) In the consolidated financial statements the difference between each disposal price and the disposal
of investment corresponding to the share of the net assets of the subsidiary before the loss of control
is recognized as other comprehensive income and transferred to the current profit and loss of the
period in which the loss of control occurred.39
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
16 Long-term equity investments (continued)
(4) Basis for determining control common control and significant influence on the investee
Control means having the power of control over the investee enjoying variable returns by
participating in the relevant activities of the investee and having the ability to use the power over
the investee to influence the amount of returns.Common control means the control that is common to an arrangement in accordance with the
relevant agreement and the decisions of relevant activities of the arrangement must be made upon
agreement of the Company and other parties sharing the control rights.Significant influence means the power to participate in the decision-making of the financial and
operating policies of the investee but by which cannot control or commonly control together with
other parties the formulation of the policies.
(5) Impairment test and allowance for impairment
On the balance sheet date if there is any indication that the long-term equity investment is impaired
due to continuous decline in the market price or deterioration of operating conditions of the investee
the recoverable amount of long-term equity investment is determined according to the net value of
a single long-term equity investment less the disposal expenses or the present value of expected
future cash flows of the long-term equity investment whichever is higher. When the recoverable
amount of the long-term equity investment is lower than the book value the book value of assets is
written-off to the recoverable amount and the amount written-down is recognized as asset
impairment losses which is included in the current profit and loss and the corresponding allowance
for asset impairment is made.For long-term equity investments without significant influence or quotation in an active market and
whose fair value cannot be measured in a reliable way the impairment loss is determined by the
difference between the book value and the present value determined by discounting the future cash
flows of similar financial assets at the current market rate of return.Other long-term equity investments with signs of impairment other than goodwill arising from
business combination if the measurement of recoverable amount indicates that the recoverable
amount of the long-term equity investment is lower than its book value the difference is recognized
as impairment losses.Goodwill arising from a business combination is tested for impairment annually regardless of
whether there is any indication of impairment.Once the impairment loss of long-term equity investment is confirmed it will not be reversed.17 Investment property
The Company's investment property means the property held for the purpose of earning rent or
capital appreciation or both including the land use rights that have been leased the land use rights
that are held for transfer upon appreciation and the leased buildings. In addition for the vacant
buildings held by the Company for the purpose of leases if the Board of Directors makes a written
resolution that expressly indicates that the buildings will be used for leases and the intention of
holding will not change in a short-term the building will also be reported as investment property.The Company adopts the cost model for subsequent measurement of investment property. For the
purpose of depreciation or amortization method the same amortization policy adopted for buildings
as fixed assets and land use rights as intangible assets are used.40
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
18 Fixed assets
(1) Recognition criteria for fixed assets
Fixed assets mean tangible assets held for the purpose of producing goods rendering of services
leases or operation management whose service life is more than one fiscal year. Fixed assets
satisfying the following conditions are recognized:
(a) The economic benefits associated with the fixed assets are likely to flow into the enterprise;
(b) The cost of the fixed asset can be measured in a reliable way.The Company's fixed assets are classified into buildings machinery and equipment office and
electronic equipment transportation vehicles and fixed assets renovation in line with capitalization
conditions. Where each component of a fixed asset with a different service life provides economic
benefits to the Company in different ways and applies different depreciation rates it is recognized
as a single fixed asset.Fixed assets are initially measured at cost. The cost of purchasing fixed assets includes the purchase
price related taxes and other expenses attributable to the fixed asset before it is ready for the
intended use such as the expenses on transportation handling installation and professional services
etc. When determining the cost of fixed assets discard expenses should be considered. Subsequent
expenditures related to fixed assets that satisfy the recognition criteria of fixed assets are included
in the cost of fixed assets; otherwise they are recognized in profit and loss in the period in which
they arise.Fixed assets are depreciated by the straight-line method. The depreciation rate of various fixed assets
is determined according to the estimated service life and estimated residual value (the estimated
residual value is 0-10% of the original value). The depreciation rate of classified fixed assets is as
follows:
Annual
Estimated Service
Asset Category Depreciation
Life
Rate
Houses and buildings 20-50 years 2-5%
Machinery and equipment (exclude mold) 5-18 years 5-20%
Mold (with benefit period more than one year) 1-3 years 33-100%
Office and electronic equipment 3-22 years 4-33%
Transportation equipment 4-8 years 12-25%
Other devices 4-5 years 20-25%
Power stations 25 years 4%
Fixed assets renovation is amortized evenly over the benefit period.41
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
18 Fixed assets (continued)
(1) Recognition criteria for fixed assets (continued)
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.19 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.42
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
20 Borrowing costs
Borrowing costs refer to interest and other related costs incurred by the Company as a result of
borrowings including interest on borrowings amortization of discounts or premiums ancillary
expenses and exchange differences arising from foreign currency borrowings.Borrowing costs that can be directly attributable to the acquisition construction or production of
assets eligible for capitalization are capitalized and included in the relevant asset cost. Other
borrowing costs are recognized as expenses in the period in which they are incurred and are
included in the current profit and loss. Assets eligible for capitalization refer to fixed assets
investment property and inventories (only refers to inventories with an acquisition construction and
production process for more than one year) that require a substantial period of acquisition
construction or production activities to get ready for the intended use or sale status.Borrowing costs refer to the interest of borrowings the amortization of discounts or premiums
auxiliary expenses and exchange differences arising from foreign currency borrowings incurred by
the Company. Borrowing costs begin to be capitalized when the following three conditions are all
satisfied:
(1) Asset expenditure has occurred;
(2) Borrowing costs have occurred;
The acquisition construction or production activities necessary to enable the assets to be ready for
(3)
the intended usable or saleable state have commenced.When an asset satisfied the capitalization conditions is abnormally interrupted during the process of
acquisition construction or production and the interruption period lasts for more than three months
the capitalization of the borrowing costs is suspended and recognized as the current expenses until
the acquisition construction or production of the assets starts again. When an asset satisfied the
capitalization conditions is ready for its intended use or sale the capitalization is stopped and the
borrowing costs incurred in the future are included in the current profit and loss. The period of
capitalization refers to the period from the time when the borrowing costs start to be capitalized to
the point when the capitalization is stopped and the period in which the borrowing costs are
suspended for capitalization is not included.During the period of capitalization if special borrowings are made for the acquisition construction
or production of assets eligible for capitalization the amount of the interest expenses actually
incurred during the current period of the special borrowings less the amount of interest income
earned by depositing unused borrowing funds in a bank or investment income earned by temporary
investment is recognized as the amount of capitalization. When a general loan is occupied for the
purpose of purchasing constructing or producing assets satisfied the capitalization conditions the
amount of capitalization is determined according to the weighted average of the accumulated asset
expenditure exceeding the special loan portion multiplied by the capitalization rate of the general
loan occupied; the capitalization rate is determined based on the weighted average interest rate of
general borrowings.43
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
21 Right-of-use assets
The Company initially measures right-of-use assets at cost. Such cost includes:
(1) The initial measurement amount of lease liabilities;
(2) Lease payments made on or before the commencement date of the lease term (if a lease incentive
exists net of the amount related to the lease incentive already taken);
(3) Initial direct costs incurred by the Company;
(4) Costs expected to be incurred by the Company to disassemble and remove the leased asset(s) restore
the premises where the leased asset(s) is/are located or restore the leased asset(s) to the condition
agreed upon under the terms of the lease (excluding costs incurred to produce inventory).After the commencement date of the lease term the Company uses the cost model for subsequent
measurement of right-of-use assets.If it is reasonably certain that ownership of the leased asset(s) will be obtained at the end of the lease
term the Company depreciates the leased asset(s) over its/their remaining service life. If it is not
reasonably certain that ownership of the leased asset(s) will be obtained at the end of the lease term
the Company depreciates the leased asset(s) over the lease term or the remaining service life of the
leased asset(s) whichever is shorter. Right-of-use assets for which depreciation reserves have been
accrued are depreciated in future periods at their carrying value net of depreciation reserves with
reference to the above principles.44
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
22 Intangible assets
Intangible assets are recorded at the actual cost at the time of acquisition. The service life of
intangible assets is analyzed and judged at the time of acquisition. Intangible assets with a finite
service life are amortized on the shortest of the estimated service lives the beneficial period of the
contract and the effective period specified by law from the time when the intangible assets are
available for use. The amortization period is as follows:
Category Amortization years
The shorter of the years of the land use rights and the
Land use rights
operating years of the Company
Patents and non-patent 10 years or the shorter of service life beneficiary years and
technologies legally valid years
Other Beneficiary period
The Company reviews the service life and amortization method of intangible assets with limited
service life at least at the end of each year and made adjustment if necessary.If an intangible asset is unforeseen 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
there is 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
(5)
reliable way.If the above conditions cannot be all satisfied the expenditures are included in the current profit and
loss when incurred.45
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
23 Long-term prepaid expense
Long-term prepaid expenses refer to various expenses that the Company has paid and whose period
of amortization is more than one year such as the improvement expenses incurred in renting fixed
assets by operating leases. Long-term prepaid expenses are amortized on a straight-line basis within
the beneficial period of the expense items.24 Impairment of long-lived assets
The impairment of assets other than inventories financial assets and deferred income tax assets is
determined by the Company as follows:
On the balance sheet date if there is evidence indicates that the asset is idle there is a use termination
plan or the market price drops sharply or the external environment changes significantly
impairment test should be conducted. The difference between the recoverable amount of the asset
and its book value is recognized as impairment loss and included in the current profit and loss and
corresponding allowance for asset impairment is made. For the goodwill formed by business
combination and the intangible assets with indefinite service life impairment test is carried out every
year regardless of whether there is any indication of impairment. The recoverable amount is
determined based on the net amount of fair value of assets less the disposal expenses or the present
value of estimated future cash flows of the assets whichever is lower. The Company estimates the
recoverable amount based on the individual assets. If it is difficult to estimate the recoverable
amount of the individual assets the recoverable amount of the asset is determined based on the asset
group to which the asset belongs. After the asset impairment loss is recognized the depreciation or
amortization expense of the impaired assets will be adjusted accordingly in the future period.Once the asset impairment loss is confirmed it cannot be reversed in the future accounting period.Treatment of goodwill impairment: in the impairment test of goodwill the book value of goodwill
is apportioned to the asset group or asset group portfolio expected to benefit from the synergy of
business combination and the book value of goodwill is apportioned to the relevant asset group or
asset group combination in a reasonable way. In the case of impairment test the asset group or asset
group portfolio that does not contain goodwill is tested for impairment first to confirm the
corresponding asset impairment loss and then the asset group or asset group containing goodwill is
tested for impairment to confirm the corresponding goodwill impairment loss.25 Asset transfer with repurchase conditions
When the Company sells products or transfers other assets it signs a product or a transfer asset
repurchase agreement with the purchaser and determines whether the sales commodity satisfies the
revenue recognition conditions according to the terms of the agreement. If the after-sales repurchase
is a financing transaction the Company does not recognize the sales revenue when the product or
asset is delivered. If the repurchase price is greater than the difference between the sales prices
interest of the difference is accrued on time during the repurchase period and included in finance
costs.46
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
26 Provisions
When the Company is involved in any litigation debt guarantee contract loss or reorganization
which is likely in need of future delivery of assets or rendering of services and the amount of which
can be measured in a reliable way it is recognized as provisions.
(1) Recognition criteria of provisions
When an obligation related to the contingent events satisfies all the following conditions it is
recognized by the Company as provisions:
(a) The obligation is the current obligation of the Company;
(b) The fulfillment of the obligation is likely to cause economic benefits to flow out of the Company;
(c) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The provisions 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 that 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 that there is no continuous range (or interval) of required expenditures or there is a
continuous range but the possibility of various results in the range is different if the contingency
involves a single item the best estimate is determined based on the most probable amount; if a
contingency involves multiple items the best estimate is determined based on various possible
outcomes and associated probabilities.If all or part of the expenses required by the Company to settle the provisions are expected to be
compensated by a third party the compensation amount is separately recognized as an asset when it
is basically confirmed to be received and the recognized compensation amount should not exceed
the book value of provisions.27 Contract liabilities
The Company recognizes as contract liabilities the part of the obligation to transfer the goods to the
customer due to received or receivable consideration from the customer.47
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
28 Employee benefits
Employee benefits include short-term employee benefits post-employment benefits termination
benefits and other long-term employee benefits provided in various forms of consideration in
exchange for service rendered by employees or compensations for the termination of employment
relationship.(a) Short-term employee benefits
Short-term employee benefits include employee wages or salaries bonus allowances and subsidies
staff welfare premiums or contributions on medical insurance work injury insurance and maternity
insurance housing funds union running costs and employee education costs and short-term paid
absences. The employee benefit liabilities are recognized in the accounting period in which the
service is rendered by the employees with a corresponding charge to the profit or loss for the current
period or the cost of relevant assets. Non-monetary benefits are measured at their fair value.(b) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or
defined benefit plans. Defined contribution plans are post-employment benefit plans under which
the Company pays fixed contributions into a separate fund and will have no obligation to pay further
contributions; and defined benefit plans are post-employment benefit plans other than defined
contribution plans. During the Reporting Period the Company’s defined contribution plans mainly
include basic pensions and unemployment insurance.(c) Termination benefits
If the Company terminates the labor relationship with an employee before the labor contract expires
or offers compensation for encouraging the employee to accept the redundancies voluntarily the
liabilities arising from the termination of labor relations with the employee is determined and also
included in the current profit and loss at the time when the group cannot unilaterally withdraw the
termination of the labor relationship plan or redundancies proposal or the time when the cost
associated with reorganization involving payment of termination benefits is confirmed whichever
is earlier.(d) Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except short-term employment
benefits post-employment benefits and termination benefits.48
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
29 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 interest rate implicit in lease cannot be
determined the Company’s incremental lending rate is used as the rate of discount. Lease payments include:
(a) The amount of fixed payments net of amounts related to lease incentives and the amount of substantive
fixed payments;
(b) Variable lease payments that depend on indexation or ratio;
(c) The exercise price of the purchase option when applicable if the Company is reasonably certain that the
option will be exercised;
(d) The amount required to be paid to exercise the option to terminate the lease if the lease term reflects that
the Company will exercise the option to terminate the lease;
(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.30 Share-based payments
The share-based payments of the Company are mainly equity-settled share-based payments and only
allow to be exercised by employees after the completion of their services in the waiting period. On
each balance sheet date in the waiting period based on the best estimate of the number of vesting
equity instruments the services obtained in the current period are included in the relevant costs or
expenses and capital reserve based on the fair value at the grant date of the equity instruments.The fair value of equity instruments is determined by the external appraiser or management based on
the binomial distribution method. The best estimate of the vesting equity instrument is determined by
the management based on historical statistics on the vesting weights and turnover rates on the balance
sheet date.Equity-settled share-based payments are measured based on the fair value of the equity instruments
granted to employees. In case that the vesting right is available immediately after the grant it is
included in relevant cost or expense based on the fair value of the equity instrument on the grant date
and the capital reserve is increased accordingly. In case that the vesting right is available after the
completion of services in the waiting period or satisfaction of stipulated performance conditions on
each balance sheet day during the waiting period the services acquired in the current period are
included into the relevant costs or expenses and capital reserve on the basis of the best estimate of the
number of feasible equity instruments and at the fair value of the date on which the equity instruments
are granted. No adjustments are made to the identified related costs or expenses or total owner's equity
after the vesting date.49
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
31 Revenue recognition
The Company shall recognize the revenue according to the transaction price assigned to the
performance obligation when any due performance obligation is fulfilled (namely when the client
obtains the control over relevant commodities or services).
(1) General principles applied to revenue recognition
The Company shall recognize the revenue according to the transaction price assigned to the
performance obligation when any due performance obligation is fulfilled (namely when the client
obtains the control over relevant commodities or services). Performance Obligation means that
under the contract the Company promises to transfer commodities or services that can be clearly
distinguished to the client. “Obtain the control over relevant commodities or services” refers to the
ability to completely dominate the use of commodities and obtain almost all economic benefits.From the contract’s effectiveness date the Company shall evaluate the contract recognize each
single performance obligation included and determine whether each performance obligation is
fulfilled within a certain period or at a time point.When any of the following conditions is met for performance obligation to be fulfilled within a
certain period the Company shall recognize corresponding revenue within the period as scheduled:
While fulfilling the due obligation in the Company the client obtains and consumes the resulting
(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 cost is predicted to be
compensated corresponding revenue shall be recognized based on the specific cost amount till the
fulfillment schedule could be reasonably determined.50
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
30 Revenue recognition (continued)
(2) Principles of handling revenues from specific transactions
(a) For the contract containing the sales return article: When the client obtains the control over relevant
commodities corresponding revenue shall be recognized according to the consideration amount
(excluding the amount predicted to be returned due to sales return) predicted to be duly charged
from transferring commodities to the client and corresponding liabilities shall be recognized based
on the amount predicted to be returned due to sales return. Meanwhile when commodities are sold
the balance through deducting the predicted cost from taking back commodities from the book value
of commodities predicted to be returned (including the impairment of value of returned
commodities) shall be checked and calculated under “Returned Commodities Cost Receivable”.(b) For the contract containing the quality assurance article: it’s required to evaluate whether the quality
assurance involves any separable service except for the promise (to the client) that commodities
conform to established standards. If the Company provides additional service it shall be deemed as
a single performance obligation and subject to the accounting treatment according to relevant
revenue criteria provisions; otherwise the quality assurance liability shall be subject to the
accounting treatment according to the accounting criteria provisions on Contingency.(c) For the sales contract containing the client’s additional purchase option: the Company shall evaluate
whether the option provides the client with any significant right. If any it shall be deemed as a single
performance obligation and the transaction price shall be apportioned to the performance obligation
and corresponding revenues shall be recognized when the client executes the purchase option right
and obtains the control over relevant commodities in the future or when the option becomes invalid.If the separable selling price applied to the client’s additional purchase option right cannot be
directly observed it’s required to comprehensively consider the difference in discounts between the
client’s execution of option right and the client’s non-execution of option right and analyze the
possibility for the client to execute the option right and other relevant information. Then
corresponding reasonable estimate shall be made.(d) The contract licensing the IP right to the client: It’s required to evaluate whether the IP right license
constitutes any single performance obligation; if any it is necessary to determine whether the
performance obligation fulfillment is fulfilled within a certain period or at a time point. If any IP
right license is granted to the client and royalties are charged based on the client’s actual sales or
usage corresponding revenues shall be recognized at a later time between the following dates: the
day when the client’s subsequent selling or usage occurs; the day when the Company fulfills relevant
performance obligation.
(3) Specific revenue recognition method
(a) Product sales contract
According to the contract terms for the selling of products subject to performance obligation
fulfillment conditions at a time point and other products the Company shall recognize the realization
of sales revenues when the client obtains the control over relevant commodities or services
according to the delivery condition agreed in the sales contract upon signed by the client after
commodities are received.(b) Technical service contract
The Company shall recognize corresponding revenues by using the straight line method within the
lease term agreed in the lease contract.(c) Royalties income
If revenues are recognized within a certain period based on the technical service contract
corresponding revenues shall be recognized according to the performance schedule.III Significant accounting policies and accounting estimates (continued)51
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
30 Revenue recognition (continued)
(3) Specific revenue recognition method (continued)
(d) Revenue from photovoltaic power stations
a. Centralized power stations: Power stations are combined to the grid. The income will be confirmed
based on the documents on power supply provided by the business departments of the Company after
the duration of continuous and trouble-free operation specified by the electric power company is met.b. Distributed power stations: Power stations are combined to the grid. The income will be confirmed
based on the documents on settlement provided by the business departments of the Company.31 Contract cost
(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.(c) The cost is predicted to be recovered.The asset shall be presented and reported in inventory or other non-current assets which depends on
whether the amortization period exceeds a normal operating cycle during the initial recognition.
(2) Contract acquisition cost
If the increment cost resulting from the Company’s acquisition of contract is predicted to be recovered
it shall be recognized as an asset as the contract acquisition cost. Increment Cost refers to the cost
which only results from the contract acquisition like the sales commission. If the amortization period
is less than one year it shall be included in current profit and loss.
(3) Contract cost amortization
The asset related to the contract cost shall adopt the same basis for the recognition of commodities or
services revenues related to the asset be amortized during the period of fulfilling the performance
obligation or according to the fulfillment schedule and be included into current profit and loss.52
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
31 Contract cost (continued)
(4) Impairment of contract cost
For the asset related to the contract cost as mentioned above if the book value is higher than the
difference between the residual consideration predicted to be obtained from the Company’s transfer
of commodities related to the asset and the cost to be incurred due to such transfer depreciation
reserves shall be calculated and withdrawn for the surplus which shall also be recognized as the asset
impairment loss.After the impairment allowances are established if changes in depreciation factors during previous
periods have made the above different higher than the asset’s book value it shall be restituted to
previously established asset impairment allowances and included in current profit and loss. However
the book value of restituted asset shall not exceed the book value of the asset on the date of restitution
without establishing impairment allowances.33 Government grants
(1) Category
Government grants are transfers of monetary or non-monetary assets from the government to the
Group at nil consideration. According to the grants targets stipulated in the relevant government
documents government grants are classified into government grants related to assets and
government grants related to income.
(2) Recognition of government grants
If a government grant is a monetary asset it is measured at the amount received or receivable. If a
government grant is a non-monetary asset it is measured at fair value. If the fair value cannot be
obtained in a reliable way it is measured at the nominal amount (RMB1). Government grants
measured at nominal amounts are recognized directly in the current profit and loss.
(3) Accounting treatment
Government grants related to assets offset the book value of the underlying assets.If the government grants related to income are used to compensate related costs or losses in the
subsequent period it is recognized as deferred income and included in the current profit and loss or
offset costs in the period in which the related costs or losses are recognized; government grants used
to compensate costs or losses incurred by the enterprise are directly included in the current profit or
loss or offset related costs. For government grants related to the daily activities of the enterprise the
R&D and VAT-related subsidies are included in other income; other government grants offset related
costs according to the nature of economic activities. Government grants not related to daily activities
of the Company are included in the non-operating income and expenditure. For preferential loans
for policy discount if the government finance department appropriates the discounted funds to the
lending bank the borrowing cost is accounted for according to the principal of the loan and the
policy preferential interest rate with the amount actually received as the entry value of the loan. If
the government finance department directly appropriates the interest grant funds to the Company
the grants offset the related borrowing costs.In case that a confirmed government grant is required to be returned the book value of the asset is
adjusted if the book value of relevant assets is offset at the initial recognition; if there is related
deferred income the book balance of deferred income is offset and the excess is included in the
current profit and loss; in case of other circumstances it is directly included in the current profit and
loss.53
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
34 Deferred income tax assets and deferred income tax liabilities
The income taxes of the Company include current income tax and deferred income tax. Both current
income tax and deferred income tax are recognized in the current profit and loss as income tax
expense or gain except for the following:
(1) Adjusting goodwill due to income tax arising from business combination;
Income tax related to transactions or events directly included in shareholders' equity is included in
(2)
shareholders’ equity.On the balance sheet date the Company recognizes the deferred income tax assets or deferred
income tax liabilities in accordance with the balance sheet liability method on temporary differences
between the book value of assets or liabilities and their tax base.The Company recognizes all taxable temporary differences as deferred tax liabilities except the
taxable temporary differences incurred in the following transactions:
(1) Initial recognition of goodwill; or initial recognition of assets or liabilities arising from transactions
with the following characteristics: the transaction is not a business combination and does not affect
the accounting profits or the amount of taxable income when occurs;
(2) For taxable temporary differences related to investments in subsidiaries associates and joint
ventures the timing of the reversal of the temporary differences can be controlled and the temporary
differences are unlikely to be reversed in the foreseeable future.The Company recognizes deferred income tax assets arising from deductible temporary differences
subject to the amount of taxable income likely to be obtained to offset the deductible temporary
differences except the deductible temporary differences incurred in the following transactions:
The transaction is not a business combination and does not affect the accounting profits or the
(1)
amount of taxable income when occurs;
(2) The deductible temporary differences related to investment in subsidiaries associates and joint
ventures cannot satisfy all the following: the temporary differences are likely to be reversed in the
foreseeable future and are likely to be used for deduction of deductible taxable income for temporary
differences in the future.On the balance sheet date the Company measures the deferred income tax assets and deferred
income tax liabilities according to the tax law based on the applicable tax rate during the period of
expectation of recovering the assets or paying off the liabilities and reflects the income tax impact
of the expected recovery of assets or liquidation of liabilities on the balance sheet date.On the balance sheet date the Company reviews the book value of deferred income tax assets. If it
is probable that no sufficient taxable income will be available in the future to offset the benefits of
deferred tax assets the book value of deferred tax assets is written down. When it is probable that
sufficient taxable income will be available the amount written-down will be reversed.54
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
35 Leases (applicable before 31 December 2020)
(1) Accounting treatment of operating leases
(a) The rental fees paid by the Company for the lease of assets are apportioned on a straight-line basis
over the entire lease term without deduction of the rent-free period and included in the current
expenses. The initial direct costs associated with the lease transactions paid by the Company are
included in the current expenses.When the lessor of an asset bears the expenses related to the lease that should be borne by the
Company the Company deducts the part of the expenses from the total rent. The deducted rental
expenses are apportioned during the lease term and included in the current expenses.(b) The rental fees charged by the Company for renting out assets are apportioned on a straight-line
basis over the entire lease term without deduction of the rent-free period and is recognized as rental
income. The initial direct expenses related to lease transactions paid by the Company are included
in the current expenses; if the amount is a significant one it is capitalized and included in the current
income in the same period as the lease income is recognized throughout the lease period.When the Company bears the lease-related expenses that should be borne by the lessee the
Company deducts the part of the expenses from the total rental income and distributes the deducted
rental expenses within the lease term.
(2) Financial leased assets
On the date when lease starts the Company recognizes the fair value of the leased asset or the
present value of the minimum lease payment as the book value of the leased asset whichever is
lower and recognizes the minimum lease payment amount as the book value of the long-term
payable and the difference between the two is recognized as unconfirmed financing expenses. The
Company adopts the effective interest rate method to amortize the unrecognized financing expenses
during the asset lease period and includes them in financial expenses.
(3) Financial leasing assets
On the date when lease starts the Company recognizes the receivable of the financial lease the
difference between the sum of unsecured residual value and its present value as unrealized financing
income and recognizes the lease income in the future period of the lease. The initial direct costs
incurred by the Company in connection with lease transactions are included in the initial
measurement of financial lease receivable and the amount of income recognized during the lease
term is reduced.36 Leases (applicable from 1 Jan. 2021)
From the effectiveness date of a contract the Company assesses whether the contract is a lease or
includes any lease. If a party to the contract transfers the right allowing the control over the use of one
or more assets that have been identified within a certain period in exchange for a consideration such
contract is a lease or includes a lease.
(1) Lease contract split
If a contract contains multiple single leases at the same time the Company will split the contract and
conduct accounting treatment of each single lease respectively.If a contract contains both lease and non-lease parts at the same time the Company will split the lease
and non-lease parts conduct accounting treatment of the lease part in accordance with the accounting
standards governing leases and conduct accounting treatment of the non-lease part in accordance with
other applicable corporate accounting standards.55
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
36 Leases (applicable from 1 Jan. 2021) (continued)
(2) Lease contract combination
With regard to two or multiple contracts containing leases concluded by the Company with the same
counterparty or its related parties at the same or a similar time when any of the following conditions
is met the contracts are combined into one contract for accounting treatment:
(a) The two or multiple contracts are concluded based on an overall business purpose and constitute a
package deal. If they are not considered on the whole the overall business purpose cannot be
understood.(b) The consideration amount of one contract among the two or multiple contracts depends on the pricing or
performance of other contracts.(c) The rights to use assets transferred by the two or multiple contracts constitute one single lease.
(3) Accounting treatment with the Company as lessee
On the commencement date of the lease term the Company recognises the right-of-use assets and
lease liabilities for the lease unless it is a simplified short-term lease or low-value asset lease.(a) Short-term leases and low-value asset leases
A short-term lease refers to a lease that does not include a purchase option and whose lease term does
not exceed 12 months. A low-value asset lease refers to a lease where the value will be low when a
single leased asset is a new asset.The Company does not recognise the right-of-use assets and 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 straight-
line basis or according to other systemic and reasonable methods.Item Simplified leased asset type
A lease whose lease term does not exceed 12
Short-term lease months from the commencement date of the
lease term
An asset lease with a value of less than
Low-value asset lease
RMB40000 or its foreign currency equivalents
The Company recognises the right-of-use assets and lease liabilities for short-term leases and low-
value asset leases other than those mentioned above.(b) The accounting policies for right-of-use assets and lease liabilities are detailed in Note III 21 and Note III
29.56
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
36 Leases (applicable from 1 Jan. 2021) (continued)
(4) Accounting treatment with the Company as lessor
(a) Lease classification
The Company classifies leases into finance leases and operating leases at the inception of leases. A
finance lease refers to a lease where almost all the risks and rewards related to the ownership of the
leased asset(s) are substantially transferred regardless of whether the ownership is transferred
eventually. An operating lease refers to all leases other than finance leases.Usually the Company classifies a lease that meets any one or more of the following conditions as a
finance lease:
1) Upon expiry of the lease term the ownership of the leased asset(s) is transferred to the lessee.2) The lessee has the option to purchase the leased asset(s). 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 ratio;
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 Company calculates and recognises the interest income in each period within the lease term at a
fixed interest rate implicit in lease. The received variable lease payments that are not included in the
measurement of the net investment in the lease are included in profit or loss for the current period
when they are actually incurred.57
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
36 Leases (applicable from 1 Jan. 2021) (continued)
(4) Accounting treatment with the Company as lessor (continued)
(c) Accounting treatment of operating leases
The Company recognises the lease payments receivable of the operating lease as rental receipt in each
period within the lease term on a straight-line basis or according to other systemic and reasonable
methods; the initial direct costs related to the operating lease are capitalised amortised within the lease
term on the same basis as the recognition of rental receipt and included in profit or loss for the current
period; the received variable lease payments related to the operating lease that are not included in the
lease payments receivable are included in profit or loss for the current period when they are actually
incurred.
(5) Sale and leaseback
(a) The Company as seller and lessee
If the asset transfer in a sale and leaseback transaction is a sale the Company will measure the right-
of-use assets formed by the sale and leaseback based on the portion of the original asset’s carrying
value that is related to the use right acquired by the leaseback and recognise related gains or losses
only for the right transferred to the lessor. If the fair value of the sales consideration is different from
the fair value of the asset or if the lessor does not charge the rent at the market price the Company
will conduct accounting treatment with the sales consideration amount below the market price as the
prepaid rent or the amount above the market price as the additional financing provided by the lessor
to the lessee; at the same time the relevant sales gains or losses will be adjusted based on the fair
value.If the asset transfer in a sale and leaseback transaction is not a sale the Company will continue to
recognise the transferred asset and at the same time recognise a financial liability equivalent to the
transfer income.(b) The Company as buyer and lessor
If the asset transfer in a sale and leaseback transaction is a sale the Company will conduct
corresponding accounting treatment for asset purchase and apply the accounting standards governing
leases to the accounting treatment of the asset lease. If the fair value of the sales consideration is
different from the fair value of the asset or if the Company does not charge the rent at the market
price the Company will conduct accounting treatment with the sales consideration amount below the
market price as the pre-collected rent or the amount above the market price as the additional financing
provided by the Company to the lessee; at the same time the rental receipt will be adjusted based on
the market price.If the asset transfer in a sale and leaseback transaction is not a sale the Company will recognise a
financial asset equivalent to the transfer income.37 Related parties
If one party controls commonly controls or exerts a significant influence on the other party and two
or more parties are under the control common control or significant influence of the other party they
constitute related parties.58
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
38 Discontinued operations
The Company recognizes a component disposed of or classified as a component that can be separately
distinguished from the category held for sale and satisfied any of the following as a component of discontinued
operations: (1) The component represents an independent major business or a separate major business area; (2)
This component is part of a related plan to dispose of an independent major business or a separate major operating
area; (3) This component is a subsidiary that is acquired for resale. Operating profit and loss such as impairment
losses for discontinued operations and the amount reversed and disposal profit and loss are presented in the
income statement as profit and loss of discontinued operations.39 Changes to major accounting policies and estimates
(1) Changes to accounting policies
From 1 January 2021 the Company started to adopt the Accounting Standards for Business Enterprises No. 21 –
Leases revised in 2018 by the Ministry of Finance. For the new accounting policies please refer to Note III 36.On the date of first adoption the Company chose to reassess whether previously existing contracts were leases or
contained leases and applied this method to all contracts consistently. Therefore the bridging provisions of the
Accounting Standards are applicable to only the above-mentioned contracts that are identified as leases under the
original accounting standards.Moreover regarding the above-mentioned lease contracts the Company chose to adopt a simplified retrospective
application method for the bridging accounting treatment in accordance with the provisions of the Accounting
Standards for Business Enterprises No. 28 – Changes in Accounting Policies and Estimates and Correction of
Errors that is to adjust the amounts of retained earnings and other relevant items in the financial statements at
the beginning of the year when the Accounting Standards were first adopted without adjusting the information
of comparable periods.The Company’s accounting policy for low-value asset leases is not to recognise right-of-use assets and lease
liabilities. According to the bridging provisions of the new accounting standards the accounting treatment of the
Company’s low-value asset leases before the date of first adoption will be conducted in accordance with the new
accounting standards from the date of first adoption and no retrospective adjustment will be made to the low-
value asset leases.The effects of the adoption of the new lease standard on the presentation of the balance sheet items as at the
beginning of the current period are as follows:
Carrying amount as per Effect of Carrying amount as per the
Item
the former lease standard remeasurement revised lease standard
Fixed assets
92829902 (1314306) 91515596
Right-of-use assets
- 1856862 1856862
Long-term prepaid expense 2536670 (437301) 2099369
Current portion of non-current
13429670 19402 13449072
liabilities
Lease liabilities
- 912551 912551
Long-term payables
1280300 (826698) 45360259
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
III Significant accounting policies and accounting estimates (continued)
39 Changes to major accounting policies and estimates (continued)
(2) Changes to accounting estimates
No change occurred to the major accounting estimates in the Reporting Period.40 Correction of previous accounting errors
No previous accounting errors were identified and corrected in the Reporting Period.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 theCompany’s directly exported goods is executed in accordance with the regulations of “ExemptionOffset and Refund”. The tax refund rate is 0%-13%.2 Urban maintenance and construction tax
Subject to the relevant tax laws and regulations of the state and local regulations urban maintenance
and construction tax is paid based on the proportion stipulated by the state according to the individual
circumstances of each member of the Company.3 Education surcharges
Education surcharges are paid according to the individual circumstances of each member of the
Company based on the proportion stipulated by the state in accordance with the relevant national tax
regulations and local regulations.4 Dike protection fee
Dike protection fee is paid according to relevant national tax regulations and local regulations.5 Property tax
Property tax is paid on the houses with property rights according to the proportion stipulated by the
state in accordance with the relevant national tax regulations and local regulations.6 Corporate income tax
The corporate income tax rate for the Company was 25% in the Current Period (2020: 25%).According to Article 28 of the Enterprise Income Tax Law of the People's Republic of China a reduced
corporate income tax rate of 15% is applied to important high-tech enterprises that the government
supports.60
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
IV Taxes (continued)
6 Corporate income tax (continued)
The following subsidiaries are entitled to tax preferences overseas subsidiaries adopt the local tax
rates and the other subsidiaries of the Company are all taxed at a rate of 25%.Subsidiaries entitled to tax preferences:
Preferential
Company name Reason
tax rate
TCL China Star Optoelectronics Technology Co. Ltd. 15% High-tech enterprise
Shenzhen China Star Optoelectronics Semiconductor
15% High-tech enterprise
Display Technology Co. Ltd.Wuhan China Star Optoelectronics Technology Co.15% High-tech enterprise
Ltd.Wuhan China Star Optoelectronics Semiconductor
15% High-tech enterprise
Display Technology Co. Ltd.Shenzhen TCL High-Tech Development Co. Ltd. 15% High-tech enterprise
Qingdao Blue Business Consulting Co. Ltd. 15% High-tech enterprise
Tianjin Huan’Ou Semiconductor
15% High-tech enterprise
Material&Technology Co. Ltd.TianJin Zhonghuan Advanced Material&Technology
15% High-tech enterprise
Co. Ltd.Inner Mongolia Zhonghuan Solar Material Co. Ltd. 15% High-tech enterprise
Huansheng Solar (Jiangsu) Co. Ltd. 15% High-tech enterprise
Zhangjiakou Huan’Ou International New Energy
15% High-tech enterprise
Technology Co. Ltd.Wuxi Zhonghuan Applied Materials Co. Ltd. 15% High-tech enterprise
Ningxia Zhonghuan Solar Material Co. Ltd. 15% Encouraged business in West China
Inner Mongolia Zhonghuan Xiexin Solar Material Encouraged business in West China High-tech
15%
Co. Ltd. enterprise
Inner Mongolia Zhonghuan Advanced Semiconductor Encouraged business in West China High-tech
12.50%
Material Co. Ltd. enterprise
Shangqiu Yaowei Photovoltaic Power Generation Co.12.50% State-supported public infrastructure project
Ltd.Tianjin Huanyu Yangguang New Energy Technology
12.50% State-supported public infrastructure project
Co. Ltd.Huludao Zhongrun Energy Technology Co. Ltd. 12.50% State-supported public infrastructure project
Kangbao Huanju New Energy Co. Ltd. 12.50% State-supported public infrastructure project
Qinhuangdao Tianhui Solar Energy Co. Ltd. 12.50% State-supported public infrastructure project
Huludao Xincheng New Energy Technology Co. Ltd. 12.50% State-supported public infrastructure project
State-supported public infrastructure project
Dushan Anju Photovoltaic Technology Co. Ltd. 7.50%
Encouraged business in West China
Huhehaote Huanju New Energy Development Co. State-supported public infrastructure project
7.5%
Ltd. Encouraged business in West China
State-supported public infrastructure project
Sonid Left Banner Huanxin New Energy Co. Ltd. 7.50%
Encouraged business in West China
State-supported public infrastructure project
Otog Banner Huanju New Energy Co. Ltd. 7.50%
Encouraged business in West China
Yixing Huanxing New Energy Co. Ltd. 7.50% State-supported public infrastructure project
Tianjin Binhai Huanneng New Energy Co. Ltd. Tax-free State-supported public infrastructure project
Gaoqing Huanyuan Energy Technology Co. Ltd. Tax-free State-supported public infrastructure project
Gaoqing Chengguang Energy Technology Co. Ltd. Tax-free State-supported public infrastructure project
Guyuan Shengju New Energy Co. Ltd. 7.50% State-supported public infrastructure project61
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
IV Taxes (continued)
6 Corporate income tax (continued)
Zhangjiakou Shengyuan New Energy Co. Ltd. 7.50% State-supported public infrastructure project
Ningjin Jinchen New Energy Co. Ltd. Tax-free State-supported public infrastructure project
Tianjin Zhonghuan New Energy Co. Ltd. Tax-free State-supported public infrastructure project
State-supported public infrastructure project
Ongniud Banner Guangrun New Energy Co. Ltd. 7.50%
Encouraged business in West China
State-supported public infrastructure project
Tuquan Guanghuan New Energy Co. Ltd. 7.50%
Encouraged business in West China
Inner Mongolia New Huanyu Yangguang New State-supported public infrastructure project
7.50%
Energy Technology Co. Ltd. Encouraged business in West China
State-supported public infrastructure project
Gengma Huanxing New Energy Co. Ltd. 7.50%
Encouraged business in West China
Dangxiong Youhao New Energy Development Co. State-supported public infrastructure project
Tax-free
Ltd. Encouraged business in West China
Small meagre-profit enterprise with a
Shangqiu Suoguang Energy Technology Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Shangqiu Suoneng Energy Technology Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Shangqiu Suoyuan Energy Technology Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Ulanqab Dishengsheng Energy Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Tongliao Guangdong New Energy Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Alxa League Huanju New Energy Co. Ltd. 20%
preferential 12.5% taxable income
Small meagre-profit enterprise with a
Jinxiang Haotian New Energy Co. Ltd. 20%
preferential 12.5% taxable income
State-supported public infrastructure project
Shaanxi Runhuan Tianyu Technology Co. Ltd. Tax-free
Encouraged business in West China
Inner Mongolia Zhonghuan Asset Management Co. Small meagre-profit enterprise with a
20%
Ltd. preferential 12.5% taxable income
Small meagre-profit enterprise with a
Inner Mongolia Huanya Hotel Management Co. Ltd. 20%
preferential 12.5% taxable income
Zhonghuan Advanced Semiconductor Materials Co. High-tech enterprise and integrated circuit-
Tax-free
Ltd. related enterprise
7 Individual income tax
Individual income tax of income paid to employees by the Company is withheld by the Company on
behalf of employees in accordance with to the relevant national tax regulations.62
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements
1 Monetary assets
30 Jun. 2021 31 Dec. 2020
Cash on hand 626 1189
Bank deposits 23727289 17744850
Deposits with the central bank 519911 209978
Interest receivable on deposits 134120 84459
Other monetary assets 2992333 3668429
27374279 21708905
Note Monetary assets with restricted use rights
30 Jun. 2021 31 Dec. 2020
TCL Tech Finance’s statutory reserve deposits with the
central bank 519911 209978
Restricted amount of other monetary assets 2226536 3206051
Interest receivable on deposits 134120 84459
2880567 3500488
As at 30 Jun. 2021 the Company's bank deposits of RMB519911 thousand (31 Dec. 2020: 209978 thousand)
are statutory reserve deposits placed in the central bank by TCL Tech Finance Co. Ltd. a subsidiary of the
Company.As at 30 Jun. 2021 the Company's monetary assets abroad amounted to RMB2307686 thousand (31 Dec.2020: RMB1131911 thousand) all of which were owned by the overseas subsidiaries of the Company.63
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
2 Held-for-trading financial assets
30 Jun. 2021 31 Dec. 2020
Financial assets at fair value through profit or loss 9548577 5300046
Including: Debt instrument investments 8837274 4628306
Equity instrument investments 711303 671740
9548577 5300046
3 Derivative financial assets
30 Jun. 2021 31 Dec. 2020
Foreign exchange forwards 139396 445690
Others - 7888
139396 453578
4 Notes receivable
(1) Notes receivable by category
30 Jun. 2021 31 Dec. 2020
Bank acceptance notes 1339413 576468
1286809 19217
Trade acceptance notes
2626222 59568564
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
4 Notes receivable (continued)
(1) Notes receivable by category (continued)
30 Jun. 2021 31 Dec. 2020
Allowance for Allowance for
Gross amount doubtful Gross amount doubtful
Carrying Carrying
accounts accounts
amount amount
Percent Amou Percen Percent PercenAmount Amount Amount
age nt tage age tage
Notes receivable for which
the allowance for doubtful
- - - - - - - - - -
accounts were established
on the individual basis
Notes receivable for which
the allowance for doubtful
2626222 100% - - 2626222 595685 100% - - 595685
accounts were established
on the grouping basis
Of which: group with no 1339413 51% - - 1339413 576468 97% - - 576468
recovery risk
By aging analysis 1286809 49% - - 1286809 19217 3% - - 19217
2626222 100% - -
2626222 595685 100% - - 595685
(2) As at 30 Jun. 2021 notes receivable in pledge were RMB168090 thousand.
(3) As at 30 Jun. 2021 there were no endorsed or discounted notes receivable that were undue on the balance
sheet date and were derecognized.5 Accounts receivable
30 Jun. 2021 31 Dec. 2020
Accounts receivable 19196620 12838895
Less: allowance for doubtful accounts 288606 281281
18908014 1255761465
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
5 Accounts receivable (continued)
(1) Accounts receivable in the period from 1 Jan. 2021 to 30 Jun. 2021 are classified as follows
by how the allowances for doubtful accounts were established:
30 Jun. 2021
Gross amount Allowance for doubtful accounts
Lifetime ECL rate Gross amount
Accounts receivable for which the related
allowances for doubtful accounts were 133756 92.36% 123537
established on the individual basis
Of which:
Accounts receivable1 133756 92.36% 123537
Accounts receivable for which the related
allowances for doubtful accounts were established 19062864 0.87% 165069
on the grouping basis
Of which:
Group 1：by aging analysis 14481327 1.14% 164966Group 2：by related party grouping 3771286 0.003% 103Group 3: Group with no recovery risk 810251 - -
19196620 288606
(2) The aging of accounts receivable is analysed as follows:
30 Jun. 2021 31 Dec. 2020
Amount Percentage Amount Percentage
Within 1 year 18251725 95.07% 11810255 91.99%
1-2 years 340900 1.78% 392397 3.06%
2-3 years 401425 2.09% 400671 3.12%
202570 1.06% 235572 1.83%
Over 3 years
19196620 100% 12838895 100%66
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements
(Continued)
5 Accounts receivable (continued)
(3) Allowances for doubtful accounts receivable are
analysed as follows:
30 Jun. 2021 31 Dec. 2020
Beginning amount 281281 45020
New subsidiaries 33481 199462
Current accrual 38813 76552
Reversal of current period (60647) (26300)
Write-off of current period - (12439)
Reduced subsidiaries (4137) -
Exchange adjustment (185) (1014)
Ending amount 288606 281281
(4) There is no debt owed by shareholders holding 5% or more voting shares in this account balance.
(5) As at 30 Jun. 2021 the accounts receivable of the top five balances are as follows:
30 Jun. 2021 31 Dec. 2020
Total amount owed by the top five 7981376 6443402
Proportion of total accounts receivable 41.58% 50.19%
6 Receivables financing
30 Jun. 2021 31 Dec. 2020
Notes receivable financing 1725478 1206289
Accounts receivable financing - 970455
1725478 2176744
Note Endorsed or discounted notes receivable that were outstanding on the balance sheet date and were
derecognized as at 30 Jun. 2021 amounted to RMB12859173 thousand.67
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements
(Continued)
7 Prepayments
(1) Prepayments are analyzed as follows:
30 Jun. 2021 31 Dec. 2020
Within 1 year 2438126 1352128
1-2 years 419 399
2-3 years 341 414
Over 3 years 556 2712
2439441 1355653
(2) As at 30 Jun. 2021 the prepayments of the top five balances are as follows:
30 Jun. 2021 31 Dec. 2020
Total amount owed by the top five 1533285 816964
As % of total prepayments 62.85% 60.26%
8 Other receivables
30 Jun. 2021 31 Dec. 2020
Dividends receivable 64333 -
Other receivables 3458681 2793640
3523014 2793640
(1) Dividends receivable
30 Jun. 2021 31 Dec. 2020
Fantasia Holdings Group Co. Limited 59403 -
Sichuan Shengtian New Energy 4930 -
Development Co. Ltd.64333 -68
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(2) Other receivables
30 Jun. 2021 31 Dec. 2020
Other receivables 3707232 3046810
Less: allowance for doubtful accounts 248551 253170
3458681 2793640
(a) Nature of other receivables is analyzed as follows:
30 Jun. 2021 31 Dec.2020
Equity transfer price 1579658 100802
Subsidy receivable 975964 1612041
External unit current account 613611 678933
Deposit and security deposit 114722 343367
Others 174726 58497
3458681 2793640
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL Lifetime ECL
12-month (credit not (credit
ECL
impaired) impaired) Total
Beginning amount 64800 113836 74534 253170
Current accrual 3877 2724 - 6601
Increase due to new - - 342 342
subsidiaries
Reversal of current period - (408) (22) (430)
Write-off in current period - - (8722) (8722)
Decrease due to disposal of - - (2227) (2227)
subsidiary
Exchange adjustment (183) - - (183)
30 Jun. 2021 68494 116152 63905 24855169
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
8 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows:
30 Jun. 2021 31 Dec. 2020
Carrying amount Percentage Carrying amount Percentage
Within 1 year 3078382 83.03% 2713832 89.07%
1 to 2 years 379535 10.24% 80991 2.66%
2 to 3 years 104157 2.81% 131394 4.31%
Over 3 years 145158 3.92% 120593 3.96%
3707232 100% 3046810 100%
(d) There is no debt owed by shareholders holding 5% or more voting shares in this account balance.(e) As at 30 Jun. 2021 the other receivables of the top five balances are as follows:
30 Jun. 2021 31 Dec. 2020
Total amount owed by the top five 2428989 2004109
As % of total other receivables 65.52% 65.78%
(f) As at 30 Jun. 2021 there is no transfer of other receivables that do not conform to the conditions for derecognition
in the balance of this account; no transaction arrangement for asset securitization with other receivables as the
subject asset; and no financial instrument that is the subject of securitization and does not conform to the
conditions for derecognition.70
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
9 Inventories
(1) Inventory is classified as follows:
30 Jun. 2021 31 Dec. 2020
Gross Inventory Carrying Gross Inventory Carrying
amount valuation amount amount Valuation amount
allowance allowance
Raw materials 5433586 360876 5072710 2698477 196354 2502123
Work in progress 3228883 424693 2804190 1900684 213991 1686693
Finished goods 6213471 491078 5722393 4606092 273232 4332860
Turnover 302334 817 301517 317162 3880 313282
materials
15178274 1277464 13900810 9522415 687457 8834958
As at 30 Jun. 2021 the Company has no inventory for liabilities guarantee.
(2) Inventory valuation allowances are analyzed as follows:
1 Jan. Current New sub Current Current Disposal of Exchange 30 Jun.2021 accrual
sidiaries reversal write-off subsidiary adjustment 2021
Raw
materials 196354 189420 22353 (12031) (34507) (713) - 360876
Work in 213991 248267 34488 (33024) (38092) (937) - 424693
progress
Finished 273232 252886 11370 (21354) (23821) (1023) (212) 491078
goods
Turnover 3880 - - - (3063) - - 817
materials
687457 690573 68211 (66409) (99483) (2673) (212) 127746471
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
10 Contract assets
(1) Contract assets are classified as follows:
30 Jun. 2021 31 Dec. 2020
Gross Valuation Carrying Gross Valuation Carrying
amount allowance amount amount allowance amount
Electricity 246375 5282 241093 186516 2866 183650
charges
receivable
(2) Valuation allowances for contract assets are analyzed as follows:
Increase
Increase due to Write- Excha
Reversal
1 Jan. in newly off in nge 30 Jun.in current
2021 current acquired current adjust 2021
period
period subsidiarie period ment
s
Electr
icity
2866 2008 479 (71) - - 5282
charg
ges
11 Assets held for sale
Expected d
Ending carryin Expected time
Fair value isposal
g amount of disposal
expense
Assets held for sale 217314 219509 2195 Within 1 year
As at 30 Jun. 2021 non-current assets expected to be disposed of within 1 year were presented as assets held
for sale.12 Other current assets
30 Jun. 2021 31 Dec. 2020
Short-term debt investments 2079163 1418900
VAT to be deducted to be certified etc. 3823646 3697455
Current portion of loans and advances to 2554365 4104903
customers (note)
Others 244614 145797
8701788 9367055
Note The current portion of loans and advances is loans due within the next year issued by subsidiary
TCL Tech Finance Co. Ltd. of which interest receivable is RMB22840 thousand.72
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
13 Loans and advances to customers
30 Jun. 2021 31 Dec. 2020
Loans and advances to customers (note) 288749 981876
Note Loans and advances to customers are loans granted by subsidiary TCL Tech Finance Co. Ltd.14 Debt investments
30 Jun. 2021 31 Dec. 2020
National debt and secondary market debt (note) - 119350
Note As at 30 Jun. 2021 there were no significant debt investments.15 Other debt investments
Loss allowances
Fair Cumul
Begin cumulatively
value ative
ning Interest Ending recognized in other
change in Cost fair amou accrual amount comprehensive
current value
nt income
period change152
Trust plans 918 487 91976 90050 1008 - 063
Note As at 30 Jun. 2021 there were no significant other debt investments.16 Long-term receivables
30 Jun. 2021 31 Dec. 2020
Range of
Gross Allowance Carrying Gross Allowance Carrying discount rate
amouont amount amouont amount
Finance lease 809720 - 809720 778889 - 778889 7.125%-
9. 975%
Of which: (943659) - (943659) (990529) - (990529)
unrealized
financing
income
809720 - 809720 778889 - 778889
17 Long-term equity investments
30 Jun. 2021 31 Dec. 2020
Gross Impairment Carrying Gross Impairment Carrying
amount allowance amount amount allowance amount
Associates (1) 24980671 1624 24979047 23941424 13622 23927802
Joint ventures (2) 612087 49503 562584 168737 49503 119234
25592758 51127 25541631 24110161 63125 24047036
As at 30 Jun. 2021 the Company has established impairment allowances for long-term equity investments in investees
with poor management and insolvent assets. Other than that there are no major restrictions on the realization of
investment and the remittance of return on investment for long-term equity investments.73
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates
Increase or decrease in current period
Increase/d Other
Increase d Investment Othe Other
ecrease in comprehe
ue to newl gains and r equ Declared cash increase
Beginning investmen nsive Impairment 30 Jun.Name of investee y acquired losses ity c dividends or s and
amount t in income allowance 2021
subsidiari recognized by hang profits decreas
current adjustmen
es equity method es es
period t
China Innovative Capital Management
1037627 - - (42867) - - - - - 994760
Limited
LG Electronics (Huizhou) Co. Ltd. 90381 - - 5014 - (12200) - - 83195
Shenzhen Qianhai Qihang Supply Chain
39561 - - (1615) - - - - - 37946
Management Co. Ltd.Shenzhen Jucai Supply Chain Technology
6668 - - 1407 - - - - - 8075
Co. Ltd.Shenzhen Tixiang Business Management
2465 - - 503 - - - - - 2968
Technology Co. Ltd.TCL Air Conditioner (Wuhan) Co. Ltd. 37834 - - (2207) - - - - 35627
TCL Finance (Hong Kong) Co. Limited 23124 - 83704 4677 - - - - 111505
Zhihui Xinyuan Commercial (Huizhou) Co.12110 - - (7765) - - - - - 4345
Ltd.Shenzhen Tianyi Hemeng Education Co.4719 - - (662) - - - - - 4057
Ltd.Urumqi TCL Equity Investment
226 - - 384 - - - - - 610
Management Co. Ltd.Hubei Changjiang Hezhi Equity Investment
1367292 - (4059) 197267 - - - - - 1560500
Fund Partnership (Limited Partnership)74
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Investme Other
Increase/d nt gains compr
Increase d Other
ecrease in and ehensi Other
ue to newl Declared cash Impairme increases
Beginning investmen losses ve equity 30 Jun.Name of investee y acquired dividends or nt allowa and
amount t in recogniz incom chang 2021
subsidiari profits nce decrease
current ed by e es
es s
period equity adjust
method ment
Xinjiang Dongpeng Weichuang Equity
Investment Partnership (Limited 850489 - (85000) 223386 (3) - (589345) - (22) 399505
Partnership)
Deqing Puhua Equity Investment Fund
- - (717) - - - - - 193954
Partnership (Limited Partnership) 194671
Xinjiang Dongpeng Heli Equity Investment
- - 25340 - - - - - 537199
Partnership (Limited Partnership) 511859
Wuxi TCL Aisikai Semiconductor Industry
Investment Fund Partnership (Limited - (992) 1735 - - (3687) - - 218754221698
Partnership)
Wuxi TCL Venture Capital Partnership
35638 - - (1) (1) - - - - 35636 (Limited Partnership)
Ningbo Meishan Bonded Port Qiyu
Investment Management Partnership 66373 - - (583) - - - - - 65790
(Limited Partnership)
Shanghai Gen Auspicious Venture Capital
- - 15292 (9) - (3805) - - 55562
Partnership (Limited Partnership) 44084
Nanjing Zijin A Dynamic Investment
21216 - - (6) (1) - - - - 21209
Partnership (Limited Partnership)75
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Increase/d Other
Increase d Investment Othe Other
ecrease in comprehe
ue to newl gains and r equ Declared cash increase
Beginning investmen nsive Impairment 30 Jun.Name of investee y acquired losses ity c dividends or s and
amount t in income allowance 2021
subsidiari recognized by hang profits decreas
current adjustmen
es equity method es es
period t
Huizhou Kaichuang Venture Investment
8709 - - (4) - - - - - 8705
Partnership (Limited Partnership)
Beijing A Dynamic Venture Capital Center
7365 - - (65) - - - - - 7300
(Limited Partnership)
Yixing Jiangnan Tianyuan Venture Capital
7800 - - 294 (2) - - - - 8092
Company (Limited Partnership)
Shenzhen Chuangdong New Industry
Investment Fund Enterprise (Limited 11436 - - (1) - - - - - 11435
Partnership)
Hubei Changjiang Hezhi Equity Investment
6107 - - (102) - - (2250) - - 3755
Fund Management Co. Ltd.Huizhou Kaimeng Angel Investment
2660 - - (14) - - - - - 2646
Partnership (Limited Partnership)
Ningbo Jiutian Matrix Investment
2660 - - (279) - - - - - 2381
Management Co. Ltd. (note)
Urumqi Qixinda Equity Investment
1611 - - 593 - - - - - 2204
Management Co. Ltd.Urumqi TCL Create Dynamic Equity
759 - - 2 - - - - - 761
Investment Management Co. Ltd.Beijing A Dynamic Investment Consulting
473 - - (3) - - - - - 470
Co. Ltd.76
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Increase/d Other
Increase d Investment Othe Other
ecrease in comprehe
ue to newl gains and r equ Declared cash increase
Beginning investmen nsive Impairment 30 Jun.Name of investee y acquired losses ity c dividends or s and
amount t in income allowance 2021
subsidiari recognized by hang profits decreas
current adjustmen
es equity method es es
period t
Shanghai Gen Auspicious Investment
509 - - (7) - - - - - 502
Management Co. Ltd.Nanjing A Dynamic Equity Investment Fund
282 - - 2 - - - - - 284
Management Co. Ltd.Wuxi TCL Medical Imaging Technology
40889 - - (3492) - - - - (3) 37394
Co. Ltd.Beijing WeMed Medical Equipment Co.4340 - (230) (813) - - - - (3297) -
Ltd.AGC New Electronic Display Glass
542770 - - 52200 - - - - - 594970
(Shenzhen) Co. Ltd.TCL Ventures Fund L.P. 54220 - - (148) - - - - 226 54298
Getech Ltd. 26147 - - (886) - - - - - 25261
Qingteng Intellectual Property Holding
- - 15721 15721
(Shenzhen) Co. Ltd.TCL Environmental Technology Co. Ltd. 98010 - 25811 7751 - - - - - 131572
Guangdong Innovative Lingyue Intelligent
Manufacturing and Information Technology
377553 - - (6092) - - - - - 371461
Industry Equity Investment Fund
Partnership (Limited Partnership)
Guangdong Utrust Emerging Industry
Equity Investment Fund Partnership 150677 (1779) 148898
(Limited77
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Increase
Increase/de Other
due to Investment gains Other Other
crease in Declared cash increases
Beginning newly and losses comprehensi equit Impairment a 30 Jun.Name of investee investment dividends or and
amount acquired recognized by ve income y cha llowance 2021
in current profits decrease
subsidiarie equity method adjustment nges
period s
s
Shenzhen Xinhuoyicheng Recreational and Sports
1514 - - (96) - - - - - 1418
Industry Co. Ltd.JOLED Incorporation 1192994 - - (113426) - - - - (88184) 991384
Sichuan Shengtian New Energy Development
457190 - - 12209 - - (4930) - - 464469
Co. Ltd.Yanyuan Fengguang New Energy Co. Ltd. 58418 - - 2595 - - - - - 61013
SunPower Systems International Limited 26367 - - - - - - - - 26367
Zhonghuan Aineng (Beijing) Technology Co.6067 - - 1167 - - - - -
Ltd. 7234
Jiangsu Huanxin Semiconductor Co. Ltd. 33849 - - - - - - - (33849) -
Inner Mongolia Zhongjing Science and
86275 - - 17983 - - - - -
Technology Research Institute Co. Ltd. 104258
Hunan Guoxin Semiconductor Technology Co.9969 - - (154) - - - - - 9815
Ltd.Maxeon Solar Technologies，Ltd. 1883629 - 219574 (100173) - 15121 - - - 2018151Xinjiang Xiexin New Energy Material
463779 - - 357114 - - - - -
Technology Co. Ltd. 820893
Ruihuan (Inner Mongolia) Solar Power Co. Ltd. 11768 - - (2209) - - - - - 9559
Tianjin Zhonghuan Haihe Intelligent
Manufacturing Fund Partnership (Limited 464614 - 55389 (6432) - - - - - 513571
Partnership)
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(1) Associates (continued)
Increase or decrease in current period
Increase d Increase/dec Investment Other
Other
ue to newl rease in gains and Other Declared cash Impairmen increase
Beginning comprehens 30 Jun.Name of investee y acquired investment losses equity dividends or t s and
amount ive income 2021
subsidiari in current recognized by changes profits allowance decreas
adjustment
es period equity method es
Tianjin Hope Equity Investment
413 - - - - - - - - 413
Fund Management Co. Ltd.Zhonghuan Feilang (Tianjin)
5126 - - (239) - - - - - 4887
Technology Co. Ltd.Tianjin Zhonghuan Tengliang
6909 - - - - - - - - 6909
Technology Co. Ltd.Ningbo Zhongxin Venture Capital
- - 40000 21 - - - - 40021
Partnership
Tianjin Huanxin
Technology&Development Co. - - 469800 (8998) - - - - (15746) 445056
Ltd.Inner Mongolia Shengou
Electromechanical Engineering - - 600 - - - - - 600
Co. Ltd.Others - (88082) 677257 (152039) - (43939) - (45384) 1365372213305909
23927802 - 716515 1318079 (152055) 15121 (660156) - (186259) 24979047
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(2) Joint ventures
Increase or decrease in current period
Increase
Increase d Other
/decreas Investment
ue to compre Declared Other
Beginni e in gains and Other Impairmen
newly hensive cash increases 30 Jun.Name of investee ng investm losses equity t
acquired income dividends or and 2021
amount ent in recognized by changes allowance
subsidiari adjustm profits decreases
current equity method
es ent
period
TCL Huizhou City Kai Enterprise
1308 - - (1) - - - - - 1307
Management Limited
Huizhou TCL Human Resources
2121 - - (175) - - - - - 1946
Service Co. Ltd.Zhangjiakou Qixin Equity Investment
115805 - (20122) (1481) - - - - - 94202
Fund Partnership
Huaxia CPV (Inner Mongolia) Power
- - - - - - - - -
Co. Ltd.Tianjin Huanyan Technology Co. Ltd. - (47000) (68) 192000 144932
TCL Microchip Technology
- - 335000 (1170) - - - - (13633) 320197
(Guangdong) Co. Ltd.119234 - 267878 (2895) - - - - 178367 562584
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
17 Long-term equity investments (continued)
(3) Impairment allowances for long-term equity investments
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021 Note
current current
period period
Pride Telecom Limited 1624 - - 1624 Note 1
Beijing WeMed Medical Equipment Co. Ltd. 11998 - (11998) -
Huaxia CPV (Inner Mongolia) Power Co. Ltd. 49503 - - 49503 Note 1
63125 - (11998) 51127
Note 1 Impairment allowances were established for the long-term investments in these investees at the recoverable amounts
because continuous operating loss occurred to these investees with poor management.18 Investments in other equity instruments
30 Jun. 2021 31 Dec. 2020
Equity instruments not held-for-trading 1100185 1333676
Reasons for
Amount of other Reasons designated as
other
comprehensive measured at fair value
Dividend Accumu Accum comprehensiv
income and whose changes
Item name income lated ulated e income
transferred to are included in other
recognized gains losses transferred to
retained comprehensive
retained
earnings income
earnings
Equity instruments Financial assets not h Sold in curr
3090 - (54428) 115871
not held-for-trading eld-for-trading ent period
19 Other non-current financial assets
30 Jun. 2021 31 Dec. 2020
Equity investments 1868405 2422328
Debt investments 589734 633267
2458139 3055595
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
20 Investment property
Buildings and
Land use rights Total
constructions
Gross amount:
1 Jan. 2021 1646742 195007 1841749
Increases
Increase in current period 3363 - 3363
Reclassified from fixed assets and 172328 - 172328
intangible assets
Reclassified from construction in 4110 - 4110
progress
Decreases
Decrease in current period - - -
Reclassified to fixed assets and intangible assets (1005478) (104012) (1109490)
30 Jun. 2021 821065 90995 912060
Accumulated depreciation and amortization
1 Jan. 2021 115212 10263 125475
Increases
Increase in current period 49300 1687 50987
Reclassified from fixed assets and intangible assets 2506 - 2506
Decreases
Decrease in current period - - -
Reclassified to fixed assets and (39483) (4748) (44231)
intangible assets
30 Jun. 2021 127535 7202 134737
Investment property net:
30 Jun. 2021 693530 83793 777323
1 Jan. 2021 1531530 184744 1716274
Impairment allowances:
1 Jan. 2021 52073 - 52073
Increases
Increase due to newly acquired
- - -
subsidiaries
Decreases
Reclassified to fixed assets and - - -
intangible assets
30 Jun. 2021 52073 52073
Investment property carrying amount:
30 Jun. 2021
641457 83793 725250
1 Jan. 2021 1479457 184744 1664201
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
21 Fixed assets
Buildin Office and Means
gs and Machinery electronic of transport Power Others Total
constru equipment equipment stations
Gross amount:
ctions
31 Dec. 2020 24344118 107045621 4236113 140658 2369816 9227 138145553
Change of accounting - (1570996) - - - - (1570996)
policy
1 Jan. 2021 24344118 105474625 4236113 140658 2369816 9227 136574557
Increases
Increase due to newly 5991686 17004318 562940 51211 - 10089 23620244
acquired subsidiaries
Purchase 8224 236904 145660 9452 8603 1236 410079
Reclassified from 1005478 - - - - - 1005478
investment property
Reclassified from 5518257 9287721 345710 13609 480 240 15166017
construction in progress
Decrease
Written down with (131150) (82569) - - - - (213719)
government grants
Decrease due to newly (45077) (663743) (70836) (308) - - (779964)
reduced subsidiaries
Reclassified to (172328) - - - - - (172328)
investment property
Other decreases (4228) (1569022) (57451) (8204) (18348) (43) (1657296)
Exchange adjustment 1392 (1378) (109) 1 - (44) (138)
30 Jun. 2021 36516372 129686856 5162027 206419 2360551 20705 173952930
Accumulated
depreciation:
31 Dec. 2020 3137624 38615003 1781623 89472 336269 5592 43965583
Change of accounting - (256690) - - - - (256690)
policy
1 Jan. 2021 3137624 38358313 1781623 89472 336269 5592 43708893
Increases
Increase due to newly 2122772 15745278 462511 43426 - 6744 18380731
acquired subsidiaries
Accrual 516854 6314567 208097 12461 45658 306 7097943
Reclassified from 39483 - - - - - 39483
investment property
Decreases
Written down with (42395) (134998) - - - - (177393)
government grants
Decrease due to newly (3336) (392348) (57734) (34) - - (453452)
reduced subsidiaries
Reclassified to (2506) - - - - (2506)
investment property
Other decreases (947) (603550) (27585) (6247) - (43) (638372)
Exchange adjustment 78 (360) (60) (6) - (15) (363)
30 Jun. 2021 5767627 59286902 2366852 139072 381927 12584 67954964
Fixed assets net:
30 Jun. 2021 30748745 70399954 2795175 67347 1978624 8121 105997966
1 Jan. 2021 21206494 67116312 2454490 51186 2033547 3635 92865664
31 Dec. 2020 21206494 68430618 2454490 51186 2033547 3635 94179970
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
21 Fixed assets (continued)
Buildings and Machinery Office and Means of Power Others Total
constructions equipment electronic transport stations
equipment
Impairment allowances:
1 Jan. 2021 771541 170409 404553 3565 - - 1350068
Increase due to newly - - - 81618 851 412 82881
acquired subsidiaries
Current accrual - 37892 7532 - - - 45424
Reclassified from - - - - - - -
investment property
Decrease due to newly (273) (606) - - - - (879)
reduced subsidiaries
Write-off in current period - - (186) - - - (186)
Exchange adjustment - - - - -
30 Jun. 2021 771268 289313 412750 3565 - 412 1477308
Fixed assets carrying
amount
30 Jun. 2021
29977477 70110641 2382425 63782 1978624 7709 104520658
1 Jan. 2021
20434953 66945903 2049937 47621 2033547 3635 91515596
31 Dec. 2020
20434953 68260209 2049937 47621 2033547 3635 92829902
Please refer to Item 84 of Note V for information on fixed asset mortgage. As at 31 30 Jun. 2021 the gross amount of the
fixed assets that were sufficiently depreciated and still in use was RMB26842773 thousand.Fixed assets with pending ownership certificates at the end of the current period:
Carrying amount Expected time of
obtaining ownership certificate
Buildings and constructions (Note) 7182588 Within 2022
Note As at 30 Jun. 2021 the fixed assets with pending ownership certificates of the Company are mainly the buildings and
constructions of CSOT’s t3 t4 and t6 manufacturing bases as well as the buildings and constructions of Inner Mongolia
Zhonghuan Solar Material Co. Ltd. Inner Mongolia Zhonghuan Xiexin Solar Material Co. Ltd. Inner Mongolia
Zhonghuan Advanced Semiconductor Material Co. Ltd. Jiangsu Zhonghuan Enterprise Management Co. Ltd. and
Tianjin Zhongke Huanhai Industrial Park Co. Ltd.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
22 Construction in progress
Increase due Interest Reclassified Investment a Of which: Cumulative capitalizat
Beginning to newly Increase in to fixed assets Other 30 Jun. Progres capitalized
Project name Budget s capitalized ion rate Funding source
amount acquired current period in current decreases 2021 s interest in
period % of budget
interest for current
subsidiaries current period period
t6 production line of Self-funded +
LCD panel 33149000
305237 - 494093 (609954) (4798) 184578 85% 99% 796952 - -
external-loan-funded
t7 production line of Self-funded +
LCD panel 35337000 9338643
- 7332969 (8215250) (34753) 8421609 60% 74% 278767 151647 4.12% external-loan-funded
t4 production line of 100 Self-funded +
LCD panel 27081000
10892755 - 5017585 (176930) - 15733410 100% 964569 124541 3.92%
% external-loan-funded
Huizhou modular Self-funded +
-
integration project 5930000 1638831 735910 (442924) (264002)
1667815 90% 86% 12988 - - external-loan-funded
Production line of 8-
12-inch semi-
conductor silicon 5707172 2027583 - 522868 (421156) (2775) 2126520 51% 51% - - - Self-funded
wafers for integrated
circuit
Industrialization phase
V of monocrystalline
silicon materials for
renewable solar power
batteries and 9125010 1417284 - 2187078 (1220370) - 2383992 72% 72% 35364 35364 4.35% Self-funded
monocrystalline silicon
wafers for ultra-thin
high-efficient solar
power batteries
Others N/A 5887978 105257 5767809 (4079433) (1018250) 6663362 N/A N/A N/A N/A N/A N/A
31508311 105257 22058313 (15166017) (1324578) 37181286
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
23 Right of use assets
Buildings and Means of Machinery Total
Gross amount: constructions transport equipment
1 Jan. 2021 542391 165 1570996 2113552
Increases:
Increase due to new 5078 1660 182 6920
subsidiary
Leased in 44195 - 238938 283133
Reduced subsidiary (12461) - - (12461)
Decrease due to contract - (167) - (167)
amendment
Other decreases - (248) (47995) (48243)
Exchange adjustment (566) (8) - (574)
30 Jun. 2021 578637 1402 1762121 2342160
Accumulated depreciation:
1 Jan. 2021 - - 256690 256690
Increases
Increase due to new 423 1100 116 1639
subsidiary
Accrual 45522 165 67047 112734
Increase due to - - - -
contract -
amendment
- - - -
Decreases - -
Change of accounting policy (1377) (1377)
Reduced subsidiary
Decrease due to contract - (140) - (140)
amendment
Other decreases - (248) (11366) (11614)
Exchange adjustment (27) - - (27)
30 Jun. 2021 44541 877 312487 357905
Right-of-use assets net
30 Jun. 2021 534096 525 1449634 1984255
1 Jan. 2021 542391 165 1314306 1856862
Impairment
allowances: - - - -
1 Jan. 2021
Increase - - - -
Accrual
Decrease - - - -
Lease expiration
Exchange adjustment - - - -
30 Jun. 2021 - - - -
Right-of-use assets carrying
amount 543041 525 1449634 1984255
30 Jun. 2021
1 Jan. 2021 542391 165 1314306 1856862
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
24 Intangible assets
Land use rights Non-patent technologies Others Total
/patents
Gross amount:
1 Jan. 2021 5788722 6206466 1106104 13101292
Increases
New subsidiary 628167 - 258383 886550
Purchase 845684 421702 44233 1311619
Reclassified from
104012 - - 104012
investment property
Reclassified from construction in
54404 - 60758 115162
progress
Reclassified from - 757202 -
development costs 757202
Decreases -
(46719)
Sale and disposal (42312) (510) (3897)
Reclassified to
- - - -
investment property
Reduced subsidiary
(8078) (1529) (68925) (78532)
Written down with
- - - -
government grants
Exchange adjustment (192) (25232) 45 (25379)
30 Jun. 2021 7370407 7358099 1396701 16125207
Accumulated amortization:
1 Jan. 2021 569351 1864170 535315 2968836
Increases
New subsidiary 36622 - 129384 166006
Accrual 97228 378889 78021 554138
Reclassified from 4748 - - 4748
investment property
Decreases - -
Sale and disposal (1808) (226) (65) (2099)
Reclassified to
- - - -
investment property
Reduced subsidiary (2924) (170) (65986) (69080)
Written down with government
(3595) - (490) (4085)
grants
Exchange adjustment - (1873) 18 (1855)
30 Jun. 2021 699622 2240790 676197 3616609
Intangible assets net：
30 Jun. 2021 6670785 5117309 720504 12508598
1 Jan. 2021 5219371 4342296 570789 10132456
Impairment allowances：
1 Jan. 2021 23562 32625 22224 78411
New subsidiary - - - -
Accrual - - - -
Write-off in current period - - - -
Exchange adjustment - (324) - (324)
30 Jun. 2021 23562 32301 22224 78087
Intangible assets carrying amount:
30 Jun. 2021 6647223 5085008 698280 12430511
1 Jan. 2021 5195809 4309671 548565 10054045
Please refer to Item 84 of Note V for information on collateralized intangible assets.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
Development costs25
Development costs are as follows：
30 Jun. 2021 31 Dec. 2020
Semi-conductor display 1722961 1383727
Semi-conductor photovoltaic and semi-conductor materials 800034 720268
2522995 2103995
Goodwill26
(1) Gross amount of goodwill
Decrease in Increase in current period
current period
Beginning Ending
Name of investee or item incurring goodwill Incurred in Increase due to amount Disposal and amount
business newly acquired
others
combination subsidiaries
TCL Medical Radiological Technology (Beijing) Note 1 28967 - - - 28967
Co. Ltd.Qingdao Blue Business Consulting Co. Ltd. Note 2 2452 - - - 2452
Tianjin Zhonghuan Electronics Group Co. Ltd. Note 3 6726130 - - - 6726130
Tianjin Huan’Ou Semiconductor Note 4 214683 - - - 214683
Material&Technology Co. Ltd.Moka International Limited Note 5 - 1727580 - - 1727580
Suzhou China Star Optoelectronics Technology Note 6 - 454644 - - 454644
Co. Ltd.6972232 2182224 - - 9154456
(2) Goodwill impairment allowance
Beginning Increase in current Decrease in current Ending amount
Name of investee amount period period
TCL Medical Radiological Technology (Beijing) Co. 28967 - - 28967
Ltd.Note The Company acquired in 2010 a 51.82% interest in TCL Medical Radiological Technology (Beijing) Co. Ltd. (hereinafter1
referred to as “TCL Medical Radiological Technology”) with a capital of RMB 52319 thousand. As such the difference
between the accumulated investment of the Company in TCL Medical Radiological Technology (corresponding to a 51.82%
interest) and the fair value of the identifiable net assets of TCL Medical Radiological Technology attributable to the Company
on the settlement date (equal to RMB 28967 thousand) was recorded in the Company’s goodwill. An impairment allowance
of RMB 28967 thousand had been established on this goodwill item for 2018.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
26 Goodwill (continued)
Note Highly Information Industry Co. Ltd. a subsidiary of the Company acquired in October 2016 a 60% interest in Qingdao
2 Blue Business Consulting Co. Ltd. (hereinafter referred to as “Blue Business Consulting”) with a capital of RMB 10000
thousand. As such the difference between the accumulated investment of Highly Information Industry Co. Ltd. in Blue
Business Consulting (corresponding to a 60% interest) and the fair value of the identifiable net assets of Blue Business
Consulting attributable to Highly Information Industry Co. Ltd. on the settlement date (equivalent to RMB 2452 thousand)
was recorded in the Company’s goodwill.Note The Company acquired on 1 October 2020 the 100% interest in Tianjin Zhonghuan Electronics Group Co. Ltd. (hereinafter
3 referred to as “Zhonghuan Electronics”) with a cash payment of RMB12500000 thousand. As from the date of acquisition
the Group has obtained the control of Zhonghuan Electronics and has thus included it into the consolidated financial
statements. As such the difference between the accumulated investment of the Company in Zhonghuan Electronics
(corresponding to the 100% interest) and the fair value of the identifiable net assets of Zhonghuan Electronics attributable to
the Company on the settlement date (equal to RMB6726130 thousand) was recorded in the Company’s goodwill.Note Tianjin Huan’Ou Semiconductor Material&Technology Co. Ltd. is a subsidiary of Zhonghuan Electronics which the
4 Company has acquired in a business combination not involving entities under common control.Note The Company acquired in April 2021 the 100% interest in Moka International Limited with a cash payment of RMB2800000
5 thousand. As from the date of acquisition the Group has obtained the control of Moka International Limited. As such the
difference between the accumulated investment of the Company in Moka International Limited (corresponding to the 100%
interest) and the fair value of the identifiable net assets of Moka International Limited attributable to the Company on the
settlement date (equal to RMB 1727580 thousand) was recorded in the Company’s goodwill.Note The Company acquired in April 2021 a 60% interest in Suzhou China Star Optoelectronics Technology Co. Ltd. (formerly6
known as “Samsung Suzhou LCD Co. Ltd.” with a cash payment of RMB4757727 thousand. The difference between the
accumulated investment of the Company in Suzhou China Star Optoelectronics Technology Co. Ltd. (corresponding to the
total 70% interest) and the fair value of the identifiable net assets of Suzhou China Star Optoelectronics Technology Co. Ltd.attributable to the Company on the settlement date (equal to RMB454644 thousand) was recorded in the Company’s goodwill.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
27 Long-term prepaid expense
Increase in Amortization
31 Dec. Change 1 Jan. New Disposal 30 Jan.current in current
of subsidi of 2021
2020 2021 period period
accountin ary subsidiar Others
g policy y
Improvement
expense on leased 1837100 (437301) 1399799 101226 - (100001) (10194) (22) 1390808
fixed assets
Others 699570 - 699570 100486 3308 (531043) (54327) (43343) 174651
2536670 (437301) 2099369 201712 3308 (631044) (64521) (43365) 1565459
28 Deferred income tax assets and deferred income tax liabilities
(1) Un-offset deferred income tax assets
30 Jun. 2021 31 Dec. 2020
Deductible Deferred income Deductible Deferred income
temporary tax assets temporary tax assets
difference difference
Deductible losses 5644754 931240 6894358 1123164
Asset impairment allowances 3008765 678875 863644 157705
Provisions 582063 104157 348755 63881
Changes in fair value 59438 10552 55115 9708
Others 1748632 370837 1236231 223630
11043652 2095661 9398103 1578088
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
28 Deferred income tax assets and deferred income tax liabilities (continued)
(2) Un-offset deferred income tax liabilities
30 Jun. 2021 31 Dec. 2020
Deductible Deferred income Deductible Deferred income
temporary tax liabilities temporary tax liabilities
difference difference
Accelerated depreciation of fixed assets 11508128 1871485 9964402 1632989
Increase in value of assets as
assessed in business 3259401 633410 1677938 330039
combination not involving
entities under common control
Changes in fair value 2490948 441918 1387815 339098
Government grants
252256 37838 120200 18030
Others
264754 39816 333004 66341
17775487 3024467 13483359 2386497
(3) Unrecognized deferred income tax assets
30 Jun. 2021 31 Dec. 2020
Deductible temporary differences 579579 450345
Deductible losses 3894326 2805343
4473905 3255688
(4) There were no deferred income tax assets or liabilities presented at the net amount after offsetting.
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
28 Deferred income tax assets and deferred income tax liabilities (continued)
(5) Deductible losses in respect of unrecognized deferred income tax assets will expire in the following years:
30 Jun. 2021 31 Dec. 2020
2021 178533 186872
2022 276375 278304
2023 494320 497214
2024 481369 487234
2025 459764 460523
2026 onwards 2003965 809291
3894326 2805343
29 Other non-current assets
30 Jun. 2021 31 Dec. 2020
Advance payment for equipment and land use rights (Note) 9300306 11725289
Advance payment for patents 246994 244462
Others 870791 563102
10418091 12532853
Note The Company reclassifies long-lived assets such as advance payment for equipment and land use rights
reflected in prepaid accounts to other non-current assets.92
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
30 Short-term borrowings
30 Jun. 2021 31 Dec. 2020
Unsecured borrowings 8476722 10983337
Borrowings secured by pledge 342347 1059306
Borrowings secured by collateral 192000 192000
Interest payable 11136 29071
9022205 12263714
As at 30 Jun. 2021 short-term borrowings secured by pledge were RMB342347 thousand (including amounts
translated from other currencies) (31 Dec. 2020: RMB1059306 thousand) which were secured by the pledge of held-
for-trading financial assets of RMB874123 thousand (including amounts translated from other currencies) (31 Dec.2020: RMB2111342 thousand). Short-term borrowings secured by collateral were RMB192000 thousand (including
amounts translated from other currencies) (31 Dec. 2020: RMB192000) which were secured by the collateral of
machinery equipment of RMB308910 thousand (including amounts translated from other currencies) (31 Dec. 2020:
RMB207407).As at 30 Jun. 2021 the Company does not have any short-term borrowings that have expired and have not been
repaid.31 Borrowings from central bank
As at 30 Jun. 2021 the balance of the borrowings of TCL Tech Finance Co. Ltd. a subsidiary of the
Company from the central bank was RMB1104750 thousand (31 Dec. 2020: RMB 469834 thousand).32 Customer deposits and deposits from banks and other financial institutions
30 Jun. 2021 31 Dec. 2020
Customer deposits and deposits from banks
and other financial institutions 2247362 2850139
Customer deposits and deposits from banks and other financial institutions are the deposits of related and non-
related enterprises absorbed by TCL Tech Finance Co. Ltd. a subsidiary of the Company within the business
scope approved by the regulatory authority.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
33 Held-for-trading financial liabilities
30 Jun. 2021 31 Dec. 2020
Financial liabilities at fair value
through profit or loss 1134251 527901
34 Derivative financial liabilities
30 Jun. 2021 31 Dec. 2020
Derivative financial liabilities 129382 384904
35 Notes payable
30 Jun. 2021 31 Dec. 2020
Bank acceptance notes 4425543 4324150
Trade acceptance notes 983281 401462
5408824 4725612
There is no amount payable to shareholders holding 5% or more voting shares in the Company in the account
balance.36 Accounts payable
30 Jun. 2021 31 Dec. 2020
Amounts due to suppliers 24863736 16468932
As at 30 Jun. 2021 there were no significant accounts payable with an age of over one year. There is no
amount payable to shareholders holding 5% or more voting shares in this account.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
37 Advances from customers
30 Jun. 2021 31 Dec. 2020
Advances from customers 41155 78597
The Company had no advances from customers of a large amount with an age of over one year.There is no advance from shareholders holding 5% or more voting shares in this account balance.38 Contract liabilities
30 Jun. 2021 31 Dec. 2020
Advances from customers 2635068 2004004
39 Financial assets sold under repurchase agreements
30 Jun. 2021 31 Dec. 2020
Financial assets sold under repurchase agreements - 50080
40 Employee benefits payable and long-term employee benefits payable
(1) Employee benefits payable
30 Jun. 2021 31 Dec. 2020
Short-term employee benefits payable 2578549 1828681
Defined contribution plans payable 40046 25394
Dismissal benefits payable - 2589
2618595 1856664
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
40 Employee benefits payable and long-term employee benefits payable (continued)
(1) Employee benefits payable (continued)
(a) Short-term employee benefits payable
Increase in Decrease in
1 Jan. 2021 current current 30 Jun. 2021
period period
Wages bonuses allowances and
1493952 4664149 (3806094) 2352007
subsidies
Employee services and benefits 20028 199099 (168219) 50896
Social insurance benefits 37127 153742 (140172) 50697
Of which: medical insurance 34566 142596 (128972) 48190
Employment injury insurance 1016 5475 (5329) 1162
Maternity insurance 1545 5671 (5871) 1345
Housing fund 36660 125161 (124885) 36936
Trade union funds and staff education
11498 45479 (24964) 32013
funds
Others 229416 17139 (190567) 55988
1828681 5204769 (4454901) 2578549
(b) Defined contribution plans
Increase in Decrease in
1 Jan. 2021 current current 30 Jun. 2021
period period
Basic pension insurance 24005 231470 (217095) 38380
Unemployment insurance 1389 7191 (6914) 1666
25394 238661 (224009) 40046
(2) Long-term employee benefits payable
30 Jun. 2021 31 Dec. 2020
Supplementary pension insurance (note) 27482 27858
Note This item is the supplementary pension insurance benefits payable to retired employees.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
41 Taxes and levies payable
30 Jun. 2021 31 Dec. 2020
VAT 148286 75769
Corporate income tax 1054653 471670
Individual income tax 58226 33518
City construction tax 26546 23919
Educational surcharge 19053 17105
Others 110952 48078
1417716 670059
Please refer to Note IV for the standards for provisions for taxes and the applicable tax rates.42 Other payables
30 Jun. 2021 31 Dec. 2020
Dividends payable 47240 1293
Other payables 19552468 14868140
19599708 14869433
(1) Dividends payable
30 Jun. 2021 31 Dec. 2020
Other non-controlling interests 47240 1293
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
42 Other payables (continued)
(2) Other payables
30 Jun. 2021 31 Dec. 2020
Payables for engineering equipment 12711845 9586852
Amounts due to external entities 5421288 4192022
Unpaid expenses 1274233 879629
Deposit and security deposit 145102 209637
19552468 14868140
There is no amount payable to shareholders holding 5% or more voting shares in this account.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
43 Current portion of non-current liabilities
Note V 30 Jun. 2021 1 Jan. 2021 31 Dec. 2020
Current portion of long-term
borrowings (note 1) 45 5029308 4360381 4360381
Current portion of bonds payable 7499441 8146771 8146771
Current portion of lease liabilities 47 380291 236574 -
Current portion of long-term 152316 143938 361110
payables
Current portion of interest payable 597186 561408 561408
13658542 13449072 13429670
Note 1 As at 30 Jun. 2021 the current portion of long-term borrowings included unsecured borrowings of RMB5029308
thousand (including amounts translated from other currencies). The interest rates of the current portion of long-term
borrowings ranged from 1.35% to 6.36% (2020: 1.35%-5.70%).44 Other current liabilities
30 Jun. 2021 31 Dec. 2020
After-sales service expense (note) 500179 197515
Others 195476 169456
695655 366971
Note After-sales service expense expected to occur within 1 year is reflected in current liabilities.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
45 Long-term borrowings
30 Jun. 2021 31 Dec. 2020
Borrowings secured by collateral 40839344 39413026
Borrowings secured by pledge 596300 445100
Unsecured borrowings 52257284 38091658
93692928 77949784
Of which: Current portion of long-term borrowings (5029308) (4360381)
88663620 73589403
The maturities of the Company’s long-term borrowings vary from 2021 to 2030.As at 30 Jun. 2021 long-term borrowings secured by collateral were RMB40839344 thousand (including amounts
translated from other currencies) (31 Dec. 2020: RMB39413026 thousand) which were secured by the collaterals
of land use rights buildings and constructions and machinery equipment of RMB 84299614 thousand (including
amounts translated from other currencies) (31 Dec. 2020: RMB83524779 thousand). Long-term borrowings
secured by pledge were RMB 596300 thousand (including amounts translated from other currencies) (31 Dec. 2020:
RMB445100 thousand) which were secured by the pledges such as rights of charge of RMB3 04321 thousand
(including amounts translated from other currencies) (31 Dec. 2020: RMB3 02447 thousand).The interest rates of the Company's long-term borrowing ranged from 1.35% to 6.36% in the current period (2020:
1.35%-5.70%).46 Bonds payable
30 Jun. 2021 31 Dec. 2020
Corporate bonds 12072366 13047234
MTN 5590763 4993539
17663129 18040773
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
46 Bonds payable (continued)
(1) Movements in bonds payable
Matur
Bond name Par value Issue date Issued Increase due to Beginning Issued in Accrued Amortization Repaid in Others Ending
ity amount newly acquired amount current interest as per of premium or current (note 1) amount
subsidiaries period par value discount period
17TCL01 1000000 2017-4-19 5 1000000 - 1000947 - - (180) - (1000767) -
17TCL02 3000000 2017-7-7 5 3000000 - 157000 - - - - - 157000
18TCL01 1000000 2018-6-6 5 1000000 - 998544 - - 297 (829981) - 168860
18TCL02 2000000 2018-8-20 5 2000000 - 1996841 - - 594 - - 1997435
19TCL01 1000000 2019-5-20 5 1000000 - 998056 - - 285 - - 998341
19TCL02 1000000 2019-7-23 5 1000000 - 998009 - - 277 - - 998286
19TCL03 2000000 2019-10-21 5 2000000 - 1995742 - - 554 - - 1996296
20TCL Tech MTN001 3000000 2020-3-27 3 3000000 - 2994641 - - 1189 - - 2995830
TCL Private Convertible 1 - 6000 6667 - - 584857
600000 2020-11-11 2 600000 - 572190
(Note 2)
TCL Private 2600000 2020-11-30 2 2600000 - 2380375 - 6500 54246 - - 2441121
Convertible 2 (Note3)
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
46 Bonds payable (continued)
(1) Movements in bonds payable (continued)
Bond name Par value Issue date Matu Issued Increase due to Beginning Issued in Accrued Amortization Repaid in Others Ending
amount newly acquired amount current interest as of premium rity current amount
subsidiaries period per par or discount period (note 1)
value
TCL TEC 1 1957483 2020-07-14 5 1957483 - 1949530 - - 3900 - (22474) 1930956
19 Zhonghuan 600000 2019-3-15 3 600000 - 600263 (369) - (599894) -
Semiconductor MTN001 - -
19 Zhonghuan
Semiconductor MTN002 600000 2019-8-23 3 600000 - 599871 - - (358) 599513
-
19 Zhonghuan 01
- 449 799213 800000 2020-6-22 3 800000 798764 -
21TCL-MTN001 - -
(High-growth debt) 2000000 2021-5-10 3 2000000 - - 2000000 - (4580) - - 1995420
23157483 23157483 - 18040773 2000000 12500 62971 (829981) (1623135) 17663129
Note 1 Others are the current portion of bonds payable reclassified to the current portion of non-current liabilities.TCL Private Convertible 1 is convertible corporate bonds with a maturity of two years. The stock convertible period starts from the first trading day 12 months after the completion of the offering
Note 2
and ends upon the maturity of the bonds. The interest rates for the first and second years are 2% and 1.5% respectively.TCL Private Convertible 2 is convertible corporate bonds with a maturity of two years. The stock convertible period starts from the first trading day six months after the completion of the offering
Note 3
and ends upon the maturity of the bonds. The interest rates for the first and second years are 0.5% and 0.1% respectively.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
47 Lease liabilities
Item 30 Jun. 2021 1 Jan. 2021
Total lease liabilities 1266806 1149125
Less: current portion of lease liabilities 380291 236574
Total 886515 912551
Descriptions of main leases:
① Inner Mongolia Zhonghuan Xiexin Solar Material Co. Ltd. a subsidiary of the Company signed a finance
lease contract with SPDB Financial Leasing Co. Ltd. in July 2020. According to the contract 60 fully
automatic single-crystal furnaces will be leased for a term of five years. Of the finance lease payables totalling
RMB125689 thousand RMB108000 thousand is the principal payable and RMB17689 thousand is the
unrecognised financing costs. The Company’s finance lease payables due within one year add up to
RMB19790 thousand and are presented as non-current liabilities due within one year. Its finance lease
payables net of those due within one year reach RMB72067 thousand and are presented as lease liabilities.② Inner Mongolia Zhonghuan Xiexin Solar Material Co. Ltd. a subsidiary of the Company signed a finance
lease contract with Tianjin Binhai New Area Technology Financial Leasing Co. Ltd. in August 2020.According to the contract 240 fully automatic single-crystal furnaces will be leased for a term of five years.Of the finance lease payables totalling RMB473277 thousand RMB432000 thousand is the principal
payable and RMB41277 thousand is the unrecognised financing costs. The Company’s finance lease
payables due within one year add up to RMB60177 thousand and are presented as non-current liabilities due
within one year. Its finance lease payables net of those due within one year reach RMB319600 thousand and
are presented as lease liabilities.③ Dushan Anju Photovoltaic Technology Co. Ltd. a subsidiary of the Company signed a finance lease
agreement with China Resources Leasing Co. Ltd. in December 2017. According to the agreement the
photovoltaic modules and EPC equipment included in the Dushan 40MW project will be leased for a term of
ten years. Of the finance lease payables totalling RMB299527 thousand RMB220000 thousand is the
principal payable RMB79527 thousand is the interest payable and RMB6600 thousand is the service charge.China Resources Leasing Co. Ltd. signed a finance transfer contract with Taiping & Sinopec Financial
Leasing Co. Ltd. on 20 June 2019 transferring the leased assets and all its rights and interests in Dushan
Anju Photovoltaic Technology Co. Ltd. including rentals and other payments to Taiping & Sinopec
Financial Leasing Co. Ltd. In June 2019 according to the contract and a newly signed agreement the long-
term account payable was re-recognised. In the end the long-term account payable amounts to RMB238106
thousand (excluding tax) and the unrecognised financing amount is RMB55226 thousand (excluding tax).The Company’s finance lease payables due within one year add up to RMB17924 thousand and are presented
as non-current liabilities due within one year. Its finance lease payables net of those due within one year reach
RMB124993 thousand and are presented as lease liabilities.④ Shangyi Shengyao New Energy Development Co. Ltd. a subsidiary of the Company signed a finance
lease contract with Industrial Bank Financial Leasing Co. Ltd. on 20 May 2021. According to the contract
the EPC equipment and photovoltaic modules included in the Shangyi 160MW project will be leased for a
term of 12 years. Of the finance lease payables totalling RMB321478 thousand (excluding tax) RMB238938
thousand (excluding tax) is the principal payable and RMB82540 thousand (excluding tax) is the interest
payable. In the finance lease contract the Company is a co-lessee. The Company’s finance lease payables
due within one year add up to RMB10389 thousand (excluding tax) and are presented as non-current
liabilities due within one year. Its finance lease payables net of those due within one year reach RMB230034
thousand (excluding tax) and are presented as lease liabilities.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
48 Long-term payables
30 Jun. 2021 1 Jan. 2021 31 Dec. 2020
Long-term payables 528172 429602 1256300
Technological development - 24000 24000
fund
528172 453602 1280300
49 Deferred income
Item Beginning Increase due to newly Increase in Decrease in Ending Source
amount acquired subsidiaries current period current period amount
Government grants 1506777 8782 1944413 (1873379) 1586593
Others 3090 - 12545 -12505 3130
1509867 8782 1956958 (1885884) 1589723
Items involving government grants:
Amount
Amount
Increase recorded Amount
New used to
due to ne in non- recorded in
1 Jan. grants in offset costs Other 30 Jun.wly acqu operating other income
2021 current and changes 2021
ired subs income in in current
period expenses in
idiaries current period
current
period
period
Government
grants
483641 4721 363715 (939) (71438) (9716) (416360) 353624
related to
assets
Government
grants
1023136 4061 1580698 (638) (698323) (325231) (350734) 1232969
related to
income
1506777 8782 1944413 (1577) (769761) (334947) (767094) 1586593
Note “Other changes” were deferred income offset by the carrying amounts of relevant assets.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
50 Share capital
1 Jan. 2021 Increase/decrease in current period 30 Jun. 2021
Amount Percentage New issues Others Subtotal Amount Percentage
1. Restricted shares
1370828 9.77% - (247254) (247254) 1123574 8.01%
2. Unrestricted shares 12659960 90.23% - 247254 247254 12907214 91.99%
3. Total shares 14030788 100% - - - 14030788 100%
As at 30 Jun. 2021 the Company’s total share capital was 14030788 thousand shares.Note
Except for Chairman of the Board Mr. Li Dongsheng who holds restricted shares subscribed for in a private placement none of the other incumbent directors supervisors
or senior management hold any restricted shares from a split-share structure reform or a private placement. The shares held by these personnel will stay partially frozen as
per the Rules on the Management of Shares Held by the Directors Supervisors and Senior Management Officers of Listed Companies and the Changes thereof. The
trading and information disclosure in relation to these shares shall be in strict compliance with the applicable laws regulations and rules.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
51 Other equity instruments
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current current period
period
Convertible bonds 230241 - - 230241
52 Capital reserves
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current current period
period
Share premium 5442385 205 (1307146) 4135444
Other capital reserves - - - -
5442385 205 (1307146) 4135444
53 Treasury stock
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current current period
period
Incentive shares 105492 400055 (118065) 387482
Repurchased shares 1807537 - - 1807537
1913029 400055 (118065) 2195019
The decrease in incentive shares in the current period was primarily attributed to the repurchase and retirement
of restricted shares.54 Surplus reserves
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current period current period
Statutory surplus reserves 2270022 - - 2270022
Discretionary surplus reserves 182870 - - 182870
2452892 - - 2452892
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.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
55 Specific reserve
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current period current period
Production safety reserve 211 456 - 667
56 General reserve
1 Jan. 2021 Increase in Decrease in 30 Jun. 2021
current period current period
General reserve 386 - (25) 361
As per the General Rules on Financial Affairs of Financial Enterprises and the Guide to the Implementation of the
General Rules on Financial Affairs of Financial Enterprises promulgated by the Ministry of Finance as well as the
Articles of Association of TCL Technology Group Corporation this subsidiary appropriated 1% of its net profit as
general reserve in the previous years.57 Retained earnings
H1 2021 H1 2020
Beginning retained earnings 14009494 11115150
Changes in accounting policies - -
Net profit for current period 6783885 1208066
Decrease in current period (1509694) (1279151)
Including: Appropriated as surplus reserves - -
Distributed to ordinary shareholders as (1625590) (1279155)
dividends
Others 115896 4
Ending retained earnings 19283685 11044065
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
58 Revenue and cost of sales
H1 2021 H1 2020
Revenue Cost of sales Revenue Cost of sales
Core business 73298779 57504287 29092257 26698363
Non-core business 999868 480685 240954 42530
74298647 57984972 29333211 26740893
(1) Core business by operating segment
Revenue Cost of sales Gross profit
H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020
Domestic 47092570 20814425 39665140 19272087 7427430 1542338
Overseas 26206209 8277832
17839147 7426276 8367062 851556
73298779 29092257 57504287 26698363 15794492 2393894
(2) The sales revenue from the top five customers combined was RMB23036823 thousand and RMB 11621499
thousand respectively for H1 2021 and H1 2020 accounting for 31.43% and 39.95% of the core business revenue.59 Interest income/expense and exchange gain
H1 2021 H1 2020
Interest income 74133 85692
Interest expense 12564 16278
Exchange gain/(loss) 964 689
The interest income interest expense and exchange gain/(loss) above occurred with the Company’s subsidiary TCL
Tech Finance Co. Ltd. which are presented separately herein as required for a financial enterprise.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
60 Taxes and levies
H1 2021 H1 2020
City maintenance and construction tax 58808 6053
Property tax 105646 43614
Stamp tax 65852 29668
Educational surcharge 42123 4312
Land use tax 14563 3280
Others 7318 357
294310 87284
The applicable tax and levy standards are detailed in Note IV.61 Selling expense
H1 2021 H1 2020
Employee salaries and benefits 275159 118172
After-sales service expense 337843 70833
Transport expense 13483 62420
Branding expense 30668 11858
Ad and sales promotion expense 23685 5178
Others 220338 56204
901176 324665
62 Administrative expense
H1 2021 H1 2020
Employee salaries and benefits 809470 239141
Depreciation and amortization expense 361440 159465
Expense for hiring intermediary organizations 443769 93429
Others 408689 277968
2023368 770003
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
63 R&D expense
H1 2021 H1 2020
Depreciation and amortization expense 1231865 828746
Material and lab expense 1335606 549480
Employee salaries and benefits 712165 275167
Outsourced development cost 53166 44397
Others 95395 184711
3428197 1882501
64 Finance costs
H1 2021 H1 2020
Interest expense 2160434 1132442
Interest income (187547) (250867)
Exchange loss/(gain) (201680) 27234
Others 477767213
1818983 916022
65 Other income
H1 2021 H1 2020
R&D subsidies 747743 939165
Over-deduction in taxable amount for VAT 7905 1307
VAT rebates on software 605 8120
Others 53781 3824
810034 952416
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
66 Return on investment
H1 2021 H1 2020
Proceeds from disposal of debt instruments at
390636 53588
fair value through profit or loss
Proceeds from disposal of equity instruments at
50360 21704
fair value through profit or loss
Proceeds from holding of equity instruments at
3708 22482
fair value through profit or loss
Proceeds from holding of debt instruments at
107165 111645
fair value through profit or loss
Proceeds from holding of equity instruments at
3090 1136
fair value through other comprehensive income
Share of net income of associates 1318079 871340
Share of net income of joint ventures (2895) 10163
Net income from disposal of long-term equity investments 849880 288383
Others 68182 (39776)
2788205 1340665
67 Gain on changes in fair value
H1 2021 H1 2020
Held-for-trading financial assets (20788) 106075
Derivative financial assets (327549) 16811
Held-for-trading financial liabilities (11045) (8860)
Derivative financial liabilities 45186 8
(314196) 114034
68 Credit impairment loss
H1 2021 H1 2020
Loss on uncollectible accounts receivable (21834) 4180
Loss on uncollectible other receivables 6171 (175)
Other financial assets 27108 (2881)
11445 1124
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
69 Asset impairment loss
H1 2021 H1 2020
Inventory valuation loss 624164 328603
Loss on impairments of fixed assets 45424 -
Loss on impairment of contract assets 1937 -
Loss on impairment of other assets 125994 79
797519 328682
70 Asset disposal income
H1 2021 H1 2020
Income/(loss) from disposal of fixed assets (2338) 1320
Income/(loss) from disposal of intangible assets 27166 -
Income from disposal of other non-current assets (501) -
24327 1320
71 Non-operating income
Amount through
H1 2021 H1 2020 current non-recurring
gains and losses
Gains on retired or damaged non- - 63 -
current assets
Government grants and others 267948 491876 267948
267948 491939 267948
72 Non-operating expense
Amount through
H1 2021 H1 2020 current non-recurring
gains and losses
Losses on retired or damaged non- 2394 139 2394
current assets
Others 9593 18662 9593
11987 18801 11987
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
73 Income tax expense
(1) Income tax expense
H1 2021 H1 2020
Current income tax expense 1119370 141710
Deferred income tax expense 294204 22877
1413574 164587
(2) Accounting profit and income tax adjustment process
H1 2021 H1 2020
Gross profit 10665541 1233711
Income tax expense calculated at statutory/applicable tax rate 2666385 308428
Impact of different tax rates applied to subsidiaries (7233) (123181)
Impact of adjusting income tax in previous periods (12685) 5403
Impact of non-taxable income (599904) (83807)
Impact of non-deductible costs expenses and losses 5418 3814
Impact of deductible losses on the use of previously unrecognized (201562) (2742)
deferred income tax assets
Impact of deductible temporary differences or deductible losses of
unrecognized deferred income tax assets in the current period 81396 95350
Others (518241) (38678)
Income tax expense 1413574 164587
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
74 Other comprehensive income
(1) Other comprehensive income items income tax effects and reclassifications to profit or loss
H1 2021 H1 2020
I. Items that cannot be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will be reclassified 1270 (6233)
to profit or loss under equity method
Amount attributable to the Company in the current period 1270 (6233)
Previous other comprehensive income reclassified to retained earnings for
current period
(185629) (7149)
2. Changes in fair value of other equity instruments
Current gain/(loss) (84931) (7145)
Previous other comprehensive income reclassified to retained earnings for
(115871) (4) current period
Income tax effects recorded in other comprehensive income 15173
II. Items that will be reclassified to profit or loss subsequently
1. Share of other comprehensive income of investees that will be reclassified
(153326) 65127 to profit or loss under equity method
Amount attributable to the Company in the current period (153326) 65127
Income tax effects recorded in other comprehensive income -
2. Changes in fair value of financial assets recorded in other comprehensive
487 (637) income
Current gain/(loss) 487 (637)
3. Cash flow hedges (4105) (76988)
Current gain/(loss) (782) (118895)
Previous other comprehensive income reclassified to profit for current
- (76988) period
Income tax effects recorded in other comprehensive income (3323)
4. Differences arising from translation of foreign currency financial 123814 (63060)
statements of overseas operations
5. Net income arising from disposal of overseas operations through profit or -
loss
(217489) (88940)
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
74 Other comprehensive income (continued)
(2) Changes in other comprehensive income items
Equity attributable to shareholders of the Company as the parent
Differences
Share of other Other
arising from
comprehensive Gain/loss on comprehen
Gain/(Loss) translation of Fair value Fair value
Accounting income of investees changes in sive Non- Total other
on changes in foreign changes of changes of
policy that will be fair value of income Subtotal controlling comprehensiv
cash flow currency- other equity other debt
Change reclassified to profit financial transferred interests e income
hedges denominated instruments instruments
or loss under equity assets to retained
financial
method earnings
statements
1 Jan. 2020 334950 230179 (350407) (34472) (733647) 19315 - - (534082) (38016) (572098)
Change in 2020 - 83771 (162) 28784 224208 51880 - 28 388509 19044 407553
31 Dec. 2020 334950 313950 (350569) (5688) (509439) 71195 - 28 (145573) (18972) (164545)
Change in H1 2021 - (152056) - (4389) 121308 (200802) 118 - (235821) 18332 (217489)
30 Jun. 2021 334950 161894 (350569) (10077) (388131) (129607) 118 28 (381394) (640) (382034)
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
75 Earnings per share
(1) Basic earnings per share
H1 2021 H1 2020
Net profit attributable to shareholders of the Company as the parent 6783885 1208066
Weighted average outstanding ordinary shares (in thousand shares) 13497433 12956324
Basic earnings per share (RMB yuan/share) 0.5026 0.0932
(2) Diluted earnings per share
H1 2021 H1 2020
Net profit attributable to shareholders of the Company as the parent 6783885 1208066
Diluted weighted average outstanding ordinary shares (in thousand shares) 14030788 13528439
Diluted earnings per share (RMB yuan/share) 0.4835 0.0893
76 Cash generated from other operating activities
Cash generated from other operating activities in the consolidated cash flow statement was RMB5032866 thousand
(H1 2020: RMB1133384 thousand) which primarily consisted of current payments received and government
grants.77 Cash used in other operating activities
Cash used in other operating activities in the consolidated cash flow statement was RMB3522074 thousand (H1
2020: RMB1707145 thousand) which primarily consisted of various expenses and current payments.78 Cash generated from other investing activities
Cash generated from other investing activities in the consolidated cash flow statement was RMB7079 thousand
(H1 2020: nil) which primarily consisted of net cash from obtained subsidiaries.79 Cash used in other investing activities
Cash used in other investing activities in the consolidated cash flow statement was RMB101676 thousand (H1
2020: RMB920 thousand) which primarily consisted of net cash from disposal of subsidiary.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
80 Cash generated from other financing activities
Cash generated from other financing activities in the consolidated cash flow statement was RMB249287 thousand
(H1 2020: RMB71503) which primarily consisted of amounts received from finance leases.81 Cash used in other financing activities
Cash used in other financing activities in the consolidated cash flow statement was RMB3060099 thousand (H1
2020: RMB612872 thousand) which was mainly cash paid to acquire non-controlling interests and to repurchase
shares.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
82 Supplementary information for the cash flow statement
(1) Reconciliation of net profit to net cash generated from/used in operating activities
H1 2021 H1 2020
Net profit 9251967 1069124
Add：Asset impairment allowance 808964 329806Depreciation of fixed assets 7148930 3491547
Depreciation of right-of-use assets 112734 -
Amortization of intangible assets 554138 301654
Amortization of long-term prepaid expense 631044 440611
Loss/(Income) from disposal of fixed assets intangible assets and other (24327) (1320)
long-lived assets
Loss on retired or damaged fixed assets 2394 76
Loss/(Gain) on changes in fair value 314196 (114034)
Financial Expenses 1970354 1175265
Return on Investment (2788205) (1340665)
Decrease/(Increase) in deferred income tax assets (517573) (19727)
Increase/(Decrease) in deferred income tax liabilities 637970 42461
Decrease/(Increase) in inventory (5690016) 136545
Decrease/(Increase) in operating receivables (9741065) (3060866)
Increase/(Decrease) in operating receivables 13615809 4335225
Others (2391599) 562108
Net cash generated from/used in operating activities 13895715 7347810
(2) Net cash payments for acquisition of subsidiaries in the current period
H1 2021 H1 2020
Payments of cash and cash equivalents made in current period due to 9768401 -
business combinations incurred in current period
Less: cash and cash equivalents held by subsidiary on acquisition date 5628896
- -
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 4139505 -
(3) Net cash proceeds from disposal of subsidiaries in the current period
Cash or cash equivalents received in current period due to disposal of 1412399 219596
subsidiary in current period
Less: cash and cash equivalents held by subsidiary on the date when the 900823 20293
Company’s control over the subsidiary ceased
Add: cash or cash equivalents received in current period due to - -
disposal of subsidiary in prior periods
Net cash proceeds from disposal of subsidiaries 511576 199303
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
82 Supplementary information for the cash flow statement
(4) Breakdown of cash and cash equivalents
30 Jun. 2021 31 Dec. 2020
1. Cash 24493712 18208417
Of which: Cash on hand 626 1189
Bank deposits available for payment on demand 23727289 17744850
Other monetary assets available for payment on demand 765797 462378
2. Cash equivalents - -
3. Cash and cash equivalents end of the period 24493712 18208417
83 Changes in cash and cash equivalents net
H1 2021 H1 2020
Ending cash and cash equivalents 24493712 21026155
Less: Beginning cash 18208417 17637743
Net increase in cash and cash equivalents 6285295 3388412
Analysis of ending cash and cash equivalents：
Ending monetary assets 27374279 21542628
Less: Ending non-cash equivalents (note) 2880567 516473
Ending cash and cash equivalents 24493712 21026155
Note The ending non-cash equivalents primarily included interest receivable on bank deposits the statutory reserve
deposits placed by TCL Tech Finance Co. Ltd. in the central bank and other monetary assets. For further
information see Note V item 1.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
84 Assets with restricted ownership or use rights
30 Jun. 2021 Reason for restriction
Statutory reserve deposits in
Monetary assets 519911
the central bank
Monetary assets 2360656 Security deposits
Notes receivable 168090 Pledge
Fixed assets 82445386 As collateral for loan
Intangible assets 2391402 As collateral for loan
Held-for-trading financial assets 874123 As pledge for loan
Construction in progress 56461 As collateral for loan
Right-of-use assets 58267 As collateral for lease
Accounts receivable 373708 Pledge
Contract assets 122745 Pledge89370749
85 Foreign currency monetary items
30 Jun. 2021
Foreign currency balance Conversion rate RMB balance
Monetary assets
Including: USD 1096209 6.4601 7081617
HKD 273331 0.8320 227411
EUR 7437 7.6914 57198
JPY 28708 0.0585 1679
CHF 117 7.0157 821
Accounts receivable
Including: USD 1251035 6.4601 8081810
HKD 1016125 0.8320 845416
EUR 0.2 7.6914 1
Receivables financing
Including: USD 43967 6.4601 284034
Accounts payable
Including: USD 359874 6.4601 2324823
HKD 1832923 0.8320 1524992
JPY 3166854 0.0585 185261
AUD 108 4.8567 526
EUR 0.04 7.6914 0.3
CHF 117 7.0157 821
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
V Notes to Consolidated Financial Statements (Continued)
85 Foreign currency monetary items (continued)
30 Jun. 2021
Foreign currency balance Conversion rate RMB balance
Other receivables
Including: USD 3786 6.4601 24458
HKD 91098 0.8320 75794
JPY 11970 0.0585 700
PLN 1640 1.7015 2790
INR 58019 0.0870 5048
KRW 102390 0.0057 585
EUR 9 7.6914 69
MXN 8512 0.3263 2777
Notes payable
Including: USD 28334 6.4601 183039
EUR 1929 7.6914 14833
JPY 1185272 0.0585 69338
Other payables
Including: USD 257114 6.4601 1660981
HKD 457153 0.8320 380351
JPY 26820263 0.0585 1568985
INR 1226971 0.0870 106746
PLN 155 1.7015 264
KRW 619 0.0057 4
MXN 11778 0.3263 3843
EUR 12 7.6914 89
Short-term borrowings
Including: USD 226996 6.4601 1466417
Long-term borrowings
Including: USD 2008420 6.4601 12974594
EUR 142000 7.6914 1092179
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VI Changes to Consolidation Scope
1 Newly consolidated entities for current period
Name of investee Consolidated Reason for change Registered capital The
period Company’s
interest
Shenzhen Huatuo Trade Technology Co. Ltd. Jan.-Jun. 2021 Newly RMB10000000 100.00%
incorporated
Xiamen Xinying Display Technology Co. Jan.-Jun. 2021 Newly RMB300000000 55.00%
Ltd. incorporated
Shaanxi Xiaoyi E-commerce Service Co. Feb.-Jun. 2021 Newly RMB1000000 60.00%
Ltd. incorporated
Combination not
Shaanxi Runhuan Tianyu Technology Co. Feb.-Jun. 2021 under common RMB65800000 100.00%
Ltd. control
Highly (Tianjin) Technology Co. Ltd. Mar.-Jun. 2021 Newly RMB50000000 100.00%
incorporated
Zhonghuan Advanced Semiconductor Feb.-Jun. 2021 Newly RMB40000000 100.00%
(Shanghai) Co. Ltd. incorporated
Ningxia Zhonghuan Solar Material Co. Ltd. Mar.-Jun. 2021 Newly RMB100000000 100.00%
incorporated
Suzhou China Star Optoelectronics
Combination not
Technology Co. Ltd. Apr.-Jun. 2021 R MB6260405000 70%
under common control
Suzhou China Star Optoelectronics
Combination not RMB1535850989 100.00%
Display Co. Ltd. Apr.-Jun. 2021
under common control
Combination not
Moka International Limited and its subsidiaries Apr.-Jun. 2021
USD1
under common control 100.00%
Huizhou Shengyao New Energy
Technology Co. Ltd. Mar.-Jun. 2021 Newly incorporated RMB1000000 100.00%
Inner Mongolia Huanya Hotel
Management Co. Ltd. Apr.-Jun. 2021 Newly incorporated RMB500000 100.00%
Huludao Xincheng New Energy
Combination not
Technology Co. Ltd. Jun. 2021 RMB51200000 100.00%
under common control
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
Note Business combination not involving entities under common control incurred in the current period
(1) Acquisition of equity interests in Suzhou China Star Optoelectronics Technology Co. Ltd.
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired in April 2021 (the date of acquisition) a 60% interest in Suzhou China Star Optoelectronics
Technology Co. Ltd. (formerly known as “Samsung Suzhou LCD Co. Ltd.” with a cash payment of RMB4757727
thousand. At the date of acquisition the Group held a total 70% interest in Suzhou China Star Optoelectronics
Technology Co. Ltd. which was included in the consolidated financial statements. This subsidiary is primarily
engaged in semiconductor display and materials.Cash consideration 4757727
Fair value of previous euity-holdings at acquisition date 804238
Less: Share of fair value of identifiable net assets acquired 5107321
Goodwill 454644
② The assets and liabilities as at the acquisition date are as follows：
Fair value at Carrying value at Increase in
acquisition date acquisition date valuation
Current assets 3971903 3969241 2662
Non-current assets 4634564 3689880 944684
Current liabilities 1069818 1069818 -
Less: non-controlling interests - - -
Net assets acquired 7296173 6585664 710509
③ Assets evaluated as appreciated assets were mainly buildings and constructions and intangible assets-land use rights. The
assessment methods for the above assets are as follows:
a Buildings are mainly appraised by the replacement method: According to construction project materials and
settlement data the full replacement value of a building (structure) is calculated based the project volume of the
building taking into account the current quota standard market price level stipulated construction fees and lending
rate and the newness rate is determined comprehensively based on the service life of the building and the on-site
survey of the building before the net appraisal value of the building is calculated;
b The methods for land use right appraisal include the market approach and the method of benchmark land price
coefficient modification: The market approach is a method used to estimate the price of a piece of land at the time
of appraisal by comparing the land being valued with similar instances of land that has been traded recently
according to the principle of substitution and making adjustments for the differences between them such as
transaction situation time region and individual factors based on the known prices of the latter. The idea behind
the method of benchmark land price coefficient modification is that the regional and other conditions of the land
being valued are compared with the average conditions of the region in which it is located according to the principle
of substitution using appraisal results such as the urban benchmark land price and the benchmark land price
modification coefficient table and then corresponding modification coefficients are selected from the modification
coefficient table to modify the benchmark land price so as to determine the price of the land being valued on the
valuation date.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
(2) Acquisition of 100% equity interests in Suzhou China Star Optoelectronics Display Co. Ltd.
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired in April 2021 (the date of acquisition) the 100% equity interests in Suzhou China Star
Optoelectronics Display Co. Ltd. (formerly known as “Samsung Display Suzhou Co. Ltd.” with a cash payment
of RMB2210673 thousand. At the date of acquisition the Group obtained control of Suzhou China Star
Optoelectronics Display Co. Ltd. which was included in the consolidated financial statements. This subsidiary is
primarily engaged in semiconductor display and materials.Cash consideration 2210673
Less: Share of fair value of identifiable net assets acquired 2250973
Goodwill (40300)
② The assets and liabilities as at the acquisition date are as follows：
Fair value at Carrying value at Increase in
acquisition date acquisition date valuation
Current assets 1425877 1424467 1410
Non-current assets 1222641 1012405 210236
Current liabilities 341207 341207 -
Less: non-controlling interests - - -
Net assets acquired 2250973 2092238 158735
③ Assets evaluated as appreciated assets were mainly intangible assets-land use rights. The assessment methods are as
follows:
a The methods for land use right appraisal include the market approach and the method of benchmark land price
coefficient modification: The market approach is a method used to estimate the price of a piece of land at the time
of appraisal by comparing the land being valued with similar instances of land that has been traded recently
according to the principle of substitution and making adjustments for the differences between them such as
transaction situation time region and individual factors based on the known prices of the latter. The idea behind
the method of benchmark land price coefficient modification is that the regional and other conditions of the land
being valued are compared with the average conditions of the region in which it is located according to the principle
of substitution using appraisal results such as the urban benchmark land price and the benchmark land price
modification coefficient table and then corresponding modification coefficients are selected from the modification
coefficient table to modify the benchmark land price so as to determine the price of the land being valued on the
valuation date.
(3) Acquisition of 100% equity interests in Moka International Limited
① The cost of acquisition and goodwill were recognized as follows:
The Group acquired in April 2021 (the date of acquisition) the 100% equity interests in Moka International Limited
with a cash payment of RMB2800000 thousand. At the date of acquisition the Group obtained control of Moka
International Limited which was included in the consolidated financial statements. Based on the relevant
performance commitments the fair value of a contingent consideration was expectedly RMB181220 thousand. This
subsidiary primarily processes intelligent terminals.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VI Changes to Consolidation Scope (Continued)
1 Newly consolidated entities for current period (continued)
Cash consideration 2800000
Fair value of contigent consideration 181220
Less: Share of fair value of identifiable net assets acquired 1253640
Goodwill 1727580
② The assets and liabilities as at the acquisition date are as follows：
Fair value at Carrying value at Increase in
acquisition date Acquisition date valuation
Current assets 6906681 6906681 -
Non-current assets 515635 217038 298597
Current liabilities 5919055 5919055 -
Less: non-controlling interests - - -
Net assets acquired 1253640 1029250 224390
Assets evaluated as appreciated assets were mainly buildings and constructions machinery equipment electronic equipment
and intangible assets (including the right to use land as well as technological assets like patents know-how software copyrights).The assessment methods for the above assets are as follows:
a The primary assessment methods for buildings and constructions are the market comparison approach the income capitalization
approach and the replacement cost approach. In terms of the market comparison approach the subject property is compared
with similar real estate transaction cases that have happened recently or will happen soon transaction conditions time price
formation regional factors (external conditions of the real estate) and individual factors (own conditions of the real estate). The
reasonable market price most possible for the subject property is calculated after necessary correction of the known prices of
real estate transaction cases that have happened recently or will happen soon. With respect to the income capitalization approach
first the future normal net earnings of the subject property are estimated when the value of the subject property is calculated.Then a suitable capitalization rate is selected and discounted to the valuation date for summation to estimate the value of the
subject property. In regard to the replacement cost approach the basic formula is: Full replacement value of the building x
newness rate = value of the subject property.b Machinery and equipment are valued mainly by the replacement method based on market prices combined with the
characteristics of the machinery and equipment being valued and the information collected;
c The full replacement value of electronic equipment is determined based on its tax-exclusive purchase prices according to local
market information and recent market price data such as those provided by Zhongguancun Online;
d The main assessment methods for the right to use land are the market comparison approach and the integrated evaluation of the
housing and land of the main building. For the market comparison approach the land to be evaluated and similar cases of land
transactions that have occurred recently are compared in line with the substitution principle when the price of the land to be
evaluated is calculated. Then the price of the land to be evaluated on the valuation date is calculated after the known price of
the latter is corrected by reference with the transaction situation time region and individual factors of the land. Specifically the
land ownership valuation of TTE Electronics India Private Limited is presented at book value; the Mexican factory land
ownership valuation of TCL Moka. S. de R.L. de C.V. has been reflected in the valuation of the buildings as the ownership has
been valued based on the market value determined by the integrated evaluation of housing and land;
e The primary assessment method for technological assets like patents know-how software copyrights is the income approach.For this method the expected future earnings of such technological assets are calculated and discounted to the present value at
a suitable discount rate. Then the value of such technological assets is calculated by summation.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VI Changes to Consolidation Scope (Continued)
2 Deconsolidated entities for current period
Name of investee Time of deconsolidation Reason
Tianjin Huanyan Technology Co. Ltd. Jan. 2021 Transferred
TCL Communication Technology (HK) Limited Mar. 2021 De-registered
Tianjin Huan’Ou International New Energy Technology Mar. 2021 De-registered
Co. Ltd.Tianjin Zhonghuan Xinyu Technology Co. Ltd. Mar. 2021 Transferred
Kangbao Shenghui New Energy Co. Ltd. Apr. 2021 De-registered
Winshero Investment Limited May 2021 De-registered
Tianjin Xietong Real Estate Development Co. Ltd. May 2021 De-registered
TCL International Distribution (HK) Limited Jun. 2021 De-registered
TCL Financial Holding Group (Guangzhou) Co. Ltd. Jun. 2021 Transferred
and its subsidiaries
Tianjin Huanxin Technology&Development Co. Ltd. Jun. 2021 Capital increase
and its subsidiaries by non-
controlling
interests
3 Subsidiaries disposed in current period
TCL Financial
Tianjin Tianjin Zhonghuan Tianjin Huanxin Holding Group
Name of subsidiary Huanyan Xinyu Technology Technology& (Guangzhou)
Technology Co. Ltd. Development Co. Ltd. Co. Ltd. and its
Co. Ltd. and its subsidiaries subsidiaries
Price for equity interest 93845 100669 - 2572020
disposal
% equity interest disposed 50% 100% 55% 100%
Way of disposal Transferred Transferred Increase in Transferred
non-controlling interests
Time of loss of control Jan. 2021 Mar. 2021 31 May 2021 Jun. 2020
Rights &
Determination basis for Rights & Rights & obligations all Rights &
obligations obligations all obligations all
time of loss of control
all transferred
transferred transferred
transferred
Difference between the
disposal price and the
Company’s share of the
subsidiary’s net assets in the 12536 2900 22475 10539
consolidated financial
statements relevant to the
disposed equity interest
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities
1 Interests in subsidiaries
(1) Principal subsidiaries
Company’s interest How
Principal
Place of Nature of subsidiary
Name of investee place of
registration business Direct Indirect was
business
obtained
TCL China Star Optoelectronics Technology Manufacturin
Shenzhen Shenzhen 83.02% - Incorporated
Co. Ltd. g and sales
Shenzhen China Star Optoelectronics Manufacturin
Shenzhen Shenzhen - 54.31% Incorporated
Semiconductor Display Technology Co. Ltd. g and sales
Guangzhou China Ray Optoelectronic Materials Guangzho Research and
Guangzhou - 100% Incorporated
Co. Ltd. u development
Wuhan China Star Optoelectronics Technology Manufacturin
Wuhan Wuhan 39.95% 49.09% Incorporated
Co. Ltd. g and sales
Wuhan China Star Optoelectronics Manufacturin
Wuhan Wuhan - 57.14% Incorporated
Semiconductor Display Technology Co. Ltd. g and sales
Business
combination
Manufacturin
Shenzhen CPT Display Technology Co. Ltd. Shenzhen Shenzhen - 100% not under
g and sales
common
control
China Star Optoelectronics International (HK) Hong
Sales Hong Kong - 100% Incorporated
Limited Kong
Business
China Display Optoelectronics Technology combination Investment
Bermuda Bermuda - 64.21% not under
Holdings Limited holding
common
control
China Display Optoelectronics Technology Manufacturin
Huizhou Huizhou - 100% Incorporated
(Huizhou) Co. Ltd. g and sales
Wuhan China Display Optoelectronics Manufacturin
Wuhan Wuhan - 100% Incorporated
Technology Co. Ltd. g and sales
Business
Suzhou China Star Optoelectronics Technology combination Manufacturin
Suzhou Suzhou - 70% not under
Co. Ltd. g and sales
common
control
Business
Suzhou China Star Optoelectronics Display Co. combination Manufacturin
Suzhou Suzhou - 100% not under
Ltd. g and sales
common
control
Beijing HAWK Cloud Information Technology Internet
Beijing Beijing 100% - Incorporated
Co. Ltd. service
TCL Culture Media (Shenzhen) Co. Ltd. Shenzhen Ad planning Shenzhen 100% - Incorporated
Product
Highly Information Industry Co. Ltd. Beijing Beijing 66.46% - Incorporated
distribution
Beijing Sunpiestore Technology Co. Ltd. Beijing Sales Beijing - 60.00% Incorporated
Beijing Lingyun Data Technology Co. Ltd. Beijing Sales Beijing - 60.00% Incorporated
TCL Tech Finance Co. Ltd. Huizhou Financial Huizhou 82.00% 18.00% Incorporated
Investment
Xinjiang TCL Equity Investment Ltd. Xinjiang Shenzhen 100% - Incorporated
business
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (continued)
(1) Principal subsidiaries (continued)
Company’s interest How
Place of Nature of Principal place
Name of investee subsidiary
registration business of business Direct Indirect was obtained
Investment
Ningbo TCL Equity Investment Ltd. Ningbo Shenzhen 100% - Incorporated
business
Property
TCL Technology Park (Huizhou) Co. Ltd. Huizhou Huizhou - 100% Incorporated
management
Research and
TCL Research America Inc. U.S. U.S. - 100% Incorporated
development
TCL Industrial Technology Research Institute (Hong Research and
Hong Kong Hong Kong - 100% Incorporated
Kong) Limited development
Investment
TCL Technology Inverstment Limited Hong Kong Hong Kong 100% - Incorporated
business
Business
combination
Manufacturing
Tianjin Zhonghuan Semiconductor Co. Ltd. Tianjin Tianjin 2.57% 27.23% not under
& sales
common
control
Business
combination
Manufacturing
Tianjin Printronics Circuit Corporation Tianjin Tianjin - 29.50% not under
& sales
common
control
Business
combination
Tianjin Huan’Ou Semiconductor Manufacturing
Tianjin Tianjin - 100% not under
Material&Technology Co. Ltd. & sales
common
control
Business
combination
Manufacturing
Wuxi Zhonghuan Applied Materials Co. Ltd. Wuxi Wuxi - 81.48% not under
& sales
common
control
Business
combination
Manufacturing
Tianjin Huanzhi New Energy Technology Co. Ltd. Tianjin Tianjin - 62.00% not under
& sales
common
control
Business
combination
Inner Manufacturing Inner
Inner Mongolia Zhonghuan Solar Material Co. Ltd. - 100% not under
Mongolia & sales Mongolia
common
control
Business
combination
TianJin Zhonghuan Advanced Material&Technology Manufacturing
Tianjin Tianjin - 60.00% not under
Co. Ltd. & sales
common
control
Business
combination
Manufacturing
Huansheng Solar (Jiangsu) Co. Ltd. Wuxi Wuxi - 77.00% not under
& sales
common
control
Business
Tianjin Huanou International Silicon Material Co. combination Procurement &
Tianjin Tianjin - 100% not under
Ltd. sales
common
control
Business
combination
Zhonghuan Hong Kong Holding Limited Hong Kong Sales Hong Kong - 100% not under
common
control
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (continued)
(1) Principal subsidiaries (continued)
Company’s interest How Place of Nature of Principal place
Name of investee subsidiary
registration business of business Direct Indirect was obtained
Business
combination
Procurement &
Tianjin Huanrui Electronic Technology Co. Ltd. Tianjin Tianjin - 100% not under
sales
common
control
Business
Inner Mongolia Zhonghuan Xiexin Solar Material combination Inner Manufacturing Inner
- 59.32% not under
Co. Ltd. Mongolia & sales Mongolia
common
control
Business
Inner Mongolia Zhonghuan Advanced Semiconductor combination Inner Manufacturing Inner
- 60.00% not under
Material Co. Ltd. Mongolia & sales Mongolia
common
control
Business
Zhonghuan Advanced Semiconductor Materials Co. combination Manufacturing
Wuxi Wuxi - 60.00% not under
Ltd. & sales
common
control
Business
combination
Investment
Moka International Limited BVI BVI 100.00% not under
holding
common
control
Business
combination
Manufacturing
Moka Technology (Guangdong) Co. Ltd. Huizhou Huizhou 100.00% not under
& sales
common
control
(2) Subsidiaries with substantial non-controlling interests
Current period Current period
Non- Ending equity
Profit or loss Dividends distributed
Name of subsidiary controlling attributable to non-
attributable to non- to non-controlling
interests controlling interests
controlling interests interests
TCL China Star
16.98% 1046746 53965 46342270
Optoelectronics Technology Co. Ltd.Tianjin Zhonghuan Semiconductor
70.20% 1450679 139141 23739097
Co. Ltd. (Note)
Highly Information Industry Co. Ltd. 33.54% 39687 45889 435326
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities (Continued)
1 Interests in subsidiaries (continued)
(2) Subsidiaries with substantial non-controlling interests (continued)
The key financial information of the above subsidiaries is as follows:
30 Jun. 2021 31 Dec. 2020
Non-
Current Non-current Current Non-current Total Current Non-curren Current Total
Total assets Total assets current
assets assets liabilities liabilities liabilities assets t assets liabilities liabilities
liabilities
TCL China Star
Optoelectronics 70848252 131567052 202415304 52305465 64198415 116503880 57189005 117985042 175174047 55328869 55005109 110333978
Technology Co. Ltd.Tianjin Zhonghuan
Semiconductor Co. 18337649 47701160 66038809 17860592 18422443 36283035 16085100 42634584 58719684 17329888 13308403 30638291
Ltd.Highly Information
5269995 107528 5377523 4062638 131201 4193839 4771001 67485 4838486 3653818 113762 3767580
Industry Co. Ltd.H1 2021 H1 2020
Total Net cash generate Total Net cash generate
Revenue Net profit comprehensive from/used in Revenue Net profit comprehensive from/used in
income operating activities income operating activities
TCL China Star
Optoelectronics 38841597 6276842 6268999 14481000 19512205 (139252) (210542) 6728060
Technology Co. Ltd.Tianjin Zhonghuan
Semiconductor Co. 17644419 1886227 1886227 2125294 - - - -
Ltd.Highly Information
14450787 125103 125103 (437244) 9126806 100311 100311 (529200)
Industry Co. Ltd.Note: Tianjin Zhonghuan Semiconductor Co. Ltd. has been included in the consolidated financial statements since 1 Oct. 2020. Therefore its profits or losses in H1 2020 were not consolidated.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates
(1) Basic information about principal joint ventures and associates
Principal
The Company’s
place of Strategic to the interest
Name of investee business Nature of business Group’s activities or
/place of not Direct Indirect
registration
Associate
R&D production &
Eastern sale of
polycrystalline
Section
silicon &
Horizontal
monocrystalline
Road No.4
silicon; PV
Hongshaquan
engineering
North
consulting &
Xinjiang Xiexin New Energy Material Industrial project
Yes - 27%
Technology Co. Ltd. (note) Zone development; self-
Zhundong operation and
Economic & agency-based
Technology operation of
Development import&export of
Zone Changji relevant goods and
Prefecture technologies
Xinjiang (except for those
not allowed)
( 2) Key financial information of major associates
30 Jun. 2021 31 Dec. 2020
Xinjiang Xiexin New Energy Material Xinjiang Xiexin New Energy Material
Technology Co. Ltd.Technology Co. Ltd.Total assets 9218330 8711309
Total liabilities 6164703 6990937
Non-controlling interests N/A N/A
Equity attributable to shareholders of
3053627 1720373
the Company as the parent
Share of equity in proportion to the
824479 464501
Company’s interest
Carrying amount of investment in
820892 463779
associate
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VII Interests in Other Entities (Continued)
2 Interests in joint ventures and associates (continued)
(2) Key financial information of major associates (continued)
H1 2021 H1 2020
Xinjiang Xiexin New Energy Material Xinjiang Xiexin New Energy Material
Technology Co. Ltd. Technology Co. Ltd.Revenue 2905071 1081209
Net profit 1322643 11709
Dividends from associate to the Group in current - -
period
Note: Other major associate is not presented herein for being listed company with financial statements pending disclosure.
(3) Financial information of other joint ventures and associates combined respectively
H1 2021 H1 2020
Joint ventures:
Aggregated carrying amount of investments 562584 54008
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) (2895) 10163
Other comprehensive income (note) - -
Total comprehensive income (2895) 10163
Associates:
Aggregated carrying amount of investments 24158154 7338987
Aggregate of following items calculated in
proportion to the Company’s interest
Net profit (note) 960965 260230
Other comprehensive income (note) (152055) (5824)
Total comprehensive income 808910 254406
Note The net profit and other comprehensive income have taken into account the impacts of both the fair value of the
： identifiable assets and liabilities upon the acquisition of investment and accounting policies unifying.
(4) The Company had no significant joint ventures in the Reporting Period.
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VIII Risks Related to Financial Instruments
The purpose of the Company’s risk management is to achieve a right balance between the risk and the
benefit and maximally reduce the adverse impact of financial risks on the Company’s financial
performance. Based on such purpose the Company has established various risk management policies to
recognize and analyze possible risks to be encountered by the Company set an appropriate risk
acceptable level and designed corresponding internal control procedures so as to control the Company’s
risk level. In addition the Company will regularly review these risk management policies and relevant
internal control system in order to adapt to the market or handle various changes in the Company’s
operating activities. Meanwhile the Company’s internal audit department will also regularly or
randomly check whether the implementation of internal control system conforms to relevant risk
management policies. In fact the Company has applied proper diversified investment and business
portfolio to disperse various financial instrument risks and worked out corresponding risk management
policies to reduce the risk of concentrating on one single industry specific region or specific counterpart.Main risks caused by the Company’s financial instruments include the credit risk the liquidity risk and
the market risk (including the foreign exchange risk and the interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss caused by any party of financial instruments to another
party due to the failure in fulfilling performance obligations. The Group controls the credit risk based on
the specific group classification and credit risk mainly results from bank deposit due from central bank
bills receivable account receivable issued loan and monies advanced and other receivables.The Group’s bank deposits and due from central bank are mainly deposited in stated-owned banks and
other large and medium-sized listed banks. The Group considers no significant credit risk existed and no
significant loss will be caused by the counterpart’s breach of contract.For notes receivable accounts receivable loans and advances to customers and other receivables the
Group has established relevant policies to control the credit risk exposure and will evaluate the client’s
credit qualification and determine corresponding credit period based on the client’s financial status the
possibility of obtaining guarantees from the third party relevant credit records and other factors (like the
current market situation). In the meantime the Group will regularly monitor the client’s credit records.For any client with unfavorable credit records the Group will issue written reminders shorten the credit
period or cancel the credit period so as to keep the Group’s overall credit risk controllable.As at 30 Jun. 2021 no significant guarantee or other credit enhancements held due to the debtor’s
mortgage was found in the Group.
(2) Liquidity risk
Liquidity risk refers to the risk of capital shortage the Company encounters when the Company is
fulfilling the obligation of settlement in the form of cash or other financial assets. Various subsidiaries
under the Group shall be responsible for predicting their own cash flow. The financial department of the
headquarters shall firstly summarize predictions on the cash flow of various subsidiaries and then
continuously monitor the short-term and long-term fund demand at the Group’s level so as to maintain
sufficient cash reserves and negotiable securities that can be realized at any time; meanwhile special
effort 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 fund so as to
satisfy the short-term and long-term capital demand.
(3) Market risk
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
VIII Risks Related to Financial Instruments
(a) Foreign exchange risk
The Group has carried out various economic activities around the world including manufacturing
selling investment and financing etc. and corresponding interest rate fluctuation risks exist in the
Group’s foreign currency assets and liabilities and future foreign currency transactions.The Group always regards “Locking the Cost and Avoiding Possible Risks” as the foreign currency risk
management goal. Through the natural hedging of settlement currency matching with the foreign
currency liabilities signing simple derivative products closely related to the owner’s operation and
meeting corresponding hedge accounting treatment requirements and applying other management
methods the foreign currency risk exposure can be controlled within a reasonable scope and the impact
of interest rate fluctuations on the Group’s overall profit and loss will be reduced.On 30 Jun. foreign-currency asset and liability items with significant exposure to exchange risk were
mainly denominated in the US dollar. After management the total risk exposure of the US dollar-
denominated items was net asset exposure of USD82755 thousand equivalent to RMB534607
thousand based on the spot exchange rate on the balance sheet date. The differences arising from the
translation of foreign currency financial statements were not included.The Group applies the following exchange rate of USD against RMB:
Average exchange Exchange rate at
rate period-end
H1 2021 30 Jun. 2021
USD/RMB 6.4682 6.4601
Provided that other risk variables remained unchanged except 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 RMB26730 thousand in the shareholders’ equity and net profit
respectively of the Group on 30 Jun.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 determines the proportion of fixed interest rates and floating interest rates
based on the market environment and its risk tolerance. Up to 30 Jun. 2021 the Group’s liabilities with
floating interest rates accounted for 64.57% 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.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
IX Classification of Financial Instruments and Fair Value
Fair value of financial instruments and levels
1. Fair value is divided into the following levels in measurement and disclosure:
Level 1 refers to the (unadjusted) quotation of the same type of assets or liabilities on the active
market; and the Company mainly adopts the closing price as the value of a financial asset. Financial
instruments of level 1 mainly include exchange listed stocks and bonds.Level 2 refers to the directly or indirectly observable input of a financial asset or liability that does
not belong to level 1.Level 3 refers to the input of a financial asset or liability determined based on variables other than the
observable market data (non-observable input).2. Basis for determining the market value of items measured at continuous level 1 fair value
The Company adopts the active market quotation as the fair value of a level 1 financial asset.Items measured at continuous level 2 fair value adopt the following valuation techniques and
3.parameters:
The Company’s receivables financing was bank acceptance notes and trade acceptance notes of
which the market prices were determined based on the transfer or discounted amounts.Derivative financial assets and liabilities are multiple IRS and CCS signed between the Group and
financial institutions. The Company adopts the quotation 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.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
IX Classification of Financial Instruments and Fair Value (Continued)
5 Financial instruments measured at three levels of fair value
Financial assets
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial assets (see 435658 8712519 400400 9548577
Note V 2)
Derivative financial assets (see Note - 139396 - 139396
V 3)
Receivables financing (see Note V 6) - 1725478 - 1725478
Investments in other equity 118680 - 981505 1100185
instruments (see Note V 18)
Other debt investments (see Note V - 91976 - 91976
15)
Other non-current financial assets (see - 955825 1502314 2458139
Note V 19)
Total assets continuously measured at 554338 11625194 2884219 15063751
fair value
Financial liabilities
Item Level 1 Level 2 Level 3 Total
Held-for-trading financial liabilities - 955861 178390 1134251
(see Note V 33)
Derivative financial liabilities (see - 129382 - 129382
Note V 34)
Total liabilities continuously measured
- 1085243 178390 1263633
at fair value
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions
1 Actual controller and its acting-in-concert parties
The Company has no controlling shareholder.Mr. Li Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited Partnership)
have become acting-in-concert parties due to the signing of the Concerted Action Agreement. They hold
a total of 1158.5994 million shares in the Company which makes them the largest shareholder of the
Company.As per Article 217 of the Company Law a controlling shareholder refers to a shareholder who owns
over 50% of a limited liability company’s total capital or over 50% of a joint stock company’s total
share capital; or despite the ownership of less than 50% of a limited liability company’s total capital or
less than 50% of a joint stock company’s total number of shares who can still prevail in the resolution
of a meeting of shareholders or a general meeting of shareholders according to the voting rights
corresponding to his interest in the limited liability company’s total capital or the joint stock company’s
total number of shares. According to the definition above the Company has no controlling shareholder
or actual controller.2 Related parties that do not control or are not controlled by the Company
Information about such related parties：
Related party Relationship with the Company
AGC New Electronic Display Glass (Shenzhen) Co. Ltd. Associate
LG Electronics (Huizhou) Co. Ltd. Associate
JOLED Incorporation Associate
Xinjiang Dongpeng Weichuang Equity Investment Partnership (Limited Partnership) Associate
Xinjiang Dongpeng Heli Equity Investment Partnership (Limited Partnership) Associate
Tianjin 712 Communication & Broadcasting Co. Ltd. Associate
Shenzhen Tixiang Business Management Technology Co. Ltd. Associate
Shenzhen Qianhai Qihang Supply Chain Management Co. Ltd. Associate
Shenzhen Qianhai Qihang International Supply Chain Management Co. Ltd. Associate
Shenzhen Jucai Supply Chain Technology Co. Ltd. Associate
Bank of Shanghai Co. Ltd. Associate
Fantasia Holdings Group Co. Limited Associate
Zhihui Xinyuan Commercial (Huizhou) Co. Ltd. Associate
TCL Intelligent Technology (Ningbo) Co. Ltd. Associate
TCL Finance (Hong Kong) Co. Limited Associate
Inner Mongolia Zhongjing Science and Technology Research Institute Co. Ltd. Associate
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
2 Related parties that do not control or are not controlled by the Company (continued)
Related party Relationship with the Company
Zhonghuan Aineng (Beijing) Technology Co. Ltd. Associate
Yanyuan Fengguang New Energy Co. Ltd. Associate
Xinjiang Xiexin New Energy Material Technology Co. Ltd. Associate
Ulanqab Xinyuan New Energy Co. Ltd. Associate
SunPower Systems International Limited Associate
Inner Mongolia Shengou Electromechanical Engineering Co. Ltd. Associate
Inner Mongolia Huanye Material Co. Ltd. Associate
Sichuan Shengtian New Energy Development Co. Ltd. Associate
Petro AP (Hong Kong) Company Limited Associate
Huizhou TCL Human Resources Service Co. Ltd. Joint venture
Huaxia CPV (Inner Mongolia) Power Co. Ltd. Joint venture
Huixing Holdings Limited Associate’s subsidiary
Shenzhen Xirang International Business Travel Co. Ltd. Associate’s subsidiary
Qihang Import & Export Limited Associate’s subsidiary
Qihang International Import & Export Limited Associate’s subsidiary
Ziteng Intellectual Property Operation (Shenzhen) Co. Ltd. Associate’s subsidiary
Zijinshan Investment Co. Ltd. Associate’s subsidiary
Elite Excellent Investments Limited Associate’s subsidiary
Huizhou TCL Real Estate Development Co. Ltd. Associate’s subsidiary
Tianjin Huanxin Technology&Development Co. Ltd. Joint venture’s subsidiary
Jiangsu Huanxin Semiconductor Co. Ltd. Joint venture’s subsidiary
Anhui TCL Human Resources Service Co. Ltd. Joint venture’s subsidiary
Union Dynamic Investment Limited Associate’s subsidiary
SunPower Systems Sar Associate’s subsidiary
Petro AP S.A. Associate’s subsidiary
Marvel Paradise Limited Associate’s subsidiary
Esteem Venture Investment Limited Associate’s subsidiary
Getech Ltd. and its subsidiaries Associate and its subsidiaries
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries Associate and its subsidiaries
TCL Environmental Technology Co. Ltd. and its subsidiaries Associate and its subsidiaries
Under control of the same
TCL Industries Holdings Co. Ltd. and its subsidiaries
director
Significantly influenced by
CJ Speedex Logistics Co. Ltd. the Company’s senior
management
Note 1: Transactions between Moka International Limited and its subsidiaries and the Company in January to March in the
current period are included in TCL Industries Holdings Co. Ltd. and its subsidiaries.Note 2: Transactions between TCL Financial Holding Group (Guangzhou) Co. Ltd. and its subsidiaries and the Company in
June in the current period are included in TCL Industries Holdings Co. Ltd. and its subsidiaries.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions
(1) Selling raw materials and finished products to related parties Note 1
H1 2021 H1 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 9060288 5240451
SunPower Systems Sar 642868 -
Shenzhen Qianhai Qihang International Supply Chain
Management Co. Ltd. 360585 234209
Qihang International Import & Export Limited 130212 107240
TCL Environmental Technology Co. Ltd. and its
subsidiaries 85317 2389
Tianjin Huanxin Technology&Development Co. Ltd. 3594 -
Qihang Import & Export Limited 5755 96347
SunPower Systems International Limited 2511 -
Jiangsu Huanxin Semiconductor Co. Ltd. 885 -
Shenzhen Jucai Supply Chain Technology Co. Ltd. 791 -
Tianjin 712 Communication & Broadcasting Co. Ltd. 661 -
Shenzhen Tixiang Business Management Technology Co.Ltd. 17 -
Shenzhen Qianhai Qihang Supply Chain Management
Co. Ltd. - 137086
Ziteng Intellectual Property Operation (Shenzhen) Co.- 508
Ltd.10293484 5818230
(2) Purchasing raw materials and finished products from related parties Note 2
H1 2021 H1 2020
AGC New Electronic Display Glass (Shenzhen) Co. Ltd. 1333171 1142086
Xinjiang Xiexin New Energy Material Technology Co.-
Ltd. 1078653
TCL Industries Holdings Co. Ltd. and its subsidiaries 815005 266602
Shenzhen Jucai Supply Chain Technology Co. Ltd. 375137 63237
Inner Mongolia Zhongjing Science and Technology
-
Research Institute Co. Ltd. 110776
Inner Mongolia Shengou Electromechanical Engineering
-
Co. Ltd. 50755
TCL Environmental Technology Co. Ltd. and its10190
subsidiaries 23155
Shenzhen Qianhai Qihang Supply Chain Management141
Co. Ltd. 3635
TCL Intelligent Technology (Ningbo) Co. Ltd. 977 7
Shenzhen Qianhai Qihang Supply Chain Management
Co. Ltd. 120
-
3791384 1482263
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(3) Receiving funding from related parties Note 3
H1 2021 H1 2020
TCL Finance (Hong Kong) Co. Limited 1369249 1510089
Zhihui Xinyuan Commercial (Huizhou) Co. Ltd. 400000 1839450
Xinjiang Dongpeng Heli Equity Investment Partnership (Limited 257053 241
Partnership)
Shenzhen Qianhai Qihang Supply Chain Management Co. Ltd. 192068 42653
Shenzhen Jucai Supply Chain Technology Co. Ltd. 115342 36224
Xinjiang Dongpeng Weichuang Equity Investment Partnership 86875 77054
(Limited Partnership)
Qihang Import & Export Limited 44641 3415
Qihang International Import & Export Limited 28453 2626
Shenzhen Qianhai Qihang International Supply Chain Management 16528 17844
Co. Ltd.Shenzhen Xirang International Business Travel Co. Ltd. 6155 -
Anhui TCL Human Resources Service Co. Ltd. 5916 -
Elite Excellent Investments Limited 1989 2187
Shenzhen Tixiang Business Management Technology Co. Ltd. 1724 2574
Huixing Holdings Limited 674 661
TCL Industries Holdings Co. Ltd. and its subsidiaries 100 -
Marvel Paradise Limited 586 650
Union Dynamic Investment Limited 392 478
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 236 5
Esteem Venture Investment Limited 49 99
Petro AP (Hong Kong) Company Limited - 122
TCL Environmental Technology Co. Ltd. and its subsidiaries - 14
Zijinshan Investment Co. Ltd. - 1
2528030 3536387
(4) Providing funding for related parties Note 3
H1 2021 H1 2020
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 1279116 -
TCL Industries Holdings Co. Ltd. and its subsidiaries 1170000 2733731
TCL Intelligent Technology (Ningbo) Co. Ltd. 682500 -
TCL Environmental Technology Co. Ltd. and its subsidiaries 2438 244714
Shenzhen Qianhai Qihang Supply Chain Management Co. Ltd. - 22428
3134054 3000873
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(5) Leases
H1 2021 H1 2020
Rental income
TCL Industries Holdings Co. Ltd. and its subsidiaries 45434 51496
AGC New Electronic Display Glass (Shenzhen) Co. Ltd. 41998 19986
Tianjin Huanxin Technology&Development Co. Ltd. 834 -
TCL Environmental Technology Co. Ltd. and its 531 29
subsidiaries
Shenzhen Jucai Supply Chain Technology Co. Ltd. 402 390
Huizhou TCL Real Estate Development Co. Ltd. 241 454
Getech Ltd. and its subsidiaries 241 -
Zhihui Xinyuan Commercial (Huizhou) Co. Ltd. - 161
Ziteng Intellectual Property Operation (Shenzhen) Co. Ltd. - 25
89681 72541
(5) Leases (continued)
H1 2021 H1 2020
Rental expense
TCL Industries Holdings Co. Ltd. and its subsidiaries 29908 31525
Huaxia CPV (Inner Mongolia) Power Co. Ltd. 478 -
Tianjin Huanxin Technology&Development Co. Ltd. 291 -
29908 31525
(6) Providing labour service for or accepting labour service from related parties
H1 2021 H1 2020
Providing labour service for related parties 90804 51194
Accepting labour service from related parties 335790 170430
(7) Receiving interest from or paying interest to Note 3
related parties
H1 2021 H1 2020
Interest received 45475 59029
Interest paid 10157 4789
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
(8) Remuneration of key management personnel
H1 2021 H1 2020
Remuneration of key management personnel 7710 5209
Note 1 Selling raw materials and finished goods to related parties
The Company sells raw materials spare parts auxiliary materials and finished goods to its joint ventures and associates
at market prices which are settled in the same way as non-related-party transactions. These related-party transactions
have no material impact on the Company’s net profit but play an important role as to the Company’s continued operations.Note 2 Purchasing raw materials and finished goods from related parties
The Company purchases raw materials and finished goods from its joint ventures and associates at prices similar
to those paid to third-party suppliers which are settled in the same way as non-related-party transactions. These
related-party transactions have no material impact on the Company’s net profit but play an important role as to
the Company’s continued operations.Note 3 Providing funding for or receiving funding from related parties and corresponding interest received or paidThe Company set up a settlement center in 1997 and TCL Tech Finance Co. Ltd. in 2006 (together the “FinancialSettlement Center”). The Financial Settlement Center is responsible for the financial affairs of the Company
including capital operation and allocation. The Center settles accounts with the Company’s subsidiaries joint
ventures and associates and pays the interest. It also allocates the money deposited by the subsidiaries joint
ventures and associates in it to these enterprises and charges interest. The interest income and expense between
the Company and the Center are calculated according to the interest rates declared by the People’s Bank of China.The funding amount provided refers to the outstanding borrowings due from the Center to related parties while
the funding amount received means the balances of related parties’ deposits in the Center.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
3 Major related-party transactions (continued)
4 Balances due from and to related parties
(1) Accounts receivable
30 Jun. 2021 31 Dec. 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 2692979 2580564
SunPower Systems Sar 292280 -
Shenzhen Qianhai Qihang International Supply Chain Management 101818 381327
Co. Ltd.Qihang International Import & Export Limited 37476 17265
Tianjin Huanxin Technology&Development Co. Ltd. 13485 -
Inner Mongolia Zhongjing Science and Technology Research Institute 2486 2149
Co. Ltd.Tianjin 712 Communication & Broadcasting Co. Ltd. 743 -
Inner Mongolia Shengou Electromechanical Engineering Co. Ltd. 625 -
Huaxia CPV (Inner Mongolia) Power Co. Ltd. 244 13825
TCL Environmental Technology Co. Ltd. and its subsidiaries 130 1148
Huizhou TCL Real Estate Development Co. Ltd. 42 4
Qihang Import & Export Limited - 112535
SunPower Systems International Limited - 99791
Wuxi Zhonghuan Yangjie Semiconductor Co. Ltd. - 6983
Bank of Shanghai Co. Ltd. 45
-
3142308 3215636
(2) Accounts payable
30 Jun. 2021 31 Dec. 2020
AGC New Electronic Display Glass (Shenzhen) Co. Ltd. 426030 385787
Shenzhen Jucai Supply Chain Technology Co. Ltd. 188579 122863
TCL Industries Holdings Co. Ltd. and its subsidiaries 623252 32336
Shenzhen Qianhai Qihang Supply Chain Management Co. Ltd. 32787 8562
Inner Mongolia Shengou Electromechanical Engineering Co. Ltd. 27202 -
Inner Mongolia Zhongjing Science and Technology Research Institute 26304 31115
Co. Ltd.Getech Ltd. and its subsidiaries 19889 21594
TCL Environmental Technology Co. Ltd. and its subsidiaries 6300 11435
Tianjin Huanxin Technology&Development Co. Ltd. 1955
Wuxi Zhonghuan Yangjie Semiconductor Co. Ltd. - 1365
1352298 615057
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(3) Other receivables
30 Jun. 2021 31 Dec. 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 1406167 41645
Shenzhen Xirang International Business Travel Co. Ltd. 3863 2755
Zhonghuan Aineng (Beijing) Technology Co. Ltd. 3099 3099
Tianjin Huanxin Technology&Development Co. Ltd. 1905 -
Petro AP S.A. 1204 1218
Ulanqab Xinyuan New Energy Co. Ltd. 425 425
Inner Mongolia Zhongjing Science and Technology Research 240 66
Institute Co. Ltd.TCL Intelligent Technology (Ningbo) Co. Ltd. 155 -
AGC New Electronic Display Glass (Shenzhen) Co. Ltd. 92 218
LG Electronics (Huizhou) Co. Ltd. 50 26
Inner Mongolia Shengou Electromechanical Engineering Co. 27 -
Ltd.Inner Mongolia Huanye Material Co. Ltd. 12 -
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 5 -
TCL Environmental Technology Co. Ltd. and its subsidiaries - 25486
Jiangsu Huanxin Semiconductor Co. Ltd. - 2
1417244 74940
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(4) Other payables
30 Jun. 2021 31 Dec. 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 188140 53036
Xinjiang Dongpeng Heli Equity Investment Partnership (Limited 164022 266838
Partnership)
Getech Ltd. and its subsidiaries 63213 34003
Shenzhen Jucai Supply Chain Technology Co. Ltd. 55194 14556
Xinjiang Dongpeng Weichuang Equity Investment Partnership 48399 47782
(Limited Partnership)
Qihang Import & Export Limited 44642 31363
Qihang International Import & Export Limited 28453 34717
Petro AP (Hong Kong) Company Limited 21450 21698
Inner Mongolia Zhongjing Science and Technology Research 11836 11836
Institute Co. Ltd.Anhui TCL Human Resources Service Co. Ltd. 5921 2548
Zhihui Xinyuan Commercial (Huizhou) Co. Ltd. 5500 5500
TCL Environmental Technology Co. Ltd. and its subsidiaries 5096 243
Ziteng Intellectual Property Operation (Shenzhen) Co. Ltd. 3611 1281
Huizhou TCL Human Resources Service Co. Ltd. - 3926
Elite Excellent Investments Limited 1989 2008
Tianjin Huanxin Technology&Development Co. Ltd. 863 -
Shenzhen Qianhai Qihang International Supply Chain Management 727 500
Co. Ltd.Huixing Holdings Limited 674 667
Shenzhen Qianhai Qihang Supply Chain Management Co. Ltd. 412 372
Marvel Paradise Limited 586 592
Union Dynamic Investment Limited 392 417
CJ Speedex Logistics Co. Ltd. 200 1050
Huizhou TCL Real Estate Development Co. Ltd. 91 91
Huaxia CPV (Inner Mongolia) Power Co. Ltd. 54 45
Esteem Venture Investment Limited 49 90
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 24 4
Shenzhen Xirang International Business Travel Co. Ltd. 13 -
Inner Mongolia Shengou Electromechanical Engineering Co. Ltd. 10 -
Shenzhen Tixiang Business Management Technology Co. Ltd. 4 -
Yanyuan Fengguang New Energy Co. Ltd. 7 28
Xinjiang Xiexin New Energy Material Technology Co. Ltd. 4 4
JOLED Incorporation - 63300
TCL Finance (Hong Kong) Co. Limited - 11419
651576 609914
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(5) Prepayments
30 Jun. 2021 31 Dec. 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 144181 92
Xinjiang Xiexin New Energy Material Technology Co. Ltd. 87615 28520
JOLED Incorporation 11395 1962
Getech Ltd. and its subsidiaries 6695 3130
Shenzhen Xirang International Business Travel Co. Ltd. 2930 4162
TCL Environmental Technology Co. Ltd. and its 123 -
subsidiaries
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 35 35
252974 37901
(6) Advances from customers
30 Jun. 2021 31 Dec. 2020
Tcl Industries Holdings Co. Ltd. and its subsidiaries 1480 341
Tcl Environmental Technology Co. Ltd. and its subsidiaries - 34
1480 375
(7) Contract liabilities
30 Jun. 2021 31 Dec. 2020
TCL Industries Holdings Co. Ltd. and its subsidiaries 27903 42533
SunPower Systems International Limited 4080 -
TCL Environmental Technology Co. Ltd. and its 131
subsidiaries
Shenzhen Qianhai Qihang International Supply Chain 111 -
Management Co. Ltd.Huizhou TCL Real Estate Development Co. Ltd. 38 -
32263 42533
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(8) Dividends receivable
30 Jun. 2021 31 Dec. 2020
Fantasia Holdings Group Co. Limited 59403 -
Sichuan Shengtian New Energy Development Co. Ltd. 4930 -
64333 -
(9) Deposits from related parties (note)
30 Jun. 2021 31 Dec. 2020
TCL Finance (Hong Kong) Co. Limited 1369330 528391
Zhihui Xinyuan Commercial (Huizhou) Co. Ltd. 400174 2000623
Shenzhen Qianhai Qihang Supply Chain Management Co. 192628 103136
Ltd.Shenzhen Jucai Supply Chain Technology Co. Ltd. 115385 52677
Xinjiang Dongpeng Heli Equity Investment Partnership 95062 1
(Limited Partnership)
Xinjiang Dongpeng Weichuang Equity Investment 39176 11062
Partnership (Limited Partnership)
Shenzhen Qianhai Qihang International Supply Chain 16542 98476
Management Co. Ltd.Shenzhen Xirang International Business Travel Co. Ltd. 6158 5826
Shenzhen Tixiang Business Management Technology Co. 1726 3328
Ltd.TCL Air Conditioner (Wuhan) Co. Ltd. and its 266 1232
subsidiaries
TCL Industries Holdings Co. Ltd. and its subsidiaries 100 -
Petro AP (Hong Kong) Company Limited - 112
2236547 2804864
These deposits are made by related parties in the Company’s subsidiary TCL Tech Finance Co. Ltd.
(10) Other current assets
30 Jun. 2021 31 Dec. 2020
TCL Air Conditioner (Wuhan) Co. Ltd. and its subsidiaries 16811 275
TCL Intelligent Technology (Ningbo) Co. Ltd. 2934 -
TCL Industries Holdings Co. Ltd. and its subsidiaries 388 1055
Huaxia CPV (Inner Mongolia) Power Co. Ltd. 14 -
TCL Environmental Technology Co. Ltd. and its subsidiaries 2 85
Huaxia CPV (Inner Mongolia) Power Co. Ltd. - 42
20135 1457
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
X Related Parties and Related-Party Transactions (Continued)
4 Balances due from and to related parties (continued)
(11) Other non-current assets
30 Jun. 2021 31 Dec. 2020
Ziteng Intellectual Property Operation (Shenzhen) Co. Ltd. 233333 232613
XI Commitments
1 Capital commitments
30 Jun. 2021 31 Dec. 2020
Under contractual obligations Note 1 14481378 8522634
but not provided for
Approved by Board but not Note 2 172384 189019
under contractual obligations
14653762 8711653
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 not under contractual obligations in the current period primarily
consisted of such commitments for CSOT’s LCD panel project.As at 30 Jun. 2021 except for the disclosures above there were no other major commitments that are required to be
disclosed.XII Contingencies
Guarantees Provided for External Parties
The guarantee amount for related party bank loan commercial drafts letters of credit etc. is RMB19602282
thousand.As at 30 Jun. 2021 the Company estimated that it was not likely for the aforesaid guarantees to cause a material
loss so it did not record a provision in the financial statements for it. Except for the said contingencies there were
no other major contingencies that are required to be disclosed as at 30 Jun. 2021.XIII Events after Balance Sheet Date
There were no other significant post-balance-sheet-date events that are required to be disclosed as at the date of the
authorization of the financial statements for issue.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XIV Other Important Matters
(I) Discontinued operations
In May 2021 the proposal on the sale of the 100% equity interests in TCL Financial Holding Group (Guangzhou)
Co. Ltd. was approved at the Second Extraordinary General Meeting of the Company in 2021. The Company
would transfer the said equity interests to TCL Industries Holdings Co. Ltd. for a consideration of RMB2572.02
million. The said spin-off was completed in May 2021.Jan.-May 2021 Jan.-Dec. 2020
Revenue from discontinued operations 168312 361300
Gross profit of discontinued operations 63259 175739
Income tax expense of discontinued 15502 29587
operations
Net profit of discontinued operations 47757 146152
Add: Net gain/loss on disposal of 10539 -
discontinued operations
Total net profit of discontinued operations 58296 146152
(II) Segment reporting
1 Basis for determining reporting segment and accounting policies
According to the Company's internal organizational structure management requirements and internal reporting
system the Company's business is divided into three reporting segments: the semi-conductor display and
materials business the distribution business and the other businesses. The Company's management regularly
evaluates the operating results of these reporting segments to determine the allocation of resources and evaluate
their performance. The Company's three reporting segments are:
(1) Semi-conductor display and materials business: mainly includes research and development manufacturing and sales
of semiconductor display panels and semiconductor display modules.
(2) Distribution business: mainly includes the sales of computers software tablet computers mobile phones and other
electronic products.
(3) Semi-conductor photovoltaic and semi-conductor materials business: mainly includes the manufacturing and
sales of semi-conductor materials semi-conductor devices new energy materials and new energy; and the
development and operation of high-efficient photovoltaic power station projects.
(4) Other businesses: other businesses besides the above including industrial finance and investment business
technology development services and patent maintenance services provided by the company etc.Segment assets include all current assets such as tangible assets intangible assets other long-term assets and
receivables attributable to each segment. Segment liabilities include payables bank loans and other long-term
liabilities attributable to each segment.Segment operating results refer to the income generated by each segment (including external transactions income
and inter-segment transaction income) net of expenses incurred by each segment depreciation amortization
and impairment losses of assets attributable to each segment gains or losses from changes in fair value
investment income non-operating income and income tax expenses. Transfer pricing of inter-segment income
is calculated on terms similar to other foreign transactions.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XIV Other Important Matters (Continued)
(II) Segment reporting (continued)
2 Financial information of reporting segments
For the 6 months ended 30 Jun. 2021
Semi-
Semi-conductor Others and
conductor
display Distribution internally
photovoltaic Total
and materials business offset
and materials
business accounts
business
Revenue 40756295 17644419 14450787 1447146 74298647
Gross profit 7656644 2106103 167885 734909 10665541
Income tax expense 1046921 219876 42782 103995 1413574
Net profit 6609723 1886227 125103 630914 9251967
Total assets 199802967 66038809 5377523 30986182 302205481
Total liabilities 112805489 36283034 4193839 43677696 196960058
Other items
Depreciation and
amortization 6926888 1411961 8121 99878 8446848
expense
Capital expenditure 10616137 3036386 - 31508 13684031
Net interest expense 668046 382859 23015 837398 1911318
For the 6 months ended 30 Jun. 2020
Semi-
Semi-conductor Others and
conductor
display Distribution internally
photovoltaic Total
and materials business offset
and materials
business accounts
business
Revenue 19512205 - 9126806 694200 29333211
Gross profit (134775) - 141187 1227299 1233711
Income tax expense (1604) - 40876 125315 164587
Net profit (133171) - 100311 1101984 1069124
Total assets 140989292 - 4325649 39518293 184833234
Total liabilities 79705967 - 3339946 36895498 119941411
Other items -
Depreciation and
amortization 4414769 - 3608 (184563) 4233814
expense
Capital expenditure 12226139 - - 264874 12491013
Net interest expense 242341 - 17893 551927 812161
Note: The semi-conductor photovoltaic and materials business has been consolidated since Oct. 2020.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent
1 Accounts receivable
30 Jun. 2021 31 Dec. 2020
Allo Allowa Allo Allowa
Perce Perce
Amount wan nce Amount wanc nce
ntage ntage
ce ratio e ratio
With
in 1 292930 100% 157 0.05% 175944 100% 157 0.09%
year
As at 30 Jun. 2021 there was not such accounts receivable from any shareholder with a 5% or greater voting stock.2 Other receivables
30 Jun. 2021 31 Dec. 2020
Dividends receivable - -
Other receivables 10837350 25555924
10837350 25555924
(a) Other receivables by nature are analyzed as follows:
30 Jun. 2021 31 Dec. 2020
Equity transfer receivables 1260290 -
Receivables from external entities 94530 216836
Security deposits 2033 2354
Others 9480497 25336734
10837350 25555924
(b) Allowance for doubtful other receivables is analyzed as follows:
Lifetime ECL (credit Lifetime ECL (credit
12-month ECL Total
not impaired) impaired)
31 Dec. 2020 962. - 40573 41535
Adjustment for change
- - - -
in accounting policy
1 Jan. 2021 962. - 40573 41535
Accrued in current
- - - 244
period
Reversal in current
- - (19) (19)
period
Write-off in current
- - (8588) (8588)
period
30 Jun. 2021 962. - 31966 32928
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
2 Other receivables (continued)
(c) The aging of other receivables is analyzed as follows：
30 Jun. 2021 31 Dec. 2020
Amount Percentage Amount Percentage
Within 1
9726762 89.48% 22903192 89.48%
year
713170 6.56% 1554740 6.07%
years
184785 1.70% 750517 2.93%
years
Over 3
245561 2.26% 389010 1.52%
years
10870278 100% 25597459 100%
The outstanding other receivables were mostly current accounts with related parties. As at 30 Jun. 2021 there
were no such other receivables from any shareholder with a 5% or greater voting stock.The top five other receivables of the Company are about RMB9518220 thousand (31 Dec. 2020:
RMB21175647 thousand) accounting for 87.56% (31 Dec. 2020：82.73%) of the total other receivables ofthe Company.3 Long-term equity investments
30 Jun. 2021 31 Dec. 2020
Impair Impair
ment Carrying ment Carrying
Gross amount Gross amount
allowa amount allowa amount
nce nce
Associates and joint 14569664 - 14569664 13903039 - 13903039
ventures (1)
Subsidiaries (2) 57051305 - 57051305 51191420 - 51191420
71620969 - 71620969 65094459 - 65094459
As at 30 Jun. 2021 there are no major restrictions on the realization of investment and the remittance of return
on long-term equity investments.153
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
3 Long-term equity investments (continued)
(1) Associates and joint ventures
Increase/decrease in current period
Cash
Increase/decre Investment gains Other Other
Other dividends or
ase in and losses comprehensiv Impairment increases
Beginning amount equity profit 30 Jun. 2021
investment in recognized by e income allowance and
changes distribution
current period equity method adjustments decreases
declared
China Innovative Capital Management Limited 1037627 - (42867) - - - - - 994760
LG Electronics (Huizhou) Co. Ltd. 90381 - 5014 - - (12200) - - 83195
Shenzhen Qianhai Qihang Supply Chain 39561 - (1615) 37946
- - - - -
Management Co. Ltd.Shenzhen Tixiang Business Management 2465 - 503 2968
- - - - -
Technology Co. Ltd.Shenzhen Jucai Supply Chain Technology Co. 6668 - 1407 8075
- - - - -
Ltd.TCL Environmental Technology Co. Ltd. 89758 25811 7751 - - - - - 123320
Guangdong Innovative Lingyue Intelligent 377553 - (6092) 371461
Manufacturing and Information Technology
- - - - -
Industry Equity Investment Fund Partnership
(Limited Partnership)
Guangdong Utrust Emerging Industry Equity 150677 - (1779) 148898
Investment Fund Partnership (Limited - - - - -
Partnership)
Huizhou TCL Human Resources Service Co. 2121 - (175) 1946
- - - - -
Ltd.TCL Microchip Technology (Guangdong) Co. - 335000 (1170) 320197
(13633)
Ltd.Others 12106228 (88084) 666729 (152039) - (10093) - (45843) 12476898
13903039 272727 627706 (152039) - (22293) - (59476) 14569664154
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries
Company
Increase in Decrease in 30 Jun.’s direct 1 Jan. 2021
current period current period 2021
interest
TCL China Star Optoelectronics Technology Co. 83.02% 27432498 5268400 - 32700898
Ltd.TCL Tech Finance Co. Ltd. 82% 1256003 - - 1 256003
100% 12500000 - - 1250000
Tianjin Zhonghuan Electronics Group Co. Ltd.0
Tianjin Zhonghuan Semiconductor Co. Ltd. 2.57% 1752635 - - 1 752635
Wuhan China Star Optoelectronics Technology 39.95% 4217000 - - 4217000
Co. Ltd.TCL Financial Holdings Group (Guangzhou) Co. - 772000 - (772000) -
Ltd.Guangzhou TCL Internet Microcredit Co. Ltd. - 1000000 - (1000000) -
Huizhou Zhongkai TCL Zhirong Technology - 457994 - (457994) -
Microcredit Co. Ltd.TCL Culture Media (Shenzhen) Co. Ltd. 100% 361414 - - 361414
Xinjiang TCL Equity Investment Ltd. 100% 200000 - - 200000
Huizhou Sailuote Communication Co. Ltd. 100% 110000 - - 110000
Highly Information Industry Co. Ltd. 66.46% 107296 - - 107296
TCL Communication Equipment (Huizhou) Co. 75.00% 79500 - 79500
-
Ltd.TCL Medical Radiological Technology (Beijing) 100% 58497 - - 58497
Co. Ltd.Shenzhen TCL Strategic Equity Investment Fund 100% 43880 21890 - 65770
Partnership (Limited Partnership)
TCL Industrial Technology Research Institute Ltd. 100% 20000 - - 20000
(Europe)
Wuhan TCL Industrial Technology Research 100% 20000 - - 20000
Institute Ltd.Shenzhen TCL High-Tech Development Co. Ltd. 100% 20000 - - 20000
Beijing HAWK Cloud Information Technology 100% 20000 - - 20000
Co. Ltd.Peer College Education Technology (Huizhou) 100% 5000 - - 5000
Co. Ltd.Huizhou Hongsheng Science and Technology 100% 1000 - - 1000
Development Co. Ltd.Beijing Zhiqujia Technology Co. Ltd. 100% 257627 - - 257627
Ningbo TCL Equity Investment Ltd. 100% 300000 - - 300000
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
3 Long-term equity investments (continued)
(2) Subsidiaries (continued)
Decrease
Company
Increase in in 30 Jun.’s direct 1 Jan. 2021
current period current 2021
interest
period
TCL Technology Investments Limited 100% 188293 2800000 - 2988293
Equity incentives of subsidiaries 10783 80 (491) 10372
51191420 8090370 (2230485) 57051305
For the registered capital of subsidiaries and the Company’s equity interests in the subsidiaries see Note V.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
4 Investments in other equity instruments
30 Jun. 2021 31 Dec. 2020
Equity instruments not held for trading 15000 15000
5 Other non-current financial assets
30 Jun. 2021 31 Dec. 2020
Equity investments 1172821 1145022
6 Revenue and cost of sales
H1 2021 H1 2020
Cost of
Revenue Cost of sales Revenue
sales
Core business 618241 606953 382812 377010
Non-core business 155431 28602 103572 7048
773672 635555 486384 384058
7 Return on investment
H1 2021 H1 2020
Income from disposal of debt instruments at fair value through profit or loss 62402 10177
Income from holding debt instruments at fair value through profit or loss 19419 2729
Debt instruments at amortized cost through profit or loss 877 -
Income from holding equity instruments at fair value through profit or loss - 12265
Dividends from subsidiaries 378888 736919
Share of profit of associates for current period 629051 626648
Share of profit of joint ventures for current period (1345) (9432)
Net income from disposal of long-term investments 761859 12549
1851151 1391855
As at 30 Jun. 2021 there were no significant restrictions on the collection of return on investment.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XV Notes to Financial Statements of the Company as Parent (Continued)
8 Net cash generated from/used in operating activities
Net cash used in operating activities of the Company as the parent was RMB19888473 thousand.9 Cash and cash equivalents end of the period
Cash and cash equivalents end of the period of the Company as the parent was RMB7893697 thousand.10 Contingent liabilities
As at 30 Jun. 2021 the contingent liabilities not provided for in the financial report are as follows:
30 Jun. 2021 31 Dec. 2020
Guarantees for trade notes and letters of guarantee of
11166067 10903205
subsidiaries
Guarantees for bank loans of subsidiaries 39551592 33054210
Guarantees for bank loans trade notes letters of credit etc. of
19602282 16144884
related parties
TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XVI Comparative Data
Certain comparative data have been reclassified to comply with the presentation of the current period.XVII Non-Recurring Gains and Losses
H1 2021 H1 2020
Gain or loss on disposal of non-current assets (inclusive of impairment allowance
739340 289779
write-offs)
Government grants through profit or loss (exclusive of government grants given in
the Company’s ordinary course of business at fixed quotas or amounts as per the 359192 355098
government’s uniform standards)
Gain equal to the amount by which investment costs for the Company to obtain
subsidiaries associates and joint ventures are lower than the Company’s enjoyable 40300 280759
fair value of identifiable net assets of investees when making investments
Gain or loss on fair-value changes on held-for-trading financial assets and
liabilities & income from disposal of held-for-trading financial assets and liabilities
210273 40067
and available-for-sale financial assets (exclusive of the effective portion of hedges
that arise in the Company’s ordinary course of business)
Non-operating income and expense other than the above 244570 192303
Income tax effects (82886) (78214)
Non-controlling interests effects (224722) (53589)
Non-recurring gains and losses attributable to ordinary shareholders of the
1286067 1026203
Company as the parent
The Company recognizes non-recurring gain and loss items in accordance with the provisions of (2008)
No.43 "Explanatory Announcement No.1-Non-recurring Gains and Losses (2008)" issued by the China
Securities Regulatory Commission.TCL Technology Group Corporation
Notes to Financial Statements
(For the period from 1 January 2021 to 30 June 2021)
(The amounts in tables are expressed in thousands of RMB)
XVIII Weighted Average Return on Equity (ROE) and Earnings per Share (EPS)
The Company calculates the ROE and EPS as follows in accordance with "the Compilation Rules No. 9 for
Information Disclosure of Companies Offering Securities to the Public-Calculation and Disclosure of Return
on Equity and Earnings per Share (Revised in 2010)" issued by China Securities Regulatory Commission and
relevant provisions of accounting standards:
Net profit EPS (RMB yuan)
attributable
to the
Weighted
Item Company as
average ROE
parent for Basic EPS Diluted EPS
Reporting
Period
Net profit attributable to ordinary
6783885 18.96% 0.5026 0.4835
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company before non- 5497818 15.37% 0.4073 0.3918
recurring gains and losses
Company Name: TCL Technology Group Corporation
Date: 10 August 2021
The financial statements and the notes thereto from page 1 to page 159 are signed by:
Person-in-charge Person-in-
of charge of the
Legal Li financial financial
Representative: Dongsheng affairs： Du Juan department: Xi Wenbo