TCL科技:2019年年度报告(英文版)

TCL Technology Group Corporation                   Annual Report 2019




    TCL 科技集团股份有限公司
    TCL Technology Group Corporation




                ANNUAL REPORT 2019
                                   31 March 2020




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TCL Technology Group Corporation                                                                              Annual Report 2019




                                               Table of Contents




Part I Important Notes, Table of Contents and Definitions .................................................. 8

Part II Corporate Information and Key Financial Information ........................................... 11

Part III Business Summary .........................................................................................................17

Part IV Directors’ Report .............................................................................................................22

Part V Significant Events ............................................................................................................51

Part VI Share Changes and Shareholder Information .........................................................84

Part VII Directors, Supervisors, Senior Management and Staff .......................................93

Part VIII Corporate Governance ..............................................................................................113

Part IX Corporate Bonds .......................................................................................................... 129

Part X Financial Report............................................................................................................. 138




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      Achieve Global Leadership by Innovation and Efficiency
                                   Chairman’s Statement



Dear shareholders, customers and partners,

In 2019, as supply surged and growth of demand slowed down, the global semi-conductor
display industry entered a cold winter with great earning pressure. To survive and also

prepare for the growth of next cycle, became the top priority for every company. Under the
severe and complicated business environment, the Company persues its global leadership
steadily, completed the significant assets spin-off, and continuously improved the efficiency
by organization reformation, so as to promote steady growth in all the businesses.

Business Review for 2019

In 2019, on the reference basis (the consolidation scope after the Restructuring), the
Company recorded revenue of RMB57.27 billion, up by 18.7% year -on-year; and a net
profit of RMB3.56 billion, up by 0.53% yearly, of which the net profit attributable to the listed
company’s shareholders was RMB2.62 billion, down by 17.0% yearly.

The Company completes the significant assets spin-off, optimizes the capital structure and

improves the operating efficiency. The net profit per capita increases to RMB74,000 from
RMB38,600. And the debt/asset ratio decreases to 61.3% from 68.4%, while the net cash
flow generated from operating activities amounted to RMB11.49 billion, both improve the
sustainable potential greatly. The Company keeps on its strategy as global industry leader,
concentrates on the long-term strategic industries which are high-tech and capital intensive.

Enhance the ecological development of the industry, improves the ability of industrial
finance and facilitates the industrial development after the restructuring. The clear
development strategy of the Company will fully release the growth potential and the positive
effect of the restructuring.

The panel price continuously drops to the historic low ebb with industry losses arising and

the market further concentrated to the leading enterprises last year. TCL CSOT keeps the
best efficiency and profitability of the industry by the business process improvement,

                                                                                                  3
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ultimate cost reduction and the better product and customer mix. For the year under review,
TCL CSOT recorded revenue of RMB33.99 billion, up by 22.9% year-on-year, and a net
profit of RMB964 million, down by 58.5% year-on-year. The t6 (G11) plant in Shenzhen

reached designed production at the end of the 2019 and the t4 (flexible AMOLED) plant
achieved mass production at the same time. The two plants will support the profit growth of
this year firmly.

TCL CSOT continuously invests in R&D and actively develops the next generation of
display technologies, from materials to manufacturing (including ink-jet printing flexible

OLED). The PCT patent applications of the Company increases 2,752 in the current period
and the acumulated patent applications reaches to 11,261.

The industrial finance business develops steadily and optimizes the capital operating
system, improves the asset efficiency and risk control capability. The supply chain finance
enables the industry development and meet the capital needs. TCL venture capital focuses

on the opportunities of cutting-edge technology; Admiralty Harbour Capital starts its
offshore operates smoothly. For the Reporting Period, the industrial finance, investment
and venture capital recorded a net profit of RMB999 million totally; Earning from the
significant assets spin-off was RMB1.15 billion. The other businesses of the Company were
stable and recorded revenue of RMB22.9 billion and a net profit of RMB320 million.

Earnings from finance and other businesses stabilize the performance of the Company
during the winter of the panel cycle.



2020 business planning

Since the end of last year, the price of the big-size panel has risen as business environment

improved. I think that the global demand-supply relationship of the industry has not
changed fundamentally, but the long-term prospect of the industry is bright with very
large market potential. The human-computer interaction technology creates the new
application scenarios and expand the new market in demand of commercial display; Global
industry reshuffling are accelerated and the industry concentrate to the leading companies.


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The environment of the global display industry will be better comparing last year and the
enterprise with edge will have more opportunities.

TCL CSOT focuses on "improving efficiency and profitability", compares with all the

benchmarks thoroughly, finds the root reason, responses quickly, builds up the core
competencies, continues to reduce the cost, improves operation quality as well as actively
expands new markets and customers to achieve business success. The Company will
maintain the max production of the t6 plant, further expand the capacity of t3 plant, reach
mass production of the Phase I of the t4 plant, complete Phase II and Phase III construction

of t4, and start the t7 (G11) operation at the end of the year. Continuously max the existing
capacity and complete full sales. Keep on capacity expansion and support the revenue
growth this year. The Company shall dedicated to the video interaction and commercial
display technology, improve LTPS and flexible AM-OLED technology, further optimize
product and customer structure, continuously strengthen the market position and enhance

earnings. We are confident that TCL CSOT's revenue growth and profitability will exceed
last year.

The industrial finance & investment business will support the semiconductor display from
many aspects, further improve the financial status and asset turnover rate, as well as lower
financial costs. TCL Capital will focus on investment from upstream to downstream of

industrial chain and strategic technology, and support ecological perfection of the
semi-conductor display. The industrial finance & investment business will continuously
contribute to steady growth in earnings and improve the capability to counter the cycle.

The Company will continue to spin off the other business and keep an eye on the M&A
opportunity in the semiconductor. Focus on the semi-conductor display business and

shareholder return.

The Company has an active expectation this year. Although the COVID-19 epidemic
causes greater uncertainty to the global economy, we have confidence to overcome
difficulties and challenges to further expand the market share and achieve a strong revenue
growth.


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Medium-and-long term strategic outlook

China is the world's largest exporter. And the manufacture is the root of China's economic
competitiveness, but the high-end manufacturing ability is insufficient with low value added.

China need to upgrade its manufacturer, enhance their high-end manufacturing and
technology ability. The long-term strategy of the company is centralizing the resource
and building up global leadership in strategic industries of technology-intensive and
capital-intensive. On the other hand, the Company enhances the industrial financial
capacity, develops the industrial finance business creatively, facilitates industrial

development, establishes the efficient industrial financial business system and
increases the investment income also.

The semi-conductor display technology and material is one of the most important core and
basic industries with great market prospects of which China has a global advantage.

I think there is an opportunity for China's display industry to become the global leader in

big-size products, but in medium and small size will face the challenges from Korean
companies. China and Korea will become the final leading forces of global display industry.
As the competition of the display industry will be heated, the business volatility will be lower
finally. The leading player's advantages will be significant and the return will increase
gradually. The Company will increase the scale and efficiency of the industry by interior and

exterior development, increase R&D investment, establish the technical barrier, break
through the next generation of display technology, deploy the global industrial chain layout
actively and serve global customers, establish the ecological system of the industry,
improve efficiency and become a global leader in the display industry.

With the advantages from technology, management and capital, the Company is looking for

opportunity to create a new field in the capital-intensive and technology-intensive strategic
industries to support long-term sustainable growth of the enterprise. The potential target will
be the leading enterprise of the industry, which has consistent business logic and has
synergy to increase earnings.

The Company always values shareholder returns and stabilizes the cash dividends. The


                                                                                                 6
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Board of Directors proposes the dividend of RMB0.1 per share for the year under review.
The Company has distributed cash dividends for 9 consecutive years since 2012 and
cumulative dividends will exceed RMB8.1 billion. The Group will continuously execute the

existing dividend policy and actively pay back the shareholders. In 2019, the Company
cumulatively repurchased 565 million shares with total RMB1.934 billion of repurchase to
enhance shareholder return.

I have personally increased my shares in the Company by a total of 175 million shares
since Dec. 2018 and I have confidence in the long-term value of the Company.

Finally, on behalf of the Board of Directors, I’d like to take this opportunity to express my
gratitude for the trusts of all our shareholders, for the support from all our partners and
users, as well as for the hard work of management team and staff!




                                                                              Li Dongsheng

                                                                             31 March 2020




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       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.
All the Company’s directors have attended the Board meeting for the review of this
Report and its summary. And all the Company’s supervisors have attended the
meeting of the Supervisory Committee for the review of this Report and its summary.
The Board has approved a final dividend plan for the ordinary shareholders as
follows: based on the share capital of 13,000,372,307 shares on 27 March 2020 that
are eligible for profit distribution (the total share capital of 13,528,438,719 shares
minus the 528,066,412 shares in the Company’s special securities account for
repurchase that are not eligible for profit distribution), a cash dividend of RMB1 (tax
inclusive) per 10 shares is to be distributed to the shareholders, totaling
RMB1,300,037,230.70. The retained earnings of RMB6,819,795,641.3 will carry
forward for future distribution. Meanwhile, there will be no bonus issue from either
profit or capital reserves for the year under review.
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.
This Report and its summary have been prepared in both Chinese and English.
Should there be any discrepancies or misunderstandings between the two versions,
the Chinese versions shall prevail.




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TCL Technology Group Corporation                                                                         Annual Report 2019



                                                         Definitions
                       Term                                                             Definition

The “Company”, the “Group”, “TCL”, “TCL         TCL Technology Group Corporation and its consolidated subsidiaries,
Tech.” or “we”                                      except where the context otherwise requires

The “Reporting Period”                               The period from 1 January 2019 to 31 December 2019

The reference basis or the reference report            The financial reports of the Reporting Period and last year that the
                                                       Company prepares based on the consolidation scope after the
                                                       restructuring, i.e. exclusive of the effects of the restructured businesses

TCL Industries                                         TCL Industries Holdings Inc.

The “Major Asset Restructuring”,                     The major asset restructuring approved at the 13 th meeting of the 6 th
“Restructuring” or “significant assets spin-off”   Board of Directors on 7 December and the First Extraordinary General
                                                       Meeting of 2019 on 7 January 2019 and settled in April 2019

TCL CSOT                                               TCL China Star Optoelectronics Technology Co., Ltd.

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                                                 Highly Information Industry Co., L td., a majority-owned subsidiary of the
                                                       Company listed on the National Equities Exchange and Quotations
                                                       (stock code: 835281)

CDOT                                                   China Display Optoelectronics Technology Holdings Limited, a
                                                       majority-owned subsidiary of the Company listed on the Stock Exchange
                                                       of Hong Kong (stock code: 00334.HK)

Bank of Shanghai                                       Bank of Shanghai Co., Ltd. (stock code: 601229.SH), with the Company
                                                       holding a 5.14% interest

712 Corp.                                              Tianjin 712 Communication & Broadcasting Co., Ltd. (stock code:
                                                       603712.SH), with the Company holding a 19.07% interest as its second
                                                       largest shareholder

Fantasia                                               Fantasia Holdings Group Co., Limited, a listed company on the Stock
                                                       Exchange of Hong Kong (stock code: 01777.HK), with the Company
                                                       holding a 20.06% interest as its second largest shareholder

Admiralty Harbour Capital                              Admiralty Harbour Capital Limited

Huizhou Environmental Resource                         Huizhou TCL Environmental Resource Co., Ltd.

TCL Industries (HK)                                    TCL Industries Holdings (HK) Limited

TCL Household Electric Appliance                       Huizhou TCL Household Electric Appliance Group Co., Ltd.

Open Edutainment                                       Beijing National Center for Open & Distance Education Co., Ltd.

Hefei Home Appliances                                  TCL Home Appliances (HeFei) Co., Ltd.

Cool Friends Technology                                Huizhou Cool Friends Network Technology Co., Ltd.


                                                                                                                                     9
TCL Technology Group Corporation                                                 Annual Report 2019


Koyoo Online Service               Koyoo Online Service Co., Ltd.

TCL Technology Park                TCL Technology Park Co., Ltd.

JDH                                JDH Information Tech (Zhuhai) Co., Ltd.

HAWK Internet                      Shenzhen HAWK Internet Co., Ltd.

Getech                             Getech Ltd.

t1 project                         The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT

t2 project                         The generation 8.5 (or G8.5) TFT-LCD (including oxide semiconductor)
                                   production line of TCL CSOT

t3 project                         The generation 6 (or G6) LTPS-LCD panel production line of TCL CSOT

t4 project                         The generation 6 (or G6) flexible LTPS-AMOLED panel production line
                                   of TCL CSOT

t6 project                         The generation 11 (or G11) new TFT-LCD production line of TCL CSOT

t7 project                         The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD
                                   and AMOLED production line of TCL CSOT




                                                                                                        10
TCL Technology Group Corporation                                                                   Annual Report 2019




    Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name                     TCL Corp.                            Stock code                 000100

Changed stock name1            TCL Tech.

Stock exchange for listing     Shenzhen Stock Exchange

Company name in Chinese        TCL 科技集团股份有限公司

Abbr.                          TCL 科技

Company name in English        TCL Technology Group Corporation

Abbr.                          TCL TECH.

Legal representative           Li Dongsheng

                               TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development District,
Registered address
                               Huizhou City, Guangdong Province, China

Zip code                       516001

                               TCL Tech Building, 17 Huifeng Third Road, Zhongkai Hi-Tech Development District,
Office address
                               Huizhou City, Guangdong Province, China

Zip code                       516001

Company website                http://www.tcl.com

Email address                  ir@tcl.com

                               Fortune China 500

                               Top 60 Chinese Corporate Citizens 2019
                               Responsibility Value Innovation Enterprise Award

                               Outstanding Enterprise in Social Responsibility granted by China Corporate Social
                               Responsibility Annual Conference

Company honors                 Investors’ Favorite Award granted by Cailianpress.com
                               Best Board Award granted by the 15 th Gold Round Table

                               Sustainability Innovation Award granted by the Caijing magazine
                               Best A-stock Company in Investment Value Award granted by Gelonghui

                               Best China Listed Companies in Corporate Social Responsibility Award 2018 granted by
                               JRJ.com



1
  In order to reflect its business scope and operations in an accurate and clear manner, as well as its strategic positioning
to become a globally leading technology company, the Company has changed, upon approval, its Chinese name from
“TCL 集团股份有限公司” to “TCL 科技集团股份有限公司”, English name from “TCL Corporation” to “TCL Technology
Group Corporation”, stock name in Chinese from “TCL 集团” to “TCL 科技”, stock name in English from “TCL” to “TCL
Tech.”, and the abbreviation of its English name from “TCL Corp.” to “TCL Tech.”. The stock code of “000100” remains
unchanged.

                                                                                                                          11
TCL Technology Group Corporation                                                                   Annual Report 2019


II Contact Information

                                                                                     Board Secretary

Name                                                            Liao Qian

                                                                19/F, Tower B, TCL Building, Gaoxin South First Road,
Address                                                         Shenzhen High-Tech Industrial Park, Shenzhen,
                                                                Guangdong Province, China

Tel.                                                            0755-3331 1666

Fax                                                             0755-3331 3819

Email address                                                   ir@tcl.com


III Media for Information Disclosure and Place where this Report Is Lodged

Newspapers designated by the Company for              Securities Times, China Securities Journal, Shanghai Securities
information disclosure                                News and Securities Daily

Website designated by CSRC for publication of
                                                      http://www.cninfo.com.cn
this Report

Place where this Report is lodged                     Board Office of TCL Technology Group Corporation


IV Change to Company Registered Information

Unified social credit code                  91441300195971850Y

Change to principal activity of the
                                            Not applicable
Company since going public (if any)

Every change of controlling
                                            Not applicable
shareholder since incorporation (if any)


V Other Information

The independent audit firm hired by the Company:

Name                                  Da Hua Certified Public Accountants (Special General Partnership)

Office address                        Room 1101, Building 7, No. 16 Xi Si Huan Zhong Road, Haidian District, Beijing

Accountants writing signatures        Qiu Junzhou and Jiang Xianmin

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting

Period:

□ Applicable ■ Not applicable

The independent financial advisor hired by the Company to e xercise constant supervision over the Company in the

Reporting Period:


                                                                                                                        12
TCL Technology Group Corporation                                                                        Annual Report 2019


               Name                         Office address                Representative            Period of supervision

                                    CITIC Securities Tower, No.
                                                                                                 From 1 March 2019 to 31
CITIC Securities Co., Ltd.          8 Zhongxin 3rd Road, Futian Huang Biao and Liu Jian
                                                                                                 December 2020
                                    District, Shenzhen, China


VI Key Financial Information

Indicate whether there is any retrospectively restated datum in the table below.

□ Yes ■ No

                                                                                          2019-over-2018
                      Item                             2019                2018                                  2017
                                                                                           change (%)
Revenue (RMB)Note                                  74,933,085,688     113,360,075,545             -33.90   111,577,362,348

EBITDA                                             14,224,327,742      14,096,523,261               0.91    13,395,054,317

Net profit (RMB)                                    3,657,735,320       4,065,194,164             -10.02     3,544,702,884

Net profit attributable to the listed
                                                    2,617,766,571       3,468,207,407             -24.52     2,664,396,006
company’s shareholders (RMB)
Net profit attributable to the listed
company’s           shareholders      before        235,119,321        1,587,391,372             -85.19     1,190,649,328
non-recurring gains and losses (RMB)

Basic earnings per share (RMB/share)                         0.1986           0.2566              -22.60            0.2178

Diluted earnings per share (RMB/share)                       0.1935           0.2562              -24.47            0.2178

Weighted average return on equity (%)                          9.09               11.98            -2.89                10.86

Net   cash     generated      from/used     in
                                                   11,490,096,405      10,486,580,443               9.57     9,209,615,123
operating activities (RMB)
Net    cash      per     share      generated
from/used       in     operating     activities              0.8493           0.7739                9.74            0.6814
(RMB/share)
                                                                                           Change of 31
                                                                                            December
                                                   31 December         31 December                           31 December
                                                                                           2019 over 31
                                                       2019                2018                                  2017
                                                                                            December
                                                                                            2018 (%)

Total assets (RMB)                                164,844,884,926     192,763,941,739             -14.48   160,293,985,835

Total owners’ equity (R MB)                       63,883,145,340      60,871,672,647               4.95    54,142,938,886

Owners’ equity attributable to the listed
                                                   30,111,946,237      30,494,364,951              -1.25    29,747,067,178
company’s shareholders (RMB)

Share capital (share)                              13,528,438,719      13,549,648,507              -0.16    13,514,972,063

Equity per share attributable to the listed
                                                             2.2258           2.2506                -1.1            2.2010
company’s shareholders (RMB/share)

Note: In April 2019, the Company completed the handover of major assets in a restructuring. Therefore, the revenue data


                                                                                                                                13
TCL Technology Group Corporation                                                                       Annual Report 2019


of 2019 and 2018 are not comparable as the former only includes the January-March 2019 revenue generated by the
restrcucted assets, while the latter comprises the January-December 2018 such revenue. Adopting the same reference
basis, revenue would be up by 18.72% in 2019 compared to 2018.

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
                                                                                                             13,528,438,719
before the disclosure of this Report (share)

Fully diluted earnings per share based on the latest total
                                                                                                                     0.1935
share capital above (RMB/share)

Note: After the restructuring, the Company has shifted to a globally leading intelligent technology company concentrating
on the semi-conductor display and materials business. It is the key operational philosophy and mission of the Company to
create value for and grow with the shareholders. In order to effecti vely protect shareholders’ interests and enhance
shareholder value, the Company carried out a share repurchase programme during the Reporting Period , which has been
completed on 10 January 2020. Cumulatively, 565,333,922 shares (or 4.18% of the total share capital) have been
repurchased, of which 3,875,613 shares have been used for the 2019 Restricted Stock Incentive Plan and the Second
Global Innovation Partner Plan, 33,391,897 shares have been used for the Second Global Partner Plan, and the rest will
be kept as treasury shares and used for employee stock ownership plans, equity incentive plans or convertible bonds.


The key financial information of 2019 and 2018 exclusive of the effects of the restructuring businesses (reference data
presented based on the consolidation scope after the restructuring) is as follows:

                                                                                                         2019-over-2018
                 Item                             2019                             2018
                                                                                                           change (%)

Revenue (RMB)                                      57,270,940,685                    48,240,376,808                18.72

Net profit (RMB)                                     3,564,025,084                    3,545,237,938                 0.53

Net profit attributable to the listed
                                                     2,617,778,635                    3,153,044,155               -16.98
company’s shareholders (RMB)
Basic     earnings      per   share
                                                             0.1986                          0.2333               -14.87
(RMB/share)
Diluted      earnings   per   share
                                                             0.1935                           0.2329              -16.92
(RMB/share)
Weighted average return on
                                                               9.09                             9.74                -0.65
equity (%)

Note: The data of 2019 and 2018 in the table above exclude the results of the restructuring businesses.

Indicate whether there are any corporate bonds.
■ Yes □ No
Indicate whether the Company has seen a deficit for the past two years.

□ Yes ■ No □ Not applicable




                                                                                                                            14
TCL Technology Group Corporation                                                                      Annual Report 2019


VII 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

No such differences for the Reporting Period.


2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards

No such differences for the Reporting Period.


3. Reasons for Accounting Data Differences Above

□ Applicable ■ Not applicable


VIII Key Financial Information by Quarter

                                                                                                                    Unit: RMB

                                            Q1                      Q2                    Q3                   Q4

Revenue                               29,600,956,875             14,180,656,860        15,036,052,357       16,115,419,596

Net profit                                1,006,077,530          1,730,985,146           750,351,631           170,321,013

Net profit attributable to the
                                           779,088,389            1,313,260,303          484,981,289            40,436,590
listed company’s shareholders

Net profit attributable to the
listed company’s shareholders
                                           560,950,806             -310,483,676          252,929,177          -268,276,986
before non-recurring gains and
losses

Net cash generated from/used
                                          2,243,903,241           3,906,918,581         1,458,452,367        3,880,822,216
in operating activities

Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what

have been disclosed in the Company’s quarterly or interim reports.

□ Yes ■ No


IX Non-Recurring Gains and Losses

                                                                                                                    Unit: RMB

                    Item                             2019                2018                  2017            Note

Gain or loss on disposal of non-current
assets (inclusive of impairment allowance        1,419,020,969           -58,305,452      420,543,530        Not applicable
write-offs)


                                                                                                                           15
TCL Technology Group Corporation                                                            Annual Report 2019


Government subsidies charged to current
profit or loss (exclusive of government
subsidies given in the Company’s ordinary
                                                 1,170,648,526   1,377,064,570   1,159,442,050     Not applicable
course of business at fixed quotas or
amounts as per the government’s uniform
standards)

Gain equal to the amount by which
investment costs for the Company to
obtain subsidiaries, associates and joint
ventures are lower than the Company’s                       -               -    191,917,137      Not applicable
enjoyable fair value of identifiable net
assets of investees when making
investments

Gain or loss on fair-value changes in
trading financial assets and liabilities &
investment income from disposal of
trading financial assets and liabilities and
                                                  186,339,457     162,729,226    -207,276,526      Not applicable
available-for-sale financial assets
(exclusive of effective portion of hedges
that arise in the Company’s ordinary
course of business)

Non-operating income and expense other
                                                   77,285,628     871,846,769     504,575,138      Not applicable
than the above

Less: Corporate income tax                        165,397,982     191,940,974     310,502,820      Not applicable


        Non-controlling interests (net of tax)    305,249,348     280,578,104     284,951,831      Not applicable

Total                                            2,382,647,250   1,880,816,035   1,473,746,678     Not applicable

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




                                                                                                                 16
TCL Technology Group Corporation                                                    Annual Report 2019




                                Part III Business Summary

I Principal Activity of the Company in the Reporting Period

During the Reporting Period, the Company primarily consists of the following three
business segments: the semi-conductor display and materials business, the industrial
finance & investment business and the other businesses.


                            Semi-conductor       TCL CSOT        China Ray

                          display & materials    Wuhan CSOT        Juhua




                          Industrial finance &
   TCL Tech.                                     TCL Financial   TCL Capital
                              investment



                                   Other            Highly       Open Edutainment


Adhere to the strategy of becoming a global leading intelligent technology company, the

Company will continue to strengthen manufacturing competitiveness, focus on developing
high-tech strategic businesses, and establish global cutting edges in related businesses.
The industrial finance business will facilitate the development of the Company’s
manufacturing business and increase returns on investments. Capitalizing on the industrial
superiority, the Company will invest in enterprises from the ecological industry chain for

better comprehensive advantage. In the future, under the principle of concentrating on the
core business and maximizing shareholder value, the Company will continue to promote
M&As in the other businesses, so as to achieve higher returns on assets.

For further information about the Company’s businesses, please refer to “Part IV Director’s
Report” herein.




                                                                                                         17
TCL Technology Group Corporation                                                                Annual Report 2019


II Significant Changes in Major Assets

1. Significant Changes in Major Assets



             Major assets                                           Significant change


                                   Primarily driven by the transfer of the construction in progress of the t2, t3, t4 and
Fixed assets
                                   t6 production lines to fixed assets

Intangible assets                  Primarily driven by spinoffs in the Restructuring


2. Major Assets Overseas

□ Applicable ■ Not applicable


III Core Competitiveness Analysis

Through the development of 39 years, TCL always adheres to the manufacturing industry,

change and innovate continuously. In the latest reform, the Company spins off the
intelligent terminal and supporting businesses, reconfirmed the technology-centric business
direction at the beginning of 2019. Furthermore, for the purpose of accurately reflecting the
strategic position-“To become a globally leading technology company”, the Company
renamed to "TCL Tech." and achieved a new round of industrial upgrading and
technological transformation with expansion and improvement on the core business.



Scale and eff iciency are prominent advantages and the compet it iveness
was intensified during the industry trough

TCL CSOT has a rapid growth of production capacity and continuously increases the

market shares, sales through the max capacity of t1 and t2, as well as t6 G11 reaches
design capacity in advance. Wuhan CSOT t3 LTPS product sales ranks second in the world,
t4 flexible AMOLED begins mass production and supply, t7 G11 project construction is in
smooth progress and TCL module and whole-widget integrated project Phase I reaches
target output. Now, the position of TCL CSOT big-size panel is stable in the market

segment: The shipment of 55-inch TV panels ranks first, the shipment of 65-inch TV panels
ranks third, the shipment of 86-inch TV panels in the white board field ranks second and the

                                                                                                                        18
TCL Technology Group Corporation                                            Annual Report 2019



shipment of 32-inch TV panels in the e-sports field ranks third. The overall advantages of
TCL CSOT stand among the forefront of the global display panel industry.

Since operation, TCL CSOT improves the efficiency of capacity expansion by efficient
production line layout, gives full play to Gemini plant layout assembly effect and industrial
chain integration advantage and drives extreme efficiency cost measures with efficiency

and benefit indicators continuing to be the global industry leader. With the industry reshuffle
intensified and concentration increased, TCL Technology can successfully cross the bottom
of the cycle based on scale and efficiency advantages and will benefit from the next
industry boom cycle with sufficient resources.



Strengthening the ability of technology research and development and
product innovation and beforehand layout of the next generat ion display
technology and materials

In 2019, the Company's R&D investment reached RMB5.46 billion. TCL Tech. submitted
2,752 PCT international patent applications with accumulative applications of 11,261

covering countries and regions such as Europe, America and Korea. The number of the
Company’s patents in the quantum dot material ranks second in the world.

After 10 years development, TCL has entered the stage of advanced technology
development from technological catch-up in the semi-conductor display field. For the large
size panel, the Company continuously optimizes the HVA technology. The Mini-LED
backlight product released for the first time in the world in 2019 and the first glass substrate

integration LED scheme have better performance in comparison to existing PCB integrated
solution. 8K and Touch technologies will be continuously used for high-end products. In the
small and medium size panel, the Company expands LTPS-LCD application scenarios with
technology, including LCD special-shaped screen, blind hole technology, small and medium
size vehicle display screen/notebook computer technology, and focuses on developing

such high-end application technologies as AMOLED foldable screen and under-panel
camera shooting. Several flexible folding products of TCL CSOT will mass produce and
sale in 2020 and the key technology of multifold and curl type is steadily developed.


                                                                                                 19
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The Company takes the lead in layout of new technologies and materials and aims to lead
the next generation display technology. In the printing OLED field, "National Printed and
Flexible Display Innovation Center" of Guangdong Juhua subordinate to the Company is

the only national innovation center in the display field in China which has built the world's
most advanced printing display public platform; The mass supply of China Ray OLED
materials has started. The QLED R&D team of the Company has solved key problems
(such as life of red and green materials), the performance of the blue -light emitting material
independently researched and developed is world-leading and related research

achievements have been published on the international scientific journal-Nature
Communication.



Taking the advantages of industrial f inance business and providing the
performance contribution with sustained and stable g rowth

After the Restructuring, the Company keeps the industrial finance and investment venture
capital, mainly by TCL Financial and TCL Capital. TCL Financial improves asset turnover
and enhances the efficiency and advantage of the main business by continuously
optimizing the asset allocation efficiency. TCL Capital focuses on investment of upstream
and downstream chain and strategic technology industry and supports ecological perfection

of the semi-conductor display. Many invested projects have synergy with the main business
with cutting-edge technology and applications jointly developed. The industrial finance &
investment and venture capital business will support industrial chain layout by the
Company in the main business and the stable profit contribution brought also makes for
offsetting the down cycle of the semi-conductor display sector.

Stable strategic customer relationship and efficient order management and
production scheduling capability

The Company is the largest big-size panel supplier among top six TV manufacturers of

China. And with a good strategic partnership with first-tier brand customers (including
Samsung, TCL Electronics and MI); For the fast growth of commercial display, the
Company works with main manufacturers (such as CVTE and Hitevision) smoothly. The G6


                                                                                                20
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LTPS t3 plant accounts for 80% shipment of first-tier mobile phone brand customers.
Folding and hole digging screens from G6 AMOLED t4 plant mass produced and shipped
to Lenovo and MI, as well as successively cooperate with BYD and Lenovo about vehicle
display screen, notebook computer, etc. in medium size.

The long-term partnership between TCL CSOT and customers is conductive to the

Company's product market share growth and cost control, remarkably strengthens the
predictability regarding relation between supply and demand in the market and production
scheduling for orders and makes for the Company optimizing capacity utilization and
product structure which is the base of the Company management hard power.



Strengthening team building, upgrading TCL's corporate culture and
revitaliz ing the vita lity of organiz ational compet ition

Team organization ability and enterprise cultural construction are important for achieving
strategic objectives. The Company will further enhance the vitality of the organization and
team, vigorously carry forward the TCL corporate culture and comprehensively enhance
the advantages of the enterprise.

The Company will continue to improve the governance structure and establish a
"customer-centric" process-driven organization to adapt to the rapid growth of industrial
scale in the future and ensure long-term stable and healthy development of the Company,
continuously promote the upgrading of corporate culture, build consensus by systematically
sorting out corporate vision, mission, core values as well as carry out the vision of " to

become a global leading intelligent technology company", the core value of "accountability,
innovation and excellence" and the realization of "global leadership" in every aspect of daily
work.




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                                   Part IV Directors’ Report

I Overview

In the Reporting Period, as supply surged and growth in demand slowed down, the global
semi-conductor display industry entered a cold winter with tremendous pressure on
earnings. In face of the tough internal and external challenges, the Company completed t he
Major Asset Restructuring, deepened reform and transformation, spun off the intelligent
terminal and supporting business and shifted from diverse operations to specialized

operations. Focusing on the core business of semi-conductor display and materials
and other strategic industries which are high-tech, capital intensive and of a long
cycle, the Company aims to become a global leading intelligent technology group.
In 2019, on the reference basis (the consolidation scope after the Restructuring), the
Company recorded revenue of RMB57.27 billion, up by 18.7% year-on-year; and a profit of

RMB3.56 billion, up by 0.53% year-on year, of which the net profit attributable to the listed
company’s shareholders was RMB2.62 billion, down by 17.0% year-on-year. Under the
complicated operating environment, the Company adhered to the strategy of being globally
leading, deepened reform, and improved quality and efficiency, so as to steady growth in all
the businesses. Prices of the major products have stabilized and begin to rebound at the

end of the Reporting Period. As the supply and demand situation improves in the industry,
the Company expects a strong earning.


The Company takes management ability and efficiency as the operation foundation,
deepens organization reform, restructures business process, and improves

operation quality, with the capital structure and operation efficiency improved
constantly. By optimizing process and management, the expense ratio has decreased to
12.5% from 16.8%. Per capita net profit of the Company is improved from RMB38,600 to
RMB74,000, the debt/assets ratio has dropped from 68.4% to 61.3%, and the net cash flow
generated from operating activities is RMB11.49 billion. At the bottom of industry cycle, the

risk resistance and sustainable development ability of the Company is further enhanced.


                                                                                               22
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The Company takes technological innovation as the main driving force, constantly
optimizes products and technologies, and actively deploys next generation display
technology and new materials. In LCD field, the Company focuses on developing 4K/8K

and Touch products. The Company launched the first Mini-LED BLU on Glass in the world,
which will establish its competition advantage in high end market of household large screen
and commercial display field. In the field of AMOLED, the Company developed the
laminated technology which allows a switch between dual fold forms of outer and inner fold,
such new technologies as multi-fold, curling, etc., have made prospective progress, and

foldable screens of t4 production line have been put into mass production for delivery. In the
field of next generation of display and materials, subordinated Guangdong Juhua of the
Company, as the only national-level printing display R&D center of the industry, has
coordinated the global industry chain resources, accelerated to promote the application of
printing display technology; OLED material which is developed independe ntly by the

Company has started its mass production, with the efficiency and life of QLED material
taking a leading position in the industry.
During the Reporting Period, there were 6,155 R&D technical staffs in the Company, with
the R&D as RMB5.46 billion; the Company submitted 2,752 PCT international application,
with cumulative applications of 11,261 and with the public patent of quantum dot ranking 2 nd

in the world; the Company held the first open conference of technological cooperati on,
employed 29 authoritative personnel of the industry as technological consultants, and
published 13 frontier technology cooperation projects world-widely, and accelerated the
breakthrough of core and basic technology and the conversion of major technological
achievements through innovation of “self-research + cooperation”.

The Company keeps on improving its industrial ability, enhances scale advantages
based on technology upgrading, and constantly enriches product portfolio. During
the reporting period, t6 G11 production line reached the designed output in advance; t7 G11
production line was constructed smoothly; t3 G6 LTPS production line expanded its
designed output and increased to 50K/month, and became the largest LTPS single plant in

the world; t4 G6 flexible OLED had Phase I mass production and the foldable screen was
delivered; Phase I of Huizhou module integration project reached the designed output; by
                                                                                                23
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2023, five-year CAGR of shipping area of TCL CSOT will reach 10% a nd the market share
will further increase. With two G8.5 production lines, two G11 production line and two G6
production lines, TCL CSOT has formed the plant layout for large, medium and small

productions, which meet the needs of major products in the market. In 2019, market share
of TV panel was improved to the 3 rd in the world, and market share of LTPS mobile phone
panel was improved to the 2 nd in the world.
As a pioneer of international layout, the Company cooperates with upstream and
downstream enterprises to construct global industry ecology integrating localized

production, sales and service, completes the layout of global manufacturing and
supply chain of TCL CSOT, and accelerates the globalization process of domestic
semi-conductor display industry. On September 26th, 2019, the construction of the panel
and module integrated intelligent manufacturing park in India under the cooperation of TCL
CSOT and TCL Electronics officially kicked off. According to the plan, the Phase I project

will produce 8 million pieces of 26-55 inch large-sized and 30 million pieces of 3.5-8 inch
small- and medium-sized modules annually, and mass production is expected to be
delivered in the first half of 2020, to meet the growing local market needs.

The industrial finance & investment bushiness of TCL maintain a good momentum of

development, and continue to contribute strategic synergy and earnings to the
Group. Finance business of the Company optimizes capital operating system, guarantees
the liquidity of the Company, and improves asset efficiency and risk control ability. The

supply chain finance gives empowerment for industry development, and the financial
investment business conducts investment to obtain stable profits by relying on its
professional advantages.           TCL   venture   capital business   focuses   on investment
opportunities in frontier technological field; Admiralty Harbour Capital operates successfully,
and bond issuing and underwriting, financial consulting, and asset management business

develops quickly. During the Reporting Period, the industrial finance, investment and
venture capital businesses recorded a profit of RMB999 million.

The other businesses develop stably, with revenue of RMB22.9 billion and a profit of
RMB320 million for the year under review. The profit of TCL industrial finance and other


                                                                                                 24
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businesses improve the performance of the Company when the main business is low
season.

Earnings from the Asset Restructuring are RMB1.15 billion in the year under review. The
principle of the Company is to focus on the owner and maximize shareholders’ value. It will
keep on promoting M&As and improving return on assets. The growth potential of the

Company will be thoroughly released through the Restructuring, which will lay a foundation
for the long term development of the Company; the positive effect of the Restructuring will
be further reflected in the future.

39-year development of the Company is an epitome of numerous Chinese enterprises. The
Company establishes its market position, brand, channel and influence of global supply
chain of intelligent terminal products in major countries and regions of the world with its

efficiency, speed and cost advantages, starts to fight upward and focuses on strategic point
in global technological map, and strives to the peak of the industry ecology.
After 10 years of catching up, the Company has established scale and efficiency
advantages in semi-conductor, new display technology and material has created
opportunities for Chinese enterprises to catch up and surpass. Although the COVID-19

epidemic at the beginning of 2020 affected the operating performance of Q1 of the
Company and brought uncertainty for global economic growth, the Company will adhere to
the strategic goal of global leadership, make its utmost efforts, overcome difficulties and
challenges, and further expand its market share to achieve the objective of a strong growth
in full-year revenue. TCL CSOT will expand from application innovation to key technology

breakthrough on the basis of leading efficiency, then to leading original technology and
ecological layout of core industry chain, break through active Mini-LED backlight and
direct-viewing product technology, and lead the development of printing OLED/QLED. The
Group will improve scale and efficiency through internal and external extension
development; enhance R&D, and establish technological barrier; accelerate to complete

layout of global industry chain, and adapt to international competition; become the leading
enterprise of global display industry; expand display industry advantage to other relevant
industry chain, and improve competitiveness and operation efficiency.


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The Company will take The Strategy to wards Global Leadership as enterprise development
outline, be led by strategy, be guaranteed by organization and culture, reform and break
through, improve quality and efficiency, and stride toward a technological industry

group with global leadership. The Company changed its name from “TCL Corporation” to
“TCL Technology Group Corporation” on February 7th , 2020, and entered its brand new
development stage.




II. Core Business Analysis

The Company primarily consists of the following three business segments: the

semi-conductor display and materials business, the industrial finance & investment
business and the other businesses.


                            Semi-conductor       TCL CSOT        China Ray

                          display & materials    Wuhan CSOT        Juhua




                          Industrial finance &
   TCL Tech.                                     TCL Financial   TCL Capital
                              investment



                                   Other                         Open Edutainment
                                                    Highly


Adhere to the strategy of becoming a global leading intelligent technology company, TCL
Tech. will gradually quit from other businesses in accordance with the principle of
maximizing shareholders’ value. It will take endogenous development power as the
foundation, powerfully promote leading progress of semiconductor products and material

business in product, technology and ecology in the world. It helps industrial development
through industrial finance, and increases investment profits; invests in ecological
enterprises by relying on industry advantages, and strengthens comprehensive
competitiveness. It utilizes technology, management, and capital advantages to deploy
Chinese enterprise assets which can establish sustainable leading advantages in capital

and technology intensive strategic industries. The selected area will be similar to

                                                                                                         26
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management and operation logic of the existing businesses and will be top enterprises in
the respective industries with synergy, enhance income and realize sustainable
development of high quality.



 (I) Semi-conductor Display and Material Business

During the Reporting Period, TCL CSOT achieved shipping area of 22.184 million square

meters, up by 23.8% compared with the same period last year, achieved revenue of
RMB33.99 billion, up by 22.9% compared with the same period last year, achieved net
profit of RMB964 million, down by 58.5% compared with the same period of last year, and
EBITDA was RMB8.68 billion. The comprehensive performance kept on taking a leading
position in the industry.

The t1 and t2 plants in Shenzhen is operating at full capacity for strong sales, the t6 plant
reached designed output in Q4 in advance, and the yield rate ramp-up was better than
expected. During the reporting period, the total shipment of large-sized panels reached
20.82 million square meters, up by 19.1% compared with the same period last year, and the
total shipment was 41.195 million pieces, up by 5% compared with the same period last

year; market share of TV panel was improved to the 3 rd in the world, the shipment of
55-inch products ranked the 1st in the world while that of 32-inch products ranked the 2nd in
the world, and market occupancy of 86-inch commercial display panel ranked the 2 nd in the
world. However, because the price of main products is lower than the same period last year,
the large size panel business achieved revenue of RMB18.93 billion, down by 12.5%

year-on-year.
T3 plant in Wuhan was operating at full capacity for strong sales, and market share of
LTPS-LCD products ranked at the 2nd in the world stably. Flexible AMOLED of t4 plant
reached Phase I mass production in Q4, curved and foldable products had mass
production successively. During the Reporting Period, the shipping area of small and

medium size products was 1.365 million square meters, up by 2.12 times compared with
the same period of last year, and the shippment was 113.978 million pieces, up by 1.25



                                                                                               27
TCL Technology Group Corporation                                            Annual Report 2019



times compared with the same period last year; the revenue reached RMB15.07 billion, up
by 1.5 times compared with the same period last year.
In 2019, semi-conductor display industry ran downward, and the industry loss heavily,

restructure accelerated, Chinese panel companies improved their global competitiveness
and market share with their capital and efficiency advantages. By the end of last year, price
of large size panel rebounded, and industry operating profits improved. The demand of
global display industry has not fundamentally changed; however, long term development
prospect of the industry gets optimistic, and the market potential is still great; the demand of

video interaction technology and commercial display products increases quickly, which
brings market increment; the global industry restructure and integration accelerates, and as
a result industry concerntration is further improved. In 2020, TCL CSOT will keep on
promoting ultimate cost reduction and profit increase, improve efficiency, further optimize
product and customer structure, develop video interaction and commercial product

business, keep on operating at fully capacity for strong sales, and increase sales revenue
and operation interest; we are confident that revenue growth and profitability in 2020 will
exceed 2019.
Through high efficient production line investment strategy, synergistic advantage of
industry chain and excellent management, TCL CSOT always maintains leading

operation efficiency and profits at low season of industry cycle. Since being put into
production, TCL CSOT take advantage of aggregation effect of Gemini P lant la yo ut , and
improved production output and expanded efficiency through high efficient production line
layout; exerted integration advantages of industry chain and taken ultimate efficiency cost
measures to realize the lowest sales expense ratio and financial expense ratio, overcome

the headwind of the industry, and keep momentum for the next round of industry growth.
As the capacity is stepping into high growth phrase, product mix will be refined
continuously. T1 and t2 G8.5 production line of TCL CSOT operates at full capacity for
strong sales; G6 LTPS production line of t3 is expanded from 45k/month to 50K/month; G11
production line of t6 reached designed output in Q4 and will have production at full capacity
this year; G6 flexible OLED production line of t4 realized Phase I mass production in
December, Phase II and Phase III construction will be completed in this year; G11


                                                                                                 28
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production line construction of t7 is progressed as planned and will be put into production at
the end of this year, which lays a foundation for performance growth. While each production
line is put into production successively, by 2023, five -year CAGR of shipping area of large
size panel of TCL CSOT will be 17%, and five -year CAGR of shipping area of small and
medium panel will be 26%. Meanwhile, the proportion of high margin products of TCL
CSOT for commercial display, vehicle display, gaming monitor, etc. will improve
continuously, and strategic cooperation is established with CVTE, HiteVision, BYD, Lenovo,
etc. successively.
Take technological innovation as core drive, improve product competitiveness
continuously. In large size field, TCL CSOT consolidates the application adva ntages of
HVA technology in LCD high end products, improves the share of such products as 4K/8K,
Touch, etc., launched MLED product based on Mini-LED backlight on Glass for the first time
in the world, to meet the demand growth of high end market of large size LCD. In the small
and medium size field, the yield rate and quality of CSOT LTPS production line has reached
international top, proportion of Incell/COF/blind via product rises continuously, and the
Company actively develops under screen/within screen fingerprint technology; flexible
AMOLED focus on under screen shooting, foldable technology and other high end
technologies, with the curved punched screen and flexible foldable screen delivered
already.

Actively promote new display technology, material & core technology development
and ecology construction, and construct core advantages which lead the future.
Guangdong Juhua, as the only “national printing and flexible display innovation center” of
the industry, has launched the manufacturing of 31-inch 4K RGB QLED sample machine for
full quantum dot printing and the first 31-inch rollable flexible sample machine for ink-jet

printing based on printing technology and OLED flexible display technology in the world,
with its R&D innovation leading the industry development. China Ray mainly develops new
OLED key materials with independent IP, and has developed more than 700 new materials
currently, including more than 30 products which enter pilot scale experiment; synthesis
mass production site and sublimation plant have been put into production, and part

materials have entered into mass production stage. QLED R&D team has broken thro ugh
key problems such as the life of red and green materials, etc., and the public patent in
quantum dot electroluminescent field ranked 2nd in the world.
                                                                                                29
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Though counter-globalization trend is severe in recent years, global supply chain
restructures, competition advantages of China manufacturing in semi-conductor are
hard to be shaken in short term. TCL CSOT will make its utmost efforts to achieve

technology leadership and ecology leadership by efficiency and product mix, break
through the next generation of new display technology and materials through
horizontal expansion and vertical extension, and lead the global display industry.



(II) Industrial Finance and Investment Business

1. TCL Financial

TCL Financial mainly includes the Group’s finance and the supply chain finance.

Finance business targets at providing capital support and management support for main
businesses and member companies, providing capital guarantee for the Group’s major
investment projects, undertaking the function of improving the Group’s asset operation
efficiency and risk control; supply chain finance business provides various financing and
support supply-chain finance for related companies, establishes ecological circle of small

and medium companies, and reduces cost of supply chain; meanwhile, financial investment
business improves capital efficiency by creating stable profits through financial services,
and reduces financial expenses of the Company.




2. TCL Capital

TCL Capital consists of TCL Venture Capital, Admiralty Harbour Capital Limited and China
Innovative Capital Management Limited (holding 49% of its equity), seek investment
opportunities in key fields of technological industries, including new display technology,

semi-conductor and their relevant industry chain, as well as high end materials and
technological equipment, etc., which promotes technology and create synergy. At the same
time, investment value was generated.



                                                                                             30
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TCL venture capital business focuses on relevant new technologies, new materials and
new applications of main business by establishing various funds. By the end of this
reporting period, the scale of funds managed by TCL venture capital business reached

RMB8.99 billion, and it invested in 115 projects cumulatively and exited from 33 projects,
including 10 projects which it exited partialy. Currently, it holds stocks of CATL, Dynanonic,
Willsemi, and other listed companies, and the interest in Cambricon, Dkem, Transwarp, and
other companies. Several projects invested by TCL venture capital business have good
synergy with current business of TCL, and play a vital role in completing industry chain,
technology foresight and layout, and lead to technology advance of the Company.


Admiralty Harbour Capital is a licensed financial company which is established in Hong

Kong, with the license of investment bank and assets management, provides
corresponding capital and financial service support for overseas business expansion, as
well as merger and restructure. During the reporting period, Admiralty Harbour Capital
completed the 12 bonds issuing and underwriting projects and 2 bond restructure projects,
financial consultant and assets management business increase quickly, and it realized
profit in the first year.


China Innovative Capital Management Limited mainly engages in equity investment for
listed companies as well as merger and restructure, invested in more than 110 listed
companies cumulatively, with good business operation and stable growing profits. China
Innovative Capital Management Limited also provides professional support for domestic
merger and purchasing as well as business expansion of the Company in China. During the

reporting period, the Company established Guangdong Rongchuang Lingyue Intelligent
Manufacturing and IT Industry Equity Investment Fund together with China Innovative
Capital Management Limited, Utrust, etc., focusing on investment in smart manufacturing,
IT industry and relevant service upgrading field, etc.


At the end of the Reporting Period, the Company directly invests in a number of listed
companies, including a 19.07% interest in 712 Corp. (603712.SH), a 5.14% interest in Bank
of Shanghai (601229.SH) and a 20.06% interest in Fantasia Holdings (01777.HK). During

                                                                                                31
TCL Technology Group Corporation                                                                              Annual Report 2019



the Reporting Period, the Company increased its interest in Bank of Shanghai by 0.15%,
other direct interests in listed companies remained the same during the Reporting Period.

2. Revenue and Cost Analysis

(1) Breakdown of Revenue

                                                                                                                            Unit: RMB

                                           2019                                           2018
Operating division                                  As % of total                                    As % of total     Change (%)
                              Revenue                                           Revenue
                                                    revenue (%)                                  Revenue (%)
    TCL CSOT                  33,993,533,865                   45.37%     27,666,368,029                  24.41%             22.87%
      Highly                  20,835,617,478                   27.81%     16,566,992,566                  14.61%             25.77%
Other businesses
  and eliminated                                                                                              Not
                              20,103,934,345        Not applicable        69,126,714,950                              Not applicable
   intercompany                                                                                         applicable
     accounts
       Total                  74,933,085,688               100.00%       113,360,075,545                 100.00%            -33.90%

Note: On the reference basis, the revenue amounted to RMB57.27 billion in 2019, up by 18.72%
year-on-year.

(2) Revenue by Operating Segment

                                                                                                                            Unit: RMB

                                           2019                                               2018
    Operating
                                                   As % of total                                      As % of total     Change (%)
     segment                  Revenue                                           Revenue
                                                   Revenue (%)                                       Revenue (%)
  Domestic core
                              47,799,405,342                   63.79%     56,473,133,329                     49.82%         -15.36%
    businesses
  Overseas core
                              26,256,983,394                   35.04%     55,809,459,497                     49.23%         -52.95%
    businesses
Other businesses                876,696,952                     1.17%          1,077,482,719                  0.95%         -18.63%
       Total                  74,933,085,688              100.00%        113,360,075,545                   100.00%          -33.90%

                                                                                                                      Unit: RMB’0,000

                                            2019                                                         2018

                         Q1           Q2           Q3               Q4             Q1            Q2              Q3          Q4

    Revenue           2,960,095.69 1,418,065.69 1,503,605.24 1,611,541.96 2,562,984.41 2,689,390.42 2,971,339.66 3,112,293.07

    Net profit
attributable to the
                        77,908.84   131,326.03     48,498.13        4,043.66      73,083.73     85,510.10       90,372.32   97,854.59
listed company’s
  shareholders



                                                                                                                                     32
TCL Technology Group Corporation                                                            Annual Report 2019


(3) Operating Division, Product Category or Operating Segment Contributing over 10% of
Revenue or Operating Profit

                                                                                                          Unit: RMB

                                                                                                             YoY
                                                          Gross                         YoY change in
                                                                      YoY change in                      change in
                          Revenue        Cost of sales    profit                        cost of sales
                                                                       revenue (%)                       gross profit
                                                          margin                             (%)
                                                                                                         margin (%)
By operating division
Semi-conductor
                        33,993,533,865   30,478,907,024   10.34%            22.87%            35.61%         -8.42%
display business
Distribution
                        20,835,617,478   20,087,790,401    3.59%            25.77%            26.26%         -0.37%
business
By product category
Semi-conductor
                        33,993,533,865   30,478,907,024   10.34%            22.87%            35.61%         -8.42%
display devices
Distribution of
                        20,835,617,478   20,087,790,401    3.59%            25.77%            26.26%         -0.37%
electronics
By operating segment
Mainland China          47,799,405,342   42,114,423,773   11.89%           -15.36%             -8.84%        -6.30%
Overseas
(including Hong         26,256,983,394   23,888,804,820    9.02%           -52.95%            -47.72%        -9.11%
Kong)


(4) Whether Revenue from Physical Sales Is Higher than Service Revenue


   Operating
                            Item              Unit            2019              2018               Change (%)
    division
                        Sales volume       0,000 ㎡           2,218             1,792               23.83%
Semi-conductor
                           Output          0,000 ㎡           2,234             1,842               21.27%
display business
                          Inventory        0,000 ㎡            84                68                 23.53%




(5) Execution Progress of Major Signed Sales Contracts in the Reporting Period

□ Applicable ■Not applicable


(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period


Compared with 2018, 17 subsidiaries (all newly incorporated) are included in and 313
subsidiaries (which 288 transferred in the Restructuring, 9 de-registered, and 16 that have
shifted from subsidiaries to associates) are excluded from the consolidation scope of 2019.

                                                                                                                   33
TCL Technology Group Corporation                                                               Annual Report 2019


(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□ Applicable ■Not applicable


(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB)                                                               21,701,692,572

Total sales to top five customers as % of total sales
                                                                                                              29.30%
of the Reporting Period (%)

Total sales to related parties among top five
customers as % of total sales of the Reporting Period                                                                 -
(%)

Top five customers:

                                                        Sales revenue contributed
   No.                     Customer                      for the Reporting Period   As % of total sales revenue (%)
                                                                 (RMB)

      1                   Customer A                                8,141,718,792                              10.99%

      2                   Customer B                                5,377,820,556                               7.26%

      3                   Customer C                                2,907,012,016                               3.93%

      4                   Customer D                                2,803,131,747                               3.79%

      5                   Customer E                                2,472,009,462                               3.34%

                        Total                                      21,701,692,572                              29.30%

Other information about major customers:

□ Applicable ■ Not applicable
Major suppliers:

Total purchases from top five suppliers (RMB)                                                        14,959,258,051

Total purchases from top five suppliers as % of total
                                                                                                              22.66%
purchases of the Reporting Period (%)

Total purchases from related parties among top five
suppliers as % of total purchases of the Reporting                                                                    -
Period (%)

Top five suppliers:

                                                        Purchase in the Reporting
      No.                   Supplier                                                 As % of total purchases (%)
                                                              Period (RMB)

      1                    Supplier A                              5,108,937,201                               7.74%

      2                    Supplier B                              4,336,151,947                               6.57%

      3                    Supplier C                              2,031,503,382                               3.08%


                                                                                                                      34
TCL Technology Group Corporation                                                                     Annual Report 2019


      4                          Supplier D                             1,815,015,871                                 2.75%

      5                          Supplier E                             1,667,649,650                                 2.53%

                             Total                                     14,959,258,051                                22.66%

Other information about major suppliers:

□ Applicable ■ Not applicable


3. Expense

                                                                                                                   Unit: RMB

                                        2019                 2018          Change (%)     Reason for any significant change

Selling expense                        2,857,488,890       8,887,021,380        -67.85% The Restructuring

Administrative expense                 1,895,087,528       4,299,610,008        -55.92% The Restructuring

Finance costs                          1,248,800,752         973,260,519         28.31% Increase in financings

R&D expense                            3,396,804,603       4,677,578,988        -27.38% The Restructuring


4. R&D Expense

Details about R&D expense:

                                                  2019                        2018                      Change (%)

Number            of           R&D
                                                              6,155                     12,481                       -50.69%
personnel Note

R&D personnel as % of total
                                                             17.40%                     16.63%                        0.77%
employees

R&D expense (RMB)                                      5,464,281,132            5,670,918,950                         -3.64%

R&D       expense      as    %    of
                                                              7.29%                      5.00%                        2.29%
revenue

Capitalized      R&D        expense
                                                       2,067,476,529            1,832,275,281                        12.84%
(RMB)

Capitalized      R&D        expense
                                                             37.84%                     32.31%                        5.53%
as % of total R&D expense

Note: During the Reporting Period, the Company completed the settlement of the Major Asset Restructuring and spun off
the terminal and supporting businesses. As such, it has become a globally leading intelligent technology company with its
core business being the semi-conductor display and material business. The number of R&D personnel and R&D expense
has decreased accordingly, which is why the data of 2019 and 2018 in the table above are not comparable. Based n the
reference basis, the number of R&D personnel would be up by 2.7% in 2019 compared to 2018.

Reasons for any significant YoY change in the percentage of R&D expense in revenue:

□ Applicable ■ Not applicable




                                                                                                                              35
TCL Technology Group Corporation                                                                    Annual Report 2019


5. Cash Flows

                                                                                                                  Unit: RMB

                  Item                             2019                          2018                    Change (%)

Subtotal of cash generated from
                                                   86,264,894,716                 130,101,601,946                 -33.69%
operating activities

Subtotal of cash used in operating
                                                   74,774,798,311                 119,615,021,503                 -37.49%
activities

Net cash generated from/used in
                                                   11,490,096,405                  10,486,580,443                   9.57%
operating activities

Subtotal of cash generated from
                                                   28,039,344,036                  60,058,874,214                 -53.31%
investing activities

Subtotal of cash used in investing
                                                   59,771,052,922                  88,289,416,141                 -32.30%
activities

Net cash generated from/used in
                                                  -31,731,708,886                 -28,230,541,927                 12.40%
investing activities

Subtotal of cash generated from
                                                   47,909,796,502                  63,323,909,094                 -24.34%
financing activities

Subtotal of cash used in financing
                                                   35,958,990,471                  43,284,087,005                 -16.92%
activities

Net cash generated from/used in
                                                   11,950,806,031                  20,039,822,089                 -40.36%
financing activities

Net increase in cash and cash
                                                    -8,064,640,553                  2,421,213,397               -433.08%
equivalents

Explanation of why any of the data above varies significantly on a year-on-year basis:

The significant changes to the cash flow statement items in the table above were primarily driven by spinoffs in the
Restructuring.

Explanation of why net cash generated from/used in operating activities varies significantly from net profit of the Reporting

Period

Net cash generated from operating activities was higher than net profit primarily driven by high depreciation and

amortization amounts in the semi-conductor display industry.


III Analysis of Non-Core Businesses

□ Applicable ■ Not applicable




                                                                                                                          36
     TCL Technology Group Corporation                                                                                    Annual Report 2019


     IV Analysis of Assets and Liabilities

     1. Significant Changes in Asset Composition

                                                                                                                                        Unit: RMB

                            31 December 2019                    1 January 2019              Change

                                             As % of                            As % of          in
                                                                                                              Reason for any significant change
                            Amount               total         Amount             total     percenta

                                             assets                              assets      ge (%)

     Monetary
                          18,648,184,663          11.31%       26,801,342,532     13.89%         -2.58%   The Restructuring
     assets

     Accounts
                           8,340,353,992           5.06%       13,647,564,194       7.07%        -2.01%   The Restructuring
     receivable

     Inventories           5,677,963,123           3.44%       19,887,971,677     10.31%         -6.87%   The Restructuring

     Investment
                              82,272,964           0.05%        1,676,210,635       0.87%        -0.82%   The Restructuring
     property

     Long-term
     equity               17,194,284,162          10.43%       17,117,936,085       8.87%        1.56%    -
     investments

                                                                                                          The transfer of the construction in
     Fixed assets         45,459,070,330          27.58%       35,983,131,306     18.64%         8.94%    progress of the t2, t3, t4 and t6
                                                                                                          production lines to fixed assets

     Construction in
                          33,578,289,802          20.37%       38,924,586,355     20.17%         0.20%    -
     progress

     Short-term
                          12,069,657,099           7.32%       13,287,723,834       6.89%        0.43%    The Restructuring
     borrowings

     Long-term
                          38,512,059,200          23.36%       36,864,922,669     19.10%         4.26%    -
     borrowings


     2. Assets and Liabilities at Fair Value

                                                                                                                                        Unit: RMB

                                     Gain/loss
                                                           Cumulative
                                    on fair-value
                                                           fair-value       Purchased in
                    Beginning       changes in                                                            Sold in the          Other          Ending
     Item                                                   changes         the Reporting
                     amount                the                                                        Reporting Period        changes         amount
                                                           charged to            Period
                                     Reporting
                                                             equity
                                      Period
Financial
assets
1.                  4,602,601,228    555,470,011                        -       12,036,720,572                8,577,351,625                8,617,440,


                                                                                                                                                  37
     TCL Technology Group Corporation                                                                     Annual Report 2019


Held-for-tra                                                                                                                         186

ding
financial
assets
(excluding
derivative
financial
assets)
2.Derivative
                                                                                                                               159,035,5
financial               391,558,256    138,118,918        -344,080,595                    -       26,560,987               -
                                                                                                                                        92
assets
3.
Investments
                                                                                                                               279,883,5
in        other         488,457,175               -          9,800,832                    -     221,004,516       2,630,024
                                                                                                                                        15
equity
instruments
Subtotal       of
                                                                                                                               9,056,359,
financial              5,482,616,659   693,588,929        -334,279,763     12,036,720,572      8,824,917,128      2,630,024
                                                                                                                                     293
assets
Financial                                                                                                                      272,924,6
                        212,097,067    219,916,229        -225,185,927         183,390,434      117,293,115                -
liabilities                                                                                                                             88

     Significant changes to the measurement attributes of the major assets in the Reporting Period:

     □ Yes ■ No


     3. Restricted Asset Rights as at the Period-End

         Restricted             Carrying amount                  Reason for restriction           As % of total            Remark
          assets                  (RMB’0,000)                                                       assets
                                                      Deposited by the finance subsidiary in                           Restricted
         Monetary
                                            57,100    the central bank as the required                         0.35%
           assets
                                                      reserve
         Monetary                                     Other monetary assets                                            Restricted
                                            43,944                                                             0.27%
           assets
     Held-for-tradin                                                                                                   In pledge
         g financial                       174,320    Put in pledge for loan                                   1.06%
           assets
       Fixed assets                       3,657,178   As collateral for loan                               22.19%      Collateralized
         Intangible                                   As collateral for loan                                           Collateralized
                                           248,370                                                             1.51%
           assets
              Total                       4,180,912   -                                                    25.36%      -




                                                                                                                                    38
TCL Technology Group Corporation                                                                         Annual Report 2019


V Investments Made

1. Total Investment Amount


   Total investment amount in 2019             Total investment amount in 2018
                                                                                                       Change (%)
                    (RMB)                                    (RMB)

                            21,060,912,197                            12,577,112,494                                         67.45%


2. Major Equity Investments Made in the Reporting Period


With confidence in the Company’s core business and long-term investment value, during
the Reporting Period, Mr. Li Dongsheng, Chairman of the Company’s Board, increased his
shareholdings in the Company through centralized bidding and block trading by a total of
167,974,800 shares with RMB513,869,000 on 3 January, 15 January, 30 January, 31

January, 29 April and 6 June 2019. As of 31 December 2019, Mr. Li Dongsheng and his
acting-in-concert party Jiutian Liancheng together held a total of 1,221,748,000 shares (a
9.02% stake) in the Company, and is the biggest shareholder of the Company.

3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable ■ Not applicable


4. Financial Investments

(1) Securities Investments

                                                                                                         Gain/lo
                                                             Purchased
                                               Beginnin                      Sold in        Ending        ss in
            Sec                     Measu                        in                                                             Fun
                                               g carrying                   Reporting      carrying      Reporti    Acco
Security    urity      Security     rement                   Reporting                                                          ding
                                                amount                       Period        amount          ng       untin
  type      cod         name         metho                     Period                                                           sour
                                               (RMB’0,0                    (RMB’0,0      (RMB’0,0     Period     g title
              e                        d                     (RMB’0,000                                                         ce
                                                  00)                          00)            00)       (RMB’0,
                                                                  )
                                                                                                          000)
                     China                                                                                          Held-
                     Developme      At fair                                                                         for-tr
Entruste    Not
                     nt Bank        value                                                                           ading      Self-
d wealth    appl
                     Win-Win        throug               -       50,000                -     50,753         753     finan      fund
manage      icab
                     RMB            h profit                                                                        cial       ed
ment        le
                     Wealth         or loss                                                                         asset
                     Manageme                                                                                       s



                                                                                                                                    39
TCL Technology Group Corporation                                      Annual Report 2019


                  nt Product
                  Tranche
                  2017666
                  CCB
                  Principal                                                    Held-
                  Shengjing      At fair                                       for-tr
           Not
                  Tongying       value                                         ading    Self-
Trust      appl
                  Debenture      throug     -   40,000   -   40,907      907   finan    fund
plan       icab
                  Investment     h profit                                      cial     ed
           le
                  Collective     or loss                                       asset
                  Capital                                                      s
                  Trust Plan
                  Guotai                                                       Held-
                  Jun’an        At fair                                       for-tr
Asset      Not
                  Asset          value                                         ading    Self-
manage     appl
                  Manageme       throug     -   30,000   -   30,681      681   finan    fund
ment       icab
                  nt Junxiang    h profit                                      cial     ed
plan       le
                  Yinghuo        or loss                                       asset
                  No. 2                                                        s
                  ICBC
                                                                               Held-
                  Wealth
                                 At fair                                       for-tr
Entruste   Not    Manageme
                                 value                                         ading    Self-
d wealth   appl   ntCorporat
                                 throug     -   30,000   -   30,488      488   finan    fund
manage     icab   e RMB
                                 h profit                                      cial     ed
ment       le     Wealth
                                 or loss                                       asset
                  Manageme
                                                                               s
                  nt
                  Agricultural
                  Bank of
                                                                               Held-
                  China
                                 At fair                                       for-tr
Entruste   Not    “An xin
                                 value                                         ading    Self-
d wealth   appl   Deli”
                                 throug     -   30,000   -   30,475      475   finan    fund
manage     icab   Directional
                                 h profit                                      cial     ed
ment       le     RMB
                                 or loss                                       asset
                  Wealth
                                                                               s
                  Manageme
                  nt Product
                  Changjiang                                                   Held-
                  Securities     At fair                                       for-tr
Entruste   Not
                  Lexiang        value                                         ading    Self-
d wealth   appl
                  1-Day          throug     -   20,000   -   20,426      426   finan    fund
manage     icab
                  Collective     h profit                                      cial     ed
ment       le
                  Asset          or loss                                       asset
                  Manageme                                                     s


                                                                                             40
TCL Technology Group Corporation                                                               Annual Report 2019


                       nt Plan
                       Agricultural
                       Bank of
                                                                                                         Held-
                       China
                                       At fair                                                           for-tr
Entruste      Not      “An xin
                                       value                                                             ading    Self-
d wealth      appl     Deli”
                                       throug             -       20,000         -   20,321       321    finan    fund
manage        icab     Directional
                                       h profit                                                          cial     ed
ment          le       RMB
                                       or loss                                                           asset
                       Wealth
                                                                                                         s
                       Manageme
                       nt Product
                       Guotai                                                                            Held-
                       Jun’an         At fair                                                           for-tr
Entruste      Not
                       Asset           value                                                             ading    Self-
d wealth      appl
                       Manageme        throug             -       10,000         -   10,227       227    finan    fund
manage        icab
                       nt Junxiang     h profit                                                          cial     ed
ment          le
                       Yinghuo         or loss                                                           asset
                       No. 1                                                                             s
                       Guotai                                                                            Held-
                       Jun’an         At fair                                                           for-tr
Entruste      Not
                       Asset           value                                                             ading    Self-
d wealth      appl
                       Manageme        throug             -       10,000         -   10,227       227    finan    fund
manage        icab
                       nt Junxiang     h profit                                                          cial     ed
ment          le
                       Yinghuo         or loss                                                           asset
                       No. 3                                                                             s
                       Changjiang
                                                                                                         Held-
                       Securities
                                       At fair                                                           for-tr
Entruste      Not      Lexiang
                                       value                                                             ading    Self-
d wealth      appl     1-Day
                                       throug             -       10,000         -   10,213       213    finan    fund
manage        icab     Collective
                                       h profit                                                          cial     ed
ment          le       Asset
                                       or loss                                                           asset
                       Manageme
                                                                                                         s
                       nt Plan
                                                                                                         Not      Self-
Other securities investments
                                                   429,117       855,791   994,424   361,376    75,532   appli    fund
       held at period-end
                                                                                                         cable    ed
               Total                               429,117     1,105,791   994,424   616,094    80,250


(2) Investments in Derivative Financial Instruments


Funding source                        Mostly foreign-currency revenue

Legal matters involved (if
                                      Not applicable
applicable)



                                                                                                                       41
TCL Technology Group Corporation                                                                         Annual Report 2019


Disclosure date of board
announcement approving            28 April 2018
derivative investment (if any)

Disclosure date of general
meeting announcement
                                  Not applicable
approving derivative
investment (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
Analysis of risks and control     to the bank for the operations of evening up or selling the derivatives below the buying
measures associated with          prices;
derivative investments held in 3. Performance risk: the Group conducts the derivative business based on rolling budgets
Reporting Period (including but for risk management, and there is a risk of performance failure due to deviation between
not limited to market risk,       the actual operating results and budgets;
liquidity risk, credit risk,        4. Other risks: in the case of specific business operations, if the operator fails to finish the
operational risk, legal risk, etc.) prescribed procedures for report or approval, or fails to record the financial derivative

                                  business information accurately, timely and completely, it may result in loss of derivative
                                  business or trading opportunities. Moreover, if the trading operator fails to fully understand
                                  the terms of transaction contracts or product information, the Group will face the legal
                                  risks and transaction losses therefrom.

                                  Measures taken for risk control:
                                  1. Basic management principles: the Group strictly follows the hedging principle and the
                                  main purpose of locking costs and avoiding risks. It is required that the financial
                                  derivatives business to be carried out matches the variety, size, direction and duration of
                                  spot goods, and no speculative trading should be involved. In the selection of hedging
                                  instruments, only simple financial derivatives that are closely related to the main business
                                  operation and meet 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



                                                                                                                                 42
TCL Technology Group Corporation                                                                               Annual Report 2019


                                          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, operationa l 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 d evelopment;
                                          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.

Changes in market prices or With the rapid expansion of overseas sales, the Company keeps following the above rules
fair     value        of     derivative in the operation of forward foreign exchange contracts, interest rate swap contracts and
investments           in     Reporting futures contracts to avoid and hedge foreign exchange risks arising from operation and
Period      (fair value       analysis financing. It saw a loss of RMB6.35 million for the Reporting Period. The fair value of
should include measurement derivatives is determined by real-time quoted price of the foreign exchange market, based
method            and          related on the difference between the contractual price and the forward exchange rate quoted
assumptions and parameters) immediately in the foreign exchange market on the balance sheet date.

Major changes in accounting
policies          and          specific
accounting principles adopted
                                          No major changes
for derivative in vestments in
Reporting Period compared to
last reporting period

                                          According to the Guiding Opinion of CSRC on Establishing the Independent Director
                                          System in Listed Companies, the Stock Listing Rules of Shenzhen Stock Exchange (2018
                                          Revision), the Company’s Articles of Association, the Rules of Procedure for Independent
                                          Directors, etc., we, as the independent directors of the Company, express our
                                          independent opinion on the trading of financial derivatives in 2019 as follows:
Opinion          of        independent
                                          In view of the fact that certain raw materials of the core business of the Company are
directors         on         derivative
                                          purchased overseas , a wide range of settlement currencies is involved. The Company
investments and risk control
                                          reduces exchange losses and locks transaction costs by reasonabl e 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 corresponding regulatory mechanism, formulating reasonable accounting policies and


                                                                                                                                      43
TCL Technology Group Corporation                                                                                    Annual Report 2019


                                    specific accounting principles, setting limits for risk exposure management, and operating
                                    simple financial derivatives. The contracting agent for financial derivatives business of the
                                    Company is a sound financial agent with good credit standing.

                                    We believe that the financial derivatives transactions carried out by the Company in 201 9
                                    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’0,000

                                                                                                                Ending contractual
                                                                                                                amount as % of the
                             Beginning amount                  Ending amount                Gain/loss in
                                                                                                               Company’s ending net
  Type of contract                                                                           Reporting
                                                                                                                           assets
                                                                                              Period
                           Contractual      Actual       Contractual         Actual                           Contractual            Actual
                            amount          amount        amount             amount                             amount               amount
 1. Forward forex           2,531,633           86,070    1,279,232           36,087                                     20.02           0.56
 contracts
 2. Interest rate             465,325           13,960      528,098           15,843                   -635               8.27           0.25
 swaps
 3. Currency swaps            311,589           15,579      215,565           14,399                                      3.37           0.23
         Total              3,308,547       115,609       2,022,895           66,329                   -635              31.66           1.04




5. Use of Funds Raised

(1) General Information about the Use of Raised Funds

                                                                                                                                 Unit: RMB’0,000

                                                                                           Cumulativ
                                                                Amount                     e amount                      Purpose
                                                                             Cumulativ                                                Amount
                                      Used in                    with                        with                         and
                            Total                                            e amount                                                being idle
 Year of      Way of                      the      Cumulativ changed                       changed         Unused whereabo
                           amount                                              with                                                   for more
 raising      raising                 Current      ely used use in the                     use as %        amount       uts of the
                           raised                                            changed                                                  than two
                                       Period                  Reporting                    of total                     unused
                                                                               use                                                     years
                                                                Period                      amount                       amount
                                                                                            raised

             Public
             offering to
2019                       400,000       400,000     400,000             -             -               -            --                           -
             qualified
             investors

Total            --        400,000       400,000     400,000             -             -               -            -       --                   -


                                                                                                                                                 44
TCL Technology Group Corporation                                                              Annual Report 2019


                                                        Remark

During the Reporting Period, TCL Technology Group Corporation raised a total of RMB4 billion through the Corporate
Bonds Publicly Offered in 2019 to Qualified Investors (Phase 1), (Phase 2) and (Phase 3), which was used up for
supplementing the working capital and repaying loans.


Promised Use of Raised Funds

□ Applicable ■ Not applicable


Changed Use of Raised Funds

□ Applicable ■ Not applicable


VI Sale of Major Assets and Equity Interests

1. Sale of Major Assets


   The Proposal on the Review of the Report of TCL Corporation on the Sale of Major
Assets & Related-Party Transaction (Draft) and Its Summary, as well as the relevant
proposals, were approved at the 13th meeting of the 6th Board of Directors on 7 December

2018 and later at the First Extraordinary General Meeting of 2019 on 7 January 2019. At
the price of RMB4.76 billion, the Company sold the following directly-held equity interests to
TCL Industries: 100% interest of TCL Industries (HK), 100% interest of Huizhou Household
Electric Appliance, 100% interest of Hefei Home Appliances, 56.50% interest in Cool
Friends Technology, 100% interest of Koyoo Online Service, 100% interest of TCL

Technology Park, 75% interest in JDH, and 36.00% interest in Getech. For details of this
restructuring, see the Report of TCL Corporation on the Sale of Major Assets &
Related-Party Transaction (Draft), its revised version and other relevant documents
disclosed on www.cninfo.com.cn dated 8 and 22 December 2018, respectively. Up to April
2019, the Company had received all the amount for this sale of major assets, marking the
completion of the restructuring. And the gain/loss on the restructuring has been recognized.

   Considering the weak connection to the Company’s core business and the small

contributions to the Company’s revenue of Huizhou TCL Environmental Resource Co., Ltd.
(“Huizhou Environmental Resource ”) and Shenzhen HAWK Internet Co., Ltd. (“HAWK
Internet”), in order to further concentrate on its core business, the Company sold a 71%

                                                                                                                     45
TCL Technology Group Corporation                                                               Annual Report 2019



interest in Huizhou Environmental Resource to TCL Industries for the consideration of
RMB274,891,300; and sold the 100% interest in HAWK Internet to TCL Electronics
(Huizhou) Ltd., a subsidiary of TCL Industries, for the consideration of RMB200,109,800.

This transaction has been approved at the 21 st Meeting of the 6th Board of Directors of the
Company on 30 October 2019. For further details, see the Announcement on Sale of
Interests in Subsidiaries & the Related-Party Transactions disclosed by the Company on
www.cninfo.com.cn dated 31 October 2019.



2. Sale of Major Equity Interests

□ Applicable ■ Not applicable


VII Major Subsidiaries

Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s
net profit:

              Rel
              atio
              nshi   Prin
               p     cip    Regist
                                        Total assets      Net assets         Revenue         Operating      Net profit
 Name         with    al     ered
                                          (RMB)             (RMB)             (RMB)         profit (RMB)      (RMB)
              the    acti   capital
              Co     vity
              mp
              any
TCL                  Se
China                mi-
Star                 con
              Sub           RMB1
Optoelec             duc                                                                                   964,444,37
              sidi          9.823     130,582,409,307   55,231,216,844   33,993,533,865     958,502,226
tronics              tor                                                                                        3
              ary           billion
Technol              dis
ogy Co.,             pla
Ltd.                 y
                     Dist
Highly
                     ribu
Informati     Sub           RMB1
                     tion                                                                                  215,604,32
on            sidi          33        4,520,509,132     1,002,879,862    20,835,617,478     308,374,952
                     of                                                                                         1
Industry      ary           million
                     not
Co., Ltd.
                     ebo



                                                                                                                      46
TCL Technology Group Corporation                                                                Annual Report 2019


                   oks

Subsidiaries obtained or disposed in the Reporting Period:

See “(6) Changes to the Consolidation Scope of the Reporting Period” in Item II of Part IV.


VIII Structured Bodies Controlled by the Company

□ Applicable ■ Not applicable


IX Prospects

The external environment is complex and severe , and opportunities and challenges both
exist in 2020. Trade war between China and the United States has intensified, the
economic globalization has encountered twists and turns and China's economic

restructuring and industrial restructuring are under increasing pressure. On the other hand,
the development of 5G, AI, IoT, big data and cloud technology brings new development
opportunities for new infrastructure and application and the global display business
environment will be improved compared to last year, but the global epidemic development
increases uncertainty.

China has manufacture and consume a lot of intelligent terminals. And the market is the
biggest size and the fastest growth of semi-conductor display industry. Chinese companies

will quickly become a global leader in the display industry based on efficiency, scale, cost
and customer response advantages and the industry chain is accelerating to transfer to
China. Moreover, the continuous product technology innovation can meet the new market
requirement, especially various high performance display products in t he commercial sector.
Smart TV big screen upgrade and increase in needs for overseas market bring industrial

development opportunities. The China Industry is expected to exert an advantage in the
industry low, accelerate merging and reorganization, increase industrial concentration and
speed up development of the global industrial chain.

TCL Tech. has completed the Major Asset Restructuring and is positioned as a technology
conglomerate which proposes the "global leadership" strategic target as well as achieves
long-term effective growth and gradually achieves global leadership by continuously
improving product quality and management efficiency, breaking through the core and key

technologies and rational ecological layout. The Company will further concentrate its

                                                                                                                     47
TCL Technology Group Corporation                                                       Annual Report 2019



resources to increase scale and market competitiveness of semi-conductor display and
material business based on TCL CSOT as the core, so as to strengthen and deepen the
semi-conductor display and material industrial chain. It will also explore integration and

expansion opportunities for relevant business in the area of key, high-end and basic
information technology.

2020 is the opening year of implementing the new strategy of the Company and various key
works has been comprehensively implemented. The volume production of G6 AMOLED
production line t4 is conducted, the G11 oversize display t7 project is constructed and the
next generation of display technology proceeds orderly. The Company will actively lay out
the upstream and downstream industrial chai n, participate in development of new materials

and layout of new process and equipment as well as further improve the global
competitiveness of the semi-conductor display industry by cooperation, investment and
participation, acquisition and reorganization, etc. TCL CSOT will achieve steady growth by
efficient industrial structure layout, innovative technical capacity and stable financial capital
structure. The Company also will take advantages of technology, management and capital

and actively enter the new area of the capital-intensive and technology-intensive strategic
industries to become a global leading intelligent technology company.

X Communications with the Investment Community such as Researches, Inquiries
and Interviews

1. During the Reporting Period


                                                  Type of communication        Index to main information
         Date             Way of communication
                                                            party                   communicated

18 January 2019         By visit                 Institutional investor   www.cninfo.com.cn

12 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

18 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

19 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

20 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

20 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

25 February 2019        By visit                 Institutional investor   www.cninfo.com.cn

27 February 2019        By visit                 Institutional investor   www.cninfo.com.cn


                                                                                                            48
TCL Technology Group Corporation                                                      Annual Report 2019


1 March 2019              By visit               Institutional investor   www.cninfo.com.cn

4 March 2019              By visit               Institutional investor   www.cninfo.com.cn

7 March 2019              By visit               Institutional investor   www.cninfo.com.cn

20 March 2019             By visit               Institutional investor   www.cninfo.com.cn

28 March 2019             By visit               Institutional investor   www.cninfo.com.cn

29 March 2019             By visit               Institutional investor   www.cninfo.com.cn

9 April 2019              By visit               Individual investor      www.cninfo.com.cn

24 April 2019             By visit               Institutional investor   www.cninfo.com.cn

25 April 2019             By visit               Institutional investor   www.cninfo.com.cn

24 May 2019               By visit               Institutional investor   www.cninfo.com.cn

29 May 2019               By visit               Institutional investor   www.cninfo.com.cn

12 June 2019              By visit               Institutional investor   www.cninfo.com.cn

13 June 2019              By visit               Institutional investor   www.cninfo.com.cn

28 June 2019              By visit               Institutional investor   www.cninfo.com.cn

25 July 2019              By visit               Institutional investor   www.cninfo.com.cn

13 August 2019            By visit               Institutional investor   www.cninfo.com.cn

12 September 2019         By visit               Institutional investor   www.cninfo.com.cn

20 September 2019         By visit               Institutional investor   www.cninfo.com.cn

31 October 2019           By phone               Institutional investor   www.cninfo.com.cn

1 November 2019           By visit               Institutional investor   www.cninfo.com.cn

5 November 2019           By visit               Institutional investor   www.cninfo.com.cn

5 November 2019           By visit               Institutional investor   www.cninfo.com.cn

6 November 2019           By visit               Institutional investor   www.cninfo.com.cn

19 November 2019          By visit               Institutional investor   www.cninfo.com.cn

20 November 2019          By visit               Institutional investor   www.cninfo.com.cn

27 November 2019          By visit               Institutional investor   www.cninfo.com.cn

2 December 2019           By visit               Institutional investor   www.cninfo.com.cn

12 December 2019          By visit               Institutional investor   www.cninfo.com.cn



Times of communications                    36

Number of institutions communicated with   456

Number of individuals communicated with    118

Number of other communication parties      0




                                                                                                           49
TCL Technology Group Corporation                    Annual Report 2019


Tip-offs or leakages of substantial
supposedly-confidential information during   None
communications




                                                                         50
TCL Technology Group Corporation                                                                 Annual Report 2019




                                     Part V Significant Events

I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)

                                    Special statement about the cash dividend policy

In compliance with the Company’s Articles of Association
                                                              Yes
and resolution of general meeting

Specific and clear dividend standard and ratio                Yes

Complete decision-making procedure and mechanism              Yes

Independent directors faithfully performed their duties and
                                                              Yes
played their due role

Non-controlling interests are able to fully express their
opinion and desire and their legal rights and interests are Yes
fully protected

In case of adjusting or changing the cash dividend policy, No changes to the dividend policy and the relevant
the conditions and procedures involved are in compliance conditions and procedures are in compliance with
with applicable regulations and transparent                   applicable regulations and transparent

The 2017 annual equity distribution plan: based on the share capital of 13,514,972,063

shares on 27 April 2018 plus the granted restricted shares for profit distribution of
34,676,444 shares, i.e. a total of 13,549,648,507 shares, a cash dividend of RMB1 (tax
inclusive) per 10 shares                 was     to be distributed             to   the shareholders, totaling

RMB1,354,964,850.7. The retained earnings would carry forward for future distribution.
Meanwhile, there was no bonus issue from either profit or capital reserves for the year.

The 2018 annual equity distribution plan: based on the share capital of 13,402,888,507
shares on 19 March 2019 that were eligible for profit distribution (the total share capital of
13,549,648,507 shares minus the 146,760,000 shares in the Company’s special securities
account for repurchase that were not eligible for profit distribution), a cash dividend of
RMB1 (tax inclusive) per 10 shares was to be distributed to the shareholders, totaling

RMB1,340,288,851. The retained earnings would carry forward for future distribution.
Meanwhile, there was no bonus issue from either profit or capital reserves for the year.

The 2019 annual equity distribution plan: based on the share capital of 13,000,372,307
shares on 27 March 2020 that are eligible for profit distribution (the total share capital of

                                                                                                                      51
TCL Technology Group Corporation                                                                           Annual Report 2019



13,528,438,719 shares minus the 528,066,412 shares in the Company’s special securities
account for repurchase that are not eligible for profit distribution), a cash dividend of RMB1
(tax inclusive) per 10 shares is to be distributed to the shareholders, totaling

RMB1,300,037,230.70. The retained earnings will carry forward for future distribution.
Meanwhile, there will be no bonus issue from either profit or capital reserves for the year.

The Company carried out a share repurchase program of up to RMB1.934 billion in 2019,
which has been completed in early January 2020. As attaching great importance to the
reasonable return of investors, the Company reviews the return plan of shareholders for the
coming three years in 2020, which not only ensures an ongoing and consistent profit
distribution policy, but also pay full attention to what the shareholders, especially the
minority shareholders, want so as to sufficiently protect their rightful interests.

Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):

                                                                                                                          Unit: RMB

                                         Net profit
                                      attributable to
                                          ordinary                                                      Total cash
                                                                 Cash dividends in
                                      shareholders of                                                    dividends
                 Cash dividends                         A as %   other forms (like       C as %                          A+C as %
     Year                                the listed                                                   (including those
                (tax inclusive) (A)                     of B (%) share repurchase) of B (%)                              of B (%)
                                       company in                                                     in other forms)
                                                                       (C)
                                       consolidated                                                        (A+C)
                                      statements for
                                       the year (B)

2019             1,300,037,230.7       2,617,766,571 49.66% 1,933,596,514.47 73.86% 3,233,633,745.17                      123.53%

2018               1,340,288,851       3,468,207,405 38.65%                          -            -     1,340,288,851      38.65%

2017             1,355,091,606.3       2,664,396,006 50.86%                          -            - 1,355,091,606.3        50.86%

Indicate whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the facts

that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to

the ordinary shareholders are positive.

□ Applicable ■ Not applicable


II Final Dividend Plan for the Reporting Period

Bonus issue from profit (share/10 shares)                                                                                           0

Cash dividend/10 shares (RMB) (ta x inclusive)                                                                                1.00



                                                                                                                                    52
TCL Technology Group Corporation                                                                       Annual Report 2019


Bonus issue from capital reserves (share/10
                                                                                                                             0
shares)

Share base (share)                                                                                           13,000,372,307

Cash dividends (RMB) (tax inclusive)                                                                        1,300,037,230.7

Cash dividends in other forms (like share
                                                                                                           1,933,596,514.47
repurchase) (RMB)

Total cash dividends (including those in other
                                                                                                           3,233,633,745.17
forms) (RMB)

Distributable profits (RMB)                                                                                      8,119,832,872

Total cash dividends (including those in other
                                                                                                                        100%
forms) as % of total profits to be distributed (%)

                                                      Cash dividend plan

Based on the share capital of 13,000,372,307 shares on 27 March 2020 that are eligible for profit distribution (the total
share capital of 13,528,438,719 shares minus the 528,066,412 shares in the Company’s special securities account for
repurchase that are not eligible for profit distribution), a cash dividend of RMB1 (tax inclusive) per 10 shares is to be
distributed to the shareholders, totaling RMB1,300,037,230.70. The retained earnings of RMB6,819,795,641.3 will carry
forward for future distribution. Meanwhile, there will be no bonus issue from either profit or capital reserves for the year.

                                         Cash and/or stock dividend plan in detail

Based on the share capital of 13,000,372,307 shares on 27 March 2020 that are eligible for profit distribution (the total
share capital of 13,528,438,719 shares minus the 528,066,412 shares in the Company’s special securities account for
repurchase that are not eligible for profit distribution), a cash dividend of RMB1 (ta x inclusive) per 10 shares is to be
distributed to the shareholders, totaling RMB1,300,037,230.70. The retained earnings of RMB6,819,795,641.3 will carry
forward for future distribution. Meanwhile, there will be no bonus issue from either profit or capital reserves for the year.


III Fulfillment of Commitments

1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and other Entities Fulfilled in the Reporting Period or
Ongoing at the Period-end


                                                           Typ
                                                           e of                              Date of
                                                                                                          Term of
                                                          com                               commitm                  Fulfillme
           Commitment                      Promisor               Details of commitment                 commitmen
                                                           mit                                 ent                      nt
                                                                                                             t
                                                          men                                making
                                                            t

                                                  Abo 1. Before and after this             During the
                                        Li Dongsheng,  transaction, I/we as an
                                                   ut enterprise or our                7   period        No
Commitments made in major asset Jiutian Liancheng
                                                  avoi controlled enterprises      Decembe when being violation
restructuring                     and Donging          shall have no horizontal
                                                  ding competition with the         r 2018 the biggest    s
                                      Huarui
                                                  hori principal activities of TCL         shareholde


                                                                                                                                53
TCL Technology Group Corporation                                        Annual Report 2019


                                   zont Corporation or its               r of TCL
                                         subsidiaries.
                                     al 2. After this transaction,       Corporatio
                                   com I/we as an enterprise             n
                                         shall take active
                                   petit measures to avoid
                                    ion carrying out business
                                         activities that are or may
                                         be in competition with the
                                         principal activities of TCL
                                         Corporation or its
                                         subsidiaries, and shall
                                         urge our controlled
                                         enterprises to do so.
                                         3. In the event that I/we
                                         as an enterprise or any
                                         enterprise controlled by
                                         me/us as an enterprise
                                         obtains an opportunity for
                                         a new business, which
                                         constitutes or may
                                         constitute horizontal
                                         competition with the main
                                         business of TCL
                                         Corporation or any of its
                                         affiliates, I/we as an
                                         enterprise will make
                                         maximum efforts to drive
                                         the business opportunity
                                         to be provided to TCL
                                         Corporation or its affiliate
                                         on reasonable and fair
                                         terms and conditions in
                                         favor of the interests of
                                         TCL Corporation under
                                         the permission of
                                         conditions.
                                         4. If due to the investment
                                         needs of me/us as an
                                         enterprise or the business
                                         development of TCL
                                         Corporation, the business
                                         of me/us as an enterprise
                                         or any enterprise
                                         controlled by me/us as an
                                         enterprise overlaps with
                                         that of TCL Corporation,
                                         which may constitute
                                         horizontal competition,
                                         I/we as an enterprise and
                                         the enterprise controlled
                                         by me/us as an enterprise
                                         agree to solve the
                                         horizontal competition
                                         problem arising thereof
                                         within the time limit
                                         specified then.
                                         5. During the period of
                                         being the first majority
                                         shareholder of TCL
                                         Corporation, the
                                         aforementioned
                                         commitments are
                                         unconditional and
                                         irrevocable. I/we as an
                                         enterprise will make


                                                                                             54
TCL Technology Group Corporation                                                               Annual Report 2019


                                                             comprehensive and
                                                             timely joint
                                                             compensations in full
                                                             amount to TCL
                                                             Corporation for any
                                                             losses incurred from the
                                                             violation of the
                                                             aforementioned
                                                             commitments.
                                                             1. I/we as an enterprise
                                                             will minimize related-party
                                                             transactions between
                                                             me/us as an enterprise as
                                                             well as any enterprise
                                                             controlled by me/us as an
                                                             enterprise and TCL
                                                             Corporation as well as
                                                             any of its affiliates.
                                                             2. In respect of any
                                                             unavoidable or
                                                             reasonable related-party
                                                             transaction, I/we as an
                                                             enterprise as well as the
                                                             enterprise controlled by
                                                             me/us as an enterprise
                                                             and TCL Corporation as
                                                             well as its affiliate shall
                                                             deal with it in accordance
                                                      Abo    with fair market principles
                                                       ut    and normal commercial
                                                             conditions, ensure the
                                                     redu    fairness of related-party
                                                                                                  During the
                                                     cing    transaction prices,
                                                             perform the                          period
                                                      and    decision-making
                                                                                                  when being
                                    Li Dongsheng,    cont    procedures for
                                                             related-party transactions       7   the biggest   No
                                   Jiutian Liancheng rolli   in accordance with laws,
                                                                                          Decembe shareholde violation
                                     and Donging      ng     undertake not to make
                                                             use of the transaction to     r 2018 r of TCL       s
                                        Huarui       relat   transfer the funds or
                                                                                                  Corporatio
                                                     ed-p    profits of TCL Corporation
                                                             illegally, and undertake             n
                                                      arty   not to take advantage of
                                                             the transaction to infringe
                                                      tran
                                                             upon the legitimate rights
                                                     sact    and interest of TCL
                                                     ions    Corporation and its
                                                             shareholders.
                                                             3. I/we as an enterprise
                                                             and the enterprises
                                                             controlled by me/us as an
                                                             enterprise will not request
                                                             TCL Corporation or any of
                                                             its affiliates to offer more
                                                             favorable conditions than
                                                             the conditions offered to
                                                             an independent third
                                                             party in any fair market
                                                             transaction.
                                                             4. During the period of
                                                             being the first majority
                                                             shareholder of TCL
                                                             Corporation, the
                                                             aforementioned
                                                             commitments are
                                                             unconditional and

                                                                                                                     55
TCL Technology Group Corporation                                                                 Annual Report 2019


                                                               irrevocable. I/we as an
                                                               enterprise will make
                                                               comprehensive and
                                                               timely joint
                                                               compensations in full
                                                               amount to TCL
                                                               Corporation for any
                                                               losses incurred from the
                                                               violation of the
                                                               aforementioned
                                                               commitments.
                                                               Upon the completion of
                                                               this transaction, I/we as
                                                               an enterprise will continue
                                                               to exercise the
                                                               shareholder’s rights in
                                                               accordance with laws,
                                                               regulations and the
                                                               Articles of Incorporation
                                                               of TCL Corporation and
                                                               maintain the
                                                               independence of TCL
                                                               Corporation in assets,
                                                               personnel, finance,
                                                               business and institution.
                                                               The specific contents are
                                                               as follows:
                                                               (I) Commitment to the
                                                               personnel independence
                                                       Abo     from TCL Corporation
                                                               I/we as an enterprise
                                                        ut
                                                               undertake to maintain
                                                       kee     personnel independence              During the
                                                               from TCL Corporation.               period
                                                       ping
                                                               General managers,
                                                       the     deputy general                      when being
                                    Li Dongsheng,              managers, financial
                                                       liste                                   7   the biggest   No
                                   Jiutian Liancheng           principals, board
                                                        d      secretaries and other       Decembe shareholde violation
                                     and Donging               senior managers of TCL
                                                       com                                  r 2018 r of TCL       s
                                        Huarui                 Corporation will not serve
                                                       pan     in any position other than          Corporatio
                                                               Director and Supervisor in
                                                        y                                          n
                                                               any enterprise which is a
                                                       inde    wholly-owned or holding
                                                               subsidiary of me/us as an
                                                       pen     enterprise or any other
                                                       dent    subsidiary over which
                                                               I/we as an enterprise has
                                                               control (hereinafter
                                                               referred to as “the
                                                               subsidiaries”). They will
                                                               not be paid salaries in the
                                                               subsidiaries of me/us as
                                                               an enterprise. The
                                                               financial personnel of TCL
                                                               Corporation will not work
                                                               in the subsidiaries of
                                                               me/us as an enterprise on
                                                               a part-time basis.
                                                               (II) Commitment to the
                                                               asset independence and
                                                               completeness of TCL
                                                               Corporation
                                                               1. I/we as an enterprise
                                                               undertake that TCL

                                                                                                                      56
TCL Technology Group Corporation                                Annual Report 2019


                                   Corporation has
                                   independent and
                                   complete assets.
                                   2. I/we as an enterprise
                                   undertake that TCL
                                   Corporation has no funds
                                   or assets misappropriated
                                   by me/us as an enterprise
                                   or the subsidiaries of
                                   me/us as an enterprise.
                                   (III) Commitment to the
                                   financial independence of
                                   TCL Corporation
                                   1. I/we as an enterprise
                                   undertake that TCL
                                   Corporation establishes
                                   an independent finance
                                   department and an
                                   independent financial
                                   accounting system.
                                   2. I/we as an enterprise
                                   undertake that TCL
                                   Corporation has standard
                                   and independent financial
                                   accounting policies.
                                   3. I/we as an enterprise
                                   undertake that TCL
                                   Corporation opens
                                   accounts independently
                                   in the bank without
                                   sharing any bank account
                                   with me/us as an
                                   enterprise.
                                   4. I/we as an enterprise
                                   undertake that the
                                   financial personnel of TCL
                                   Corporation not work in
                                   the subsidiaries of me/us
                                   as an enterprise on a
                                   part-time basis.
                                   5. I/we as an enterprise
                                   undertake that TCL
                                   Corporation is able to
                                   make financial decisions
                                   independently and that
                                   I/we as an enterprise not
                                   intervene in the fund use
                                   of TCL Corporation.
                                   (IV) Commitment to the
                                   institutional
                                   independence of TCL
                                   Corporation
                                   1. I/we as an enterprise
                                   undertake that TCL
                                   Corporation has an
                                   independent and
                                   complete organizational
                                   institution and run it
                                   independently and
                                   autonomously.
                                   2. I/we as an enterprise
                                   undertake that the office
                                   institutions and
                                   production and operation
                                   places of TCL


                                                                                     57
TCL Technology Group Corporation                                                                 Annual Report 2019


                                                            Corporation are separate
                                                            from my subsidiaries/us
                                                            as an enterprise.
                                                            3. I/we as an enterprise
                                                            undertake that the Board
                                                            of Directors, Board of
                                                            Supervisors and
                                                            functional departments of
                                                            TCL Corporation are
                                                            operated independently
                                                            without any affiliation with
                                                            the functional department
                                                            of us as an enterprise.
                                                            (V) Commitment to the
                                                            business independence
                                                            from TCL Corporation
                                                            1. I/we as an enterprise
                                                            undertake to maintain
                                                            business independence
                                                            from the TCL Corporation
                                                            after this transaction.
                                                            2. I/we as an enterprise
                                                            undertake that TCL
                                                            Corporation has the
                                                            assets, personnel,
                                                            qualifications and
                                                            capabilities for
                                                            independent performance
                                                            of operating activities and
                                                            the capabilities for
                                                            autonomous operation
                                                            targeting market.
                                                            I/we as an enterprise or
                                                            the subsidiaries of me/us
                                                            as an enterprise will make
                                                            bear the corresponding
                                                            compensation liabilities in
                                                            accordance with laws for
                                                            any losses incurred to
                                                            TCL Corporation due to
                                                            the violation of the
                                                            commitments under the
                                                            commitment letter.

                                   Star Century
                                   Enterprises
                                   Limited; Linzhou
                                   Xinglan Venture    Abo
                                   Investment         ut    We agree not to transfer
                                   Management         shar the shares that we
                                   Partnership        e     subscribe for within 36        25      25
                                                                                                              No
Commitments made in refinancing (Limited              tradi months since the end of        Decembe December
                                                                                                              violation
                                   Partnership);      ng    TCL’s asset purchase via r 2017       2020
                                                                                                              s
                                   Linzhou Xingyong restr share offering (25
                                   Venture            ictio December 2017).
                                   Investment         ns
                                   Management
                                   Partnership
                                   (Limited


                                                                                                                      58
TCL Technology Group Corporation                                                                  Annual Report 2019


                                   Partnership);
                                   Linzhou Xingyuan
                                   Venture
                                   Investment
                                   Management
                                   Partnership
                                   (Limited
                                   Partnership); and
                                   Linzhou Xinglian
                                   Venture
                                   Investment
                                   Management
                                   Partnership
                                   (Limited
                                   Partnership)

                                                                I will comply with
                                                                obligations specified in
                                                                the management
                                                                regulations for
                                                                short-swing trading,
                                                        Abo
                                                                insider trading and
                                                        ut
                                                                changes in the
                                                        hori
                                                                shareholding of senior
                                                        zont
                                                                management; I agree to
                                                        al
                                                                have me and the
                                                        com
                                                                partnership enterprise
                                                        petit
                                                                recognized as persons
                                                        ion,
                                   Li Dongsheng; Bo             acting in concert and
                                                        relat
                                   Lianming; Liao               have the number of         4                       No
                                                        ed-p                                          Long-stand
                                   Qian; Huang                  shares I hold of TCL       February                violation
                                                        arty                                          ing
                                   Xubin; Yan Xiaolin           Corporation and that the   2015                    s
                                                        tran
                                   and Shi Wanwen               partnership enterprise
                                                        sact
                                                                holds of TCL Corporation
                                                        ion
                                                                calculated in
                                                        and
                                                                consolidation in
                                                        capi
                                                                accordance with the
                                                        tal
                                                                provisions of related
                                                        occ
                                                                regulations such as
                                                        upat
                                                                Article 83 of the
                                                        ion
                                                                Management Measures
                                                                on the Acquisition of
                                                                Listed Companies and
                                                                the Articles of
                                                                Incorporation when the


                                                                                                                           59
TCL Technology Group Corporation                                                                      Annual Report 2019


                                                              related parties perform
                                                              their legal obligations of
                                                              information disclosure on
                                                              major equity changes and
                                                              tender offer.

                                                              1) I shall avoid horizontal
                                                      Abo
                                                              competition between the
                                                      ut
                                                              companies, enterprises or
                                                      hori
                                                              other business
                                                      zont
                                                              organizations that I own,
                                                      al
                                                              control, control with                    During the
                                                      com
                                                              others, have significant                 period
                                                      petit
                                                              influence on and TCL                     when being
                                                      ion,
                                                              Corporation with its                     TCL
                                                      relat
                                                              subsidiaries; and             30         Corporatio No
                                                      ed-p
                                   Li Dongsheng               2) I shall reduce and         August     n’s director, violation
                                                      arty
                                                              control related-parties       2013       supervisor s
                                                      tran
                                                              transactions between the                 or senior
                                                      sact
                                                              companies, enterprises or                manageme
                                                      ion
                                                              other business                           nt
                                                      and
                                                              organizations that I own,
                                                      capi
                                                              control, control with
                                                      tal
                                                              others, or have significant
                                                      occ
                                                              influence on and TCL
                                                      upat
                                                              Corporation with its
                                                      ion
                                                              subsidiaries.

                                                      Abo
                                                      ut
                                                      not
                                   Li Dongsheng;     redu
                                                              I/We as an enterprise
                                   Xinjiang Jiutian   cing
                                                              shall not reduce our
                                   Liancheng Equity shar                                                             No
                                                              shareholdings in the          19 June    19 June
                                   Investment         ehol                                                           violation
                                                              Company within 12             2018       2019
                                   Partnership        ding                                                           s
                                                              months since 19 June
Other commitments                  (Limited           s in
                                                              2018.
                                   Partnership)       the
                                                      Co
                                                      mpa
                                                      ny

                                                      Abo The Company undertakes
                                                                                                                     No
                                                      ut      to TCL Multimedia that:       16 June    Long-stand
                                   The Company                                                                       violation
                                                      hori The Company and its              2014       ing
                                                                                                                     s
                                                      zont subsidiaries (other than


                                                                                                                              60
TCL Technology Group Corporation                                                       Annual Report 2019


                                                   al    TCL Multimedia and its
                                                   com subsidiaries) will not
                                                   petit engage in the
                                                   ion, manufacturing, assembly
                                                   relat and distribution of TV sets
                                                   ed-p (“restricted businesses”)
                                                   arty and will engage in the
                                                   tran R&D, manufacturing and
                                                   sact sales of audio and video
                                                   ion   products (excluding TV
                                                   and sets) (“related
                                                   capi businesses”) which are
                                                   tal   not restricted businesses,
                                                   occ provided that the party
                                                   upat making the commitment
                                                   ion   or any party therein runs
                                                         or engages in related
                                                         businesses through
                                                         equity investment in Tonly
                                                         Electronics. The
                                                         distribution and
                                                         maintenance of TV sets
                                                         and the manufacturing,
                                                         assembly, distribution and
                                                         maintenance of
                                                         information technology
                                                         products related to
                                                         Internet from time to time
                                                         will no longer be included
                                                         in the scope of res tricted
                                                         businesses. The
                                                         termination condition is
                                                         that the total equity which
                                                         TCL Multimedia and its
                                                         subsidiaries hold of Cool
                                                         Friends Technology is
                                                         less than 15%.

Fulfilled on time                         Yes

Specific reasons for failing to fulfill
commitments on time and plans for Not applicable
next step




                                                                                                            61
TCL Technology Group Corporation                                                                     Annual Report 2019


2. Where there had been an earnings forecast for an asset or project and the Reporting Period
was still within the forecast period, explain why the forecast has been reached for the Reporting
Period.

□ Applicable ■ Not applicable
Commitments made by the Company’s shareholders and transaction counterparties regarding the operating performance
of the Reporting Period:
□ Applicable ■ Not applicable


IV Occupation of the Company’s Capital by the Controlling Shareholder or Its
Related Parties for Non-Operating Purposes

□ Applicable ■ Not applicable




V Explanations Given by the Board of Directors, the Supervisory Committee and the
Independent Directors (if any) Regarding the Independent Auditor's “Modified
Opinion” on the Financial Statements of the Reporting Period

□ Applicable ■ Not applicable


VI YoY Changes to Accounting Policies, Estimates and Methods

For details, see “36. Changes to main accounting policies and estimates ” in “III Significant accounting policies and
estimates” in “Part X Financial Report”.


VII Retrospective Restatements due to Correction of Material Accounting Errors in
the Reporting Period

□ Applicable ■ Not applicable


VIII YoY Changes to the Scope of the Consolidated Financial Statements

Compared with 2018, 2019 saw the official exclusion of the intelligent terminal and
supporting businesses from the consolidated financial statements as the Restructuring was
completed in April 2019. The consolidated financial statements of 2019 included the Q1
data of the restructured businesses, while those of 2018 included the full-year data.

IX Engagement and Disengagement of Independent Auditor

Current independent auditor:




                                                                                                                           62
TCL Technology Group Corporation                                                             Annual Report 2019


                                                                Da Hua Certified Public Accountants (Special General
Name of the domestic independent auditor
                                                                                                        Partnership)

The Company’s payment to the domestic independent
                                                                                                                316
auditor (RMB’0,000)

How many consecutive years the domestic independent
                                                                                                                  12
auditor has provided audit service for the Company

Names of the certified public accountants from the domestic
independent auditor writing signatures on the auditor’s                           Qiu Junzhou and Jiang Xianmin
report

How many consecutive years the certified public
                                                                                                    1 year for both
accountants have provided audit service for the Company


Indicate whether the independent auditor was changed for the Reporting Period.

□ Yes ■ No

Indicate whether the independent auditor was changed during the audit period.

□ Yes ■ No


X Possibility of Listing Suspension or Termination after Disclosure of this Report

□ Applicable ■ Not applicable


XI Insolvency and Reorganization

□ Applicable ■ Not applicable


XII Major Legal Matters

□ Applicable ■ Not applicable


XIII Punishments and Rectifications

□ Applicable ■ Not applicable


XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller

□ Applicable ■ Not applicable


XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive
Measures for Employees

(I) The First Top 400 and Key Personnel Stock Ownership Plan and the Global


                                                                                                                   63
TCL Technology Group Corporation                                          Annual Report 2019



Partner Plan

1. On 28 March 2019, the Company disclosed the Announcement on the Quota Allocation
and Equity Vesting of the First Top 400 and Key Personnel Stock Ownership Plan and the
Global Partner Plan (the “First Stock Ownership Plan”). This plan set out a company
performance-related condition of a not-lower-than-15% growth in the net profit attributable

to shareholders of the Company as the parent in 2018 compared to 2017. According to the
2018 Annual Independent Auditor’s Report for TCL Corporation issued by Da Hua Certified
Public Accountants (Special General Partnership), the net profit attributable to
shareholders of the Company as the parent in 2018 grew by 30.17% compared to 2017,
which meant the said condition had been satisfied.

2. A total of 99,148,115 shares were purchased for the First Stock Ownership Plan. As per

the rules governing the First Stock Ownership Plan, the Management Committee of the
First Stock Ownership Plan decided to vest a total of approximately 47.49 million shares in
the holders of the First Stock Ownership Plan. To be specific, a total of about 4.26 million
shares were vested in directors, supervisors and senior management (Mr. Li Dongsheng,
Ms. Du Juan, Mr. Huang Wei, Mr. Jin Xuzhi, Mr. Liao Qian, Mr. Yan Xiaolin and Mr. Mao

Tianxiang), and the rest of 43.23 million shares were given to the other holders. The
unvested about 51.66 million shares under the First Stock Ownership Plan and the
corresponding dividends (if any) were taken back by the Management Committee of the
First Stock Ownership Plan with no compensation. These shares would be sold at a proper
timing before the expiry of the First Stock Ownership Plan, and the proceeds generated
therein would be returned to the Company.

(II) The Second Global Partner Plan

1. The Proposal on the Second Global Partner Plan (Draft) and Its Summary, and the
Measures for the Management of the Second Global Partner Plan were approved

respectively at the 16th Meeting of the 6th Board of Directors on 23 April 2019 and the Third
Extraordinary General Meeting of 2019 on 8 May 2019. Shares for the Second Global
Partner Plan would be obtained through a non-deal transfer from the special securities
account for repurchases.


                                                                                               64
TCL Technology Group Corporation                                         Annual Report 2019



2. The Proposal on Adjustments to the Second Global Partner Plan (Draft) and Its
Summary was approved at the 22 nd Meeting of the 6th Board of Directors on 12 August
2019. The Company’s independent directors expressed their independent opinion on

whether the interests of the Company and its shareholders would be jeopardized by these
adjustments.

3. The shares used for the Second Global Partner Plan were part of the shares
repurchased in 2019. On 23 August 2019, the Company initiated a non-deal transfer
procedure with the Shenzhen branch of China Securities Depository and Clearing Co., Ltd.
Up to that day, the cumulative shares in the special securities account for repurchases were
repurchased at an average price of RMB3.394/share through centralized bidding. The

capital used for the Second Global Partner Plan came from the Special Fund for the 2019
Stock Ownership Plans, with a ceiling of RMB113.3321 million. Based on the aforesaid
average repurchase price, the shares to be transferred from the special securities account
for repurchases to the Second Global Partner Plan would be 33.3919 million shares in total.

4. The Announcement on the Completion of the Non-Deal Transfer to the Second Global
Partner Plan was disclosed on the designated media dated 12 October 2019. The

Company had received the Securities Transfer Confirmation issued by the Shenzhen
branch of China Securities Depository and Clearing Co., Ltd. 33.3919 million shares (or
0.25% of the Company’s total share capital) had been transferred in a non-deal manner
from the special securities account for repurchases to the securities account for employee
stock ownership plans. As required by the Second Global Partner Plan (Draft), the shares

under the Second Global Partner 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 from the special securities account for repurchases, i.e. from 12 October
2019 to 11 October 2020.

(III) The 2018 Restricted Stock Incentive Plan and the Global Innovation Partner Plan

1. As authorized by the First Extraordinary General Meeting of 2018, the Company
convened the 16th Meeting of the 6th Board of Directors and the 10th Meeting of the 6th
Supervisory Committee on 23 April 2019. At the meetings, the Proposal on an Adjustment


                                                                                              65
TCL Technology Group Corporation                                            Annual Report 2019



to the Repurchase Price of the 2018 Restricted Stock Incentive Plan and the Global
Innovation Partner Plan was approved. As such, it was decided to adjust the repurchase
price of the 2018 Restricted Stock Incentive Plan and the Global Innovation Partner Plan

(the “2018 Restricted Stock Incentive Plan” for short) from RMB1.83/share to
RMB1.63/share.

2. The Proposal on the Repurchase and Retirement of Restricted Shares That Have Been
Granted to Certain Awardees under the 2018 Restricted Stock Incentive Plan and the
Global Innovation Partner Plan But Are Still in Lockup was approved respectively at the 18 th
Meeting of the 6th Board of Directors and the 12 th Meeting of the 6th Supervisory Committee
both dated 20 May 2019. As such, it was agreed to repurchase and retire the 21,209,788

restricted shares that had been granted to 755 awardees but were still in lockup due to
reasons such as job transfer to TCL Industries in the Restructuring, resignation, or failure of
fulfillment of the performance indicator.

The Proposal on the Satisfaction of the Unlocking Condition for the First Unlocking Period
of the 2018 Restricted Stock Incentive Plan and the Global Innovation Partner Plan was
also approved. A total of 712 awardees could apply to unlock their restricted shares of

6,685,704 shares in total (or 0.05% of the Company’s existing total share capital) for
trading.

3. On 29 October 2019, 21,209,788 restricted shares were repurchased and retired through
the Shenzhen branch of China Securities Depository and Clearing Co., Ltd.

(IV) The 2019 Restricted Stock Incentive Plan and the Second Global Innovation
Partner Plan

1. On 23 April 2019, the Proposal on the 2019 Restricted Stock Incentive Plan and the
Second Global Innovation Partner Plan of TCL Corporation (Draft) and the Summary, the
Proposal on the Measures for the Implementation of the 2019 Restricted Stock Incentive

Plan and the Second Global Innovation Partner Plan of TCL Corporation, the Proposal on
Asking the General Meeting to Authorize the Board to Handle Matters Related to the 2019
Restricted Stock Incentive Plan and other proposals were approved at the 16th Meeting of
the Sixth Board of Directors. Meanwhile, the Company’s independent directors expressed

                                                                                                 66
TCL Technology Group Corporation                                       Annual Report 2019



their independent opinion on whether these incentive plans would be good for the
Company’s sustained development and whether the interests of the Company and its
shareholders would be jeopardized.

2. On 23 April 2019, the Proposal on the 2019 Restricted Stock Incentive Plan and the
Second Global Innovation Partner Plan of TCL Corporation (Draft) and the Summary, the
Proposal on the Measures for the Implementation of the 2019 Restricted Stock Incentive
Plan and the Second Global Innovation Partner Plan of TCL Corporation, and the Proposal
on the Awardee List for the 2019 Restricted Stock Incentive Plan were approved at the 10th

Meeting of the Sixth Supervisory Committee.

3. Following the publication of the awardee list within the Company, the Supervisory
Committee’s Statement Regarding the Review and Publication of the Awardee List for the
Restricted Stock Incentive Plan and the Second Global Innovation Partner Plan was
disclosed to the public on 6 May 2019.

4. On 8 May 2019, the Proposal on the 2019 Restricted Stock Incentive Plan and the
Second Global Innovation Partner Plan of TCL Corporation (Draft) and the Summary, the
Proposal on the Measures for the Implementation of the 2019 Restricted Stock Incentive
Plan and the Second Global Innovation Partner Plan of TCL Corporation, and the Proposal
on Asking the General Meeting to Authorize the Board to Handle Matters Related to the

2019 Restricted Stock Incentive Plan were approved at the Third Extraordinary General
Meeting of 2019.

5. On 10 May 2019, the Proposal on the Adjustments to the 2019 Restricted Stock
Incentive Plan and the Second Global Innovation Partner Plan were approved at the 17th
Meeting of the Sixth Board of Directors and at the 11th Meeting of the Sixth Supervisory

Committee. As such, it was approved to grant 3,875,600 restricted shares to 122 eligible
awardees on 10 May 2019. The Company’s independent directors expressed their
independent opinion that the awardee determination method and the grant date were in
compliance with the applicable requirements.




                                                                                            67
TCL Technology Group Corporation                                                                    Annual Report 2019



6. On 27 June 2019, the Company disclosed the Announcement on the Completion of the
Grant of Restricted Stock for 2019. This grant had been completed by the Board. And the
granted shares were listed on 26 June 2019.

XVI Major Related-Party Transactions

1. Continuing Related-Party Transactions

□ Applicable ■ Not applicable


2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

□ Applicable ■Not applicable


3. Related Transactions Regarding Joint Investments in Third Parties

□ Applicable ■ Not applicable


4. Credits and Liabilities with Related Parties

□ Applicable ■ Not applicable

Indicate whether there were any credits and liabilities with related parties for non-operating purposes :
□ Yes ■ No


5. Other Major Related-Party Transactions


           Title of announcement                    Date of disclosure                    Website for disclosure

Announcement on Intended Continuing
Related-Party Transactions with TCL          8 December 2018
Industries Holdings (Guangdong) Inc.

Announcement on TCL Finance Co., Ltd.
and TCL Industries Holdings Inc. Signing a
                                             13 June 2019
Financial Service Agreement and the
Related-Party Transaction                                                      http://www.cninfo.com.cn

Announcement on the Acquisition of
Interest in Subsidiary and the               13 August 2019
Related-Party Transaction

Announcement on Investment in Equity
Investment Fund and the Related-Party        13 August 2019
Transaction




                                                                                                                         68
TCL Technology Group Corporation                                                                Annual Report 2019



Announcement on Increase in the
Estimated Amount of Continuing                 31 October 2019
Related-Party Transactions with TCL
Industries Holdings Inc.

Announcement on the Sale of Interest in
Subsidiary and the Related-Party               31 October 2019

Transaction

Announcement on Investment in Equity
Investment Fund and the Related-Party          19 November 2019
Transaction


XVII Major Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable ■ Not applicable


(2) Contracting

□ Applicable ■ Not applicable


(3) Leases

□ Applicable ■ Not applicable


2. Major guarantees

Guarantees

                                                                                                        Unit: RMB'0,000

  Guarantees provided by the Company as the parent and its subsidiaries for external par ties (exclusive of those for
                                                       subsidiaries)

                      Disclosure
                                                                                                               Guarant
                      date of the
                                                    Actual        Actual                             Having    ee for a
                       guarantee     Line of                                  Type of    Term of
       Obligor                                    occurrence     guarantee                           expired   related
                           line     guarantee                                guarantee   guarantee
                                                     date         amount                              or not   party or
                       announce
                                                                                                                 not
                           ment




                                                                                                                         69
TCL Technology Group Corporation                                                               Annual Report 2019


TCL King Electrical
                                                                     Joint-liabilit 39 days--60
Appliances              2019/3/19   345,000   2019/07/23   232,163                                Not      Yes
                                                                     y                months
(Huizhou) Co., Ltd.

TCL Overseas
                                                                     Joint-liabilit 19 –365
Electronics             2019/3/19   120,000   2019/07/17    83,200                                Not      Yes
                                                                     y                days
(Huizhou) Ltd.

TCL King Electrical
                                                                     Joint-liabilit
Appliances              2019/3/19   60,000    2019/11/18     4,000                    302 days    Not      Yes
                                                                     y
(Chengdu) Co., Ltd.

Huizhou TCL Mobile
                                                                     Joint-liabilit 1 day—15
Communication Co., 2019/3/19        450,000   2019/07/29   223,585                                Not      Yes
                                                                     y                months
Ltd.

TCL Communication
                                                                     Joint-liabilit 18—60
Technology              2019/3/19   120,000   2017/11/20   106,903                                Not      Yes
                                                                     y                months
Holdings Limited

TCL Mobile
Communication                                                        Joint-liabilit 3—4
                        2019/3/19   248,500    2019/10/8    42,099                                Not      Yes
(HK) Company                                                         y                months
Limited

TCT Mobile                                                           Joint-liabilit
                        2019/3/19     6,625            -                                         - Not     Yes
Overseas Limited                                                 -y

TCT Mobile (US)                                                      Joint-liabilit
                        2019/3/19   84,500             -                                         - Not     Yes
Inc.                                                             -y

TCT Mobile                                                           Joint-liabilit
                        2019/3/19   31,000             -                                         - Not     Yes
International Limited                                            -y

TCT Mobile Italy                                                     Joint-liabilit
                        2019/3/19     1,600            -                                         - Not     Yes
S.R.L                                                            -y

TCT MOBILE -                                                         Joint-liabilit
                        2019/3/19   12,000             -                                         - Not     Yes
TELEFONES LTD A.                                                 -y

TCL Home
                                                                     Joint-liabilit 2—365
Appliances (Hefei)      2019/3/19   140,000   2020/01/02   59,189                                 Not      Yes
                                                                     y                days
Co., Ltd.

TCL Home
Appliances                                                           Joint-liabilit 4—185
                        2019/3/19   16,000    2019/07/13    12,187                                Not      Yes
(Zhongshan) Co.,                                                     y                days
Ltd.

TCL Air-Conditioner
                                                                     Joint-liabilit 27—1,804
(Zhongshan) Co.,        2019/3/19   158,600   2016/09/09    91,686                                Not      Yes
                                                                     y                days
Ltd.




                                                                                                                    70
TCL Technology Group Corporation                                                              Annual Report 2019


TCL Air Conditioner                                                Joint-liabilit 33—360
                       2019/3/19   131,600   2019/05/07   67,124                                 Not      Yes
(Wuhan) Co., Ltd.                                                  y                days

Zhongshan TCL
                                                                   Joint-liabilit 90—196
Refrigeration          2019/3/19   75,300    2019/06/21   26,211                                 Not      Yes
                                                                   y                days
Equipment Co., Ltd.

Guangdong TCL
Smart Heating &                                                    Joint-liabilit 90—189
                       2019/3/19     7,000   2019/07/30   5,964                                  Not      Yes
Ventilation                                                        y                days
Equipment Co., Ltd.

TCL Home
                                                                   Joint-liabilit
Appliances             2019/3/19    11,500            -                             -            Not      Yes
                                                               -y
(Huizhou) Co., Ltd.

TCL Intelligent
                                                                   Joint-liabilit
Technology (Hefei)     2019/3/19      800    2019/01/15       2                     76 days      Not      Yes
                                                                   y
Co., Ltd.

TCL Air-Conditioner                                                Joint-liabilit 180—365
                       2019/3/19   25,000    2019/07/09   12,019                                 Not      Yes
(Jiujiang) Co., Ltd.                                               y                days

TCL Home
                                                                   Joint-liabilit
Appliances (Hong       2019/3/19   20,000             -                             -            Not      Yes
                                                               -y
Kong) Limited

Shenzhen TCL
Hangxiang Supply                                                   Joint-liabilit
                       2019/3/19      500             -                             -            Not      Yes
Chain Service Co.,                                             -y
Ltd.

Zhongshan Hhappy
                                                                   Joint-liabilit 31—31
Tree Network           2019/3/19     2,000   2019/12/16       3                                  Not      Yes
                                                                   y                days
Technology Co., Ltd.

TCL Tonly
                                                                   Joint-liabilit
Electronics            2019/3/19   40,000    2019/02/15   7,206                     1—2 years   Not      Yes
                                                                   y
(Huizhou) Co., Ltd.

TCL Commercial
Information                                                        Joint-liabilit 3—259
                       2019/3/19   14,000    2018/11/16                                          Not      Yes
Technology                                                     -y                   days
(Huizhou) Co., Ltd.

TCL Very Lighting
                                                                   Joint-liabilit 2—196
Technology             2019/3/19     9,500   2019/07/11   4,795                                  Not      Yes
                                                                   y                days
(Huizhou) Co., Ltd.

TCL Capital (Hong                                                  Joint-liabilit
                       2019/3/19   100,000            -                             -            Not      Yes
Kong) Limited                                                  -y




                                                                                                                   71
TCL Technology Group Corporation                                                              Annual Report 2019


Huizhou Cool
                                                                    Joint-liabilit 6—204
Friends Network        2019/3/19   13,000    2019/11/11    12,989                                 Not     Yes
                                                                    y                days
Technology Co., Ltd.

SHIFENDAOJIA
                                                                    Joint-liabilit 2—189
Online Service Co.,    2019/3/19     3,000   2019/06/28     1,216                                 Not     Yes
                                                                    y                days
Ltd.

TCL Technology                                                      Joint-liabilit
                       2019/3/19   27,000             -                              -            Not     Yes
Park Co., Ltd.                                                  -y

Guangzhou
                                                                    Joint-liabilit 120—144
Yunsheng Tianji        2019/3/19   110,000   2017/09/28    94,900                                 Not     Yes
                                                                    y                months
Technology Co., Ltd.

Guangzhou TCL
Science and
                                                                    Joint-liabilit 156—156
Technology             2019/3/19   200,000   2018/12/18    38,250                                 Not     Yes
                                                                    y                months
Development Co.,
Ltd.

Shenzhen Bao’an
TCL Haichuanggu
                                                                    Joint-liabilit 36—36
Technology Park        2019/3/19   20,000    2018/09/25    16,144                                 Not     Yes
                                                                    y                months
Development Co.,
Ltd.

TCL Industries
                                                                    Joint-liabilit
Holdings (HK)          2019/3/19   800,000    2016/10/4   631,197                    1—5 years   Not     Yes
                                                                    y
Limited

Huizhou TCL
                                                                    Joint-liabilit 7 days-3
Environment            2019/3/19     6,000   2019/01/24      684                                  Not     Yes
                                                                    y                months
Technology Co., Ltd.

Canyon Circuit
                                                                    Joint-liabilit 24—188
Technology             2019/3/19     5,000   2019/07/03     3,205                                 Not     Yes
                                                                    y                days
(Huizhou) Co., Ltd.

Huizhou Shenghua                                                    Joint-liabilit 59—239
                       2019/3/19     9,000   2019/06/28     7,421                                 Not     Yes
Industrial Co., Ltd.                                                y                days

Taiyang
                                                                    Joint-liabilit 109—184
Electro-optic          2019/3/19     4,000   2019/07/05     3,235                                 Not     Yes
                                                                    y                days
(Huizhou) Co., Ltd.

Shenzhen Qianhai
Qihang Supply                                                       Joint-liabilit
                       2019/3/19   110,000    2018/3/27    28,052                    2-12 months Not      Yes
Chain Management                                                    y
Co., Ltd.




                                                                                                                   72
TCL Technology Group Corporation                                                                             Annual Report 2019


Qihang
                                                                                Joint-liabilit
Import&Export          2019/3/19        30,000                -                                    -               Not       Yes
                                                                               -y
Limited

Huizhou
                                                                                Joint-liabilit 89—245
Gaoshengda             2019/3/19         9,000    2019/06/25              390                                      Not       Yes
                                                                                y                  days
Technology Co., Ltd.

AGC New Electronic
                                                                                Joint-liabilit
Display Glass          2019/6/12        40,000                -                                    -               Not       Yes
                                                                               -y
(Shenzhen) Co., Ltd.

Total approved line for such                                      Total actual amount of
guarantees in Reporting Period                      3,617,025 such        guarantees          in                             3,893,397
(A1)                                                              Reporting Period (A2)

Total approved line for such                                      Total actual balance of
guarantees at end of Reporting                      3,617,025 such guarantees at end                                         1,816,017
Period (A3)                                                       of Reporting Period (A4)

                         Guarantees provided by the Company as the parent for its subsidiaries

                       Disclosure
                                                                                                                              Guarant
                       date of the
                                                   Actual            Actual                                        Having     ee for a
                       guarantee      Line of                                       Type of            Term of
       Obligor                                   occurrence        guarantee                                       expired    related
                          line       guarantee                                   guarantee             guarantee
                                                    date            amount                                          or not    party or
                       announce
                                                                                                                                not
                         ment

Wuhan China Star                                                                                   14
                                                                                Joint-liabilit
Optoelectronics        2019/3/19       800,000    2016/07/05          554,546                      days—96        Not       Not
                                                                                y
Technology Co., Ltd.                                                                               months

Shenzhen China
Star Optoelectronics
                                                                                Joint-liabilit 6—96
Semiconductor          2019/3/19 4,763,100         2017/03/31       1,079,113                                      Not       Not
                                                                                y                  months
Display Technology
Co., Ltd.

TCL China Star                                                                                     18
                                                                                Joint-liabilit
Optoelectronics        2019/6/12       889,535    2015/04/27          404,127                      days—96        Not       Not
                                                                                y
Technology Co., Ltd.                                                                               months

Wuhan China Star
Optoelectronics
                                                                                Joint-liabilit 3—96
Semiconductor          2019/3/19 1,160,000         2017/12/22         642,500                                      Not       Not
                                                                                y                  months
Display Technology
Co., Ltd.

Huizhou China Star                                                                                 24
                                                                                Joint-liabilit
Optoelectronics        2019/3/19       500,000    2019/09/25          100,611                      days—12        Not       Not
                                                                                y
Technology Co., Ltd.                                                                               months


                                                                                                                                        73
TCL Technology Group Corporation                                                               Annual Report 2019


China Star
Optoelectronics                                                      Joint-liabilit
                        2019/3/19   260,000   2019/08/30    48,000                    24 months   Not      Not
International (HK)                                                   y
Limited

China Display
Optoelectronics                                                      Joint-liabilit 7 days—60
                        2019/3/19   150,000   2019/09/26    37,713                                Not      Not
Technology                                                           y                months
(Huizhou) Co., Ltd.

Wuhan China
Display                                                              Joint-liabilit 22—196
                        2019/3/19   50,000    2019/04/10     7,790                                Not      Not
Optoelectronics                                                      y                days
Technology Co., Ltd.

Guangdong Juhua
                                                                     Joint-liabilit
Printed Display         2019/3/19   30,000             -                              -           Not      Not
                                                                 -y
Technology Co., Ltd.

TCL Finance Co.,                                                     Joint-liabilit
                        2019/3/19   150,000            -                              -           Not      Not
Ltd.                                                             -y

TCL Commercial
                                                                     Joint-liabilit
Factoring               2019/3/19   50,000             -                              -           Not      Not
                                                                 -y
(Shenzhen) Co., Ltd.

Huizhou Zhongkai
TCL Zhirong                                                          Joint-liabilit 12—12
                        2019/3/19   50,000    2019/03/10    22,989                                Not      Not
Technology                                                           y                months
Microcredit Co., Ltd.

Guangzhou TCL
                                                                     Joint-liabilit
Internet Microcredit    2019/3/19   50,000             -                              -           Not      Not
                                                                 -y
Co., Ltd.

Highly Information                                                   Joint-liabilit 1—26
                        2019/3/19   283,000   2018/04/12   212,192                                Not      Not
Industry Co., Ltd.                                                   y                months

Beijing Hecheng
                                                                     Joint-liabilit 22—22
Nuoxin Technology       2019/3/19   20,000    2018/09/05     2,000                                Not      Not
                                                                     y                months
Co., Ltd.

Beijing Lingyun Data                                                 Joint-liabilit 1—24
                        2019/3/19   35,000    2018/01/01    33,340                                Not      Not
Technology Co., Ltd.                                                 y                months

Beijing Sunpiestore                                                  Joint-liabilit 12—22
                        2019/3/19   67,000    2018/09/05    47,000                                Not      Not
Technology Co., Ltd.                                                 y                months

Shaanxi Titi
                                                                     Joint-liabilit 22—22
Electronic              2019/3/19     3,000   2018/09/05     1,000                                Not      Not
                                                                     y                months
Technology Co., Ltd.




                                                                                                                    74
TCL Technology Group Corporation                                                                                Annual Report 2019


TCL Technology
                                                                                     Joint-liabilit
Park (Huizhou) Co.,     2019/3/19       200,000                 -                                     -               Not        Not
                                                                                  -y
Ltd.

TCL Technology                                                                       Joint-liabilit
                        2019/6/12       400,000                 -                                     -               Not        Not
Investments Limited                                                               -y

Total approved line for such                                        Total actual amount of
guarantees in the Reporting                           9,910,635 such guarantees in the                                          3,024,432
Period (B1)                                                         Reporting Period (B2)

                                                                    Total actual balance of
Total approved line for such
                                                                    such guarantees at the
guarantees at the end of the                          9,910,635                                                                 3,192,920
                                                                    end     of the     Reporting
Reporting Period (B3)
                                                                    Period (B4)

                                           Guarantees provided between subsidiaries

                        Disclosure
                                                                                                                                 Guarant
                        date of the
                                                     Actual            Actual                                         Having     ee for a
                        guarantee      Line of                                          Type of           Term of
       Obligor                                     occurrence       guarantee                                         expired    related
                           line       guarantee                                       guarantee           guarantee
                                                      date            amount                                           or not    party or
                        announce
                                                                                                                                   not
                          ment



Total approved line for such                                        Total actual amount of
guarantees in the Reporting                                     - such guarantees in the                                                    -
Period (C1)                                                         Reporting Period (C2)

                                                                    Total actual balance of
Total approved line for such
                                                                    such guarantees at the
guarantees at the end of the                                    -                                                                           -
                                                                    end     of the     Reporting
Reporting Period (C3)
                                                                    Period (C4)

                           Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved in                                    Total   actual     guarantee
the         Reporting       Period                  13,527,660 amount in the Reporting                                          6,917,829
(A1+B1+C1)                                                          Period (A2+B2+C2)

                                                                    Total   actual     guarantee
Total approved guarantee line at
                                                                    balance at the end of the
the end of the Reporting Period                     13,527,660                                                                  5,008,937
                                                                    Reporting               Period
(A3+B3+C3)
                                                                    (A4+B4+C4)

Total actual guarantee amount (A4+B4+C4) as % of the                                                                               166%
Company’s net assets

Of which:

Balance of guarantees provided for shareholders, actual
                                                                                                                            1,816,016.79
controller and their related parties (D)



                                                                                                                                            75
TCL Technology Group Corporation                                                                  Annual Report 2019


Balance of debt guarantees provided directly or indirectly for
                                                                                                            2,284,430.79
obligors with an over 70% debt/asset ratio (E)

Amount by which the total guarantee amount exceeds 50%
                                                                                                            3,503,339.28
of the Company’s net assets (F)

Total of the three amounts above (D+E+F)                                                                    7,603,786.86

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)


Irregularities in Provision of Guarantees

□ Applicable ■ Not applicable


3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management

Overview of wealth management entrustments in the Reporting Period:

                                                                                                          Unit: RMB’0,000

                                                                                                    Unrecovered overdue
           Type                 Source of capital         Amount                 Undue amount
                                                                                                          amount

       Bank’s wealth
                                Self-owned capital                    770,029            145,424                        0-
management product

   Securities firm’s
 wealth management              Self-owned capital                     95,000              95,000                       0-
          product

         Trust plan             Self-owned capital                    150,000              40,000                       0-

           Other                Self-owned capital                     91,751              26,944                       0-

                        Total                                        1,101,751           307,368                        0-

High-risk wealth management transactions with a significant single amount, low liquidity and no principal protection:

□ Applicable ■ Not applicable

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable ■ Not applicable


(2) Entrusted Loans

Overview of entrusted loans provided in the Reporting Period:
                                                                                                          Unit: RMB’0,000



                                                                                                                         76
TCL Technology Group Corporation                                                                     Annual Report 2019


                                                                                                  Unrecovered overdue
        Total amount                  Source of capital                Undue amount
                                                                                                         amount

                             0 Self-owned capital                                      711.09                             0

High-risk entrusted loans with a significant single amount, low liquidity and no principal protection:

□ Applicable ■ Not applicable

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable ■ Not applicable


4. Other Major Contracts

□ Applicable ■ Not applicable


XVIII Corporate Social Responsibility (CSR)

1. Measures Taken to Fulfill CSR Commitment

Please refer to The 2019 Corporate Social Responsibility Report of TCL Technology Group
Corporation.

2. Measures Taken for Targeted Poverty Alleviation

(1) Plans

To respond to the "Opinions of the China Securities Regulatory Commission on the Role of
Capital Markets in Serving the Country in Poverty Alleviation", the Compa ny has been
fulfilling its social responsibilities in poverty alleviation and public service, especially in the
field of education poverty alleviation. The "TCL Hope Engineering Candlelight Awards

Program" jointly established by CYDF and Shenzhen TCL Public Welfare Foundation in
2013 is one of the earliest public welfare projects for rural teachers in the country. The
investment to this project is over RMB34 million in six 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.




                                                                                                                          77
TCL Technology Group Corporation                                             Annual Report 2019


(2) Summary of the Related Work Done in the Reporting Period

In the 2019 "Candlelight Awards Program", a total of 402 outstanding rural teachers were
selected. The 100 rural teacher representatives who participated in the award ceremony
were awarded the "Candlelight Award" for dedication, innovation and guidance. The
award-winning teachers will receive funding and training support. The individual award,

which is worth RMB8,000, includes a cash reward of RMB5,000 and a "candle classroom"
training of RMB3,000 in online and offline "Flipped Classroom" per person. In 2019, the
coverage of "Candlelight Micro-Loan" was expanded. Except for the outstanding teachers
who were rewarded by the "TCL Hope Engineering Candlelight Awards", all the teachers
under training who belong to the Hope Primary School Teacher Training Office of CYDF
can apply for the loan.

In order to serve the national poverty alleviation work and respond to the call for targeted
poverty alleviation, Shenzhen TCL Public Welfare Foundation initiated an "assistance
program for retired private substitute teachers" jointly with CYDF to solve the problem of
low-paid and difficult living for retired private substitute teachers in poverty-stricken areas.
This program helps and supports retired private substitute teachers who contributed to

education in poverty-stricken areas to improve their living conditions by funding services
and social advocacy, and encourage them to develop for social respect and
self-development.

(3) Results

                                                  Measurement
                      Indicators                                  Quantity/Development
                                                      Unit

I. Overall summary                                    ——                ——

  Of which: 1. Cash                                RMB’0,000                            779.298

            4. Poverty alleviation by education       ——                ——

                4.3 Investment amount in
improvement of educational resources in            RMB’0,000                                360
poverty-stricken areas

            8. Poverty alleviation by public
                                                      ——                ——
programmes



                                                                                                   78
TCL Technology Group Corporation                                                                      Annual Report 2019


                 8.2 Investment amount in targeted
                                                                 RMB’0,000                                              10
poverty alleviation

                 8.3 Investment amount in public
                                                                 RMB’0,000                                         409.298
fund for poverty alleviation


(4) Subsequent Plans

In 2020, the Company will expand the existing award scale and publicity impact of the TCL
Hope Project—Candlelight Awards Program, and strengthen interaction with netizens on
the Internet platform to maintain social attention.

Starting from 2020, the Company will also expand the coverage of the Candlelight
Micro-loan Project to solve the financial needs of more rural teachers and improve their
lives. This is to ensure the positive development of rural education.

3. Issues Related to Environmental Protection

The Company as the parent is not a major polluter. The subsidiaries in the table below were
major polluters declared by the environmental protection authorities in 2019, and
“subsidiaries” mentioned in this section refer to the following subsidiaries in particular.
 Name of                                                                                              Approved
                                                     Distributio Discharge Governing         Total
    the                                  Number of                                                      total
               Major        Way of                      n of        concentrati discharge discharge                Excessive
Company                                  discharge                                                    discharge
             pollutants   discharge                  discharge         on       standards   (metric                discharge
    or                                    outlets                                                      (metric
                                                       outlets        (mg/L)     (mg/L)      ton)
subsidiary                                                                                            tons/year)

                          Intermittent
               COD                                                  106.9mg/L 260 mg/L      777.23t   1226.05t       None
                                ly
                                                     Northwest
                          discharged
                                                     ern corner
                         to                 1
TCL China Ammonia                                    of the plant
                     Guangmin                                        5.6 mg/L   30 mg/L     40.81t        /          None
    Star    nitrogen                                    area
                     g Sewage
Optoelectr
                        Plant
   onics
                     Continuou
Technolog    COD                                      Artificial    16.6 mg/L   30 mg/L     70.15t     174.89t       None
                         sly
y Co., Ltd.                                          wetland to
                     discharged
                                            1         the north
             Ammonia            to
                                                     of the plant 0.65 mg/L     1.5 mg/L     2.7t        7.7t        None
              nitrogen    Dongkeng
                                                        area
                               shui




                                                                                                                              79
TCL Technology Group Corporation                                                          Annual Report 2019


Shenzhen       COD                                          50mg/L    110mg/L   237.25t    494.52t     None
China Star               Intermittent
Optoelectr                    ly
                                            Northeaste
   onics                 discharged
                                             rn corner
Semicondu                    to         1
              Ammonia                       of the plant
    ctor                 Guangmin                           3mg/L     30mg/L     14t        79.12t     None
              nitrogen                         area
  Display                g Sewage
Technolog                   Plant
y Co., Ltd.

Wuhan                    Intermittent
               COD                                         16-34mg/L 400mg/L    250.45t    353.55t     None
China Star                    ly            Northwest
Optoelectr               discharged         ern corner
                                        1
onics         Ammonia to Zuoling            of the plant 0.306-5.59
                                                                       30mg/L   25.05t      35.36t     None
Technolog     nitrogen    Sewage               area          mg/L
y Co., Ltd.                 Plant

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. An advanced sewage management system has

been established for each subsidiary, and regular monitoring and supervision and
inspection mechanisms have been adopted to ensure the emission and disposal of waste
water, waste gas, and solid waste and factory noises generated during the operation are in
compliance with 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 subjected to the standards 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 alkaline waste gas
treatment system, acidic waste gas treatment system, organic waste gas treatment system,

waste gas treatment system for waste water treatment station, cloth bag dedusting system,
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

                                                                                                               80
TCL Technology Group Corporation                                          Annual Report 2019



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 b y
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. 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 s table
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 e nvironmental protection administrative
licenses, and no violations occurred during the Reporting 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 and prepared an environmental emergency response
plan, which has been filed with the local environmental protection department in
accordance with relevant national laws and regulations. In addition, regularly emergency
drills are conducted for environmental incidents according to the plan to ensure the validity
of emergency response plan.

Environmental Self-Monitoring Program

Each subsidiary has formulated an environmental self-monitoring program in accordance

                                                                                               81
TCL Technology Group Corporation                                             Annual Report 2019



with national regulations, and monitors the discharge of pollutants by manual monitoring or
manual monitoring performed by a third-party qualified agency. The monitoring plans and
annual monitoring reports can be checked on the key environmental monitoring information
platform managed by local environmental authorities or subsidiary websites.
Other environment-related information that should be disclosed:
None.
Other relevant information:
None.

XIX Other Significant Events

On 25 March 2019, the Company disclosed the Announcement on the Investment in an
Overseas Equity Investment Fund (Announcement No. 2019-039). As the electronic
information industry (where the Company competes) features a typical global vertical
specialization in terms of capital allocation as well as technological expertise. In view of that,
the Company has established R&D centers in Guangzhou, Wuhan, Hong Kong, the U.S.,

Europe, etc. based on local resources and global planning. By cooperating with
professional investing institutions across the globe through the platform of TCL Capital, the
Company strengthens insight in cutting-edge technologies and look for investment targets
with high growth potential, business synergy and financial returns. Therefore, through its
majority-owned subsidiary Li Rong Development Limited as a limited partner, the Company

intended to make an investment of US$25 million in Sierra Ventures XII, L.P., a venture
capital fund registered in Delaware, the U.S. The fund is currently in normal operation.

On 13 August 2019, the Company disclosed the Announcement on the Investment in an
Equity Investment Fund and the Related-Party Transaction (Announcement No. 2019-113).
In order to find investment projects with high growth potential, and promote the
improvement of industrial chain and technological progress through investment, the
Company intended to establish Chongqing Zhongxin Rongxin Investment Center (Limited

Partnership) jointly with Chongqing Zhongxin Rongchuang Investment Co., Ltd. and Tibet
Zhongxin Ruiyin Investment Management Co., Ltd. As a limited partnership, the fund aims
for a goal of RMB2.31 billion, of which Chongqing Zhongxin Rongchuang Investment Co.,


                                                                                                  82
TCL Technology Group Corporation                                             Annual Report 2019



Ltd. subscribed for RMB0.06 billion, the Company subscribed for RMB1.5 billion and Tibet
Zhongxin Ruiyin Investment Management Co., Ltd. subscribed for RMB0.75 billion. The
fund is currently in normal operation.

On 19 November 2019, the Company disclosed the Announcement No. 2019-151 on
Investment in an Equity Investment Fund and the Related-Party Transaction. In order to

coordinate and leverage various resources to optimize the allocation of various elements
for faster realization of the Company’s strategies, the Company intended to make an
investment in Guangdong Rongchuang Lingyue Intelligent Manufacturing and Information
Technology Industry Equity Investment Fund Partnership (Limited Partnership) to be
established. As a limited partnership, the fund aimed to raise RMB3 billion in two tranches.

The goal of the first tranche was RMB2.03 billion, of which the Company subscribed for
RMB0.75 billion, Guangdong Utrust Industry Investment Fund Partnership (Limited
Partnership) subscribed for RMB0.4 billion, Chongqing Sokon Industry Group Stock Co.,
Ltd. subscribed for RMB0.15 billion, Win-All Hi-Tech Seed Co., Ltd. subscribed for RMB0.1
billion, Shenzhen Qianhai Zhongxin Financial Capital Management Company Limited

subscribed for RMB0.03 billion, Ningbo Meishan Bonded Port Area Chuangyi Asset
Management Partnership (Limited Partnership) subscribed for RMB0.1 billion, Chongqing
Haorong Ruigong Investment Center (Limited Partnership) subscribed for RMB0.3 billion,
and Tangying (Ningxia) Investment Management Co., Ltd. subscribed for RMB0.2 billion.
The goal of the second tranche was RMB0.97 billion. The fund is now in normal operation.

XX Significant Events of Subsidiaries

      Title of current announcement              Disclosure date     Disclosure website

Announcement on Shenzhen Industry
Development Fund Increasing Its Capital
                                          24 April 2019
Increase to the G11 New Display Device
Production Line Project Company                                    http://www.cninfo.com.cn

Announcement on Name Change of
Subsidiary TCL China Star                 4 November 2019
Optoelectronics Technology Co., Ltd.




                                                                                                  83
TCL Technology Group Corporation                                                               Annual Report 2019




            Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

                                                                                                           Unit: share

                                                        Increase/decrease in the
                                   Before                                                          After
                                                          Reporting Period (+/-)

                                            Percenta                                                        Percenta
                            Shares                       Other           Subtotal         Shares
                                             ge (%)                                                          ge (%)

1. Restricted shares        1,825,653,291     13.47%    -957,888,311      -957,888,311     867,764,980          6.41%


1.1 Shares held by
state-owned        legal               0       0.00%               0                0                0          0.00%

persons

1.2 Shares held by
other        domestic       1,734,836,800     12.80%    -957,734,601      -957,734,601     777,102,199          5.74%

investors

Among          which:
Shares      held     by
                            1,210,757,974      8.94%   -1,059,849,533   -1,059,849,533     150,908,441          1.12%
domestic           legal
persons

         Shares held
by domestic natural          524,078,826       3.86%     102,114,932       102,114,932     626,193,758          4.63%

persons

1.3 Shares held by
                              90,816,491       0.67%        -153,710          -153,710      90,662,781          0.67%
foreign investors

Among          which:
Shares      held     by
                              90,532,347       0.67%               0                0       90,532,347          0.67%
foreign            legal
persons

         Shares held
by foreign natural               284,144       0.00%        -153,710          -153,710         130,434          0.00%

persons

2.        Unrestricted
                           11,723,995,216     86.53%     936,678,523       936,678,523   12,660,673,739        93.59%
shares

2.1
                           11,723,995,216     86.53%     936,678,523       936,678,523   12,660,673,739        93.59%
RMB-denominated


                                                                                                                         84
TCL Technology Group Corporation                                                                     Annual Report 2019


ordinary shares


3. Total shares        13,549,648,507       100.00%         -21,209,788       -21,209,788   13,528,438,719      100.00%


Reasons for share changes:

Some of the shares in a share offering made in 2017 for asset purchase, i.e. 1,059,849,533 shares, were unlocked on 4
January 2019, reducing the restricted shares and increasing the unrestricted shares accordingly; and 6,685,704 restricted
shares under the 2018 Restricted Stock Incentive Plan were unlocked, reducing the restricted shares and increasing the
unrestricted shares accordingly. 3,875,613 restricted shares were granted under the 2019 Restricted Stock Incentive Plan,
increasing the restricted shares accordingly. Mr. Li Dongsheng increased his shareholding by 167,974,800 shares,
increasing the restricted shares accordingly. 21,209,788 restricted shares under the 2018 Restricted Stock Incentive Plan
were repurchased and retired, reducing the total share capital from 13,549,648,507 shares to 13,528,438,719 shares.

Approval of share changes:

□Applicable ■Not applicable

Transfer of share ownership:

□Applicable ■Not applicable
Progress on any share repurchase:

It is the key operational philosophy and mission of the Company to create value for and grow with the shareholders. In

order to effectivel y protect shareholders’ interests and enhance shareholder value, the Company convened the 14 th

Meeting of the 6 th Board of Directors on 10 January 2019, at which the Proposal on the Repurchase of Certa in Public

Shares was approved. The Report on the Repurchase of Certain Public Shares was disclosed on 14 February 2019. In

                                                                                             th                  th
view of the trends on the secondary market of stocks, the Company convened the 15                 Meeting of the 6 Board of

Directors on 19 March 2019, at which the Proposal on the Adjustment to the Upper Limit of the Share Repurchase Price.

As such, the upper limit of the share repurchase price was adjusted from RMB3.80/share to RMB5.00/share. The

Company implemented the share repurchase from 14 February 2019. Up to 10 January 2020, the Company has

cumulatively repurchased 565,333,922 shares (or 4.18% 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 RMB4.17/share, the lowest

trading price being RMB3.13/share, and the average trading price being RMB3.42/share. The total transaction amount

was RMB1,933.5965 million (exclusive of trading fees). 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 14 th Meeting of the 6 th Board of Directors, with no difference with the

disclosed Report on Share Repurchase. As such, the Company has completed the share repurchase as per the

repurchase plan that it disclosed.



                                                                                                                          85
TCL Technology Group Corporation                                                                      Annual Report 2019




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

                                                                                                                  Unit: share

                        Beginning       Unlocked in       Increase in        Ending
                                                                                              Reason for        Date of
  Shareholder            restricted      Reporting         Reporting        restricted
                                                                                               restriction     unlocking
                          shares           Period           Period           shares

Hubei Changjiang
Hezhi Hanyi
Equity In vestment                                                                           IPO restricted
                      1,059,849,533    1,059,849,533                    -                -                    2019-1-4
Fund Partnership                                                                             shares
(Limited
Partnership)

Star Century
                                                                                             IPO restricted
Enterprises               90,532,347                  -                 -   90,532,347                        2020-12-25
                                                                                             shares
Limited

Duilong Xinglan
Venture
Investment
                                                                                             IPO restricted
Management                42,521,163                  -                 -   42,521,163                        2020-12-25
                                                                                             shares
Partnership
(Limited
Partnership)

Duilong Xingyong
Venture
Investment
                                                                                             IPO restricted
Management                38,380,684                  -                 -   38,380,684                        2020-12-25
                                                                                             shares
Partnership
(Limited
Partnership)




                                                                                                                           86
TCL Technology Group Corporation                                                                     Annual Report 2019


Duilong Xingyuan
Venture
Investment
                                                                                          IPO restricted
Management              37,695,315                    -                -    37,695,315                       2020-12-25
                                                                                          shares
Partnership
(Limited
Partnership)

Duilong Xinglian
Venture
Investment
                                                                                          IPO restricted
Management              32,311,279                    -                -    32,311,279                       2020-12-25
                                                                                          shares
Partnership
(Limited
Partnership)

                                                                                          Locked-up
                                                                                          shares of
Other                  489,686,526                    -     125,981,101    615,667,627                       9999-99-99
                                                                                          senior
                                                                                          management

2018 Restricted                                                                           Restricted
Stock Incentive         34,676,444        27,859,492                         6,780,952    shares granted     2020-5-16
Plan                                                                                      as incentives

2019 Restricted                                                                           Restricted
Stock Incentive                   -                   -       3,875,613      3,875,613    shares granted     2020-5-10
Plan                                                                                      as incentives

Total                1,825,653,291     1,087,709,025        129,856,714    867,764,980              --            --


II. Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period


                                                                                          Number
 Name of stock
                                  Issue price (or                                       approved for Termination date of
and its derivative   Issue date                     Issued number      Listing date
                                   interest rate)                                          public          transaction
   securities
                                                                                          trading

Type: convertible corporate bonds, convertible corporate bonds with warrants, corporate bonds

Corporate bonds 2019-5-20         4.33%                   10,000,000       2019-06-06    10,000,000

Corporate bonds 2019-7-23         4.30%                   10,000,000       2019-08-06    10,000,000

Corporate bonds 2019-10-21        4.20%                   20,000,000       2019-10-29    20,000,000

2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures

Some of the shares in a share offering made in 2017 for asset purchase, i.e. 1,059,849,533

                                                                                                                          87
TCL Technology Group Corporation                                                                            Annual Report 2019



shares, were unlocked on 4 January 2019, reducing the restricted shares and increasing
the unrestricted shares accordingly; and 6,685,704 restricted shares under the 2018
Restricted Stock Incentive Plan were unlocked, reducing the restricted shares and

increasing the unrestricted shares accordingly. 3,875,613 restricted shares were granted
under the 2019 Restricted Stock Incentive Plan, increasing the restricted shares
accordingly. Mr. Li Dongsheng increased his shareholding by 167,974,800 shares,
increasing the restricted shares accordingly. 21,209,788 restricted shares under the 2018
Restricted Stock Incentive Plan were repurchased and retired, reducing the total share
capital from 13,549,648,507 shares to 13,528,438,719 shares.


3. Existing Staff-Held Shares


□ Applicable ■ Not applicable


III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

                                                                                                                             Unit: share

                                                                                                     Number            of
                                                                                                     preferred
                                  Number          of                Number            of             shareholders
Number         of                 ordinary                          preferred                        with      resumed
ordinary                          shareholders at                   shareholders with                voting rights at
shareholders             433,940 the month-end              546,906 resumed        voting          - the month-end                   -
at           the                  prior     to   the                rights    at     the             prior     to     the
period-end                        disclosure      of                period-end        (if            disclosure        of
                                  this Report                       any) (see note 8)                this Report (if
                                                                                                     any) (see note
                                                                                                     8)

                                         5% or greater shareholders or top 10 shareholders

                                Sharehol                     Increase/dec                                    Shares in pledge or
                    Nature of                Total shares
     Name of                      ding                        rease in the    Restricted    Unrestricted              frozen
                    sharehold                 held at the
 shareholder                    percenta                       Reporting     shares held    shares held
                       er                     period-end                                                     Status         Shares
                                  ge                            Period

Li Dongsheng Domestic                                                                                        Put in
and his             natural         9.03 1,221,748,009 174,574,800 609,636,366 612,111,643 pledge                      541,620,000
acting-in-conc person/g                                                                                      by Li


                                                                                                                                     88
TCL Technology Group Corporation                                            Annual Report 2019


ert party        eneral                                                     Dongsh
                 legal                                                       eng
                 person
                                                                            Put in
                                                                            pledge
                                                                              by
                                                                                      408,899,521
                                                                            Jiutian
                                                                            Lianche
                                                                              ng

Huizhou
                 State-ow
Investment
                 ned legal   6.48   878,419,747               878,419,747
Holding Co.,
                 person
Ltd.

Tibet Tianfeng Domestic
Enterprise       general
                             3.89   526,095,642 526,095,642   526,095,642
Management       legal
Co., Ltd.        person

China
                 Domestic
Securities
                 general
Finance                      2.76   373,231,553               373,231,553
                 legal
Corporation
                 person
Limited

Hong Kong
                 Foreign
Securities
                 legal       2.61   353,489,854               353,489,854
Clearing
                 person
Company Ltd.

Central Huijin
                 State-ow
Asset
                 ned legal   1.53   206,456,500               206,456,500
Management
                 person
Co., Ltd.

                 Domestic
Xiaomi
                 general
Communicatio                 1.00   134,949,437               134,949,437
                 legal
ns Co., Ltd.
                 person

Xinjiang
Dongxing
                 Domestic
Huarui Equity
                 general
Investment                   0.86   115,726,278               115,726,278
                 legal
Partnership
                 person
(Limited
Partnership)

TCL              Domestic
                             0.73    99,148,115                99,148,115
Corporation- general


                                                                                                 89
TCL Technology Group Corporation                                                                           Annual Report 2019


The First           legal
Employee            person
Stock
Ownership
Plan

Star Century        Foreign
Enterprises         legal             0.67      90,532,347                                  90,532,347
Limited             person

                                Hubei Changjiang Hezhi Hanyi Equity Investment Fund Partnership (Limited Partnership) has
Strategic      investor       or also become a top-10 shareholder in a share offering of the Company, with its shareholdings
general     legal      person locked up from 25 December 2017 to 25 December 2018. For further information, see the
becoming        a      top-10 Implementation Report on TCL Corporation’s Asset Purchase via Share Offering and the
ordinary shareholder in a Related-Party Transaction & the New Share Listing Announcement. Changjiang Hanyi was
rights issue (if any) (see de-registered as a legal person in November 2019 and the indirect equity-holding of the
note 3)                         original partner has become direct equity-holding. Therefore, Tibet Tianfeng Enterprise
                                Management Co., Ltd. has become a top-10 shareholder of the Company.

Related                       or Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr. Li
acting-in-concert      parties Dongsheng and Xinjiang Jiutian Liancheng Equity In vestment Partnership (Limited
among the shareholders Partnership) are the biggest shareholder of the Company with a total of 1,221,748,000
above                           shares.

                                                  Top 10 unrestricted shareholders

                                                                                                     Shares by type
        Name of shareholder                  Unrestricted shares held at the period-end
                                                                                                 Type               Shares

Huizhou Investment Holding Co.,                                                           RMB-denominated
                                                                           878,419,747                              878,419,747
Ltd.                                                                                      ordinary stock

Li Dongsheng and his                                                                      RMB-denominated
                                                                            612,111,643                             612,111,643
acting-in-concert party                                                                   ordinary stock

Tibet Tianfeng Enterprise                                                                 RMB-denominated
                                                                           526,095,642                              526,095,642
Management Co., Ltd.                                                                      ordinary stock

China Securities Finance                                                                  RMB-denominated
                                                                           373,231,553                              373,231,553
Corporation Limited                                                                       ordinary stock

Hong Kong Securities Clearing                                                             RMB-denominated
                                                                           353,489,854                              353,489,854
Company Ltd.                                                                              ordinary stock

Central Huijin Asset Management                                                           RMB-denominated
                                                                           206,456,500                              206,456,500
Co., Ltd.                                                                                 ordinary stock

                                                                                          RMB-denominated
Xiaomi Communications Co., Ltd.                                            134,949,437                              134,949,437
                                                                                          ordinary stock

Xinjiang Dongxing Huarui Equity
                                                                                          RMB-denominated
Investment Partnership (Limited                                             115,726,278                             115,726,278
                                                                                          ordinary stock
Partnership)


                                                                                                                                90
TCL Technology Group Corporation                                                                                Annual Report 2019


TCL Corporation-The First                                                                     RMB-denominated
                                                                                  99,148,115                              99,148,115
Employee Stock Ownership Plan                                                                  ordinary stock

Jiaxing Junying Youchang
                                                                                               RMB-denominated
Investment Partnership (Limited                                                   87,208,957                              87,208,957
                                                                                               ordinary stock
Partnership)

Related or acting-in-concert parties
among top 10 unrestricted public Being acting-in-concert parties upon the signing of the Agreement on Acting in
shareholders, as well as between Concert, Mr. Li Dongsheng and Xinjiang Jiutian Liancheng Equity In vestment
top    10           unrestricted         public Partnership (Limited Partnership) are the biggest shareholder of the Company with
shareholders           and         top      10 a total of 1,221,748,000 shares.
shareholders

Top    10      ordinary      shareholders
involved       in     securities     margin None
trading (if any) (see note 4)


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


2. Controlling Shareholder


The Company has no controlling shareholder.

Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr.
Li Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited

Partnership) are the biggest shareholder of the Company with a total of 1,221,748,000
shares.

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


                                                                                                                                     91
TCL Technology Group Corporation                                                                   Annual Report 2019



controller.

3. Actual Controller and Its Acting-in-Concert Parties


 The “actual controller” refers to an entity which is not a shareholder of a company but
actually controls the company behaviors through investment relationship, agreement or
other arrangements. According to the definition above, the Company has no actual
controller.

Whether there is any shareholder with a greater than 10% interest at the ultimate control level:

□ Yes ■ No

Shareholders with a greater than 5% interest at the ultimate control level:
□ Applicable ■ Not applicable

Change of the actual controller in the Reporting Period:
□ Applicable ■ Not applicable

Indicate whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable ■ Not applicable


4. Other 10% or Greater Corporate Shareholders

□ Applicable ■ Not applicable


5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder , Actual
Controller, Reorganizer and Other Commitment Makers

□ Applicable ■ Not applicable




                                                                                                                        92
TCL Technology Group Corporation                                                                                        Annual Report 2019




     Part VII Directors, Supervisors, Senior Management and Staff

I Change in Shareholdings of Directors, Supervisors and Senior Management

                                                                                                                    Decrease Other
                                                                                                  Increase in
                              Incumb                                             Beginning                           in the        increas    Ending
                                                      Start of                                   the Reporting
     Name      Office title   ent/For Gender    Age               End of tenure shareholding                        Reporting e/decre shareholding
                                                      tenure
                                                                                                    Period
                               mer                                                (share)                            Period         ase       (share)
                                                                                                    (share)
                                                                                                                     (share)       (share)

             Chairman of
Li                            Incumb
             the Board and             Male     62    2002-4-16     2020-8-31 644,873,688         167,974,800                  -          - 812,848,488
Dongsheng                     ent
             CEO

             Vice
                              Incumb
Liu Bin      Chairman of               Male     50    2015-8-31     2020-8-31                0                  -              -          -             0
                              ent
             the Board

             Director,
                              Incumb
Du Juan      COO and                   Female   49     2018-3-2     2020-8-31                0                  -              -          -             0
                              ent
             CFO

             Director and
                              Incumb
Liao Qian    Board                     Male     39    2014-4-23     2020-8-31                0                  -              -          -             0
                              ent
             Secretary

             Director and
                              Incumb
Jin Xuzhi    Senior Vice               Male     65    2015-8-13     2020-8-31                0                  -              -          -             0
                              ent
             President

             Independent Incumb
Yan Yan                                Male     63    2015-3-24     2020-8-31                0                  -              -          -             0
             Director         ent

             Independent Incumb
Lu Xin                                 Female   57     2014-9-1     2020-8-31                0                  -              -          -             0
             Director         ent

             Independent Incumb
Zhou Guofu                             Male     56     2014-9-1     2020-8-31                0                  -              -          -             0
             Director         ent

             Independent Incumb
Liu Xunci                              Male     61     2017-9-1     2020-8-31                0                  -              -          -             0
             Director         ent

             Chairman of

             the              Incumb
He Zhuohui                             Male     54     2015-9-2     2020-8-31                0                  -              -          -             0
             Supervisory      ent

             Committee

Mao          Employee         Incumb
                                       Male     39     2017-9-1     2020-8-31                0                  -              -          -             0
Tianxiang    Supervisor       ent




                                                                                                                                                        93
TCL Technology Group Corporation                                                                                   Annual Report 2019


                            Incumb
Qiu Haiyan Supervisor                  Female     45       2014-9-1     2020-8-31            0               -         -    -           0
                            ent

            Senior Vice
                            Incumb
Yan Xiaolin President and              Male       53       2014-9-1     2020-8-31      599,500               -         -    -    599,500
                            ent
            CTO

Wang        Senior Vice
                            Former Male           45      2018-3-19     2019-1-10            0               -         -    -           0
Cheng       President

Huang       Director and
                            Former Male           54      2011-6-20     2019-1-10     3,383,380              -   845,000    -   2,538,380
Xubin       CFO

            Vice

He Jinlei   Chairman of     Former Male           46       2017-9-1     2019-5-21            0               -         -    -           0

            the Board

Wu Xiaohui Director         Former Female         48       2017-9-1      2019-8-7            0               -         -    -           0

            Director and

Huang Wei Senior Vice       Former Male           57      2015-8-13    2019-12-13            0               -         -    -           0

            President

Total              --          --        --        --        --           --        648,856,568    167,974,800   845,000    - 815,986,368




II Change of Directors, Supervisors and Senior Management

                                                Type of
        Name            Office title                              Date of change                      Reason for change
                                                change

                                                                                    Transferred to TCL Industries upon the
                    Senior Vice
Wang Cheng                                Resignation       10 January 2019         Restructuring according to the principle of “people
                    President
                                                                                    follow assets”

                    Director and
Huang Xubin                               Resignation       10 January 2019         Personal and family reason
                    CFO

                    Director and
He Jinlei           Vice Chairman Resignation               21 May 2019             Job change
                    of the Board

                                                                                    No longer worked in the shareholder entity due to
Wu Xiaohui          Director              Resignation       7 August 2019
                                                                                    job transfer




                                                                                                                                        94
TCL Technology Group Corporation                                                            Annual Report 2019


                                                               On 30 October 2019, the plan on sale of the 71%
                                                               interest in Huizhou TCL Environmental Resource
                                                               Co., Ltd. was approved at the 21 st Meeting of the
               Director and                                    6th Board of Directors. The relevant liabilities and
Huang Wei      Senior Vice    Resignation   13 December 2019 personnel would be transferred along with the
               President                                       asset. As the Chairman of the Board of Huizhou
                                                               TCL Environmental Resource Co., Ltd., Mr. Huang
                                                               Wei has been transferred to the transaction
                                                               counter-party.



III Biographical Information

Born in July 1957, Mr. Li Dongsheng is the founder of TCL Technology Group Corporation

and currently serves as the Company’s Chairman and CEO; he was elected as a delegate
to China’s 16th National Congress of the CPC and a deputy to the 10th, 11th, 12th and 13th
National People’s Congress. Mr. Li holds a number of prestigious positions: Vice Chairman
of All China Federation of Industry and Commerce (ACFIC), Honorary President of China

Video Industry Association, Vice Chairman of China Commerce of International Chamber,
President of Guangdong Provincial Enterprise Confederation, President of Guangdong
Provincial Association of Entrepreneurs, First President of China Manufacturing Innovation
Alliance, Honorary President of South China University of Technology Education
Development Foundation, Vice President of Alumni Association South China University of

Technology, Member of the Council of South China University of Technology, Visiting
Professor in Wuhan University and Honorary Professor in Beijing Institute of Technology.

From 1982 to 1985, he served as Technician, Workshop Manager and Production Director

in TTK Household Appliances Co., Ltd.; from 1985 to 1986, he served as First General
Manager of TCL Communication Devices Company; from 1986 to 1989, he served as
Director of the Introduction Department in Guangdong