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Medlive Technology Co., Ltd. AGM Information 2019

May 10, 2019

50436_rns_2019-05-10_2130d80c-48e0-4c2a-8b0e-f9a24585f235.pdf

AGM Information

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in HISENSE HOME APPLIANCES GROUP CO., LTD. , you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

海信家電

HISENSE HOME APPLIANCES GROUP CO., LTD. 海信家電集團股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 00921)

(1) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (2) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SHAREHOLDERS’ GENERAL MEETING;

  • (3) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE MEETING;

  • (4) PROPOSED ELECTIONS OF EXECUTIVE DIRECTOR AND SHAREHOLDERS’ REPRESENTATIVE SUPERVISOR; (5) PROPOSED SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2019-2021); AND

  • (6) NOTICE OF 2018 ANNUAL GENERAL MEETING

A letter from the Board is set out on pages 3 to 30 of this circular.

A notice of the AGM to be held on 26 June 2019 at 3:00 p.m. at the conference room of the Company’s head office, Shunde District, Foshan City, Guangdong Province, the PRC is set out on pages 31 to 35 of this circular. A proxy form for use at the AGM is enclosed with this circular. The notice of the AGM and the proxy form are also published on the websites of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.kelon.com).

If you are not able to attend the AGM in person, you are requested to complete and return the proxy form in accordance with the instructions printed thereon and to lodge the same with the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time fixed for holding the AGM or any adjournment thereof (as the case may be). Completion and delivery of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof (as the case may be) if you so wish.

10 May 2019

CONTENTS

Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
**LETTER FROM ** THE BOARD
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		 3
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

  • “AGM” the 2018 annual general meeting of the Company to be held at the conference room of the Company’s head office, Shunde District, Foshan City, Guangdong Province, the PRC on 26 June 2019 at 3:00 p.m. for approval of, inter alia,: (i) proposed amendments to the Articles of Association; (ii) proposed amendments to the Rules of Procedures for the Shareholders’ General Meeting; and (iii) proposed amendments to the Rules and Procedures for the Supervisory Committee; (iv) proposed elections of executive director and Shareholders’ Representative Supervisor; and (v) proposed Shareholders’ Return Plan for the Next Three Years (2019-2021);

  • “Articles of Association” the Articles of Association of the Company;

  • “A Shares” domestic ordinary shares of the Company with a nominal value of RMB1.00 each and are listed on the Shenzhen Stock Exchange;

  • “Board” the board of directors of the Company;

  • “Company” Hisense Home Appliances Group Co., Ltd., a company incorporated in the PRC with limited liability, whose shares are listed on the main board of the Hong Kong Stock Exchange and the main board of the Shenzhen Stock Exchange;

  • “H Shares” overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on the Hong Kong Stock Exchange;

  • “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China;

  • “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited;

  • “Latest Practicable Date” 3 May 2019, being the latest practicable date prior to the printing of this circular for inclusion of certain information herein;

“Listing Rules” the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange;

– 1 –

DEFINITIONS

“Notice of AGM” the notice of the AGM of the Company dated 10 May
2019;

  • “PRC” the People’s Republic of China;

  • “Rules of Procedures for the the rules of procedures for the shareholders’ general Shareholders’ General meeting of the Company; Meeting”

  • “Rules of Procedures for the the rules of procedures for the Supervisory Committee Supervisory Committee meeting; Meeting”

  • “Share(s)” share(s) of RMB 1.00 each in the capital of the Company; comprising the A shares and the H shares;

  • “Shareholder(s)” holder(s) of the share(s) of RMB1.00 each in the capital of the Company, comprising the A Shares and the H Shares;

  • “Shareholders’ Representative shareholders’ representative supervisor of Company; Supervisor”

  • “Shenzhen Stock Exchange” The Shenzhen Stock Exchange;

  • “Supervisory Committee” the supervisory committee of the Company;

  • “RMB” Renminbi, the lawful currency of the PRC;

  • “%” per cent; and

  • “*” for identification purposes only.

– 2 –

LETTER FROM THE BOARD

海信家電

HISENSE HOME APPLIANCES GROUP CO., LTD. 海信家電集團股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 00921)

Executive Directors: Mr. Tang Ye Guo Mr. Jia Shao Qian Mr. Lin Lan Mr. Dai Hui Zhong Mr. Wang Yun Li

Registered Office: No. 8 Ronggang Road Ronggui Shunde Foshan Guangdong Province The PRC

Independent non-executive Directors:

Mr. Ma Jin Quan Mr. Zhong Geng Shen Mr. Cheung Sai Kit

Principal place of business in Hong Kong: Room 3101-05 Singga Commercial Centre, No. 148 Connaught Road West, Hong Kong 10 May 2019

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION; (2) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SHAREHOLDERS’ GENERAL MEETING;

  • (3) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE MEETING;

  • (4) PROPOSED ELECTIONS OF EXECUTIVE DIRECTOR AND SHAREHOLDERS’ REPRESENTATIVE SUPERVISOR; (5) PROPOSED SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2019-2021); AND

  • (6) NOTICE OF 2018 ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions in relation to, among others: the (i) proposed amendments to the Articles of Association; (ii) proposed amendments to the Rules of Procedures for the Shareholders’ General Meeting; (iii) proposed amendments to the Rules of Procedures for the Supervisory

– 3 –

LETTER FROM THE BOARD

Committee Meeting; (iv) proposed elections of executive director and Shareholders’ Representative Supervisor; (v) proposed Shareholders’ Return Plan for the Next Three Years (2019-2021); and (vi) notice of 2018 AGM.

I. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

According to the “Decision on amendments to the Company Law of the People’s Republic of China” （「關於修改《中華人民共和國公司法》的決定」） dated 26 October 2018 decided in the 6th meeting of the 13th Session of the Standing Committee of the National People’s Congress of the PRC (the “ Decision ”), the “Company Law of the People’s Republic of China” （《中華人民共和國公司法》） (the “ Company Law of the PRC ”), the “Guidelines for the Governance of Listed Companies”（《上市公司治理准則》）and the relevant provisions of the Listing Rules, and taking into account the actual situation of the Company, the Board proposes to amend the provisions of the existing Articles of Association. Save for the proposed amendments to the Articles of Association set out below, other provisions in the Articles of Association remain unchanged. Details of the proposed amendments are as follows:–

**Existing ** Articles **Revised ** Articles
**Article ** 4.2 **Article ** 4.2

The Company must prepare a balance sheet and an inventory of assets when it reduces its registered capital.

The Company shall notify its creditors within ten (10) days from the date of the Company’s resolution for reduction of capital and shall publish an announcement in a newspaper at least three (3) times within thirty (30) days from the date of such resolution. A creditor has the right within thirty (30) days from the date of receipt of the notice from the Company or, in the case where a creditor does not receive such notice, within ninety (90) days from the date of the first announcement , to require the Company to repay its debts or to provide a corresponding guarantee for the repayment of such debt.

The Company’s registered capital must not, after the reduction in capital, be less than the minimum amount prescribed by law.

The Company must prepare a balance sheet and an inventory of assets when it reduces its registered capital. The Company shall notify its creditors within ten (10) days from the date of the Company’s resolution for reduction of capital and shall publish an announcement in a newspaper within thirty (30) days from the date of such resolution. A creditor has the right within thirty (30) days from the date of receipt of the notice from the Company or, in the case where a creditor does not receive such notice, within forty-five (45) days from the date of the announcement , to require the Company to repay its debts or to provide a corresponding guarantee for the repayment of such debt.

The Company’s registered capital must not, after the reduction in capital, be less than the minimum amount prescribed by law.

– 4 –

LETTER FROM THE BOARD

Existing Articles Existing Articles Existing Articles Revised Articles
Article 4.4 Article 4.4
The Company may, in accordance with law, The Company may, in accordance with law,
administrative regulations and these administrative
regulations
and
these
Articles
of
Association,		 repurchase its Articles
of
Association,
repurchase		 its
issued
shares		 under
the		 following issued
shares
under
the
following
circumstances: circumstances:
(1) cancellation of
shares		 for the (1) reducing
registered
capital
of		 the
purposes of reducing its capital; Company;
(2) merger
with
another		 company that (2) merging with another company that
holds shares in the Company; holds shares of the Company;
(3) _granting of _ _shares as _ _bonus to _ the (3) utilising its shares in the employee
Company’s staff; share
ownership
plan
or
as
share
incentive;
(4) shareholders who disagree with the
resolutions for the merger or division (4) shareholders who disagree with the
of the Company passed at a general resolutions for the merger or division
meeting
request
the		 Company to of the Company passed at a general
purchase their shares; meeting
request
the
Company		 to
purchase their shares;
(5) other circumstances permitted by laws
and administrative regulations. (5) _utilising the shares for conversion _ of
corporate bonds which are convertible
into shares issued by the Company;
(6) where
it
is
necessary
for		 the
safeguard
of
the
value
of		 the
Company
and
the
interests
of		 its
shareholders;
(7) other circumstances permitted by laws
and administrative regulations.
Apart from the foregoing, the Company
shall not purchase its own shares.

– 5 –

LETTER FROM THE BOARD

**Existing ** **Existing ** Articles Revised Articles
Any purchase by the Company of its own
shares under the circumstances as required
in
(1)
and
(2)
shall
be
resolved
at
a
shareholders’
general
meeting;
any
purchase by the Company of its own shares
under the circumstances as required in (3),
(5)
and
(6)
shall,
after
obtaining
the
authorization of the shareholders’ general
meeting, be approved by a resolution of the
Board meeting where over two-thirds of the
directors are present.
Where the Company has purchased its A
Shares according to the above provision, in
the
event
of
(1),
the
same
shall
be
cancelled within ten (10) days from the
date of purchase; in the event of (2) or (4)
above, the same shall be transferred or
cancelled within six (6) months; in the
event of (3), (5) and (6), the total A Shares
of the Company held by the Company itself
shall not exceed 10% of its total A Shares
in
issue
and
shall
be
transferred
or
cancelled within three (3) years after the
purchase; in the event of (7), transfer or
cancellation
shall
be
carried
out
in
accordance
with
applicable
laws
and
regulations,
normative
documents
and
provisions
of
the
securities
regulatory
authorities of where shares of the Company
are listed.
Where the Company has acquired its H
Shares according to the provision of this
Article, the same shall be cancelled as
soon as reasonably practicable pursuant to
the requirements of the listing rules of
Hong Kong Stock Exchange.
If the Company acquires its own shares, it
shall
fulfil
its
disclosure
obligation
as
required under the Securities Law of the
People’s
Republic
of
China,
the
Rules
Governing Listing of Stocks on Shenzhen
Stock Exchange, and the listing rules of
Hong Kong Stock Exchange.

– 6 –

LETTER FROM THE BOARD

Existing Articles Existing Articles Revised Articles
Article 4.5 Article 4.5
The Company may repurchase shares in The Company may choose to repurchase
one of the following ways: shares in one of the following ways:
(1) by making a general offer; (1)
by making a general offer;
(2) by
means		 of
centralized		 auction (2)
by
means
of
centralized
auction
trading on a stock exchange; trading on a stock exchange;
(3) by means of an agreement; (3)
by means of an agreement;
(4) by
other		 means
as
authorized		 by (4)
by
other
means
as
authorized
by
regulatory authorities. regulatory authorities.
If the Company acquires its own shares
under the circumstances as required in (3),
(5) and (6) of Article 4.4, it shall be
carried out by centralized auction trading
on a stock exchange.
Article 6.11 Article 6.11
No change shall be made in the register of For Company’s shareholders of H shares,
shareholders as a result of a transfer of no change shall be made in the register of
shares within thirty (30) days prior to the shareholders as a result of a transfer of
date of a shareholders’ general meeting or shares within thirty (30) days prior to the
within five (5) days before the record date date of a shareholders’ general meeting or
for the
Company’s
distribution		 of within five (5) days before the record date
dividends. for
the
Company’s
distribution
of
dividends.
The interval between the share registration
date for the shareholders of A shares and
the date of the shareholders’ meeting shall
not exceed seven (7) business days.
Once the share registration date for the
shareholders’ meeting is confirmed, it shall
not be changed.

– 7 –

LETTER FROM THE BOARD

  • Existing Articles Revised Articles

  • Article 7.6 Article 7.6 In addition to the obligations imposed by In addition to the obligations imposed by laws and administrative regulations or laws and administrative regulations or required by the listing rules of the stock required by the listing rules of the stock exchange on which the Company’s shares exchange on which the Company’s shares are listed, a controlling shareholder, while are listed, a controlling shareholder, while exercising his powers as a shareholder, exercising his powers as a shareholder, shall not exercise his voting rights in shall not exercise his voting rights in respect of the following matters in a respect of the following matters in a manner which is prejudicial to the interests manner which is prejudicial to the interests of all or part of the shareholders of the of all or part of the shareholders of the Company: Company: ...... ...... (4) the controlling shareholder and person (4) the controlling shareholder and person in actual control of the Company have in actual control of the Company have fiduciary duties towards the Company fiduciary duties towards the Company and the public shareholders. The and the public shareholders. The controlling shareholder shall exercise controlling shareholder shall exercise its rights as investor strictly in its rights as shareholder strictly in accordance with the laws. The accordance with the laws. The controlling shareholder shall not controlling shareholder and person in damage the lawful rights of the actual control shall not damage the Company and the public shareholders lawful rights of the Company and the by means of connected transactions, public shareholders by means of profit distribution, assets restructuring, connected transactions, profit external investment, appropriation of distribution, assets restructuring, capital and loan guarantee, etc. and external investment, appropriation of shall not take advantage of its capital and loan guarantee, etc. and controlling position to damage the shall not take advantage of its interest of the Company and the controlling position to damage the public shareholders. interest of the Company and the public shareholders.

– 8 –

LETTER FROM THE BOARD

Existing Articles Revised Articles
Article 7.7 Article 7.7
Further to Article 7.6 herein, a controlling Further to Article 7.6 herein, a controlling
shareholders
shall
also
observe
the		 shareholder and person in actual control
following regulations with respect to its shall also observe the following regulations
activities: with respect to its activities:
(1) the
controlling
shareholder
shall		 (1) the controlling shareholder and person
safeguard
the
independence
of
the		 in actual control shall safeguard the
staff,
assets
and
finance
of
the		 independence of the staff, assets and
Company and shall not intervene with finance of the Company and shall not
any
of
its
financial
or
accounting		 intervene with any of its financial or
activities. No controlling shareholder accounting activities. No controlling
or any of its sub-units shall engage in shareholder
and
person
in
actual
business
which
is
the
same
as
or		 control
or
any
of
their
respective
similar to the business carried on by sub-units
under
their
control
shall
the listed company. The controlling engage in business which is the same
shareholder
shall
adopt
effective		 as or similar to the business carried
measures
to
avoid
horizontal		 on
by
the
listed
company.
The
competition; controlling shareholder and person in
actual
control
shall
adopt
effective
(2) the
controlling
shareholder
shall		 measures
to
avoid
horizontal
support the Company in deepening its competition;
reform
in
the
employment,
human
resources
and
allocation
systems,		 (2) the controlling shareholder and person
transforming its regulatory regime for in actual control owe fiduciary duty
business operation, and implementing towards
the
Company
and
other
policies
in
which
the
management		 shareholders. It shall exercise its right
officers are hired through competitive as shareholder in strict compliance
examination
and
are
capable
in		 with the law and shall not damage the
performing duties at different levels, lawful
rights
of
the
Company
and
the employees are chosen for their other shareholders by means of assets
excellence
and
may
be
hired
or		 restructuring, etc. and shall not take
laid-off
depending
on
their		 advantage
of
its
special
status
to
performance
and
the
income		 acquire any additional benefits;
allocation is flexible and effective in
motivation; (3) the controlling shareholder shall not
impose any approval requirement in
respect of any resolution for election
in the shareholders’ general meeting
and resolution for appointment in the
Board
and
shall
not
bypass
the
shareholders’ general meeting and the
Board
to
appoint
or
remove
any
senior officer of the Company;

– 9 –

LETTER FROM THE BOARD

Existing Articles Revised Articles
(3)
the
controlling
shareholder
owes
fiduciary duty towards the Company
and
other
shareholders.
It
shall
exercise its right as investor in strict
compliance with the law and shall not
damage
the
lawful
rights
of
the
Company and other shareholders by
means of assets restructuring, etc. and
shall not take advantage of its special
status
to
acquire
any
additional
benefits;
(4)
the controlling shareholder shall not
impose any approval requirement in
respect of any resolution for election
in the shareholders’ general meeting
and resolution for appointment in the
Board
and
shall
not
bypass
the
shareholders’ general meeting and the
Board
to
appoint
or
remove
any
senior officer of the Company;
(5)
all material decisions of the listed
company shall be determined by the
shareholders’ general meeting and the
Board in accordance with the law. The
controlling
shareholder
shall
not
directly or indirectly intervene in the
decision-making of and any business
activity lawfully commenced by the
Company and damage the interest of
the Company and other shareholders.
(4)		 all material decisions of the listed
company shall be determined by the
shareholders’ general meeting and the
Board in accordance with the law. The
controlling shareholder and person in
actual control shall not directly or
indirectly
intervene
in
the
decision-making of and any business
activity lawfully commenced by the
Company and damage the interest of
the Company and other shareholders.
Article 8.2
Article 8.2

The shareholders’ general meeting shall The shareholders’ general meeting shall have the following functions and powers: have the following functions and powers: ...... ...... (10) to decide on the issue of debentures (10) to decide on the issue of shares, by the Company; repurchase of the shares of the Company, the issue of debentures by ...... the Company and other financing instruments by the Company ;

– 10 –

LETTER FROM THE BOARD

**Existing ** Articles Revised Articles
Article 8.35 Article 8.35
The following matters shall be resolved by The following matters shall be resolved by
a special
resolution		 at
a
shareholders’		 a special
resolution
at
a
shareholders’
general meeting: general meeting:
(1) the
increase
or		 reduction in share (1) the
increase
or
reduction
in
share
capital and the issue of shares of any capital and the issue of shares of any
class,
warrants		 and
other		 similar class,
warrants
and
other
similar
securities; securities;
(2) the
issue
of		 debentures of the (2) the
issue
of
debentures
of		 the
Company; Company;
(3) the division, merger, dissolution and (3) the division, merger, dissolution and
liquidation of the Company; liquidation of the Company;
(4) the amendment of these Articles of (4) the
Company
repurchase
its		 own
Association; shares
under
the
circumstances		 as
_required in (1) and (2) of Article _ 4.4
(5) other matters which are resolved in of these Articles of Association;
shareholders’
general
meeting		 by
ordinary resolution as being material (5) the amendment of these Articles of
to the Company and required to be Association;
passed by special resolution.
(6) other matters which are resolved in
shareholders’
general
meeting		 by
ordinary resolution as being material
to the Company and required to be
passed by special resolution.
Article 10.13 Article 10.13

The managing personnel, person in charge of finance, person in charge of sales and marketing personnel and the Board Secretary shall not hold any office other than directorship in the controlling shareholder’s units. A person who is both a member of the controlling shareholder’s senior management as well as a Director of the Company shall ensure that he has sufficient time and energy to perform the Company’s tasks.

The Company’s president and senior management shall not hold any executive position other than directorship and supervisory position in the controlling shareholder’s units. A person who is both a member of the controlling shareholder’s senior management as well as a Director or supervisor of the Company shall ensure that he has sufficient time and energy to perform the Company’s tasks.

– 11 –

LETTER FROM THE BOARD

Existing Articles Revised Articles
Article 10.15 Article 10.15
The Board
is
accountable		 to the The Board
is
accountable
to		 the
shareholders’
general
meeting
and		 shall shareholders’
general
meeting
and		 shall
exercise
the
following
functions		 and exercise
the
following
functions		 and
powers: powers:
...... ......
(6) to formulate proposals for the increase (6) to formulate proposals for the increase
or
reduction
of
the
Company’s		 or
reduction
of
the
Company’s
registered capital and for the issuance registered capital and for the issuance
of debentures by the Company; of debentures by the Company;
(7) to
draw
up
plans
for		 material (7) to
draw
up
plans
for
material
acquisition
or
disposal		 by the acquisition
or
disposal
by		 the
_Company and plans for the _ merger, Company_,
_merger,
division		 or
division
or
dissolution		 of the dissolution
of
the
Company,		 and
Company; acquisition
of
the
shares
of		 the
Company
under
circumstances		 as
(8) to exercise the Company’s power as required in (1) and (2) of Article 4.4
to financing and borrowing and to of these Articles of Association;
determine
the
charge,
lease		 and
transfer
of
important
assets		 of the (8) to determine the acquisition of shares
Company; of
the
Company
under		 the
circumstances as required in (3), (5)
(9) to decide on the Company’s internal and (6) of Article 4.4 of these Articles
management structure; of Association within the authorization
of the shareholders’ general meeting;
...... (Subsequent
clause
numbers		 are
followed correspondingly) (9) to exercise the Company’s power as
to financing and borrowing and to
Save in respect of the matters specified in determine
the
charge,
lease		 and
sub-paragraphs (6), (7) and (11) of this transfer
of
important
assets
of		 the
Article
which
shall
be
passed		 by the Company;
affirmative votes of two-thirds or more of
all the Directors, the Board’s resolutions in (10) to decide on the Company’s internal
respect of all other matters above may be management structure;
passed by the affirmative votes of more
than one-half of the Directors. ...... (Subsequent
clause
numbers		 are
followed accordingly)

– 12 –

LETTER FROM THE BOARD

Existing Articles Existing Articles Existing Articles Existing Articles Existing Articles Revised Articles
Save in respect of the matters specified in
sub-paragraphs (6), (7), (8) and (13) of this
Article
which
shall
be
passed
by
the
affirmative votes of two-thirds or more of
all the Directors, the Board’s resolutions in
respect of all other matters above may be
passed by the affirmative votes of more
than one-half of the Directors.
Article 10.34 Article 10.34
The Board shall have independent The
Board
shall
have
independent
Directors. Directors.
...... ......
The independent Directors shall perform The independent Directors shall perform
their duties independently, without being their duties independently, without being
affected by major shareholders
of		 the affected
by
major
shareholders
of
the
Company, persons in actual control of the Company, persons in actual control of the
Company or other interested entities or Company and other interested organizations
individuals of the Company, its major or individuals of the Company. There shall
shareholders and the persons in actual not
be
any
relationship
between
the
control. independent Directors and the Company or
the Company’s major shareholders which
might
hinder
the
independent
Directors
from
making
independent
and
objective
judgment.

– 13 –

LETTER FROM THE BOARD

Existing Articles Existing Articles Existing Articles Existing Articles Existing Articles Revised Articles
Article 10.39 Article 10.39
The Company should ensure that the The
Company
should
ensure
that
the
independent Directors shall enjoy the same independent Directors shall enjoy the same
right to information as other Directors. The right to information and status as other
Company shall timely provide the Directors.
The
Company
shall
timely
independent Directors with relevant provide
the
independent
Directors
with
materials and information, regularly notify relevant
materials
and
information,
them of the operation of the Company and regularly notify them of the operation of
organize on-site visit by the independent the Company and organize on-site visit by
Directors if necessary. the independent Directors if necessary, so
as to ensure that the independent Directors
have
a
comprehensive
and
fair
understanding on the Company.
Where
there
is
any
conflict
among
the
shareholders of the Company or among the
Directors which causes significant impact
on
the
operation
management
of
the
Company, the independent Directors shall
proactively
perform
their
duties
and
safeguard the interests of the Company as
a whole.

– 14 –

LETTER FROM THE BOARD

Existing Articles Revised Articles Revised Articles
Article 10.45 Article 10.45
The major
responsibilities
of
the
audit		 The major
responsibilities
of		 the
audit
committee are as follows: committee include:
(1) to suggest the appointment or change (1) to
supervise		 and
assess		 external
of external auditing institutions; audits; to suggest the appointment or
change
of		 external auditing
(2) to monitor and implement the internal institutions;
audit system of the Company;
(2) to
supervise		 and
assess		 internal
(3) to
be
responsible
for
the		 audits;
communication between the internal
and external audit functions; (3) to be responsible for the coordination
between
the		 internal
and		 external
(4) to examine and approve the financial audit functions;
information of the Company and its
disclosure; (4) to examine and approve the financial
information of the Company and its
(5) to examine the internal control system disclosure;
of the Company;
(5) to
supervise		 and
assess
the
(6) to
establish
a
whistle-blowing		 Company’s internal control;
mechanism to follow and handle openly
the questions and complaints made by (6) to
consider
the
laws,
regulations,
the
staff,
customers,
suppliers
and		 Articles of Association and such other
investors of the Company and social matters as the Board may authorize.
media on the truthfulness, accuracy and
completeness of financial information.

– 15 –

LETTER FROM THE BOARD

**Existing ** **Existing ** **Existing ** Articles Revised Articles
**Article ** 10.46 Article 10.46
The major responsibilities of the The major
responsibilities
of		 the
nomination committee are as follows: nomination committee include:
(1) to analyze the standard and process for (1) to analyze the standard and process
selection of Directors and managers and for selection of Directors_, presidents_
to make recommendations; and other senior officers and to make
recommendations;
(2) to extensively identify individuals
qualified to become
Directors		 or (2) to
screen
candidates
qualified		 to
managers; become
Directors,
presidents		 and
_other senior officers according _ _to _ the
(3) to examine the candidates for the Company’s
business
model		 and
_positions of _ _Directors and _ managers specific
needs
and
by		 taking
and to make recommendations. comprehensive
consideration		 of
factors such as age, gender, education
background,
skills,
professional
_knowledge, experience, etc., and _ _to _ set
_up measurable targets to ensure _ the
diversity of Board members;
(3) to
examine
the
candidates
for		 the
_positions of Directors, presidents _ and
other
senior
officers
and
to		 make
recommendations.

– 16 –

LETTER FROM THE BOARD

Existing Articles Revised Articles
Article 10.47 Article 10.47
The major
responsibilities
of		 the The major
responsibilities
of
the
remuneration and appraisal committee are remuneration
and
appraisal
committee
as follows: include:
(1) to analyze the standard of appraisal of (1) to analyze the standard of appraisal of
Directors and managers, to carry out Directors, presidents and other senior
the
appraisal
and
to		 make officers, to carry out the appraisal and
recommendations; to make recommendations taking into
account the actual conditions of the
(2) to
analyze
and
examine		 the Company;
remuneration policy and proposal for
Directors and senior officers; (2) to
analyze
and
examine
the
remuneration policy and proposal for
(3) to
make
recommendations		 in Directors_, presidents and other_ senior
situations where Directors or senior officers;
officers
accept
responsibilities		 and
resign or are proposed to be dismissed (3) to
make
recommendations
in
for
their
defaults
and
failure		 to situations where Directors_, presidents_
perform their duties. and
other
senior
officers
accept
responsibilities
and
resign
or
are
proposed to be dismissed for their
defaults and failure to perform their
duties.
Chapter 12 General Manager and Deputy Chapter 12 Presidents and Other Senior
General Manager of the Company Officers of the Company
Article 12.3 Article 12.3
The tenure of the _general manager _ and The tenure of the presidents and other
deputy general manager is three (3) years, senior officers is three (3) years, which is
which is renewable upon re-appointment. renewable upon re-appointment.
Article 12.10 Article 12.10
The general
manager,
deputy
general		 The presidents and other senior officers
managers and other senior officers shall _can _ resign prior to the expiry of their term;
_give _ _the Board written notice three _ (3) specific procedures and measures for such
months prior to their resignation. resignation
shall
be
subject
to
the
agreement
made
in
the
labor
contract
between them and the Company.

– 17 –

LETTER FROM THE BOARD

Existing Articles Revised Articles
**Article ** 16.17 **Article ** 16.17
The profit
distribution
policies		 and The profit
distribution
policies
and
decision-making
process
for		 profit decision-making
process
for
profit
distribution proposal of the Company: distribution proposal of the Company:
...... ......
(2) Form,
condition
and
proportion		 of (2) Form,
condition
and
proportion
of
profit distribution of the Company: profit distribution of the Company:
(a) The
Company
may		 distribute (a) The
Company
may
distribute
dividends in cash, in shares or in dividends in cash, in shares or in
a combination of both cash and a combination of both cash and
shares and distribution of profits shares and distribution of profits
by cash shall be a prioritized by cash shall be a prioritized
means. When the conditions for means. When the conditions for
profit distribution by cash are profit distribution by cash are
met, profit distribution by cash met, profit distribution by cash
shall be adopted. shall
be
adopted.
Where
the
Company repurchases its shares
...... by means of offer or centralized
auction
trading
with
the
consideration in cash, it shall be
deemed as cash dividend of the
Company and be counted in the
calculation
of
relevant
proportion of cash dividend.
......

– 18 –

LETTER FROM THE BOARD

Existing Articles Revised Articles Article 25.2 Article 25.2 Unless the context of these Articles of Unless the context of these Articles of Association otherwise requires, Association otherwise requires, “announcement” referred to in these “announcement” referred to in these Articles of Association shall mean, in Articles of Association shall mean, in relation to announcements to holders of relation to announcements to holders of domestic shares or announcements to be domestic shares or announcements to be published in the PRC as required by the published in the PRC as required by the relevant requirements and these Articles of relevant requirements and these Articles of Association, announcements published in Association, announcements published in the newspapers in the PRC as designated the newspapers in the PRC and on the by the PRC laws and regulations or the websites as designated by the PRC laws securities regulatory authorities of the State and regulations or the securities regulatory Council; whereas in relation to authorities of the State Council; whereas in announcements to holders of H shares or relation to announcements to holders of H announcements to be published in Hong shares or announcements to be published in Kong as required by the relevant Hong Kong as required by the relevant requirements and these Articles of requirements and these Articles of Association, such announcements published Association, such announcements published in accordance with the requirements of in accordance with the requirements of listing rules on the Company’s website, the listing rules of the Hong Kong Stock website of Hong Kong Stock Exchange or Exchange on the Company’s website, the other websites as required from time to website of Hong Kong Stock Exchange or time by the listing rules. other websites as required from time to time by the listing rules of the Hong Kong Stock Exchange .

Notes:

  1. The “......” above are existing provisions in the Articles of Association. As they are not involved in the proposed amendments, they are omitted herein.

  2. In addition to the above amendments, taking into account the actual situation of the Company, the “manager” and “general manager” involved in the original Articles of Association are universally revised to “president”, and “deputy general manager” is universally revised to “vice-president”.

The Company confirms that the proposed amendments to the Articles of Association will not have any adverse effect to the existing businesses and operations of the Company and the Directors confirm that the proposed amendments to the Articles of Association are in compliance with the Listing Rules.

According to the PRC legal opinions dated 28 March 2019 from Beijing DHH (Guangzhou) Law Firm, the proposed amendments to the Articles of Association are in compliance with the Constitution of the Communist Party of China, Company Law of the PRC and the Articles of Association.

– 19 –

LETTER FROM THE BOARD

All proposed amendments to the Articles of Association will be put forward by way of special resolution and they shall become effective upon the Shareholders’ approval at the AGM.

Effect of the proposed amendments to the Articles of Association

The proposed amendments to the Articles of Association will enable the Company to meet the requirements of the relevant laws and regulations and normative documents of the PRC in a better manner which will in turn improve the Company’s corporate governance standards.

(II) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SHAREHOLDERS’ GENERAL MEETING

Pursuant to the Decision and the proposed amendments to the Articles of Association, and based on the actual situation of the Company, the Board proposes to amend Rules 1, 2 and 37 of the Rules of Procedures for the Shareholders’ General Meeting. Details of the amendments are set out below:–

Existing Rules Revised Rules Rule 1 Rule 1 These Rules are formulated to protect the These Rules are formulated to protect the legitimate rights and interests of the legitimate rights and interests of the shareholders of Hisense Kelon Electrical shareholders of Hisense Home Appliances Holdings Company Limited (hereafter Group Co., Ltd. (hereafter abbreviated as abbreviated as the “Company”), improve the “Company”), improve the efficiency of the efficiency of the general meetings of the general meetings of the shareholders of the shareholders of the Company, promote the Company, promote the standardized the standardized operation of the Company, operation of the Company, according to the according to the relevant laws and relevant laws and regulations such as “The regulations such as “The Company Law of Company Law of the People’s Republic of the People’s Republic of China” (hereafter China” (hereafter abbreviated as the abbreviated as the “Company Law”) and “Company Law”) and “Articles of “Articles of Association of Hisense Kelon Association of Hisense Home Appliances Electrical Holdings Company Limited ” Group Co., Ltd .” (hereinafter abbreviated (hereinafter abbreviated as the “Articles of as the “Articles of Association”). Association”).

– 20 –

LETTER FROM THE BOARD

Existing Rules Existing Rules Revised Rules
Rule 2 Rule 2
The shareholders’ general meeting is the The shareholders’ general meeting is the
organ
of
the
highest
authority		 of the organ
of
the
highest
authority
of		 the
Company and shall exercise its functions Company and shall exercise its functions
and powers in accordance with laws. and powers in accordance with laws.
The shareholders’ general meeting shall The shareholders’
general
meeting		 shall
have the following functions and powers: have the following functions and powers:
...... ......
(11) to
decide		 on
the		 appointment, (11) _to decide on the acquisition of _ the
dismissal
and		 non-reappointment of Company’s
shares
made
by		 the
the accountants of the Company; Company
pursuant
to		 the
circumstances
as
specified
in		 the
...... (Subsequent clause numbers are _provisions of Articles 4.4(1) and _ (2)
followed accordingly) in the Articles of Association;
(12) to
decide
on
the
appointment,
dismissal
and
non-reappointment		 of
the accountants of the Company;
...... (Subsequent
Rule
numbers		 are
followed accordingly)

– 21 –

LETTER FROM THE BOARD

Existing Rules Revised Rules Rule 37 Rule 37 Connected transactions between the Connected transactions between the Company and its connected persons of an Company and its connected persons of an amount exceeding RMB30 million and amount exceeding RMB30 million and consists of 5% or above of the latest consists of 5% or above of the latest audited net asset absolute value of the audited net asset absolute value of the Company shall be submitted to the Company shall be submitted to the shareholders’ general meeting for shareholders’ general meeting for consideration. consideration.

The approval power regarding other connected transactions shall be delegated by the board of directors who shall make resolutions on the same. Should the numbers of directors attending the meeting be less than a quorum following withdrawal from board meeting by the directors who have interest in the transaction, all directors (including connected directors) shall make resolutions on procedural issues such as whether these transactions shall be submitted to the shareholders’ general meeting of the Company for consideration. Related resolutions on such transactions shall be made at the shareholders’ general meeting .

The approval power regarding other connected transactions shall be decided by the board of directors. Where a resolution is required to be passed by the board of directors, the board meeting can be convened with a majority of unconnected directors present at the meeting, and the resolutions proposed by the board of directors shall be passed only with affirmative votes of a majority of those unconnected directors. In the event that the number of unconnected directors present at the meeting is less than 3, the proposed resolution shall be considered at a shareholders’ general meeting.

The approval power regarding other connected transactions shall be decided by the board of directors. Where a resolution is required to be passed by the board of directors, the board meeting can be convened with a majority of unconnected directors present at the meeting, and the resolutions proposed by the board of directors shall be passed only with affirmative votes of a majority of those unconnected directors. In the event that the number of unconnected directors present at the meeting is less than 3, the proposed resolution shall be considered at a shareholders’ general meeting.

– 22 –

LETTER FROM THE BOARD

(III) PROPOSED AMENDMENTS TO THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE MEETING

Pursuant to the changes in the actual situation of the Company, the Board proposes to amend Rules 3, 4, 6, 23 and 25 of the Rules of Procedures for the Supervisory Committee Meeting. Details of the proposed amendments are set out below:–

**Existing ** Rules **Revised ** Rules
**Rule ** 3 **Rule ** 3

The supervisory committee shall consist of three (3) members and one (1) member shall be the chairman of the supervisory committee. The appointment and removal of the chairman of the supervisory committee shall be passed by two-thirds or more of the members of the supervisory committee. The tenure of a supervisor is three (3) years, which is renewable upon re-election.

Rule 4

The supervisory committee shall consist of three (3) members and one (1) member shall be the chairman of the supervisory committee. The appointment and removal of the chairman of the supervisory committee shall be passed by two-thirds or more of the members of the supervisory committee. Where the chairman of the supervisory committee is unable to or does not perform his duty, a supervisor nominated by one-half or more of the supervisors shall convene and chair the supervisory meeting. The tenure of a supervisor is three (3) years, which is renewable upon re-election. Rule 4

The supervisory committee shall comprise The supervisory committee shall comprise two shareholders’ representatives and one two shareholders’ representatives and one representative of the employees of the representative of the employees of the Company. The shareholders’ representatives Company. The shareholders’ representatives shall be elected and removed at the shall be elected and removed at the shareholders’ general meeting, and the shareholders’ general meeting, and the employees’ representative shall be employees’ representative shall be democratically elected and removed by the democratically elected and removed by the employees of the Company through the employees of the Company through the meeting of employee representatives, meeting of employee representatives, employees’ assembly or by other form of employees’ assembly or by other form of democratic election. Members of the democratic election. Members of the supervisory committee shall possess supervisory committee shall possess relevant expertise or work experience relevant expertise or work experience required for acting as supervisors. required for acting as supervisors.

– 23 –

LETTER FROM THE BOARD

Existing Rules Revised Rules Revised Rules Revised Rules Revised Rules Revised Rules Revised Rules Revised Rules
The supervisory committee shall have a Directors and senior officers of the
chairman and may have a vice chairman. Company shall not act concurrently as
The chairman and the vice chairman of the supervisors.
supervisory committee shall be elected by
one-half or more of the supervisors. The
chairman
of
the
supervisory
committee
shall convene and chair at the supervisory
meeting.
Where
the
chairman
of
the
supervisory committee is unable to or does
not perform his duty, the vice chairman of
the supervisory committee shall convene
and
chair
at
the
supervisory
committee
meetings; where the vice chairman of the
supervisory committee is unable to or does
not
perform
his
duty,
a
supervisor
nominated
by
one-half
or
more
of
the
supervisors shall convene and chair the
supervisory meetings.
Directors
and
senior
officers
of
the
Company
shall
not
act
concurrently
as
supervisors.
Rule 6 Rule 6
The notice of supervisory meeting shall be The notice of regular supervisory meeting
delivered to all supervisors in writing ten shall be delivered to all supervisors in
(10)
days
prior
to
the
meeting,
upon		 writing ten (10) days prior to the meeting;
delivery, the supervisor or its authorized _all supervisors _ _should _ _be _ _notified _ _three _ (3)
person shall sign on the reply slip of the days before an extraordinary supervisory
notice. meeting. The form of notice could be
delivery in person, telephone, e-mail,
_facsimile, _ _express courier _ _service, _ etc.
Rule 25 Rule 25
These
Rules
shall
be
effective
upon		 These Rules shall be effective upon
approval of the board of directors. approval of the shareholders’ general
meeting.

– 24 –

LETTER FROM THE BOARD

(IV) PROPOSED ELECTIONS OF EXECUTIVE DIRECTOR AND SHAREHOLDERS’ REPRESENTATIVE SUPERVISOR

Reference is made to the announcement dated 1 February 2019 and the supplementary announcement dated 11 February 2019 in relation to the resignation of executive director, nomination of executive director candidate and change of Shareholders’ Representative Supervisor. According to the Articles of Association and the relevant Listing Rules, (1) the nomination of Mr. Fei Li Cheng (“ Mr. Fei ”) as an executive director candidate of the tenth session of the Board; and (2) the nomination of Ms. Gao Yu Ling (“ Ms. Gao ”) as the Shareholders’ Representative Supervisor candidate of the tenth session of the Supervisory Committee, shall be submitted to the AGM for consideration and approval by the Shareholders.

The biographical details of Mr. Fei and Ms. Gao are set out below.

The biographical details of Mr. Fei are as follows:–

Mr. Fei Li Cheng

Mr. Fei Li Cheng, aged 56, graduated from the Ocean University of China . He has been in the positions of the manager of a branch of 青島電視機廠 (Qingdao Television Factory), the general manager of 青島微電機廠 (Qingdao Micro-electromechanical Factory), the deputy general manager of 青島海信數字音像有限公司 (Qingdao Hisense Digital, Audio and Video Co., Ltd.) and the general manager of 青島海信模具有限公司 (Qingdao Hisense Mould Co., Ltd). Since January 2003, Mr. Fei has been the general manager of Qingdao Hisense Hitachi Air-Conditioning Systems Co., Ltd. Mr. Fei currently also serves as a director of a company which is controlled by Hisense Company Limited (i.e. the controlling shareholder of the Company).

Save as disclosed above, Mr. Fei does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company, and he has not held any directorship in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years and does not hold any other position with the Company or any member of the group companies.

As at the Latest Practicable Date, Mr. Fei does not have any interest within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

If Mr. Fei is appointed as an executive director at the AGM, Mr. Fei will enter into a director’s service contract with the Company and his term will commence on the date of appointment at the AGM until the end of this session of the Board (i.e. 25 June 2021). During his term of office, Mr. Fei will not receive remuneration as a director from the Company.

Mr. Fei confirms that there is no other matter relating to Mr. Fei as a candidate for executive director that needs to be brought to the attention of the Shareholders, nor is there any information that needs to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.

– 25 –

LETTER FROM THE BOARD

The biographical details of Ms. Gao are as follows:–

Ms. Gao Yu Ling

Ms. Gao Yu Ling, aged 38, holds a Master’s Degree in Management. She has been in the positions of funds supervisor, tax supervisor, accounting inspection supervisor, accounting supervisor and financial management supervisor of the finance centre of Hisense Electric Co., Ltd. She was the deputy director of the finance centre of Hisense Electric Co., Ltd. from April 2012 to February 2013. She was the deputy head of the finance and operation management department of Hisense Company Limited from March 2013 to February 2015. She was a supervisor of the Company from January 2014 to December 2015. She was the chief financial officer of the Company from December 2015 to January 2019. Ms. Gao is the current general manager of the operation and finance management department of Hisense Company Limited and supervisor of Qingdao Hisense Air-conditioning Company Limited.

Save as disclosed above, Ms. Gao does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company, and she has not held any directorship in public companies the securities of which are listed on any securities market in Hong Kong or overseas in the last three years and does not hold any other position with the Company or any member of the group companies.

As at the Latest Practicable Date, Ms. Gao does not have any interest within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

If Ms. Gao is appointed as the Shareholders’ Representative Supervisor at the AGM, Ms. Gao will enter into a service contract with the Company and her term will commence on the date of appointment at the AGM until the end of this session of the Supervisory Committee (i.e. 25 June 2021). During her term of office, Ms. Gao will not receive remuneration as a supervisor from the Company.

Ms. Gao confirms that there is no other matter relating to Ms. Gao as a candidate for Shareholders’ Representative Supervisor that needs to be brought to the attention of the Shareholders, nor is there any information that needs to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.

– 26 –

LETTER FROM THE BOARD

(V) PROPOSED SHAREHOLDERS’ RETURN PLAN FOR THE NEXT THREE YEARS (2019-2021)

In order to improve and perfect the scientific, stable and sustainable dividend distribution mechanism of the Company, positively reward investors and effectively protect the legitimate rights and interests of medium and small investors, the Board has formulated the Shareholders’ Return Plan for the Next Three Years (2019-2021) of the Company (the “ Plan ”) in accordance with the requirements of relevant laws, regulations and regulatory documents such as the Company Law of the PRC, the Notice Regarding Further Implementation of Cash Dividends Distribution of Listed Companies (Zheng Jian Fa (2012) No. 37) and the Listed Companies Regulatory Guidance No.3 – Cash Dividends Distribution of Listed Companies (CSRC Announcement (2013) No. 43) of China Securities Regulatory Commission, and the Articles of Association, taking into consideration factors such as the profitability, business development strategy and plan, shareholders’ return, social funding costs and external financing environment. Particulars of the Plan are as follows:–

i. Considerations in the Formulation of the Plan

Focusing on sustainable development of the Company and taking into account factors such as the profitability, business development plan, cash flow, Shareholders’ requests and wishes, social funding costs and external financing environment, the Company aims to establish a sustainable, stable and scientific return plan and mechanism for investors and make institutional arrangement on profit distribution so as to guarantee the sustainability and stability of the profit distribution policy.

ii. Principles for Formulation of the Plan

The opinions of Shareholders, in particular, public investors and the medium and small investors, and opinions of independent non-executive directors and the Supervisory Committee shall be fully heard and considered by the Company in formulating the Plan. The Company shall focus on giving reasonable investment return to its investors, while taking into consideration of the Company’s actual operation condition and sustainable development. The profit distribution policies shall maintain continuity and stability. Subject to satisfying relevant conditions, the Company shall give priority to profit distribution in the form of cash dividends in the next three years.

iii. The Shareholders’ Return Plan for the Next Three Years (2019-2021)

(1) Means and period interval for profit distribution

The Company may distribute its profits by distributing dividends in form of cash, shares or a combination of both cash and shares and distribution of profits by cash dividends shall be a prioritized means. When the conditions for profit distribution by cash dividends are met, profit distribution by cash dividends shall be adopted.

– 27 –

LETTER FROM THE BOARD

Subject to meeting the conditions for dividend distribution, the Company shall, in principle, distribute dividends once a year. The Company may distribute interim cash dividends or distribute dividends in form of shares based on its profitability and capital requirements.

(2) Conditions and specific proportion of profit distribution

In distributing dividends in form of cash, the Company shall also meet the following conditions:–

  1. the distributable profits of the Company for the year (i.e. the profits after tax of the Company after making up for losses and making allocations to the statutory common reserve fund and statutory welfare reserve shall be a positive figure;

  2. the auditing firm shall issue a standard unqualified audit report on the financial report of the Company for the year;

  3. the cash flows of the Company shall meet the normal operation and long-term development of the Company.

In principle, the dividends in cash distributed by the Company for the year shall not be less than 10% of the distributable profits realized for the year, and the accumulated profits distributed by the Company in cash in the last three years shall not be less than 30% of the average annual distributable profits realized for the last three years. The remaining portion shall be used to support the sustainable development of the Company. After taking into account of factors such as the Company’s stage of development, level of profits, and operation and development plan, the Board shall propose the specific proportion of profit to be distributed in the form of cash and submit to the general meeting for consideration.

Conditions for distributing profits by dividends in form of Shares: Under the prerequisite of ensuring reasonable share capital size and shareholding structure of the Company, the Company may distribute profits by dividends in form of Shares when the valuation of its Shares is within a reasonable range, in order to provide return to its Shareholders and share its corporate value.

The profits distributed by the Company shall not exceed the accumulated distributable profits or jeopardise the ability of sustainable operation of the Company.

– 28 –

LETTER FROM THE BOARD

(3) Decision-making Mechanism of the Plan

The Plan shall be proposed by the Board in accordance with the relevant requirements of the Articles of Association after taking into account factors such as the Company’s profitability, operation and business development plan, shareholders’ return, capital requirement, social funding costs and external financing environment. The Plan shall be implemented after its approval by the general meeting of the Company.

The Plan shall be construed by the Board and effective from the date of its approval at the AGM of the Company.

AGM

The AGM will be held at the conference room of the Company’s head office, Shunde District, Foshan City, Guangdong Province, the PRC at 3:00 p.m. on 26 June 2019 (Wednesday), at which resolutions in relation to, among others, (i) proposed amendments to the Articles of Association; (ii) proposed amendments to the Rules of Procedures for the Shareholders’ General Meeting; (iii) proposed amendments to the Rules of Procedures for the Supervisory Committee Meeting; and (iv) proposed elections of executive director and Shareholders’ Representative Supervisor; and (v) proposed Shareholders’ Return Plan for the Next Three Years (2019-2021) will be proposed.

The Notice of AGM is set out on pages 31 to 35 of this circular. A proxy form for use at the AGM is enclosed with this circular. The Notice of AGM and the proxy form are also published on the websites of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.kelon.com).

If you are not able to attend the AGM in person, you are requested to complete and return the proxy form in accordance with the instructions printed thereon and to lodge the same with the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time fixed for holding the AGM or any adjournment thereof (as the case may be). Completion and delivery of the proxy form will not preclude you from attending and voting in person at the AGM or any adjournment thereof (as the case may be) if you so wish.

In accordance with article 8.27 of the Articles of Association of the Company, a poll may be demanded in any general meeting of the Company by:

  • (a) the chairman of the meeting; or

  • (b) at least two Shareholders in person or by proxy entitled to vote at the general meeting; or

  • (c) one or more Shareholder(s) present in person or by proxy and individually or in aggregate representing 10% or more of all Shares carrying the voting rights at the general meeting.

– 29 –

LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Listing Rules, all votes casted at the AGM must be taken by poll (except those which relate purely to a procedural or administrative matter) and the chairman of the meeting will make such demand at the AGM and the results of the poll will be announced in the manner prescribed under Rule 13.39(5) of the Listing Rules.

The register of members of H Shares of the Company will be closed from 28 May 2019 (Tuesday) to 26 June 2019 (Wednesday)(both days inclusive), during which time no share transfers of H Shares will be effected. Holders of domestic shares and H shares of the Company whose names appeared on the register of members of the Company as at the close of business on 27 May 2019 (Monday) (including holders of H Shares of the Company who have submitted verified transfer forms on or before 27 May 2019 (Monday), 4:30 p.m.) are entitled to attend the AGM and to vote in respect of all resolutions to be proposed at the AGM.

RECOMMENDATION

The Board is of the opinion that all resolutions to be proposed at the AGM are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolutions to be proposed at the AGM as set out in the Notice of AGM.

Yours faithfully, By Order of the Board of Hisense Home Appliances Group Co., Ltd Tang Ye Guo Chairman

– 30 –

NOTICE OF ANNUAL GENERAL MEETING

海信家電

HISENSE HOME APPLIANCES GROUP CO., LTD. 海信家電集團股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 00921)

NOTICE OF 2018 ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2018 annual general meeting (the “ AGM ”) of Hisense Home Appliances Group Co., Ltd. (the “ Company ”) will be held at the conference room of the Company’s head office, Shunde District, Foshan City, Guangdong Province, the People’s Republic of China (the “ PRC” ) on 26 June 2019 at 3:00 p.m. to consider and, if thought fit, pass the following resolutions:–

ORDINARY RESOLUTIONS

  1. To consider and approve the report of the board of directors of the Company for the year 2018[(7)] ;

  2. To consider and approve the report of the supervisory committee of the Company for the year 2018[(7)] ;

  3. To consider and approve the annual report of the Company for the year 2018 and its summary[(7)] ;

  4. To consider and approve the audited financial statements of the Company for the year 2018[(7)] ;

  5. To consider and approve the profit distribution proposal of the Company for the year 2018[(8)] ;

  6. To consider and approve the “Shareholders’ Return Plan for the Next Three Years (2019-2021)”[(10)] ;

  7. To consider and approve the resolution to purchase liability insurance for directors and senior management members of the Company and to authorize the board of directors (the “ Board ”) of the Company to handle the relevant matters[(11)] ;

  8. To consider and approve the resolution on the reappointment of Ruihua Certified Public Accountants as the auditor of the Company for the year 2019 and the authorization to the Board to fix its remuneration[(12)] ;

  9. To consider and approve the resolution on “Adjustment on the basic annual remuneration of the chairman of the Board”[(13)] ;

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NOTICE OF ANNUAL GENERAL MEETING

  1. To consider and approve the resolution on amendments to the relevant provisions of the rules of procedures for the shareholders’ general meeting of the Company[(14)] ;

  2. To consider and approve the resolution on amendments to the relevant provisions of the rules of procedures for the supervisory committee meeting of the Company[(14)] ;

  3. To consider and approve the resolution on election of Mr. Fei Li Cheng as an executive director of the tenth session of the Board and to fix the level of his remuneration[(15)] ; and

  4. To consider and approve the resolution on election of Ms. Gao Yu Ling as a shareholders’ representative supervisor of the tenth session of the supervisory committee of the Company and to fix the level of her remuneration[(15)] .

SPECIAL RESOLUTION

  1. To consider and approve the resolution on amendments to the relevant provisions of the articles of association of the Company (the “ Articles of Association ”) and to authorize the Board to deal with the filing, change, registration and other related matters required for the amendments to the Articles of Association for and on behalf of the Company.

By order of the Board of Hisense Home Appliances Group Co., Ltd. Tang Ye Guo Chairman

Foshan City, Guangdong, the PRC, 10 May 2019

As at the date of this notice, the Company’s executive directors are Mr. Tang Ye Guo, Mr. Jia Shao Qian, Mr. Lin Lan, Mr. Dai Hui Zhong and Mr. Wang Yun Li; and the Company’s independent non-executive directors are Mr. Ma Jin Quan, Mr. Zhong Geng Shen and Mr. Cheung Sai Kit.

Notes:

  • (1) Holders of H shares intending to attend the AGM shall return the accompanying reply slip in writing to the registered office of the Company on or before Thursday, 6 June 2019.

  • (2) Holders of A shares and H shares of the Company whose names appear on the register of members of the Company as at the close of business on 27 May 2019 (Monday) (including holders of H shares of the Company who have submitted verified transfer forms on or before 27 May 2019) will be entitled to attend the AGM. For determining the entitlement of shareholders of the Company to attend and vote at the AGM, the register of members of the Company will be closed from 28 May 2019 (Tuesday) to 26 June 2019 (Wednesday) (both days inclusive). To qualify for attendance at the AGM, all H shares transfer together with the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Monday, 27 May 2019 for registration.

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NOTICE OF ANNUAL GENERAL MEETING

  • (3) Shareholders who are entitled to attend and vote at the AGM are entitled to appoint one or more persons (whether or not a shareholder of the Company) as their proxy or proxies to attend and vote on their behalf.

  • (4) In order to determine the list of holders of shares of the Company who are entitled to receive the dividend, the register of members of the H shares of the Company will be closed from 5 July 2019 (Friday) to 11 July 2019 (Thursday) (both days inclusive). Holders of H shares of the Company whose names appear on the register of members of the H shares of the Company on 11 July 2019 (Thursday) are entitled to receive the dividend. Holders of H shares of the Company who wish to receive the dividend have to submit transfer forms, together with the relevant share certificate(s) to the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong before 4:30 p.m. on 4 July 2019 (Thursday).

  • (5) To be valid, the form of proxy, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be deposited with the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 24 hours before the time appointed for holding the AGM.

  • (6) In accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), any vote of shareholders at a general meeting (except those which relate purely to a procedural or administrative matter) must be taken by poll. As such, the resolutions set out in the notice of AGM will be voted by way of poll. Voting results will be uploaded to the website of the Company at www.kelon.com and the website of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk after conclusion of the AGM.

  • (7) Please refer to the annual report of the Company for the year 2018 for information relating to the reports as referred to in the ordinary resolutions numbered 1, 2, 3 and 4 in the notice of AGM.

  • (8) The profit distribution proposal of the Company for the year 2018 referred to in the ordinary resolution numbered 5 in the notice of AGM is as follows:

As audited by Ruihua Certified Public Accountants, the Company’s net profits attributable to the shareholders of the parent company for the year 2018 is RMB 776,515,067.46. Pursuant to the relevant requirements of the Articles of Association of the Company, RMB 77,651,506.75 is allocated to the statutory common reserve fund; undistributed profits at the beginning of the year 2018 of, RMB 2,024,987,603.50 is added; and the distributed profits of RMB 599,599,162.80 is deducted. The actual distributable profits is RMB 2,124,252,001.41.

The profit distribution proposal of the Company for the year 2018 is as follows:

The payment of a cash dividend of RMB3.03 (tax inclusive) per 10 shares held by all shareholders on the basis of the total share capital of 1,362,725,370 shares of the Company as at 31 December 2018, without bonus issue and not to issue shares by way of conversion of capital reserve. The total amount of cash dividend to be distributed will be RMB 412,905,787.11. The remaining undistributed profit will be retained for distribution in the following year.

If, during the period after the Boardhas approved the profit distribution plan until the implementation of the profit distribution plan, the Company’s total share capital is changed, the distribution proportion will be re-ascertained based on the latest total share capital in accordance with the principle of “the total amount of cash dividend to be distributed remaining the same”.

  • (9) Withholding and payment of dividend income tax

Pursuant to the provisions of the Corporate Income Tax Law of the People’s Republic of China（《中華人民共 和國企業所得稅法》）and the Implementing Regulations of the Corporate Income Tax Law of the People’s Republic of China （《中華人民共和國企業所得稅法實施條例》）, with effect from 1 January 2008, any PRC domestic enterprise shall withhold the corporate income tax when distributing dividends payable to the shareholders being non-resident enterprises (i.e. legal persons) for accounting periods starting from 1 January 2008, and the payer of the dividends shall serve as the withholding agent. The Company will

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NOTICE OF ANNUAL GENERAL MEETING

strictly abide by the law and identify all shareholders who are subject to the withholding and payment of corporate income tax based on the register of members of H shares of the Company as at the record date in respect of the distribution of dividends and shall distribute the relevant dividends after deducting corporate income tax of 10% to non-resident enterprise shareholders (as defined under the Enterprise Income Tax Law （《企業所得稅法》）, including HKSCC (Nominees) Limited, other corporate nominees or trustees, or other organizations or entities) whose names appear on such register of members of H shares of the Company.

After receiving dividends, non-resident enterprise may apply to the relevant tax authorities for enjoying treatment of taxation treaties (arrangement) in person or through appointed agent or through a person who has obligation to withhold or pay dividend, and provide information to prove that it is an actual beneficiary conforming with the requirement(s) of taxation treaties (arrangement). After the relevant tax authorities have verified that there is no error, it shall refund tax with reference to the tax levied and the difference in the amount of tax payable calculated at the tax rate under the taxation treaties (arrangement).

Pursuant to the requirements of “Notice of the Ministry of Finance and the State Administration of Taxation on Certain Policies Regarding Individual Income Tax (Cai Shui Zi [1994]020)”（財政部、國家稅務總局關於個 人所得稅若干政策問題的通知（財稅字[1994]020號））, foreign individuals are exempted from individual income tax on dividends and bonus received from foreign-invested enterprises in the PRC. As the Company is a foreign-invested joint stock limited company, thus the individual shareholders who hold the H shares of the Company and whose names appear in the register of members of the H shares are not required to pay the individual income tax of the PRC.

Shareholders and investors should read the contents of this notice carefully. Shareholders are recommended to consult their tax advisers regarding PRC, Hong Kong and other tax implications arising from their holding and disposal of H shares of the Company. The Company has no obligation and shall not be responsible for confirming the identities of the shareholders. The Company will withhold and pay the enterprise income tax in strict compliance with the relevant laws or requirements of the relevant governmental authorities and based strictly on the H Share register of members on the record date. The Company shall owe no liability whatsoever in respect of and will not entertain any request arising from any delay in ascertaining the identity of the shareholders, or inaccurate determination of the identity of the shareholders, or any disputes over the mechanism of withholding and paying of the enterprise income tax.

  • (10) In relation to the documents mentioned in ordinary resolution numbered 6 in the notice of AGM, please refer to the “Shareholders’ Return Plan for the Next Three Years (2019-2021) as set out on pages 27 to 29 of this circular.

  • (11) In relation to the ordinary resolution numbered 7 in the notice of AGM, the Company intends to purchase “director and senior management liability insurance” for directors and senior management members of the Company, and it is agreed that the Company will enter into insurance contract of insurance premium not exceeding RMB100,000 for a term of one year.

  • (12) In relation to the ordinary resolution numbered 8 in the notice of AGM, the Company intends to reappoint Ruihua Certified Public Accountants as the auditor of the Company for the year 2019 to audit the financial report and internal control of the Company in 2019.

  • (13) In relation to the ordinary resolution numbered 9 in the notice of AGM, with reference to the remuneration level of the chairmen of the industry and region of the Company, it is agreed that the chairman of the Company would receive annual basic remuneration of RMB 1,500,000 (before taxation).

  • (14) Information referred to in ordinary resolutions numbered 10 and 11 in the notice of AGM has been published in the announcement of the Company dated 28 March 2019 and is set out on pages 20 to 24 of this circular.

  • (15) Information referred to in ordinary resolutions numbered 12 and 13 in the notice of AGM has been published in the announcement of the Company dated 1 February 2019 and is set out on pages 25 to 26 of this circular.

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NOTICE OF ANNUAL GENERAL MEETING

  • (16) Amendments to the Articles of Association referred to in the special resolution numbered 1 in the notice of AGM have been published in the announcement of the Company dated 28 March 2019 and are set out on pages 4 to 20 of this circular.

  • (17) The registered address of the Company is: No. 8 Ronggang Road, Ronggui, Shunde District, Foshan City, Guangdong Province.

Postal code: 528303 Tel: (86) 757 2836 2148 Fax: (86) 757 2836 1055 Contact person: Ms. Wei Fang Yuan

  • (18) The English version of the proposed resolutions as set out in this notice is for reference only and if there is any conflict between the English and the Chinese versions, the Chinese version shall prevail.

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