Medlive Technology Co., Ltd. — Interim / Quarterly Report 2016

Oct 21, 2016

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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HISENSE KELON ELECTRICAL HOLDINGS COMPANY LIMITED 海信科龍電器股份有限公司

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

(Stock Code: 00921)

2016 THIRD QUARTERLY REPORT

This announcement is made by Hisense Kelon Electrical Holdings Company Limited (the “Company”) pursuant to Part XIVA of the Securities and Futures Ordinance (CAP.571) and Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

I. IMPORTANT NOTICE

1. The board of directors (the “Board”), the supervisory committee (the “Supervisory Committee”), the directors (the “Directors”), the supervisors (the “Supervisors”) and the senior management (the “Senior Management”) of the Company warrant that there are no false representation or misleading statements contained in, or material omissions from, this report; and jointly and severally accept legal responsibility for the truthfulness, accuracy and completeness of the information contained herein.

2. Mr. Tang Ye Guo, the person in charge of the Company and Ms. Gao Yu Ling, the person in charge of the accounting function and Mr. Yan Zhi Yong, the person in charge of the accounting department, warrant the truthfulness, accuracy and completeness of the contents of the financial statements in this quarterly report.

3. All Directors attended the Board meeting for considering and approving the 2016 third quarterly report.

4. The financial statements of the Company for the third quarter of 2016 have not been audited by accountants.

5. The full text of the Company’s balance sheet, income statement and cash flow statement are published on the website as designated by the Shenzhen Stock Exchange for release of information: http://www.cninfo.com.cn.

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II. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS

Did the Company make retrospective adjustment to or restatement of the accounting data of prior years due to changes in accounting policies and correction of accounting errors? □Yes √No

				Increase or
				decrease as
	End of the reporting
Items		End of the previous financial year		compared to the
	period
				end of the previous
				financial year(%)
Total assets(RMB)	18,780,223,939.39	14,292,817,039.53		31.40
Net assets attributable to shareholders of	4,641,527,384.86	4,044,017,698.45
				14.78
listed company (RMB)
				Increase or
				decrease (the
		Increase or
				beginning of the
		decrease as	The beginning of
				year to the end of
		compared to	the year to the end
Items	Reporting period			the reporting
		corresponding	of the reporting
				period as compared
		period last year	period
				to corresponding
		(%)
				period last year)
				(%)
Operatingrevenue(RMB)	7,307,367,677.79	30.11	20,430,319,209.30	6.26
Net profits attributable to shareholders of	304,094,646.88		863,374,128.19
listed company (RMB)		N/A		87.81
Net profits attributable to shareholders of
listed company after deducting
extraordinary profit and loss(RMB)	281,740,052.09	N/A	800,901,281.98	257.73
Net cash flow from operating activities			2,400,819,540.17
(RMB)	--	--		N/A
Basic earningsper share(RMB/share)	0.22	N/A	0.63	85.29
Diluted earningsper share(RMB/share)	0.22	N/A	0.63	85.29
Weighted average rate of return on net
assets(%)	6.71	7.88	19.72	7.26

Extraordinary profit and loss items and amounts

√Applicable □ Not applicable

Unit: RMB	Unit: RMB	Unit: RMB
	Amounts from the
	beginning of the year
Items		Description
	to the end of the
	reporting period
Profits or losses from disposal of non-current assets (including the part
writtenoff forprovision for impairment onassets)	-1,462,785.50

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Government subsidy recorded in the profits or losses of the current period
(except government subsidy which is closely related to the Company’s
business and is entitled for fixed amounts or fixed percentage based on
unified standards promulgated by the government)	56,140,213.57
Non-operatingincome and expenses other than the aforementioned items	24,243,226.82
Less: Effect of income tax	8,614,608.58
Effect of minority interests (after tax)	7,833,200.10
Total	62,472,846.21	--

III. Table showing total number of shareholders and the shareholding of the top ten holders of ordinary shares at the end of the reporting period

Unit: shares

Total number of shareholders of
ordinary shares at the end of the						27,955
reporting period
The shareholding ofthe top ten holders ofordinary shares
			Percentage			Situation of
			to the total		No. of	pledged or frozen
			issued share		shares held	shares
		Nature of		No. of shares
Name of Shareholder			capital of		subject to
		Shareholder		held
			the		selling	Share
							Quantity
			Company		restrictions	status
			(%)
Qingdao Hisense Air-conditioning CompanyLimited		State-owned legalperson	43.10%	587,316,909	0
HKSCC Nominees LimitedNote1		Foreign legal person	33.62%	458,144,769	0
Cental Huijin Investment Ltd.		State-owned legalperson	1.95%	26,588,700	0
China Securities Finance Corporation Limited		Domestic non-state-owne dlegalperson	0.72%	9,782,096	0
Zhang Shao Wu		Domestic naturalperson	0.53%	7,200,000	0
ICBC Credit Suisse Fund - Agricultural Bank of China - ICBC Credit Suisse China Securities Financial AssetManagementPlan		Other	0.48%	6,518,300	0
Southern Fund - Agricultural Bank of China - Southern China Securities Financial Asset ManagementPlan		Other	0.48%	6,518,300	0
Central European Fund - Agricultural Bank of China - Central European China Securities Financial AssetManagementPlan		Other	0.48%	6,518,300	0
Boshi Fund - Agricultural Bank of China- BoshiChina Securities		Other	0.48%	6,518,300	0

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Financial AssetManagementPlan
Dacheng Fund - Agricultural Bank of China - Dacheng China Securities Financial Asset ManagementPlan	Other	0.48%		6,518,300		0
Jiashi Fund - Agricultural Bank of China - Jiashi China Securities Financial AssetManagementPlan	Other	0.48%		6,518,300		0
Guangfa Fund - Agricultural Bank of China - Guangfa China Securities Financial Asset ManagementPlan	Other	0.48%		6,518,300		0
Huaxia Fund - Agricultural Bank of China - Huaxia China Securities Financial AssetManagementPlan	Other	0.48%		6,518,300		0
Yinhua Fund - Agricultural Bank of China - Yinhua China Securities Financial AssetManagementPlan	Other	0.48%		6,518,300		0
Yifangda Fund - Agricultural Bank of China - Yifangda China Securities Financial Asset ManagementPlan	Other	0.48%		6,518,300		0
The shareholding ofthe top ten holders ofordinary sharesnot subject to sellingrestrictions
			Number of shares		Class
Name of Shareholder			held not subject to
					Class			Quantity
			selling restrictions
QingdaoHisenseAir-conditioning CompanyLimited			587,316,909		RMBordinary shares			587,316,909
HKSCC Nominees LimitedNote1			458,144,769		Overseas listed
					foreignshares			458,144,769
Cental Huijin InvestmentLtd.			26,588,700		RMBordinary shares			26,588,700
China SecuritiesFinance Corporation Limited			9,782,096		RMBordinary shares			9,782,096
Zhang Shao Wu			7,200,000		RMBordinary shares			7,200,000
ICBC Credit Suisse Fund - Agricultural Bank of China - ICBC Credit Suisse China Securities Financial AssetManagementPlan			6,518,300
					RMBordinary shares			6,518,300
Southern Fund - Agricultural Bank of China - Southern China Securities Financial Asset ManagementPlan			6,518,300
					RMBordinary shares			6,518,300
Central European Fund - Agricultural Bank of China - Central European China Securities Financial Asset ManagementPlan			6,518,300
					RMBordinary shares			6,518,300
Boshi Fund - Agricultural Bank of China - Boshi China SecuritiesFinancial AssetManagementPlan			6,518,300
					RMBordinary shares			6,518,300
Dacheng Fund - Agricultural Bank of China - Dacheng China Securities Financial Asset ManagementPlan			6,518,300
					RMBordinary shares			6,518,300
Jiashi Fund - Agricultural Bank of China - Jiashi China SecuritiesFinancial AssetManagementPlan			6,518,300
					RMBordinary shares			6,518,300
GuangfaFund- Agricultural BankofChina-			6,518,300		RMBordinary shares			6,518,300

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Guangfa China Securities Financial Asset ManagementPlan
Huaxia Fund - Agricultural Bank of China - Huaxia China SecuritiesFinancial AssetManagementPlan	6,518,300
		RMBordinary shares	6,518,300
Yinhua Fund - Agricultural Bank of China - Yinhua China SecuritiesFinancial AssetManagementPlan	6,518,300
		RMBordinary shares	6,518,300
Yifangda Fund - Agricultural Bank of China - Yifangda China Securities Financial Asset ManagementPlan	6,518,300
		RMBordinary shares	6,518,300

Notes:

1. The shares held by HKSCC Nominees Limited are held on behalf of a number of its account participants, among which, Hisense (Hong Kong) Company Limited, a party acting in concert with the controlling shareholder of the Company, is the holder of 97,202,000 H shares of the Company in total at the end of the reporting period, representing 7.13% of the total number of shares of the Company.

IV. SIGNIFICANT MATTERS

1. Details of and reasons for significant changes of the principal accounting items and financial indicators during the reporting period

• √Applicable □ Not applicable

Unit: RMB

Balance sheet items	Closing balance	Opening balance	Change （%）	Reason for the change
Cash and cash equivalents	2,308,837,790.94	1,014,410,146.17	127.60	Mainly due to an increase in operating profit during the reporting period, leading to acceleration of capital turnover and decrease in inventory occupancy, resulting in an increase in operating cash flow and net cash amount
Notes receivable	4,080,554,317.89	2,289,706,048.91	78.21	Mainly due to an increase in payment in form of notes and decrease in endorsement of notes receivable at the end of the reporting period
Accounts receivable	3,025,634,183.90	2,086,596,419.00	45.00	Mainly due to the substantial year-to-year increase in sales during the third quarter of theyear
Other current assets	1,216,772,043.98	467,872,305.65	160.06	Mainly due to an increase in purchase of wealth managementproducts from banks
Short-term borrowings	74,704,436.32	223,496,764.71	-66.57	Mainly due to a decrease in the accounts receivable factoring transactions at the end of the reporting period
Notes payable	5,481,043,522.21	2,931,174,504.52	86.99	Mainly due to an increase in the use of the payment method of self-issued notes during the reporting period
Accounts payable	4,139,962,504.49	2,878,291,676.53	43.83	Mainly due to substantial increase in production and sales duringthe thirdquarter

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				of the year
Income statement items	Amount for the period from the		Change （%）	Reason for the change
	beginning of the	Amount for the
	year to the end of the reporting period	corresponding period last year
Financial expenses	-40,518,249.02	-77,088,464.72	N/A	Mainly due to year-to-year decrease in foreign exchangegains
Income tax expenses	143,522,249.55	75,891,880.19	89.11	Mainly due to an increase in operating profit, leading to increase in income tax payable during the end of the reporting period and changes in deferred income tax
Statement of cash flow items	Amount for the period from the		Change （%）	Reason for the change
	beginning of the	Amount for the
	year to the end of the reporting period	corresponding period last year
Cash received from sale of products and rendering of services	15,045,245,225.70	10,286,199,334.62	46.27	Mainly due to an increase in payment received from bank acceptance bills at their maturity and an increase in payment collection from export business during the reporting period
Cash paid for purchase of goods and services received	7,686,714,551.01	5,590,955,262.62	37.48	Mainly due to an increase in payment for notes at their maturity during the reporting period
Cash received from returns from investments	160,230,000.00	330,278,145.68	-51.49	Mainly due to the receipt of returns in investment from disposal of equity interests of Huayi Compressor during the corresponding period last year which did not occur duringthe reporting period
Cash received from other investment related activities	761,000,000.00	-	N/A	Mainly due to funds received from the banks’ wealth management products at their maturity
Cash paid to acquire fixed assets, intangible assets and other long-term assets	191,262,926.95	365,894,553.05	-47.73	Mainly due to a decrease in infrastructure investment of the Company during the reporting period
Cash paid for other investment related activities	1,561,000,000.00	-	N/A	Mainly due to an increase in purchase of banks’ wealth management products
Cash paid for repayment of borrowings	836,484,462.63	1,261,798,334.30	-33.71	Mainly due to the changes in factoring accounts receivable business

2.Development of significant matters and analysis of their impacts and solutions

√Applicable □ Not applicable

On 3 August 2016, the Company entered into the equity transfer agreement with Whirlpool (Hong Kong) Limited pursuant to which Whirlpool (Hong Kong) Limited shall transfer its 50% equity

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interest held in Hisense Whirlpool (Zhejiang) Electric Appliances Co., Ltd. (海信惠而浦（浙江） 電器有限公司) to the Company. The relevant equity transfer procedures are still in progress.

		Enquiry index of website
Description of significant matters	Disclosure date
		disclosingtemporaryreport
Whirlpool (Hong Kong) Limited transfers its 50% equity interest held in Hisense Whirlpool (Zhejiang) Electric Appliances Co., Ltd. (海信惠而浦（浙江） 電器有限公司) to the Company		Announcement website:
		Juchao information network
	4 August 2016
		Announcement number:
		2016-019

3. Undertakings performed in the reporting period or not yet performed by the end of the reporting period by the Company, shareholder(s), beneficial controller(s), acquirer(s), director(s), supervisor(s), senior management or other connected party(ies)

√Applicable □ Not applicable

	Undertaking		Time of	Time limit of	Status of
Undertakings		Subject matter of undertakings
	party(ies)		undertakings	undertakings	performance
Undertakings made in report on acquisition or report on changes in shareholding		1.After the acquisition of subject shares
		by Hisense Air-conditioning, the
		undertaking parties would deal with
		possible connected transactions with the
		Company in strict compliance with the
		relevant laws and regulations, and the
		relevant requirements of China Securities
		Regulatory Commission, the Stock
		Exchange, the Shenzhen Stock Exchange
		and the Articles of Association of the
		Company based on the market principles
		of justice, fairness, openness and
	Hisense
		reasonableness, without prejudicing the
	Company
		interests of the Company and other
	Limited
		shareholders.
	(“Hisense
		2.The undertaking parties will not
	Group”),
	Qingdao Hisense	exploit their positions and controlling	12 October
				—	Ongoing
	Air-conditioning	influence as the largest shareholders of	2005
	Company	the Company to induce the Company to
	Limited	provide them with rights which are more
	(“Hisense
		favourable than those offered to third
	Air-conditioning
		parties in respect of business cooperation
	”)
		and other aspects;
		3.The undertaking parties will not exploit
		their positions and controlling influence
		as the largest shareholders of the
		Company to seek priority rights in
		concluding transactions with the
		Company;
		4.The undertaking parties will not
		conduct transactions with the Company
		on terms which are less favourable than

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		market prices and will not engage in any
		acts detrimental to the interests of the
		Company through such transactions.
Undertakings made during asset restructuring		Undertakings on avoidance of business
		competition:
		1.Upon the completion of this
		transaction, all white goods-related
		assets and businesses of Hisense
		Air-conditioning, Hisense Group and
		their controlled corporations have been
		injected into the Company. There is no
		business competition between the other
		assets and businesses retained by
		Hisense Air-conditioning, Hisense Group
		and their controlled corporations and
		those of the Company and its controlled
		corporations.
		2.For future development, where Hisense
		Air-Conditioning, Hisense Group and
		their controlled corporations obtain any
		business development opportunities
		which are suitable for the Company and
		its controlled corporations, the Company
		and its controlled corporations may
		pursue such development based on their
		needs and Hisense Air-Conditioning,
	Hisense Group,	Hisense Group and their controlled
	Hisense	corporations will provide the necessary	9 June 2010	—	Ongoing
	Air-conditioning	support and assistance to the Company
		and its controlled corporations.
		3. So long as Hisense Air-Conditioning
		is the controlling shareholder of the
		Company and Hisense Group is the
		beneficial controller of the Company,
		Hisense Air-Conditioning, Hisense
		Group and their controlled corporations
		will not develop any businesses or
		projects of a nature identical or similar to
		businesses of the Company and its
		controlled corporations in China or
		overseas; and will cease to directly or
		indirectly engage in businesses
		competing with the Company and its
		controlled corporations through setting
		up joint venture, cooperation, joint
		operation or by way of operating leases,
		subcontract and entrusted management
		with any third parties.
		4. Hisense Air-Conditioning and Hisense
		Groupwill not exploit their direct or

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	indirect advantageous shareholding
	position in the Company to engage in
	any acts detrimental to the interests of
	the Company and other shareholders, in
	particular the medium and small
	shareholders.
	5. Where Hisense Air-Conditioning and
	Hisense Group breach the above
	undertakings and guarantees, they will
	immediately terminate businesses
	competing with the Company and its
	controlled corporations and adopt the
	necessary rectification and remedial
	measures; at the same time, they will be
	jointly and severally liable to
	compensate the Company and its
	controlled corporations for all losses and
	consequences resulted from breach of the
	above undertakings and guarantees.
	Undertakings on regulation and
	minimization of connected transactions:
	1.Upon the completion of this
	transaction, Hisense Air-conditioning
	and Hisense Group would continue to
	exercise the rights of shareholders or
	directors and perform the obligations of
	shareholders or directors in strict
	compliance with the laws and regulations
	such as the Company Law, and the
	relevant requirements of the Articles of
	Association of the Company, and abstain
	from voting on resolutions in relation to
	connected transactions between related
	companies and the Company at general
	meetings and board meetings.
Hisense Group,
	2. Upon completion of this transaction,
Hisense		9 June 2010	—	Ongoing
	connected companies will minimise
Air-conditioning
	connected transactions with the
	Company. In the course of conducting
	any necessary and unavoidable
	connected transactions, the Company
	will ensure that they are conducted fairly
	on the basis of market principle and fair
	pricing, and the Company will adopt the
	decision making procedures and perform
	obligation in relation to information
	disclosure in accordance with the
	relevant requirements of the laws and
	regulations, regulatory documents and
	the Articles of Association of the
	Company.

9

		3. In case Hisense Air-Conditioning and
		Hisense Group breach the undertakings
		and guarantees, they will be liable for the
		default in accordance with the laws and
		will be jointly and severally liable to
		compensate the Company and its
		shareholders (other than Hisense
		Air-Conditioning) for the losses caused
		therefrom.
		Undertaking of maintaining the
		independence of the listed company:
		Hisense Air-Conditioning and Hisense
		Group undertake that after this material
		assets disposal, they will maintain
	Hisense Group,
		separation with the Company in five
	Hisense		9 June 2010	—	Ongoing
		aspects, namely personnel, assets,
	Air-conditioning
		finance, corporate structure and business
		to ensure the independence of personnel,
		independence of assets, independence of
		finance, independence of corporate
		structure and independence of business.
Whether the undertakings are
		Yes
timely performed
Specific reasons for failure in
performance and the plan going		Not Applicable
forward

4. Estimate of operating results for 2016

Warnings and explanations of any estimated losses or significant changes to accumulated net profit from the beginning of the year to the end of next reporting period compared to the same period last year

□Applicable √ Not applicable

5. Derivatives investment

√Applicable □ Not applicable

Unit: RMB (in ten thousand)

Nam	Conn	Whethe	Type of	Initial	Effective	Expiry	Investme			Amo	Invest	Proportio	Actual
e of	ectio	r or not	derivatives	investment	Date	Date	nt at the			unt of	ment at	n of	amount
oper	n	a	investment	of			beginning	Amount		provi	the end	investme	of
ators		connect		derivatives			of the		Amount	sion	of the	nt to the	profit
								of
of		ed		investment			Reporting		of	for	Reporti	net asset	and
								purchase
deriv		transact					Period		disposal	impai	ng	of the	loss
ative		ion						during	during the	rment	Period	Company	during
s								the	Reporting	(if		at the end	the
								Reportin
inves									Period	any)		of the	Reporti
								g Period
tmen												Reporting	ng
t												Period	Period
												(%)

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			Forward
						30
											10,640.4
												2.29	445.69
Bank	No	No	foreign	83,342.85	1 Januar	September	83,342.85	55,461.47	128,163.87
			h		2016
			excange		y	2016					5
			contracts
Total				83,342.85	--	--	83,342.85	55461.47			10,640.4	2.29	445.69
									128163.87		5
								,	,
Source of derivatives				Export trade payment
investment funding
Litigation involved (if				Not applicable
applicable)
Date of the announcement				30 March 2016
disclosing the approval of
derivatives investment by the
Board(if any)
Date of the announcement				25 June 2016
disclosing the approval of
derivatives investment during
shareholders’ meetings(if any)
				The derivatives business of the Company mainly represents the forward foreign exchange contracts
				used to avoid the risk of foreign exchange fluctuations related to the overseas sales receivables.
Risk analysis of positions in				The Company determines a reasonable range of foreign exchange rates to achieve the hedging
derivatives during the				purpose.
Reporting Period and
explanations of risk control				The Company has formulated the “Management Measures for the Foreign Exchange Capital
measures (including but not				Business” and “the Internal Control System for Forward Foreign Exchange Capital Transactions”.
limited to market risk, liquidity				The measures specifically regulate the basic principles, operation rules, risk control measures and
risk, credit risk, operation risk,				internal controls that shall be followed when engaging in the business of foreign exchange
legal risk etc.)				derivatives. In respect of actual business management, the Company manages the derivatives
				business before, during and after the operation based on the management measures for the
				derivatives business.
Changes in market price or
product fair value of invested				The assessment of the fair value of the derivatives carried out by the Company mainly represents
derivatives during the				the outstanding foreign exchange forward contracts entered into by the Company and banks, which
Reporting Period, where				are recognized as transactional financial assets or liabilities based on the difference between the
specific methods and relevant				quotation of the outstanding foreign exchange forward contracts and the forward exchange rate as
assumptions and parameters				at the end of the period. During the Reporting Period, the Company recognized a gain on change in
used shall be disclosed in the				fair value of the derivatives of RMB 9.873 million. Investment gain amounted to RMB-5.4161
analysis of derivatives’ fair				million, resulting in a total profits or losses of RMB4.4569 million.
value
Explanations of any significant
changes in the Company’s
accounting policies and specific				During the Reporting Period, there were no material changes in the accounting policy and specific
accounting and auditing				accounting and auditing principles for the Company’s derivatives business as compared to last
principles on derivatives				reporting period.
between the Reporting Period
and the last reporting period
				Opinion of independent directors: Commencement of foreign exchange derivatives business by the
Specific opinions of
				Company was beneficial to the Company in the prevention of exchange rate fluctuation risks. The
independent Directors on the
				Company has devised the Internal Control System for Forward Foreign Exchange Capital
derivatives investment and risk
				Transactions to strengthen internal control and enhance the management of foreign exchange risks
control of the Company
				bythe Company, and the targeted risk control measures adopted werepracticable.

The derivatives business of the Company mainly represents the forward foreign exchange contracts used to avoid the risk of foreign exchange fluctuations related to the overseas sales receivables. Risk analysis of positions in The Company determines a reasonable range of foreign exchange rates to achieve the hedging derivatives during the purpose. Reporting Period and explanations of risk control The Company has formulated the “Management Measures for the Foreign Exchange Capital measures (including but not Business” and “the Internal Control System for Forward Foreign Exchange Capital Transactions”. limited to market risk, liquidity The measures specifically regulate the basic principles, operation rules, risk control measures and risk, credit risk, operation risk, internal controls that shall be followed when engaging in the business of foreign exchange legal risk etc.) derivatives. In respect of actual business management, the Company manages the derivatives business before, during and after the operation based on the management measures for the derivatives business.

Changes in market price or product fair value of invested The assessment of the fair value of the derivatives carried out by the Company mainly represents derivatives during the the outstanding foreign exchange forward contracts entered into by the Company and banks, which Reporting Period, where are recognized as transactional financial assets or liabilities based on the difference between the specific methods and relevant quotation of the outstanding foreign exchange forward contracts and the forward exchange rate as assumptions and parameters at the end of the period. During the Reporting Period, the Company recognized a gain on change in used shall be disclosed in the fair value of the derivatives of RMB 9.873 million. Investment gain amounted to RMB-5.4161 analysis of derivatives’ fair million, resulting in a total profits or losses of RMB4.4569 million. value

Explanations of any significant changes in the Company’s accounting policies and specific During the Reporting Period, there were no material changes in the accounting policy and specific accounting and auditing accounting and auditing principles for the Company’s derivatives business as compared to last principles on derivatives reporting period. between the Reporting Period and the last reporting period

Opinion of independent directors: Commencement of foreign exchange derivatives business by the Specific opinions of Company was beneficial to the Company in the prevention of exchange rate fluctuation risks. The independent Directors on the Company has devised the Internal Control System for Forward Foreign Exchange Capital derivatives investment and risk Transactions to strengthen internal control and enhance the management of foreign exchange risks control of the Company by the Company, and the targeted risk control measures adopted were practicable.

6. Table setting out the reception activities in respect of research, communications and visits

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during the reporting period

√Applicable □Not applicable

		Reception target
Reception time	Reception way		Index of basic situation of research
		type
			Announcement website: Juchao information
			network
26 August 2016	Field research	Institution
			Investor relations activities record number:
			2016-002

7. Illegal external guarantees

□Applicable √ Not applicable

8. Non-operating use of the capital of the listed company by the controlling shareholder and its connected parties

□Applicable √ Not applicable

This quarterly report is prepared in Chinese and English respectively. In case of inconsistency, the Chinese text of this quarterly report shall prevail over its English text.

By order of the Board of

Hisense Kelon Electrical Holdings Company Limited Tang Ye Guo

Chairman

Foshan City, Guangdong, the PRC, 21 October 2016

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Liu Hong Xin, Mr. Lin Lan, Mr. Dai Hui Zhong, Mr. Jia Shao Qian and Mr. Wang Yun Li; and the Company’s independent non-executive directors are Mr. Xu Xiang Yi, Mr. Wang Xin Yu and Mr. Wang Ai Guo.

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