HAIER SMART HOME CO., LTD.
(II) Evaluate and classify the Company's
environmental, social and governance risks and
opportunities, and report and make recommendations
to the Board;
(III) Review the implementation of the Company's
environmental, social and governance work and
internal control system, and report and make
3 recommendations to the Board on their
appropriateness and effectiveness;
(IV) Review and monitor the Company's relevant
environmental, social and governance objectives and
its implementation, and report and make
recommendations to the Board;
(V) Review the social responsibility report
disclosed by the Company to the public, and report
and make recommendations to the Board;
(VI) Conduct research and make recommendations on
other major environmental, social and governance
matters and emergencies that affect the Company;
(VII) Inspect the implementation of the above
matters;
(VIII) Other matters authorised by the Board. (The
subsequent provisions number sequence should be
reordered in proper sequence upon the addition of
above contents.)
Article 334 The Articles of Association shall
be considered and approved by the general meeting of Article 335 The Articles of Association shall
shareholders of the Company and shall come into come into force on the date when it is considered
force on the date when the foreign shares (H-share) and approved by the general meeting of shareholders
4 listed abroad are listed on the Stock Exchange of of the Company. The original Articles of Association
Hong Kong. The original Articles of Association of of the Company and all amendment thereto shall
the Company and all amendment thereto shall automatically become invalid upon the date when the
automatically become invalid upon the date when the Articles of Association become effective.
Articles of Association become effective.
5 The expression of "manager" in the Articles of Amended to "president"
Association
6 The expression of "deputy manager" in the Articles Amended to "vice-president"
of Association
Appendix II: Explanatory Statement for the Repurchase Mandate
This appendix serves as an explanatory statement to provide the requisite information to you for your consideration of the repurchase mandate.
Share Capital
On 8 February 2021 (the "Latest Practicable Date"), the total issued capital of the Company was RMB9,027,846,441, comprising 2,448,279,814 H Shares of RMB1.00 each, 6,308,552,654 A Shares of RMB1.00 each and 271,013,973 D Shares of RMB1.00 each. The Company has issued HKUSD8,000,000,000 Zero Coupon Guaranteed Convertible Bonds due 2022 convertible into the ordinary H shares of the Company (Stock Code: 5024.HK). Such bonds will be convertible into 424,327,258 H shares, representing approximately 4.70% of the issued share capital of the Company as at the Latest Practicable Date and approximately 4.49% of the issued share capital of the Company as enlarged by the issuance of such shares (assuming that there is no other change to the issued share capital of the Company).
If the special resolutions are approved at the EGM and the Class Meetings, respectively, the Board will be granted the repurchase mandate until the earlier of (a) the conclusion of the 2021 annual general meeting of the Company; or (b) the date on which the authorities conferred by the relevant special resolution is revoked or varied by special resolution by the Shareholders at the general meeting, the A Shares Class Meeting, the D Shares Class Meeting and the H Shares Class Meeting, respectively (the "Relevant Period").
Reasons for the Repurchase of H Shares
The Directors believe that the flexibility offered by the repurchase mandate would be beneficial to the Company and the Shareholders as a whole. At any time in the future when the Shares are trading at a discount to their underlying value, the ability of the Company to repurchase the Shares will be beneficial to the Shareholders who retain their investment in the Company as their proportionate interest in the assets of the Company would increase in proportion to the number of shares repurchased by the Company from time to time and thereby resulting in an increase in net asset value and/or earnings per Share. Such repurchases will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders as a whole.
Exercise of the Repurchase Mandate
The exercise in full of the repurchase mandate would not result in repurchasing more than 10% of the total H Shares in issue on the date of passing the relevant special resolution at the EGM and the Class Meetings on the basis of 2,448,279,814 H Shares in issue as at the Latest Practicable Date and no H Shares will be allotted, issued or repurchased by the Company on or prior to the date of the EGM and the Class Meetings, the repurchased shares would not be more than 244,827,981 H Shares (which may be adjusted based on the conversion of the Convertible Bonds) being repurchased by the Company according to the repurchase mandate during the Relevant Period.
Funding of Repurchases
In the repurchase of H Shares, the Company intends to utilise self-owned funds or self-raising funds of the Company legally available for such purpose in accordance with the Articles of Association, Listing Rules and the applicable laws, rules and regulations of the PRC.
The Directors consider that there will not be a material adverse impact on the working capital or on the gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the listing document of the Company dated 16 November 2020) in the event that the repurchase mandate is to be exercised in full at any time during the relevant period.
Prices of H Shares
The highest and lowest prices at which the H Shares have been traded on the Hong Kong Stock Exchange during the 12 calendar months preceding the Latest Practicable Date were as follows:
H Shares
Highest Trading Price Lowest Trading Price
Month HKUSD HKUSD
December 2020 28.8 22.60
January 2021 37.30 28.35
February 2021 (up to the Latest Practicable Date) 36.85 32.30 Directors' Undertakings and General Information
The Directors have undertaken to the Hong Kong Stock Exchange that, so far as the same may be applicable, they will exercise the powers to make repurchases pursuant to the proposed special resolution to approve the repurchase mandate in accordance with the Listing Rules and the applicable laws, rules and regulations of the PRC.
None of the Directors nor, to the best of their knowledge, having made all reasonable enquiries, any of their close associates (as defined in the Listing Rules) presently have the intention to sell H Shares (if any) to the Company in the event that the repurchase mandate is approved by the Shareholders at the EGM and the Class Meetings, and the conditions (if any) to which the repurchase mandate is subject are fulfilled.
The Company has not been notified by any core connected persons (as defined in the Listing Rules) of the Company that they have a present intention to sell any H Shares to the Company, nor they have undertaken not to sell any H Shares held by them to the Company in the event that the repurchase mandate is approved by the Shareholders at the EGM and the Class Meetings and the conditions (if any) to which the repurchase mandate is subject are fulfilled.
Takeovers Code and the Public Float Requirement
If a Shareholder's proportionate interest in the voting rights of the Company increases as a result of the Company's repurchase of shares pursuant to the repurchase mandate, such increase will be treated as an acquisition of voting rights for the purposes of Rule 32 of the Hong Kong Takeovers Code and, if such increase results in a change of control or consolidation of control, it may in certain circumstances give rise to an obligation to make a mandatory offer for Shares under Rule 26 of the Hong Kong Takeovers Code.
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