Whirlpool (Hong Kong) Limited

Announcement of Hisense Kelon Electric Appliance Co., Ltd. on Joint Venture between Foreign Investment and Whirlpool (Hong Kong) Co., Ltd.

The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete, and there are no false records, misleading statements or major omissions.

I. Overview of foreign investment

(A) the basic situation of foreign investment

Hisense Kelon Electric Appliance Co., Ltd. (hereinafter referred to as "the Company") signed a joint venture contract with Whirlpool (Hong Kong) Co., Ltd. (hereinafter referred to as "Whirlpool Hong Kong") in Qingdao, China, and established a joint venture company Hisense Whirlpool (Zhejiang) Electric Appliance Co., Ltd. (hereinafter referred to as "the joint venture company") with a registered capital of RMB 450 million.

(II) Deliberative opinions of the board of directors

The 6th Board of Directors of the Company held the 11th meeting in 2008 in the form of written proposal on April 27th, 2008, and unanimously voted to pass this joint venture contract.

(3) The examination and approval procedures required for the investment behavior to take effect.

The joint venture contract shall be approved by the shareholders' meeting of the company and approved by the relevant administrative departments of the state.

Second, the basic situation of the subject of the investment agreement

(1) Company;

Whirlpool (Hong Kong) Limited

A company formally established under the laws of Hong Kong, with its legal address at16th Floor, No.68 Yihe Street, Causeway Bay, Hong Kong, and its registered capital of100,000 Hong Kong dollars. Its main business is the production of household appliances such as washing machines, and its legal representative is Mr. Yuan Zijian. Whirlpool (Hong Kong) has nothing to do with our company.

Third, the basic situation of the investment target

Name of Joint Venture: Hisense Whirlpool (Zhejiang) Electric Appliance Co., Ltd.

English name: Hisense-Whirlpool (Zhejiang) Electric Appliance Co., Ltd.

Legal address: Plot 01-01-64-0014, Changxing Economic and Technological Development Zone, Zhejiang Province, China.

Registered capital: RMB 450 million.

Total investment: 900 million yuan, of which 450 million yuan of registered capital is contributed by both parties to the joint venture company and the remaining 450 million yuan is raised by the joint venture company with the assistance of both parties.

Scope of business: development, production and assembly of washing machines, refrigerators and their parts; Selling homemade products; Provide after-sales service and technical consulting services related to the above products.

Term of joint venture: The term of the joint venture company is 50 years, counting from the date of establishment. With the consent of both parties and the approval of the examination and approval authority, both parties may change the term of the joint venture.

Composition of the Board of Directors: The Board of Directors consists of six directors, three of whom are appointed by the Company and Whirlpool (Hong Kong) respectively. Whirlpool (Hong Kong) has the right to appoint the chairman, and the company has the right to appoint the vice chairman, who is the legal representative of the joint venture company. The board of directors is the highest authority of the joint venture company.

Composition of the Board of Supervisors: According to relevant laws and regulations, the joint venture company shall have one supervisor appointed by both parties.

Composition of management: the joint venture company has a general manager who is responsible to the board of directors; Set up three deputy general managers in charge of different fields (technical deputy general manager, manufacturing deputy general manager and financial deputy general manager); Set up finance minister, procurement minister, deputy procurement minister and marketing minister.

The registered capital of the joint venture company subscribed by the Company and Whirlpool (Hong Kong) is RMB 220,000,000.00 Yuan, and Wu Bai Ten Thousand Yuan (RMB 225,000,000.00 Yuan) is as follows:

(1) The mode of capital contribution of the company

1. 1. According to the Law of People's Republic of China (PRC) on Chinese-foreign Joint Ventures and its implementing regulations, the first phase of registered capital was invested in cash with its own funds of 33.75 million yuan;

2. The registered capital is contributed in kind by the land use right occupied by the site (the current total valuation is120,000,000 yuan) and the ownership of the workshop above the site. This value is divided into the following parts:

The land use right of the site shall be transferred for not less than 45 years from the date of signing the joint venture contract;

The site covers an area of 166 mu with a total area of160,000 yuan/mu, totaling 26.56 million yuan.

The company will build a factory building on this plot, totaling RMB 93.44 million.

Note: The above ex-factory value is only the agreed budget, and the final value must be evaluated by a qualified evaluation agency. If the evaluation value is lower than the agreed budget, the company will make up the shortfall in cash. If the evaluation value is higher than the agreed budget and both investors agree on the excess, the joint venture company will pay the excess to the company in cash at that time.

3. Sign an asset transfer contract, and make in-kind contribution to the registered capital with machinery and equipment worth 37.5 million yuan;

4. Sign an asset transfer contract, and make in-kind contribution to the registered capital with molds worth 33.75 million yuan.

Note: The final pricing of the machines, equipment and molds mentioned in items 3 and 4 above shall be evaluated by a qualified appraiser's office in China based on the trading day. If the final calculated consideration is greater than or equal to 765,438 yuan+0,250,000 yuan, of which 765,438 yuan+0,250,000 yuan will be used as the registered capital of the joint venture company by Hisense Kelon, and the excess will be paid to the company by the joint venture company in cash. If the final calculated consideration is less than 765,438 yuan+0,250,000 yuan, all the consideration will be contributed by Hisense Kelon as the registered capital of the joint venture company, and the insufficient part will be made up by Hisense Kelon in cash.

The Company promises that there is no mortgage, pledge or other third-party rights for the above-mentioned assets contributed in kind, and there are no major disputes, lawsuits or arbitrations or judicial measures such as seizure and freezing involving the assets.

(B) Whirlpool (Hong Kong) investment model

Whirlpool Hong Kong shall contribute RMB 225 million in cash or equivalent foreign currency.

1. According to the Law of People's Republic of China (PRC) on Chinese-foreign Joint Ventures and its implementing regulations, 33.75 million yuan in cash will be used as the first contribution of the registered capital, and the rest will be completed within two years.

Where the capital contribution is made in equivalent foreign currency, it shall be settled at the RMB exchange rate announced by the People's Bank of China on the day when the foreign currency funds arrive in the capital verification account of the joint venture company.

Four, the main contents of the foreign investment contract

(1) Amount of capital contribution

The investment amount of the company this time is RMB 225 million, accounting for 36.38% of the absolute value of the company's latest audited net assets (RMB-665,438+08,485,673).

(2) Obligations of both investors

1. In addition to the obligations such as capital contribution, at the request of the joint venture company, especially in the initial stage of the joint venture company, the joint venture company will perform the following obligations:

(1) Assist the joint venture company to obtain all approvals, permits and licenses required for the establishment and operation of the joint venture company and the construction of the joint venture company factory on site;

(2) Assist the joint venture company to organize the facilities needed for business and put them into use;

(3) Assist the joint venture company to purchase equipment made in China and ensure that it meets the appropriate quantity and quality required by the joint venture company for its business operation;

(4) Assist the joint venture company in purchasing equipment manufactured outside China to ensure that it meets the appropriate quantity and quality required by the joint venture company's operation;

(5) Assist the joint venture company to apply for and obtain the most favorable tax reduction and exemption treatment and other investment preferences stipulated by China laws and regulations;

(6) Assist the joint venture company to contact relevant departments to implement external water supply, oil supply, power supply, transportation, communication and other services required for the operation of the joint venture company's production facilities;

(7) Assist the joint venture company in arranging the transportation of imported equipment and materials between China port and the company's location;

(eight) to assist in the application and licensing procedures for the import of necessary quantities of machinery, equipment, materials and supplies;

(9) Assisting the foreign employees of the joint venture company, the foreign employees of the signatories of the joint venture company and the foreign directors of the board of directors to obtain the necessary entry visas and work permits;

(10) Assist the joint venture company to open RMB and foreign currency bank accounts;

(1 1) Assist the joint venture company to handle all import and customs clearance procedures for machinery, equipment, materials and materials imported by the joint venture company;

(12) assist the joint venture company in purchasing raw materials, spare parts and other materials in China;

(13) Assist the joint venture company to obtain the certification of advanced technology enterprises and obtain relevant certification certificates;

(14) assist the joint venture company, Party B and/or its affiliated companies in handling the China tax and foreign exchange matters related to the profits distributed by the joint venture company according to this contract or paid or to be paid to Party B and/or its affiliated companies according to any contract between the joint venture company and Party B or its affiliated companies;

(15) assist the joint venture company in recruiting personnel who meet the needs of the joint venture company; and

(17) Handle other matters agreed by both parties.

2. In addition to the obligation of capital contribution, Whirlpool (Hong Kong) will perform the following obligations at the request of the joint venture company:

(1) Assist the joint venture company in purchasing materials outside China;

(2) Assisting the Joint Venture Company in recruiting personnel who meet the needs of the Joint Venture Company;

(3) Assist the joint venture company to apply for and obtain the most favorable tax reduction and exemption treatment and other investment preferences stipulated by China laws and regulations;

(four) to assist in the application and licensing procedures for the import of necessary quantities of machinery, equipment, materials and supplies;

(5) Assist the joint venture company to purchase equipment made in China and ensure that it meets the appropriate quantity and quality required by the joint venture company for its business operation;

(6) Assist the joint venture company in purchasing equipment manufactured outside China to ensure that it meets the appropriate quantity and quality required by the joint venture company's operation; and

(7) Handle other matters agreed by both parties.

(3) the technology and trademark of the joint venture company

1, the company's technology license to the joint venture company.

(1) The joint venture company shall use its advanced technology and proprietary technology to produce the company's products under the principle of non-transferability and non-exclusivity according to the relevant technology license contract of Hisense Kelon, and the joint venture company shall pay 3.5 million yuan to Hisense Kelon as a one-time license fee within 30 days after the business license is issued, for a period of one year.

(2) The joint venture company shall also use its advanced technology and proprietary technology to produce its products in accordance with the provisions of the relevant technology license contract of Hisense Kelon under the principle of non-transferability and non-exclusivity, and the joint venture company shall pay the annual license fee to the joint venture company in RMB according to the rate stipulated in the relevant technology license contract of Hisense Kelon.

2. The technical license granted by Whirlpool Company (a Delaware company, the actual controller of Whirlpool (Hong Kong)) to the joint venture company.

(1) The joint venture company shall use Whirlpool's advanced technology and proprietary technology to produce the company's products in accordance with Whirlpool's relevant technology licensing contract under the principle of non-transferability and non-exclusivity, and the joint venture company shall pay the equivalent of RMB 3.5 million (converted at the intermediate exchange rate announced by the People's Bank of China on the same day) as a one-time licensing fee within one year after the issuance of the business license.

(2) The joint venture company shall also use Whirlpool's advanced technology and proprietary technology to produce the company's products under the principle of non-transferability and non-exclusivity, and the joint venture company shall pay the annual license fee to the technology licensor designated by Whirlpool at the rate stipulated in the relevant technology license contract.

3. Trademark of the joint venture company

The joint venture company may use any trademark belonging to Hisense, Whirlpool or their respective affiliates on the company's products according to the specific requirements specified in the supply agreement signed by the joint venture company and Whirlpool sales organization and/or Hisense sales organization. Whirlpool and Hisense retain full control over their trademarks/brands, while the joint venture company is allowed to use the above trademarks/brands only for the packaging and labeling of the company's products according to the terms of the above supply agreement.

Note: Hisense sales organization refers to the sales entity directly or indirectly controlled by Hisense Group Co., Ltd., the actual controller of the company; Whirlpool sales organization refers to the sales entity directly or indirectly controlled by Whirlpool Company, the actual controller of Whirlpool (Hong Kong).

(4) Sales of products of the joint venture company

The types of products produced after the establishment of the joint venture company are as follows:

"Class A products": as far as washing machine products are concerned, it includes (1) vertical shaft: fully automatic pulsator and agitator; (2) Horizontal axis and oblique axis: the full capacity of fully automatic drum; (3) comprises a washing dryer and a dryer. As far as refrigerator products are concerned, it includes (1) door-to-door and French door-to-door (all widths and capacities); (2) All widths and capacities of multiple doors (4 or more doors). With the approval of the board of directors of the joint venture company, the scope of Class A products may be changed from time to time;

"Class B products": any product that the joint venture company has the ability to produce with the approval of the board of directors but does not fall within the scope of Class A products.

1 and sales of Class A products.

(1) Sales within the protection period

Unless otherwise agreed by both parties to the joint venture, within 24 months after the joint venture is officially put into production (the "protection period"), the joint venture company is the only manufacturing and supplying entity for Whirlpool sales organization and Hisense sales organization to sell and purchase Class A products in this area, and both parties shall and shall urge their affiliated companies, agents and distributors to only purchase Class A products from the joint venture company for sale in this area;

(two) sales after the expiration of the protection period.

Unless otherwise agreed by both parties to the joint venture, after the protection period expires, the joint venture company will remain the only manufacturing and supplying entity for Whirlpool sales organization and Hisense sales organization to purchase Class A products for sale in the region, provided that the joint venture company can provide Class A products with market competitiveness. Both parties shall urge their affiliated companies, agents and distributors to only purchase Class A products from the joint venture company for sale in the region.

2. Sales of Class B products

(1) Sales within the protection period

For any product that the Joint Venture Company is capable of producing but does not fall within the scope of Class A products ("Class B products"), as long as the Joint Venture Company can produce and deliver the products according to the orders received within the protection period, both parties agree to purchase (and urge their affiliated companies) Class B products from the Joint Venture Company for its sales in the region. If the joint venture company is fully loaded and cannot complete the order for Class B products, both parties and/or their affiliated companies may purchase Class B products from a third party.

(two) sales after the expiration of the protection period.

After the expiration of the protection period, both parties agree to give priority (and urge their affiliated companies) to purchase Class B products from the joint venture company for its sales in the region, provided that the joint venture company can provide Class B products with market competitiveness. If the joint venture company is fully loaded and cannot complete the order for Class B products, both parties and/or their affiliated companies may purchase Class B products from a third party.

3. Company product sales

Class A products and Class B products are collectively referred to as company products.

In this area, the joint venture company can only sell its products to relevant Hisense or Whirlpool entities designated by Hisense sales organization and Whirlpool sales organization respectively. With the approval of the board of directors, the company's products can also be directly sold to third parties in the region. If there are any company products that are not branded by Hisense and its affiliates or Whirlpool and its affiliates, whether they are sold in the region through Hisense sales organization or Whirlpool sales organization or not, the sales of these company products must be approved by the board of directors. Both parties shall urge the joint venture company to make the products of Whirlpool and its affiliated companies with their own brands different from those of Hisense according to the memorandum of brand/product differentiation signed between Whirlpool and Hisense.

(5) Liability for breach of contract

1. If one party violates this contract and the joint venture contract (including its annexes) cannot be performed or fully performed, the observant party shall notify the defaulting party in writing and require it to correct the breach within three months. If the non-breaching party fails to correct the breach within the prescribed time limit, the non-breaching party has the right to refer the problem of the other party's failure to correct the breach within the prescribed time limit to the chief executives of both parties for negotiation and settlement. If such problems are submitted to the chief executives of both parties within 30 days, if the breaching party still fails to correct the breach, the observant party has the right to terminate this contract, and the liabilities caused by the breach shall be borne by the breaching party, and the observant party has the right to carry out the acquisition procedures under the breach. If both parties to this contract breach the contract, each party shall bear the responsibilities caused by the breach;

2. The Company confirms and agrees that if the Company materially violates any obligation under the non-competition, priority purchase and OEM arrangement agreement for reasons other than Whirlpool (Hong Kong) and any related party, it shall also be regarded as a material breach of this contract. In this case, Whirlpool (Hong Kong) has the right to terminate this contract and carry out the acquisition procedures according to this contract;

3. Whirlpool (Hong Kong) confirms and agrees that if Whirlpool (Hong Kong) materially violates any obligations under the non-competition, priority procurement and OEM arrangement agreement for reasons not attributable to the Company or any of its related parties, it shall also be deemed as a material breach of this contract. In this case, the Company has the right to terminate the contract and carry out the acquisition procedures according to the provisions of this contract.

Note: The buyout procedure means that according to the provisions of the joint venture contract, the joint venture company is appraised by a qualified appraisal firm, the equity transfer price is determined according to 50% of the appraised price of the joint venture company, and 50% of the equity of the defaulting party is purchased.

(vi) Methods of dispute settlement

Any dispute arising from or related to this joint venture contract (including disputes related to the performance, existence, effectiveness or termination of this contract) ("dispute") shall be settled by both parties through friendly negotiation. If the dispute cannot be settled in this way within 60 days after negotiation, either party may submit the dispute to Singapore International Arbitration Center for arbitration in accordance with the arbitration rules and relevant regulations in force at that time.

The arbitral award is final and binding on both parties. Both parties agree to be bound by and act in accordance with the ruling.

The arbitration fee shall be borne by the losing party, unless otherwise stipulated in the arbitration award.

In case of any dispute or arbitration, both parties shall continue to exercise their respective rights and perform their respective obligations under this contract except the disputed matters.

(7) Conditions and time for contracting.

The joint venture contract and articles of association of the joint venture company have been approved by the examination and approval authority, and the relevant examination and approval procedures have been fulfilled, and they have been approved in accordance with other relevant laws and regulations.

Verb (abbreviation of verb) The influence of foreign capital on listed companies

The joint venture company is not included in the scope of the company's consolidated statements, and the company owns 50% of the equity of the joint venture company, and enjoys the benefits and risks in proportion according to law; The establishment of the joint venture company is conducive to the company's research and development and production of high-end products for washing machines and refrigerators, further increasing the variety of high-end products, expanding the sales scale of high-end products, increasing the market share of such products and increasing the investment income for the company. By cooperating with Whirlpool to achieve complementary advantages, we can introduce advanced technology and management methods to further consolidate our position in the domestic household appliance industry.

Six, horizontal competition

There is no direct competition between the joint venture company and the company:

1. The washing machine in the main business of the joint venture company is not the main product of the company;

2. The refrigerators produced by the joint venture company are mainly large refrigerators with two doors, French double doors and multiple doors, which are not homogeneous products with the refrigerators produced by the company at present, and there are obvious differences between the two sides in terms of technology use, market positioning and target customer base.

Seven. Reference document catalogue

1. Resolution of the 11th meeting of the 6th Board of Directors of Hisense Kelon Electric Appliance Co., Ltd. in 2008;

2. The joint venture contract between Hisense Kelon Electric Co., Ltd. and Whirlpool (Hong Kong) Co., Ltd. for the establishment of Hisense Whirlpool (Zhejiang) Electric Co., Ltd.;

3. Articles of Association of Hisense Whirlpool (Zhejiang) Electric Co., Ltd. ..

Hisense Kelon Electric Holding Co., Ltd.

board of directors

May 8(th), 2008

The evaluation firm evaluates the joint venture company, determines the equity transfer price at 50% of the evaluation price of the joint venture company, and buys 50% of the equity of the defaulting party.

(vi) Methods of dispute settlement

Any dispute arising from or related to this joint venture contract (including disputes related to the performance, existence, effectiveness or termination of this contract) ("dispute") shall be settled by both parties through friendly negotiation. If the dispute cannot be settled in this way within 60 days after negotiation, either party may submit the dispute to Singapore International Arbitration Center for arbitration in accordance with the arbitration rules and relevant regulations in force at that time.

The arbitral award is final and binding on both parties. Both parties agree to be bound by and act in accordance with the ruling.

The arbitration fee shall be borne by the losing party, unless otherwise stipulated in the arbitration award.