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HISENSE HOME APPLIANCES GROUP CO., LTD.

(the "Company")

Terms of Reference for Audit Committee of the Board of Directors

(Considered and adopted at the 2019 first meeting of the tenth session

of the Board of Directors on 28 March 2019)

Chapter 1

General

Rule 1. In order to perfect the functions of the board of directors (the "Board") to achieve an integration of various supervision methods, including external and internal audits, to ensure effective supervision on the Company by the Board and to improve corporate governance structure, the Company has specially established an audit committee (the "Audit Committee") under the Board and formulated these terms of reference pursuant to The Company Law of the People's Republic of China, Code of Corporate Governance for Listed Companies in China, Articles of Association, Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and other relevant rules.

Rule 2. The Audit Committee is a specialized working organ under the Board that is primarily responsible for the communication, supervision and verification in relation to the internal and external audits of the Company.

Chapter 2

Composition

Rule 3. The Audit Committee shall consist of three independent non-executive directors, at least one of whom being a person with accounting expertise as required under relevant provisions of the Listing Rules. A former partner of the Company's existing auditing body should be prohibited from acting as a member of the Audit Committee for a period of 2 years from the date of such person ceasing:

(1)to be a partner of the auditing body; or

(2)to have any financial interest in the auditing body, whichever is the later.

Rule 4. The Audit Committee shall have one chairman (convener) who must be an independent non-executive director with accounting expertise. The chairman (convener) shall lead the work of the committee and shall be elected among the committee members and whole election shall be reported to the Board for approval.

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Rule 5. The term of office of the members of the Audit Committee shall be the same as their term of office on the Board. Where a member ceases to be a director of the Company during his term of office, he will be a u t o m a t i c a l l y disqualified as a member of the committee. The Board shall fill the vacancy of committee members pursuant to the above Rule 3 and Rule 4.

Rule 6. The audit department is an organ under the Audit Committee which is responsible for carrying out day-to-day operations, such as the audit, checking and supervision for internal control, according to the decisions made or authorization given by the Audit Committee.

Chapter 3 Duties and Authority

Rule 7. The major duties of the Audit Committee include:

(1)to supervise and assess external audits, and to make recommendations on the appointment or change of external auditing body; to be primarily responsible for making recommendations to the Board on the appointment, reappointment and removal of the external auditing body, and to approve the remuneration and terms of engagement of the external auditing body, and any questions of its resignation or dismissal;

(2)to review and monitor the independence and objectivity of the external auditing body and the effectiveness of the audit process in accordance with applicable standards. The Audit Committee should discuss with the auditing body the nature and scope of the audit and reporting obligations before the audit commences;

(3)to develop and implement policy on engaging an external auditing body to supply non-audit services. For this purpose, "external auditing body" includes any entity that is under common control, ownership or management with the auditing body or any entity that a reasonable and informed third party knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally. The Audit Committee should report to the Board, identifying and making recommendations on any matters where action or improvement is needed;

(4)to examine the Company's financial information and disclosures; to monitor the integrity of the Company's financial statements and annual report and accounts, half-year report and quarterly reports, and to review significant financial reporting judgments contained in them. In reviewing these reports before submission to the Board, the committee should focus particularly on:

1.any changes in accounting policies and practices;

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2.major judgmental areas;

3.significant adjustments resulting from the audit;

4.the going concern assumptions and any qualifications;

5.compliance with accounting standards; and

6.compliance with the Listing Rules and legal requirements in relation to financial reporting;

(5)Regarding item (4) above:

1.members of the committee should liaise with the Board and senior management and the committee must meet, at least twice a year, with the Company's auditing body; and

2.the committee should consider any significant or unusual items that are, or may need to be, reflected in the reports and accounts, and it should give due consideration to any matters that have been raised by the Company's staff responsible for the accounting and financial reporting function, compliance officer or auditing body.

(6)to supervise and assess the Company's internal control; to review the Company's financial controls, risk management and internal control systems;

(7)to discuss the risk management and internal control systems with management to ensure that management has performed its duty to establish effective systems. This discussion should include the adequacy of resources, staff qualifications, experience a n d training programmes, and relevant budget of the Company's accounting and financial reporting function;

(8)to consider major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and management's response to these findings;

(9)to supervise and assess internal audits, to be responsible for the co-ordination between internal audits and external audits, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and to review and monitor its effectiveness;

(10)to examine and review the Company's financial, accounting policies and practices;

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(11)to review the management letter provided to the management by the external auditing body, any material queries raised by the auditing body to management about the accounting records, financial accounts or systems of control and management's response;

(12)to ensure that the Board will provide a timely response to the issues raised in the management letter provided to the management by the external auditing body;

(13)to report to the Board on the matters in these terms of reference;

(14)to examine and review the following arrangements: employees of the Company can, in confidence, raise concerns about possible improprieties in financial reporting, internal control or other matters. The Audit Committee should ensure that proper arrangements are in place for the Company to conduct fair and independent investigation of these matters and for appropriate follow-up action;

(15)to act as the key representative body for overseeing the Company's relationship with the external auditing body;

(16)to establish a whistle-blowing mechanism to follow, pay attention to and openly handle the questions and complaints made by the staff, customers, suppliers and investors of the Company and social media on the truthfulness, accuracy and completeness of financial information;

(17)to make recommendations regarding the establishment and modification of corporate governance mechanism and to provide effective supervision over the implementation of resolutions of the Board by senior management of the Company; and

(18)to be responsible for matters pursuant to the laws, regulations, Articles of Association and such other matters as the Board may authorize.

Rule 8. The Audit Committee shall be accountable to the Board and the proposal of the committee shall be submitted to the Board for approval.

Chapter 4 Decision-making Process

Rule 9. The audit department shall duly carry out preparation works before the decision-making of the Audit Committee and provide relevant information to the Company in written form in relation to the following:

(1)relevant financial reports of the Company;

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(2)work reports of internal and external auditing bodies;

(3)external auditing contracts and relevant work reports;

(4)situation of the Company's disclosure of information to the public;

(5)audit reports on material connected transactions of the Company;

(6)other relevant matters.

Rule 10. The reports provided by the audit department shall be evaluated at the meeting of the Audit Committee and the relevant written resolutions shall be submitted to the Board for discussion:

(1)evaluation on the work carried out by the external auditing body and the appointment and change of the external auditing body;

(2)whether the internal control system of the Company has been effectively implemented and whether the financial reports of the Company are complete and true in all respects;

(3)whether information, such as financial reports, disclosed by the Company to the public is objective and true and whether the material connected transactions of the Company are in accordance with the relevant laws and regulations;

(4)evaluation on the work of the finance department and audit department of the Company, including the personnel in charge;

(5)other relevant matters.

Chapter 5 Rules for proceedings of meetings

Rule 11. The Audit Committee shall meet at least twice every year. Seven days' notice shall be given to all members before the meeting. The meeting shall be chaired by the convener, or, where the convener is unable to b e present at the meeting, one of the members as authorized by the convener.

Rule 12. The meetings of the Audit Committee shall only be held when two-thirds or more of members are present. Each member shall have one vote. Resolutions made at the meeting shall be passed by more than half of all members.

Rule 13. Resolutions at the meetings of the Audit Committee shall be determined by

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