Texhong Textile : PROPOSED GRANT OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Texhong Textile Group Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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.

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 2678)

PROPOSED GRANT OF GENERAL MANDATES

TO ISSUE AND REPURCHASE SHARES

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of the Company to be held at 2:30 p.m. at Function Room 1, 11th Floor, Nina Hotel Tsuen Wan West, 8 Yeung Uk Road, Tsuen Wan, Hong Kong on 3 May 2021 is set out on pages 14 to 18 of this circular.

Whether or not you are able to attend the meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same as soon as possible and in any event not later than 48 hours before the time of the annual general meeting (i.e., at or before 2:30 p.m. on 1 May 2021 (Hong Kong time)) or any adjournment thereof to the Company's Hong Kong branch share registrar, Boardroom Share Registrars (HK) Limited at 2103B, 21/F, 148 Electric Road, North Point, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment thereof should you so wish.

29 March 2021

CONTENTS

Definitions .........................................................................

Letter from the Board

Notice of the Annual General Meeting ..............................................

Appendix II - Particulars of Directors proposed for re-election ..................

Appendix I

-	Introduction ...............................................................	3
-	IssueMandate .............................................................	4
-	RepurchaseMandateandExtensionMandate ................................	4
-	Re-electionofDirectors ....................................................	4
-	Actionstobetaken ........................................................	6
-	VotingattheAnnualGeneralMeeting ......................................	6
-	Recommendation ..........................................................	6
-	ClosureofRegisterofMembers ............................................	7
-	Generalinformation .......................................................	7
8
12
14

- Explanatory statement ............................................

Page

1

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

''Annual General Meeting''

''Articles''

the annual general meeting of the Company to be held at 2:30 p.m. at Function Room 1, 11th Floor, Nina Hotel Tsuen Wan West, 8 Yeung Uk Road, Tsuen Wan, Hong Kong on 3 May 2021, the notice of which is set out on pages 14 to 18 of this circular, and any adjournment thereof the articles of association of the Company adopted pursuant to a written resolution passed by the Shareholders on 21 November 2004 and as amended from time to time

''associates''

''Board''

has the meaning ascribed to it under the Listing Rules the board of Directors

''Companies Law''

the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

''Company''

Texhong Textile Group Limited 天虹紡織集團有限公司 ,a company incorporated in the Cayman Islands and the issued Shares of which are listed on the Stock Exchange

''connected person(s)''

''Director(s)''

has the meaning ascribed to it under the Listing Rules director(s) of the Company

''Extension Mandate''

a general and unconditional mandate proposed to be granted to the Directors to the effect that the total number of Shares which may be allotted and issued under the Issue Mandate may be increased by an additional number representing such number of Shares actually repurchased under the Repurchase Mandate

''Group''

the Company and its subsidiaries

''Hong Kong''

the Hong Kong Special Administrative Region of the People's Republic of China

''Issue Mandate''

a general and unconditional mandate proposed to be granted to the Directors to exercise the power of the Company to allot, issue or otherwise deal with new Shares up to a maximum of 20% of the total number of issued Shares as at the date of passing the relevant resolution at the Annual General Meeting

''Latest Practicable Date''

19 March 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

''Listing Rules''

the Rules Governing the Listing of Securities on the Stock Exchange

''Repurchase Mandate''

a general and unconditional mandate proposed to be granted to the Directors to enable them to repurchase the Shares on the Stock Exchange which shall not exceed 10% of the total number of issued Shares as at the date of passing the relevant resolution at the Annual General Meeting

''SFO''

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

''Share(s)''

ordinary share(s) of HK$0.10 each in the share capital of the Company

''Shareholder(s)''

holder(s) of the Shares

''Stock Exchange''

The Stock Exchange of Hong Kong Limited

''Takeovers Code''

The Codes on Takeovers and Mergers and Share Buy-backs

''HK$''

Hong Kong dollars, the lawful currency of Hong Kong

''RMB''

Renminbi, the lawful currency of the People's Republic of China

''%''

per cent.

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 2678)

Executive Directors:	Registered office:
Hong Tianzhu	Cricket Square
Zhu Yongxiang	Hutchins Drive
Tang Daoping	P.O. Box 2681
Hui Tsz Wai	Grand Cayman KY1-1111
Ji Zhongliang	Cayman Islands
Independent non-executive Directors:	Head office and principal place of
Cheng Longdi	business in Hong Kong:
Tao Xiaoming	Unit 3, 37/F
Ting Leung Huel, Stephen	Cable TV Tower
9 Hoi Shing Road
Tsuen Wan
Hong Kong
29 March 2021
To the Shareholders
Dear Sir/Madam

PROPOSED GRANT OF GENERAL MANDATES

TO ISSUE AND REPURCHASE SHARES

RE-ELECTION OF DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The primary purpose of this circular is to provide you with information regarding the resolutions to be proposed at the Annual General Meeting and to give you notice of the Annual General Meeting. Resolutions to be proposed at the Annual General Meeting include, inter alia: (a) ordinary resolutions on the proposed grant of each of the Issue Mandate, the Repurchase Mandate and the Extension Mandate; and (b) ordinary resolutions relating to the proposed re-election of the Directors.

ISSUE MANDATE

At the Annual General Meeting, an ordinary resolution will be proposed that the Directors be granted the Issue Mandate, i.e. a general and unconditional mandate to allot, issue and deal with new Shares up to 20% of the total number of issued Shares as at the date of passing of the relevant resolution. As at the Latest Practicable Date, a total of 915,000,000 Shares were in issue. Subject to the passing of the proposed resolution granting the Issue Mandate to the Directors and on the basis that no Shares will be issued or repurchased by the Company prior to the Annual General Meeting, the Company will be allowed under the Issue Mandate to issue a maximum of 183,000,000 Shares.

REPURCHASE MANDATE AND EXTENSION MANDATE

At the Annual General Meeting, an ordinary resolution will also be proposed to give the Directors the Repurchase Mandate, i.e. a general and unconditional mandate to exercise all powers of the Company to repurchase, on the Stock Exchange, or on any other stock exchange on which the Shares may be listed, Shares up to a maximum of 10% of the total number of issued Shares as at the date of passing of the relevant resolution. In addition, an ordinary resolution regarding the Extension Mandate will be proposed at the Annual General Meeting to authorise the increase in the total number of new Shares which may be allotted and issued under the Issue Mandate by an additional number representing such number of Shares actually repurchased under the Repurchase Mandate.

The Repurchase Mandate and the Issue Mandate would expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; or (b) the end of the period within which the Company is required by the Companies Law or the Articles to hold its next annual general meeting; or (c) when revoked or varied by ordinary resolution(s) of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

Under the Listing Rules, the Company is required to give to its Shareholders all information which is reasonably necessary to enable Shareholders to make an informed decision as to whether to vote for or against the resolution in respect of the Repurchase Mandate at the Annual General Meeting. An explanatory statement for such purpose is set out in the Appendix I to this circular.

RE-ELECTION OF DIRECTORS

According to Article 108(A) of the Articles, at each annual general meeting, one third of the Directors for the time being, or if their number is not three or a multiple of three, then the number nearest to but not less than one-third, shall retire from office by rotation provided that every Director, including those appointed for a specific term, shall be subject to retirement by rotation at least once every three years. A retiring Director shall be eligible for re-election. The Company at the general meeting at which a Director retires may fill the vacated office.

According to Article 108(B) of the Articles, the Directors to retire by rotation shall include (so far as necessary to obtain the number required) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot.

By virtue of Articles 108(A) and 108(B) of the Articles, Mr. Hui Tsz Wai, Mr. Ji Zhongliang and Prof. Tao Xiaoming will retire as Directors at the Annual General Meeting, and Mr. Hui Tsz Wai and Prof. Tao Xiaoming, being eligible, will offer themselves for re-election at the Annual General Meeting, Mr. Ji Zhongliang has informed the Board that he will retire as a Director and will not offer himself for re-election at the Annual General Meeting.

Recommendations to the Board for the proposal for re-election of each of Mr. Hui Tsz Wai as an executive Director and Prof. Tao Xiaoming as an independent non-executive Director were made by the nomination committee of the Board (''Nomination Committee''), after having considered a range of diversity perspectives including but not limited to gender, age, cultural and educational background, professional experience, skills, knowledge and length of service, as set out in the board diversity policy of the Company.

Particulars of Mr. Hui Tsz Wai and Prof. Tao Xiaoming are set out in Appendix II to this circular.

Recommendation of the Nomination Committee with respect to the Independent Non-executive Director subject to Re-election at the Annual General Meeting

The Nomination Committee had assessed and reviewed the written confirmation of independence of Prof. Tao Xiaoming, the independent non-executive Director who has offered herself for re-election at the Annual General Meeting based on the independence criteria as set out in Rule 3.13 of the Listing Rules and are satisfied that she remains independent in accordance with Rule 3.13 of the Listing Rules. In addition, the Nomination Committee had evaluated her performance and is of the view that she has provided valuable contributions to the Company and has demonstrated her abilities to provide independent, balanced and objective view to the Company's affairs.

The Nomination Committee is also of the view that Prof. Tao Xiaoming would bring to the Board her own perspective, skills and experience, as further described in her biography in Appendix II to this circular.

Based on the board diversity policy adopted by the Company, the Nomination Committee considers that Prof. Tao Xiaoming can contribute to the diversity of the Board, in particular, with her strong and diversified educational background and professional experience in her expertise, including in-depth knowledge in the textile industries.

Therefore, the Board, with the recommendation of the Nomination Committee, has nominated Prof. Tao Xiaoming for re-election as independent non-executive Director at the Annual General Meeting.

ACTIONS TO BE TAKEN

At the Annual General Meeting, ordinary resolutions will be proposed to approve, among other matters, the following:

• (a) the proposed grant of the Issue Mandate, Repurchase Mandate and Extension Mandate; and

• (b) the proposed re-election of Directors.

Whether or not you are able to attend the Annual General Meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time for the Annual General Meeting (i.e., at or before 2:30 p.m. on 1 May 2021 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment thereof should you so wish.

VOTING AT THE ANNUAL GENERAL MEETING

Pursuant to Rule 13.39 of the Listing Rules, all votes of the Shareholders at the general meetings must be taken by poll. The chairman of the Annual General Meeting will therefore demand a poll for every resolution put to the vote of the Annual General Meeting pursuant to article 72 of the Articles. An announcement on the poll vote results will be made by the Company after the Annual General Meeting in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

The Directors believe that the proposed grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate and the re-election of Directors are beneficial to the Company and the Shareholders as a whole.

The Directors believe that an exercise of the Issue Mandate will enable the Company to take advantage of market conditions to raise additional capital for the Company.

The Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be exercised when the Directors believe that repurchases of Shares will benefit the Company and the Shareholders.

An exercise of the Repurchase Mandate in full may have a material adverse impact on the working capital and/or gearing position of the Company compared with that as at 31 December 2020, being the date of its latest audited consolidated financial statements. The Directors do not, however, intend to make any repurchase in circumstances that would have a material adverse impact on the working capital or gearing of the Company.

Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolutions for approving the grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate and the re-election of Directors at the Annual General Meeting.

CLOSURE OF REGISTER OF MEMBERS

For determination of the entitlement to attend and vote at the Annual General Meeting, the transfer books and register of members will be closed from 28 April 2021 to 3 May 2021, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for attending and voting at the Annual General Meeting, all transfers accompanied by the relevant share certificates must be lodged with the Company's Hong Kong branch share registrar, Boardroom Share Registrars (HK) Limited at 2103B, 21/F, 148 Electric Road, North Point, Hong Kong not later than 4:30 p.m. on 27 April 2021.

For determination of the entitlement to the proposed final dividend, conditional upon the passing of the resolution approving the declaration of the proposed final dividend at the Annual General Meeting, the transfer books and register of members will be closed from 10 May 2021 to 12 May 2021, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Hong Kong branch share registrar, Boardroom Share Registrars (HK) Limited at the address stated above not later than 4:30 p.m. on 7 May 2021.

GENERAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully,

For and on behalf of the Board of

Texhong Textile Group Limited

Hong Tianzhu

Chairman

This Appendix I serves as an explanatory statement, as required by the Listing Rules, to provide the Shareholders with all the requisite information to enable them to make an informed decision on whether to vote for or against the ordinary resolution to approve the grant of the Repurchase Mandate to the Directors.

1. LISTING RULES RELATING TO THE REPURCHASE OF SHARES

The Listing Rules permit companies whose primary listing is on the Stock Exchange to repurchase their shares on the Stock Exchange and any other stock exchange on which the securities of the company are listed and such exchange is recognised by the Securities and Futures Commission of Hong Kong subject to certain restrictions. Among such restrictions, the Listing Rules provide that the shares of such company must be fully paid up and all repurchase of shares by such company must be approved in advance by an ordinary resolution of shareholders, either by way of a general repurchase mandate or by specific approval of a particular transaction.

2. SHARE CAPITAL

As at Latest Practicable Date, there were a total of 915,000,000 Shares in issue.

Subject to the passing of the proposed resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 91,500,000 Shares which represents 10% of the total number of issued Shares as at the date of passing such resolution.

3. REASONS FOR THE REPURCHASE

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from the Shareholders to enable the Company to repurchase the Shares on the Stock Exchange or any other stock exchange on which the Shares are listed. Share repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such repurchase will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

In repurchasing the Company's securities, the Company may only apply funds legally available for the purpose in accordance with the Company's memorandum of association, the Articles, the Companies Law and other applicable laws of the Cayman Islands.

Taking into account the current working capital position of the Company, the Directors consider that, if the Repurchase Mandate were to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of the Company as compared with the position as at 31 December 2020, being the date of its latest audited consolidated financial statements. However, the Directors do not intend to make any repurchases to such anextent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing position of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

5. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the twelve calendar months immediately preceding (and including) the Latest Practicable Date are as follows:

Highest	Lowest
HK$	HK$
March 2020	8.61	5.43
April 2020	6.04	5.16
May 2020	5.58	4.71
June 2020	6.50	5.33
July 2020	7.15	5.35
August 2020	6.21	5.47
September 2020	6.33	5.14
October 2020	7.36	5.18
November 2020	7.58	5.94
December 2020	7.48	6.21
January 2021	8.59	6.65
February 2021	14.56	8.01
March 2021 (Note)	14.36	9.91

Note:

up to the Latest Practicable Date

6. THE TAKEOVERS CODE AND MINIMUM PUBLIC HOLDING

If a Shareholder's proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert (as defined in the Takeovers Code) could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 or Rule 32 of the Takeovers Code.

On the basis of the respective shareholding held by Mr. Hong Tianzhu, Trade Partner Investments Limited and Wisdom Grace Investments Limited (all being the companies controlled by Mr. Hong Tianzhu and/or Ms. Zhao Zhiyang (the spouse of an executive Director, Mr. Zhu Yongxiang), two of the substantial shareholders) as at the Latest Practicable Date set out below, the exercise in full of the Repurchase Mandate will not result in any of Mr. Hong Tianzhu, Ms. Zhao Zhiyang, Mr. Zhu Yongxiang, Trade Partner Investments Limited and Wisdom Grace Investments Limited (being presumed parties acting in concert under the Takeovers Code) obliged to make a mandatory offer under Rule 26 of the Takeovers Code. In addition, the Directors are not aware of any consequence which would arise under the Takeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate.

Approximate percentage of

Approximate	shareholding if
percentage of	the Repurchase
existing	Mandate is
Name	Number of Shares	shareholding	exercised in full
Hong Tianzhu	5,400,000 Shares	0.59%	0.66%
(Note 1)
New Green Group Limited	392,842,400 Shares	42.93%	47.70%
(Note 2)
Trade Partner Investments	151,900,000 Shares	16.60%	18.45%
Limited	(Note 3)
Wisdom Grace Investments	68,000,000 Shares	7.43%	8.26%
Limited	(Note 4)
Total:	67.55%	75.07%
Notes:

• 1. These 5,400,000 Shares were registered in the name of and beneficially owned by Mr. Hong Tianzhu, an executive Director.

• 2. These 392,842,400 Shares were registered in the name of and beneficially owned by New Green Group Limited, the entire issued share capital of which is beneficially owned by Texhong Group Holdings Limited. Texhong Group Holdings Limited is wholly owned by Mr. Hong Tianzhu, an executive Director.

• 3. These 151,900,000 Shares were registered in the name of and beneficially owned by Trade Partner Investments Limited, the entire issued share capital of which is beneficially owned as to 57.44% by Mr. Hong Tianzhu (an executive Director) through New Green Group Limited and as to 42.56% by Ms. Zhao Zhiyang (the spouse of an executive Director) through Wisdom Grace Investments Limited.

• 4. These 68,000,000 Shares were registered in the name of and beneficially owned by Wisdom Grace Investments Limited, the entire issued share capital of which is beneficially owned by Ms. Zhao Zhiyang. As Ms. Zhao Zhiyang and Mr. Zhu Yongxiang, an executive Director, have a spousal relationship, Mr. Zhu Yongxiang was deemed to be interested in the Shares in which Ms. Zhao Zhiyang was interested by virtue of the SFO.

The Directors have no intention to exercise the Repurchase Mandate to such an extent that will result in the number of Shares in the hands of public falling below the prescribed minimum percentage of 25%.

7. SHARE REPURCHASE MADE BY THE COMPANY

The Company had not purchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months immediately preceding the Latest Practicable Date.

8. GENERAL

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) have any present intention to sell any Shares to the Company if the Repurchase Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange that they will only exercise the power of the Company to make repurchase pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands and the regulations set out in the memorandum of association of the Company and the Articles.

No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she has a present intention to sell any Shares to the Company nor has any such core connected person undertaken not to sell any Shares held by him to the Company in the event that the Repurchase Mandate is granted.

The biographical details of the Directors eligible for re-election at the Annual General Meeting are set out below:

MR. HUI TSZ WAI

Mr. Hui Tsz Wai, aged 47, first joined the Group in 2004 as the chief financial officer of the Group and was appointed as an executive Director on 1 February 2015 and the company secretary of the Company on 28 August 2017.

Mr. Hui Tsz Wai entered into a service contract dated 1 February 2015 with the Company to act as an executive Director for an initial term of three years commencing from 1 February 2015, and continued thereafter for successive terms of one year until terminated by not less than three month's notice in writing served by either party on the other. Under the service contract, he shall be entitled to a monthly salary and, in respect of each financial year of the Company, a management bonus in such sum as the Board may in its absolute discretion determine provided that the aggregate amount of management bonuses payable to all Directors in respect of any financial year of the Company shall not exceed 5% of the audited consolidated or combined net profit of the Company (after taxation and minority interests and payment of such bonuses but excluding extraordinary and exceptional items) in respect of each financial year. For the year ended 31 December 2020, he was entitled to emolument of approximately RMB4,067,000, which is covered under his service contract and comprising of salaries of approximately RMB3,468,000, discretionary bonuses of approximately RMB281,000 and employer's contribution to benefit scheme of approximately RMB318,000. The emolument of Mr. Hui is determined by the Board with reference to his duties, responsibilities, performance and the results of the Group.

Mr. Hui graduated from the Chinese University of Hong Kong with a bachelor of business administration (honours) degree. He is a fellow member of the Association of Chartered Certified Accountants and a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants. He is also a Chartered Financial Analyst and a Certified Fraud Examiner. He has more than 20 years working experience in finance related area. Mr. Hui had been working at one of the big four international accounting firms for about nine years before joining the Group in November 2004.

As at the Latest Practicable Date, Mr. Hui was interested in 4,500,000 Shares, being the options granted to him under the share option scheme of the Company. Mr. Hui is not related to any other Directors, senior management, or substantial or controlling shareholders (as defined in the Listing Rules) of the Company. Mr. Hui did not hold directorship in other listed public companies in the last three years.

There is no information which is discloseable nor is/was Mr. Hui involved in any matters required to be disclosed pursuant to any of the requirements of the provisions under the Rule 13.51(2) of the Listing Rules.

There are no other matters concerning Mr. Hui that need to be brought to the attention of the Shareholders.

PROFESSOR TAO XIAOMING

Professor Tao Xiaoming, aged 63, was appointed as an independent non-executive Director on 3 March 2014.

Professor Tao Xiaoming is an elected fellow of The Textile Institute, the American Society of Mechanical Engineers, the Royal Academy of Arts and Design and Commerce of the United Kingdom, and has been the Chair Professor in Textile Technology at the Institute of Textiles and Clothing of the Hong Kong Polytechnic University since April 2002. She was elected as the world president of The Textile Institute for a tenure of three years from May 2007. Professor Tao received a bachelor's degree in textile engineering from China Textile University (中國紡織大學) (currently known as Donghua University (東華大學)) of the PRC in January 1982 and a doctorate degree in textile physics from University of New South Wales in August 1987. From September 1987 to September 1988 and from October 1990 to September 1994, she had been a scientist of the Commonwealth Scientific and Industrial Research Organisation of Australia. From October 1988 to January 1990, she had been a lecturer of Donghua University. Professor Tao was a recipient of prestigious individual awards of the field: the honorary fellowship of the Textile Institute in 2010, the founder award of the Fiber Society of the United States in 2013, and Guanghua Engineering Scientific and Technological Award of Chinese Academy of Engineering in 2020. With seven academic monographs, over 800 research papers published and over 41 patents granted, she has been internationally recognised in particular for her pioneering work on smart textiles and clothing and textile engineering such as low-twist yarns, solo spun yarns and fabric sensing technology which have been widely applied in the textile industry.

Professor Tao entered into an appointment letter dated 3 March 2014 with the Company to act as an independent non-executive Director for an initial term of one year renewable automatically for a successive term of one year each commencing from the next day after expiry of the then current term, unless terminated by not less than three months' in writing at the end of the initial term or at any time thereafter. As at the Latest Practicable Date, she was entitled to an annual director's fee of HK$180,000 under her appointment letter which was determined by reference to her experience, duties and responsibilities.

As at the Latest Practicable Date, Professor Tao did not have any interest in the shares, underlying shares or debenture in the Company within the meaning of Part XV of the SFO, nor was she related to any other Directors, senior management, or substantial or controlling shareholders (as defined in the Listing Rules) of the Company. Professor Tao did not hold directorship in other listed public companies in the last three years.

There is no information which is discloseable nor is/was Professor Tao involved in any matters required to be disclosed pursuant to any of the requirements of the provisions under the Rule 13.51(2) of the Listing Rules.

There are no other matters concerning Professor Tao that need to be brought to the attention of the Shareholders.

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 2678)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of Texhong Textile Group Limited (''Company'') will be held at 2:30 p.m. at Function Room 1, 11th Floor, Nina Hotel Tsuen Wan West, 8 Yeung Uk Road, Tsuen Wan, Hong Kong on 3 May 2021 to consider and, if thought fit, transact the following ordinary businesses:

• 1. to receive and consider the audited consolidated financial statements and the reports of the directors of the Company and the Company's auditors for the year ended 31 December 2020;

• 2. to approve the declaration of a final dividend for the year ended 31 December 2020 of HK$0.20 per share of HK$0.10 each in the capital of the Company;

• 3. to re-elect, each as a separate resolution, the following person as a director of the Company:

  • (a) Mr. Hui Tsz Wai; and

  • (b) Prof. Tao Xiaoming.

• 4. to authorise the board of directors of the Company to fix the directors' remuneration;

• 5. to re-appoint PricewaterhouseCoopers as the Company's auditors and to authorise the board of directors to fix their remuneration;

and, to consider and, if thought fit, pass the following resolutions (with or without modification):

ORDINARY RESOLUTIONS

6.

''THAT:

(a) subject to paragraph (c) below, pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (''Listing Rules''),

the exercise by the directors of Texhong Textile Group Limited (''Company'') during the Relevant Period of all the powers of the Company to allot, issue and deal with the unissued shares (each, a ''Share'') of HK$0.10 each in the capital of the Company and to make or grant offers, agreements and options, including warrants to subscribe for Shares, which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall authorise the directors of the Company during the Relevant Period (as defined in paragraph (d) below) to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

• (c) the total number of Shares allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to options or otherwise) by the directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue; or (ii) the exercise of any options granted under all share option schemes of the Company adopted on 7 April 2014 or similar arrangement adopted by the Company from time to time in accordance with the Listing Rules; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company in force from time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares shall not exceed the aggregate of:

  (aa) 20 per cent. of the total number of issued Shares on the date of the passing of this resolution; and

  (bb) (if the directors of the Company are so authorised by a separate ordinary resolution of the shareholders of the Company) the total number of issued Shares purchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10 per cent. of the total number of issued Shares on the date of the passing of this resolution),

  and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (d) for the purposes of this resolution:

  ''Relevant Period'' means the period from the date of the passing of this resolution until whichever is the earliest of:

  • (i) the conclusion of the next annual general meeting of the Company;

  • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or the applicable law of the Cayman Islands to be held; or

  • (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the directors of the Company by this resolution;

''Rights Issue'' means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the directors of the Company to holders of Shares on the Company's register of members on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).''

7.

''THAT:

• (a) subject to paragraph (b) below, the exercise by the directors of Texhong Textile Group Limited (''Company'') during the Relevant Period of all powers of the Company to purchase shares (each, a ''Share'') of HK$0.10 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (''Stock Exchange''), or any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for such purpose, and otherwise in accordance with the rules and regulations of the Securities and Futures Commission of Hong Kong, the Stock Exchange, the Companies Law, Chapter 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands and all other applicable laws in this regard, be and the same is hereby generally and unconditionally approved;

• (b) the total number of Shares which may be purchased or agreed to be purchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period (as defined in paragraph (c) below) shall not exceed 10 per cent. of the total number of issued shares of the Company as at the date of the passing of this resolution and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (c) for the purposes of this resolution, ''Relevant Period'' means the period from the date of the passing of this resolution until whichever is the earliest of:

  • (i) the conclusion of the next annual general meeting of the Company;

  • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or the applicable law of the Cayman Islands to be held; or

  • (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the directors of the Company by this resolution.''

8.

''THAT conditional on the passing of resolutions numbered 6 and 7 above, the general mandate granted to the directors of Texhong Textile Group Limited (''Company'') pursuant to paragraph (a) of resolution numbered 6 above be and it is hereby extended by the addition to the total number of the shares which may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to or in accordance with such general mandate of an amount representing the total number of issued shares of the Company purchased or agreed to be purchased by the Company pursuant to or in accordance with the authority granted under paragraph (a) of resolution numbered 7 above.''

For and on behalf of the Board

Texhong Textile Group Limited

Hong Tianzhu

Chairman
Hong Kong, 29 March 2021
Registered office:	Head office and principal place of
Cricket Square	business in Hong Kong:
Hutchins Drive	Unit 3, 37/F
P.O. Box 2681	Cable TV Tower
Grand Cayman KY1-1111	9 Hoi Shing Road
Cayman Islands	Tsuen Wan
Hong Kong
Notes:

• 1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more than one proxy to attend and, subject to the provisions of the articles of association of the Company, vote in his stead. A proxy need not be a member of the Company.

• 2. To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of the Company's Hong Kong branch share registrar, Boardroom Share Registrars (HK) Limited at 2103B, 21/F, 148 Electric Road, North Point, Hong Kong not later than 48 hours before the time of the above meeting (i.e., at or before 2:30 p.m. on 1 May 2021 (Hong Kong time)) or any adjourned meeting.

• 3. For the purpose of determining members who are qualified for attending the annual general meeting, the register of members of the Company will be closed from 28 April 2021 to 3 May 2021, both days inclusive, during which no transfer of share will be effected. In order to qualify for attending the annual general meeting, all transfers of Shares, accompanied by the relevant share certificates, must be lodged with the Company's branch share registrar in Hong Kong at the address stated in note 2 above not later than 4:30 p.m. on 27 April 2021 for registration.

• 4. For the purpose of determining members who are qualified for the proposed final dividend, conditional on the passing of resolution no. 2 set out in this notice, the register of members of the Company will be closed from 10 May 2021 to 12 May 2021, both days inclusive, during which no transfer of share will be effected. In order to qualify for the proposed final dividend, all transfers of Shares, accompanied by the relevant share certificates, must be lodged with the Company's branch share registrar in Hong Kong at the address stated in note 2 above not later than 4:30 p.m. on 7 May 2021 for registration.

• 5. In relation to proposed resolutions numbered 6 and 8 above, approval is being sought from the shareholders for the grant to the directors of a general mandate to authorise the allotment and issue of shares under the Listing Rules. The directors wish to state that they will exercise the powers conferred thereby to allot and issue shares of the Company in circumstances which they deem appropriate for the benefit of the Company and its shareholders as a whole.

• 6. In relation to proposed resolution numbered 7 above, the directors wish to state that they will exercise the powers conferred thereby to purchase shares of the Company in circumstances which they deem appropriate for the benefit of the Company and its shareholders as a whole. An explanatory statement containing the information necessary to enable the shareholders to make an informed decision to vote on the proposed resolution as required by the Listing Rules is set out in the Appendix I in this circular of which this notice of the Annual General Meeting forms part.

• 7. Delivery of an instrument appointing a proxy should not preclude a member from attending and voting in person at the above meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

• 8. In the case of joint holders of a share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto to if more than one of such joint holders are present at the above meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.