UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant x
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Filed by a Party other than the Registrant ¨
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Sec. 240.14a-12
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CHINA HGS REAL
ESTATE INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 24, 2021
September 1, 2021
Dear Shareholder:
You are cordially invited to attend the 2021 Annual
Meeting of Shareholders (the “Annual Meeting”) of China HGS Real Estate Inc. (“China HGS,” “we” or
“our”), to be held on September 24, 2021, at 10:00 a.m. China time, at our corporate offices located at 6 Xinghan
Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000.
We discuss the matters to be acted upon at the
meeting in more detail in the attached Notice of Annual Meeting and Proxy Statement. At the Annual Meeting, we will ask you to consider
the following proposals:
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to elect five directors;
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to ratify the appointment of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30, 2021; and
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to transact such other business that may properly come before the meeting or at any adjournment thereof.
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Included with the Proxy Statement is a copy of
our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. We encourage you to read the Form 10-K. It
includes our audited financial statements.
Shareholders of record as of August 27, 2021
may vote at the Annual Meeting.
Your vote is important. Whether or not you plan
to attend the meeting in person, it is important that your shares be represented. Please vote as soon as possible.
Sincerely,
/s/ Xiaojun Zhu
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Chairman of the Board
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NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 24, 2021
September 1, 2021
To the Shareholders of CHINA HGS REAL ESTATE INC.:
NOTICE IS HEREBY given that the 2021 Annual Meeting
of Shareholders (the “Annual Meeting”) of China HGS Real Estate Inc. (the “China HGS”) will be held at our corporate
offices located at 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000, on September 24, 2021 at 10:00 a.m. (China
time) for the following purposes:
1. to elect Xiaojun Zhu, Shenghui
Luo, Christy Young Shue, John Chen, and Yuankai Wen as directors;
2. to ratify the appointment
of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30, 2021; and
3. to transact such other
business that may properly come before the meeting or at any adjournment or postponement thereof.
More information about these business items is
described in the proxy statement accompanying this notice. Any of the above matters may be considered at the Annual Meeting at the date
and time specified above or at an adjournment or postponement of such meeting.
Your vote is important. Whether or not you plan
to attend the meeting in person, it is important that your shares be represented. To ensure that your vote is counted at the meeting,
please vote as soon as possible.
For the Board of Directors,
/s/ Xiaojun Zhu
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Chairman of the Board
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YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD OR VOTING INSTRUCTION
CARD AS INSTRUCTED.
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CHINA HGS REAL ESTATE
INC.
PROXY STATEMENT FOR 2021 ANNUAL MEETING OF SHAREHOLDERS
GENERAL
These proxy materials are
furnished to you for use at the Annual Meeting of Shareholders of China HGS (the “Annual Meeting”) to be held on September 24,
2021 at 10:00 a.m. (China time), or at any postponement or adjournment of the Annual Meeting, for the purposes set forth herein and
in the foregoing Notice of Annual Meeting of Shareholders. The Annual Meeting will be held at our offices located at 6 Xinghan Road, 19th
Floor, Hanzhong City, Shaanxi Province, PRC 723000. Shareholders of record as of August 27, 2020 (the “Record Date”)
are invited to attend the Annual Meeting and are asked to vote on the proposals described in this proxy statement.
September 1, 2021 is
the approximate date on which this Proxy Statement, Notice of Annual Meeting of Shareholders (“Notice”) and accompanying form
of proxy are first being sent to shareholders. Our principal executive offices are located at 6 Xinghan Road, 19th Floor, Hanzhong City,
Shaanxi Province, PRC 723000, and our telephone number is + 86 91 6262 2612.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND OUR ANNUAL MEETING
Q:
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What
is the purpose of the Annual Meeting?
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A:
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To
vote on the following proposals:
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to elect Xiaojun Zhu, Shenghui Luo, Christy Young Shue, John Chen, and Yuankai Wen as directors;
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to ratify the appointment of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30, 2021; and
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to transact such other business that may properly come before the meeting or at any adjournment or postponement thereof.
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Q:
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What
are the Board of Directors’ recommendations?
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A:
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The
Board recommends a vote:
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FOR the election of Xiaojun Zhu, Shenghui Luo, Christy Young Shue, John Chen, and Yuankai Wen as directors; and
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FOR the ratification of the appointment of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30, 2021. .
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Who is entitled to vote at the meeting?
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A: Shareholders Entitled to Vote. Shareholders
who our records show owned shares of China HGS as of the close of business on the Record Date may vote at the Annual Meeting. On the Record
Date, we had a total of 25,617,807 shares of China HGS common stock (“Common Stock”) issued and outstanding, which were held
of record by289 shareholders and no shares of preferred stock were outstanding. Each share of Common Stock is entitled to one vote. The
stock transfer books will not be closed between the Record Date and the date of the Annual Meeting.
Registered
Shareholders. If your shares are registered directly in your name with China HGS’s transfer agent, you are considered
the shareholder of record with respect to those shares, and the Notice was provided to you directly by China HGS. As the shareholder of
record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the
Annual Meeting.
Street
Name Shareholders. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the
beneficial owner of shares held in street name and the Notice was forwarded to you by your broker or nominee, who is considered, with
respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct your broker or nominee how to
vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since you are not the shareholder of record,
you may not vote your shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy.
Q:
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Can I attend the meeting in person?
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A: You are invited to attend the Annual Meeting
if you are a registered shareholder or a street name shareholder as of the Record Date. In addition, you must also present a form of photo
identification acceptable to us, such as a valid driver’s license or passport.
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How can I vote my shares?
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A: Registered Shareholders: Registered
shareholders may vote in person at the Annual Meeting or by completing, signing and dating the proxy card and returning it in the prepaid
envelope provided.
Street
Name Shareholders: If your shares are held by a broker, bank or other nominee, you should have received instructions on how
to vote or instruct the broker to vote your shares from your broker, bank or other nominee. Please follow their instructions carefully.
Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote at the Annual Meeting,
you must request a legal proxy from the bank, broker or other nominee that holds your shares and present that proxy and proof of identification
at the Annual Meeting to vote your shares.
Street name shareholders may generally vote by
one of the following methods:
By
Mail. If you requested printed copies of the proxy materials to be mailed to you, you may vote by signing, dating and returning
your voting instruction card in the enclosed pre-addressed envelope;
By
Methods Listed on Voting Instruction Card. Please refer to your voting instruction card or other information provided by your
bank, broker or other holder of record to determine whether you may vote by telephone or electronically on the Internet, and follow the
instructions on the voting instruction card or other information provided by the record holder; or
In
Person With a Proxy from the Record Holder. A street name shareholder who wishes to vote at the Annual Meeting will need to
obtain a legal proxy from his or her bank or brokerage firm. Please consult the voting instruction card provided to you by your bank or
broker to determine how to obtain a legal proxy in order to vote in person at the Annual Meeting.
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If I submit a proxy, how will it be voted?
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A: When proxies are properly dated, executed and
returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the shareholder.
If no specific instructions are given, however, the shares will be voted in accordance with the above recommendations of our Board of
Directors. If any matters not described in the Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use
their own judgment to determine how to vote your shares. If the Annual Meeting is adjourned, the proxy holders can vote your shares on
the new meeting date as well, unless you have revoked your proxy instructions, as described below under “Can I change my vote?”
A: You may change your vote at any time prior
to the vote at the Annual Meeting. To revoke your proxy instructions and change your vote if you are a holder of record, you must (i) attend
the Annual Meeting and vote your shares in person, (ii) advise our Corporate Secretary at our principal executive office (6 Xinghan
Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000) in writing before the proxy holders vote your shares, (iii) deliver
later dated and signed proxy instructions (which must be received prior to the Annual Meeting) or (iv) vote again on a later date
on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted).
Q:
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What happens if I decide to attend the Annual Meeting but
I have already voted or submitted a proxy covering my shares?
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A: You may attend the meeting and vote in person
even if you have already voted or submitted a proxy. Please be aware that attendance at the Annual Meeting will not, by itself, revoke
a proxy. If a bank, broker or other nominee holds your shares and you wish to attend the Annual Meeting and vote in person, you must obtain
a legal proxy from the record holder of the shares giving you the right to vote the shares.
Q:
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What quorum is required for the Annual Meeting?
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A: At the Annual Meeting, the presence in person
or by proxy of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting is required for the Annual
Meeting to proceed. If you have returned valid proxy instructions or attend the Annual Meeting in person, your Common Stock will be counted
for the purpose of determining whether there is a quorum, even if you wish to abstain from voting on some or all matters at the meeting.
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How are votes counted?
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A: Each share of our common stock outstanding
on the Record Date is entitled to one vote on each of the five director nominees and one vote on each other matter.
In the election of directors, the five nominees
receiving the highest number of “FOR” votes at the annual meeting will be elected. The proposal for the ratification of the
independent registered public accounting firm requires the affirmative “FOR” vote of a majority of those shares present in
person or represented by proxy and entitled to vote on each proposal at the annual meeting. If you hold shares beneficially in street
name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Generally, broker
non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and voting
instructions are not given. In tabulating the voting results for the proposals related to the election of directors, shares that constitute
broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of the proposals
related to the election of directors, assuming that a quorum is obtained.
Q:
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Who will tabulate the votes?
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A: China HGS has designated a representative of
Broadridge as the Inspector of Election who will tabulate the votes.
Q:
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Who is making this solicitation?
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A: This proxy is being solicited on behalf of
China HGS’s Board of Directors.
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Who pays for the proxy solicitation process?
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A: China HGS will pay the cost of preparing, assembling,
printing, mailing and distributing these proxy materials and soliciting votes. We may, on request, reimburse brokerage firms and other
nominees for their expenses in forwarding proxy materials to beneficial owners. In addition to soliciting proxies by mail, we expect that
our directors, officers and employees may solicit proxies in person or by telephone or facsimile. None of these individuals will receive
any additional or special compensation for doing this, although we will reimburse these individuals for their reasonable out-of-pocket
expenses.
Q:
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May I propose actions for consideration at next year’s annual meeting of shareholders or nominate individuals to serve as directors?
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A: You may present proposals for action at a future
meeting only if you comply with the requirements of the proxy rules established by the SEC. In order for a shareholder proposal to
be included in our Proxy Statement and form of Proxy relating to the meeting for our 2019 Annual Meeting of Shareholders under rules set
forth in the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), the proposal must be received by
us no later than May 15, 2022.
Q:
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What should I do if I get more than one proxy or voting instruction card?
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A: Shareholders may receive more than one set
of voting materials, including multiple copies of the Notice, these proxy materials and multiple proxy cards or voting instruction cards.
For example, shareholders who hold shares in more than one brokerage account may receive separate Notices for each brokerage account in
which shares are held. Shareholders of record whose shares are registered in more than one name will receive more than one Notice. You
should vote in accordance with all of the Notices you receive relating to our Annual Meeting to ensure that all of your shares are voted.
Q:
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How do I obtain a separate set of proxy materials or request a single set for my household?
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A: We have adopted a procedure approved by the
SEC called “householding.” Under this procedure, shareholders who have the same address and last name and do not participate
in electronic delivery of proxy materials will receive only one copy of our annual report and proxy statement unless one or more of these
shareholders notifies us that they wish to continue receiving individual copies. This procedure reduces our printing costs and postage
fees. Each shareholder who participates in householding will continue to be able to access or receive a separate proxy card.
If you wish to receive a separate Notice, proxy
statement or annual report at this time, please request the additional copy by contacting Corporate Secretary by telephone at +86 91
6262 2612, or by facsimile at +86 91 6225 1606. If any shareholders in your household wish to receive a separate annual report and a
separate proxy statement in the future, they may call the Company’s transfer agent, Securities Transfer Corporation at (469)
633-0101, or by facsimile at (469) 633-0088 or write to Securities Transfer Corporation at 2901 N. Dallas Parkway, Suite 380, Plano,
Texas, 75093. Other shareholders who have multiple accounts in their names or who share an address with other shareholders can authorize
us to discontinue mailings of multiple annual reports and proxy statements by calling or writing to our transfer agent as set forth above.
Q:
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What
if I have questions about lost stock certificates or need to change my mailing address?
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A: You may contact our transfer agent, Securities
Transfer Corporation at (469) 633-0101, or by facsimile at (469) 633-0088, if you have lost your stock certificate or need to change
your mailing address.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors is
presently composed of five (5) members: Xiaojun Zhu, Shenghui Luo, Christy Young Shue, John Chen, and Yuankai Wen. Mr. Zhu serves
as Chairman of the Board of Directors. The Board of Directors has determined that Christy Young Shue, John Chen and Yuankai Wen are independent
directors within the meaning set forth in the NASDAQ listing rules and as required by the rules and regulations of the SEC,
as currently in effect. There are no family relationships between any director and an executive officer.
The Board of Directors held
4 meetings during fiscal year 2021, all of which were regularly scheduled meetings and none of which was a special meeting. The Board
also acted 4 times by unanimous written consent. Each director attended at least 75% of the aggregate number of meetings of our Board
of Directors and the committees on which such director served during fiscal year 2019 and was eligible to attend.
Information about the Directors and Nominees
Set forth below is information regarding our directors/nominees
as of August 30, 2021:
Name
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Age
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Position
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Director Since
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Xiaojun Zhu
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53
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President, Chief Executive Officer and Chairman of the Board of Directors
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2009
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Shenghui Luo
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51
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Director
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2010
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Christy Young Shue
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57
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Director
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2012
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John Chen
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48
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Director
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2012
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Yuankai Wen
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73
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Director
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2010
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Xiaojun
Zhu, the President, Chief Executive Officer, and Chairman of the Board of Directors of China HGS, began his entrepreneurial
career in 1995 by creating a privately-run real estate company in Hanzhong, Shaanxi Province. With more than 20 years’ experience,
Mr. Zhu is considered to be one of China’s most influential business leaders in the real estate industry. In October 2005,
Mr. Zhu received the “Top 100 Management Elites in China’s Building Industry 2005” award by the Chinese Academy
of Management Science. Mr. Zhu also received the “Innovative Shaanxi - Person of the Year 2007” award and the “Outstanding
Socialism Builder of Shaanxi Province in 2008” award. In August 2009, Mr. Zhu joined China Agro as Chairman and Chief
Executive Officer. In 2007, before joining China Agro, Mr. Zhu served as the Chairman and General Manager of Shaanxi Guangsha Investment
and Development Group Co., Ltd. From 1995 to 2007, Mr. Zhu was the Chairman and General Manager of Hanzhong Guangsha Real Estate
Development Co, Ltd., a real estate development company. From 1992 to 1995, prior to starting his own business, Mr. Zhu served
as a Vice General Manager in the real estate-based subsidiary of Hanjiang Building Material Group Corporation. From 1985 to 1988, Mr. Zhu
studied at Shaanxi Metallurgy College. As the founder of the Company, Mr. Zhu is acknowledged to be one of China’s leading
business executives in the real estate industry and is able to provide the Board with an understanding of the Company’s business
as well as provide expert perspective on industry trends and opportunities. Mr. Zhu’s experience with the Company from its
founding also offers the Board insight to the evolution of the Company, including from execution, cultural, operational, competitive and
industry points of view.
Shenghui
Luo has served as a director since January 2010. Ms. Luo joined Shaanxi Guangsha Investment and Development Group
Co., Ltd., the Company’s subsidiary, in 1997. From 2000 through March 2009, Ms. Luo served as Vice Director of the
Finance Department of Shaanxi Guangsha Investment and Development Group Co., Ltd. In March 2009, Ms. Luo was appointed
a Manager of the Finance Department of Shaanxi Guangsha Investment and Development Group Co., Ltd. Ms. Luo received her Bachelor’s
degree in Accounting from Shaanxi Finance College. As a result of Ms. Luo’s service as a member of the Company’s finance
department, she developed an extensive understanding of the Company’s business. In addition, her knowledge and experience in finance
and accounting provides her with a broad understanding of the Company’s financial reporting obligations both locally and in the
U.S.
Christy
Young Shue has served as a director since August 2012. Ms. Shue served as Executive Vice President, Finance and Investor
Relations and Corporate Secretary of Harbin Electric, Inc. (NASDAQ: HRBN) from 2007 through April 2012, when Harbin went private
as a result of a management buyout transaction. From 2006 through 2007, Ms. Shue was a Vice President, a Senior Investor Relations
Consultant at Christensen, an Investor Relations advisory firm. From 2003 through 2006, Ms. Shue served as Investor Relations Manager
at International Paper (NYSE: IP). Ms. Shue received her MBA degree in finance/international business from Stern School of Business,
New York University, a Ph.D. in Chemistry from Purdue University, and a Bachelor of Science degree in Chemistry from Sichuan University.
Ms. Shue’s previous experience as an officer and Investor Relations manager for public companies has given her insights into
various challenges that public companies experience, as well as extensive knowledge and understanding of capital market related issues
such as corporate governance and financial reporting.
John
Chen has served as a director since August 2012. Mr. Chen is a California Certified Public Accountant. Mr. Chen
has been the Chief Financial Officer of General Steel Holdings Inc. (NYSE: GSI) since May 2004. From 1997 to 2003, Mr. Chen
was a Senior Accountant at Moore Stephens Frazer and Torbet. Mr. Chen received his Bachelor of Science degree in Business Administration,
Accounting from California State Polytechnic University. Mr. Chen’s experience as a California Certified Public Accountant
and his experience as a chief financial officer of a public company have provided him with broad experience in finance including accounting
and financial reporting. This experience has led our Board of Directors to determine that he is an “audit committee financial expert”
as that term is defined in Item 407(d)(5) of Regulation S-K under the 1934 Act.
Yuankai
Wen has served as a director since January 2010. Since 1998, Mr. Wen has served as the Chairman of Beijing Neolinde
Management Training Center. From 1997 to 1998, he was also the Chairman of Beijing Neolinde Management Consulting Co. From 1994 through
1997, Mr. Wen was a Vice President of Roosevelt China Investment Co., an investment firm. Mr. Wen received his Bachelor’s
degree in Chemistry from Nanjing University. He was also a visiting scholar of Physical and Chemical Biology Institute, University of
Paris in France. Mr. Wen’s experience as Chairman of the Beijing Neolinde Management Graining Center and as Chairman of the
Beijing Neolinde Management Consulting Co. has provided him with broad leadership and executive experience. Moreover, his management experience
in China provides him with a perspective on Chinese business operations.
The business experience during at least the last
five years of the Company’s executive officers not included above is as follows:
Wei
(Samuel) Shen has been the Chief Financial Officer of the Company since May 2012. From November 2011 to May 2012,
Mr. Shen was the Vice President for Finance of the Company. Mr. Shen is also the Director at Bluehill Investment Advisory Group,
a PRC based financial consulting firm and the chief financial officer of New Era Minerals Inc. (TSX.V: NEM), a junior resource company.
From 2006 to 2011, Mr. Shen served as an Audit Assurance Manager at MSCM LLP, Toronto, where he managed audit engagements for U.S.
and Canadian public companies in real estate, health care, manufacturing, and IT industries. Mr. Shen holds both Chartered Accountant
and Certified Public Accountant designations and is experienced with financial reporting under IFRS, U.S. and Canadian GAAP. Mr. Shen
holds a Master of Management and Public Accounting from the Rotman School of Management, University of Toronto.
Committees of the Board of Directors
The Board of Directors has
the following standing committees: Audit, Compensation, and Nominating and Corporate Governance. The Board of Directors has adopted written
charters for each of these committees, copies of which are attached as exhibits to our 2013 Proxy Statement. All members of the committees
appointed by the Board of Directors are non-employee directors and the Board of Directors has determined that all such members are independent
under the applicable rules and regulations of NASDAQ and the SEC, as currently in effect. In addition, all directors who served on
a committee during any portion of fiscal year 2019 were independent under the applicable rules and regulations of NASDAQ and the
SEC during such director’s period of service.
The following chart details
the membership of each standing committee and the number of meetings each committee held in fiscal year 2020.
Name of Director
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Audit
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Compensation
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Nominating
&
Corporate
Governance
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Christy Young Shue
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M
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M
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C
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John Chen
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C
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M
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M
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Yuankai Wen
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M
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C
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M
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Number of Meetings in Fiscal 2020
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4
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1
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1
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M = Member
C = Chair
Audit Committee
The Audit Committee oversees
our accounting, financial reporting and audit processes; appoints, determines the compensation of, and oversees, the independent registered
public accountants; pre-approves audit and non-audit services provided by the independent registered public accountants; reviews the results
and scope of audit and other services provided by the independent registered public accountants; reviews the accounting principles and
practices and procedures used in preparing our financial statements; oversees the Company’s internal audit function; and reviews
our internal controls.
The Audit Committee works
closely with management and our independent registered public accountants. The Audit Committee also meets with our independent registered
public accountants without members of management present, on a quarterly basis, following completion of our independent registered public
accountants’ quarterly reviews and annual audit and prior to our earnings announcements, to review the results of their work. The
Audit Committee also meets with our independent registered public accountants to approve the annual scope and fees for the audit services
to be performed.
The Board of Directors has
determined that John Chen is an “audit committee financial expert” as defined by SEC rules, as currently in effect.
Compensation Committee
The Compensation Committee
has overall responsibility for (i) overseeing the Company’s compensation and benefits policies generally; and (ii) overseeing,
evaluating and approving executive officer and director compensation plans, policies and programs.
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee (i) considers and periodically reports on matters relating to the identification, selection and qualification
of the Board of Directors and candidates nominated to the Board of Directors and its committees; (ii) develops and recommends governance
principles applicable to China HGS; (iii) oversees the evaluation of the Board of Directors and management from a corporate governance
perspective; and (iv) reviews China HGS’ reporting in documents filed with the SEC to the extent related to corporate governance.
Director Qualifications. The
Nominating and Corporate Governance Committee has adopted a variety of criteria upon which candidates to become members of the Board will
be assessed. These include the candidate’s reputation, relevant experience and expertise, knowledge of the Company and issues affecting
the Company, and the candidate’s willingness and ability to apply sound, objective and independent business judgment, and to assume
broad fiduciary responsibility. The Committee will also consider candidates recommended by shareholders. Shareholders must follow certain
procedures to recommend candidates to the Nominating Committee as set forth in the committee charter.
Identification and Evaluation
of Nominees for Directors. The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating
nominees for director. The Nominating and Corporate Governance Committee regularly assesses the appropriate size of the Board of Directors,
and whether any vacancies on the Board of Directors are expected due to retirement or otherwise. In the event that vacancies are anticipated,
or otherwise arise, the Nominating and Corporate Governance Committee considers various potential candidates for director. Candidates
may come to the attention of the Nominating and Corporate Governance Committee through current members of the Board of Directors, professional
search firms, shareholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate
Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee considers
properly submitted shareholder recommendations for candidates for the Board of Directors. In evaluating such recommendations, the Nominating
and Corporate Governance Committee uses the qualifications standards discussed above and seeks to achieve a balance of knowledge, experience
and capability on the Board of Directors.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation
Committee during fiscal 2021 was an officer or employee of China HGS. In addition, no member of the Compensation Committee or executive
officer of China HGS served as a member of the Board of Directors or Compensation Committee of any entity that has an executive officer
serving as a member of our Board of Directors or Compensation Committee.
Involvement in Certain Legal Proceedings
To the best of our knowledge,
none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors,
or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final
order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding
of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as
set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors, director nominees
or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates
which are required to be disclosed pursuant to the rules and regulations of the SEC.
Annual Meeting Attendance
We do not have a formal policy regarding attendance
by members of the Board of Directors at our annual meetings of shareholders although directors are encouraged to attend annual meetings
of China HGS shareholders. Last year, all of our directors attended our annual meeting of shareholders.
Communications with the Board of Directors
Although we do not have a
formal policy regarding communications with the Board of Directors, shareholders may communicate with the Board of Directors in writing
at China HGS Real Estate Inc., 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000; Attention Board of Directors.
Shareholders who would like their submission directed to a member of the Board of Directors may so specify.
Code of Conduct
On January 22, 2010,
the Board of Directors adopted a Code of Conduct which sets forth the standards by which the Company’s employees, officers and directors
should conduct themselves. A copy of the Code of Conduct is attached as an exhibit to our 2013 Proxy Statement. The Company will disclose
any amendment to the Code of Conduct or waiver of a provision of the Code of Conduct that applies to the Company’s Chief Executive
Officer, Chief Financial Officer and any other principal financial officer, and any other person performing similar functions and relates
to certain elements of the Code of Conduct, including the name of the officer to whom the waiver was granted.
Compensation of Directors
The following table provide information about the
actual compensation earned by non-employee directors who served during fiscal 2021.
FISCAL 2021 DIRECTOR COMPENSATION
|
|
Name
|
|
Fees Earned
or Paid in
Cash ($)
|
|
|
Stock
Awards ($)
|
|
|
Option
Awards ($)(1)
|
|
|
Non-Equity
Incentive Plan
Compensation ($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
|
|
All Other
Compensation ($)
|
|
|
Total ($)
|
|
Yuankai Wen (2)
|
|
|
14,274
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Chen
|
|
|
36,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
36,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christy Young Shue
|
|
|
24,000
|
|
|
|
-
|
|
|
|
_-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,000
|
|
|
(1)
|
These amounts reflect the value determined by the Company for accounting purposes for these awards and do not reflect whether the recipient has actually realized a financial benefit from the award (such as by exercising stock options). This column represents the compensation expense for fiscal year 2020 for stock options. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. No stock option awards were forfeited by any of our non-employee directors in fiscal year 2021.
|
|
(2)
|
Mr. Wen receives annual compensation in the amount of RMB100,000. The amount set forth in this column is based on an exchange rate of RMB7.0056 to the U.S. dollar, the average exchange rate in the fiscal year 2021.
|
Independent Director Agreements
The Company has entered into
Independent Director Agreements with Ms. Shue, Messrs. Chen and Wen pursuant to which the Company has agreed to pay each of
these directors annual cash compensation in the amount of $24,000, $36,000 and RMB100,000, respectively. In addition, the Company has
agreed to grant each of these directors, annually, non-statutory stock options to purchase 60,000, 60,000 and 10,000 shares of the Company’s
common stock, respectively, which options shall vest in accordance with the schedule determined as of the date of grant. In addition,
the Company has agreed to reimburse each director for all reasonable, out-of-pocket expenses, subject to the advance approval of the Company
incurred in connection with the performance of Director’s duties.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth
information regarding the beneficial ownership of our Common Stock as of August 30, 2021 as to (i) each person who is known
by us to own beneficially more than 5% of our outstanding Common Stock, (ii) each of the executive officers and other persons named
in the Summary Compensation Table, (iii) each director and nominee for director, and (iv) all directors and executive officers
as a group. Except as otherwise indicated in the footnotes, all information with respect to share ownership and voting and investment
power has been furnished to us by the persons listed. Except as otherwise indicated in the footnotes, each person listed has sole voting
power with respect to the shares shown as beneficially owned. Unless otherwise indicated, the address of each listed shareholder is c/o
China HGS Real Estate Inc., 6 Xinghan Road, 19th Floor, Hanzhong City, Shaanxi Province, PRC 723000.
Name and Address of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership(1)
|
|
|
Percent
of
Class (2)
|
|
5% Holders
|
|
|
|
|
|
|
|
|
Rising Pilot, Inc. (a British Virgin Islands company)(3)
|
|
|
7,000,000
|
|
|
|
27.3
|
%
|
Shaanxi Tianhao Construction Engineer Co., Ltd
|
|
|
3,092,114
|
|
|
|
12.1
|
%
|
Directors and Officers
|
|
|
|
|
|
|
|
|
Mr. Xiaojun Zhu(4)
|
|
|
14,900,000
|
|
|
|
58.2
|
%
|
Shenghui Luo
|
|
|
840,000
|
|
|
|
3.3
|
%
|
Christy Young Shue
|
|
|
-
|
|
|
|
*
|
|
John Chen
|
|
|
-
|
|
|
|
*
|
|
Yuankai Wen
|
|
|
-
|
|
|
|
*
|
|
Wei (Samuel) Shen
|
|
|
-
|
|
|
|
*
|
|
All directors and executive officers as a group (6 persons)
|
|
|
15,740,000
|
|
|
|
61.4
|
%
|
* less than 1%
(1) Except as indicated in the footnotes
to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power
with respect to all shares of Common Stock owned by such person. The number of shares beneficially owned includes Common Stock that such
individual has the right to acquire as of August 30, 2021 or within 60 days thereafter, including through the exercise of stock options.
(2) Percentage of beneficial ownership is
based upon 25,617,807 shares of Common Stock outstanding as of August 30, 2021. For each named person, this percentage includes Common
Stock that the person has the right to acquire either currently or within 60 days of August 30, 2021, including through the exercise
of an option; however, such Common Stock is not deemed outstanding for the purpose of computing the percentage owned by any other person.
(3) Mr. Xiaojin Zhu has voting and dispositive
control over securities held by Rising Pilot, Inc.
(4) Includes 7,900,000 shares of Common Stock
owned by Mr. Zhu directly and 7,000,000 shares owned through Rising Pilot, Inc.
PROPOSAL
ONE:
ELECTION OF DIRECTORS
The Board of Directors currently
consists of five directors. At each annual meeting of shareholders, directors are elected for a term of one year and until their respective
successors are duly qualified and elected to succeed those directors whose terms expire on the annual meeting dates or such earlier date
of resignation or removal.
Board Independence
The Board of Directors has
determined that Christy Young Shue, John Chen, and Yuankai Wen are independent directors within the meaning set forth in the NASDAQ listing
rules, as currently in effect.
Nominees
The Nominating and Corporate
Governance Committee of the Board of Directors recommended, and the Board of Directors approved, Xiaojun Zhu, Shenghui Luo, Christy Young
Shue, John Chen, and Yuankai Wen as nominees for election at the Annual Meeting to the Board of Directors. If elected, Xiaojun Zhu, Shenghui
Luo, Christy Young Shue, John Chen, and Yuankai Wen will serve as directors until our annual meeting in 2022, and until a successor is
qualified and elected or until his or her earlier resignation or removal. Each of the nominees is currently a director of the Company.
Unless otherwise instructed,
the proxy holders will vote the proxies received by them FOR each of Xiaojun Zhu, Shenghui Luo, Christy Young Shue, John Chen,
and Yuankai Wen. If the nominees are unable or decline to serve as a director at the time of the Annual Meeting, the proxies will be voted
for another nominee designated by the Board of Directors. We are not aware of any reason that a nominee would be unable or unwilling to
serve as a director.
Vote Required
Provided a quorum is present,
the five nominees receiving the highest number of “FOR” votes at the annual meeting will be elected. Abstentions and broker
non-votes will have no effect on the election of directors.
The Board of Directors
unanimously recommends that shareholders vote “FOR” the election of each of Xiaojun Zhu, Shenghui Luo, Christy Young Shue,
John Chen, and Yuankai Wen.
PROPOSAL
TWO:
The Audit Committee has selected
Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30, 2021 and recommends
that shareholders vote for ratification of such selection. Although ratification by shareholders is not required by law, the Company has
determined that it is desirable to request ratification of this selection by the shareholders. Notwithstanding its selection, the Audit
Committee, in its discretion, may appoint new independent registered public accountants at any time during the year if the Audit Committee
believes that such a change would be in the best interests of China HGS and its shareholders. If the shareholders do not ratify the selection
of Wei, Wei & Co., LLP, the Audit Committee may reconsider its selection.
Principal Accountant Fees and Services
Friedman
LLP served as the Company’s independent registered public accounting firm for fiscal years 2019. Wei, Wei & Co.,
LLP shall serve as the Company’s independent registered public accounting firm for fiscal years 2020. Fees (excluding reimbursements
for out-of-pocket expenses) paid to independent registered public accounting firms for services in fiscal 2020 and 2019 were as follows:
|
|
2020
|
|
|
2019
|
|
Audit Fees
|
|
$
|
130,000
|
|
|
$
|
256,000
|
|
Audit-Related Fees
|
|
|
-
|
|
|
|
-
|
|
Tax Fees
|
|
|
-
|
|
|
|
-
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
130,000
|
|
|
$
|
256,000
|
|
“Audit Fees” consisted of fees for
the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q and
services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings
or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result
of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdiction, the preparation of an
annual “management letter” on internal control matters and assurance services provided in connection with the assessment and
testing of internal controls with respect to Section 404 of the Sarbanes-Oxley Act of 2002.
“Tax Fees” consisted of professional
services rendered by our public accounting firm for tax compliance and tax planning. The services for the fees disclosed under this category
include tax return preparation and technical tax advice.
The
above amounts relate to services provided in the indicated fiscal years, irrespective of when they were billed. The Audit Committee considered
the compatibility of non-audit services by the public accounting firm with the maintenance of that firm’s independence and
determined, in each case, that at all times, Wei, Wei & Co., LLP and Friedman LLP remained independent.
Pre-approval
Policy. The Audit Committee Charter establishes a policy governing our use of Wei, Wei & Co., LLP and Friedman LLP
for audit and non-audit services. Under the Charter, the Audit Committee is required to pre-approve all audit and non-audit services performed
by the Company’s independent registered public accountants in order to ensure that the provision of such services does not impair
the public accountants’ independence. The Audit Committee pre-approves certain audit and audit-related services, subject to certain
fee levels. Any proposed services that are not a type of service that has been pre-approved or that exceed pre-approval cost levels require
specific approval by the Audit Committee in advance. The Audit Committee has approved all audit and audit-related services to be performed
by Wei, Wei & Co., LLP in 2020.
The
Audit Committee has determined that the rendering of other professional services for tax compliance and tax advice by Wei, Wei &
Co., LLP and Friedman LLP is compatible with maintaining their independence.
Representatives of Wei, Wei &
Co., LLP are not expected to be present at the Annual Meeting.
Vote Required
The affirmative vote of the
holders of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on the matter is necessary
to ratify the selection of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September 30,
2021. Abstentions will have the effect of a vote “against” the ratification of Wei, Wei & Co., LLP as our independent
registered public accountants. Broker non-votes will have no effect on the outcome of the vote.
The Board of Directors,
on behalf of the Audit Committee, recommends that shareholders vote “FOR” the ratification of the selection of Wei, Wei &
Co., LLP as China HGS’ independent registered public accountants for the fiscal year ending September 30, 2021.
EXECUTIVE OFFICERS
Our executive officer and his age as of August 30,
2020 is as follows:
Name
|
|
Ages
|
|
Position
|
Xiaojun Zhu
|
|
53
|
|
President, Chief Executive Officer and Chairman of the Board of Directors
|
Wei (Samuel) Shen
|
|
41
|
|
Chief Financial Officer
|
See page 5 for Mr. Zhu’s and page 6 for Mr. Shen’s
professional background and business experience.
SUMMARY COMPENSATION TABLE
Name and Principal Position
|
|
Year
|
|
|
Salary
($)(1)
|
|
|
Bonus
($)
|
|
|
All Other
Compensation
($)
|
|
|
Totals
($)
|
|
Xiaojun Zhu, Chief Executive Officer, Chief Financial Officer and Chairman of the Board
|
|
|
2020
|
|
|
|
28,549
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
28,549
|
|
|
|
|
2019
|
|
|
|
29,089
|
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
29,089
|
|
Wei (Samuel) Shen, Chief Financial Officer
|
|
|
2020
|
|
|
|
102,775
|
|
|
|
—
|
|
|
|
-
|
|
|
|
102,775
|
|
|
|
|
2019
|
|
|
|
104,723
|
|
|
|
—
|
|
|
|
-
|
|
|
|
104,723
|
|
|
(1)
|
Mr. Zhu is paid in Renminbi. The amounts reflected in this column have been converted to U.S. dollars at the exchange rate of 6.8753 to the U.S. dollar for the fiscal year 2019 and RMB7.0056 to the U.S. dollar for the fiscal year 2020.
|
|
(2)
|
The Company owns a motor vehicle which is available for Mr. Zhu’s use for business purposes. The value of this perquisite is less than $10,000.
|
Option
Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officer named
in the Summary Compensation Table in fiscal 2020 and 2019.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table. There were no stock options exercised during fiscal 2020 and 2019
by the executive officer named in the Summary Compensation Table.
Long-Term
Incentive Plan (“LTIP”) Awards Table. There were no awards made to a named executive officer in fiscal 2020 and
2019 under any LTIP.
On May 28, 2012, the
Company entered into an employment agreement with Mr. Samuel Shen to serve as the Chief Financial Officer of the Company. The initial
term of the contract was for one year. It was extended for an indefinite period of time upon mutual agreement between the parties. Pursuant
to the terms of the employment agreement, Mr. Shen receives a monthly salary of RMB60,000 (approximately US$9,778) and a discretional
bonus of up to RMB180,000 (approximately US$29,333). Subject to the board’s approval, Mr. Shen is also entitled to 100,000
shares of restricted common stock. Mr. Shen did not receive any bonus or restricted stock for the years ended September 30,
2020 and 2019. In accordance with the terms of the agreement, the Company may terminate the contract with Mr. Shen for cause (as
defined in the contract) upon thirty days’ prior written notice. Under certain circumstances, the Company may elect to pay Mr. Shen
an additional month’s salary in lieu of providing him with advance written notice. Mr. Shen may terminate the contract upon
ninety days’ prior written notice to the Company. The contract also contains certain covenants regarding non-competition and confidentiality.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires the Company’s officers and directors and persons who own more than 10%
of the Company’s common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission,
and the NASDAQ. SEC rules require reporting persons to supply the Company with copies of these reports. Based solely on its review
of the copies of such reports received and written representations from reporting persons, the Company believes that with respect to fiscal
2020 all reporting persons timely filed the required reports.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for the compensation
agreements and indemnification agreements with each of its directors and certain executive officers which require the Company to indemnify
such individuals, to the fullest extent permitted by Florida law, for certain liabilities to which they may become subject as a result
of their affiliation with the Company, there was not during fiscal year 2020 nor is there currently proposed, any transaction or series
of similar transactions to which China HGS was or is to be a party in which the amount involved exceeds $120,000 and in which any director,
executive officer, five percent shareholder or any member of the immediate family of any of the foregoing persons had or will have a direct
or indirect material interest.
The Audit Committee is responsible
for reviewing and approving in advance any proposed related person transactions. The Audit Committee reviews any such proposed related
person transactions on a quarterly basis, or more frequently as appropriate. In cases in which a transaction has been identified as a
potential related person transaction, management must present information regarding the proposed transaction to the Audit Committee for
consideration and approval or ratification. During fiscal 2019, the Audit Committee was also responsible for reviewing the Company’s
policies with respect to related person transactions and overseeing compliance with such policies.
AUDIT COMMITTEE REPORT
The following is the report
of the Audit Committee of the Board of Directors. The Audit Committee has reviewed and discussed our audited financial statements for
the fiscal year ended September 30, 2020 with our management. In addition, the Audit Committee has discussed with Wei, Wei &
Co., LLP , our independent accountants, the matters required to be discussed by Statement on Auditing Standards No. 61 as amended
(AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T
(as superseded by Statement on Auditing Standards No. 114). The Audit Committee also has received the written disclosures and the
letter from Wei, Wei & Co., LLP as required by the applicable requirements of the Public Company Accounting Oversight Board regarding
the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed
with Wei, Wei & Co., LLP the independence of Wei, Wei & Co., LLP.
Based on the Audit Committee’s
review of the matters noted above and its discussions with our independent accountants and our management, the Audit Committee recommended
to the Board of Directors that the financial statements be included in our Annual Report on Form 10-K for the fiscal year ended September 30,
2020.
Respectfully submitted by:
John Chen (Chair)
Christy Young Chue
Yuankai Wen
OTHER BUSINESS
The Board of Directors does
not presently intend to bring any other business before the meeting, and, so far as is known to the Board of Directors, no matters are
to be brought before the meeting except as specified in the Notice of Annual Meeting. As to any business that may properly come before
the meeting, however, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with the judgment
of the persons voting such proxies.
HOUSEHOLDING
Please see the discussion
of “householding” on page 4 above.
INCORPORATION BY REFERENCE
The information contained
above under the caption “Audit Committee Report” shall not be deemed to be “soliciting material” or to be “filed”
with the SEC, nor will such information be incorporated by reference into any future SEC filing except to the extent that China HGS specifically
incorporates it by reference into such filing.
For the Board of Directors
|
|
/s/ Xiaojun Zhu
|
|
Chairman of the Board
|
|
September 1, 2021
|
|
CHINA HGS REAL ESTATE INC. 6 XINGHAN ROAD, 19TH FLOOR HANZHONG CITY,
SHAANXI PROVINCE P.R.C. 723000 CHINA VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for
electronic delivery of information. Vote by 11:59 P.M. ET on 09/23/2021. Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future
proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials
electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote
by 11:59 P.M. ET on 09/23/2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and
date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD
IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY The Board of Directors recommends you vote FOR the following:
1. Election of Directors Nominees 01) Xiaojun Zhu 02) Shenghui Luo For Withhold For All To withhold authority to vote for any All All
Except individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0 0 0 03)
Christy Young Shue 04) John Chen 05) Yuankai Wen R1.0.0.177 1 _ 0000519780 The Board of Directors recommends you vote FOR proposal 2.
2. To ratify the appointment of Wei, Wei & Co., LLP as our independent registered public accountants for the fiscal year ending September
30, 2021. NOTE: To transact such other business that may properly come before the meeting or at any adjournment or postponement thereof.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full
corporate or partnership name by authorized officer. For Against Abstain 0 0 0 Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint
Owners) Date
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting: The Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com CHINA HGS REAL ESTATE INC. Annual
Meeting of Shareholders September 24, 2021 10:00 AM This proxy is solicited by the Board of Directors Xiaojun Zhu and Shenghui Luo, and
each of them, each with full power of substitution, hereby are authorized to vote as specified on the reverse side or, with respect to
any matter not set forth on the reverse side, as a majority of those or their substitutes present and acting at the meeting shall determine,
all of the shares of capital stock of China HGS Real Estate Inc. that the undersigned would be entitled to vote, if personally present,
at the 2021 Annual Meeting of Shareholders and any adjournment thereof. Unless otherwise specified, this proxy will be voted FOR Proposals
1 and 2. The Board of Directors recommends a vote FOR Proposals 1 and 2. R1.0.0.177 2 _ 0000519780 Continued and to be signed on reverse
side
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