Beijing Enterprises Water Group Limited — Proxy Solicitation & Information Statement 2015

Apr 20, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any 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, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Beijing Enterprises Water Group Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale 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.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 371)

(1) PROPOSALS FOR REFRESHMENT OF 10% GENERAL LIMIT ON GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME, (2) GRANT OF ISSUE MANDATE AND PURCHASE MANDATE, (3) PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND

(4) NOTICE OF ANNUAL GENERAL MEETING

A letter from the board of directors of Beijing Enterprises Water Group Limited containing its recommendation is set out from pages 4 to 10 of this circular.

A notice convening the annual general meeting of Beijing Enterprises Water Group Limited to be held at 66th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on Thursday, 21 May 2015 at 3:00 p.m. is set out from pages 22 to 27 of this circular. A form of proxy for use at the annual general meeting of the Company is also enclosed. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk). Whether or not you are able to attend the annual general meeting of the Company, please complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the annual general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the annual general meeting if they so wish.

21 April 2015

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Refreshment of the Share Option Scheme Mandate Limit . . . . . . . . . . . . . . . . . . . . . .	5
General Mandate to Issue and Purchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Re-election of the Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
The Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Voting at the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix I – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix II – Details of Directors proposed for re-election. . . . . . . . . . . . . . . . . . . .	15
Notice of the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

– i –

DEFINITIONS

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

“AGM”

the annual general meeting of the Company to be held at 66th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on Thursday, 21 May 2015 at 3:00 p.m., the notice of which is set out on pages 22 to 27 of this circular

• “associate(s)”

has the meaning ascribed thereto under the Listing Rules

• “Board”

the board of Directors

• “Bye-laws”

the bye-laws from time to time adopted by the Company

• “Company”

Beijing Enterprises Water Group Limited (Stock Code: 371), a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange

• “Company Act”

The Companies Act 1981 of Bermuda (as amended)

• “connected person(s)”

has the meaning ascribed thereto under the Listing Rules

• “controlling shareholder(s)”

has the meaning ascribed thereto under the Listing Rules

• “Directors”

• the directors of the Company

• “Eligible Participant(s)”

Any:

• (a) Employee;

• (b) non-executive director and any independent nonexecutive director or officer of any member of the Group; and

• (c) consultant of any member of the Group

– 1 –

DEFINITIONS

“Employee” any person employed by the Company or a subsidiary of the Company and any person who is an officer or director (whether executive or non-executive) of the Company or any subsidiary of the Company. A Grantee shall not cease to be an Employee in the case of (a) any leave of absence approved by the Company or the relevant subsidiary; or (b) transfers between the Company and any subsidiary or any successor “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “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 all powers of the Company to allot and issue Shares as set out in resolution numbered 7 and 8 in the notice convening the AGM “Latest Practicable Date” 16 April 2015, 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 “Purchase Mandate” a general and unconditional mandate proposed to be granted to the Directors to empower the Directors to exercise all powers of the Company to purchase Shares as set out in resolution number 5 in the notice convening the AGM “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

– 2 –

DEFINITIONS

“Share(s)”

“Shareholder(s)”

“Share Option(s)”

“Share Option Scheme”

• “Share Option Scheme Mandate Limit”

“Stock Exchange”

• “Takeover Code”

“%”

ordinary share(s) of HK$0.10 each in the capital of the Company or if there has been a subsequent sub-division, consolidation, reclassification or reconstruction of the share capital of the Company, shares forming part of the ordinary equity share capital of the Company

holder(s) of the Share(s)

share option(s) granted or to be granted under the Share Option Scheme

the share option scheme adopted by the Shareholders at the special general meeting of the Company held on 28 June 2011

the maximum number of the Share (being up to 10% of the Shares in issue as at the date of the relevant general meeting) which may be issued upon exercise of all Share Options to be granted under the Share Option Scheme as at the date of adoption of the Share Option Scheme or as refreshed from time to time

The Stock Exchange of Hong Kong Limited

The Code on Takeovers and Mergers and Share Repurchases published by the Securities and Futures Commission of Hong Kong

per cent.

– 3 –

LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 371)

Executive Directors: Mr. Li Yongcheng (Chairman) Mr. E Meng (Vice Chairman) Mr. Jiang Xinhao Mr. Hu Xiaoyong (Chief Executive Officer) Mr. Zhou Min Mr. Li Haifeng Mr. Zhang Tiefu Ms. Qi Xiaohong Mr. Ke Jian Mr. Tung Woon Cheung Eric Mr. Li Li

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda Head office and principal place of business: 66th Floor Central Plaza 18 Harbour Road Wanchai Hong Kong

Independent non-executive Directors: Mr. Shea Chun Lok Quadrant Mr. Zhang Gaobo Mr. Guo Rui Ms. Hang Shijun Mr. Wang Kaijun Mr. Yu Ning

21 April 2015

To the Shareholders

Dear Sir or Madam,

(1) PROPOSALS FOR REFRESHMENT OF 10% GENERAL LIMIT ON GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME, (2) GRANT OF ISSUE MANDATE AND PURCHASE MANDATE, (3) PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND

(4) NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information and/or to seek your approval, inter alia, on (i) the refreshment of the Share Option Scheme Mandate Limit; (ii) the granting of the Issue Mandate and the Purchase Mandate; and (iii) the re-election of the retiring Directors. A notice of the AGM containing the resolutions to be proposed at the AGM is set out on pages 22 to 27 of this circular.

– 4 –

LETTER FROM THE BOARD

REFRESHMENT OF THE SHARE OPTION SCHEME MANDATE LIMIT

The Company adopted the Share Option Scheme pursuant to a resolution passed by the Shareholders at the special general meeting held on 28 June 2011 in accordance with the requirements set out in Chapter 17 of the Listing Rules. The purpose of the Share Option Scheme is to enable the Company to grant Share Options to the Eligible Participants as incentives and/or rewards for their contribution to the Group. As at the Latest Practicable Date, apart from the Share Option Scheme, the Company did not have any other share option schemes.

As at 28 June 2011, being the date on which the Share Option Scheme was adopted, the maximum number of shares which may be issued upon exercise of all Share Options to be granted under the Share Option Scheme of the Company was 685,013,469 shares, being 10% of the issued share capital of the Company on such date (the “ Scheme Mandate Limit ”). The Company may refresh the Scheme Mandate Limit by an ordinary resolution of the Shareholders at general meeting provided that:

• (i) the Scheme Mandate Limit so refreshed shall not exceed 10% of the total numbers of Shares in issue as at the date of the Shareholders’ approval of the refreshment of the Scheme Mandate Limit (“ Refreshed Scheme Mandate Limit ”); and

• (ii) options previously granted under the Share Option Scheme and any other share option scheme(s) of the Company (including those outstanding, cancelled, or lapsed in accordance with the relevant scheme rules or exercised options) shall not be counted for the purpose of calculating the Scheme Mandate Limit as refreshed.

Notwithstanding the foregoing, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option scheme(s) of the Company must not in aggregate exceed 30% of the total number of Shares in issue from time to time.

As at the Latest Practicable Date, there were in total 372,350,000 outstanding Options carrying rights to subscribe for 372,350,000 Shares, representing 4.27% of the total issued share capital of the Company granted by the Company under the Scheme Mandate Limit. Up to the Latest Practicable Date, the total number of Options granted under the Share Option Scheme was 402,000,000 Options, in which 23,200,000 Options were exercised and 6,450,000 Options were lapsed. Accordingly, the available limit under the Scheme Mandate Limit can only allow the grant of options to subscribe for 283,013,469 Shares, representing approximately 3.25% of the total issued share capital of the Company as at the Latest Practicable Date (i.e. 8,712,039,196 shares).

– 5 –

LETTER FROM THE BOARD

The aggregate maximum number of the Shares, that can be issued pursuant to the Share Options to be granted under the Refreshed Scheme Mandate Limit (i.e. 871,203,919 Shares) and the existing number of the Shares to be issued upon the exercise of the outstanding Share Options granted under the Share Option Scheme adopted by the Company (i.e. 372,350,000 Shares), were 1,243,553,919 Shares, representing 14.27% of the total issued share capital of the Company and did not exceed 30% of the Shares in issue as at the Latest Practicable Date.

Proposal

The Board considers that share option is an important incentive for motivating and/ or rewarding the Eligible Participants to contribute to the success of the Group’s business and financial performance. As such granting of options will not affect the Group’s cash flow but will help the Company to provide them with a direct economic interest in attaining the long term objectives of the Company, the Board decided to grant to those Eligible Participants such number of options which will provide sufficient incentives to them to achieve the Group’s business goals. In this connection, the Company wishes to take the opportunity of the AGM to seek Shareholders’ approval for refreshment of the Scheme Mandate Limit.

If the refreshment of the Scheme Mandate Limit is approved at the AGM, based on the 8,712,039,196 Shares in issue as at the Latest Practicable Date and assuming no further Shares will be allotted and issued and no Share will be repurchased after the Latest Practicable Date and up to the date of the AGM, the Company may grant further options carrying rights to subscribe for up to a total of 871,203,919 Shares under the Share Option Scheme (representing 10% of the issued capital of the Company as at the date of the AGM). The Board considers that refreshment of the Scheme Mandate Limit is in the interests of the Company and its Shareholders as a whole.

Conditions

The refreshment of the Scheme Mandate Limit is conditional on:

• (a) the passing of the necessary resolution to approve the refreshment of the Scheme Mandate Limit by the Shareholders at the AGM; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in such number of Shares representing 10% of the Shares in issue as at the date of the AGM, which my be issued pursuant to exercise of options to be granted under the refreshed Scheme Mandate Limit.

– 6 –

LETTER FROM THE BOARD

Application for listing

Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares to be issued by the Company (representing 10% of the Shares in issue as at the date of the AGM) which may be issued pursuant to exercise of options to be granted under the refreshed Scheme Mandate Limit.

GENERAL MANDATE TO ISSUE AND PURCHASE SHARES

At the Company’s last annual general meeting held on 23 May 2014, the Directors were granted a mandate to allot, issue and deal with the Shares not exceeding 20% of the issued share capital of the Company as at 23 May 2014 (equivalent to the then 1,731,123,131 Shares) (“ 2014 Issue Mandate ”); and a general mandate to repurchase the Shares up to a maximum of 10% of the issued share capital of the Company as at 23 May 2014 (equivalent to the then 865,561,565 Shares) (“ 2014 Purchase Mandate ”).

In order to settle and discharge the respective parties’ obligations and liabilities remaining under the sale and purchase agreement dated 6 September 2013 and the supplemental agreement dated 27 January 2014, the Company entered into the settlement agreement on 20 August 2014 whereas the Company agreed to allot and issue the 33,223,537 Shares of the Company under the 2014 Issue Mandate subject to and against the receipt of the final consideration payment amount. The completion of issuance of 33,223,537 consideration Shares of the Company took place on 11 September 2014. Reference were made to the announcements of the Company dated 17 July 2013, 6 September 2013, 25 October 2013, 27 January 2014, 20 August 2014 and 22 August 2014 respectively.

The 2014 Purchase Mandate have not yet been utilized.

The 2014 Purchase Mandate and 2014 Issue Mandate will lapse at the conclusion of the AGM.

As at the Latest Practicable Date, the total number of Shares in issue was 8,712,039,196Shares. Ordinary resolutions will be proposed at the AGM to approve the granting of new general mandates to the Directors:

• (1) to allot, issue or deal with Shares with an aggregate nominal amount not exceeding 20% of the aggregate nominal amount of the issued share capital of the Company at the date of passing the proposed resolution at the AGM (i.e. a maximum of 1,742,407,839 Shares on the basis that no further Shares will be issued or repurchased prior to the date of the AGM) (“ Issue Mandate ”); and

– 7 –

LETTER FROM THE BOARD

• (2) to purchase Shares with an aggregate nominal amount not exceeding 10% of the aggregate nominal amount of issued share capital of the Company as at the date of passing the proposed resolution at the AGM (i.e. a maximum of 871,203,919 Shares on the basis that no further Shares will be issued or repurchased prior to the date of the AGM) (“ Purchase Mandate ”).

The Directors will also propose a separate ordinary resolution at the AGM to add to the general mandate to issue those Shares purchased by the Company pursuant to the Purchase Mandate granted to the Directors at the AGM.

The Directors have no immediate plans to allot and issue any new Shares under the Issue Mandate.

An explanatory statement relating to the general mandate to purchase Shares is set out in Appendix I to this circular.

DISTRIBUTION

Subject to the approval of Shareholders at the AGM, the Directors recommended to make distributions of HK4.8 cents per Share out of the contributed surplus of the Company, payable to Shareholders whose names appear on the register of members of the Company on Friday, 29 May 2015.

RE-ELECTION OF THE RETIRING DIRECTORS

The Board currently consists of seventeen Directors, namely Mr. Li Yongcheng (Chairman), Mr. E Meng (Vice Chairman), Mr. Jiang Xinhao, Mr. Hu Xiaoyong (Chief Executive Officer), Mr. Zhou Min, Mr. Li Haifeng, Mr. Zhang Tiefu, Ms. Qi Xiaohong, Mr. Ke Jian, Mr. Tung Woon Cheung Eric and Mr. Li Li as the executive Directors; Mr. Shea Chun Lok Quadrant, Mr. Zhang Gaobo, Mr. Guo Rui, Ms. Hang Shijun, Mr. Wang Kaijun and Mr. Yu Ning as the independent nonexecutive Directors.

Mr. Li Yongcheng was appointed as the chairman of the Board and an executive Director on 29 October 2014. Pursuant to Bye-law 91 of the Company, Mr. Li Yongcheng shall hold office until the AGM and, being eligible, offers himself for re-election.

In accordance with Bye-law 99(B), Mr. E Meng, Mr. Hu Xiaoyong, Mr. Li Haifeng, Mr. Tung Woon Cheung Eric, Mr. Wang Kaijun and Mr. Yu Ning will retire by rotation as Directors at the AGM pursuant to the Bye-laws and being eligible, will offer themselves for re-election.

– 8 –

LETTER FROM THE BOARD

The Board considers that each of Mr. Wang Kaijun and Mr. Yu Ning, being an independent non-executive Directors, is and continues to be independent based on his submitted annual written confirmation concerning his independence.

The re-election of the retiring Directors will be individually and separately voted on by the Shareholders. Details of the above retiring Directors which are required to be disclosed by the Listing Rules are set out in Appendix II to this circular.

If a valid notice from a Shareholder to propose a person to stand for election as a Director at the AGM is received in accordance with the Bye-laws after the printing of this circular, the Company will issue a supplemental circular to inform Shareholders of the details of any additional candidate proposed.

THE ANNUAL GENERAL MEETING

The notice of the AGM is set out on pages 22 to 27 of this circular. At the AGM, ordinary resolutions will be proposed to approve, inter alia, (i) the refreshment of the Scheme Mandate Limit; (ii) the granting of the Issue Mandate and the Purchase Mandate; and (iii) the re-election of the retiring Directors.

A form of proxy for use at the AGM is enclosed with this circular. Whether or not you are able to attend the AGM, you are requested to complete the accompanying form of proxy in accordance with the instruction printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM if you so wish.

VOTING AT THE ANNUAL GENERAL MEETING

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at the AGM must be taken by poll and the Company will then announce the results of the poll in the manner as prescribed under Rule 13.39(5) of the Listing Rules after the AGM.

– 9 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors are of the opinion that (i) the refreshment of the Scheme Mandate Limit; (ii) the granting of the Issue Mandate and the Purchase Mandate; and (iii) the re-election of the retiring Directors are in the interests of the Company and the Shareholders as a whole and, accordingly, the Directors recommend all Shareholders to vote in favour of the resolutions set out in the notice of the AGM contained herein.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices to this circular. The English text shall prevail over the Chinese text in this circular.

Yours faithfully, By Order of the Board

Beijing Enterprises Water Group Limited

Li Yongcheng

Chairman

– 10 –

EXPLANATORY STATEMENT

APPENDIX I

The following is an explanatory statement required by the Listing Rules relating to the Purchase Mandate proposed to be granted to the Directors.

1. LISTING RULES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their securities on the Stock Exchange subject to certain restrictions, the most important of which is summarised below:

The Listing Rules provide that repurchases of securities of such company must be approved in advance by an ordinary resolution of shareholders, either by way of a general mandate or by a specific approval of a particular transaction and that the securities to be purchased must be fully paid up.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 8,712,039,196 Shares and there is no outstanding convertible notes or options carrying the rights to subscribe for any Shares.

Subject to the passing of the ordinary resolution approving the grant of the Purchase Mandate and on the basis that no Shares are issued or purchased by the Company prior to the AGM, the Company will be allowed to purchase a maximum of 871,203,919 Shares, representing 10% of the issued share capital of the Company as at the date of passing the resolution.

3. FUNDING OF PURCHASES

In purchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association, the Bye-laws and the laws of Bermuda. The Company is empowered by its Bye-laws to purchase its Shares. The laws of Bermuda provide that the amount of capital repaid in connection with a share purchase may only be paid out of the capital paid up on the relevant shares, or from funds of the Company that would otherwise be available for dividend or distribution, or from the proceeds of an issue of shares made for the purpose. The amount of premium payable on redemption may only be paid out of either funds of the Company that would otherwise be available for dividend or distribution or out of the Company’s share premium account.

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EXPLANATORY STATEMENT

APPENDIX I

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the most recent published audited accounts for the year ended 31 December 2014 of the Company dated 30 March 2015) in the event that the Purchase Mandate was to be exercised in full at any time during the proposed purchase period.

The Directors do not propose to exercise the Purchase Mandate to such extent, as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing level of the Company, which in the opinion of the Directors are from time to time appropriate for the Company.

4. REASON FOR PURCHASE

The Directors believe that it is in the best interests of the Company and the Shareholders to have a general authority from the Shareholders to enable the Directors to purchase Shares on the market. Such purchase may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or its earning per Share and will only be made when the Directors believe that such purchase will benefit the Company and the Shareholders as a whole.

5. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the powers of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules and all applicable laws of Bermuda, and in accordance with the regulations set out in its memorandum of association and the Bye-laws.

6. EFFECT OF TAKEOVERS CODE

If as a result of a purchase of Share(s) a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert (within the meaning of the Takeovers Code) depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code as a result of such increase.

– 12 –

APPENDIX I

EXPLANATORY STATEMENT

As at the Latest Practicable Date, Beijing Enterprises Holdings Limited, is beneficially interested in 3,824,367,831 Shares, representing approximately 43.89% of the total issued share capital of the Company. On the basis that no Shares are issued or purchased prior to the date of the AGM, in the event that the Directors exercise in full the power to purchase Shares in accordance with the terms of the relevant ordinary resolution to be proposed at the AGM, the interests of Beijing Enterprises Holdings Limited in the Company would be increased to approximately 48.78% of the total issued share capital of the Company. In the opinion of the Directors, such an increase of shareholding may give rise to an obligation for Beijing Enterprises Holdings Limited to make a mandatory offer under Rule 26 of the Takeover Code. As at the Latest Practicable Date, the Directors do not have any present intention to exercise the Purchase Mandate to such an extent such that the mandatory offer obligation would be triggered. Save as aforesaid, the Directors are not aware of any consequences which will arise under the Takeovers Code as a result of any purchase to be made under the Purchase Mandate.

Within the knowledge of the Directors, approximately 56.11% of the Company’s total issued capital was held by the public as at the Latest Practicable Date. On the basis that no Shares are issued or purchased from the public prior to the date of the AGM, in the event that the Directors exercise in full the power to purchase Shares in accordance with the term of the relevant ordinary resolution to be proposed at the AGM, approximately 51.22% of the Company ‘s total issued capital was held by the public. The Company can still maintain its 25% minimum public float upon fully exercising the Purchase Mandate.

7. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best of the knowledge and belief of the Directors having made all reasonable enquiries, any of the close associates (as defined in the Listing Rules) has any present intention, in the event that the relevant proposed resolution is approved by the Shareholders in the AGM, to sell Shares to the Company or its subsidiaries.

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 securities to the Company nor has he/ she undertaken not to sell any of securities held by him/her to the Company in the event that the Company is authorised to make purchases of the Shares.

8. SHARE REPURCHASES MADE BY THE COMPANY

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

– 13 –

EXPLANATORY STATEMENT

APPENDIX I

9. SHARE PRICES

The highest and lowest prices at which the Shares were traded on the Stock Exchange in each of the previous twelve months were as follows:

	Price per Share	Price per Share
	Highest	Lowest
	HK$	HK$
2014
April	5.59	4.78
May	5.10	4.13
June	5.31	4.82
July	5.47	5.05
August	5.43	4.89
September	5.62	5.11
October	5.58	5.09
November	5.60	5.16
December	5.50	4.39
2015
January	5.40	5.02
February	5.11	4.16
March	5.50	4.59
April (up to the Latest Practicable Date)	6.88	5.30

Source: http://www.hkex.com.hk

– 14 –

APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Li Yongcheng (“ Mr. Li ”), aged 53, was appointed as the chairman and an executive director of the Company on 29 October 2014. Mr. Li is also the chairman of nomination committee of the Company. He is currently vice chairman and executive deputy general manager of Beijing Enterprises Group Company Limited and an executive director of Beijing Enterprises Holdings Limited (stock code: 392). Mr. Li is a senior engineer, graduated from Wuhan University of Science and Technology with a master’s degree in environmental engineering, and subsequently obtained an EMBA degree from Guanghua School of Management of Peking University. Mr. Li has once assumed various positions of deputy general manager, vice chairman and general manager with Beijing Gas Group Co., Ltd., and was vice president of Beijing Enterprises Holdings Limited (stock code: 392). Mr. Li possesses extensive experience and professional expertise in public utilities industry, and also has plenty of experience in enterprise operations and capital operations.

As at the Latest Practicable Date, Mr. Li does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Li does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

The Company and Mr. Li entered into a letter of appointment for a term of three years effective on 29 October 2014. Pursuant to the bye-laws of the Company and the Listing Rules, Mr. Li shall hold office until the next annual general meeting of the Company and, being eligible, offer himself for re-election and thereafter subject to retirement by rotation and re-election at annual general meetings of the Company.

The director’s fee for Mr. Li is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. Mr. Li waived to receive any director’s fees of the Company for the year ended 31 December 2014.

Save as disclosed herein, Mr. Li holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Li does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

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APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. E Meng, aged 56, was appointed as an executive director of the Company in February 2008 and vice chairman of the Company in April 2013. He serves as a vice general manager and the chief financial officer of Beijing Enterprises Group Company Limited. He is also an executive director and an executive vice president of Beijing Enterprises Holdings Limited (stock code: 392) and the chairman and an executive director of Beijing Development (Hong Kong) Limited (stock code: 154). Mr. E Meng also is an independent non-executive director of JLF Investment Company Limited (stock code: 472). Mr. E Meng graduated from China Science and Technology University with a master’s degree in engineering and subsequently obtained an EMBA degree from The Hong Kong University of Science and Technology. He is a PRC senior accountant with the qualifications of PRC certified accountant, asset appraiser, certified real estate appraiser and tax appraiser. From 1988 to 1997, he was the deputy director of Beijing New Technology Development Zone and concurrently acting as the director of the Department of Financial Auditing, the general manager of Investment Operation Company, the chief accountant of Beijing Tianping Accounting Firm and the deputy director of the State-owned Assets Management Office of Beijing Haidian District. Mr. E Meng has extensive experience in economics, finance and enterprise management.

As at the Latest Practicable Date, Mr. E Meng does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. E Meng does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. E Meng’s letter of appointment, his term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. E Meng is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. The total amount of remuneration of Mr. E Meng for the year ended 31 December 2014 was HK$120,000.

Save as disclosed herein, Mr. E Meng holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. E Meng does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

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APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Hu Xiaoyong (“ Mr. Hu ”), aged 50, was appointed as an executive director and the chief executive officer of the Company in August 2008. He is also an executive director of Genvon Group Limited (stock code: 2389). Mr. Hu graduated with an EMBA from the Tsinghua University. He was the vice chairman of the China Environmental Service Industry Association（全國工商聯環境 服務業商會）. Mr. Hu is currently the director of BEWG Environmental Group Co., Ltd.

As at the Latest Practicable Date, Mr. Hu has personal interest in 100,000 Shares, the personal interests in 64,000,000 underlying Shares in respect of Share Options granted, and corporate interest in 310,336,456 Shares through Starry Chance Investments Limited. Mr. Hu was interested in Starry Chance Investments Limited as to 100% and therefore Mr. Hu was regarded as interested in the 310,336,456 Shares. Save as disclosed above, Mr. Hu does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Hu does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. Hu’s letter of appointment, his term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. Hu is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. The total amount of remuneration of Mr. Hu for the year ended 31 December 2014 was HK$6,193,000.

Save as disclosed herein, Mr. Hu holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Hu does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

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APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Li Haifeng, aged 44, was appointed as an executive director and a vice president of the Company in August 2008. He graduated with a bachelor’s degree in Laws from the Peking University. He was an assistant to president of Founder Group（方正集團）and the executive vice president of Founder Xintiandi Software Technology Co. Ltd.（方正新天地軟件科技有限公 司）. Mr. Li Haifeng is now the chairman of the Supervisory Committee of BEWG Environmental Group Co., Ltd., responsible for exploring business opportunities in water market in the PRC. He is currently the chairman and an executive director of Carry Wealth Holdings Limited (stock code: 643). During the period from April 2010 to April 2013, He was an independent non-executive director of Simsen International Corporation Limited (stock code: 993). Both Carry Wealth Holdings Limited and Simsen International Corporation Limited are listed on the Stock Exchange of Hong Kong Limited.

As at the Latest Practicable Date, Mr. Li Haifeng has the personal interests in 27,200,000 underlying Shares in respect of Share Options granted. Save as disclosed above, He does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Li Haifeng does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. Li Haifeng’s letter of appointment, his term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. Li Haifeng is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. The total amount of remuneration of Mr. Li Haifeng for the year ended 31 December 2014 was HK$2,870,000.

Save as disclosed herein, Mr. Li Haifeng holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Li Haifeng does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

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APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Tung Woon Cheung Eric (“ Mr. Tung ”), aged 44, was appointed as an executive director of the Company in August 2011. Mr. Tung is the chief financial officer and company secretary of the Company. Mr. Tung is also the assistant president and general manager of the finance department of Beijing Enterprises Holdings Limited (stock code: 392), a company listed on the main board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), the company secretary of Biosino Bio-Technology and Science Incorporation* (stock code: 8247), a company listed on growth enterprise market of the Stock Exchange and an independent nonexecutive director of South China Financial Holdings Limited (stock code: 619) and GR Properties Limited (stock code: 108), both of which are listed on the main board of the Stock Exchange. Mr. Tung graduated from York University, Toronto, Canada with a bachelor’s honours degree in administrative studies. He is a Hong Kong Certified Public Accountant and a U.S. licensed practice Certified Public Accountant.

As at the Latest Practicable Date, Mr. Tung has the personal interests in 9,000,000 underlying Shares in respect of Share Options granted. Save as disclosed above, He does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Tung does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. Tung’s letter of appointment, her term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. Tung is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, her duties and responsibilities with the Group and her contribution to the Group. The total amount of remuneration of Mr. Tung for the year ended 31 December 2014 was HK$120,000.

Save as disclosed herein, Mr. Tung holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Tung does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to her re-election that need to be brought to the attention of the Shareholders.

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APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Wang Kaijun (“ Mr. Wang ”), aged 54, was appointed as an independent non-executive director of the Company in August 2008. Mr. Wang holds a Doctor degree from the Environmental Technology Department of the Wageningen Agricultural University in the Netherlands. Mr. Wang was previously appointed as the chief engineer of Beijing Municipal Environmental Protection Technology Research Centre（北京市環境保護科學研究院）. He is now working as a professor in School of Environment, Tsinghua University（清華大學環境學院）, a member of Committee of Science and Technology in Ministry of Environmental Protection and the director of State Environment Engineering Center for Technology Management and Evaluation. Mr. Wang has been engaged and experienced in the relevant research, development and industrialization of sewage pollution control technologies and the evaluation of policy-making over the years. Mr. Wang has unique and innovative opinions on the academic study and has made many achievements and demonstration cases on the hydrolysis-aerobic process theory, aerobic and anaerobic reactor theory and design, development and application of sewage sludge treatment and disposal technologies, planning and management of state environment protection administration system, etc. Mr. Wang also developed the research fields on municipal sewage hydrolysis-aerobic treatment process, high performance anaerobic reactors, sewage sludge treatment and disposal, livestock dejection treatment and rural environmental protection in mainland China.

As at the Latest Practicable Date, Mr. Wang has the personal interests in 2,000,000 underlying Shares in respect of Share Options granted. Save as disclosed above, he does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Wang does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. Wang’s letter of appointment, his term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. Wang is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. The total amount of remuneration of Mr. Wang for the year ended 31 December 2014 was HK$120,000.

Save as disclosed herein, Mr. Wang holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Wang does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

– 20 –

APPENDIX II

DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Yu Ning (“ Mr. Yu ”), aged 61, was appointed as an independent non-executive director of the Company in December 2012. Mr. Yu is a qualified PRC lawyer. Mr. Yu graduated from the law department of Peking University with a bachelor degree in 1983 and obtained a master degree specialising in economic law from the law department of Peking University in 1996. Mr. Yu was a member of the Chinese People’s Political Consultative Conference. Mr. Yu was previously the president of All China Lawyers Association. Mr. Yu served as principal lawyer at Beijing Times Highland Law Firm, part-time professor at Peking University and mentor of master postgraduates at the Law School of Tsinghua University. He is an independent director of each of Bank of Beijing Co., Ltd. (Stock Code: 601169) and China CSSC Holdings Limited (Stock Code: 600150), and was an independent director of Sinolink Securities Co., Ltd. (Stock Code: 600109), all of which are listed on The Shanghai Stock Exchange. He is also an independent director of each of United Science and Technology Co., Ltd. (formerly known as United Mechanical and Electrical Co., Ltd.) (Stock Code: 000925) and BOE Technology Group Co., Ltd.* (Stock Code: 000725), both of which are listed on the Shenzhen Stock Exchange. Mr. Yu is also an independent non-executive director of Intime Retail (Group) Company Limited (formerly known as Intime Department Store (Group) Company Limited) (Stock Code: 1833), a company listed on the main board of The Stock Exchange of Hong Kong Limited.

As at the Latest Practicable Date, Mr. Yu has the personal interests in 2,000,000 underlying Shares in respect of Share Options granted. Save as disclosed above, he does not hold any shares, underlying shares or debenture of the Company and/or its associated corporation within the meaning of Part XV of the SFO.

Save as disclosed herein and as at the Latest Practicable Date, Mr. Yu does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company as defined in the Listing Rules.

Pursuant to Mr. Yu’s letter of appointment, his term of office is three years and subject to retirement and being eligible for re-election at the AGM in accordance with the Bye-laws.

The director’s fee for Mr. Yu is to be determined by the Board with reference to the prevailing market rate, the Company’s remuneration policy, his duties and responsibilities with the Group and his contribution to the Group. The total amount of remuneration of Mr. Yu for the year ended 31 December 2014 was HK$120,000.

Save as disclosed herein, Mr. Yu holds no other directorships in listed public companies in the last three years preceding the date of this circular.

Mr. Yu does not have any information which is required to be disclosed under Rules 13.51(2)(h) to (v) of the Listing Rules. Save as disclosed above, there are no other matters relating to his re-election that need to be brought to the attention of the Shareholders.

• for identification purpose only

– 21 –

NOTICE OF THE AGM

==> picture [62 x 60] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 371)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the shareholders of Beijing Enterprises Water Group Limited (the “ Company ”) will be held at 66th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on Thursday, 21 May 2015 at 3:00 p.m. for the purpose of considering and, if thought fit, passing the following resolutions:–

ORDINARY RESOLUTIONS

1. To receive and consider the audited consolidated financial statements and the reports of the directors and of the auditors of the Company for the year ended 31 December 2014.

2. To make distributions of HK4.8 cents per share out of the contributed surplus of the Company.

3. To re-elect the retiring directors and to authorise the board of directors of the Company to fix the directors’ remuneration.

4. To re-appoint Messrs. Ernst & Young as auditors of the Company and to authorise the board of directors of the Company to fix their remuneration.

– 22 –

NOTICE OF THE AGM

1. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an ordinary resolution of the Company:

“ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting the listing of, and permission to deal in, the shares of HK$0.10 each in the share capital of the Company (the “ Shares ”) to be issued pursuant to the exercise of share options which may be granted under the New Scheme Limit (as defined below), the refreshment of the scheme limit of the Company’s share option scheme of the Company adopted on 28 June 2011, up to 10% of the number of Shares in issue as at the date of passing of this resolution (the “ New Scheme Limit ”) be and is hereby approved and any Director, or any two Directors if affixation of the common seal of the Company is necessary, be and is/are hereby authorised to do all such acts and execute all such documents to effect the New Scheme Limit.”

1. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an ordinary resolution of the Company:

“ THAT

• (A) subject to paragraph (B) of this resolution, the exercise by the directors of the Company (“ Directors ”) during the Relevant Period (as hereinafter defined) of all powers of the Company to purchase its own shares of the Company on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or requirements of the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”) or any other stock exchange as amended from time to time, be and is hereby, generally and unconditionally approved;

– 23 –

NOTICE OF THE AGM

• (B) the aggregate nominal amount of shares of the Company to be purchased by the Company pursuant to the approval in paragraph (A) of this resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing 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 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 bye-laws of the Company or the Companies Act 1981 of Bermuda or any other applicable law to be held; and

• (iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

• As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an ordinary resolution of the Company:

“ THAT

• (A) subject to paragraph (C) of this resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the capital of the Company and to make or grant offers, agreements, options (including bonds, warrants and debentures convertible into shares of the Company), which would or might require the exercise of such powers be and is hereby, generally and unconditionally approved;

– 24 –

NOTICE OF THE AGM

• (B) the approval in paragraph (A) of this resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements, options (including bonds, warrants, and debentures convertible into shares of the Company), which would or might require the exercise of such power after the end of the Relevant Period;

• (C) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and to be issued by the Directors pursuant to the approval in paragraph (A) of this resolution, otherwise than pursuant to (i) a Rights Issue (as hereafter defined), or (ii) an issue of shares under any option scheme or similar arrangement for the time being adopted by the Company and/or its subsidiaries for the grant or issue of shares or rights to acquire shares in the capital of the Company, or (iii) any scrip dividend scheme or similar arrangement providing for the allotment and issue of shares in lieu of the whole or part of a dividend on shares in accordance with the bye-laws of the Company or (iv) the exercise of right of subscription or conversion under the terms of any warrants, option bond or convertible bond issued by the Company, or any securities which are convertible into shares of the Company, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this resolution and the said approval shall be limited accordingly; and

• (D) for the purposes of this resolution:

“ Relevant Period ” means the period from 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 bye-laws of the Company or the Companies Act 1981 of Bermuda or any other applicable law to be held; and

• (iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

– 25 –

NOTICE OF THE AGM

“ Rights Issue ” means an offer of shares or issue of options to subscribe for shares open for a period fixed by the Directors to holders of shares whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the law of, or the requirements of any recognised regulatory body or any stock exchange, in any territory applicable to the Company).”

1. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an ordinary resolution of the Company:

“ THAT the general mandate granted to the directors of the Company pursuant to resolution numbered 7 above and for the time being in force to exercise the powers of the Company to allot shares and to make or grant offers, agreements and options which would or might require the exercise of such powers be and is hereby extended by the total nominal amount of shares in the capital of the Company repurchased by the Company pursuant to the exercise by the Directors of the powers of the Company to purchase such shares since the granting of such general mandate referred to in the above resolution numbered 6, provided that such amount shall not exceed 10% of the total nominal amount of the share capital of the Company in issue on the date of passing of this resolution.”

By Order of the Board Beijing Enterprises Water Group Limited Li Yongcheng Chairman

Hong Kong, 21 April 2015

– 26 –

NOTICE OF THE AGM

Notes:

1. The register of members will be closed from Tuesday, 19 May 2015 to Thursday, 21 May 2015 (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for attending and voting at the forthcoming annual general meeting of the Company to be held on Thursday, 21 May 2015, all transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with the Company’s share registrar, Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Monday, 18 May 2015.

2. The register of members will be closed from Thursday, 28 May 2015 to Friday, 29 May 2015 (both days inclusive), during which period no transfer of shares will be registered. In order to qualify for entitlement to the proposed distributions, all transfers of shares accompanied by the relevant share certificates and transfer forms must be lodged with the Company’s share registrar, Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Wednesday, 27 May 2015.

3. A member entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and vote instead of him. In the case of a recognised clearing house, it may authorise such person(s) as it thinks fit to act as its representative(s) at the meeting and vote in its stead. A proxy need not be a member of the Company.

4. In order 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 branch share registrar of the Company in Hong Kong, Tricor Tengis Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof.

5. With regard to item no. 3 in this notice of the meeting, the Board proposes that the retiring Directors namely, Mr. Li Yongcheng (Chairman), Mr. E Meng (Vice Chairman), Mr. Hu Xiaoyong (Chief Executive Officer), Mr. Li Haifeng, Mr. Tung Woon Cheung Eric, Mr. Wang Kaijun and Mr. Yu Ning be re-elected as Directors. Details of these Directors are set out in Appendix II to the circular to Shareholders dated 21 April 2015.

6. As at the date of this notice of the meeting, the board of directors of the Company comprises eleven executive directors, namely, Mr. Li Yongcheng (Chairman), Mr. E Meng (Vice Chairman), Mr. Jiang Xinhao, Mr. Hu Xiaoyong (Chief Executive Officer), Mr. Zhou Min, Mr. Li Haifeng, Mr. Zhang Tiefu, Ms. Qi Xiaohong, Mr. Ke Jian, Mr. Tung Woon Cheung Eric and Mr. Li Li and six independent non-executive directors, namely, Mr. Shea Chun Lok Quadrant, Mr. Zhang Gaobo, Mr. Guo Rui, Ms. Hang Shijun, Mr. Wang Kaijun and Mr. Yu Ning.

– 27 –