China Environmental Resources Group Limited — Proxy Solicitation & Information Statement 2021

Oct 20, 2021

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, bank manager, solicitor, professional accountant or other professional adviser immediately.

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

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation 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.

CHINA ENVIRONMENTAL RESOURCES GROUP LIMITED 中國環境資源集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1130)

PROPOSALS FOR

RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO ISSUE SHARES

AND TO REPURCHASE SHARES

AND

NOTICE OF ANNUAL GENERAL MEETING

The notice convening an annual general meeting of China Environmental Resources Group Limited to be held at Orchid Room, 2/F, The Royal Garden, 69 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong on Wednesday, 1 December 2021 at 11: 00 a.m. is set out on pages 14 to 19 of this circular.

Whether or not you are able to attend the annual general meeting, you are requested to complete the accompanying form of proxy, in accordance with the instructions printed thereon and deposit the same at the Company’s Hong Kong branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible and 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 you from attending and voting in person at the annual general meeting or any adjournment thereof should you so wish.

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

In accordance with health advice recommended by the Centre for Health Protection, for general meetings must be held, please refer to Notice of Annual General Meeting (page 19) for precautionary measures being taken to prevent and control the spread of the novel coronavirus pneumonia (COVID-19) at the AGM, including:

• (i) mandatory body temperature screening at the entrance of the venue for each attendee. Any person with a body temperature over 37.5[o] C shall not be permitted to enter the venue;

• (ii) use of a surgical mask for each attendee;

• (iii) no distribution of corporate souvenirs/gifts or refreshments;

• (iv) appropriate distancing and spacing between seats; and

• (v) other governmental regulatory requirements.

Any attendee who does not comply with the precautionary measures or is subject to quarantine, with any flu-like symptoms, who has had close contact with any person under quarantine, or has travelled overseas within 21 days immediately before the AGM shall not be permitted to enter the venue. All shareholders are strongly encouraged to appoint the chairman of the meeting as their meeting proxy to vote on the relevant resolutions(s) at the AGM as an alternative to attending the AGM in person and contacting the Company for questions (if any) for management.

21 October 2021

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-election of retiring	Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General Mandates to issue Shares and to repurchase Shares . . . . . . . . . . . . . . . . . . .		5
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Voting by way of poll	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
General Information	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
Appendix I — Details of	Retiring Directors proposed to be re-elected . . . . . . . . . . . . .	8
Appendix II — Explanatory Statement as to Repurchase Mandate . . . . . . . . . . . . . . . . .		11
Appendix III — Notice of	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

– i –

DEFINITIONS

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

• ‘‘AGM’’ the annual general meeting of the Company to be held at Orchid Room, 2/F, The Royal Garden, 69 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong on Wednesday, 1 December 2021 at 11: 00 a.m.

• ‘‘AGM Notice’’ the notice convening the AGM as set out in Appendix III to this circular

• ‘‘Articles of the articles of association of the Company Association’’

• ‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘Board’’ the board of Directors ‘‘close associate(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘Company’’ China Environmental Resources Group Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the main board of the Stock Exchange (Stock code: 1130) and have a secondary listing on Singapore Exchange Securities Trading Limited

• ‘‘connected person(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘core connected has the meaning ascribed thereto under the Listing Rules person(s)’’

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ or ‘‘Hong Kong Hong Kong dollars, the lawful currency of Hong Kong Dollars’’

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Issuance Mandate’’ as defined in paragraph 3 of the Letter from the Board in this circular

• ‘‘Latest Practicable 12 October 2021, being the latest practicable date prior to the Date’’ printing of this circular for the purpose of ascertaining certain information included herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

– 1 –

DEFINITIONS

• ‘‘Main Board’’ the Main Board operated by the Stock Exchange

• ‘‘PRC’’ the People’s Republic of China

• ‘‘Repurchase Mandate’’ as defined in paragraph 3 of the Letter from the Board in this circular

• ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Share Option Scheme’’ the share option scheme adopted by the Company on 11 November 2015

• ‘‘Share(s)’’ ordinary share(s) of HK$0.02 each in the share capital of the Company

• ‘‘Shareholder(s)’’ registered holder(s) of Share(s)

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Substantial has the meaning ascribed thereto under the Listing Rules Shareholder(s)’’

• ‘‘Takeovers Code’’ Hong Kong Code on Takeovers and Mergers

• ‘‘%’’ per cent

– 2 –

LETTER FROM THE BOARD

CHINA ENVIRONMENTAL RESOURCES GROUP LIMITED 中國環境資源集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1130)

Executive Directors:

• Mr. Yeung Chi Hang (Chairman and Chief Executive Officer)

• Mr. Leung Kwong Choi

• Mr. Wong Po Keung

• Mr. Chung Siu Wah

• Mr. Chik To Pan

Registered office: Ugland House South Church Street P.O. Box 309 George Town Grand Cayman Cayman Islands British West Indies

Independent Non-executive Directors:

• Mr. Wong Kwai Sang

• Mr. Ong Chi King

• Mr. Heung Chee Hang, Eric

Head office and principal place of business: Room 2608, 26/F, Greenfield Tower, Concordia Plaza, No.1 Science Museum Road, Tsim Sha Tsui East, Kowloon, Hong Kong

21 October 2021

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR

RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES AND

NOTICE OF ANNUAL GENERAL MEETING

– 3 –

LETTER FROM THE BOARD

1. INTRODUCTION

The purpose of this circular is to provide you with the information regarding resolutions to be proposed at the AGM relating to re-election of retiring Directors, granting to the Directors of the Issuance Mandate and Repurchase Mandate, and notice to convene the AGM to approve, among other things, re-election of retiring Directors and granting of the Issuance Mandate and Repurchase Mandate and extension of Issuance Mandate.

2. RE-ELECTION OF RETIRING DIRECTORS

Pursuant to the Articles of Association, at each annual general meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) shall retire from office by rotation. A retiring Director shall be eligible for re-election. The Directors to retire by rotation shall include (so far as necessary to ascertain the number of Directors to retire by rotation) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree between themselves) be determined by lot.

Pursuant to the Articles of Association, Mr. Leung Kwong Choi, Mr. Wong Po Keung and Mr. Wong Kwai Sang (the ‘‘Retiring Directors’’), being the existing Directors longest in office since their last re-election, will retire by rotation at the AGM. All these Retiring Directors, being eligible, offer themselves for re-election.

The nomination committee of the Board had reviewed, with reference to nomination policy adopted by the Company, the overall contribution and service to the Company of the Retiring Directors. The nomination committee also reviewed their expertise and professional qualifications and considered that the Retiring Directors continued to meet the nomination criteria under the nomination policy of the Company. Besides, Mr. Wong Kwai Sang, Eric has been independent non-executive Director since 2009. The nomination committee and the Board had assessed and reviewed the annual written confirmation of independence of the independent non-executive Directors including Mr. Wong Kwai Sang for the year ended 30 June 2021 based on the independence criteria as set out in rule 3.13 of the Listing Rules and considered Mr. Wong Kwai Sang remains to be independent.

With reference to the board diversity policy of the Company, the nomination committee conducted an annual review of the effectiveness of the Board and considered the balance of talents, skills, experience, independence, knowledge and diversity on the existing Board.

The nomination committee considered and nominated the Retiring Directors to the Board for it to propose to the Shareholders for re-election at the AGM.

– 4 –

LETTER FROM THE BOARD

The Board is of the view that the Retiring Directors are beneficial to the Board with diversity of their comprehensive business experience that contributes to invaluable expertise, continuity and stability to the Board and the Company has benefited greatly from their contribution and valuable insights derived from their in-depth knowledge of the Company. The Board believes that they will continue to contribute effectively to the Board.

Accordingly, with the recommendation of the nomination committee, the Board has proposed that each of the Retiring Directors, namely Mr. Leung Kwong Choi, Mr. Wong Po Keung and Mr. Wong Kwai Sang, stands for re-election as Director by way of separate resolution at the AGM.

Details of the Retiring Directors proposed to be re-elected at the AGM are set out in Appendix II hereto.

3. GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES

At the annual general meeting of the Company held on Friday, 11 December 2020, an ordinary resolution was passed for the granting of general mandates to the Directors, to allot, issue or otherwise deal with Shares not exceeding 20% of the number of the issued Shares of the Company as at that date (i.e. 407,307,622 Shares) (the ‘‘Existing Issuance Mandate’’) and to repurchase Shares not exceeding 10% of the number of the issued Shares of the Company as at that date (i.e. 203,653,811 Shares) (the ‘‘Existing Repurchase Mandate’’).

The Existing Issuance Mandate and Existing Repurchase Mandate will lapse upon the conclusion of the AGM. The Directors consider that the Existing Issuance Mandate and Existing Repurchase Mandate increase the flexibility in the Company’s affairs and are in the interests of the Shareholders, and should continue to be adopted by the Company.

It will therefore be proposed at the forthcoming AGM to approve the granting of new general mandates to the Directors to exercise the power of the Company:

• (i) to allot, issue and deal with new Shares and to make or grant offers, agreements and options, including warrants to subscribe for Shares and other rights of subscription for or conversion into Shares, of not exceeding 20% of the number of issued Shares of the Company as at the date of passing of such resolution (the ‘‘Issuance Mandate’’); and

• (ii) to repurchase Shares on the Stock Exchange of not exceeding 10% of the number of issued Shares of the Company as at the date of passing of such resolution (the ‘‘Repurchase Mandate’’).

Assuming that there is no further issuance and allotment of and dealing in new Shares from the Latest Practicable Date to the date of AGM, a maximum of 407,307,622 new Shares, representing 20% of the number of issued Shares of the Company, shall be allotted, issued and dealt with under the Issuance Mandate.

– 5 –

LETTER FROM THE BOARD

A resolution authorising the extension of the Issuance Mandate to include the aggregate nominal number of Shares repurchased (if any) under the Repurchase Mandate will be proposed as ordinary resolution 6 set out in the AGM Notice.

An explanatory statement containing the particulars required by the Listing Rules to enable the Shareholders to make an informed decision on whether to vote for or against the resolution to approve the granting of the Repurchase Mandate is set out in Appendix II to this circular.

4. ANNUAL GENERAL MEETING

The AGM Notice is set out in Appendix III to this circular. At the AGM, ordinary resolutions will be proposed to approve, inter alia, re-election of Retiring Directors, granting of the Issuance Mandate and the Repurchase Mandate and extension of the Issuance Mandate.

A form of proxy is enclosed with this circular for use at the AGM. Whether or not you are able to attend the AGM, you are requested to complete and return the enclosed form of proxy to the Company’s Hong Kong branch share registrar and transfer office, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

5. VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The chairman of the meeting will therefore demand a poll for every resolution put to the vote at the AGM pursuant to the Articles of Association and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

6. RECOMMENDATION

The Directors consider that the proposed ordinary resolutions for approval of re-election of Retiring Directors, granting of Issuance Mandate and Repurchase Mandate and extension of the Issuance Mandate are each in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Shareholders vote in favour of the relevant resolutions to be proposed at the AGM.

7. GENERAL INFORMATION

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

– 6 –

LETTER FROM THE BOARD

8. RESPONSIBILITY STATEMENT

This document, 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 issuer. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document 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.

Yours faithfully, By Order of the Board

China Environmental Resources Group Limited Yeung Chi Hang Chairman and Chief Executive Officer

– 7 –

APPENDIX I DETAILS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

The biographical details of the Retiring Directors who shall retire from office at the AGM and, being eligible, will offer themselves for re-election are as follows:

1. Mr. Leung Kwong Choi, aged 65, was appointed as Executive Director on 6 October 2008. He is also the Chairman of the investment committee of the Company. Mr. Leung holds a Bachelor of Social Science Degree from the Chinese University of Hong Kong. He had been working for 10 years in the marketing department of Hang Lung Development Ltd. since graduation. Mr. Leung had also served the positions of executive director of Top Glory International Holdings Limited, China Foods Limited, Cheung Tai Hong Holdings Limited, and an independent non-executive director of Top Spring International Holdings Limited (stock code: 3688), all of which are companies with shares listed on The Stock Exchange of Hong Kong Limited. Mr. Leung has over 28 years of real estate and business experience in Hong Kong and Mainland China concentrating in property investment and development, acquisition and merger, deal marking and investment projects arrangement. He was appointed as an independent non-executive director of Rainbow Digital Commercial Co., Ltd. (stock code: 002419SZ) with effect from 19 September 2019.

Save as disclosed above, Mr. Leung does not hold any other positions in the Company or any subsidiaries of the Company and did not hold any directorships in any listed public companies in the last three years.

Mr. Leung has entered into an appointment letter with the Company for a term of three years commencing from 6 October 2021. He is subject to retirement by rotation at the annual general meeting of the Company and re-election under the provision of the Articles of Association. Pursuant to the appointment letter, he is entitled to a director’s fee of HK$360,000 per annum which is determined with reference to his duties and responsibilities within the Company, the performance of the Company and the prevailing market situation and subject to the authorisation by the Shareholders at the annual general meeting and determination by the remuneration committee of the Company and the Board.

Mr. Leung does not have any relationships with the directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Leung has a personal interest in share options granted under the Company’s Share Option Scheme to subscribe for 1,500,000 shares. Save as disclosed above, Mr. Leung does not have any interests in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, the Board is not aware of any other information in relation to Mr. Leung which is required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there is no other matter that needs to be brought to the attention of the Shareholders.

– 8 –

APPENDIX I DETAILS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

1. Mr. Wong Po Keung, aged 50, was appointed as Executive Director on 30 September 2013. He is also the director of certain subsidiaries of the Company, the financial controller and a member of the investment committee of the Company. Mr. Wong holds a Master degree in business administration from the University of South Australia. He is a fellow member of both the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants. He has ample experience in auditing, accounting, financial management and company secretarial practices in respect of listed companies. He was appointed as an independent non-executive director of FSM Holdings Limited (stock code: 1721) with effect from 8 April 2020.

Save as disclosed above, Mr. Wong does not hold any other positions in the Company or any subsidiaries of the Company and did not hold any directorships in any listed public companies in the last three years.

Mr. Wong has entered into an appointment letter with the Company for a term of three years commencing from 30 September 2019. He is subject to retirement by rotation at annual general meeting of the Company and re-election under the provision of the Articles of Association. For the year ended 30 June 2021, Mr. Wong received emoluments in a total sum of HK$978,000 which comprised director’s fees, salaries and allowances, discretionary bonus and retirement benefit scheme contributions which is with reference to his qualification and experience, his duties and responsibilities within the Company, the performance of the Company and the prevailing market situation and subject to authorisation by the Shareholders at the annual general meeting and determination by the remuneration committee of the Company and the Board.

Mr. Wong does not have any relationships with the directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Wong has a personal interest in share options granted under the Company’s Share Option Scheme to subscribe for 16,942,817 shares. Save as disclosed above, Mr. Wong does not have any interests in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, the Board is not aware of any other information in relation to Mr. Wong which is required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there is no other matter that needs to be brought to the attention of the Shareholders.

1. Mr. Wong Kwai Sang, aged 69, was appointed as an Independent Non-executive Director on 2 March 2009. He is also a member of the audit committee, remuneration committee and nomination committee of the Company. Mr. Wong had been an Independent Non-executive Director, member of audit committee and member of remuneration committee of the Company since 3 July 2002. He resigned on 4 July 2008 as he himself had a long term personal assignment stationed in Shanghai. Mr. Wong had completed his assignment in Shanghai and returned to Hong Kong. He holds a

– 9 –

APPENDIX I DETAILS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

Bachelor of Social Sciences degree from the University of Hong Kong. He is a property consultant and a fellow member of the Hong Kong Institute of Real Estate Administrators and the Australian Institute of Building respectively.

Save as disclosed above, Mr. Wong does not hold any other positions in the Company or any subsidiaries of the Company and did not hold any directorships in any listed public companies in the last three years.

Mr. Wong has entered into an appointment letter with the Company for a term of three years commencing from 2 March 2021. He is subject to retirement by rotation at annual general meeting of the Company and re-election under the provision of the Articles of Association. Pursuant to the appointment letter, he is entitled to a director’s fee of HK$120,000 per annum which is determined with reference to his duties and responsibilities within the Company, the performance of the Company and the prevailing market situation and subject to authorisation by the Shareholders at the annual general meeting and recommendation by the remuneration committee of the Company and determination by the Board.

Mr. Wong does not have any relationships with the directors, senior management, substantial shareholders or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Wong has a personal interest in share options granted under the Company’s Share Option Scheme to subscribe for 1,000,000 shares. Save as disclosed above, Mr. Wong does not have any interests in the Shares within the meaning of Part XV of the SFO.

Save as disclosed above, the Board is not aware of any other information in relation to Mr. Wong which is required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there is no other matter that needs to be brought to the attention of the Shareholders.

– 10 –

APPENDIX II EXPLANATORY STATEMENT AS TO REPURCHASE MANDATE

This appendix includes an explanatory statement required by the Stock Exchange to be presented to the Shareholders concerning the Repurchase Mandate proposed to be granted to the Directors.

1. LISTING RULES FOR REPURCHASES OF SHARES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions.

The Listing Rules provide that all proposed repurchases of shares by a company with a primary listing on the Stock Exchange must be approved by shareholders in advance by an ordinary resolution at a general meeting, either by way of a general mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

2. FUNDING AND IMPACT OF REPURCHASES

Any repurchase will be made out of funds which are legally available for the purpose in accordance with the memorandum of association of the Company, the Articles of Association, the Listing Rules and the applicable laws of the Cayman Islands. As compared with the financial position of the Company as at 30 June 2021 (being the date to which the latest audited financial statements of the Company have been made up), the Directors consider that there would be a material adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period.

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

3. REASONS FOR REPURCHASES

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

4. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 2,036,538,114 Shares.

– 11 –

APPENDIX II EXPLANATORY STATEMENT AS TO REPURCHASE MANDATE

Subject to the passing of the relevant ordinary resolutions to approve the general mandates to issue and repurchase Shares and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the AGM, the Directors would be authorised to exercise the powers of the Company to repurchase a maximum of 203,653,811 Shares.

5. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of the Cayman Islands, the memorandum of association of the Company and the Articles of Association.

6. EFFECT OF THE TAKEOVERS CODE

A repurchase of Shares by the Company may result in an increase in the proportionate interests of substantial Shareholder in the voting rights of the Company, which may give rise to an obligation to make a mandatory offer in accordance with Rules 26 of the Takeovers Code. As at the Latest Practicable Date, the following Shareholders are taken to have 5% or more of the issued share capital of the Company:

		Percentage of	shareholding	shareholding
		in the Company
			After	exercise in
				full of the
	No. of Shares	As at the Latest		Repurchase
Name of Shareholders	interested	Practicable Date		Mandate
Mr. Yeung Chi Hang	528,178,817	25.94%		28.82%
Mr. Chu Ying Man	135,000,000	6.63%		7.37%

On the basis that no further Shares are issued or repurchased prior to the AGM, in the event that the Directors exercise in full the Repurchase Mandate, the interests of the above Shareholders would be increased to such percentages of the issued share capital of the Company as set out in the fourth column of the above table and such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

In the event that the Repurchase Mandate is exercised in full, the number of Shares held by the public would not fall below 25%.

7. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

None of the Directors nor, to the best knowledge and belief of the Directors, having made all reasonable enquiries, any of their respective close associates has any present intention, in the event that the proposed Repurchase Mandate is granted, to sell Shares to the Company. No core connected person of the Company has notified the Company that he/she/it has a present intention to sell Shares to the Company nor has he/she/it undertaken not to sell any of the Shares held by him/her/it to the Company in the event that the Company is authorised to make repurchases of Shares.

– 12 –

APPENDIX II EXPLANATORY STATEMENT AS TO REPURCHASE MANDATE

8. SHARE REPURCHASE MADE BY THE COMPANY

No repurchase of Shares has been made by the Company (whether on the Stock Exchange or otherwise) during the six months ended on the Latest Practicable Date.

9. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous twelve months up to the Latest Practicable Date were as follows:

	Shares
	Highest	Lowest
	HK$	HK$
2020
October	0.071	0.060
November	0.070	0.060
December	0.064	0.053
2021
January	0.119	0.052
February	0.099	0.075
March	0.087	0.065
April	0.083	0.071
May	0.088	0.070
June	0.084	0.069
July	0.080	0.065
August	0.073	0.058
September	0.071	0.058
October (till the Latest Practicable Date)	0.076	0.057

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

CHINA ENVIRONMENTAL RESOURCES GROUP LIMITED 中國環境資源集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1130)

NOTICE IS HEREBY GIVEN that an annual general meeting of China Environmental Resources Group Limited (the ‘‘Company’’) will be held at Orchid Room, 2/F, The Royal Garden, 69 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong on Wednesday, 1 December 2021 at 11: 00 a.m. for the following purposes:

ORDINARY BUSINESS

ORDINARY RESOLUTIONS

1. To receive and adopt the audited consolidated financial statements for the year ended 30 June 2021 together with the report of the directors and the independent auditor’s report.

2. (a) To re-elect each of the retiring directors of the Company as follows by way of a separate resolution:

   • (i) Mr. Leung Kwong Choi

   • (ii) Mr. Wong Po Keung

   • (iii) Mr. Wong Kwai Sang

3. (b) To authorise the board of Directors (the ‘‘Board’’) to fix the directors’ remuneration for the year ending 30 June 2022.

4. To re-appoint ZHONGHUI ANDA CPA Limited as auditor of the Company and to authorise the Board to fix the remuneration of auditor of the Company.

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

SPECIAL BUSINESS

ORDINARY RESOLUTIONS

The following resolutions 4 to 6 will be proposed to be considered and, if thought fit, passing with or without amendments, as ordinary resolutions of the Company:

1. ‘‘THAT:

2. (a) subject to the provisions of paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares HK$0.02 each in the capital of the Company (‘‘Shares’’) and to make or grant offers, agreements and options which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

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

4. (c) the total number of shares allotted and issued or agreed conditionally or unconditionally to be allotted, issued (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares upon the exercise of rights of subscription or conversion under the terms of warrants of the Company or any securities which are convertible into shares; (iii) an issue of Shares as scrip dividends or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the articles of association of the Company from time to time; (iv) an issue of shares under any share option scheme or similar arrangement of the Company; or (v) an issue of shares under a specific mandate granted by the shareholders of the Company in general meeting, shall not exceed 20% of the total number of the issued shares of the Company at the date of passing of this resolution, provided that if any subsequent consolidation or subdivision of Shares is effected, the maximum number of Shares that may be allotted and issued under the mandate in paragraph (a) above as a percentage of the total number of issued Shares at the date immediately before and after such consolidation or subdivision shall be the same and such maximum number of shares shall be adjusted accordingly; and

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

• (d) for the purpose 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 applicable laws of the Cayman Islands or the Company’s articles of association to be held; or

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution in general meeting.

‘‘Rights Issue’’ means an offer of shares open for a period fixed by the directors of the Company to holders of shares of the Company whose names 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 exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restriction or obligations under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory applicable to the Company).’’

1. ‘‘THAT:

2. (a) subject to the provisions of paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase the Shares on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) or on any stock exchange on which the securities of the Company may be listed and recognised for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange under the Hong Kong Code on Share Repurchases, subject to and in accordance with all applicable laws and requirements of the Rules Governing the Listing of Securities on the Stock Exchange (the ‘‘Listing Rules’’) or listing rules of any other stock exchange as amended from time to time and the articles of association of the Company, be and is hereby generally and unconditionally approved;

3. (b) the total number of shares of the Company which the directors of the Company are authorised to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10% of the total number of issued shares of the Company as at the date of the passing of this resolution, provided that if any subsequent consolidation or subdivision of Shares is effected, the maximum number of Shares that may be allotted and issued under the mandate in paragraph (a) above as a percentage of the total

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

number of issued Shares at the date immediately before and after such consolidation or subdivision shall be the same and such maximum number of shares shall be adjusted accordingly; and

• (c) for the purpose 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 laws of the Cayman Islands or the Company’s articles of association to be held; or

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution in general meeting.’’

• ‘‘THAT subject to the passing of the resolution nos. 4 and 5 set out in the notice convening this meeting, the general mandate granted to the directors of the Company to allot, issue and deal with additional shares pursuant to resolution no. 4 set out in the notice convening this meeting be and is hereby extended by the addition thereto of a number representing the total number of shares of the Company repurchased by the Company under the authority granted pursuant to resolution no. 5 set out in the notice convening this meeting, provided that such number of shares so repurchased shall not exceed 10% of the total number of the issued shares of the Company as at the date of the said resolution.’’

Yours faithfully, By Order of the Board

China Environmental Resources Group Limited Yeung Chi Hang Chairman and Chief Executive Officer

Hong Kong, 21 October 2021

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint a proxy or, if such member is a holder of two or more shares, proxies to attend and vote in his stead. A proxy need not be a member of the Company but must attend the meeting in person to represent the appointing member.

2. To be valid, the form of proxy must be deposited with the Company’s Hong Kong branch share registrar and transfer office, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. Where there are joint holders of any share, any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at the meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

4. For the purpose of determining the entitlement of the Shareholders of the Company to attend and vote at the annual general meeting, the register of members of the Company will be closed from Wednesday, 24 November 2021 to Wednesday, 1 December 2021 (both days inclusive), during which period no transfer of share(s) will be effected. In order to be eligible to attend and vote at the annual general meeting, all transfers documents, accompanied by the relevant share certificates, must be lodged with Union Registrars Limited, the branch share registrar and transfer office of the Company in Hong Kong, at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong for registration not later than 4: 30 p.m. on Tuesday, 23 November 2021.

5. With regard to item no. 2(a) in this notice, the Board proposes Mr. Leung Kwong Choi, Mr. Wong Po Keung and Mr. Wong Kwai Sang, the retiring Directors, for re-election as Directors. Details of the retiring Directors are set out in Appendix I to the circular to shareholders of the Company dated 21 October 2021.

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APPENDIX III

NOTICE OF ANNUAL GENERAL MEETING

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

In accordance with health advice recommended by the Centre for Health Protection, for general meetings must be held, precautionary measures are being taken to prevent and control the spread of the novel coronavirus pneumonia (COVID-19) at the AGM, including:

• (i) mandatory body temperature screening at the entrance of the venue for each attendee. Any person with a body temperature over 37.5[o] C shall not be permitted to enter the venue;

• (ii) use of a surgical mask for each attendee;

• (iii) no distribution of corporate souvenirs/gifts or refreshments;

• (iv) appropriate distancing and spacing between seats; and

• (v) other governmental regulatory requirements.

Any attendee who does not comply with the precautionary measures or is subject to quarantine, with any flu-like symptoms, who has had close contact with any person under quarantine, or has travelled overseas within 21 days immediately before the AGM shall not be permitted to enter the venue. All shareholders are strongly encouraged to appoint the chairman of the meeting as their meeting proxy to vote on the relevant resolutions(s) at the AGM as an alternative to attending the AGM in person and contacting the Company for questions (if any) for management.

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