China Water Industry Group Limited — Proxy Solicitation & Information Statement 2016

Apr 27, 2016

THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Water Industry 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, a licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in Cayman Islands with limited liability)

(Stock code: 1129)

(1) PROPOSED GRANT OF GENERAL MANDATES TO ISSUE SHARES AND TO BUY-BACK SHARES;

(2) PROPOSED REFRESHMENT OF THE SCHEME MANDATE LIMIT UNDER THE SHARE OPTION SCHEME;

(3) RE-ELECTION OF RETIRING DIRECTORS AND

(4) NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of China Water Industry Group Limited to be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 13 June 2016 at 9:30 a.m. is set out on pages 17 to 21 of this circular.

A letter from the Board is set out on pages 3 to 8 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 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, as soon as possible and in any event not later than 48 hours before the time appointed for holding the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the Annual General Meeting or any adjournment thereof should you so wish. If you attend and vote at the Annual General Meeting, the authority of your proxy will be revoked.

28 April 2016

• For identification purpose only

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
ISSUE MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
BUY-BACK MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
REFRESHMENT OF THE SCHEME MANDATE LIMIT . . . . . . . . . . . . . . . . . . .	5
RE-ELECTION OF RETIRING DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
THE ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
VOTING BY WAY OF POLL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
RESPONSIBILITY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX I – EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . .	9
APPENDIX II – PARTICULARS OF RETIRING DIRECTORS
PROPOSED TO BE RE-ELECTED
AT THE ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . .	13
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17

– i –

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

• “Annual General Meeting”

the annual general meeting of the Company to be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 13 June 2016 at 9:30 a.m. or any adjournment thereof

• “Articles of Association”

• the articles of association of the Company adopted from time to time

• “associates”

• has the meaning ascribed to it under the Listing Rules

• “Board”

• the board of Directors

• “Buy-back Mandate”

• a general and unconditional mandate proposed to be granted to the Directors to exercise the power of the Company to buy-back the Shares on the Stock Exchange with an aggregate number not exceeding 10% of the total number of issued Shares of the Company as at the date of passing the relevant resolution at the Annual General Meeting

• “Companies Law”

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

• “Company”

• China Water Industry Group Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Main Board of the Stock Exchange

• “connected person(s)”

• has the meaning ascribed to it under the Listing Rules

• “Director(s)”

• director(s) of the Company

• “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 PRC

– 1 –

DEFINITIONS

“Issue Mandate”

a general and unconditional mandate proposed to be granted to the Directors to exercise the power of the Company to allot, issue and deal with new Shares with an aggregate number not exceeding 20% of the total number of issued Shares of the Company as at the date of passing the relevant resolution at the Annual General Meeting

• “Latest Practicable Date” 22 April 2016, 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

• “Notice”

• the notice convening the Annual General Meeting which is set out on pages 17 to 21 of this circular

• “Options”

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

“PRC” means the People’s Republic of China, and for the purpose of this circular only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan

“SFO”

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

• “Share(s)”

• “Shareholder(s)”

share(s) of par value of HK$0.50 each in the share capital of the Company holder(s) of the Shares

“Share Option Scheme” the share option scheme adopted by the Company at the annual general meeting held on 3 June 2011 “Stock Exchange” The Stock Exchange of Hong Kong Limited

“Takeovers Code”

The Hong Kong Code on Takeovers and Mergers

“%”

per cent.

– 2 –

LETTER FROM THE BOARD

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(Incorporated in Cayman Islands with limited liability)

(Stock code: 1129)

Executive Directors:

Mr. Wang De Yin (Chairman and CEO) Mr. Liu Feng Mr. Lin Yue Hui Ms. Chu Yin Yin, Georgiana Ms. Deng Xiao Ting

Registered Office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent Non-executive Directors:

Mr. Guo Chao Tian Mr. Li Jian Jun Mr. Wong Siu Keung, Joe

Head office and principal place of

business in Hong Kong:

Room 1207, 12th Floor West Tower, Shun Tak Centre No. 168-200 Connaught Road Central, Hong Kong

28 April 2016

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED GRANT OF GENERAL MANDATES TO ISSUE SHARES AND TO BUY-BACK SHARES;

(2) PROPOSED REFRESHMENT OF THE SCHEME MANDATE LIMIT UNDER THE SHARE OPTION SCHEME; (3) RE-ELECTION OF RETIRING DIRECTORS AND

(4) NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the Annual General Meeting for (i) granting to the Directors of the Issue Mandate and the Buy-back Mandate; (ii) the refreshment of the Scheme Mandate Limit under the Share Option Scheme; and (iii) the re-election of the retiring Directors.

• For identification purpose only

– 3 –

LETTER FROM THE BOARD

ISSUE MANDATE

At the Annual General Meeting, an ordinary resolution will be proposed to grant to the Directors a general and unconditional mandate to exercise the power of the Company to allot, issue and deal with new Shares with an aggregate number not exceeding 20% of the total number of issued Shares of the Company as at the date of passing of the relevant resolution. As at the Latest Practicable Date, a total of 1,596,539,766 Shares were in issue. Subject to the passing of the proposed resolution granting the Issue Mandate to the Directors and on the basis that no Shares will be issued or bought-back by the Company between the Latest Practicable Date and the date of the Annual General Meeting, the Company will be allowed under the Issue Mandate to issue a maximum of 319,307,953 Shares, being 20% of the Shares in issue as at the Latest Practicable Date. The Directors have no present intention to exercise the general mandate to issue Shares and to buy-back Shares of the Company.

BUY-BACK MANDATE

At the Annual General Meeting, an ordinary resolution will be proposed to grant to the Directors a general and unconditional mandate to exercise all powers of the Company to buyback, on the Stock Exchange, Shares with an aggregate number value not exceeding 10% of the total number of issued Shares of the Company as at the date of passing of the relevant resolution.

Subject to passing of the proposed resolution granting the Buy-back Mandate, and on the basis that there were 1,596,539,766 fully paid up Shares as at the Latest Practicable Date and no Shares will be issued or bought-back by the Company from the Latest Practicable Date to the date of the Annual General Meeting, the Company will be allowed under the Buy-back Mandate to buy-back a maximum of 159,653,976 Shares. There is no present intention for any buy-back of Shares pursuant to the Buy-back Mandate.

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

– 4 –

LETTER FROM THE BOARD

REFRESHMENT OF THE SCHEME MANDATE LIMIT

The Share Option Scheme (“ Scheme ”) was adopted by the Company at the annual general meeting on 3 June 2011 (“ 2011 AGM ”). The scheme mandate limit for the Scheme allows the Company to issue a maximum of 41,033,176 Options under the Scheme (“ Scheme Mandate Limit ”). From the date of the Scheme being adopted up to the Latest Practicable Date, the Scheme Mandate Limit has not been refreshed, nor has any Option been granted. Accordingly, the total number of shares available for issue under the Scheme is 41,033,176, representing 10% of the Shares then in issue of the Company as at the date of the 2011 AGM. The purpose of the Scheme is to enable the Company to grant Options to selected participants as incentive and/or rewards for their contribution and support to the Group and/or to enable the Group to recruit and retain high-caliber employees and attract human resources that are valuable to the Group. The Scheme will remain in force for 10 years and expire on 2 June 2021.

After completion of the share consolidation (“ Share Consolidation ”) for every 10 issued and unissued Shares of par value of HK$1.00 each to one consolidated Share of par value of HK$1.00 each (“ Consolidated Shares ”) and the capital reduction pursuant to which the par value of each of the issued Consolidated Share was reduced from HK$1.00 to HK$0.50 each by cancelling paid-up capital to the extent of HK$0.50 per issued Consolidation Share, as disclosed in the circular of the Company on 2 September 2011, the total number of Shares in issue has been changed. The Company repurchased 1,792,000 Shares and cancelled them on 11 September 2015 (“ Share Repurchase ”). From the Share Repurchase until the Latest Practicable Date, the total number of Shares in issue is 1,596,539,766 at par value of HK$0.50 each.

As at the Latest Practicable Date, the issued share capital of the Company has been changed from 4,103,317,644 Shares to 1,596,539,766 Shares after the Share Consolidation and Share Repurchase.

If the refreshment of the Scheme Mandate Limit is approved by the Shareholders at the Annual General Meeting, based on 1,596,539,766 Shares in issue, at the Latest Practicable Date and assuming that no further Shares are issued by the Company from the Latest Practicable Date up to and including the date of the Annual General Meeting, the Company will be allowed to grant Options under the Scheme for subscription of up to a total of 159,653,976 Shares, representing 10% of the Shares in issue as at the date of the Annual General Meeting. As at the Latest Practicable Date, apart from the Scheme, the Company had no other share option scheme currently in force.

– 5 –

LETTER FROM THE BOARD

Pursuant to the terms of the Scheme and in compliance with Chapter 17 of the Listing Rules, the total number of Shares which may be allotted and issued upon exercise of all Options to be granted under the Scheme and any other schemes after the refreshment must not exceed 10 per cent. of the total issued share capital of the Company as at the date of the adoption of the Scheme, unless the Company obtains a fresh approval from Shareholders to refresh the 10 per cent. limit. Also, the maximum number of Shares which may be allotted and issued upon exercise of all outstanding share options granted and yet to be exercised under the Scheme and any other schemes must not exceed 30 per cent. of the issued share capital of the Company from time to time.

The Directors consider that the Company should refresh the Scheme Mandate Limit so that the Company could have more flexibility to provide incentives to the participants of the Scheme by way of granting Options and motivate the participants under the Scheme.

At the Annual General Meeting, an ordinary resolution will be proposed to the Shareholders to approve the proposed refreshment of the Scheme so as to allow the Company to grant Options under the Scheme for subscription of up to a total of 159,653,976 Shares, representing 10% of the Shares in issue at the date of the Annual General Meeting on the basis that no further Shares will be issued or repurchased by the Company prior to the date of the Annual General Meeting. The total number of Share issued and to be issued upon exercise of the Options granted to each participant (including exercised, cancelled and outstanding Options) under the Scheme in any 12-months period will not exceed 1% of the total number of Shares in issued. None of the Shareholders are required to abstain from voting at the Annual General Meeting pursuant to Rule 17.03(4) of the Listing Rules.

The refreshment of the Scheme is conditional upon:

• (a) the passing of an ordinary resolution to approve the refreshment of the Scheme Mandate Limit by the Shareholders at the Annual General Meeting; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, any new Shares which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the Options that may be granted under the refreshed Scheme Mandate Limit up to 10% of the Shares in issue as at the date of the relevant ordinary resolution at the Annual General Meeting.

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in any Shares to be issued upon exercise of the Options to be granted under the refreshed Scheme Mandate Limit.

– 6 –

LETTER FROM THE BOARD

RE-ELECTION OF RETIRING DIRECTORS

As at the Latest Practicable Date, the Board currently consists of eight Directors, namely Mr. Wang De Yin, Mr. Liu Feng, Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting, all being executive Directors, and Mr. Wong Siu Keung, Joe, Mr. Li Jian Jun and Mr. Guo Chao Tian, all being independent non-executive Directors.

According to Article 108(A) of the Articles, at each annual general meeting, one-third of the Directors for the time being (or if their number is not three or a multiple of three, then the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director shall be subject to retirement at least once every three years. A retiring Director shall be eligible for re-election. Accordingly, Mr. Liu Feng, Ms. Deng Xiao Ting and Mr. Wong Siu Keung, Joe will retire from office by rotation and they will offer themselves for re-election as executive Directors and independent non-executive Director at the Annual General Meeting.

Mr. Wong Siu Keung, Joe, being the independent non-executive Director, has made annual confirmation of independency pursuant to Rule 3.13 of the Listing Rules. The Company is of the view that Mr. Wong meets the independency guidelines set out in the Listing Rules.

Details of the Directors which are required to be disclosed under the Listing Rules are set out in Appendix II to this circular.

THE ANNUAL GENERAL MEETING

The Notice convening the Annual General Meeting to be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 13 June 2016 at 9:30 a.m. is set out on pages 17 to 21 of this circular.

A form of proxy for use at the Annual General Meeting is enclosed with this circular.

Whether or not you are able to attend the Annual General Meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon and deposit the same at the branch share registrar of the Company in Hong Kong, Union Registrars Limited at Suites 3301-04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. 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.

– 7 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors believe that the proposed grant of the Issue Mandate, the Buy-back Mandate, the refreshment of the Scheme Mandate Limit under the Share Option Scheme and the re-election of Directors named above are in the interests of the Company and the Shareholders as a whole.

Accordingly, the Directors recommend that Shareholders vote in favour of the ordinary resolutions for approving the grant of Issue Mandate, the Buy-back Mandate, the refreshment of the Scheme Mandate Limit under the Scheme and the re-election of Directors at the Annual General Meeting.

VOTING BY WAY OF POLL

Pursuant to Rule 13.39 of the Listing Rules, all votes of the Shareholders at general meetings must be taken by poll. The chairman of the Annual General Meeting will therefore demand a poll for every resolution put to the vote of the Annual General Meeting pursuant to Article 72 of the Articles.

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 Group. The Directors, having made all reasonable enquiries, confirm that to 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 circular misleading.

GENERAL

Your attention is drawn to the additional information as set out in the Appendices.

By order of the Board China Water Industry Group Limited Wang De Yin

Chairman and Chief Executive Officer

– 8 –

EXPLANATORY STATEMENT

APPENDIX I

This Appendix I serves as an explanatory statement, as required by the Listing Rules, to provide requisite information as to the proposed Buy-back Mandate.

1. LISTING RULES RELATING TO THE BUY-BACK OF SHARES

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

2. SHARE CAPITAL

As at the Latest Practicable Date, there were a total of 1,596,539,766 Shares in issue.

Subject to the passing of the proposed resolution granting the Buy-back Mandate and on the basis that no further Shares are issued or bought-back between the Latest Practicable Date and the date of the Annual General Meeting, the Company will be allowed under the Buy-back Mandate to buy-back a maximum of 159,653,976 Shares, which represents 10% of the entire issued share capital of the Company as at the date of passing the resolution.

3. REASONS FOR THE BUY-BACK

Although the Directors have no present intention of buying-back any Shares, the Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from the Shareholders to enable the Company to buy-back the Shares on the Stock Exchange or any other stock exchange on which the Shares may be listed. Share buy-backs may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such buy-back will benefit the Company and the Shareholders as a whole.

– 9 –

EXPLANATORY STATEMENT

APPENDIX I

4. FUNDING OF BUY-BACK

In buying-back the Company’s securities, the Company may only apply funds legally available for the purpose in accordance with the Articles of Association and the applicable laws of Hong Kong and the Cayman Islands. The Companies Law provides that a share buyback by the Company may only be made out of the profit of the Company, out of the share premium account or out of the proceeds of a fresh issue if shares made for the purpose of the buy-back or, if so authorised by the Articles of Association and subject to the provisions of the Companies Law, out of capital. Any premium payable on a buy-back over the par value of the Shares bought-back must be provided for out of profits of the Company and/or out of the Company’s share premium account or, if so authorised by the Articles of Association and subject to the provisions of the Companies Law, out of capital.

Taking into account the current working capital position of the Company, the Directors consider that, if the Buy-back Mandate was to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of the Company as reflected in the latest published audited financial statements of the Company. However, the Directors do not intend to make any buy-backs to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing position of the Company.

5. SHARE PRICES

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

– 10 –

EXPLANATORY STATEMENT

APPENDIX I

	Highest	Lowest
	(HK$)	(HK$)
May 2015	2.71	2.01
June 2015	2.70	2.10
July 2015	2.07	1.77
August 2015	1.89	1.34
September 2015	1.53	1.41
October 2015	1.65	1.56
November 2015	1.65	1.51
December 2015	1.63	1.25
January 2016	1.60	1.40
February 2016	1.43	1.31
March 2016	1.35	1.27
April 2016 (up to the Latest Practicable Date)	1.36	1.27

6. THE TAKEOVERS CODE AND MINIMUM PUBLIC HOLDING

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

Assuming that no further Shares will be allotted and issued or bought-back from the Latest Practicable Date to the date of Annual General Meeting, on exercise in full of the Buyback Mandate, the number of issued Shares will decrease from 1,596,539,766 to 1,436,885,789 of the total issued share capital of the Company.

The Company has no present intention to buy-back and the Directors will not exercise the Buy-back Mandate to such an extent that will result in the number of Shares in the hands of public falling below the prescribed minimum percentage of 25%.

7. SHARE BUY-BACK MADE BY THE COMPANY

The Company had not bought-back any of its Shares (whether on the Stock Exchange or otherwise) during the previous six months preceding the Latest Practicable Date.

– 11 –

EXPLANATORY STATEMENT

APPENDIX I

8. UNDERTAKING

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates has any present intention to sell any Shares to the Company if the Buy-back Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange that they will only exercise the power of the Company to make buy-backs pursuant to the Buy-back Mandate in accordance with the Articles of Association, the Listing Rules and the applicable laws of the Cayman Islands.

No connected person of the Company has notified the Company that he/she/it has any present intention to sell any Shares to the Company nor has any such connected person undertaken not to sell any Shares held by them to the Company in the event that the Buy-back Mandate is granted.

– 12 –

PARTICULARS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

APPENDIX II

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

EXECUTIVE DIRECTORS

Mr. Liu Feng (“Mr. Liu”)

Mr. Liu, aged 54, was appointed as an executive Director of the Company in August 2011. Mr. Liu graduated from Guangdong Provincial Party School majoring in Economics and subsequently attained postgraduate qualification. Before joining the Company, he had accumulated over 30 years of experience in the banking, finance and property sectors, including the posts of section chief and deputy governor of Foshan Commercial Bank and held directors and senior posts in various investment companies.

Mr. Liu is a director of Billion City Investments Limited, Onfar International Limited, China Ace Investment Limited, Nourish Gain Investments Limited, Yichun Water Industry Co., Ltd, China Water Industry (HK) Limited, Linyi Fenghuang Water Industry Co., Ltd, Shenzhen Haisheng Environmental Sci-Tech Company Limited, Shenzhen Shi Guang Company Limited, Shi Guang Limited, Shenzhen City Li Sai Industrial Development Limited, Happy Hour Limited, Mascot Industries Limited, Smart Giant Group Limited, Blue Mountain Hong Kong Group Limited, Swift Surplus Holdings Limited, Guangzhou Hyde Environmental Protection Technology Co., Ltd, Foshan City Gaoming Huaxin Sewage Treatment Company Limited, Bonus Raider Investments Limited, Bloom Profit Investment Limited, Neutral Crown Holdings Limited, Victory Strategy Investment Limited and South Top Investment Limited. All those companies are subsidiaries of the Company.

Save as disclosed above, Mr. Liu does not hold any other position with the Company and other members of the Company and did not hold any directorship in other public listed companies in the past three years.

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

As at the Latest Practicable Date, Mr. Liu is personally interested in 5,000,000 Shares of the Company (within the meaning of Part XV of the SFO).

– 13 –

PARTICULARS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

APPENDIX II

Mr. Liu has accepted a letter of appointment from the Company without entering into a service contract with the Company. Mr. Liu is subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the Articles of Association. Mr. Liu is entitled to a director’s fee of HK$47,692 per month, which is determined by the Board considering the recommendation of the remuneration committee, taking into account of Mr. Liu’s skill, knowledge and experience and will be reviewed by the Board regularly with reference to his duties and responsibilities with the Company.

Save as disclosed above, there is no information relating to Mr. Liu that is required to be disclosed under 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.

Ms. Deng Xiao Ting (“Ms. Deng”)

Ms. Deng, aged 42, was appointed as an executive Director of the Company on 19 July 2012. She has once served as a national civil servant at Huizhou Public Security Bureau. Ms. Deng graduated from Jinan University, majoring in Accounting and subsequently graduated from the Party School of the Central Committee of C.P.C. with a major in law. Ms. Deng has over 15 years’ experience on treasury and fund management.

Ms. Deng is a director of Swan (Huizhou) Investment Company Limited, a subsidiary of the Company.

Save as disclosed above, Ms. Deng does not hold any other position with the Company and other members of the Company and did not hold any directorship in other public listed companies in the past three years.

Ms. Deng is the sister of Mr. Deng Jun Jie who is the beneficial owner of Honghu Capital Co. Ltd. (“Honghu”). Honghu is the substantial Shareholder of the Company. Save as disclosed herein, Ms. Deng does not have any relationships with any directors, senior management or other substantial Shareholder or controlling Shareholders of the Company.

As at the Latest Practicable Date, Ms. Deng is personally interested in 3,000,000 Shares of the Company (within the meaning of Part XV of the SFO).

– 14 –

PARTICULARS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

APPENDIX II

Ms. Deng has accepted a letter of appointment from the Company without entering into a service contract with the Company. Ms. Deng is subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the Articles of Association. Ms. Deng is entitled to a director’s fee of HK$71,769 per month, which is determined by the Board considering the recommendation of the remuneration committee, taking into account of Ms. Deng’s skill, knowledge and experience and will be reviewed by the Board regularly with reference to her duties and responsibilities with the Company.

Save as disclosed above, there is no information relating to Ms. Deng that is required to be disclosed under 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.

INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. Wong Siu Keung, Joe (“Mr. Wong”)

Mr. Wong, aged 51, was appointed as an independent non-executive Director of the Company on 10 October 2012. He is currently an independent non-executive director of Interactive Entertainment China Cultural Technology Investments Limited which is listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (stock code: 8081).

Mr. Wong holds a Degree of Master of Arts in International Accounting from City University of Hong Kong and a Master Degree of Corporate Governance from The Hong Kong Polytechnic University. He is an associate member of Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants. Mr. Wong has an extensive experience in taxation, accounting, financing, audit field and public listed companies for many years.

Save as mentioned above, Mr. Wong does not hold any other position with the Company and other members of the Company and did not hold any directorship in other public listed companies in the past three years.

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

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PARTICULARS OF RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

APPENDIX II

As at the Latest Practicable Date, Mr. Wong does not have any interests in the Shares of the Company within the meaning of Part XV of the SFO.

Mr. Wong has accepted a letter of appointment from the Company without entering into a service contract with the Company. Mr. Wong is subject to retirement by rotation and re-election at annual general meeting of the Company in accordance with the Articles of Association. Mr. Wong is entitled to a director’s fee of HK$11,153 per month, which is determined by the Board considering the recommendation of the remuneration committee, taking into account of Mr. Wong’s skill, knowledge and experience and will be reviewed by the Board regularly with reference to his duties and responsibilities with the Company.

Save as disclosed above, there is no information relating to Mr. Wong that is required to be disclosed under 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.

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Cayman Islands with limited liability)

(Stock code: 1129)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of China Water Industry Group Limited (the “ Company ”) will be held at Boardroom 3-4, M/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 13 June 2016 at 9:30 a.m. to consider and, if thought fit, transact the following ordinary business:

ORDINARY BUSINESS

1. to receive and adopt the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors and the auditor of the Company for the year ended 31 December 2015;

2. to re-elect Mr. Liu Feng as an executive Director of the Company and to authorise the board of directors of the Company to fix his remuneration;

3. to re-elect Ms. Deng Xiao Ting as an executive Director of the Company and to authorise the board of directors of the Company to fix her remuneration;

4. to re-elect Mr. Wong Siu Keung, Joe, as an independent non-executive Director of the Company and to authorise the board of directors of the Company to fix his remuneration;

5. to authorize the board of directors of the Company to fix the remuneration of the Company’s directors; and

6. to re-appoint Crowe Horwath (HK) CPA Limited as the Company’s auditor to hold office until the conclusion of the next annual general meeting and authorise the board of directors of the Company to fix their remuneration;

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

1. “ THAT :

2. (a) subject to paragraph (c) below, pursuant to The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), the exercise by the directors of the Company during the Relevant Period (as defined in paragraph (d) below) of all the powers of the Company to allot, issue and deal with the additional shares in the capital of the Company and to make or grant offers, agreements or options, including warrants to subscribe for Shares, which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

3. For identification purpose only

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements or options which might require the exercise of the aforesaid powers after the expiry of the Relevant Period;

• (c) the aggregate number of Shares allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to options and otherwise) by the directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (defined below); or (ii) the exercise of any options granted under all share option schemes of the Company adopted from time to time in accordance with the Listing Rules; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company in force from time to time shall not exceed 20% of the total number of issued Shares of the Company as at the date of 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 date of the passing of this resolution until whichever is the earliest of:

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

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

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

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

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as defined in paragraph (c) below) of all the powers of the Company to buy-back its own shares subject to and in accordance with all other applicable laws, be and is hereby generally and unconditionally approved;

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

4. (c) for the purposes of this resolution, “Relevant Period” means the period from the date of the passing of this resolution until whichever is the earliest of:

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

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

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

5. “ THAT conditional upon resolutions no. 7 and 8 above being passed, the aggregate number of shares in the capital of the Company which are boughtback by the Company under the authority granted to the directors as mentioned in resolution no. 8 above shall be added to the total number of Shares that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to resolution no. 7 above.”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT subject to and conditional upon the Listing Committee of the Stock Exchange of Hong Kong Limited granting listing of, and permission to deal in, the shares of HK$0.50 each in the share capital of the Company (representing a maximum of 10% of the Shares in issue as at the date of the passing of this resolution) to be issued pursuant to the exercise of options which may be granted under the Company’s Share Option Scheme adopted by the Company on 3 June 2011, the refreshment of the Scheme Mandate Limit on grant of options under the Share Option Scheme of the Company be and is hereby approved provided that:

2. (a) the total number of Shares in respect of which options may be granted under the Share Option Scheme shall not exceed 10% of the total number of Shares in issue as at the date of passing this resolution (the “ Refreshed Scheme Mandate Limit ”);

3. (b) options previously granted under the Share Option Scheme (including those outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme) will not be counted for the purpose of calculating the Refreshed Scheme Mandate Limit;

4. (c) such refreshment of the Scheme Mandate Limit shall in no event result in the 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 schemes of the Company exceed 30% of the Shares in issued from time to time; and

5. (d) any director of the Company be and is hereby authorised, subject to compliance with the Listing Rules, to grant options under the Scheme up to the Refreshed Scheme Mandate Limit and to exercise all the powers of the Company to allot, issue and deal with the Shares of the Company pursuant to the exercise of such options and to do such act and execute such document to effect the Refreshed Scheme Mandate Limit”.

By order of the Board

China Water Industry Group Limited Wang De Yin

Chairman and Chief Executive Officer

Hong Kong, 28 April 2016

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NOTICE OF ANNUAL GENERAL MEETING

Registered office:

Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong:

Room 1207, 12th Floor

West Tower, Shun Tak Centre No. 168-200 Connaught Road Central

Hong Kong

Notes:

1. Any member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and, on a poll, vote in his stead. A member holding two or more Shares may appoint more than one proxy. A proxy need not be a member of the Company.

2. In order to be valid, a form of proxy together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited at the offices of 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 at least 48 hours before the time for holding the above meeting.

3. In the case of joint holders of a Share, any one of such persons may vote at the meeting either in person or by proxy, in respect of such Share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at any 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 of the Company in respect of the joint holding.

4. Delivery of an instrument appointing a proxy shall not preclude a shareholder from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

5. As at the date of this notice, the Board comprises Mr. Wang De Yin, Mr. Liu Feng, Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting, all being executive Directors, and Mr. Wong Siu Keung, Joe, Mr. Li Jian Jun and Mr. Guo Chao Tian, all being independent non-executive Directors.

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