THIS DOCUMENT 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 your stockbroker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Dongjiang Environmental Company Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

==> picture [25 x 16] intentionally omitted <==

==> picture [37 x 50] intentionally omitted <==

==> picture [33 x 26] intentionally omitted <==

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 00895)

(1) PROPOSED ENTERING INTO OF LOAN EXTENSION AGREEMENT BETWEEN THE CONTROLLING SHAREHOLDER AND THE COMPANY AND RELATED TRANSACTIONS; (2) PROPOSED ADOPTION OF THE ESTIMATE ON ROUTINE RELATED TRANSACTIONS FOR 2021;

(3) FORMULATION OF THE “REMUNERATION AND ASSESSMENT SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT”;

(4) FORMULATION OF THE “PERFORMANCE APPRAISAL SCHEME

FOR THE CHAIRMAN AND SENIOR MANAGEMENT”;

(5) PROPOSED APPLICATION OF INTEGRATED BANK CREDIT FACILITIES FOR 2021; AND

(6) NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

Notices convening the first extraordinary general meeting of the Company in 2021 to be held at 11th Floor, Dongjiang Environmental Building, No. 9 Langshan Road, Nanshan District, Shenzhen, the People’s Republic of China (the “ PRC ”) at 3:00 p.m. on Tuesday, 23 March 2021 is set out on pages 41 to 42 of this circular.

Whether or not you intend to attend the first extraordinary general meeting in 2021, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company’s H share registrar, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H shares of the Company), as soon as possible, and please return the proxy form not less than 24 hours (i.e. 3:00 p.m. on Monday, 22 March 2021) before the time appointed for the holding of the first extraordinary general meeting in 2021 or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the first extraordinary general meeting in 2021 or any adjournment thereof (as the case may be) should you so wish.

8 March 2021

For identification purposes only

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I – Th e “Remuneration and Assessment Scheme for the Chairman and
Senior Management”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Appendix II – Th e “Performance Appraisal Scheme for the Chairman and
Senior Management”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Notice of the First Extraordinary General Meeting in 2021. . . . . . . . . . . . . . . . . . . . . . . . . .	41

– i –

DEFINITIONS

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

“Announcement” the Company’s overseas regulatory announcement dated 11 December 2020 in relation to the proposed entering into of loan extension agreement between Guangdong Rising Assets, a controlling shareholder, and the Company and Related Transactions

“A Share(s)” A share(s) in the share capital of the Company, with a par value of RMB1.00 each, which are subscribed for and traded in RMB on the Shenzhen Stock Exchange
“Articles of Association” the articles of association of the Company, as amended from time to time
“Board” the board of Directors “Company” or “Dongjiang 東江環保股份有限公司 (Dongjiang Environmental Company Environmental” Limited*), a joint stock limited company established in the PRC, the H Shares and A Shares of which are listed on the Stock Exchange and on the Shenzhen Stock Exchange, respectively
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“Director(s)” the director(s) of the Company “EGM” the first extraordinary general meeting of the Company in 2021 to be held at 11th Floor, Dongjiang Environmental Building, No. 9 Langshan Road, Nanshan District, Shenzhen, the PRC at 3:00 p.m. on Tuesday, 23 March 2021 or any adjournment thereof (as the case may be) for the Shareholders to consider, and, if thought fit, to approve, among other things, the proposed entering into of loan extension agreement between controlling shareholder and the Company and related transactions; the proposed adoption of estimate on Routine Related Transactions for 2021; formulation of the “Remuneration and Assessment Scheme for the Chairman and Senior Management”; formulation of the “Performance Appraisal Scheme for the Chairman and Senior Management”; and proposed application of integrated bank credit facilities for 2021
“Group” the Company and its subsidiaries
“Guangdong Rising Assets” Guangdong Rising Assets Management Co., Ltd.* ( 廣東省廣晟資產經營有限公司 ), a limited company established in the PRC, which is a substantial Shareholder of the Company as at the Latest Practicable Date
“H Share(s)” the overseas listed foreign share(s) in the share capital of the Company, with a par value of RMB1.00 each, which are subscribed for and traded in HK$ on the Stock Exchange

– 1 –

DEFINITIONS

“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Latest Practicable Date”	2 March 2021, being the latest practicable date prior to the printing of
	this circular for the purpose of ascertaining certain information contained
	herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“PRC” or “China”	the People’s Republic of China, which for the purpose of this circular
	only, excludes Hong Kong, the Macau Special Administrative Region of
	the People’s Republic of China and Taiwan
“Related Person(s),	has the meaning ascribed to it under the Shenzhen Listing Rules
Related Party(ies)”
“Related Transaction(s)”	the transaction between the Company and its controlling subsidiary and
	the Related Person(s), Related Party(ies) under the Shenzhen Listing
	Rules
“RMB”	Renminbi, the lawful currency of the PRC
“Routine Related	the estimated routine related transactions of the Group for the year
Transactions”	ending 31 December 2021 proposed to be approved at the EGM in
	accordance with the Shenzhen Listing Rules
“Share(s)”	the share(s) of the Company, unless specified otherwise, including A
	Shares and H Shares
“Shareholder(s)”	the holders of Share(s)
“Shenzhen Listing Rules”	the Rules Governing the Listing of Securities on the Shenzhen Stock
	Exchange
“Shenzhen Stock Exchange”	the Shenzhen Stock Exchange
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent

In this circular, the English names of the PRC entities are translations of their Chinese names, and are included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail.

– 2 –

LETTER FROM THE BOARD

==> picture [25 x 16] intentionally omitted <==

==> picture [37 x 49] intentionally omitted <==

==> picture [33 x 25] intentionally omitted <==

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 00895)

Executive Directors: Mr. Tan Kan (Chairman) Mr. Lin Peifeng

Non-executive Directors: Mr. Tang Yi Ms. Shan Xiaomin Mr. Jin Yongfu

Registered office: 1/F, 3/F North of 8/F, 9/F-12/F Dongjiang Environmental Building No. 9 Langshan Road North Zone of Hi-tech Industrial Park Nanshan District, Shenzhen the PRC

Independent non-executive Directors: Mr. Li Jinhui Mr. Siu Chi Hung Ms. Guo Suyi

Principal place of business in Hong Kong: 6th Floor, O.T.B. Building 259-265 Des Voeux Road Central Hong Kong

To the Shareholders

Dear Sir or Madam:

(1) PROPOSED ENTERING INTO OF LOAN EXTENSION AGREEMENT BETWEEN THE CONTROLLING SHAREHOLDER AND THE COMPANY AND RELATED TRANSACTIONS; (2) PROPOSED ADOPTION OF THE ESTIMATE ON ROUTINE RELATED TRANSACTIONS FOR 2021;

(3) FORMULATION OF THE “REMUNERATION AND ASSESSMENT SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT”;

(4) FORMULATION OF THE “PERFORMANCE APPRAISAL SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT”; (5) PROPOSED APPLICATION OF INTEGRATED BANK CREDIT FACILITIES FOR 2021; AND

(6) NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

INTRODUCTION

This circular aims at providing you with information regarding the proposed entering into of loan extension agreement between the controlling Shareholder and the Company and Related Transactions; the proposed adoption of estimate on Routine Related Transactions for 2021; formulation of the “Remuneration and Assessment Scheme for the Chairman and Senior Management”; formulation of the “Performance Appraisal Scheme for the Chairman and Senior Management”; and proposed application of integrated bank credit facilities for 2021.

For identification purposes only

– 3 –

LETTER FROM THE BOARD

1. Proposed entering into of loan extension agreement between the controlling Shareholder and the Company and Related Transactions

Reference is made to the overseas regulatory announcements of the Company dated 29 August 2019 in relation to loan agreement entered into by the Company and Guangdong Rising Assets, a controlling Shareholder. Guangdong Rising Assets provided the Company with a special environmental protection loan of no more than RMB432.14 million.

As at 11 December 2020, the Company has received such loan in full. As disclosed in the overseas regulatory announcement of the Company dated 11 December 2020 (“ Announcement ”), Guangdong Rising Assets shall inject capital into Shaoguan Dongjiang Environmental Renewable Resources Development Co., Ltd ( 韶關東江環保再生資源發展有限公司 ) by the way of setting off the loan of RMB60 million and related interest, and inject capital into Zhuhai Dongjiang Environmental Technology Co., Ltd ( 珠海巿東江環保科技有限公司 ) by way of setting off the loan of RMB67.19 million and related interest. After the above transaction was reviewed and approved by the Board and the completion of related procedures such as industrial and commercial changes, the remaining outstanding principal of the loan was RMB304.95 million. In order to further expand, strengthen and optimize the Company’s main environmental protection business, according to the actual needs of the Company and its subsidiaries for the construction and operation of environmental protection projects, the Company intends to sign a loan extension agreement with Guangdong Rising Assets. The loan amount is RMB304.95 million and the extension period is 6 months (from 20 December 2020 to 19 June 2021). The loan shall bear an interest of 10% lower than the loan benchmark interest rate promulgated by the People’s Bank of China for the corresponding period, and the Company is not required to provide any form of security such as guarantees, mortgages and pledges.

The main terms of the loan extension agreement are summarized as follows:

Parties (a) the Company; and (b) Guangdong Rising Assets Loan amount Guangdong Rising Assets will provide specific environmental protection loan with total amount of RMB304.95 million to the Company.

Term of loan 6 months (from 20 December 2020 to 19 June 2021) Purpose of loan The loan shall be specially used for the construction and working capital of environmental protection projects of the Company and its subsidiaries.

Loan interest The loan shall bear an interest of 10% lower than the loan benchmark interest rate promulgated by the People’s Bank of China for the corresponding period (daily interest rate shall be calculated based on 360 days in a year).

– 4 –

LETTER FROM THE BOARD

In case that the People’s Bank of China adjusts the loan interest rate during the performance of the loan extension agreement, Guangdong Rising Assets has the right to calculate the interest rate according to the adjusted loan interest rate and method.

Interest-bearing method

Interest on borrowed funds is calculated on a quarterly basis, and a one-off repayment of principal and interest is calculated based on the actual number of days occupied.

Guarantee

For the extension of loan, the Company is not required to provide any forms of security such as guarantees, mortgages and pledges.

Repayment method of the loan

The repayment method shall be negotiated by the parties according to the operation status and relevant requirements, including but not limited to debt-to-equity swaps in relation to the project companies that use the loan. If it is impossible to achieve the purpose of the loan as agreed due to objective reasons, upon negotiation and confirmation between the parties, the purpose may be changed or the corresponding amount shall be repaid at the request of Guangdong Rising Assets.

If the Company requests an extension of the loan, it shall submit a written application to Guangdong Rising Assets within 30 days before the maturity date of the loan and sign a loan extension agreement upon the consent of Guangdong Rising Assets. If the loan is not extended or the purpose of the loan is not realized as agreed and the relevant amount is not repaid, the overdue interest shall be calculated and charged at the rate of 0.05% per day from the overdue date based on the overdue principal and interest.

Pricing policy and pricing basis of the transaction

The Related Transaction is conducted after thorough negotiation between both parties based on the pricing principles of objectivity, equality and fairness. The loan shall bear interests at 10% lower than the loan benchmark interest rate promulgated by the People’s Bank of China for the corresponding period, and the Company is not required to provide any forms of security such as guarantees, mortgages and pledges. The interest payable by the Company is fair and reasonable. The terms of the extension of loan are fair and reasonable and on normal commercial terms, and the transaction was entered into in the ordinary and usual course of business of the Company and in the interest of the Company and its Shareholders as a whole, and does not prejudice the interest of the Company and its Shareholders.

– 5 –

LETTER FROM THE BOARD

I. Information of Related Party

Company name:

Guangdong Rising Assets Management Co., Ltd.

Type: Limited liability company Legal representative: Liu Weidong Registered address: Floor 50-58, The Pinnacle, No.17 Zhujiang West Road, Tianhe District, Guangzhou, Guangdong Province

Registered capital: RMB10 billion Date of establishment: 23 December 1999 Scope of business:

Asset management and operation, equity management and operation, investment operation, management and reinvestment of investment revenue; other businesses authorized by the State-Owned Assets Supervision and Administration Commission on provincial level; contracting overseas projects and international projects tendered in China; contracting the surveying, consultancy, design and supervision of aforementioned overseas projects; export of labour and personnel required for the aforementioned overseas projects; deployment of staff necessary for the aforementioned overseas projects; property leasing; development, sales and deep processing of rare earth mineral products (undertaken by branches with operation license).

For the year ended 2019, Guangdong Rising Assets recorded audited total assets of RMB128.127 billion, total liabilities of RMB80.993 billion, and net assets of RMB47.134 billion. From January to December 2019, the total audited operating income of Guangdong Rising Assets was RMB60.345 billion and the net profit was RMB2.930 billion.

As at 30 September 2020, Guangdong Rising Assets recorded unaudited total assets of RMB131.023 billion, total liabilities of RMB87.401 billion, and net assets of RMB43.622 billion. From January to September 2020, the total unaudited operating income of Guangdong Rising Assets was RMB50.703 billion and the net profit was RMB1.392 billion.

According to the relevant verification results, Guangdong Rising Assets is not a dishonest person subject to enforcement.

As of the date of the Announcement, Guangdong Rising Assets and its subsidiaries hold on aggregate 226,147,494 shares of the Company, accounting for 25.72% of the total share capital of the Company, and is the controlling shareholder of the Company. According to the relevant requirements of the Stock Listing Rules of the Shenzhen Stock Exchange, Guangdong Rising Assets is the related legal person of the Company, and the extension of loan agreement constitutes a Related Transaction.

– 6 –

LETTER FROM THE BOARD

II. Purpose of the transaction and effect on the Company

The special environmental protection loan meets the actual needs of the Company and its subsidiaries for the construction and operation of environmental protection projects, which is beneficial to the Company to improve financing efficiency, reduce capital costs, accelerate the construction of hazardous waste projects, and support Company in developing its main environmental business and business expansion and ensure the continuous and high quality development of the Company.

The Related Transaction reflects the controlling Shareholder’s support to the Company, and ensures the Company’s needs will be satisfied for its normal production and operation. The interest borne by the Company is fair and reasonable, and the Company is not required to provide any forms of security such as guarantees, mortgages and pledges; the legitimate interest of the Company’s Shareholders will not be prejudiced, in particular minority Shareholders. The implementation of the Related Transaction will not adversely affect the Company and will not affect the independence of the Company.

III. Total Amount of Related Transactions entered into with the Related Party from the beginning of 2020 to 11 December 2020

From the beginning of 2020 to 11 December 2020, the details of the total amount of Related Transactions entered into between the Company and Guangdong Rising Assets and its subsidiaries are as follows:

(i) Routine Related Transactions

				Actual amount
			Contractual value	realised as at
Type of		Content of	or estimated	the date of
Related Transactions	Related Party	Related Transactions	amount	the Announcement
			RMB0’000	RMB0’000
Sale of products or	Guangdong Rising Assets	Selling recycled products	300.00	0
goods to	and its subsidaries
Related Parties
	Shenzhen Zhongjin	Selling recycled products	2,000.00	223.92
	Lingnan Nonfemet Co.
	Limited*
Labor services rendered	Guangdong Rising Assets	Providing industrial waste	700.00	440.17
to Related Parties	and its subsidaries	treatment and technical
		consulting services
	Shenzhen Zhongjin	Providing industrial waste	300.00	32.98
	Lingnan Nonfemet	treatment services
	Co. Limited*

– 7 –

LETTER FROM THE BOARD

						Actual amount
					Contractual value	realised as at
Type of				Content of	or estimated	the date of
Related	Transactions	Related Party		Related Transactions	amount	the Announcement
					RMB0’000	RMB0’000
Labor services and		Guangdong Rising Assets		Receiving labor services	300.00	14.91
goods	purchased	and its subsidaries		and purchasing goods
or received from
Related Parties
		Guangzhou Huajian		Receiving engineering	300.00
		Engineering		service
		Construction Co., Ltd.*
		Guangdong Zhongnan		Receiving engineering	3,000.00	2,120.47
		Construction Co., Ltd.*		service
		Guangdong Zhongren		Receiving engineering	4,000.00	1,489.93
		Group Construction		service
		Limited*
		Guangdong Yixin Great		Receiving engineering	747.00	205.60
		Wall Construction Group		service
		Co., Ltd.*
Total		–		–	11,647.00	4,527.98
(ii)	Other Related Transactions
						Actual amount
						incurred as at
			Content of		Contractual	the date of
	Related Party		Related Transactions		value	the Announcement
					RMB0’000	RMB0’000
	Guangdong Rising Assets		Receiving financial assistance		11,000.00	11,000.00
	Guangdong Rising Finance Co., Ltd*		Financial services		24,000.00	8,162.70
					(Deposits)	(Deposits)
					100,000.00	20,000.00
					(credit line)	(Short-term
						loan balance)

(ii) Other Related Transactions

– 8 –

LETTER FROM THE BOARD

IV. Prior acknowledgement and independent opinions from independent Directors

Mr. Zhu Zhengfu, Mr. Qu Jiu Hui and Mr. Wong Hin Wing, the independent Directors of the sixth session of the Board of the Company, have provided prior acknowledgement to the Related Transaction and expressed their independent opinions as follows:

The specific environmental loan from Guangdong Rising Assets, which will be used to finance the construction and operation of environmental projects of the Company and its subsidiaries, may support the Company in developing its main business of hazardous waste disposal and other businesses, enhancing financing efficiency, reducing finance costs, accelerating the construction of hazardous waste projects and strengthening the market expansion, thereby ensuring continuous and high quality development of the Company. The interest borne by the Company is fair and reasonable, and the Company is not required to provide surety, collateral, pledge or any other form of guarantee. The terms of the loan are fair and reasonable and on normal commercial terms, and the transaction is entered into in the ordinary and usual course of business of the Company in accordance with the requirements of relevant rules, laws and regulations, and does not prejudice the legitimate interest of the Company’s Shareholders, in particular minority Shareholders. The implementation of the Related Transaction will not cause any adverse effect on the Company and will not affect the independence of the Company. The related Directors have abstained from voting on the resolution at the Board meeting according to relevant laws, and the decision-making procedures of the related transaction are in compliance with relevant requirements of the Company Law, the Shenzhen Listing Rules and the Articles of Association, etc.

This Related Transaction has been acknowledged by independent Directors before it was submitted to the Board for approval. The related Directors have abstained from voting on the proposal according to relevant laws, and the procedure is in compliance with relevant laws and regulations and the Articles of Association; and it does not prejudice the legitimate interest of the Company and minority Shareholders. As such, the independent Directors have acknowledged the proposal.

– 9 –

LETTER FROM THE BOARD

2. Proposed adoption of estimate on Routine Related Transactions for 2021

I. Basic information of the Routine Related Transactions

(i) Overview of the Related Transactions

In accordance with the needs in daily production and operation of 2021, the Company and its controlling subsidiaries expect to conduct Routine Related Transactions, such as purchase and sale of products as well as providing and receiving labor services, with Guangdong Rising Assets and its subsidiaries (hereinafter referred to as “ Guangdong Rising Assets ”), Jiangsu High Hope International Group Corporation (including its subsidiaries, hereinafter referred to as “ High Hope Group ”), Huizhou Dongjiang Veolia Environmental Service Co., Ltd. (hereinafter referred to as “ Dongjiang Veolia ”), and Guangdong Anjiatai Environmental Protection Technology Co., Ltd ( 廣東安佳泰環保科技有限公司 ) (hereinafter referred to as “ Anjiatai* ”), with the total amount expected not to exceed RMB358,000,000 (exclusive of tax).

On 3 February 2021, at the 3rd meeting of the seventh session of the Board of the Company, “Estimated Routine Related Transactions for Year 2021” considered and approved with 5 votes in favor, 0 votes against and 0 votes abstained. Mr. Tang Yi, Ms. Shan Xiaomin and Mr. Jin Yongfu, being Directors, abstained from voting on the proposal in their capacities as related Directors and all the other non-related Directors approved unanimously.

The estimated maximum amount of the 2021 Routine Related Transactions is RMB358,000,000 (exclusive of tax). According to the requirements of Shenzhen Listing Rules and the Articles of Association, the Routine Related Transactions are subject to consideration and approval at the general meeting of the Company.

– 10 –

LETTER FROM THE BOARD

(ii) Estimated Type and Amount of the Related Transactions in 2021

				Contractual
			Pricing principle	value or	Actual amount
Type of		Content of	of Related	estimated	as at 3 February	Actual amount
Related Transactions	Related Party	Related Transactions	Transactions	amount in 2021	2021	incurred in 2020
						(unaudited)
				RMB0’000	RMB0’000	RMB0’000
Sale of products or goods to	Guangdong Rising	Selling recycled		2,000.00	36.83	260.74
Related Parties	Assets	products
	Subtotal	–		2,000.00	36.83	260.74
Labor services rendered to	Guangdong Rising	Providing industrial		2,000.00	90.48	743.33
Related Parties	Assets	waste treatment and
		technical consulting
		services
	Dongjiang Veolia	Providing industrial		15,000.00	265.45	8,823.89
		waste treatment
		services
	Subtotal	–	Please refer to	17,000.00	355.93	9,567.22
			the section headed
Labor services and goods purchased	Guangdong Rising	Receiving labor services	“Pricing Principle	10,000.00	137.06	4,028.68
or received from Related Parties	Assets	and purchasing goods	and Transaction
	Dongjiang Veolia	Receiving industrial	Price of the Related	3,000.00	73.52	875.47
		waste treatment	Transactions”
		service
	Anjiatai	Receiving industrial		2,000.00	0.00	0.00
		waste treatment
		service
	High Hope Group	Rental, property		300.00	11.11	31.03
		management fee and
		renovation fee
	Subtotal	–		15,300.00	221.70	4,935.17
Other agreed transfer of	Dongjiang Veolia	Providing branding		1,500.00	45.03	828.78
resources or obligations		services
	Subtotal	–		1,500.00	45.03	828.78
Total	–	–		35,800.00	659.48	15,591.92

– 11 –

LETTER FROM THE BOARD

(iii) Actual Routine Related Transactions in the Previous Year

						Difference
					Percentage of	between
					actual amount	actual amount
		Content of	Actual	Estimated	to the same	and estimated	Date of disclosure
Type of Related Transactions	Related Party	Related Transactions	amount	amount	business	amount	and index
			(unaudited)
			RMB0’000	RMB0’000	(%)	(%)
Sale of products or goods to Related Parties	Guangdong Rising Assets	Selling recycled products	0.00	300.00	0.00%	-100%
	Shenzhen Zhongjin Lingnan	Selling recycled products	260.74	2,000.00	0.25%	-87%
	Nonfemet Co. Limited
	(深圳市中金嶺南有色金
	屬股份有限公司)
	Subtotal	–	260.74	2,300.00	0.25%	-89%
Labor services rendered to Related Parties	Guangdong Rising Assets	Providing industrial waste	696.19	700.00	0.44%	-1%
		treatment and technical
		consulting services
	Dongjiang Veolia	Providing industrial waste	8,823.89	15,000.00	5.56%	-41%
		treatment services
	Shenzhen Zhongjin Lingnan	Providing industrial waste	47.14	300.00	0.03%	-84%
	Nonfemet Co. Limited	treatment services
	(深圳市中金嶺南有色金
	屬股份有限公司)
							Please refer to
	Subtotal	–	9,567.22	16,000.00	6.03%	-40%	the Announcement on
							Estimated Routine
Labor services and goods received or	Guangdong Rising Assets	Receiving labor services	14.91	300.00	0.02%	-95%	Related Transactions
purchased from Related Parties		and purchasing goods					for the Year 2021
	Dongjiang Veolia	Receiving industrial waste	875.47	6000	0.89%	-85%	disclosed by the
		treatment services					Company at www.
	Guangzhou Huajian	Receiving engineering	0.00	300	0.00%	-100%	cninfo. com.cn
	Engineering Construction Co., Ltd. (廣州華建工程	service					on 6 February 2020 for details.
	建築有限公司)
	Guangdong Zhongnan	Receiving engineering	2,120.47	3000	2.16%	-29%
	Construction Co., Ltd.	service
	(廣東中南建設有限公司)
	Guangdong Zhongren Group	Receiving engineering	1,687.70	4000	1.72%	-58%
	Construction Limited (廣東	service
	中人集團建設有限公司)
	High Hope Group	Rental, property	31.03	100	0.03%	-69%
		management fee and
		renovation fee
	Subtotal	–	4,729.58	13,700.00	4.81%	-65%
Other agreed transfer of resources or	Dongjiang Veolia	Providing branding	828.78	1,500.00	20.40%	-45%
obligations		services
	Subtotal	–	828.78	1,500.00	20.40%	-45%
Total	–	–	15,386.32	33,500.00	–	-54%

– 12 –

LETTER FROM THE BOARD

Explanation of the Board of the Company on the substantial differences between the actual occurrence of Routine Related Transactions and the estimates
For the whole year of 2020, due to the changes in the industrial hazardous waste treatment market and the industry in which Related Parties operate, and business adjustments, etc., the amount of Related Transactions between the Company and Related Parties were different from those expected at the beginning of the year. The reason for the differences is mainly due to external factors. The difference compared to the estimates at the beginning of the year is normal and will not have a major impact on the Company’s daily operations and performance.
T h e C o m p a n y ’ s i n d e p e n d e n t Directors’ explanation on the substantial difference between the actual occurrence of Routine Related Transactions and the estimates
The actual total amount of the Company’s Related-Party transactions in 2020 is lower than the estimated amount, which was mainly due to external factors such as changes in the industrial hazardous waste treatment market, changes in the industries in which Related Parties operate, and business adjustments. The Company adjusted sales and handling arrangements in a timely manner according to market demand and its own conditions to meet the actual needs of the Company’s production and operation. The Routine Related Transactions of the Company strictly follow the transaction principle of “openness, fairness and justness”, and there is no prejudice to the interests of the Company and its Shareholders.

– 13 –

LETTER FROM THE BOARD

II. Information of Related Parties and the related relationship

(i) Basic information of Related Parties
Guangdong Rising Assets

Company name:

Guangdong Rising Assets Management Co., Ltd.

Registered address:

Floor 50-58, The Pinnacle, No.17 Zhujiang West Road, Tianhe District, Guangzhou, Guangdong Province

Registered capital: RMB10 billion

Scope of business:

Asset management and operation, equity m a n a g e m e n t a n d o p e r a t i o n , i n v e s t m e n t operation, management and reinvestment of investment revenue; other businesses authorized by the State-Owned Assets Supervision and Administration Commission on provincial level; contracting overseas projects and international projects tendered in China; contracting the surveying, consultancy, design and supervision of aforementioned overseas projects; export of labour and personnel required for the aforementioned overseas projects; deployment of staff necessary for the aforementioned overseas projects; property leasing; development, sales and deep processing of rare earth mineral products.

According to the relevant verification results, Guangdong Rising Assets is not a dishonest person subject to enforcement.

– 14 –

LETTER FROM THE BOARD

As it is expected that there will be many Related Parties involved in the Routine Related Transactions between the subsidiaries of Guangdong Rising Assets and the Company and its controlling subsidiaries, it is impracticable to disclose the information of all Related Parties; the information of Related Parties with estimated transaction amount of less than RMB3 million or 0.5% of the audit net assets of the Company for 2019 are presented under the heads of common controlling shareholders on a combined basis.

High Hope Group

Company name:

J i a n g s u H i g h H o p e I n t e r n a t i o n a l G r o u p Corporation

Registered address:

No. 91 Baixia Road, Nanjing

Registered capital: RMB2,242,433,192

Scope of business:

Self-operation of and acting as agent for the import and export of various types of commodities and technologies, domestic trade, domestic and foreign investment; research and development, manufacturing, warehousing of textile raw materials and finished products; research and development, installation, leasing of electronic devices, computer software and hardware, electronic products and network engineering design, installation, consultation and technical services; real estate development, residential property leasing, property management services, warehousing; wholesale of dangerous chemicals; wholesale of pre-packaged food products and bulk food products, milk products (including infant formula milk powder), sale of fuel oil, purchase and sale of grain.

For the year ended 2019, High Hope Group recorded audited total assets of RMB25.233 billion, total liabilities of RMB18.674 billion, and net assets of RMB6.559 billion. From January to December 2019, the total audited operating income of High Hope Group was RMB35.578 billion and the net profit was RMB499 million.

As at 30 September 2020, High Hope Group had unaudited total assets of RMB27.396 billion, total liabilities of RMB20.814 billion, and net assets of RMB6.581 billion. From January to September 2020, the total unaudited operating income of High Hope Group was RMB26.156 billion and the net profit was RMB231 million.

– 15 –

LETTER FROM THE BOARD

According to the relevant verification results, High Hope Group is not a dishonest person subject to enforcement.

As it is expected that there will be many Related Parties involved in the Routine Related Transactions between the subsidiaries of High Hope Group and the Company and its controlling subsidiaries, it is impracticable to disclose the information of all Related Parties, the information of Related Parties with estimated transaction amount of less than RMB3 million or 0.5% of the audit net assets of the Company for 2019 are presented under the heads of common controlling shareholders on a combined basis.

Dongjiang Veolia

Company name:

Huizhou Dongjiang Veolia Environmental Service Co., Ltd.

Registered address:

Shiwuliao Nankeng, Lianghua Town, Huidong County, Guangdong Province

Registered capital: RMB60 million Scope of business:

Investment and construction in Shiwuliao Nankeng, Lianghua Town, Huidong County, operation and management of dangerous waste safety landfill, dangerous waste incineration and treatment, waste battery recycling and treatment, and treatment and utilization of hyper-toxic chemical wastes. Development, design, construction and related services of industrial solid waste treatment and disposal projects; operation services of environmental pollution control facilities; environmental protection technology development, consultation, exchange, and management services; technical services for hazardous waste treatment and disposal.

Shareholding structure:

Dongjiang Environmental Company Limited (holding 50% of its equity interests), and Veolia Environmental Services (Hong Kong) Company limited (holding 50% of its equity interests)

– 16 –

LETTER FROM THE BOARD

The financial information provided by Dongjiang Veolia to the Company is as follows:

For the year ended 2019, Dongjiang Veolia recorded audited total assets of RMB431,544,300, total liabilities of RMB201,947,500, and net assets of RMB229,596,900. From January to December 2019, the total audited operating income of Dongjiang Veolia was RMB341,706,300 and the net profit was RMB15,730,700.

As at 30 September 2020, Dongjiang Veolia had unaudited total assets of RMB397,800,300, total liabilities of RMB177,293,300, and net assets of RMB222,506,900. From January to September 2020, the total unaudited operating income of Dongjiang Veolia was RMB209,255,200 and the net profit was RMB23,433,300.

According to the relevant verification results, Dongjiang Veolia is not a dishonest person subject to enforcement.

Anjiatai

Company name: Guangdong Anjiatai Environmental Protection Technology Co., Ltd

Registered address: Shiwuliao Nankeng, Lianghua Town, Huidong County, Guangdong Province

Registered capital: RMB175 million

Scope of business: I n v e s t m e n t , c o n s t r u c t i o n , o p e r a t i o n a n d management of hazardous waste, and collection, temporary storage, treatment and comprehensive utilization (incineration waste, physical and chemical waste, waste fluorescent tube) in Shiwuliao Nankeng, Lianghua Town, Huidong County.

Shareholding structure:

Huizhou Dongjiang Veolia Environmental Service Co., Ltd. (holding 70% of its equity interests), and Guangdong Donghuan Hazardous Waste Comprehensive Treatment Demonstration Center Co., Ltd. ( 廣東東寰危險廢物綜合處理示範中心有限公司 ) (holding 30% of its equity interests)

– 17 –

LETTER FROM THE BOARD

The financial information provided by Anjiatai to the Company is as follows:

For the year ended 2019, Anjiatai recorded audited total assets of RMB156,007,600, total liabilities of RMB1,925,100, and net assets of RMB154,782,500. In 2019, Anjiatai is in the project development period.

As at 30 September 2020, Anjiatai has unaudited total assets of RMB152,592,700, total liabilities of RMB1,357,500, and net assets of RMB151,235,300. From January to September 2020, From January to September 2020, Anjiatai is in the project development period.

According to the relevant verification results, Anjiatai is not a dishonest person subject to enforcement.

(ii) Related Relationship with the Company

As at the Latest Practicable Date, Guangdong Rising Assets, together with its subsidiaries, held a total of 226,147,494 shares of the Company, representing 25.72% of the total share capital of the Company, and is a controlling Shareholder of the Company. According to the Shenzhen Listing Rules, Guangdong Rising Assets and its subsidiaries are related legal persons of the Company.

As at the Latest Practicable Date, High Hope Group, together with its subsidiaries, held a total of 94,287,507 shares of the Company, representing 10.72% of the total share capital of the Company, and is the second largest Shareholder of the Company. According to the Shenzhen Listing Rules, High Hope Group and its subsidiaries are related legal persons of the Company.

Dongjiang Veolia is not consolidated into the financial statements of the Company, it is a commonly controlled entity of the Company. Mr. Wang Shi, a senior management officer of the Company assumes the office of director in Dongjiang Veolia. According to the Shenzhen Listing Rules and relevant requirements, Dongjiang Veolia is a related legal person of the Company.

Anjiatai is not consolidated into the financial statements of the Company, it is a commonly controlled entity of the Company. Mr. Wang Shi, a senior management officer of the Company assumes the office of director in Anjiatai. According to the Shenzhen Listing Rules and relevant requirements, Anjiatai is a related legal person of the Company.

(iii) Analysis on Performance Capacity

The aforesaid Related Parties have maintained sound performance of contractual duties, normal operation and stable financial condition, and currently, there is no possibility of forming bad debts in relation to the amount payable to the Company nor possibility of non-performance of contractual duties.

– 18 –

LETTER FROM THE BOARD

III. Pricing principle and transaction price of the Related Transactions

All the Related Transactions between the Group and the Related Parties were determined by both parties through negotiation based on the principle of fairness and reasonableness, on normal commercial terms, and with reference to the prevailing market price or cost plus a reasonable profit margin. There are no actions which prejudice the interests of the Company and its Shareholders.

The Group will enter into the relevant contracts with these Related Parties and carry out the transactions according to the actual conditions of the routine production and operation as well as the principle of openness, equality, fairness and justice.

IV. Purpose of the Related Transactions and their effect on the Company

(i) Purpose of the Related Transactions

The Routine Related Transactions between the Company together with its controlling subsidiaries and the Related Parties mainly include purchase and sales of the products and acceptance of the labour services. Such transactions may reduce the related selling expenses of the Company while enlarging the sales of the products of the Company, and effectively promote sustainable and stable development of the production and operation of the Company.

(ii) Effect on the Company

The Related Transactions between the Company together with its controlling subsidiaries and the Related Parties are within the ordinary operational businesses conducted by the Company together with its controlling subsidiaries in combination with the actual conditions of their routine production and operation based on the principle of openness, impartiality, fairness and justice without circumstances which prejudice the interests of the Company and its Shareholders. Neither would they have any negative effect on the current and future financial situations as well as operating results of the Company, nor affect the independence of the Company.

V. Verification opinions from independent Directors

Mr. Li Jinhui, Mr. Siu Chi Hung and Ms. Guo Suyi, the independent Directors of the seventh session of the Board of the Company, have provided prior acknowledgement to the estimate on Routine Related Transactions for the year 2021 and expressed their independent opinions as follows:

– 19 –

LETTER FROM THE BOARD

The Company’s estimated Routine Related Transactions for the year 2021 were based on the Company’s needs of the routine operation and in compliance with the Company’s requirements of the current and future business. The estimates of the Related Transactions were conducted fairly, voluntarily, equally and with consideration, and the transaction price was determined based on market price, which was a fair pricing without violating the principle of openness, equality and fairness. The estimated Routine Related Transactions for the year 2021 will not affect the independence of the Company or its ability to recover amount receivables, nor prejudice the interests of the Company as a whole and the legal interests of minority Shareholders. Such transactions are in line with the strategic planning for long-term development of the Company and benefit the sustainable and stable development of the Company.

While the Board of the Company was considering the resolution on the estimate on the Related Transactions for 2021, the related Directors, have abstained from voting, and its voting procedure and process complied with the relevant regulations under the laws and regulations and the Articles of Association without circumstances which prejudice the interests of the Company and its public Shareholders. This resolution has been approved by independent Directors before it was submitted to the Board.

3. Formulation of the Remuneration and Assessment Scheme for the Chairman and Senior Management

In order to further improve the standard of management of the Company, establish and perfect the incentive and restraint mechanism of the Company, fully mobilize the enthusiasm and creativity of chairman and senior management of the Company and create greater benefits for the Company and its Shareholders, the “Remuneration and Assessment Scheme for the Chairman and Senior Management” is formulated based on the industrial characteristics and actual situation of the Company in accordance with the principle of equivalence in responsibilities, rights and interests as well as in compliance with the relevant regulations under the Company Law, the Code of Corporate Governance for Listed Companies and the Articles of Association. For the “Remuneration and Assessment Scheme for the Chairman and Senior Management”, please refer to Appendix I.

4. Formulation of the Performance Appraisal Scheme for the Chairman and Senior Management

In order to strengthen the sense of responsibility and result orientation of the chairman and senior management, and ensure the effective implementation of performance appraisal, the “Performance Appraisal Scheme for the Chairman and Senior Management” is formulated. For the “Performance Appraisal Scheme for the Chairman and Senior Management”, please refer to Appendix II.

– 20 –

LETTER FROM THE BOARD

5. Proposed application of integrated bank credit facilities for 2021

Reference is made to the Company’s overseas regulatory announcement dated 25 February 2021 in relation to application of integrated bank credit facilities for 2021. The Board approved and resolved to propose to the Shareholders for considering, and if thought fit, approving the proposed application for integrated bank credit facilities in the amount of not exceeding RMB14.6 billion in 2021. Details of which are set out as follows:

In order to meet the capital needs of production and operation of the Company, the Company and its subsidiaries (including wholly-owned subsidiaries, controlling subsidiaries, and indirect subsidiaries) intend to apply for integrated bank credit facilities in the amount of not exceeding RMB14.6 billion in 2021. The credit facilities may include but are not limited to working capital loans, non-current capital loans, acceptance bills, factoring, letter of guarantee, letter of credit issuance, bill discounting and other credit services. The details of the proposed application for integrated bank credit facilities are as follows:

No.	Name of bank	Line of credit	Term
		RMB0’000
1	Industrial Bank Co., Ltd. Shenzhen	120,000.00	The particulars are
	High-tech Zone Sub-branch		subject to the
2	China Merchants Bank Co., Ltd. Shenzhen	100,000.00	credit agreement
	Branch
3	China CITIC Bank Co., Ltd. Shenzhen	30,000.00
	Branch
4	HSBC Bank (China) Co., Ltd. Shenzhen	50,000.00
	Branch
5	China Minsheng Banking Corporation	30,000.00
	Shenzhen Branch
6	Bank of China Limited Shenzhen High-tech	30,000.00
	Zone Sub-branch
7	Ping An Bank Co., Ltd. Shenzhen Branch	100,000.00
8	Bank of Beijing Co., Ltd. Shenzhen Branch	65,000.00
9	Postal Savings Bank of China Co., Ltd.	100,000.00
	Shenzhen Branch
10	Agricultural Bank of China Co., Ltd.	60,000.00
	Shenzhen Phoenix Sub-branch
11	Industrial and Commercial Bank of China	40,000.00
	Co., Ltd. Shenzhen High-tech Zone
	Sub-branch
12	Everbright Bank Co., Ltd. Shenzhen Branch	47,000.00
13	Bank of Communications Co., Ltd.	100,000.00
	Shenzhen Branch
14	China Guangfa Bank Co., Ltd. Shenzhen	60,000.00
	Branch
15	Bank of Ningbo Co., Ltd. Shenzhen Branch	30,000.00

– 21 –

LETTER FROM THE BOARD

No.	Name of bank	Line of credit
		RMB0’000
16	Bank of Jiangsu Co., Ltd. Shenzhen Branch	50,000.00
17	Bank of Shanghai Co., Ltd. Shenzhen	40,000.00
	Branch
18	The Export-Import Bank of China Shenzhen	65,000.00
	Branch
19	Agricultural Development Bank of China	120,000.00
	Shenzhen Branch
20	Industrial Bank Co., Ltd. Xiamen Branch	11,600.00
21	Xiamen Bank Co., Ltd.	10,000.00
22	Hubei Jiangling Rural Commercial Bank	1,000.00
	Co., Ltd.
23	Industrial and Commercial Bank of China	15,000.00
	Co., Ltd. Jiangling Branch
24	Jiangsu Rudong Rural Commercial Bank	10,000.00
	Co., Ltd. Guangrong Sub-branch
25	China Construction Bank Corporation	10,000.00
	Rudong Branch
26	Industrial Bank Co., Ltd. Nanping	20,000.00
	Sub-branch
27	Industrial and Commercial Bank of China	30,000.00
	Co., Ltd. Foshan Branch
28	Industrial and Commercial Bank of China	3,000.00
	Limited Shaoxing Branch
29	China Construction Bank Corporation	26,400.00
	Jieyang Branch
30	Industrial and Commercial Bank of China	30,000.00
	Limited Jieyang Branch
31	China Construction Bank Corporation	30,000.00
	Zhuhai Branch
32	Postal Savings Bank of China Co., Ltd.	26,000.00
	Mianyang Branch
	Total	1,460,000.00

The above-mentioned credit line is not the actual financing amount of the Company, and the specific financing amount will be determined according to the actual capital needs of production and operation of the Company. Within the above-mentioned credit line and validity period, the Company can increase the scope of credit banks or adjust the line of credit between banks according to operating conditions, and the credit line is a recurring facility. The specific financing amount, credit period and other relevant terms will depend on the actual needs of the Company, and the relevant agreement actually signed by banks and the Company shall prevail.

– 22 –

LETTER FROM THE BOARD

This proposal is subject to the consideration and approval of the Shareholders at the EGM. The credit line is valid from the date of approval at the EGM to the day when the comprehensive credit line is approved at the general meeting in 2022. It will be sought at the EGM that the chairman of the Board or its designated authorized agent be authorised to handle the above-mentioned credit line-related application matters and the signing of relevant legal documents.

THE EGM AND CLOSURE OF REGISTER OF MEMBERS OF H SHARES

Set out on pages 41 to 42 of this circular are the notices convening and holding the EGM at 11th Floor, Dongjiang Environmental Building, No. 9 Langshan Road, Nanshan District, Shenzhen, the PRC on 3:00 p.m. on Tuesday, 23 March 2021.

The register of members of H Shares is to be closed from Wednesday, 17 March 2021 to Tuesday, 23 March 2021 (both days inclusive), during which no transfer of H Shares will be registered for the identification of Shareholders qualified to attend and vote at the EGM. In order to be entitled to attend and vote at the EGM, share transfer documents accompanied by relevant H Share certificates should be lodged with the Company’s H Share registrar, Tricor Tengis Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable and in any event not later than 4:30 p.m. on Tuesday, 16 March 2021. Shareholders whose names appear on the register of members of the H Shares at 4:30 p.m. on Tuesday, 16 March 2021 are entitled to attend and vote at the EGM (for holders of H Shares).

The proxy form for the use in connection with the EGM is enclosed with this circular. You are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company’s H share registrar, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, (for holders of H shares of the Company) as soon as possible, and please return the proxy form not less than 24 hours (i.e. 3:00 p.m. on Monday, 22 March 2021) before the time appointed for the holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish.

LISTING RULES REQUIREMENTS

According to the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, resolutions put to vote at the EGM will be taken by way of poll.

– 23 –

LETTER FROM THE BOARD

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 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.

RECOMMENDATION

Having considered the reasons set out herein, the Directors consider that the above matters are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolutions to be proposed at the EGM.

By order of the Board Dongjiang Environmental Company Limited* Tan Kan Chairman

Shenzhen, the PRC, 8 March 2021

For identification purposes only

– 24 –

The “Remuneration and Assessment Scheme

Appendix I

for the Chairman and Senior Management”

DONGJIANG ENVIRONMENTAL COMPANY LIMITED REMUNERATION AND ASSESSMENT SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT

CHAPTER I GENERAL PROVISIONS

Article 1 In order to further enhance the standard of management, establish and improve incentive and restraint mechanism of Dongjiang Environmental Company Limited (hereinafter referred to as the “ Company ”), fully mobilize the initiative and creativity of the Chairman and senior management members of the company, and create greater benefits for the Company and its Shareholders, this Scheme is formulated on the basis of the actual situation of the Company and the industrial characteristics in accordance with the principle of equality in responsibilities, rights and interests as well as in compliance with the relevant regulations under the Company Law, the Code of Corporate Governance for Listed Companies and the Articles of Association.
Article 2 This Scheme is applicable to the Chairman and the senior management members (hereinafter referred to as the “ Senior Management ”) of the Company, and the Senior Management include president, vice presidents, person in charge of finance and other positions recognized as senior management members in the Articles of Association.

Article 3 The remuneration shall be determined based on the following principles:

(1) To adhere to the principle of distribution based on duties as well as responsibilities, rights and interests;
(2) To adopt market-oriented approach and take into account the industry characteristics and development condition of the Company;
(3) To align the remuneration standard with the Company’s operational benefits and objectives;
(4) To determine the remuneration in line with the Company’s long-term interests in order to strengthen incentives and constraints and promote the Company’s long-term and stable development.

– 25 –

The “Remuneration and Assessment Scheme for the Chairman and Senior Management”

Appendix I

CHAPTER II COMPOSITION OF REMUNERATION AND DETERMINATION OF APPRAISAL COEFFICIENT

Article 4 The remuneration consists of annual salary, incremental incentives, special contribution rewards, and tenure incentive income.
Article 5 Annual salary includes basic annual salary and performance-based annual salary.
Article 6 Basic annual salary represents fixed basic salary for a year which is generally reviewed once a year. The benchmark basic annual salary is determined based on four times of the average salary of employees of urban non-private entities in previous year in Shenzhen (if it is lower than the Guangzhou standard, the Guangzhou standard shall apply).
Article 7 The benchmark performance-based annual salary is determined by the Board of Directors based on the benchmark basic annual salary, the annual comprehensive appraisal coefficient of the Company, the performance adjustment coefficient and the net profit accomplishment ratio for annual appraisal of the Company.
(i) Formula: benchmark performance-based annual salary = benchmark basic annual salary x annual comprehensive appraisal coefficient of the Company x performance adjustment coefficient of the Company x net profit accomplishment ratio for annual appraisal
(ii) The annual comprehensive appraisal coefficient of the Company is determined based on appraisal scores corresponding to the level of accomplishment of annual appraisal targets and is capped at 2. Please refer to Table 1 for details.

Table 1: Table of Annual Comprehensive Appraisal Scores and the Corresponding Coefficients

Level of appraisal

Comprehensive Appraisal scores appraisal coefficient

Outstanding 90 (inclusive) or above 1.5 (inclusive) – 2 Good 80 (inclusive) – 90 1 (inclusive) – 1.5 Normal 60 (inclusive) – 80 0.5 (inclusive) – 1 Poor Below 60 0

– 26 –

The “Remuneration and Assessment Scheme for the Chairman and Senior Management”

Appendix I

(iii) The performance adjustment coefficient of the Company is determined mainly based on the net profit for annual appraisal by taking into account the adjustment of governmental policies, changes in industry and market conditions and other relevant factors, and is capped at 3. Please refer to Table 2 for details.

Table 2: Table of Net Profit for Annual Appraisal and the Corresponding Performance Adjustment Coefficients

Performance Net profit for annual appraisal (P) adjustment coefficients P ＜ 0 Decrease in loss 0.3 (inclusive) – 0.6 Increase in loss 0 (inclusive) – 0.3 0≤P ＜ RMB20 million 0.6 (inclusive) – 0.7 RMB20 million ≤P ＜ RMB40 million 0.7 (inclusive) – 0.8 RMB40 million ≤P ＜ RMB100 million 0.8 (inclusive) – 1 RMB100 million ≤P ＜ RMB200 million 1 (inclusive) – 1.2 RMB200 million ≤P ＜ RMB500 million 1.2 (inclusive) – 1.8 RMB500 million ≤P ＜ RMB800 million 1.8 (inclusive) – 2.4 P≥ RMB800 million 2.4 (inclusive) – 3

(iv) The Board of Directors will determine the target value and accomplished value of net profit for annual appraisal, and the net profit accomplishment ratio for appraisal = accomplished value/target value of net profit for appraisal, if the net profit accomplishment ratio for appraisal ≥1, 1 shall apply; if the net profit accomplishment ratio for appraisal ＜ 1, the actual ratio shall apply. Any adjustment due to special operating situation of the Company shall be submitted to the Board of Directors for consideration and approval.

Article 8 If the Company’s net profit exceeds the target for annual appraisal of the year, incremental incentives will be provided. The proposal and total amount of incremental incentives shall become effective after being considered and approved by the Board of Directors of the Company, and the distribution plan for the Chairman and the Senior Management shall be implemented after being reviewed by the Board of Directors.

Article 9 Special contribution rewards represent the rewards for outstanding results achieved or major contribution made in major project investment, capital operation, asset revitalization, turning loss into profit and assuming social responsibilities, which are granted by applying with the Board of Directors of the Company with a maximum amount of RMB1 million, and the distribution plan shall be implemented after being reviewed by the Board of Directors.

– 27 –

The “Remuneration and Assessment Scheme for the Chairman and Senior Management”

Appendix I

Article 10 Tenure incentive income represents the income related to the result of tenure appraisal. Tenure appraisal covers a term of three years. Tenure incentive income is determined based on the result of tenure appraisal and shall not exceed 10% of the total annual salary (basic annual salary and performance-based annual salary) during the term of office. In principle, tenure incentive will be granted only if the tenure performance is assessed as normal or above in the comprehensive appraisal. Tenure appraisal is conducted based on the results of comprehensive appraisal in each year during the tenure to assess the capital preservation and appreciation ratio, innovation capability, and abilities to solve historical problems and prevent and control major risks. Tenure appraisal plan is formulated separately and shall be implemented after being considered and approved by the Board of Directors of the Company.
Article 11 Social insurance and other benefits shall be provided in accordance with relevant national regulations and relevant management rules of the Company.
Article 12 All salaries and incentives are pre-tax income and do not include social insurance and provident fund payable by the Company for its employees according to relevant regulations. Individual income tax shall be withheld and paid by the Company on behalf of its employees according to relevant laws, and the Company shall not bear such individual income tax.
Article 13 Chairman and the Senior Management shall participate in the basic pension insurance and basis medical insurance according to relevant national regulations, and for corporate pension and supplementary medical insurance, the contribution ratio shall not exceed the standards set out in relevant national regulations.
Article 14 The Company may further improve the long-term incentive and restraint mechanism by implementing the equity incentive scheme and other methods.

CHAPTER III CALCULATION AND PAYMENT OF PERSONAL REMUNERATION

Article 15 The personal annual remuneration of the Chairman and the Senior Management shall be determined based on personal position-based distribution coefficient. The formula is: personal annual remuneration = (benchmark basic annual salary + benchmark performance-based annual salary) x personal position-based distribution coefficient

Article 16 Participants and personal position-based distribution coefficient shall be determined by the Board of Directors in a reasonable manner. In particular, the coefficient is 1 for the Chairman, 0.95 for the president and 0.6 to 0.9 for other Senior Management based on the value of their respective positions and the risks they assume.

Article 17 Actual personal annual remuneration is the realizable annual remuneration determined based on the actual annual results of the Company, the personal position-based distribution coefficient and the result of personal annual appraisal.

– 28 –

The “Remuneration and Assessment Scheme for the Chairman and Senior Management”

Appendix I

The result of personal annual appraisal is categorized into four grades, namely excellent (A), competent (B), basically competent (C) and incompetent (D). In particular, score of 90 (inclusive) or above is assessed as excellent (A), score of 80 (inclusive) to 90 is assessed as competent (B), score of 60 (inclusive) to 80 is assessed as basically competent, and score of below 60 is assessed as incompetent (D). If assessed as excellent or competent in the personal annual appraisal, the personal position-based distribution coefficient shall be determined according to the requirements of Article 16. If assessed as basically competent in the personal annual appraisal, the distribution coefficient shall not exceed 0.8 for the Chairman, 0.75 for the president and 0.6 for other Senior Management. If assessed as incompetent in the personal annual appraisal, no performance-based annual salary will be granted.
Article 18 Basic annual salary is payable on a monthly basis. In order to reflect the guiding function of comprehensive budget management for operation management and ensure balanced payment of remuneration, if the targets and tasks are accomplished as scheduled, the performance-based annual salary can be paid in advance on a monthly basis within 60% of the expected performance-based annual salary.
Article 19 Tenure incentive income shall be paid within two years after the tenure appraisal, and in principle, paid based on the ratio of 6:4 in each year.
Article 20 For termination of employment before expiry of tenure, the remuneration shall be calculated and paid based on the following principles. Basic annual salary is accrued until the date of departure. Performance-based and other variable compensations are accrued on a case-by-case basis: for resignation due to personal reasons, performance-based annual salary and tenure incentive for incomplete appraisal period will not be paid; if assessed as incompetent or subject to demotion or more serious penalty according to relevant rules, performance-based annual salary and tenure incentive for incomplete appraisal period will not be granted; for early dismissal before expiry of tenure through negotiation for non-personal reasons, performance-based annual salary and tenure incentive will be granted based on the actual length of service and level of accomplishment of performance targets.

CHAPTER IV DETERMINATION OF RESULTS OF PERSONAL PERFORMANCE APPRAISAL

Article 21 The Chairman and the Senior Management are subject to both annual performance appraisal and tenure performance appraisal. Depending on the positions, roles and duties, the appraisal indicators generally consist of company performance indicator, supervised business indicator, personal special work indicator and personal comprehensive appraisal indicator. The performance targets of the Chairman and the Senior Management shall be determined by the Board of Directors. In the event of material changes in external conditions such as business environment or in case of internal reassignment or adjustment to job content, the tenure and annual performance targets shall be adjusted in a timely manner.

– 29 –

The “Remuneration and Assessment Scheme

Appendix I

for the Chairman and Senior Management”

Article 22 Annual performance appraisal covers an accounting year as the appraisal period. At the end of tenure or a year, the Chairman and the Senior Management shall prepare a written report to describe their work performance, and the Board of Directors will conduct a comprehensive appraisal on the personal performance and level of accomplishment of the indicators based on job duties and personal annual performance target and responsibility statement. The tenure appraisal is made in conjunction with the annual appraisal in the third year of the tenure, and the Board of Directors will conduct a comprehensive appraisal based on the personal tenure performance responsibility statement as well as the results of annual appraisal. The specific implementation plan for appraisal will be formulated separately and submitted for approval in accordance with relevant procedures for implementation.

CHAPTER V REMUNERATION MANAGEMENT AND SUPERVISION

Article 23 For positions assumed concurrently in wholly-own, controlling and non-wholly-own subsidiaries or other external entities, the Chairman and the Senior Management shall not receive any salary, bonus, allowance and other compensation in any kind from such enterprises (entities).
Article 24 In the event of reaching the statutory retirement age and being eligible for pension according to relevant rules, the Chairman and the Senior Management shall not receive remuneration from the Company other than the performance-based annual salary, tenure incentive income, special contribution rewards, incremental incentive and midto long-term incentive accrued based on the actual length of service during the year.

CHAPTER VI RESTRAINT MECHANISM

Article 25 In the event that the Chairman and the Senior Management are subject to disciplinary or administrative sanctions for violation of disciplines and regulations, 10% to 100% of the performance-based annual salary and tenure incentive income for the year will be deducted based on the sanctions they are subject to, and the specific penalties will be implemented according to relevant regulations of the Company and higher authorities.

Article 26 No personal remuneration will be provided for the period of being released on bail, residential surveillance, criminal detention or arrest. In the event of being subject to criminal liability due to illegal or criminal acts, the performance-based annual salary for the year and all tenure incentive income for the tenure will be forfeited in full, and such person will be held accountable for corresponding liabilities according to relevant rules and regulations.

– 30 –

The “Remuneration and Assessment Scheme for the Chairman and Senior Management”

Appendix I

CHAPTER VII SUPPLEMENTARY PROVISIONS

Article 27 This Scheme shall become effective from 1 January 2020 after being considered by the Board of Directors and approved at the shareholders’ general meeting.
Article 28 The Remuneration and Appraisal Scheme for the Chairman and the Remuneration and Appraisal Scheme for the Senior Management of the Company shall lapse automatically from the effective date of this Scheme.

Dongjiang Environmental Company Limited 25 February 2021

– 31 –

The “Performance Appraisal Scheme

Appendix II

for the Chairman and Senior Management”

DONGJIANG ENVIRONMENTAL COMPANY LIMITED PERFORMANCE APPRAISAL SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT

This Scheme is formulated to strengthen the sense of responsibility and result-oriented mindset of the Chairman and the senior management members and ensure the effective implementation of performance assessment.

I. APPRAISAL SUBJECT

This Scheme is applicable to the Chairman and the senior management members (hereinafter referred to as the “ Senior Management ”) of the Company, and the Senior Management include president, vice presidents, person in charge of finance and other positions recognized as senior management members in the Articles of Association.

II. PERSONAL ANNUAL PERFORMANCE APPRAISAL

(i) Personal annual performance targets consist of company performance indicator, supervised business indicator, special task indicator and personal comprehensive appraisal indicator, and the structure and weight of such appraisal indicators are determined based on the positions and duties.

Personal annual performance targets of the Chairman and the president include company performance indicator (80% weighting) and personal comprehensive appraisal indicator (20% weighting).

Personal annual performance targets of the vice presidents, person in charge of finance and other positions recognized as senior management members in the Articles of Association include company performance indicator (50% weighting), supervised business indicator (20% weighting), special task indicator (10% weighting) and personal comprehensive appraisal indicator (20% weighting).

(ii) Assessment rules of annual appraisal indicators

1. Company performance indicator

The Board of Directors shall determine the annual appraisal indicator and conduct relevant appraisal and assessment mainly on the benefits, key tasks, Party construction work and leadership construction of the Company.

2. Supervised business indicator

Such indicator shall be determined based on the annual appraisal results of the department or business entity under the supervision of the Senior Management, and in case of multiple supervised departments or entities, the average score of performance appraisal of all supervised departments or entities shall apply.

– 32 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

3. Special task indicator

Based on the Company’s general annual plan for key tasks, one to three personal key tasks of the Senior Management will be selected for appraisal, which are rated by the Chairman and the president, in which the ratings by the Chairman and the president shall weigh 60% and 40%, respectively.

Rating standards: Formula shall be set based on the quantitative indicators for the special tasks (if any). The ratings shall be assessed as excellent for a score of 90 (inclusive) or above, good for a score of 80 (inclusive) to 90, basically accomplished (C) for a score of 60 (inclusive) to 80 and to be improved (D) for a score of below 60.

4. Personal comprehensive appraisal indicator

Items	Weight
Political quality	4%
Professional competence	4%
Work ethic	4%
Ability to perform duties	4%
Integrity and self-discipline	4%
Total	20%

The personal comprehensive appraisal for the Chairman shall be conducted by the president and deputy leaders of the Company, and the results shall be calculated based on the average rating given by the appraisers.

The personal comprehensive appraisal for the president and deputy leaders shall be conducted by the Chairman, the president, deputy leaders of the Company, heads of headquarter departments and heads of four departments and one institute, and the results shall be calculated on a weighted average basis with specific weighting as follows:

Item Appraiser Chairman President Deputy leaders of the Company Heads of headquarter departments and heads of four departments and one institute Total	Appraisee Description President Deputy leaders 50% 35% / 25% 30% 20% Self-appraisal permitted, calculated based on average score 20% 20% Calculated based on average score 100% 100%

– 33 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

(iii) Appraisal procedures

Annual performance appraisal covers an accounting year as the appraisal period. Personal annual performance target and responsibility statement shall be signed annually within one month after issuing the Company business performance target and responsibility statement.

At the end of the year, he Chairman and the Senior Management shall prepare a written report to describe their work performance, and such description shall mainly include level of accomplishment of designated tasks; implementation of key or special tasks; contribution to facilitating the overall works of the Company; and cooperation and collaboration with others. The Board of Directors will conduct a comprehensive appraisal on the personal performance and level of accomplishment of the indicators based on job duties and personal annual performance target and responsibility statement. For appointment of less that one year, the appraisal shall be conducted for actual length of service.

(iv) The result of personal annual performance appraisal is categorized into four grades, namely excellent (A), competent (B), basically competent (C) and incompetent (D). In particular, score of 90 (inclusive) or above is assessed as excellent (A), score of 80 (inclusive) to 90 is assessed as competent (B), score of 60 (inclusive) to 80 is assessed as basically competent, and score of below 60 is assessed as incompetent (D).

Personal appraisal grade is linked with the annual appraisal and assessment results of the Company. If the Company’s performance is assessed as general in the annual appraisal, the Chairman and the president shall not be assessed as excellent; if the Company’s performance is assessed as poor in the annual appraisal, the Chairman and the president shall not be assessed as competent or above, and the Senior Management shall not be assessed as excellent.

III. PERSONAL TENURE PERFORMANCE APPRAISAL

The Chairman and the Senior Management generally serve a term of three years, and shall sign the personal tenure performance target and responsibility statement upon their appointment. Tenure appraisal is conducted based on the results of comprehensive appraisal in each year during the tenure to assess the capital preservation and appreciation ratio, innovation capability, and abilities to solve historical problems and prevent and control major risks. The tenure appraisal is made in conjunction with the annual appraisal in the third year of the tenure, and the Board of Directors will conduct a comprehensive appraisal based on the personal tenure performance responsibility statement as well as the results of annual appraisal of the Company.

– 34 –

The “Performance Appraisal Scheme

Appendix II

for the Chairman and Senior Management”

This Scheme shall become effective from 1 January 2020 after being considered by the Board of Directors and approved at the shareholders’ general meeting.

Appendix 1: Table of Annual Performance Appraisal Indicators (for Chairman and President)

Appendix 2: Table of Annual Performance Appraisal Indicators (for Other Senior Management)

Appendix 3: Personal Tenure Performance Target and Responsibility Statement

Appendix 4: Personal Annual Performance Target and Responsibility Statement

Dongjiang Environmental Company Limited 25 February 2021

APPENDIX 1: TABLE OF ANNUAL PERFORMANCE APPRAISAL INDICATORS (FOR CHAIRMAN AND PRESIDENT)

No. Aspects Items

Calculation formular Weight or rating method (%)

1 Company performance Indicators mainly for the operating indicator benefits, key tasks, Party construction work and leadership construction of the Company
2 Personal comprehensive Political quality appraisal indicator Professional competence Work ethic Ability to perform duties Integrity and self-discipline
80% Implemented based on the annual performance appraisal plan of the Board of Directors
4% To be assessed as excellent 4% for a score of 90 4% (inclusive) or above, 4% good for a score of 80 4% (inclusive) to 90, basically accomplished (C) for a score of 60 (inclusive) to 80 and to be improved (D) for a score of below 60; calculated based on the weighted average score given by the appraisers.

Total

100%

– 35 –

The “Performance Appraisal Scheme

Appendix II

for the Chairman and Senior Management”

APPENDIX 2: TABLE OF ANNUAL PERFORMANCE APPRAISAL INDICATORS (FOR OTHER SENIOR MANAGEMENT)

Calculation formular Weight or rating method (%)

No. Aspects Items Weight or rating method (%)
1 Company performance Indicators mainly for the operating 50% Implemented based on the indicator benefits, key tasks, Party annual performance construction work and leadership appraisal plan of the Board construction of the Company of Directors
2 Supervised business Annual operation appraisal targets of 20% Average score of the indicator relevant entities/departments performance appraisal of supervised departments and entities
3 Special task indicator 1-3 special tasks 10% To be assessed as excellent for a score of 90 (inclusive) or above, good for a score of 80 (inclusive) to 90, basically accomplished (C) for a score of 60 (inclusive) to 80 and to be improved (D) for a score of below 60
4 Personal comprehensive Political quality 4% To be assessed as excellent appraisal indicator Professional competence 4% for a score of 90 Work ethic 4% (inclusive) or above, Ability to perform duties 4% good for a score of 80 Integrity and self-discipline 4% (inclusive) to 90, basically accomplished (C) for a score of 60 (inclusive) to 80 and to be improved (D) for a score of below 60; calculated based on the weighted average score given by the appraisers.
50% Implemented based on the annual performance appraisal plan of the Board of Directors

Total

100%

– 36 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

APPENDIX 3:

Personal Tenure Performance Target and Responsibility Statement

Party A: Dongjiang Environmental Company Limited

Party B:

ID number:

Based on the working target of Party A from to and the performance appraisal target set by the Board of Directors and in accordance with the principle of equality in responsibilities, rights and interests, both parties reach mutual agreement and hereby sign the tenure performance target and responsibility statement for the period from to .

I. Appraisal Period

From to

II. Appraisee

Appraisee: , currently serves as

III. Performance Target

Party A shall conduct tenure appraisal to assess the work performance of Party B, and the work performance target of Party B shall be determined by Party A and filed in accordance with the prescribed procedures.

The tenure work performance targets are:

1． ...

2． ...

． 3 ...

IV. In the event of material changes in policies, major natural disasters, asset liquidation, asset restructuring and other matters that cause material impact on the operation and management of the enterprise during the appraisal period, Party A may negotiate with Party B to adjust the content of Party B’s appraisal based on actual situation.
V. Party A shall organize to conduct personal tenure performance appraisal, report the appraisal results to the Board of Directors for approval, and implement rewards and punishments for Party B according to the final appraisal results returned by the Board of Directors and relevant plan issued by the Board of Directors.

– 37 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

VI. Party B shall report to Party A in a timely manner on material matters arising from the implementation of the responsibility statement, put efforts in preventing and controlling business operation risks, and ensure stable and sustainable development of the enterprise. Party B shall also strictly abide by relevant national and enterprise rules and regulations, perform relevant tasks according to relevant laws and regulations, standardize financial accounting, and ensure that all data related to the appraisal indicators are true and complete and give a true view of the operating results.
VII. Once signed, this responsibility statement shall be legally binding on both parties, and both parties shall comply with the statement which shall not be changed or cancel by any party without cause. If the appraisee is subject to force majeure or unforeseen changes in national laws and regulations, leading to inability to perform this responsibility letter, both parties may negotiate to change or cancel this statement.
VIII. Matters not covered in this responsibility statement shall be negotiated by both parties, and supplementary documents may be signed as annexes to this responsibility statement.
IX. This responsibility statement shall be executed in three counterparts, two for Party A and one for Party B.

Party A:

Party B (signature):

Person in charge (signature):

Date:

Signing location: Nanshan District, Shenzhen

– 38 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

APPENDIX 4:

Personal Annual Performance Target and Responsibility Statement

Party A: Dongjiang Environmental Company Limited

Party B:

ID number:

Based on the working target of Party A for the year of and the performance appraisal target for the year of set by the Board of Directors and in accordance with the principle of equality in responsibilities, rights and interests, both parties reach mutual agreement and hereby sign the annual performance target and responsibility statement for the year of .

I. Appraisal Period

From 1 January to 31 December

II. Appraisee

Appraisee: , currently serves as

III. Performance Target

Party A shall conduct annual appraisal to assess the work performance of Party B, and the work performance target of Party B shall be determined by Party A and filed in accordance with the prescribed procedures.

The tenure work performance targets are:

1．

2．

3．

IV. In the event of material changes in policies, major natural disasters, asset liquidation, asset restructuring and other matters that cause material impact on the operation and management of the enterprise during the appraisal period, Party A may negotiate with Party B to adjust the content of Party B’s appraisal based on actual situation.
V. Party A shall organize to conduct personal annual performance appraisal, report the appraisal results to the Board of Directors for approval, and implement rewards and punishments for Party B according to the final appraisal results returned by the Board of Directors, relevant plan issued by the Board of Directors and relevant regulations of Party A.

– 39 –

The “Performance Appraisal Scheme for the Chairman and Senior Management”

Appendix II

VI. Party B shall report to Party A in a timely manner on material matters arising from the implementation of the responsibility statement, put efforts in preventing and controlling business operation risks, and ensure stable and sustainable development of the enterprise. Party B shall also strictly abide by relevant national and enterprise rules and regulations, perform relevant tasks according to relevant laws and regulations, standardize financial accounting, and ensure that all data related to the appraisal indicators are true and complete and give a true view of the operating results.
VII. Once signed, this responsibility statement shall be legally binding on both parties, and both parties shall comply with the statement which shall not be changed or cancel by any party without cause. If the appraisee is subject to force majeure or unforeseen changes in national laws and regulations, leading to inability to perform this responsibility letter, both parties may negotiate to change or cancel this statement.
VIII. Matters not covered in this responsibility statement shall be negotiated by both parties, and supplementary documents may be signed as annexes to this responsibility statement.
IX. This responsibility statement shall be executed in three counterparts, two for Party A and one for Party B.

Party A:

Party B (signature):

Person in charge (signature):

Date:

Signing location: Nanshan District, Shenzhen

– 40 –

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

==> picture [25 x 16] intentionally omitted <==

==> picture [37 x 49] intentionally omitted <==

==> picture [33 x 25] intentionally omitted <==

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 00895)

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

NOTICE IS HEREBY GIVEN that the first extraordinary general meeting of Dongjiang Environmental Company Limited (the “ Company ”) in 2021 (the “ EGM ”) will be held at 11th Floor, Dongjiang Environmental Building, No. 9 Langshan Road, Nanshan District, Shenzhen, the People’s Republic of China (the “ PRC* ”) at 3:00 p.m. on Tuesday, 23 March 2021 for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTIONS

The resolution on the extension of loan provided by controlling shareholder to the Company and related transactions;
The resolution on the estimation of routine related transactions for 2021;
The resolution on the “Remuneration and Assessment Scheme for the Chairman and Senior Management”;
The resolution on the “Performance Appraisal Scheme for the Chairman and Senior Management”; and
The resolution on application of integrated bank credit facilities for 2021.

By order of the Board Dongjiang Environmental Company Limited* Tan Kan Chairman

Shenzhen, the PRC, 25 February 2021

For identification purpose only

– 41 –

NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

Notes:

The register of members of the Company will be closed from Wednesday, 17 March 2021 to Tuesday, 23 March 2021 (both days inclusive) during which no transfer of shares will be effected. For the identification of the shareholders of the Company (the “ Shareholders ”) who are qualified to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s H share registrar, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares) not later than 4:30 p.m. on Tuesday, 16 March 2021.
Holders of H shares whose names appear on the register of members of the Company at 4:30 p.m. on Tuesday, 16 March 2021 are entitled to attend and vote at the EGM.
Whether or not you are able to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s H share registrar, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong (for holders of H Shares) as soon as possible, but in any event, not less than 24 hours (i.e. 3:00 p.m. on Monday, 22 March 2021) before the time appointed for the holding of the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish.
A form of proxy for use at the EGM is enclosed herewith. In the case of a joint holding, the form of proxy may be signed by any one of the joint holders, but if more than one joint holder is present at the EGM, whether in person or by proxy, that one of the joint holders whose name stands first on the register of members in respect of the relevant joint holding shall alone be entitled to vote in respect thereof.
If the proxy form is signed by an authorised representative under a power of attorney or other authority, a notarially certified copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form.
Shareholders and their proxies should produce identity proof when attending the EGM.
The EGM is not expected to last for more than half a day. Shareholders shall be responsible for their own travelling and accommodation expenses for attending the EGM.

As at the date of this notice, the Board of Directors of the Company comprises two executive Directors, being Mr. Tan Kan and Mr. Lin Peifeng; three non-executive Directors, Mr. Tang Yi, Ms. Shan Xiaomin and Mr. Jin Yongfu and three independent non-executive Directors, being Mr. Li Jinhui, Mr. Siu Chi Hung and Ms. Guo Suyi.

– 42 –

AI assistant

Dongjiang Environmental Company Limited — Proxy Solicitation & Information Statement 2021

49545_rns_2021-03-08_ac3b44d4-00b6-4526-a49a-654af95b2588.pdf

DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司

(1) PROPOSED ENTERING INTO OF LOAN EXTENSION AGREEMENT BETWEEN THE CONTROLLING SHAREHOLDER AND THE COMPANY AND RELATED TRANSACTIONS; (2) PROPOSED ADOPTION OF THE ESTIMATE ON ROUTINE RELATED TRANSACTIONS FOR 2021;

(4) FORMULATION OF THE “PERFORMANCE APPRAISAL SCHEME

FOR THE CHAIRMAN AND SENIOR MANAGEMENT”;

(5) PROPOSED APPLICATION OF INTEGRATED BANK CREDIT FACILITIES FOR 2021; AND

(6) NOTICE OF THE FIRST EXTRAORDINARY GENERAL MEETING IN 2021

CONTENTS

DEFINITIONS

DEFINITIONS

DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司

INTRODUCTION

1. Proposed entering into of loan extension agreement between the controlling Shareholder and the Company and Related Transactions

LETTER FROM THE BOARD

I. Information of Related Party

II. Purpose of the transaction and effect on the Company

III. Total Amount of Related Transactions entered into with the Related Party from the beginning of 2020 to 11 December 2020

(i) Routine Related Transactions

IV. Prior acknowledgement and independent opinions from independent Directors

2. Proposed adoption of estimate on Routine Related Transactions for 2021

I. Basic information of the Routine Related Transactions

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

II. Information of Related Parties and the related relationship

LETTER FROM THE BOARD

LETTER FROM THE BOARD

(ii) Related Relationship with the Company

(iii) Analysis on Performance Capacity

III. Pricing principle and transaction price of the Related Transactions

IV. Purpose of the Related Transactions and their effect on the Company

(i) Purpose of the Related Transactions

(ii) Effect on the Company

V. Verification opinions from independent Directors

LETTER FROM THE BOARD

3. Formulation of the Remuneration and Assessment Scheme for the Chairman and Senior Management

4. Formulation of the Performance Appraisal Scheme for the Chairman and Senior Management

5. Proposed application of integrated bank credit facilities for 2021

LETTER FROM THE BOARD

THE EGM AND CLOSURE OF REGISTER OF MEMBERS OF H SHARES

LISTING RULES REQUIREMENTS

RESPONSIBILITY STATEMENT

RECOMMENDATION

DONGJIANG ENVIRONMENTAL COMPANY LIMITED REMUNERATION AND ASSESSMENT SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT

CHAPTER I GENERAL PROVISIONS

CHAPTER II COMPOSITION OF REMUNERATION AND DETERMINATION OF APPRAISAL COEFFICIENT

Table 1: Table of Annual Comprehensive Appraisal Scores and the Corresponding Coefficients

Level of appraisal

Comprehensive Appraisal scores appraisal coefficient

Table 2: Table of Net Profit for Annual Appraisal and the Corresponding Performance Adjustment Coefficients

CHAPTER IV DETERMINATION OF RESULTS OF PERSONAL PERFORMANCE APPRAISAL

CHAPTER V REMUNERATION MANAGEMENT AND SUPERVISION

CHAPTER VI RESTRAINT MECHANISM

CHAPTER VII SUPPLEMENTARY PROVISIONS

DONGJIANG ENVIRONMENTAL COMPANY LIMITED PERFORMANCE APPRAISAL SCHEME FOR THE CHAIRMAN AND SENIOR MANAGEMENT

I. APPRAISAL SUBJECT

II. PERSONAL ANNUAL PERFORMANCE APPRAISAL

(ii) Assessment rules of annual appraisal indicators

1. Company performance indicator

2. Supervised business indicator

3. Special task indicator

4. Personal comprehensive appraisal indicator

(iii) Appraisal procedures

III. PERSONAL TENURE PERFORMANCE APPRAISAL

for the Chairman and Senior Management”

APPENDIX 1: TABLE OF ANNUAL PERFORMANCE APPRAISAL INDICATORS (FOR CHAIRMAN AND PRESIDENT)

No. Aspects Items

APPENDIX 2: TABLE OF ANNUAL PERFORMANCE APPRAISAL INDICATORS (FOR OTHER SENIOR MANAGEMENT)

APPENDIX 3:

Personal Tenure Performance Target and Responsibility Statement

I. Appraisal Period

II. Appraisee

III. Performance Target

The tenure work performance targets are:

APPENDIX 4:

Personal Annual Performance Target and Responsibility Statement

I. Appraisal Period

III. Performance Target

Dongjiang Environmental Company Limited Proxy Solicitation & Information Statement 2021

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**

**DONGJIANG ENVIRONMENTAL COMPANY LIMITED[*] 東江環保股份有限公司**