ELL Environmental Holdings Limited — Proxy Solicitation & Information Statement 2021

Nov 10, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Sinotrans Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

2021 SECOND EXTRAORDINARY GENERAL MEETING (I) THE EXTENSION OF COMMITMENT PERIOD BY THE CONTROLLING SHAREHOLDER IN RELATION TO AVOIDING HORIZONTAL COMPETITION; AND (II) PROPOSED APPOINTMENT OF SUPERVISOR

A letter from the Board is set out on pages 3 to 9 of this circular.

A notice convening the EGM to be held at 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No. 5 Anding Road, Chaoyang District, Beijing 100029, the PRC at 2 p.m. on 30 November 2021, a notice of attendance and a form of proxy for use at the EGM are available on the website of the Company and the website of the Hong Kong Stock Exchange.

Shareholders who intend to attend the EGM shall complete and return the notice of attendance in accordance with the instruction printed thereon on or before 26 November 2021. Shareholders who intend to appoint a proxy to attend the EGM shall complete and return the enclosed form of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding 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 of it, if you so wish.

11 November 2021

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
NOTICE OF THE 2021 SECOND EXTRAORDINARY GENERAL MEETING . . . . .		10

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DEFINITIONS

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

“A Share(s)” the domestic share(s) of the Company with nominal value of RMB1.00 each, which are listed on the SSE and traded in RMB “Board” the board of Directors of the Company “China Merchants” 招商局集團有限公司 (China Merchants Group Limited), the ultimate controlling shareholder of the Company, a wholly stateowned enterprise established under the laws of the PRC under direct control of the State-owned Assets Supervision and Administration Commission of the State Council of the PRC “Company” 中國外運股份有限公司 (Sinotrans Limited), a joint stock limited company incorporated in the PRC with limited liability, whose H Shares are listed on the Hong Kong Stock Exchange and whose A Shares are listed on the SSE “Director(s)” the director(s) of the Company “EGM” the 2021 second extraordinary general meeting of the Company to be held at 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No. 5 Anding Road, Chaoyang District, Beijing 100029, the People’s Republic of China at 2 p.m. on 30 November 2021 “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited

• “H Share(s)” overseas listed foreign invested share(s) of RMB1.00 each in the share capital of the Company, which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars

“Latest Practicable Date” 5 November 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“PRC” the People’s Republic of China, for the purpose of this circular, excluding Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan “RMB” Renminbi, the lawful currency of the PRC

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DEFINITIONS

“Sinotrans & CSC” or “Controlling 中國外運長航集團有限公司 (Sinotrans & CSC Holdings Co., Shareholder” Ltd.), a wholly state-owned enterprise established under the laws of the PRC, a wholly owned subsidiary of China Merchants, the controlling Shareholder of the Company which holds approximately 36.01% of the issued Share capital of the Company “Sinotrans & CSC Group” the Sinotrans & CSC and its subsidiaries “Share(s)” H Share(s) and A Share(s) “Shareholder(s)” holder(s) of the Shares “SSE” The Shanghai Stock Exchange “Supervisor(s)” the supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company

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LETTER FROM THE BOARD

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

Chairman: Wang Hong Vice Chairman: Song Dexing Executive Director: Song Rong

Non-executive Directors: Liu Weiwu Deng Weidong Jiang Jian Jerry Hsu Independent non-executive Directors: Wang Taiwen Meng Yan Song Haiqing Li Qian

Registered Office: Sinotrans Plaza A A43, Xizhimen Beidajie Haidian District Beijing, 100082 People’s Republic of China

Headquarters: Building 10/Sinotrans Tower B, No. 5 Anding Road Chaoyang District Beijing, 100029 People’s Republic of China

Principal Place of Business in Hong Kong: Units F & G, 20/F, MG Tower, 133 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong

11 November 2021

To the Shareholders

Dear Sir/Madam,

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LETTER FROM THE BOARD

2021 SECOND EXTRAORDINARY GENERAL MEETING

(I) THE EXTENSION OF COMMITMENT PERIOD BY THE CONTROLLING SHAREHOLDER IN RELATION TO AVOIDING HORIZONTAL COMPETITION; AND (II) PROPOSED APPOINTMENT OF SUPERVISOR

I. INTRODUCTION

The purpose of this circular is to provide Shareholders with all the information reasonably necessary so as to make an informed decision on voting in respect of the resolutions in relation to (i) the extension of the commitment period by the Controlling Shareholder of the Company in relation to avoiding horizontal competition (the “ Extension of Commitment Period ”), and (ii) the proposed appointment of Mr. Kou Suiqi (“ Mr. Kou ”) as a Supervisor of the Company to be proposed at the EGM.

II. THE EXTENSION OF COMMITMENT PERIOD

The Company received a supplementary letter of commitment on further avoiding horizontal competition from the Controlling Shareholder (the “ Supplemental Commitment Letter ”) recently. On 27 October 2021, the fourth meeting of the third session of the Board and the sixth meeting in 2021 of the Supervisory Committee approved the resolution in relation to the Extension of Commitment Period.

1. Background of the Commitment Letter

When the Company undertook the absorption and merger of Sinotrans Air Transportation Development Co., Ltd. through share swap to apply for the listing of the A shares on the SSE, except for the Company and its subsidiaries, certain subsidiaries of Sinotrans & CSC (the “ Excluded Companies ”) also engaged in integrated logistics business, which caused a certain degree of horizontal competition. Therefore, Sinotrans & CSC issued a commitment letter to the Company on 13 April 2018 (the “ Commitment Letter ”) to undertake that:

• (1) According to the development plan of Sinotrans & CSC Group, Sinotrans & CSC shall regard the Company as the unified integrated platform to operate and develop the integrated logistics business (the “ Principal Business ”), and Sinotrans & CSC shall adopt effective measures to avoid horizontal competition; and

• (2) As of the date of the Commitment Letter, due to some defects in asset ownership, entity qualifications, profitability, etc., the Excluded Companies did not meet the requirements to be injected into the Company. Sinotrans & CSC and the Company have entered into an entrusted management agreement, according to which Sinotrans & CSC entrusted all the Excluded Companies to the Company for management, so as to ensure that there is no competition in substance between Sinotrans & CSC and the Company and its subsidiaries.

On the basis of performance of the aforementioned entrusted management arrangement, Sinotrans & CSC further undertook that within three years from the effective date of the Commitment Letter (i.e. 18 January 2019), Sinotrans & CSC shall take the following measures to gradually realize

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LETTER FROM THE BOARD

the Excluded Companies to exit from the operation of the Principal Business according to the actual conditions, and thoroughly resolve the competition in substance between Sinotrans & CSC and the Company and its subsidiaries:

• (1) Sinotrans & CSC shall ensure that the Excluded Companies maintain or gradually reduce their existing business scale and operating area of the Principal Business;

• (2) Sinotrans & CSC is willing to gradually transfer the assets, personnel and business related to the integrated logistics business of the Excluded Companies to the Company or its subsidiaries through methods such as equity transfer, asset reorganization and divestment;

• (3) Sinotrans & CSC would gradually eliminate the Excluded Companies that have substantial obstacles to be transferred in the aforementioned methods through liquidation, cancellation, transfer to unrelated third parties, etc.;

• (4) Before the expiration of the Commitment Letter, Sinotrans & CSC would continue to entrust the Excluded Companies to the Company for management.

……

2. The Performance of the Commitment Letter and the Reasons for the Extension of Commitment Period

Since Sinotrans & CSC issued the Commitment Letter, except for thoroughly resolving the competition in substance with the Company and its subsidiaries, other undertakings have been continuously effective and strictly fulfilled. During the period, Sinotrans & CSC continued to entrust the Company to manage the Excluded Companies, and, in accordance with the requirements of the Commitment Letter, Sinotrans & CSC has gradually adopted methods such as asset leasing, exit from the Principal Business, liquidation, cancellation, etc., to regulate the entities that have competition in substance with the Company and its subsidiaries, realizing the business integration of 68 entrusted companies, and the liquidation, cancellation or equity transfer of 75 entrusted companies.

Although the above work has made effective progress, due to the large number of subsidiaries involved in the Principal Business, the long period required for the transfer of business and personnel and for the approval process for equity transfer, and other historical issues that need to be further resolved, etc., it is expected that there will be no more than 10 subsidiaries of Sinotrans & CSC being unable to thoroughly resolve the horizontal competition in substance before the expiration of the Commitment Letter. The business locations of the aforementioned companies are not in the core business area of the Company, and the logistics business operation scale is small. In 2020, the revenue and profit relating to logistics business generated by such companies were approximately RMB215.43 million and RMB7.39 million, respectively, merely approximately 0.25% and 0.21% of total operating revenue and total profit of the Company, respectively, in the corresponding period. In the first half of 2021, the revenue and profit relating to logistics business generated by such companies were approximately RMB57.34 million and RMB6.68 million, respectively, merely approximately 0.09% and 0.25% of total operating revenue and total profit of the Company, respectively, in the same period.

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LETTER FROM THE BOARD

3. The Extension of Commitment Period and the Content of the Supplemental Commitment Letter

Due to the aforementioned reasons, Sinotrans & CSC issued the Supplemental Commitment Letter, and asked for extending the commitment period in relation to thoroughly resolving the horizontal competition in substance for another three years and has undertaken that Sinotrans & CSC will continue to reduce the scale and area of the Principal Business of those entities that have horizontal competition with the Company and its subsidiaries in substance, and through ways of transfer of equity, asset restructure, asset divestment and optimizing the entrusted management model, Sinotrans & CSC shall thoroughly resolve the horizontal competition in substance with the Company and its subsidiaries before 17 January 2025.

4. The Influence of the Extension of Commitment Period on the Company

Sinotrans & CSC has comprehensively considered the above factors and asked for the Extension of the Commitment Period, which is in line with the current actual situation, is constructive to further resolving the horizontal competition issue and avoiding the horizontal competition in substance and there is no situation that harms the interests of the Company and all Shareholders, especially minority Shareholders. At the same time, the Company will continue to maintain regular communication with Sinotrans & CSC to monitor the performance of the Supplemental Commitment Letter and disclose in its regular reports in accordance with the requirements of relevant laws and regulations.

5. The Review of the Extension of Commitment Period

On 27 October 2021, the Company held the fourth meeting of the third session of the Board to review and approve the resolution in relation to the Extension of the Commitment Period. Related Directors Mr. Song Dexing, Mr. Liu Weiwu and Mr. Jiang Jian (all concurrently holding positions in China Merchants) have abstained from voting on the relevant Board resolution in relation to the Extension of the Commitment Period. The independent non-executive Directors and the Supervisory Committee have issued consensual opinions on the resolution. The sponsor institutions for the Company’s A Share listing issued no objection opinion on the Extension of Commitment Period.

The Company has published an announcement dated 27 October 2021 on the website of SSE in accordance with the relevant provisions of Listed Company Supervision Guidelines No. 4- Commitments and Fulfillment of the Actual Controllers, Shareholders, Related Parties, Acquirers of Listed Companies and Listed Companies 《上市公司監管指引第( 4 號——上市公司實際控制 人、股東、關聯方、收購人以及上市公司承諾及履行》) (the “ Listed Company Supervision Guidelines No. 4 ”) issued by the China Securities Regulatory Commission and also published an overseas regulatory announcement on the website of the Hong Kong Stock Exchange on the same day.

The abovementioned matter shall be submitted to the general meeting for Shareholders’ approval pursuant to the Listed Company Supervision Guidelines No. 4, and therefore the Company has proposed an ordinary resolution at the EGM for the Shareholders to consider and, if thought fit, approve the abovementioned proposal.

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LETTER FROM THE BOARD

III. PROPOSED APPOINTMENT OF SUPERVISOR

Reference is made to the announcement of the Company dated 27 October 2021 in relation to the proposed appointment of Mr. Kou as a Supervisor, with a term of office from the approval of the Shareholders at the EGM to the date of conclusion of the third session of the Board.

The biographical details of Mr. Kou are set out as follows:

Mr. Kou, born in 1966, is the Deputy Head of Audit Department of China Merchants. Mr. Kou graduated from Henan University with a bachelor degree in science in July 1987, and then he obtained a master degree in economics from Zhongnan University of Economics and Law in July 1993. Mr. Kou successively served as the Section Staff and Section Chief of the Finance Department of Shekou Industrial Zone of China Merchants Group, the Head of Finance Department of Shenzhen West Port and Shipping Development Co., Ltd. (深圳市西部港航開發有限公司) and Shenzhen Pingfang Automobile Park Co., Ltd. (深圳市平方汽車園區有限公司) from July 1993 to May 2005. Since May 2005, Mr. Kou has successively served as Manager, Senior Manager, Assistant General Manager and Deputy General Manager of Audit Department, Deputy Head of Risk Management Department, Deputy Director of Audit Center and Deputy Head of Audit Department of China Merchants.

Mr. Kou has confirmed that, save as disclosed in this circular, as at the date of the Latest Practicable Date (i) he did not hold any directorship in any other public companies, the securities of which are listed on any securities market in Hong Kong or overseas in the last three years; (ii) he is not related to any director, senior management or substantial or controlling Shareholders of the Company; (iii) he does not hold any position in the Company or any of its subsidiaries; and (iv) he does not have nor is deemed to have any interest in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)). The Company will enter into a supervisor contract with Mr. Kou, which shall become effective upon the approval of Mr. Kou’s appointment as a Supervisor at the EGM, while Mr. Kou will not be entitled to receive any emoluments as a Supervisor of the Company.

Save as disclosed in this circular, there is no other information relating to Mr. Kou’s appointment as a Supervisor of the Company that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules and there are no other matters that need to be brought to the attention of the Shareholders of the Company.

The Company has proposed an ordinary resolution at the EGM for the Shareholders to consider and, if thought fit, approve the proposed appointment of Mr. Kou as a Supervisor of the Company.

IV. EGM

The H Share register of members of the Company will be closed from 26 November 2021 to 30 November 2021 (both days inclusive), during which no transfer of H Shares will be registered. Any holders of H Shares whose names appear on the H Share register of members of the Company at 4:30 p.m. on 25 November 2021, are entitled to attend and vote at the EGM of the Company after completing the registration procedures for attending the meeting. In order for the H Shareholders to be entitled to attend and vote at the EGM, persons holding H Shares shall lodge share transfer documents accompanied by the relevant H Share

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LETTER FROM THE BOARD

certificates with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 25 November 2021, for registration.

The EGM will be convened and held at the 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No.5 Anding Road, Chaoyang District, Beijing 100029, the PRC at 2 p.m. on 30 November 2021 to consider and, if thought fit, approve the resolution as set out in the notice of the EGM.

Notice of the EGM enclosed in this circular, together with the notice of attendance and proxy form are despatched to Shareholders on 11 November 2021 and are available on the website of the Company and the website of the Hong Kong Stock Exchange. Shareholders who intend to attend the EGM shall complete and return the notice of attendance in accordance with the instruction printed thereon on or before 26 November 2021. Shareholders who intend to appoint a proxy to attend the EGM shall complete and return the enclosed form of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding 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, if you so wish.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, China Merchants held in aggregate approximately 57.64% of the issued share capital, including 4,072,813,639 A Shares and 192,978,000 H Shares, of which 2,472,216,200 A Shares and 192,978,000 H Shares were indirectly held through Sinotrans & CSC. China Merchants and its associates are required under the Listing Rules and the listing rules of the SSE to abstain from voting on the resolution in respect of the Extension of the Commitment Period at the EGM. Save as disclosed above, to the best knowledge, information and belief of the Directors having made all reasonable enquiry, as at the Latest Practicable Date, none of the Shareholders had any material interest in the proposed resolutions and would be required to abstain from voting on the proposed resolutions at the EGM.

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the EGM will be taken by poll. The Company will announce the results of the poll in accordance with the Listing Rules after the EGM.

V. DIRECTORS’ RECOMMENDATION

As disclosed above, two ordinary resolutions will be proposed at the EGM, to approve (i) the extension of the commitment period by the Controlling Shareholder of the Company in relation to avoiding horizontal competition; and (ii) the proposed appointment of Mr. Kou Suiqi as a Supervisor of the Company.

In order to pass an ordinary resolution of the Company at the EGM, it requires at least a simple majority of the votes held by Shareholders attending the EGM in person or by proxy (and entitled to vote) being voted in favour of the relevant resolution.

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LETTER FROM THE BOARD

The Directors consider that the resolutions as set out in this circular is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the EGM.

Yours faithfully, By order of the Board of Sinotrans Limited Li Shichu Company Secretary

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NOTICE OF THE 2021 SECOND EXTRAORDINARY GENERAL MEETING

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 0598)

NOTICE OF THE 2021 SECOND EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2021 second extraordinary general meeting (the “ EGM ”) of Sinotrans Limited (the “ Company ”) will be held at 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No. 5 Anding Road, Chaoyang District, Beijing 100029, the People’s Republic of China at 2 p.m. on 30 November 2021 for the purpose of considering and, if thought fit, approving, with or without modifications, the following resolutions:

ORDINARY RESOLUTIONS

1. To consider and approve the extension of the commitment period by the Controlling Shareholder of the Company in relation to avoiding horizontal competition.

2. To consider and approve the proposed appointment of Mr. Kou Suiqi as a Supervisor of the Company.

By order of the Board Sinotrans Limited Li Shichu Company Secretary

Beijing, China 11 November 2021

Notes:

1. Unless otherwise specified, details of the resolution are set out in the circular of the Company in relation to the EGM dated 11 November 2021 (the “ Circular ”). Terms defined in the Circular shall have the same meanings when used in this notice unless the context otherwise requires.

2. The H Share register of members of the Company will be closed from 26 November 2021 to 30 November 2021 (both days inclusive), during which no transfer of H Shares will be registered. Any holders of H Shares whose names appear on the H Share register of members of the Company at 4:30 p.m. on 25 November 2021, are entitled to attend and vote at the EGM of the Company after completing the registration procedures for attending the meeting. In order for the H Shareholders to be entitled to attend and vote at the EGM, persons holding H Shares shall lodge share transfer

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NOTICE OF THE 2021 SECOND EXTRAORDINARY GENERAL MEETING

documents accompanied by the relevant H Share certificates with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on 25 November 2021, for registration.

1. Shareholders intending to attend the EGM shall give written notice to the Company, which shall be lodged at the office of the Company, at 10th Floor, Building 10/Sinotrans Tower B, No. 5 Anding Road, Chaoyang District, Beijing (Tel: (8610) 5229 5721) (for A Shareholders), or Computershare Hong Kong Investor Services Limited, the Company’s H Share Registrar, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for H Shareholders), on or before 26 November 2021.

2. Shareholders entitled to attend and vote at the EGM are entitled to appoint one or more persons (whether or not a shareholder of the Company) as their proxy to attend and vote on behalf of themselves.

3. In order to be valid, the form of proxy, together with a duly notarised power of attorney or other document of authority, if any, under which the form is signed must be deposited at the office of the Company, at 10th Floor, Building 10/ Sinotrans Tower B, No. 5 Anding Road, Chaoyang District, Beijing (Tel: (8610) 5229 5721) (for A Shareholders), or Computershare Hong Kong Investor Services Limited, the Company’s H Share Registrar, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for H Shareholders), not later than 24 hours before the time for holding the EGM or any adjournment thereof.

4. A proxy attends the EGM on behalf of a Shareholder, he/she should produce his/her ID card and the instrument signed by the appointer or his/her legal representative, and specifying the date of its issuance. If a legal person Shareholder appoints its corporate representative to attend the EGM, such representative should produce his/her ID card and the notarised copy of the resolution passed by the board or other authorities or other notarised copy of the authorisation issued by such legal person Shareholder.

5. Shareholders attending the EGM are responsible for their own transportation and accommodation expenses.

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