Luzhou Xinglu Water (Group) Co., Ltd. - Proxy Solicitation & Information Statement 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Luzhou Xinglu Water (Group) Co., Ltd. *, you should at once hand this circular, together with the accompanying form of proxy and reply slip 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 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 company incorporated in the People’s Republic of China with limited liability) (Stock code: 2281)

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND

(2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 6 to 15 of this circular and a letter from the Independent Board Committee, containing its recommendation to the Independent Shareholders, is set out on pages 16 to 17 of this circular. A letter from the Independent Financial Adviser, Maxa Capital, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 18 to 29 of this circular.

Notice of convening the EGM to be held at the meeting room of 6th Floor, 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC at 10:00 a.m. on Friday, 8 October 2021 is set out on pages 37 to 38 of this circular. Form of proxy for use at the EGM are also enclosed with this circular. If you intend to attend the EGM by proxy, you are required to complete and return the enclosed form(s) of proxy in accordance with the instructions printed thereon to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in respect of H Shareholders), or to the office of the Board located at the Company’s registered office in the PRC at 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC (in respect of Domestic Shareholders) as soon as possible but in any event by not later than 24 hours before the time appointed for holding of the EGM (i.e. not later than 10:00 a.m. on Thursday, 7 October 2021) or any adjournment thereof. Completion and return of the form(s) of proxy shall not preclude you from attending and voting in person at the EGM or any adjourned meeting(s) if you so wish.

For identification purposes only

16 September 2021

	Page
PRECAUTIONARY MEASURES FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . .	16
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . .	18
APPENDIX – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
NOTICE OF THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37

– i –

PRECAUTIONARY MEASURES FOR THE EGM

In view of the current development of the Novel Coronavirus (“ COVID-19 ”), the Company will implement the following measures at its EGM:

(i) All participants (including Shareholders or their proxy) in the EGM are required to wear appropriate face masks at all times during their attendance.
(ii) No refreshments will be served, and there will be no corporate gifts. Seating will be arranged to ensure adequate physical distancing between attendees in order to reduce person-to-person contact.

To the extent permitted under the laws of the PRC, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue in order to ensure the safety of the attendees at the EGM.

Although Shareholders are welcome to attend in person to vote at the EGM, the Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. As an alternative, by using proxy forms with voting instructions inserted, Shareholders may appoint the Chairman of the EGM as their proxy to vote on the relevant resolution at the EGM instead of attending in person. The proxy form will be despatched to the Shareholders and can be downloaded from the websites of the Stock Exchange and the Company.

– 1 –

DEFINITIONS

Unless the context otherwise requires, the following expressions in this circular shall have the meanings set out below:

“Board” the board of Directors
“Chairman” the chairman of the Board
“Company”
Luzhou Xinglu Water (Group) Co., Ltd.*（瀘州市興瀘水務（集團）股份有限公司）, a joint stock company with limited liability incorporated in the PRC, whose H Shares are listed on the Main Board of the Stock Exchange
“Director(s)” the director(s) of the Company
“Domestic Share(s)”
the ordinary share(s) in the capital of the Company with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in RMB by PRC nationals and/or PRC legal entities
“Domestic Shareholder(s)” the holder(s) of Domestic Shares
“EGM”
the 2021 first extraordinary general meeting of the Company to be convened and held on Friday, 8 October 2021 for the Independent Shareholders to consider and, if thought fit, to approve the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder
“Group” the Company and its subsidiaries
“H Share(s)”
the overseas listed foreign invested ordinary share(s) in the capital of the Company with a nominal value of RMB1.00 each, which are subscribed for and traded in HK$ and listed on the Stock Exchange
“H Shareholder(s)” the holder(s) of H Shares
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC

– 2 –

DEFINITIONS

“Independent Board Committee”
a committee of the Board comprising Mr. Gu Ming’an, Mr. Lin Bing and Mr. Cheng Hok Kai, Frederick, all being the independent non-executive Directors, which is formed to advise the Independent Shareholders on the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder
“Independent Financial Adviser” or “Maxa Capital”
Maxa Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders on the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder
“Independent Shareholders”
the Shareholders who are not interested or involved in the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder
“Independent Third Party(ies)” person(s) or company(ies) which is(are) not a connected person(s) (as defined in the Listing Rules) of the Company
“Latest Practicable Date” 13 September 2021, being the latest practicable date for ascertaining certain information in this circular before its publication
“Lingang Industrial Development” Luzhou Lingang Industrial Development Co., Ltd.*（瀘州臨港產業開發有限公司）, a PRC limited liability company established on 15 November 2013 and is wholly-owned by Lingang Investment
“Lingang Industrial Development the construction service agreement entered into between Construction Service the Company and Lingang Industrial Development on Agreement” 31 August 2021
“Lingang Investment”
Luzhou Lingang Investment Group Co., Ltd.*（瀘州臨港投資集團有限公司）, a PRC limited liability company established on 16 June 2013, which is directly owned as to approximately 66.33% by Xinglu Investment and therefore a connected person (as defined in the Listing Rules) of the Company

– 3 –

DEFINITIONS

“Listing Rules”
“Luzhou Infrastructure”
the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time Luzhou City Infrastructure Investment Co., Ltd.*（瀘州市基礎建設投資有限公司）, a PRC limited liability company established on 29 May 2001, which is directly owned as to approximately 55% by Xinglu Investment and therefore a connected person (as defined in the Listing Rules) of the Company

“PRC”

the People’s Republic of China, for the purposes of this circular, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
“Previous Construction Service Agreements”
the construction service agreement dated 19 June 2020 and its supplemental agreement dated 28 January 2021 entered into between the Company and Luzhou Aviation Development Investment Group Co., Ltd. (瀘州航空發展投資集團有限公司), the construction service agreement dated 26 February 2021 entered into between the Company and Luzhou Xinglu Jutai Construction Company Limited Jiangyang Branch (瀘州興瀘居泰建設有限公司江陽分公司), the construction service agreement dated 2 June 2021 entered into between the Company and Xinglu Investment, the construction service agreement dated 30 June 2021 entered into between the Company and Lingang Industrial Development, the construction service agreement dated 27 August entered into between the Company and Luzhou Jiaotou Group Car Station Construction Co., Ltd. (瀘州交投集團汽車站點建設有限公司) and the construction service agreement dated 27 August entered into between the Company and Luzhou Xinglu Jutai Construction Company Limited (瀘州興瀘居泰建設有限公司)
“RMB”

Renminbi, the lawful currency of the PRC

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” the Domestic Share(s) and the H Share(s)
“Shareholder(s)” the holder(s) of the Shares
“Stock Exchange” The Stock Exchange of Hong Kong Limited

– 4 –

DEFINITIONS

“Supervisor(s)” the supervisor(s) of the Company “Xinglu Investment” Luzhou City Xinglu Investment Group Co., Ltd.* (瀘州市興瀘投資集團有限公司), the Controlling Shareholder of the Company, a PRC limited liability company established on 28 January 2003 and owned as to 90% by the State-owned Assets Supervision and Administration Commission of Luzhou (瀘州市國有資產監督管理委員會)

For identification purposes only

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LETTER FROM THE BOARD

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(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock code: 2281)

Executive Directors: Mr. ZHANG Qi (張歧先生) Mr. LIAO Xingyue (廖星樾先生) Mr. WANG Junhua (王君華先生)

Non-executive Directors: Mr. CHEN Bing (陳兵先生) Ms. XU Yan (徐燕女士) Mr. XIE Xin (謝欣先生)

Independent non-executive Directors: Mr. GU Ming’an (辜明安先生) Mr. LIN Bing (林兵先生) Mr. CHENG Hok Kai, Frederick (鄭學啟先生)

Registered office: 16 Baizi Road Jiangyang District, Luzhou Sichuan Province the PRC

Principal place of business in Hong Kong: 40th Floor, Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai, Hong Kong

16 September 2021

To the Shareholders,

Dear Sir/Madam,

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND

(2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 31 August 2021 in relation to the Lingang Industrial Development Construction Service Agreement entered into between the Company and Lingang Industrial Development for the provision of water supply pipelines installation services to Lingang Industrial Development.

The purpose of this circular is to provide the Shareholders with, among others, (i) a letter from the Board containing further information on the Lingang Industrial Development Construction Service Agreement; (ii) a letter from the Independent Board Committee in respect of the Lingang Industrial Development Construction Service Agreement; (iii) a letter

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LETTER FROM THE BOARD

from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Lingang Industrial Development Construction Service Agreement; (iv) notice of convening the EGM; and (v) other information as required under the Listing Rules.

LINGANG INDUSTRIAL DEVELOPMENT CONSTRUCTION SERVICE AGREEMENT

On 31 August 2021 (after trading hours), the Company entered into the Lingang Industrial Development Construction Service Agreement with Lingang Industrial Development, pursuant to which, the Company agreed to provide water supply pipelines installation services, including the construction of the public pipe network (公共管網), to Lingang Industrial Development.

The principal terms of the Lingang Industrial Development Construction Service Agreement are set out below:

Date: 31 August 2021 (after trading hours) Parties: (1) the Company; and (2) Lingang Industrial Development

Project: The project under the Lingang Industrial Development Construction Service Agreement is Yueyingdongfang Water Supply Pipelines Installation Project I, II and III (月映東方一、二、三期給水管道安裝工程) which is located in Longmatan District of Luzhou City, the PRC.

Scope of Construction Service: The water supply pipelines installation services that the Company agreed to provide to Lingang Industrial Development under the Lingang Industrial Development Construction Service Agreement include the construction of the public pipe network (公共管網). Construction Period: 90 calendar days starting from the date notified by Lingang Industrial Development in writing after its payment of 60% of the construction service fee in accordance with the Lingang Industrial Development Construction Service Agreement and ending on or before 31 December 2021.

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LETTER FROM THE BOARD

Construction Service Fee and Payment Terms:

The final construction service fee under the Lingang Industrial Development Construction Service Agreement will be not more than an estimated amount of RMB5,659,740 (tax inclusive) and shall be determined by Lingang Industrial Development and the Company based on the final mapping report (終測繪報告), financial review report (財評報告) and the actual costs and expenses as shown in the cost and expenses sheet (費用預核定單).

Payments shall be made in the following manners:

(1) RMB3,395,844, representing 60% of the highest estimated construction service fee, shall be paid by Lingang Industrial Development as prepayment within seven (7) business days after the signing of the Lingang Industrial Development Construction Service Agreement; and
(2) the balance of the final construction service fee shall be paid by Lingang Industrial Development after the completion of the substantial construction works and prior to the issuance of installation notice of commercials balance meters by the Company.

Period of Warranty:

Two (2) years commencing from the examination and acceptance date of the construction work of the project under the Lingang Industrial Development Construction Service Agreement.

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LETTER FROM THE BOARD

Pricing Policy:

The construction service fee was determined by the Company and Lingang Industrial Development in accordance with the pricing standard set out in the Company’s internal pricing document (Lu Shui Gu Fen [2021] No. 23) which was made based on the documents published by the PRC governmental authorities from time to time, including but not limited to the Notice on Relaxation of the Price Control of Installation, Inspection and Repairment for Utilities Projects (Chuanfagaijiage [2015] No. 884) (關於放開水電氣工程安裝及檢查維修價格的通知（川發改價格[2015]884 號）) issued by Sichuan Province Development and Reform Commission (四川省發展和改革委員會), the Notice on Forwarding Relaxation of the Price Control of Installation, Inspection and Repairment for Utilities Projects (Chuanfagaijiage [2016] No. 71) (關於轉發放開水電氣工程安裝及檢查維修價格的通知（川發改價格[2016]71 號）) issued by Luzhou City Development and Reform Commission (瀘州市發展和改革委員會), and the Sichuan Province Quota of Project Quantities Detailed Pricing List for Engineering Construction (2020 version) (四川省建設工程工程量清單計價定額 (2020年版)) issued by Sichuan Province Housing and Urban-Rural Development Department(四川省住房和城鄉建設廳) with their respective ancillary documents or applicable revised versions.

The PRC governmental and Company’s pricing standards provide pre-determined mechanism for calculation of construction service fees detailing the fees to be charged for each category of service and the applicable formula for calculation of fees in different scenarios under each category. While determining the construction service fee under the Lingang Industrial Development Construction Service Agreement, the Company and Lingang Industrial Development calculated in accordance with the pre-determined formulae based on the actual construction area of the project, the specific number of the users, the types of the construction materials and their respective market prices, and in ordinary and usual course of business and on normal commercial terms, and such terms and conditions were negotiated on an arm’s length basis and are not more favorable than those offered by the Group to Independent Third Parties.

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LETTER FROM THE BOARD

HISTORICAL FIGURES

The annual construction service fees paid by Lingang Industrial Development to the Group for the three years ended 31 December 2020 amounted to nil, approximately RMB10,608 and nil, respectively.

ANNUAL CAPS

The table below sets out the annual caps for the transactions under the Lingang Industrial Development Construction Service Agreement, the Previous Construction Service Agreements and the aggregate annual cap of them, which are the estimated largest construction service fees determined in accordance with the aforementioned pricing policies.

Annual caps Lingang Industrial Development Construction Service Agreement Previous Construction Service Agreements(1) Aggregate Annual Cap	For the year ending 31 December 2021 (RMB in million) 5.66 39.43
	45.09

Note:

(1) Details of the Previous Construction Service Agreements are as follows:

			Annual Cap
			for the Year
Date of	Contractual Party and	Relationship with the	Ending 31
Agreement	Connected Person	Company	December 2021
			(RMB in
			million)
19 June 2020 and	Luzhou Aviation	Directly controlled as to	19.6
supplemented on	Development Investment	83.78% by Xinglu
28 January 2021	Group Co., Ltd.*（瀘州航空	Investment, the controlling
	發展投資集團有限公司）	shareholder of the Company
26 February 2021	Xinglu Jutai Construction	Indirectly wholly-owned by	7.0
	Company Limited	Luzhou Xinglu Jutai Real
	Jiangyang Branch*	Estate Co., Ltd.*
	（瀘州興瀘居泰建設有限公司江	（瀘州興瀘居泰房地產有限公司）
	陽分公司）	, which is a 30%-controlled
		company of Xinglu
		Investment, the controlling
		shareholder of the Company
2 June 2021	Xinglu Investment	The controlling shareholder	6.0
		of the Company

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LETTER FROM THE BOARD

Date of Agreement Contractual Party and Connected Person Relationship with the Company 30 June 2021 Lingang Industrial Development Wholly-owned by Lingang Investment, which is directly held as to approximately 66.33% by Xinglu Investment, the controlling shareholder of the Company 27 August 2021 Luzhou Jiaotou Group Car Station Construction Co., Ltd.（瀘州交投集團汽車站點建設有限公司） Wholly-owned by Luzhou Transportation Investment Group Co., Ltd.（瀘州市交通投資集團有限責任公司）, which is indirectly held as to approximately 49.37% by Xinglu Investment, the controlling shareholder of the Company 27 August 2021 Luzhou Xinglu Jutai Construction Company Limited（瀘州興瀘居泰建設有限公司） Wholly-owned by Luzhou Xinglu Jutai Real Estate Co., Ltd.（瀘州興瀘居泰房地產有限公司）, which is a 30%-controlled company of Xinglu Investment, the controlling shareholder of the Company Total	Annual Cap for the Year Ending 31 December 2021 (RMB in million) 5.4 1.12 0.31
	39.43

Date of
Agreement
Contractual Party and
Connected Person
Relationship with the
Company
30 June 2021
Lingang Industrial
Development
Wholly-owned by Lingang
Investment, which is
directly held as to
approximately 66.33% by
Xinglu Investment, the
controlling shareholder of
the Company
27 August 2021
Luzhou Jiaotou Group Car
Station Construction Co.,
Ltd.（瀘州交投集團汽車站點
建設有限公司）
Wholly-owned by Luzhou
Transportation Investment
Group Co., Ltd.（瀘州市交
通投資集團有限責任公司）,
which is indirectly held as
to approximately 49.37% by
Xinglu Investment, the
controlling shareholder of
the Company
27 August 2021
Luzhou Xinglu Jutai
Construction Company
Limited（瀘州興瀘居泰建設
有限公司）
Wholly-owned by Luzhou
Xinglu Jutai Real Estate
Co., Ltd.（瀘州興瀘居泰房地
產有限公司）, which is a
30%-controlled company of
Xinglu Investment, the
controlling shareholder of
the Company
Total

Annual Cap
for the Year
Ending 31
December 2021
(RMB in
million)
5.4
1.12
0.31

39.43

INTERNAL CONTROL

(i) the legal department and finance department of the Company will closely monitor the transaction under the Lingang Industrial Development Construction Service Agreement to ensure that the transaction amount will not exceed the annual cap for the Lingang Industrial Development Construction Service Agreement;

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LETTER FROM THE BOARD

(ii) the legal department of the Company will conduct regular random checks to review and assess whether the transaction contemplated under the Lingang Industrial Development Construction Service Agreement is conducted on normal commercial terms, in accordance with the terms set out in the agreement and whether the construction service fees and relevant contract terms are in the interest of the Company and the Shareholders as a whole;
(iii) the Company’s external auditors will conduct an annual review of the transaction entered into under the Lingang Industrial Development Construction Service Agreement to ensure that the transaction amount is within the annual cap and the transaction is in accordance with the terms set out in the agreement; and
(iv) the Company’s independent non-executive Directors will conduct regular reviews of the status of the transaction under the Lingang Industrial Development Service Agreement to ensure that the Company has complied with its internal approval process, the terms of the Lingang Industrial Development Construction Service Agreement and the relevant requirements under the Listing Rules.

INFORMATION ABOUT LINGANG INDUSTRIAL DEVELOPMENT AND THE GROUP

Lingang Industrial Development is a limited liability company established in the PRC on 15 November 2013 and is primarily engaged in project construction of real estate development, which is as at the Latest Practicable Date wholly-owned by Lingang Investment. Lingang Investment is directly held as to 66.33% by Xinglu Investment, the Controlling Shareholder. Xinglu Investment is directly held as to 90% by Luzhou State-owned Assets Supervision and Administration Commission（瀘州市國有資產監督管理委員會) and is primarily engaged in investment and assets management.

The Group is mainly engaged in the provision of tap water supply and related installation and maintenance services and wastewater treatment and related infrastructure construction services.

BENEFITS OF AND REASONS FOR THE TRANSACTION

The Company has been providing installation and maintenance services in its ordinary and usual course of business to companies in Luzhou City, and therefore, the Company is familiar with the requirements and the specifications for the installation and maintenance services required by local government and companies. The Directors believe that entering into the Lingang Industrial Development Construction Service Agreement is beneficial for the long-term business relationship between the Company and Lingang Industrial Development. By entering into the Lingang Industrial Development Construction Service Agreement, the Group can further expand its principal business. The Directors are of the view that entering into the Lingang Industrial Development Construction Service Agreement is in line with the Group’s goal to enhance the Company’s position in the industry and its influence in the region.

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LETTER FROM THE BOARD

The Directors (including the independent non-executive Directors) are of the view that the terms of the transaction under the Lingang Industrial Development Construction Service Agreement are fair and reasonable, on normal commercial terms, in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole.

Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder have been approved by the Board. None of the Directors has material interest in the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder and hence no Director is required to abstain from voting on the relevant resolution of the Board approving the same.

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, Lingang Industrial Development is wholly-owned by Lingang Investment. Lingang Investment is directly held as to approximately 66.33% by Xinglu Investment, the Controlling Shareholder. Accordingly, Lingang Industrial Development is a connected person of the Company under the Listing Rules and the transaction contemplated under the Lingang Industrial Development Construction Service Agreement constitute a continuing connected transaction for the Company pursuant to Chapter 14A of the Listing Rules.

Pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, the transaction contemplated under the Lingang Industrial Development Construction Service Agreement is required to be aggregated with other transactions contemplated under the Previous Construction Service Agreements. As the highest applicable percentage ratio in respect of the transaction contemplated under the Lingang Industrial Development Construction Service Agreement and the Previous Construction Service Agreements, on an annual and aggregated basis, exceeds 5%, the transaction contemplated under the Lingang Industrial Development Construction Service Agreement constitutes a continuing connected transaction of the Company subject to the reporting, announcement, annual review, circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

EXTRAORDINARY GENERAL MEETING

The EGM will be held at 10:00 a.m. on Friday, 8 October 2021 at the meeting room of 6th Floor, 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC. The notice of the EGM is set out on pages 37 to 38 of this circular. The form of proxy and reply slip for the EGM are enclosed herewith.

Whether or not you are able to attend the EGM, you are advised to complete and return as soon as possible the enclosed form of proxy in accordance with the instructions printed thereon. The form of proxy for holders of H Shares should be returned to the Company’s H share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, and the form of proxy for holders of Domestic Shares should be returned to the office of the Board located at 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC by no later than 24 hours before the time appointed for convening the EGM (i.e. not later than

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LETTER FROM THE BOARD

10:00 a.m. on Thursday, 7 October 2021) or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM, or any adjourned meeting, in person if you so wish.

If you intend to attend the EGM in person, you are required to complete and return the reply slip to the Company’s H share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited (for H Shareholders) or to the office of the Board (for Domestic Shareholders) on or before Tuesday, 5 October 2021 for the Company to assess whether or not it is necessary to announce the notice of the EGM again. If the number of voting Shares as represented by the reply slips collected by Tuesday, 5 October 2021 reaches no less than one half of the total number of the issued Shares, the Company may hold the EGM as stipulated in the notice of the EGM. If not, the Company shall within five days notify the Shareholders again, by public notice or otherwise required in the Articles of Association, of the matters to be considered as well as the date and place of the EGM. Upon such notification, the Company may hold the EGM.

Xinglu Investment and Luzhou Infrastructure, being the connected persons of the Company and having a material interest in the Lingang Industrial Development Construction Service Agreement, controlled or are entitled to exercise control over the voting rights in respect of 574,363,690 Domestic Shares of the Company, representing approximately 66.80% total issued share capital of the Company as at the Latest Practicable Date. In accordance with the Listing Rules, they will abstain from voting at the EGM on the resolution to approve the Lingang Industrial Development Construction Service Agreement.

Save as disclosed above, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, no other Shareholder has any material interest in the Lingang Industrial Development Construction Service Agreement, and therefore no other Shareholder is required to abstain from voting at the EGM in respect of the resolution approving the aforesaid matters. The poll results will be published on the websites of the Company and the Stock Exchange following the EGM.

CLOSURE OF REGISTER OF MEMBERS

In order to determine the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Tuesday, 5 October 2021 to Friday, 8 October 2021 (both days inclusive), during which period no transfer of Shares will be effected. The record date for entitlement to attend and vote at the EGM is Tuesday, 5 October 2021. In order to be qualified to attend and vote at the EGM, all transfers accompanied by the relevant share certificates must be lodged with the H share registrar of the Company, namely Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in respect of H Shareholders), or to the office of the Board located at the Company’s registered office in the PRC at 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC (in respect of Domestic Shareholders) no later than 4:30 p.m. on Monday, 4 October 2021.

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LETTER FROM THE BOARD

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, the resolution to be proposed at the EGM as set out in the notice of the EGM set out at the end of this circular must be taken by poll. The Chairman of the EGM will therefore demand a poll for such resolution put to the vote at the EGM. On a poll, every Shareholder present in person or by proxy or (being a corporation) by its duly authorized representative shall have one vote for each Share registered in his or her name in the register of Shareholders. A Shareholder entitled to more than one vote need not use all his or her votes or cast all the votes he or she uses in the same way.

RECOMMENDATION

The Board considers that the resolution set out in the notice of the EGM for Shareholders’ consideration and approval is in the best interests of the Company and its Shareholders. As such, the Board recommends the Shareholders to vote in favor of the resolution set out in the notice of the EGM which is to be proposed at the EGM.

By order of the Board Luzhou Xinglu Water (Group) Co., Ltd. * Zhang Qi Chairman

For identification purposes only

– 15 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock code: 2281)

16 September 2021

To the Independent Shareholders

Dear Sir or Madam,

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND (2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

We refer to the circular issued by the Company dated 16 September 2021 (the “ Circular ”) of which this letter forms part. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings in this letter.

We have been appointed by the Board to advise the Independent Shareholders as to whether (i) the Lingang Industrial Development Construction Service Agreement is on normal commercial terms or better and in the ordinary and usual course of business of the Group, and (ii) the terms of the Lingang Industrial Development Construction Service Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Maxa Capital has been appointed to act as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Lingang Industrial Development Construction Service Agreement. The text of the letter of advice from the Independent Financial Adviser containing their recommendations and the principal factors they have taken into account in arriving at their recommendations are set out from pages 18 to 29 of the Circular.

Having taken into account the terms of the Lingang Industrial Development Construction Service Agreement and the advice of the Independent Financial Adviser, we are of the opinion that (i) the Lingang Industrial Development Construction Service Agreement is on normal commercial terms or better and in the ordinary and usual course of business of the Group, and that (ii) the terms of the Lingang Industrial Development Construction Service Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 16 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

We therefore recommend the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the EGM to approve the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder.

Yours faithfully, For and on behalf of the Independent Board Committee GU Ming’an LIN Bing CHENG Hok Kai, Frederick Independent Non-Executive Directors

– 17 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the letter of advice from Maxa Capital, the Independent Financial Adviser, to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of inclusion in this circular.

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Unit 1908, Harbour Center 25 Harbour Road Wan Chai Hong Kong

16 September 2021

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONTINUING CONNECTED TRANSACTION – THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder, details of which are set out in the Letter from the Board (the “ Letter from the Board ”) contained in the circular dated 16 September 2021 issued by the Company (the “ Circular ”) of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

As at the Latest Practicable Date, Lingang Industrial Development is wholly owned by Lingang Investment, which is directly held as to approximately 66.33% by Xinglu Investment, the Controlling Shareholder. Accordingly, Lingang Industrial Development is a connected person of the Company under the Listing Rules and the transaction contemplated under the Lingang Industrial Development Construction Service Agreement constitutes a continuing connected transaction for the Company pursuant to Chapter 14A of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

transaction contemplated under the Lingang Industrial Development Construction Service Agreement and the Previous Construction Service Agreements, on an annual and aggregated basis, exceeds 5%, the transaction contemplated under the Lingang Industrial Development Construction Service Agreement constitutes a continuing connected transaction of the Company subject to the reporting, announcement, annual review, circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The EGM will be convened and held for the Independent Shareholders to consider and, if thought fit, approve the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder. Xinglu Investment and its associates shall abstain from voting on the resolution approving the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder at the EGM.

The Independent Board Committee comprising all independent non-executive Directors has been established to advise the Independent Shareholders on, among other things, the terms of the Lingang Industrial Development Construction Service Agreement and on how to vote on the resolution in respect of the Lingang industrial Development Construction Service Agreement at the EGM. We, Maxa Capital, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

OUR INDEPENDENCE

As at the Latest Practicable Date, we did not have any relationship with or interest in the Company, its subsidiaries and any other parties that could reasonably be regarded as relevant to our independence. We are not associated or connected with the Company, Lingang Industrial Development or their respective substantial shareholders or associates and, accordingly, are considered eligible to give independent advice on the Lingang industrial Development Construction Service Agreement and the transaction contemplated thereunder. Save for this appointment, there was no other engagement between the Company and us in the last two years. Apart from normal professional fees payable to us in connection with this appointment, no arrangement exists whereby we will receive any fees or benefits from the Company, Lingang Industrial Development or their respective substantial shareholders or associates.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we consider that we have reviewed sufficient and relevant information and documents and have taken reasonable steps as required under Rule 13.80 of the Listing Rules to reach an informed view and to provide a reasonable basis for our recommendation. We have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the date of this letter. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

due enquiry and careful consideration. Our opinion is based on the Directors’ representation and confirmation that no material facts have been omitted from the information provided and referred to in the Circular.

The Company confirmed that they have, at our request, provided us with all currently available information and documents which are available under present circumstances to enable us to reach an informed view and we have relied on the accuracy of the information contained in the Circular so as to provide a reasonable basis for our opinion. We have no reason to suspect that any material facts or information, which is known to the Company, have been omitted or withheld from the information supplied or opinions expressed in the Circular nor do doubt the truth and accuracy of the information and facts, or the reasonableness of the opinions expressed by the Company and the Directors which have been provided to us. We have not, however, conducted any independent verification on the information provided to us by the Directors, nor have we conducted any form of independent in-depth investigation into the business and affairs of the Company, Lingang Industrial Development and each of their respective subsidiaries or associates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Lingang industrial Development Construction Service Agreement and the transaction contemplated thereunder, we have taken into consideration the following principal factors and reasons:

1. Information on the Group

The Company is principally engaged in the provision of (i) tap water supply and related installation and maintenance service, and (ii) wastewater treatment service and related construction service.

Set out below is the financial information of the Group for the two years ended 31 December 2020 and for the six months period ended 30 June 2020 and 2021 respectively prepared in accordance with International Financial Reporting Standards and extracted from the Company’s 2020 Annual Report and 2021 Interim Results Announcement.

	For the year ended	For the year ended	For the six months	For the six months
	31 December		ended	30 June
	2020	2019	2021	2020
	RMB’000	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)	(unaudited)
Revenue	2,521,905	2,067,132	925,646	1,170,554
Profit for the year/period	224,804	201,523	127,964	103,866

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

				As at
		As at 31	December	30 June
		2020	2019	2021
		(audited)	(audited)	(unaudited)
		RMB’000	RMB’000	RMB’000
Total	assets	7,224,011	5,815,603	7,590,063
Total	liabilities	4,891,079	3,688,125	5,165,326
Total	equity	2,332,932	2,127,478	2,424,737

As illustrated in the above table, the Group’s revenue amounted to approximately RMB2,521.91 million for the year ended 31 December 2020 (“ FY2020 ”), representing an increase of approximately 22.0% as compared to approximately RMB2,067.13 million for the year ended 31 December 2019 (“ FY2019 ”). The Group’s profit for the year was approximately RMB224.80 million in FY2020, representing an increase of approximately 11.55% compared with that in FY2019.

The Group’s total assets increased by approximately 24.2% from approximately RMB5,815.60 million as at 31 December 2019 to approximately RMB7,224.01 million as at 31 December 2020. The total liabilities of the Group recorded an increase of approximately 32.6% from approximately RMB3,688.13 million as at 31 December 2019 to approximately RMB4,891.08 million as at 31 December 2020. The total equity of the Group amounted approximately RMB2,332.93 million as at 31 December 2020, representing an increase of approximately 9.66% from approximately RMB2,127.48 million as at 31 December 2019.

The Group’s revenue amounted to approximately RMB925.65 million for the six months ended 30 June 2021, representing a decrease of approximately 20.92% as compared to approximately RMB1,170.55 million for the six months ended 30 June 2020, which is mainly due to a decrease of RMB337.1 million in the revenue from infrastructure construction and upgrade services during such period. The Group’s profit for the period was approximately RMB127.96 million for the six months ended 30 June 2021, representing an increase of approximately 23.20% compared with that for the six months ended 30 June 2020.

The Group’s total assets increased by approximately 5.07% from approximately RMB7,224.01 million as at 31 December 2020 to approximately RMB7,590.06 million as at 30 June 2021. The total liabilities of the Group recorded an increase of approximately 5.61% from approximately RMB4,891.08 million as at 31 December 2020 to approximately RMB5,165.33 million as at 30 June 2021. The total equity of the Group amounted approximately RMB 2,424.74 million as at 30 June 2021, representing an increase of approximately 3.94% from approximately RMB2,332.93 million as at 31 December 2020.

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Information on Lingang Industrial Development

Lingang Industrial Development is a limited liability company established in the PRC on 15 November 2013 and is primarily engaged in project construction of real estate development, which is wholly-owned by Lingang Investment as at the Latest Practicable Date. Lingang Investment is directly held as to 66.33% by Xinglu Investment, the Controlling Shareholder. Xinglu Investment is directly held as to 90% by Luzhou State-owned Assets Supervision and Administration Commission（瀘州市國有資產監督管理委員會）and is primarily engaged in investment and assets management.

3. Reasons for and benefits of the Lingang industrial Development Construction Service Agreement

As stated in the Letter from the Board, the reasons for and possible benefits of the Lingang industrial Development Construction Service Agreement are as follows:

According to the 2020 Annual Report of the Company, the Group recorded revenue of approximately RMB1.17 billion from the installation services and construction and upgrade services of tap water supply infrastructure, which represents 46.4% of the total revenue of the Group in 2020. Besides, Mr. Zhang Qi, chairman of the Board, mentioned in the chairman’s statement in the 2020 Annual Report of the Company that one of the major objectives for the Group’s future development will be focusing on main business operation.

Considering that (i) providing installation and maintenance services generates large portion of the Group’s revenue and is in the ordinary and usual course of business of the Group; and (ii) entering into Lingang Industrial Development Construction Service Agreement will generate revenue for the Group and is in line with the future development objective of the Company, we concur with the Directors that the transaction contemplated under the Lingang Industrial Development Construction Service Agreement is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Principal terms of the Lingang industrial Development Construction Service Agreement

The principal terms of the Lingang Industrial Development Construction Service Agreement are set out below:

Date: 31 August 2021 (after trading hours)

Parties: (1) the Company; and

(2) Lingang Industrial Development

Project:

The project under the Lingang Industrial Development Construction Service Agreement is Yueyingdongfang Water Supply Pipelines Installation Project I, II and III （月映東方一、二、三期給水管道安裝工程）which is located in Longmatan District of Luzhou City, the PRC.

Scope of Construction Service:

The water supply pipelines installation services that the Company agreed to provide to Lingang Industrial Development under the Lingang Industrial Development Construction Service Agreement include the construction of the public pipe network（公共管網）.

Construction Period:

90 calendar days starting from the date notified by Lingang Industrial Development in writing after its payment of 60% of the construction service fee in accordance with the Lingang Industrial Development Construction Service Agreement and ending on or before 31 December 2021.

Construction Service Fee and Payment Terms:

The final construction service fee under the Lingang Industrial Development Construction Service Agreement will be not more than an estimated amount of RMB5,659,740 (tax inclusive) and shall be determined by Lingang Industrial Development and the Company based on the final mapping report （終測繪報告）, financial review report （財評報告）and the actual costs and expenses as shown in the cost and expenses sheet （費用預核定單）.

– 23 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Payments shall be made in the following manners:

(1) RMB3,395,844, representing 60% of the highest estimated construction service fee, shall be paid by Lingang Industrial Development as prepayment within seven (7) business days after signing the Lingang Industrial Development Construction Service Agreement; and
(2) the balance of the final construction service fee shall be paid by Lingang Industrial Development after the completion of the substantial construction works and prior to the issuance of installation notice of commercials balance meters by the Company.

Period of Warranty:

Pricing Policy:

Two (2) years commencing from the examination and acceptance date of the construction work of the project under the Lingang Industrial Development Construction Service Agreement.

The construction service fee was determined by the Company and Lingang Industrial Development in accordance with the pricing standard set out in the Company’s internal pricing document (Lu Shui Gu Fen [2021] No. 23) which was made based on the documents published by Inspection and Repairment for Utilities Projects (Chuanfagaijiage [2015] No. 884)（關於放開水電氣工程安裝及檢查維修價格的通知（川發改價格[2015]884號）） issued by Sichuan Province the PRC governmental authorities from time to time, including but not limited to the Notice on Relaxation of the Price Control of Installation, Development and Reform Commission（四川省發展和改革委員會）, the Notice on Forwarding Relaxation of the Price Control of Installation, Inspection and Repairment for Utilities Projects (Chuanfagaijiage [2016] No. 71)（關於轉發放開水電氣工程安裝及檢查維修價格的通知（川發改價格[2016]71號））issued by Luzhou City Development and Reform Commission（瀘州市發展和改革委員會）, and the Sichuan Province Quota of Project Quantities Detailed Pricing List for Engineering Construction (2020 version)（四川省建設工程工程量清單計價定額（2020年版））issued by Sichuan Province Housing and Urban-Rural Development Department（四川省住房和城鄉建設廳）with their respective ancillary documents or applicable revised versions.

– 24 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The PRC governmental and Company’s pricing standards provide predetermined mechanism for calculation of construction service fees detailing the fees to be charged for each category of service and the applicable formula for calculation of fees in different scenarios under each category. While determining the construction service fee under the Lingang Industrial Development Construction Service Agreement, the Company and Lingang Industrial Development calculated in accordance with the pre-determined formulae based on the actual construction area of the project, the specific number of the users, the types of the construction materials and their respective market prices, and in ordinary and usual course of business and on normal commercial terms, and such terms and conditions were negotiated on an arm’s length basis and are not more favorable than those offered by the Group to Independent Third Parties.

In assessing the fairness and reasonableness of the terms in the Lingang Industrial Development Construction Service Agreement, we have obtained and reviewed the principal terms of (i) the Lingang Industrial Development Construction Service Agreement, (ii) the Previous Construction Service Agreements as disclosed in the announcements of the Company dated 19 June 2020, 28 January 2021, 26 February 2021, 2 June 2021, 30 June 2021 and 27 August 2021 (Collectively, “ Previous Announcements ”), and (iii) three randomly selected service agreements in relation to water supply pipelines installation services provided by the Company to Independent Third Parties in 2021. We noted that the major terms of the Lingang Industrial Development Construction Service Agreement, including the pricing policy, are similar with those in the Previous Construction Service Agreements and the three service agreements with Independent Third Parties.

In respect of the pricing policy, we have also obtained and reviewed Company’s internal pricing document (Lu Shui Gu Fen [2021] No. 23), and noted that the pricing policies in the Lingang Industrial Development Construction Service Agreement, the Previous Construction Service Agreements and the three service agreements with Independent Third Parties, all comply with Company’s internal document strictly. In other words, the service fees for the water supply pipelines installation services offered by the Company to Lingang Industrial Development will be on terms not more favorable than those offered by the Company to Independent Third Parties, which we consider fair and reasonable.

In view of the above, we consider that the terms under the Lingang Industrial Development Construction Service Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned.

– 25 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Annual caps

5.1 Historical Figures

The construction service fee paid by Lingang Industrial Development to the Group for the three years ended 31 December 2020 amount to nil, approximately RMB10,608 and nil, respectively.

5.2 Annual Caps

Lingang Industrial Development Construction Service Agreement Previous Construction Service Agreements Aggregate Annual Cap	For the year ending 31 December 2021 (RMB in million) 5.66 39.43
	45.09

Note:

(1) Details of Previous Construction Service Agreements are as follows:

			Annual Cap
			for the Year
			Ending
	Contractual Party and	Relationship with the	31 December
Date of Agreement	Connected Person	Company	2021
			(RMB in
			million)
19 June 2020 and	Luzhou Aviation	Directly controlled as	19.6
supplemented on 28	Development	to 83.78% by Xinglu
January 2021	Investment Group	Investment, the
	Co., Ltd.*（瀘州航空發	controlling
	展投資集團有限公司）	shareholder of the
		Company

– 26 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Annual Cap
			for the Year
			Ending
	Contractual Party and	Relationship with the	31 December
Date of Agreement	Connected Person	Company	2021
			(RMB in
			million)
26 February 2021	Xinglu Jutai	Indirectly	7.0
	Construction	wholly-owned by
	Company Limited	Luzhou Xinglu Jutai
	Jiangyang Branch*（	Real Estate Co.,
	瀘州興瀘居泰建設有限	Ltd.*（瀘州興瀘居泰房
	公司江陽分公司）	地產有限公司）, which
		is a 30%-controlled
		company of Xinglu
		Investment, the
		controlling
		shareholder of the
		Company
2 June 2021	Xinglu Investment	The controlling	6.0
		shareholder of the
		Company
30 June 2021	Lingang Industrial	Wholly-owned by	5.4
	Development	Lingang Investment,
		which is directly held
		as to approximately
		66.33% by Xinglu
		Investment, the
		controlling
		shareholder of the
		Company
27 August 2021	Luzhou Jiaotou Group	Wholly-owned by	1.12
	Car Station	Luzhou
	Construction Co.,	Transportation
	Ltd.*（瀘州交投集團汽車	Investment Group
	站點建設有限公司）	Co., Ltd.*（瀘州市交通
		投資集團有限責任公司）
		, which is indirectly
		held as to
		approximately
		49.37% by Xinglu
		Investment, the
		controlling
		shareholder of the
		Company

– 27 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Date of Agreement Contractual Party and Connected Person Relationship with the Company 27 August 2021 Luzhou Xinglu Jutai Construction Company Limited（瀘州興瀘居泰建設有限公司） Wholly-owned by Luzhou Xinglu Jutai Real Estate Co., Ltd. （瀘州興瀘居泰房地產有限公司）, which is a 30%-controlled company of Xinglu Investment, the controlling shareholder of the Company Total	Annual Cap for the Year Ending 31 December 2021 (RMB in million) 0.31
	39.43

Date of Agreement
Contractual Party and
Connected Person
Relationship with the
Company
27 August 2021
Luzhou Xinglu Jutai
Construction
Company Limited（
瀘州興瀘居泰建設有限
公司）
Wholly-owned by
Luzhou Xinglu Jutai
Real Estate Co., Ltd.
（瀘州興瀘居泰房地產有
限公司）, which is a
30%-controlled
company of Xinglu
Investment, the
controlling
shareholder of the
Company
Total

Annual Cap
for the Year
Ending
31 December
2021
(RMB in
million)
0.31

39.43

We have reviewed the Previous Announcements and noted that the Aggregate Annual Cap is equal to the summation of the annual cap for the Lingang Industrial Development Construction Service Agreement and each annual cap for Previous Construction Service Agreements as disclosed in the Previous Announcements.

6. Internal Control Policies

In order to ensure the terms of the Lingang Industrial Development Construction Service Agreement are on normal commercial terms and fair and reasonable to the Company and the Shareholders and are not more favourable than those offered by the Group to Independent Third Parties, the Company has adopted certain internal control procedures measures, details of which are included in section headed “INTERNAL CONTROL” in the Letter form the Board. We have obtained and reviewed the Company’s Detailed Rules of Implementation for the Administration of Connected Transactions （關連交易管理工作實施細則）.

We understood from the Company that standard service agreements are used for water supply pipelines installation services provided by the Company to all customers. We have obtained and reviewed the full list of service agreements in relation to water supply pipelines installation services provided by the Company to Independent Third Parties in 2021 and noted there are approximately 660 in total of such agreements while the contract amounts are within the range of RMB200 to approximately RMB28.71 million. We have also obtained and reviewed three service agreements in relation to water supply pipelines installation services provided by the Company to Independent Third Parties in 2021, which

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

were randomly selected by the Company as per our request for each of the contract amount ranges of (i) below RMB1 million, (ii) RMB1 million to RMB10 million, and (iii) above RMB10 million, and we believe such agreements are fair and representative samples. We have compared the fees offered by the Company to Lingang Industrial Development and those offered to Independent Third Parties for water supply pipelines installation services and noted that the service fees of such services offered by the Company to Lingang Industrial Development are not more favourable than those offered by the Company to the Independent Third Parties.

Pursuant to Rules 14A.55 and 14A.56 of the Listing Rules, the independent non-executive Directors and auditor of the Company will conduct annual review and issue confirmations regarding the continuing connected transactions of the Company each year. We have reviewed the annual reports of the Company for the years ended 31 December 2019 and 2020 and noted that the independent non-executive Directors and the auditor of the Company have reviewed the non-exempt continuing connected transactions during such years and provided the relevant confirmations. The Company also confirmed that it will continue to comply with the relevant annual review requirement under the Listing Rules on an on-going basis.

Based on the above, we concur with the Directors’ view that the Group has effective internal policies in place to continue to monitor the continuing connected transactions, and hence the interest of the Independent Shareholders could be safeguarded.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that the Lingang Industrial Development Construction Service Agreement has been entered into on normal commercial terms and in the ordinary and usual course of the Group’s business, and the transaction contemplated thereunder is fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend and we also recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM in respect of the Lingang Industrial Development Construction Service Agreement and the transaction contemplated thereunder.

Yours faithfully, For and on behalf of Maxa Capital Limited Dian Deng Managing Director

Ms. Dian Deng is a licensed person registered with the Securities and Futures Commission of Hong Kong and a responsible officer of Maxa Capital to carry out type 6 (advising on corporate finance) regulated activities under the SFO and has over 13 years of experience in corporate finance industry.

– 29 –

GENERAL INFORMATION

APPENDIX

1. 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.

2. DISCLOSURE OF INTEREST

(a) Substantial shareholders’ interests and short position in Shares and underlying Shares

As at the Latest Practicable Date, to the best knowledge of the Company based on the public information, the following persons (other than the Directors, Supervisors and chief executive of the Company) had interests or short positions in the Shares or underlying Shares and/or debentures of the Company which were required to be notified to the Company or the Hong Kong Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or which were required by Section 336 of the SFO to be recorded in the register specified in the section, or owned interest and short positions in more than 5% of any class of issued shares of the Company:

					Approximate
				Approximate	percentage
				percentage in	in total
	Shareholding	Class of	Number of	class of	Shares
Name of Shareholder	capacity	Shares	Shares (1)	Shares issued	issued
Xinglu Investment (2)	Beneficial	Domestic	511,654,127(L)	79.35%	59.51%
	owner	Shares
	Interest in a	Domestic	62,709,563(L)	9.73%	7.29%
	controlled	Shares
	corporation
Luzhou Laojiao Group	Beneficial	Domestic	70,406,310(L)	10.92%	8.19%
Co., Ltd.*	owner	Shares
（瀘州老窖集團有限責任公司)
Luzhou Infrastructure (2)	Beneficial	Domestic	62,709,563(L)	9.73%	7.29%
	owner	Shares
Beijing Enterprises Water	Beneficial	H Shares	71,150,000(L)	33.10%	8.28%
Group Limited	owner
（北控水務集團有限公司）(3)
Beijing Enterprises	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
Environmental	controlled
Construction Limited (3)	corporation

– 30 –

APPENDIX

GENERAL INFORMATION

					Approximate
				Approximate	percentage
				percentage in	in total
	Shareholding	Class of	Number of	class of	Shares
Name of Shareholder	capacity	Shares	Shares (1)	Shares issued	issued
Beijing Enterprises	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
Holdings Limited (3)	controlled
	corporation
Beijing Enterprises Group	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
(BVI) Company Limited	controlled
(3)	corporation
Beijing Enterprises Group	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
Company Limited (3)	controlled
	corporation
Beijing Enterprises	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
Investments Limited	controlled
	corporation
Modern Orient Limited	Interest in a	H Shares	71,150,000(L)	33.10%	8.28%
	controlled
	corporation
Sichuan Sans Venture	Beneficial	H Shares	19,247,000(L)	8.95%	2.24%
Capital Co., Ltd.*	owner
（四川三新創業投資有限責任
公司）(4) (7)
Suntront Intelligence (Hong	Beneficial	H Shares	16,884,000(L)	7.86%	1.96%
Kong) Co., Ltd. (5)	owner
Suntront Tech Co., Ltd.*	Interest in a	H Shares	16,884,000(L)	7.86%	1.96%
（新天科技股份有限公司）(5)	controlled
	corporation
Fei Zhanbo（費戰波）(5)	Interest in a	H Shares	16,884,000(L)	7.86%	1.96%
	controlled
	corporation
Luzhou Xiangyang Real	Beneficial	H Shares	14,635,000(L)	6.81%	1.70%
Estate DevelopmentCo.,	owner
Ltd.*（瀘州向陽房地產開發
有限公司) (6) (7)
Yang Lunfen（楊倫芬) (7)	Beneficial	H Shares	14,635,000(L)	6.81%	1.70%
	owner
Wang Xiumei（王秀梅) (7)	Beneficial	H Shares	14,635,000(L)	6.81%	1.70%
	owner
Yang Bin（楊彬) (7)	Beneficial	H Shares	14,635,000(L)	6.81%	1.70%
	owner
Hwabao Trust Co., Ltd. (7)	Trustee	H Shares	77,787,000(L)	36.19%	9.05%
Hwabao �Overseas Market	Trustee	H Shares	19,247,000(L)	8.95%	2.24%
Investment II (37–1 QDII
Single Fund Trust) (7)

– 31 –

APPENDIX

GENERAL INFORMATION

					Approximate
				Approximate	percentage
				percentage in	in total
	Shareholding	Class of	Number of	class of	Shares
Name of Shareholder	capacity	Shares	Shares (1)	Shares issued	issued
Hwabao �Overseas Market	Trustee	H Shares	14,635,000(L)	6.81%	1.70%
Investment II (20–14
QDII Single Fund
Trust (7)
Hwabao �Overseas Market	Trustee	H Shares	14,635,000(L)	6.81%	1.70%
Investment II (37–3 QDII
Single Fund Trust) (7)
Hwabao �Overseas Market	Trustee	H Shares	14,635,000(L)	6.81%	1.70%
Investment II (37–4 QDII
Single Fund Trust) (7)
Hwabao �Overseas Market	Trustee	H Shares	14,635,000(L)	6.81%	1.70%
Investment II (20–15
QDII Single Fund
Trust) (7)

(1) As at the Latest Practicable Date, the Company had issued totally 859,710,000 Shares, including 644,770,000 Domestic Shares and 214,940,000 H Shares. (L) represents long position.
(2) Xinglu Investment has 61.70% interests in Luzhou Infrastructure. Therefore, pursuant to the SFO, Xinglu Investment is deemed to be interested in the Domestic Shares held by Luzhou Infrastructure.
(3) Beijing Enterprises Water Group Limited is held by Beijing Enterprises Environmental Construction Limited as to 41.12%, which is in turn wholly-owned by Beijing Enterprises Holdings Limited, which is held as to 41.06% by Beijing Enterprises Group (BVI) Company Limited, as to 100% by Beijing Enterprises Group Company Limited. Therefore, pursuant to the SFO, all of Beijing Enterprises Environmental Construction Limited, Beijing Enterprises Holdings Limited, Beijing Enterprises Group (BVI) Company Limited and Beijing Enterprises Group Company Limited are deemed to be interested in H Shares held by Beijing Enterprises Water Group Limited.
(4) Sichuan Development Holding Co., Ltd.*（四川發展（控股）有限責任公司）has 100% interests in Sichuan Sans Venture Capital Co., Ltd. Therefore, pursuant to the SFO, Sichuan Development Holding Co., Ltd. is deemed to be interested in H Shares held by Sichuan Sans Venture Capital Co., Ltd.
(5) Suntront Tech Co., Ltd has 100% interests in Suntront Intelligence (Hong Kong) Co., Ltd. Fei Zhanbo has 35.68% interests in Suntront Tech Co., Ltd. Therefore, pursuant to the SFO, Fei Zhanbo and Suntront Tech Co., Ltd are deemed to be interested in H Shares held by Suntront Intelligence (Hong Kong) Co., Ltd.
(6) Luzhou Xiangyang Enterprises Group Limited（瀘州向陽企業集團有限公司) has 55% interests in Luzhou Xiangyang Real Estate Development Co., Ltd（瀘州向陽房地產發展有限公司). Therefore, pursuant to the SFO, Luzhou Xiangyang Enterprises Group Limited is deemed to be interested in H Shares held by Luzhou Xiangyang Real Estate Development Co., Ltd.

– 32 –

APPENDIX

GENERAL INFORMATION

(7) Sichuan Sans Venture Capital Co., Ltd holds a total of 19,247,000 H Shares through a trust named “Hwabao � Overseas Market Investment II (37-1 QDII Single Fund Trust)” managed by Hwabao Trust Co., Ltd; Luzhou Xiangyang Real Estate Development Co., Ltd holds a total of 14,635,000 H Shares through a trust named “Hwabao � Overseas Market Investment II (20-14 QDII Single Fund Trust)” managed by Hwabao Trust Co., Ltd; Yang Lunfen holds a total of 14,635,000 H Shares through a trust named “Hwabao � Overseas Market Investment II (37-3 QDII Single Fund Trust)” managed by Hwabao Trust Co., Ltd; Wang Xiumei holds a total of 14,635,000 H Shares through a trust named “Hwabao � Overseas Market Investment II (37-4 QDII Single Fund Trust)” managed by Hwabao Trust Co., Ltd; and Yang Bin holds a total of 14,635,000 H Shares through a trust named “Hwabao � Overseas Market Investment II (20-15 QDII Single Fund Trust)” managed by Hwabao Trust Co., Ltd. Pursuant to the SFO, Hwabao Trust Co., Ltd, acting as the trustee for the above-mentioned trusts, is deemed to be interested in the aggregate 77,787,000 H Shares with interests owned by such trusts. None of the Hwabao � Overseas Market Investment II (37-1 QDII Single Fund Trust), Hwabao � Overseas Market Investment II (20-14 QDII Single Fund Trust), Hwabao � Overseas Market Investment II (37-3 QDII Single Fund Trust), Hwabao � Overseas Market Investment II (37-4 QDII Single Fund Trust) and Hwabao � Overseas Market Investment II (20– 15 QDII Single Fund Trust) has any interests and/or short positions in the Company which arerequired to be notified to the Company or the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

Save as disclosed above, to the best knowledge of the Company, as at the Latest Practicable Date, no person (other than the Directors, Supervisors and chief executives of the Company) informed the Company that they had interests and/or short positions in the Share and (in respect of positions held pursuant to equity derivatives) underlying Shares and/or debentures of the Company which were required to be notified to the Company or the Hong Kong Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or which were required by Section 336 of the SFO to be recorded in the register specified in the section.

(b) Interests and Short Positions of Directors, Supervisors and Chief Executive in the Shares, Underlying Shares and Debentures

As at the Latest Practicable Date, none of the Directors, Supervisors or chief executive had any interests and/or short positions in the Shares, and (in respect of positions held pursuant to equity derivatives) underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO which should be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or was required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or was required, pursuant to the Model Code to be notified to the Company and Hong Kong Stock Exchange.

(c) Other positions of Directors

Name of Director Position Company Mr. Zhang Qi（張歧先生) Director Xinglu Investment Mr. Chen Bing（陳兵先生) Director and deputy Xinglu Investment general manager Director Luzhou Infrastructure

– 33 –

GENERAL INFORMATION

APPENDIX

Save as disclosed above, and as at the Latest Practicable Date, none of our Directors is a director or employee of a company which has an interest or short position in the Shares and underlying shares of the Group which would fall to be disclosed to the issuer under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective close associates had any interest in any business, which competes or may compete, either directly or indirectly, with the business of the Group as if each of them were treated as a controlling shareholder of the Company under Rule 8.10 of the Listing Rules.

4. DIRECTORS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been, since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

5. DIRECTORS’ INTERESTS IN CONTRACTS

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting and which is significant in relation to the business of the Group.

6. DIRECTORS’ INTERESTS IN SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered, or proposed to enter into a service contract or service agreement with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

7. EXPERT AND CONSENT

The following is the qualifications of the expert who has given an opinion or advice, which is contained or referred to in this circular:

Name Qualifications Maxa Capital A licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

– 34 –

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, Maxa Capital did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Maxa Capital did not have any direct or indirect interest in any assets which have been, since 31 December 2020, being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, Maxa Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter dated 16 September 2021 in connection with their advice to the Independent Board Committee and the Independent Shareholders, and reference to its name and opinion in the form and context in which it appears.

8. LITIGATION

There was no litigation or claim of material importance pending or threatened against any member of the Group as at the Latest Practicable Date.

9. MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up.

10. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the following documents will be made available for inspection during normal business hours at the Company’s principal place of business in Hong Kong at 40th Floor, Dah Sing Financial Centre, No. 248 Queen’s Road East, Wanchai, Hong Kong from the date of this circular up to and including the date of the EGM:

(a) the Articles of Association;
(b) the letter from the Independent Board Committee, the text of which is set out in the section headed “Letter from the Independent Board Committee” of this circular;
(c) the letter from the Independent Financial Adviser in respect of their advice to the Independent Board Committee and the Independent Shareholders, the text of which is set out in the section headed “Letter from the Independent Financial Adviser” of this circular;
(d) the annual reports of the Company for each of the two financial years ended 31 December 2019 and 2020;

– 35 –

GENERAL INFORMATION

APPENDIX

(e) the Lingang Industrial Development Construction Service Agreement;
(f) the Previous Construction Service Agreements;
(g) the written consent from Maxa Capital referred to in the section headed “7. Expert and Consent” in this Appendix; and
(h) this circular.

11. MISCELLANEOUS

(a) The joint company secretaries of the Company are Mr. Chen Yongzhong（陳永忠先生) and Ms. Ng Wing Shan（吳詠珊女士).
(b) The registered office of the Company is located 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the PRC. The head office and principal place of business of the Company in Hong Kong is located at 40th Floor, Dah Sing Financial Centre No. 248 Queen’s Road East, Wanchai, Hong Kong.
(c) The Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited located at Shops 1712-1716, 17th Floor Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(d) This circular in both English and Chinese is available in printed form and published on the respective websites of the Company at “www.lzss.com” and Hong Kong Exchanges and Clearing Limited at “http://www.hkexnews.hk”. To the extent that there are any inconsistencies between the English version and the Chinese version of this circular, the English version shall prevail.
For identification purposes only

– 36 –

NOTICE OF THE EGM

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==> picture [39 x 32] intentionally omitted <==

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(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock code: 2281)

NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2021 first extraordinary general meeting (the “ EGM ”) of Luzhou Xinglu Water (Group) Co., Ltd. (the “ Company ”) will be held at 10:00 a.m. on Friday, 8 October 2021 at the meeting room of 6th Floor, 16 Baizi Road, Jiangyang District, Luzhou, Sichuan Province, the People’s Republic of China (the “ PRC* ”) to consider and, if thought fit, approve the following resolution:

ORDINARY RESOLUTION

To consider and approve the Lingang Industrial Development Construction Service Agreement dated 31 August 2021 entered into between the Company and Lingang Industrial Development and the transaction contemplated thereunder.

By order of the Board Luzhou Xinglu Water (Group) Co., Ltd. * Zhang Qi Chairman

Luzhou, Sichuan Province, the PRC 16 September 2021

Notes:

Pursuant to the Rules Governing the Listing of Securities (the “ Listing Rules ”) on the Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”), voting on all resolutions at a general meeting shall be by way of poll. The poll results of the EGM will be published on the websites of the Stock Exchange and the Company in accordance with the requirements of the Listing Rules.
For the purpose of ascertaining eligibility to attend and vote at the EGM, the register of members of the Company will be closed from Tuesday, 5 October 2021 to Friday, 8 October 2021 (both dates inclusive) during which registration for transfer of shares will be suspended. Holders of H shares of the Company who intend to attend and vote at the EGM shall deliver all transfer forms together with the relevant share certificates to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited, no later than 4:30 p.m. on Monday, 4 October 2021.
Any shareholder of the Company (the “ Shareholder ”) who is entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on his/her behalf. A proxy needs not be a Shareholder. If the Shareholder appoints more than one proxy, his/her proxies may only vote by poll.

– 37 –

NOTICE OF THE EGM

The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorized in writing. If the Shareholder is a legal entity, then the relevant appointing document must be either under seal or under the hand of its director or attorney duly authorized. If the instrument appointing a proxy is signed by a person duly authorized by the Shareholder, the powers of attorney or other instruments of authorization shall be notarized.
The form of proxy together with the power of attorney or other authorization documents, if any, must be delivered to the office of the Board located at the registered office of the Company in the PRC (for holders of domestic shares of the Company) or the Company’s H share registrar, Computershare Hong Kong Investor Services Limited (for holders of H shares of the Company) not later than 24 hours before the time appointed for the holding of the EGM (i.e. not later than 10:00 a.m. on Thursday, 7 October 2021) or any adjourned meeting thereof (as the case may be) in order to be effective.
Any Shareholder who wishes to attend the EGM in person or by proxy is required to complete and return the reply slip to the office of the Board located at the registered office of the Company in the PRC (for holders of domestic shares of the Company) or to the Company’s H share registrar, Computershare Hong Kong Investor Services Limited (for holders of H shares of the Company), by hand or by post, on or before Tuesday, 5 October 2021.
The H share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited and its address and contact information are as follows:

Shops 1712-1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong Tel: (+852) 2862 8686 Fax: (+852) 3186 2419

The address and contact information of the office of the Board located at the registered office of the Company in the PRC are as follows:

16 Baizi Road, Jiangyang District, Luzhou Sichuan Province the PRC

Contact person: Zhang Hailiang（張海良) Tel: +86 (830) 319 4768 Fax: +86 (830) 258 0239

Pursuant to the articles of association of the Company, for joint registered Shareholders consisting of two or more persons, only the Shareholder whose name appears first on the register of members of the Company is entitled to receive this notice, attend the EGM and exercise the entire voting rights conferred by the relevant shares of the Company, and this notice shall be deemed to have served all such joint registered Shareholders.
The EGM is expected to last for no more than half a day. Shareholders who attend the EGM in person or their proxies shall be responsible for their own travelling and accommodation expenses. Shareholders or their proxies who attend the EGM must produce their identity documents for identification.

As at the date of this notice, the Board comprises of (i) three executive directors, namely Mr. Zhang Qi, Mr. Liao Xingyue and Mr. Wang Junhua; (ii) three non-executive directors, namely Mr. Chen Bing, Ms. Xu Yan and Mr. Xie Xin; and (iii) three independent non-executive directors, namely Mr. Gu Ming’an, Mr. Lin Bing and Mr. Cheng Hok Kai, Frederick.

For identification purposes only

– 38 –

AI assistant

Luzhou Xinglu Water (Group) Co., Ltd. — Proxy Solicitation & Information Statement 2021

50494_rns_2021-09-15_4afdf483-9fe4-4422-a724-d0f79a0080a8.pdf

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND

(2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND

(2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LINGANG INDUSTRIAL DEVELOPMENT CONSTRUCTION SERVICE AGREEMENT

LETTER FROM THE BOARD

LETTER FROM THE BOARD

HISTORICAL FIGURES

ANNUAL CAPS

LETTER FROM THE BOARD

INTERNAL CONTROL

INFORMATION ABOUT LINGANG INDUSTRIAL DEVELOPMENT AND THE GROUP

BENEFITS OF AND REASONS FOR THE TRANSACTION

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

EXTRAORDINARY GENERAL MEETING

LETTER FROM THE BOARD

CLOSURE OF REGISTER OF MEMBERS

VOTING BY POLL

RECOMMENDATION

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT AND (2) NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

CONTINUING CONNECTED TRANSACTION – THE CONSTRUCTION SERVICE AGREEMENT WITH LINGANG INDUSTRIAL DEVELOPMENT

INTRODUCTION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

OUR INDEPENDENCE

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Information on the Group

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Information on Lingang Industrial Development

3. Reasons for and benefits of the Lingang industrial Development Construction Service Agreement

4. Principal terms of the Lingang industrial Development Construction Service Agreement

Period of Warranty:

Pricing Policy:

5. Annual caps

5.1 Historical Figures

5.2 Annual Caps

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6. Internal Control Policies

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTEREST

(a) Substantial shareholders’ interests and short position in Shares and underlying Shares

GENERAL INFORMATION

GENERAL INFORMATION

APPENDIX

GENERAL INFORMATION

(b) Interests and Short Positions of Directors, Supervisors and Chief Executive in the Shares, Underlying Shares and Debentures

(c) Other positions of Directors

3. DIRECTORS’ INTEREST IN COMPETING BUSINESS

4. DIRECTORS’ INTERESTS IN ASSETS

5. DIRECTORS’ INTERESTS IN CONTRACTS

6. DIRECTORS’ INTERESTS IN SERVICE CONTRACTS

7. EXPERT AND CONSENT

8. LITIGATION

9. MATERIAL ADVERSE CHANGE

10. DOCUMENTS AVAILABLE FOR INSPECTION

11. MISCELLANEOUS

NOTICE OF THE EGM

NOTICE OF 2021 FIRST EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

NOTICE OF THE EGM

More from Luzhou Xinglu Water (Group) Co., Ltd.

Luzhou Xinglu Water (Group) Co., Ltd. Proxy Solicitation & Information Statement 2021