THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. HISTORY AND CORPORATE STRUCTURE

HISTORY OF OUR COMPANY

Introduction

Our business can be traced back to 1958 when our predecessor, an enterprise owned by the whole people* (全民所有制企業) named City Tap Water Plant* (瀘州市自來水廠), was established. Luzhou City Tap Water Plant* (瀘州市自來水廠) was subsequently renamed as Luzhou City Tap Water Company* (瀘州市自來水公司) and then as Luzhou City Tap Water Main Company* (瀘州市自來水總公司). On 31 July 2002, our Company, Luzhou Water (Group) Company Limited* (瀘州市水務(集團)有限公司), was established in the PRC with a registered capital of RMB66.28 million based on the reorganisation of Luzhou City Tap Water Main Company* (瀘州市自來水總公司).

On 13 July 2007, Luzhou Water (Group) Company Limited* (瀘州市水務(集團)有限公司) was renamed and re-registered as Luzhou Xinglu Water (Group) Company Limited* (瀘州市 興瀘水務(集團)有限公司) with a registered capital of approximately RMB83.50 million.

On 25 December 2015, Luzhou Xinglu Water (Group) Company Limited* (瀘州市興瀘水 務(集團)有限公司) was converted into a joint stock company with limited liability, and was re-named as Luzhou Xinglu Water (Group) Co., Ltd.* (瀘州市興瀘水務(集團)股份有限公司) with a registered capital of RMB600 million, and was held by three promoters, namely, Xinglu Investment as to 87.86%, Luzhou Laojiao as to 10.92% and Luzhou Infrastructure as to 1.22%. For further details in relation to our three promoters, please refer to the paragraphs headed “— Information of Existing Shareholders” below. As of the Latest Practicable Date, our registered capital was RMB664.31 million and our Company was held by Xinglu Investment as to 79.35%, Luzhou Laojiao as to 10.92% and Luzhou Infrastructure as to 9.73%.

Our Company is currently primarily engaged in tap water supply and wastewater treatment business. For further details on the principal business of our Group, please refer to the paragraphs headed “Our Business — Overview” in this document.

Our Business Milestones

Set out below is a list of key milestones in the founding and development of our Group:

Year Business Milestones 1958 • Our water supply business commenced operations in Luzhou City, Province, the PRC.

1987 • We constructed Nanjiao Supply Plant.

1994 • We constructed Beijiao Supply Plant.

2002 • Our Company was established as a limited liability company, namely Luzhou Water (Group) Company Limited* (瀘州市水務(集團)有限公 司).

• We acquired Qiancao Supply Plant from an Independent Third Party.

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Year Business Milestones 2003 • We started our wastewater treatment business by constructing our first wastewater treatment plant in Yaerdang.

• We acquired approximately 70.4% equity interest in Hejiang Water, which owns our Hejiang Supply Plant, from People’s Government of Hejiang County.

2004 • Beijiao Water, the entity which owns Beijiao Supply Plant, was established and was held by our Company as to approximately 25% at that time.

2009 • We set up Luzhou Xinglu Water (Group) Co., Ltd. Water Supply and Drainage Quality Monitoring Station* (瀘州市興瀘水務(集團)有限公 司供水排水水質監測站) to monitor the water quality of water supply and drainage in Luzhou City.

2010 • We constructed Erdaoxi Treatment Plant.

2011 • We acquired Xuyong Treatment Plant from the People’s Government of .

2012 • We acquired additional 96.6% equity interest in Xinglu Wastewater Treatment from Xinglu Investment.

• We acquired Naxi Treatment Plant from Luzhou Guoxing Wastewater Treatment Co., Ltd.* (瀘州市納溪區國興污水處 理有限公司), a SOE.

2014 • We started the construction of Nanjiao Supply Plant II, Chengdong Treatment Plant and Chengnan Treatment Plant.

• Xinglu Wastewater Treatment was awarded the certificate for compliance with the GB/T19001-2008/ISO9001:2008 quality management system.

• Upon completion of our acquisition of Hejiang Treatment Plant and Gulin Treatment Plant, our wastewater treatment service covered the entire Luzhou Area, including four counties (, Hejiang County, Xuyong County and ) and three districts in Luzhou urban area (, and Naxi District).

• We implemented the geographic information system (GIS) for collection of the data in relation to the location, operation and maintenance records, and for conducting real-time monitoring of the operational status of and water flow in our pipeline network.

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Year Business Milestones 2015 • We started the construction of the Beijiao Supply Plant Phase III.

• We converted into a joint stock company with limited liability and were re-named as Luzhou Xinglu Water (Group) Co., Ltd.* (瀘州市興 瀘水務(集團)股份有限公司).

• Our Company was awarded the certificate for compliance with the GB/T19001-2008/ISO9001:2008 and GB/T50430-2007 quality management systems.

MAJOR CHANGES IN SHARE CAPITAL

Since our establishment and up to the Latest Practicable Date, we have undergone the below major changes in our registered capital and paid-up share capital as a result of capital injection:

• On 13 July 2007, upon registration with Luzhou City AIC, the registered capital of our Company was increased from RMB66.28 million to approximately RMB83.50 million. According to a registered capital verification report issued by an independent third party auditor, as of 4 June 2007, 100% of the increased registered capital had been paid up.

• On 11 August 2009, upon registration with Luzhou City AIC, the registered capital of our Company was increased from approximately RMB83.50 million to approximately RMB84.90 million. According to a registered capital verification report issued by an independent third party auditor, as of 14 July 2009, 100% of the increased registered capital had been paid up.

• On 27 December 2012, upon registration with Luzhou City AIC, the registered capital of our Company was increased from approximately RMB84.90 million to approximately RMB184.90 million. According to a registered capital verification report issued by an independent third party auditor, as of 5 December 2012, 100% of the increased registered capital had been paid up.

• On 4 September 2014, upon registration with Luzhou City AIC, the registered capital of our Company was decreased from approximately RMB184.90 million to approximately RMB184.40 million. Please refer to the subsection headed “— Major Acquisition and Disposal — Capital Reduction and Disposal of Non-principal Businesses Related Assets” in this section for further details.

• On 5 January 2015, upon registration with Luzhou City AIC, the registered capital of our Company was increased from RMB184.40 million to RMB278.71 million.

• On 25 December 2015, upon registration with Luzhou City AIC, we were converted from a limited liability company to a joint stock company with the registered capital of RMB600 million. According to a registered capital verification report issued by an Independent Third Party Auditor, as of 17 December 2015, 100% of the increased registered capital had been paid up.

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• On 11 May 2016, upon registration with Luzhou City AIC, the registered capital of our Company was increased from RMB600 million to RMB664.31 million. According to a registered capital verification report issued by an Independent Third Party auditor, as of 12 May 2016, 100% of the increase registered capital had been paid up.

MAJOR ACQUISITION AND DISPOSAL

Acquisition of Xinglu Wastewater Treatment

With a view to further supplement our wastewater treatment business, on 31 December 2012, we acquired approximately 96.6% equity interest in Xinglu Wastewater Treatment from Xinglu Investment at a consideration of approximately RMB67.2 million, which was determined based on an assets appraisal report issued by an independent valuer and after arm’s length negotiation and was fully paid by us by December 2012. Upon the completion of such acquisition, Xinglu Wastewater Treatment was held by our Company and Xinglu Investment as to 98% and 2%, respectively, and Xinglu Wastewater Treatment became one of our non-wholly owned subsidiaries.

Capital Reduction and Disposal of Non-principal Businesses Related Assets

With a view to focus on our principal business and centralise our management and financial resources, upon approval from Luzhou City SASAC and pursuant to the resolution passed at the Shareholders’ meeting 30 June 2014, our Company disposed of our non-principal businesses related assets, i.e. certain long-term equity investments, investment properties, buildings and structures and land use rights, with an aggregate book value of approximately RMB55.07 million as at 30 June 2013, and injected the same into a separate company named Luzhou City Xinglu Assets Management Co., Ltd.* (瀘州市興瀘資產管理有 限公司)(“Xinglu Assets Management”) established by way of company division (分立)from our Company. In connection with the establishment of Xinglu Assets Management, our registered capital was also reduced by RMB0.5 million, which was contributed into Xinglu Assets Management as its registered capital. Upon completion of the establishment of Xinglu Assets Management, Xinglu Assets Management was held by Xinglu Investment and Luzhou Infrastructure as to 98.15% and 1.85%, respectively.

On 25 December 2015, the 1.85% equity interest in Xinglu Assets Management held by Luzhou Infrastructure was transferred to Xinglu Investment. As at the Latest Practicable Date, Xinglu Assets Management was wholly owned by Xinglu Investment.

As confirmed by our PRC legal adviser, Jia Yuan Law Offices, all applicable regulatory approvals have been obtained and the acquisition, the capital reduction and disposal disclosed above have been properly and legally completed and settled.

During the Track Record Period and up to the Latest Practicable Date, save as disclosed above, we did not have any major acquisition, disposal or merger.

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OUR MAJOR SUBSIDIARIES

1. Xinglu Wastewater Treatment

Xinglu Wastewater Treatment is a limited liability company established in the PRC and commenced business on 11 December 2000 with a registered capital of RMB1 million. Subsequently, after three instances of capital increase and as at the Latest Practicable Date, the registered capital of Xinglu Wastewater Treatment was RMB248 million and was held by our Company and Xinglu Investment as to 98% and 2%, respectively. For details of our acquisition of Xinglu Wastewater Treatment, please refer to the paragraph headed “Major Acquisition and Disposal” in this section.

Xinglu Wastewater Treatment is currently mainly engaged in providing wastewater treatment services.

2. Beijiao Water

Beijiao Water is a limited liability company established in the PRC and commenced business on 25 March 2004 with a registered capital of approximately RMB16.45 million. Beijiao Water became one of our non-wholly owned subsidiaries after a rectification of shareholding in Beijiao Water in June 2011. For further details, please refer to the subsection headed “— Shareholding in Our Subsidiaries Held by Our Employees” in this section.

As at the Latest Practicable Date, the registered capital of Beijiao Water was approximately RMB43.9 million and was held by our Company as to approximately 86.78%, Luzhou Zhongxu as to approximately 8.30%, Luzhou Bei’er Asset Management Center (Limited Partnership)* (瀘州北貳資產管理中心(有限合夥)) (“Luzhou Bei’er”) as to approximately 3.04% and Luzhou Beiyi Asset Management Center (Limited Partnership)* (瀘 州北壹資產管理中心(有限合夥)) (“Luzhou Beiyi”) as to approximately 1.88%. As at the Latest Practicable Date, other than their interests in Beijiao Water, Luzhou Beiyi and Luzhou Bei’er were Independent Third Parties to our Company and Luzhou Zhongxu also held equity interest in our other subsidiaries, details of which was disclosed in paragraph headed “— Corporate Structure” below.

Beijiao Water is currently mainly engaged in the business of tap water production.

3. Jiangnan Water

Jiangnan Water is a limited liability company established in the PRC on 7 March 2003 with a registered capital of RMB6.52 million. Its registered capital remained unchanged since its establishment and as at the Latest Practicable Date, Jiangnan Water was held as to approximately 44.19% by Luzhou Zhongxu, as to approximately 5.85% in aggregate by 29 PRC individuals, who are our employees, former employees or Independent Third Parties, and as to approximately 49.96% by our Company. Jiangnan Water is currently mainly engaged in the business of tap water production and sales.

After a rectification of shareholding in Jiangnan Water in June 2011, details of which are disclosed in the paragraphs headed “— Shareholding in Our Subsidiaries Held by Our

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Employees”, and according to an acting in concert agreement dated 30 June 2011 entered into between our Company and Mr. Wang Tianshou (汪天壽), one of the then shareholders of Jiangnan Water that held approximately 9.89% equity interests in Jiangnan Water for himself and on behalf of several then employees, Mr. Wang agreed to vote in shareholders’ meetings of Jiangnan Water in the same manners as our Company. From 10 December 2015 to 28 December 2015, Mr. Wang and such then employees on whose behalf Mr. Wang held shares entered into respective equity transfer agreements with Luzhou Zhongxu, pursuant to which Mr. Wang and such then employees agreed to sell and Luzhou Zhongxu agreed to acquire an aggregate of 8.38% equity interests held by Mr. Wang and such then employees in Jiangnan Water, at an aggregate consideration of approximately RMB2.8 million which was fully settled by 4 January 2016. Subsequently, according to an acting in concert agreement dated 3 February 2016 entered into between our Company and Luzhou Zhongxu, which held approximately 44.19% equity interests in Jiangnan Water, Luzhou Zhongxu agreed to exercise its shareholder’s rights of Jiangnan Water in the same manners as our Company when no consensus can be reached and therefore Jiangnan Water is regarded as being controlled by our Company and accounted for as a subsidiary of our Company.

4. Hejiang Water

Hejiang Water is a limited liability company established in the PRC and commenced business on 26 April 1999 with a registered capital of approximately RMB8.64 million. Its registered capital remained unchanged since its establishment. In October 2003, Hejiang Water became one of our non-wholly owned subsidiaries. Subsequently, Hejiang Water conducted rectification of its shareholding, details of which are disclosed in the paragraph headed “— Shareholding in Our Subsidiaries Held by Our Employees” in this section. As at the Latest Practicable Date, Hejiang Water was held by 48 PRC individuals, who were our employees or Independent Third Parties, as to approximately 9.72% in aggregate, Luzhou Zhongxu as to approximately 4.35%, and our Company as to approximately 85.93%.

Hejiang Water is currently mainly engaged in the business of tap water production and sales.

SHAREHOLDING IN OUR SUBSIDIARIES HELD BY OUR EMPLOYEES

When we were established as a limited liability company in 2002, we transferred certain net assets to the then employees of our subsidiaries in the form of equity in the relevant subsidiaries, resulting in the number of shareholders of our certain subsidiaries having exceeded the maximum limit of 50 shareholders allowed under the PRC Company Law and as disclosed in the section headed “Regulatory Environment”, and the existence of dormant shareholders in our certain subsidiaries.

In 2011, 2014 and 2015, our Group took steps to regulate the shareholding in our certain subsidiaries held by our then employees through the following methods: (1) individual shareholders transferred equity interests held by them to our Company and/or Luzhou Zhongxu by entering into the share transfer agreements; or (2) individual shareholders set up partnerships and transferred equity interests held by them to such partnerships. Details of the

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Before the rectification After the rectification(8) Number of Aggregate Number of Aggregate individual shareholding individual shareholding Subsidiaries shareholders interest (%) shareholders interest (%) Beijiao Water ...... 513(1) 7500 Nanjiao Water ...... 359(2) 100 46 10.38 Jiangnan Water ...... 312(3) 89.84 29 5.85 Naxi Water ...... 85(4) 30.50 6 1.58 Hejiang Water ...... 75(5) 14.74 48 9.72 Sitong Engineering ...... 119(6) 80.04 13 1.98 Sitong Design ...... 436(7) 100 21 2.96

Notes:

(1) Before the rectification, there were 22 registered individual shareholders in Beijiao Water, among whom, six shareholders were beneficial owners and 16 shareholders were holding equity interest on behalf of other 507 individuals. After the rectification in June 2011, Beijiao Water became a non-wholly subsidiary of our Company and was held by our Company as to approximately 63.77%.

(2) Before the rectification, there were 13 registered individual shareholders in Nanjiao Water, who were holding equity interest on behalf of other 359 individuals. After the rectification in June 2011, Nanjiao Water was held by our Company as to approximately 43.38%. According to the acting in concert agreement dated 30 June 2011 entered into between our Company and Mr. Wang Tianshou (汪天壽), one of the then shareholders of Nanjiao Water who held approximately 14.34% equity interests in Nanjiao Water for himself and on behalf of several then employees, Mr. Wang agreed to vote in shareholders’ meetings of Nanjiao Water in the same manners as our Company. Therefore, Nanjiao Water was regarded as being controlled by our Company and accounted for as a subsidiary of our Company.

(3) Before the rectification, there were 14 registered individual shareholders in Jiangnan Water, who were holding equity interest on behalf of other 312 individuals. After the rectification in June 2011, Jiangnan Water was held by our Company as to approximately 49.05%. According to the acting in concert arrangement, Jiangnan Water was regarded as being controlled by our Company and accounted for as a subsidiary of our Company. For details of the acting in concert arrangement, please refer to the paragraph headed “— Our Major Subsidiaries — 3. Jiangnan Water” in this section.

(4) Before the rectification, there were seven registered individual shareholders in Naxi Water, who were holding equity interest on behalf of other 85 individuals, and our Company held other 69.50% equity interests in Naxi Water. After the rectification in June 2011, Naxi Water was held by our Company as to approximately 62.17%.

(5) Before the rectification, there were four registered individual shareholders in Hejiang Water, who were holding equity interest on behalf of other 75 individuals, and our Company held other 85.26% equity interests in Hejiang Water. After the rectification in June 2011, Hejiang Water was held by our Company as to approximately 85.93%

(6) Before the rectification, there were 10 registered individual shareholders in Sitong Engineering, who were holding equity interest on behalf of other 119 individuals. After the rectification in June 2011, Sitong Engineering became a non-wholly subsidiary of our Company and was held by our Company as to approximately 79.38%.

(7) Before the rectification, there were three registered individual shareholders in Sitong Design, who were holding equity interest on behalf of other 436 individuals. After the rectification in June 2011, Sitong Design became a non-wholly subsidiary of our Company and was held by our Company as to approximately 65.98%.

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(8) The number of individual shareholders and their aggregate shareholding interest in this column show the shareholding structure of our seven subsidiaries immediately after the completion of the rectification process in 2011, 2014 and 2015. For further details of the shareholding structure of the seven subsidiaries as at the Latest Practicable Date and upon [REDACTED], please refer to the paragraph headed “— Corporate Structure” in this section.

As confirmed by our PRC legal adviser, Jia Yuan Law Offices, (i) our Group has legally completed the rectification of shareholding by our employees and the measures taken for such regulation are legal; there remains no dispute on such rectification of shareholding by our employees; (ii) our current shareholding in our aforementioned seven subsidiaries were legal and in compliance with the requirements regarding number of shareholders under the relevant laws and regulations, including the PRC Company Law; and (iii) each of our Company and its subsidiaries is a company duly established and validly existing under the relevant PRC laws and regulations.

INFORMATION OF EXISTING SHAREHOLDERS

As at the Latest Practicable Date, our Company was owned by Xinglu Investment, Luzhou Laojiao and Luzhou Infrastructure as to 79.35%, 10.92% and 9.73%, respectively. Further details regarding our existing Shareholders are set out below:

1. Xinglu Investment

Our Company was allocated by the People’s Government of Luzhou from Luzhou Planning and Construction Bureau* (瀘州市規劃建設局) to Xinglu Investment, who became our Controlling Shareholder on 17 March 2005. Xinglu Investment is a wholly stated-owned limited liability company established in the PRC on 28 January 2003. It is mainly engaged in management, investment and financing of state-owned assets. As at the Latest Practicable Date, Xinglu Investment was owned by Luzhou City SASAC as to 100% and was our Controlling Shareholder.

2. Luzhou Laojiao

Luzhou Laojiao became one of our Shareholders upon completion of the increase of our registered capital on 5 January 2015. Luzhou Laojiao is a wholly stated-owned limited liability company established in the PRC on 21 December 2000. It is mainly engaged in the rice production and processing and brewing. As at the Latest Practicable Date, Luzhou Laojiao was owned by Luzhou City SASAC as to 100%.

3. Luzhou Infrastructure

Luzhou Infrastructure became one of our Shareholders upon completion of the increase of our registered capital on 13 July 2007. Luzhou Infrastructure Investment is a limited liability company established in the PRC on 29 May 2001. It is mainly engaged in the management, investment and financing of state-owned assets and infrastructure construction. As at the Latest Practicable Date, Luzhou Infrastructure was held by CDB Development Fund Co., Ltd.* (國開發展基金有限公司) as to 20.86%, Xinglu Investment as to 79.13% and Luzhou Xinglu Jutai Real Estate Co., Ltd.* (瀘州興瀘居泰房地產有限公司), a wholly-owned subsidiary of Xinglu Investment, as to 0.01%, respectively.

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CORPORATE STRUCTURE

Immediately prior to the [REDACTED], the equity holding structure of our Group is set out below:

Xinglu Investment

79.13%

Luzhou Luzhou Laojiao Infrastructure 9.73% 79.35 % 10.92 %

Our Company(1)

98% 86.78% 45.79% 49.96% 76.64% 85.93% 79.38% 67.38% 100%

Xinglu Xinglu Wastewater Beijiao Nanjiao Jiangnan Naxi Hejiang Sitong Sitong Water (3) (4) (5) (6) (7) (8) (9) (2) Water Water Water Crystal Treatment Water Water Engineering Design Mall

The equity holding structure of our Group immediately following completion the [REDACTED] (assuming that the [REDACTED] is not exercised) is set out below:

Xinglu Investment

79.13%

Luzhou Luzhou H Shareholders Infrastructure Laojiao [REDACTED ]% [REDACTED ]% [REDACTED ]% [REDACTED ]% (10)

Our Company (1)

98% 86.78% 45.79% 49.96% 76.64% 85.93% 79.38% 67.38% 100%

Xinglu 7 Xinglu Beijiao Nanjiao Jiangnan Wastewater Naxi Hejiang Sitong Sitong Water (3) (4) (5) (6) (7) (8) (9) (2) Water Water Water Water Water Engineering Design Crystal Treatment Mall

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Notes:

(1) As at the Latest Practicable Date, there were two branches of our Company, namely Luzhou Xinglu Water (Group) Co., Ltd. Lu County Branch* (瀘州市興瀘水務(集團)股份有限公司瀘縣分公司) and Luzhou Xinglu Water (Group) Co., Ltd. Water Supply and Drainage Quality Monitoring Station* (瀘州 市興瀘水務(集團)股份有限公司供水排水水質監測站).

(2) The remaining 2% equity interest in Xinglu Wastewater Treatment was held by Xinglu Investment as at the Latest Practicable Date.

(3) The remaining approximately 13.22% equity interest in Beijiao Water was held by Luzhou Beiyi as to approximately 1.88%, Luzhou Bei’er as to approximately 3.04% and Luzhou Zhongxu as to approximately 8.30% as at the Latest Practicable Date.

(4) The remaining approximately 54.21% equity interest in Nanjiao Water was held by Luzhou Zhongxu as to approximately 43.83% and 46 PRC individuals, who are our employees or Independent Third Parties, as to approximately 10.38% in aggregate as at the Latest Practicable Date. According to an acting in concert agreement dated 3 February 2016 entered into between our Company and Luzhou Zhongxu, which held approximately 43.83% equity interests in Nanjiao Water, Luzhou Zhongxu agreed to exercise its shareholder’s rights of Nanjiao Water in the same manners as our Company when no consensus can be reached and therefore Nanjiao Water was regarded as being controlled by our Company and accounted for as a subsidiary of our Company as at the Latest Practicable Date.

(5) The remaining approximately 50.04% equity interest in Jiangnan Water was held by Luzhou Zhongxu as to approximately 44.19% and 29 PRC individuals, who are our employees or Independent Third Parties, as to approximately 5.85% in aggregate as at the Latest Practicable Date. According to an acting in concert agreement dated 3 February 2016 entered into between our Company and Luzhou Zhongxu, which held 44.19% equity interests in Jiangnan Water, Luzhou Zhongxu agreed to exercise its shareholder’s rights of Jiangnan Water in the same manners as our Company when no consensus can be reached and therefore Jiangnan Water was regarded as being controlled by our Company and accounted for as a subsidiary of our Company.

(6) The remaining approximately 23.36% equity interest in Naxi Water was held by Luzhou Zhongxu as to approximately 21.78% and 6 PRC individuals, who are our employees or Independent Third Parties, as to approximately 1.58% in aggregate as at the Latest Practicable Date.

(7) The remaining approximately 14.07% equity interest in Hejiang Water was held by Luzhou Zhongxu as to approximately 4.35% and 48 PRC individuals, who are our employees or Independent Third Parties, as to approximately 9.72% in aggregate as at the Latest Practicable Date.

(8) The remaining approximately 20.62% equity interest in Sitong Engineering was held by Luzhou Zhongxu as to approximately 18.64% and 13 PRC individuals, who are our employees or Independent Third Parties, as to approximately 1.98% in aggregate as at the Latest Practicable Date.

(9) The remaining approximately 32.62% equity interest in Sitong Design was held by Luzhou Zhongxu as to approximately 29.66% and 21 PRC individuals, who are our employees or Independent Third Parties, as to approximately 2.96% in aggregate as at the Latest Practicable Date.

(10) The shares held by H Shareholders include the H Shares converted from Domestic Shares and offered by our [REDACTED] in accordance with the PRC laws relating to state-owned shares reduction. For details, please refer to the section headed “Share Capital” in this document.

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