History and Corporate Structure
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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 OVERVIEW Our history traced back to the establishment of our Predecessor Company in the PRC on 5 May 1993 as a limited liability company. Our Predecessor Company commenced the water supply service in Taizhou in December 1995. Pursuant to the Founders Agreement, our Predecessor Company was converted into our Company, a joint stock company with limited liability, on 30 June 1999 and our registered capital was increased to RMB149.13 million through contribution of net assets of our Predecessor Company and cash by our Founders. Our Company adopted its current name “Taizhou Water Group Co., Ltd.” (台州市水務集 團股份有限公司) on 23 May 2016. KEY MILESTONES Below sets out the key milestones of our business development: May 1993 our Predecessor Company was established. December 1995 our Predecessor Company commenced the business of water supply service December 1996 the leading group of Huang-Jiao-Wen Joint Water Supply Project (黃椒温聯合供水指揮部) transferred the assets of Taizhou Water Supply System (Phase I) June 1999 our Predecessor Company was converted into a joint stock limited liability company [February 2004] participation in the construction of the Taizhou Water Supply System (Phase II) commenced [December 2008] completion of the construction of the Taizhou Water Supply System (Phase II) May 2015 our project proposal on the Taizhou Water Supply System (Phase III) was accepted by Taizhou DRC February 2018 construction of the Taizhou Water Supply System (Phase III) commenced. –95– 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 April 2018 our project proposal on the Taizhou Water Supply System (Phase IV) was accepted by Taizhou DRC. November 2018 construction of the Taizhou Water Supply System (Phase IV) commenced. OUR CORPORATE DEVELOPMENT The following sets forth the corporate history and changes in the shareholding composition of our Company. Our Predecessor Company Our Predecessor Company was established as a limited liability company in the PRC on 5 May 1993 with an initial registered capital of RMB65,415,000. The following table sets forth the changes in registered capital and shareholders of our Predecessor Company since its establishment and up to the establishment of our Company: Registered share Shareholders and shareholding capital immediately percentage immediately Date Change after the change after the change Upon – RMB65.415 million (i) Huangyan City Financial establishment Development Company* (黃岩市 財務開發公司) (48.52%) (ii) Jiaojiang Financial Development Company* (椒江市財務開發公司) (36.04%) (iii) Wenling Zeguo Economic Development Company* (溫嶺市澤國經濟開發公司) (15.44%) January 1996 Transfer of equity interest in our RMB65.415 million (i) Taizhou Jiaojiang Infrastructure Predecessor Company by (36.04%) Huangyan City Financial (ii) Zhejiang Huangyan Financial Development Company to Development (28.00%) Zhejiang Huangyan Financial (iii) Taizhou Luqiao Financial Development and Taizhou Luqiao Development (20.52%) Financial Development (iv) Wenling Zeguo Economic Development Company (15.44%) –96– 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 Registered share Shareholders and shareholding capital immediately percentage immediately Date Change after the change after the change 1998 (i) Increase in registered capital RMB109.13 million (i) Taizhou Urban Construction by RMB43.715 million (30.24%) (ii) Transfer of equity interest in (ii) Zhejiang Huangyan Financial our Predecessor Company by Development (24.30%) Wenling Zeguo Economic (iii) Taizhou Jiaojiang Infrastructure Development Company to (20.25%) Taizhou Financial (iv) Taizhou Luqiao Financial Development Company* (台 Development (16.05%) 州市財務開發公司) (v) Taizhou Small Hydropower (iii) Contribution of capital by Service Station (9.16%) Taizhou Financial Development Company (iv) Transfer of equity interest in our Predecessor Company by Taizhou Financial Development Company to Taizhou Urban Construction (v) Transfer of equity interest in our Predecessor Company in the value of RMB10.0 million by Taizhou Jiaojiang Infrastructure to Taizhou Small Hydropower Service Station* (台州市小水電服務 站) January 1999 Transfer of equity interest in our RMB109.13 million (i) Taizhou Urban Construction Predecessor Company by Taizhou (30.24%) Small Hydropower Service Station (ii) Zhejiang Huangyan Financial to Taizhou Hydropower(Note) Development (24.30%) (iii) Taizhou Jiaojiang Infrastructure (20.25%) (iv) Taizhou Luqiao Financial Development (16.05%) (v) Taizhou Hydropower (9.16%) Note: Pursuant to the Decision in relation to the transfer of equity interest in Taizhou Water Supply Co., Ltd. to Taizhou Hydropower (Tai Shui Dian [1999] No. 12)《關於劃撥台州供水有限公司股份給台州市 ( 電力開發有限公司的決定》(台水電[1999]12號)) issued by the Taizhou Water Resources and Electric Power Bureau* (台州市水利電力局) on 14 January 1999, Taizhou Small Hydropower Service Station transferred its equity interest in the Predecessor Company to Taizhou Hydropower. –97– 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 Establishment of our Company Pursuant to the Founders Agreement, the Founders agreed to convert our Predecessor Company into a joint stock limited liability company under the name of Zhejiang Taizhou Water Supply Co., Ltd.* (浙江台州供水股份有限公司) and the Founders shall contribute to the registered capital by way of cash or net assets of our Predecessor Company. Upon obtaining approval by the then Securities Commission of the Zhejiang Provincial People’s Government* (浙江省人民政府證券委員會) in its Approval in relation to Establishment of Zhejiang Taizhou Water Supply Co., Ltd. (Zhe Zheng Wei [1999] No. 25) 《關於同意設立浙江台州供水股份有限公司的批覆》( (浙證委[1999]25號)) on 31 March 1999, our Predecessor Company was converted into a joint stock limited liability company on 30 June 1999 with an initial registered capital of RMB149,130,000, divided into 149,130,000 Shares with a par value of RMB1.00 each. The then entire registered capital was fully settled by our Founders in December 1998 in cash or net assets of our Predecessor Company based on its appraised value as of 30 November 1998. The following table sets forth the details of our Founders’ contribution to the establishment of our Company: Number of Shareholding Name of Founders Shares held Contribution percentage Taizhou Urban Construction 33,000,000 Net assets of our Predecessor 22.13% Company in the value of RMB33,000,000 Zhejiang Huangyan Financial 26,524,800 Net assets of our Predecessor 17.79% Development Company in the value of RMB26,524,800 Taizhou Jiaojiang 22,094,000 Net assets of our Predecessor 14.82% Infrastructure Company in the value of RMB22,094,000 Zhejiang Taixin 20,000,000 RMB20,000,000 in cash 13.41% Zhejiang Zhijiang 20,000,000 RMB20,000,000 in cash 13.41% Taizhou Luqiao Financial 17,511,200 Net assets of our Predecessor 11.74% Development Company in the value of RMB17,511,200 Taizhou Hydropower 10,000,000 Net assets of our Predecessor 6.70% Company in the value of RMB10,000,000 149,130,000 RMB149,130,000 100% For further information of our Founders, please see the paragraph headed “Information of our Founders” below. –98– 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 Share transfers between 2002 and 2011 In September 2002, Taizhou Hydropower entered into a share transfer agreement with Taizhou Urban Construction, pursuant to which Taizhou Hydropower agreed to transfer its 6.70% shareholding interest in our Company to Taizhou Urban Construction at the price of RMB1.50 per share for a total consideration of RMB15,000,000, which was determined with reference to a valuation appraised by an independent valuer in the PRC. The transfer was completed in December 2003. In September 2008, Zhejiang Zhijiang agreed to transfer (i) its 6.705% shareholding interest in our Company to Lipin Enterprise; and (ii) its 6.705% shareholding interest in our Company to Lanping Jinghong Investment Co., Ltd.* (蘭坪景鴻投資有限公司)(“Lanping Jinghong”). The consideration of each transfer was RMB10,000,000, which was determined with reference to the registered capital of the Company at the time of transfer, has been fully settled. The transfers were completed in October 2008. In September 2010, Lanping Jinghong entered into a share transfer agreement with Qufeng Holdings, pursuant to which Lanping Jinghong agreed to transfer its 6.705% equity interest in our Company to Qufeng Holdings for a consideration of RMB9,999,166.50 which was determined after arm’s length negotiation. In March 2011, Taizhou Luqiao Financial Development transferred its 11.74% shareholding interest in our Company to Taizhou Luqiao Public Assets. Taizhou Luqiao Financial Development and Taizhou Luqiao Public Assets were wholly state-owned enterprises controlled by the People’s Government of Luqiao District. The People’s Government of Luqiao