PDF《泸州市兴泸水务 （集团） 股份有限公司》

20 business days commencing on the effective date of the PPP Project Agreement. The Company and Leshan City Investment and Construction shall pay up the registered capital of the Project Company, which amounts to approximately RMB38.40 million, within

10 business days after the execution of the PPP Project Agreement. The Project Company shall enter into a supplemental agreement with Leshan City Shizhong District Housing and Construction Bureau* (乐 山市市中区住房和建设局) within five business days after its establishment to succeed all obligations and responsibilities of the Company under the PPP Project Agreement. C

3 C INFORMATION ABOUT THE PPP PROJECT The PPP Project comprises of (i) the construction and operation of Leshan City Shizhong District city wastewater treatment plant and the supporting pipeline networks project ("Project under Construction"), which covers the wastewater treatment plants and their supporting pipeline networks in

20 towns, with the daily wastewater treatment capacity of 3,800 tonnes;

and (ii) the entrusted operation of stock assets ("Completed Project"), which covers the wastewater treatment plants and their supporting pipeline networks in

17 towns and market towns, with the daily wastewater treatment capacity of 7,613 tonnes. The estimated total investment for the PPP Project will be approximately RMB192.02 million which, excluding the registered capital of the Project Company, will be financed by the Project Company mainly by way of debt financing. It is expected that the PPP Project will be carried out by using the project model of build-operate-transfer (as for the Project under Construction) and operations & maintenance (as for the Completed Project). INFORMATION ABOUT LESHAN CITY SHIZHONG DISTRICT HOUSING AND CONSTRUCTION BUREAU* (乐山市市中区住房和建设局) AND THE GROUP Leshan City Shizhong District Housing and Construction Bureau* (乐山市市中区住房 和建设局) is a local government authority in the PRC and is authorized by the People's Government of Leshan City Shizhong District to implement the PPP Project. To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, Leshan City Shizhong District Housing and Construction Bureau*(乐山市市中区住房和建设局) is a third party independent of the Company and its connected person(s) (as defined under the Listing Rules). 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. REASONS FOR AND BENEFITS OF ENTERING INTO THE PPP PROJECT AGREEMENT As the PPP Project will cover Shizhong District, Leshan City, entering into the PPP Project Agreement will help the Group expand its business market to areas outside Luzhou City. According to the urban planning of Leshan City, the population growth rate of Shizhong District, where the PPP Project mainly covers, will improve largely, resulting in the rapid increase of wastewater volume in this area. Therefore, entering into the PPP Project Agreement will enlarge the Group's business scale, bringing profits to the Company and its shareholders and realizing the continuous and stable growth of the Company's cash flow, which is consistent with the Company's development strategy. C

4 C Accordingly, the Directors consider that the terms of the PPP Project Agreement and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms and are in the interest of the Company and its shareholders as a whole. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: "Board" the board of Directors of the Company "Business Operation Date" the date when the commercial operation of the PPP Project starts, which shall be the day when the project passes the trial operation as for Project under Construction and shall be the next day immediately after the Transfer Date as for Completed Project "Company" Luzhou Xinglu Water (Group) Co., Ltd.* (泸州市兴泸水 务(集团)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 of Hong Kong Limited "Director(s)" the director(s) of the Company "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Leshan City Investment and Construction" Leshan City Shizhong District City Investment and Construction Co., Ltd* (乐山市市中区城市投资建设有 限公司), a limited liability company established in the PRC on