The Board announce that on 26 August 2019, Dongjiang Environmental Company Limited has entered into the Shareholder Investment Agreement with Jiangsu High Hope International Group Corporation (High Hope Group) in relation to the establishment of the Joint Venture. Pursuant to the Shareholder Investment Agreement, the total registered capital of the Joint Venture will be RMB 200 million, in which High Hope Group and the company has agreed to make a capital contribution of RMB 120 million and RMB 80 million respectively, accounting for 60% and 40% of the total registered capital of the Joint Venture, respectively. The company and High Hope Group agreed to establish the Joint Venture (the proposed name of which is Jiangsu High Hope Dongjiang Environmental Company Limited, which is subject to approval from and registration with relevant industry and commerce authority with registered capital of RMB 200 million; the place of registration shall be Nanjing, Jiangsu.

High Hope Group will make a capital contribution of RMB 120 million to the Joint Venture, accounting for 60% of the registered capital. The Company will make a capital contribution of RMB 80 million to the Joint Venture, accounting for 40% of the registered capital. According to the proportion of their respective contributions to the joint venture, the contracting parties shall pay their respective contributions in cash by 31, December 2019.

Research, development and installation services of equipment for control and treatment of wastewater, exhaust gas and noise; wastewater treatment and recycling; solid and hazardous waste disposal and recycling; promotion, development, consultation, transfer and service of environmental technologies; consultation and service of renewable energy technologies; wholesale of environmental equipment; energy technology consultation; carbon emission reduction technology consultation; development, promotion and consultation of energy saving technologies; environment monitoring; environmental engineering project design; construction technology consultation; and construction project management service (for items subject to approval as required by law, approvals from the relevant authorities must be obtained prior to commencement of operation). The board of directors of the Joint Venture will be comprised of 5 directors, of which 3 directors will be nominated by High Hope Group and 2 directors will be nominated by the company. The chairman will be the legal representative of the Joint Venture and will be assumed by a director nominated by High Hope Group.

The supervisory committee of the Joint Venture will be comprised of 3 supervisors, and the chairman of the supervisory committee will be elected by votes representing a simple majority of all the supervisors. The ratio of shareholder representative supervisors and employee representative supervisors in the supervisory committee shall be 2:1. In particular, each of High Hope Group and the Company will appoint one shareholder representative supervisor, who shall be elected at the general meeting, and the employee representative supervisor shall be elected at the employee representative meeting. The general manager of the Joint Venture will be nominated by the Company, whose appointment or dismissal shall be determined by the board of directors.