Kunming Dianchi Water Treatment Co., Ltd. announced that Mr. Luo Yun ("Mr. Luo"), an executive Director, a member of the strategy and investment decision committee (the "Strategy and Investment Decision Committee") and a deputy general manager of the Company, has been subject to investigation by the Kunming Disciplinary Inspection Committee of the Communist Party of China and the Kunming Supervisory Committee for suspected serious breach of disciplines and laws, and the Board considers that Mr. Luo is unable to perform his duties as an executive Director, a member of the Strategy and Investment Decision Committee and a deputy general manager of the Company. On 7 February 2023, the Board resolved to propose the removal of Mr. Luo as an executive Director, a member of the Strategy and Investment Decision Committee and a deputy general manager (the "Proposed Removal of Mr. Luo"). The Board is not aware of the details of the investigation of Mr. Luo.

To the best of the Board's knowledge, the Company is not under any investigation. In accordance with the articles of association of the Company, the abovementioned proposed removal of Mr. Luo as an executive Director will become effective from the date of approval by the shareholders of the Company by way of an ordinary resolution at the general meeting, and the removal of Mr. Luo as a member of the Strategy and Investment Decision Committee and a deputy general manager has been approved and agreed by the Board with effect from 7 February 2023. As the Board has three executive Directors (including Mr. Luo), the duties of Mr. Luo have been taken up by the other executive Directors.

The Board confirms that the functions of the Board and the business operation of the Group have not been adversely affected by the Proposed Removal of Mr. Luo. The Board will make arrangements for matters in relation to the proposed removal of Mr. Luo as an executive Director in accordance with the relevant requirements and issue a circular and notice convening a general meeting to the shareholders of the Company in due course. Mr. Chen Changyong has been appointed by the Board as a member of the Strategy and Investment Decision Committee with effect from 7 February 2023.