On 6 February 2024, Beijing Boqi Electric Power Science & Technology Co., Ltd. (Beijing Boqi) and Richinfo Company entered into the JV Agreement in relation to the proposed formation of the Joint Venture Company in the PRC for development of new energy business. Pursuant to the JV Agreement, Beijing Boqi shall make a capital contribution of RMB 4 million in cash, representing 40% of the total registered capital of the Joint Venture Company and Richinfo Company shall make a capital contribution of RMB 6 million in cash, representing 60% of the total registered capital of the Joint Venture Company. The formation of the Joint Venture Company is beneficial to fully leveraging the advantages of resources of the parties, accelerating the expansion of new energy business market of the Company and achieving mutual benefit and win-win results, so as to build a standardized and lightweight investment operation and management platform based on advanced technology practices and projects.

The business scope of the Joint Venture Company is proposed to be " General items: solar photovoltaic grid-connected power generation, electricity sales; the development, construction, operation, management and maintenance of solar photovoltaic power stations; engaging in technology development, technology transfer in the field of solar cells; solar power generation technology services; power generation technology services; energy conservation management services; energy storage technology services; engineering management services; foreign contracted projects; engineering and technical services; import and export of goods and technology (For projects that require approval according to law, operating activities can only be conducted after being approved by relevant departments. The business scope of the Joint Venture Company is subject to the approval results.)". The total registered capital of the Joint Venture Company is RMB 10 million.

Beijing Boqi shall make a capital contribution of RMB 4 million in cash, representing 40% of the total registered capital of the Joint Venture Company and Richinfo Company shall make a capital contribution of RMB 6 million in cash, representing 60% of the total registered capital of the Joint Venture Company. Each of the parties shall fulfill their obligations of capital contribution in accordance with the business needs of the Joint Venture Company based on the aforesaid proportion, but in any event the obligations shall be fulfilled within five years. When one party fails to fulfill its obligations of capital contribution, the parties shall enjoy relevant rights and interests in the Joint Venture Company based on the actual amount of capital contribution.

The amount of capital contribution was determined after arm's length negotiations between the parties with reference to the initial capital requirement of the Joint Venture Company. The parties intend to finance its investment in the Joint Venture Company from their own funds. The board of directors of the Joint Venture Company shall comprise three directors.

Beijing Boqi shall nominate one director and Richinfo Company shall nominate two directors. The Joint Venture Company shall have one chairman of the board of the directors who shall be elected by the board of directors. The supervisory committee of the Joint Venture Company shall comprise three supervisors, which are elected by the shareholders' meeting.

Each of Beijing Boqi and Richinfo Company shall nominate one supervisor and the remaining one shall be an employee representative supervisor. The senior management of the operation and management organization of the Joint Venture Company are appointed by the board of directors. The Joint Venture Company shall have one general manager, who is responsible to the board of directors.

The Group is mainly engaged in providing comprehensive and professional environmental management services in Mainland China to large industrial and energy customers, including flue gas treatment, hazardous solid waste treatment and disposal, industrial water treatment, and dual carbon new energy+, etc. Beijing Boqi, a limited liability company established in the PRC, is an indirect wholly-owned subsidiary of the Company. Its main business includes providing services such as flue gas treatment, water treatment, hazardous solid waste treatment and disposal, as well as dual carbon new energy+ to large industrial and energy customers.

The establishment of the Joint Venture Company aims to fully leverage the resource advantages of both parties and jointly develop the market for new energy business, which is in line with the development direction in acceleration of the strategic deployment of the new energy business of the Company. Having reviewed the terms of the JV Agreement, the Directors (excluding Mr. Zeng but including the independent non-executive Directors) are of the view that: (i) the terms of the JV Agreement are fair and reasonable; (ii) the entering into of the JV Agreement is on normal commercial terms, notwithstanding that it is not conducted in the ordinary and usual course of business of the Company; and (iii) the entering into of the JV Agreement is in the interest of the Company and its Shareholders as a whole.