Towngas China : Circulars -

Towngas China_E_GM Cir.indb

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisor.

If you have sold or transferred all your shares in Towngas China Company Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1083)

PROPOSALS INVOLVING GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, DECLARATION OF DIVIDEND, SCRIP DIVIDEND SCHEME AND CLOSURE OF REGISTER OF MEMBERS, RE-ELECTION OF DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

The notice convening an annual general meeting of the Company to be held at Meeting Rooms S426-S427 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong on Friday, 3 June 2016 at 11:00 a.m. is set out on pages 16 to 20 of this circular. Whether or not you are able to attend the meeting in person, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the office of the Company's branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the meeting (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the meeting (or any adjournment thereof) should you so wish.

18 April 2016

CONTENTS

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. GENERAL MANDATE TO REPURCHASE SHARES. . . . . . . . . . . . . . . . . . . 4

3. GENERAL MANDATE TO ISSUE SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . 5

4. DECLARATION OF DIVIDEND, SCRIP DIVIDEND SCHEME

AND CLOSURE OF REGISTER OF MEMBERS . . . . . . . . . . . . . . . . . . . . 5

5. RE-ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

6. ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

7. ACTION TO BE TAKEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

8. RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

9. DIRECTORS' RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . 8

APPENDIX I - EXPLANATORY STATEMENT ON THE SHARE REPURCHASE MANDATE . . . . . . . . . . . . . 9 APPENDIX II - BIOGRAPHICAL DETAILS OF THE DIRECTORS PROPOSED FOR RE-ELECTION 12 NOTICE OF ANNUAL GENERAL MEETING 16

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

"AGM" the annual general meeting of the Company to be held at Meeting Rooms S426-S427 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong on Friday, 3 June 2016 at 11:00 a.m. and any adjournment thereof, notice of which is set out on pages 16 to 20 of this circular

"AGM Notice" the notice for convening the AGM set out on pages 16 to 20 of this circular

"Annual Report" the annual report of the Company for the year ended 31 December 2015

"Articles" the articles of association of the Company

"Board" the board of Directors

"Companies Law" the Companies Law (2013 Revision) of the Cayman Islands

"Company" Towngas China Company Limited (Stock Code: 1083), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the main board of the Stock Exchange

"Director(s)" the director(s) of the Company

"Dividend" the final dividend proposed to be paid out of the share premium account of the Company of HK ten cents per Share in respect of the year ended 31 December 2015

"Group" the Company and its subsidiaries

"HKCG" The Hong Kong and China Gas Company Limited, a controlling shareholder of the Company

"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China

"Latest Practicable Date" 11 April 2016, being the latest practicable date prior to the

printing of this circular for ascertaining certain information contained herein

"Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange

DEFINITIONS

"Ordinary Resolution(s)" the proposed ordinary resolution(s) as referred to in the

AGM Notice

"Repurchase Mandate" a general mandate to the Directors to exercise the power of

the Company to repurchase Shares during the period as set out in Ordinary Resolution No. 4 in the AGM Notice up to a maximum of 10% of the total number of issued shares of the Company as at the date of passing of such resolution

"Scrip Dividend Scheme" the scrip dividend scheme proposed by the Board and

announced in the results announcement of the Company on 17 March 2016 which offers Shareholders a scrip alternative whereby Shareholders may elect to receive the Dividend wholly or partly by the allotment of new Share(s) credited as fully paid to be issued under the Scrip Dividend Scheme in lieu of cash

"SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

"Share(s)" share(s) of HK$0.10 each in the share capital of the Company

"Share Buy-Back Rules" the relevant rules set out in the Listing Rules to regulate the

repurchase by companies with primary listing on the Stock Exchange of their own securities

"Shareholder(s)" holder(s) of Shares

"Share Issue Mandate" a general mandate to the Directors to exercise the powers of

the Company to allot, issue and deal with the Shares during the period as set out in Ordinary Resolution No. 5 in the AGM Notice up to a maximum of 20% of the total number of issued shares of the Company as at the date of passing of such resolution

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Takeovers Code" The Codes on Takeovers and Mergers and Share Buy-backs "HK$" Hong Kong dollars, the lawful currency of Hong Kong

"%" per cent.