In May 2008, the Group has purchased 83.33% of the equity interest in the Joint Venture. After completed the transaction, the Group will inject RMB13,000,000 as further registered capital to the Joint Venture. The registered capital of the Joint Venture will be RMB13,600,000.

The Water Treatment Plant in the Joint Venture is capable of supplying 10,000 tonnes of water per day. It is located at a hilltop next to Feilaixia Town and adjacent to the river, Bei Jiang, where the water treatment works draws the raw water. The Joint Venture supplies treated water to the 80,000 population at Feilaixia Town through a distribution network of approximately 40 kilometres covering an area of 26 square kilometres. The Joint Venture is in possession of adequate land for the expansion and uprating of the Water Treatment Plant to a capacity of supplying 30,000 tonnes of water per day.

Following the completion of the Equity Transfer Agreement, the Concession Agreement will be prepared and signed in relation to the grant of an exclusive license to the Joint Venture for the provision of water supply service in Jiangkou Administrative Area, Feilaixia Town, Qingxin County, the PRC for 30 years.