Company Information for Asia Water Technology Ltd.

Company Statement

Asia Water Technology Ltd. ("We", the "Company" or "Asia Water") is a water treatment specialist company, offering total engineering solutions for both water purification and wastewater treatments systems. Asia Water has also invested in a Build-Operate-Transfer (“BOT”) project for a wastewater treatment plant. Working primarily with clients in the power generation and municipal wastewater treatment industries, we are dedicated to the protection of the environment and the conservation of China 's precious water resources.

The Company conducts its business primarily in the PRC through its subsidiary, Wuhan Kaidi Water Services Co., Ltd. (“Kaidi Water”) which was incorporated in 1996. Located in Wuhan, the PRC, Kaidi Water provides water purification treatment and wastewater treatment systems through its own patented core technologies. In addition, through our close working relationships with international partners in the water treatment arena. Asia Water combines its patented technologies with leading-edge solutions of international water treatment companies to ensure that the needs of municipals and industries' for purified water are met.

In a vote of confidence in our technological capabilities, the PRC (under the coveted Rule 863 research grant) and Wuhan City Science and Technology bureaus awarded us a total of RMB8 million in research grant, towards the cost of the “Dynamic Cyclic Active Sludge” research project undertaken by our subsidiary, Wuhan Kaidi Water Services. When this in-house biochemical wastewater treatment technology is successfully developed and patented, it will mean cost savings and better efficiency for our future projects. We are one of only two water treatment companies in China to have been awarded this grant.

In June 2004, together with the three other partners, Asia Water incorporated an associated company which has obtained a license to build and operate a municipal wastewater treatment plant in the west of Han Kou within the Hubei Province (“Hanxi Project”). The aggregate proposed investment value is approximately RMB 463 million of which we hold a shareholding interest of 43%. Upon the completion of construction, the wastewater treatment plant is expected to serve an estimated population of 600,000, as well as treat 400,000 tonnes of water daily. We expect to benefit from the future income stream of Hanxi Project, which will be derived from the collection of water tariffs.

In May 2005, we were awarded another RMB193 million contract for the procurement, installation and commissioning of the wastewater treatment system of this mega municipal wastewater treatment plant. In the same year, we incorporated another subsidiary in Huaiyuan, Anhui Province. It acquired and is now operating a tapwater plant, with a daily capacity of 10,000 tonnes per day.

Less than two weeks after being listed, we secured two contracts under a new tapwater treatment project worth a total of RMB111.7 million in Tianmen City in Hubei province. This project is a first for Asia Water Technology and marks our foray into the promising tapwater treatment business. In the second half of the year, we successfully acquired a tapwater treatment plant in Huaiyuan City, Anhui Province and we have incorporated a wholly-owned subsidiary to run the business. These will not only boost our revenue streams for future financial years, but will also likely to be our key growth driver in the future.

China's huge appetite for electricity and the increasing need to treat wastewater to curb its water shortages are favorable opportunities for Asia Water’s expansion. We continue to hold our market share in the powerplant water treatment segment, breaking new grounds with our wins on nuclear powerplant projects. With our scalable core technologies that can be applied in other related industries including seawater desalination, Asia Water is well positioned to ride the next wave of growth.

Company Diagram

ILLUSTRATION OF THE POWER GENERATION PROCESS

Current Operations

Asia Water prides itself for building a team with strong technical capabilities. As our customers are mainly the power generation industry, they usually require both the water purifications systems as well the associating automated control systems. Majority of our competition are unable to provide both systems.

As a one-stop integrated service provider, other than undertaking the water purification treatment systems projects, Asia Water is able to synergistically provide associated automated control systems. Our capabilities extend from initial design of systems to installation, testing and commissioning and after-sales maintenance services with personal services and expert advice.

WATER PURIFICATION TREATMENT

Asia Water's water purification systems are constructed mainly for use in the power generation industry. Power plant requires ultra-pure water to generate electricity. This waste water is heated in the boiler to produce steam, needed to drive the generator. It is crucial that the water is absolutely free from impurities, which would otherwise cause the tube wall in the boiler to scale and corrode, damaging the boiler with devastating results.

Water purification is required in two areas of the entire power generation process as indicated in the diagram.

The first stage, which is the make-up water treatment stage, involves the treatment of raw water for use in the boiler for production of steam. By employing a combination of membrane technology or deionization technology, raw water is processed and purified into water fit for use in the boiler system.

The second stage, or the condensate water treatment stage, involves the treatment of water collected after steam passes through the turbine driving the generator. Steam from the turbine is cooled through the condenser and the cooling tower resulting in condensate water. This will be treated prior to being re-introduced in the boilers.

We employ the CONESEP “S” technology, an advanced process used for treatment of condensate water in power plants, in our water purification treatment system

WASTEWATER MANAGEMENT

Municipal and industrial wastewater differs in their levels and content of pollutants and so requires different treatment processes. For industrial wastewater projects, we employ both the chemical and biochemical treatment methods. For municipal wastewater projects, we utilize the Unitank technology; along with other advanced technologies in order to ensure that the treated water satisfies the PRC government's standards before discharging it back into the environment.

Geographical Spread

Our Group structure as at 31 December 2006 is as follows:

Board of Directors and Key Management

Addyson Xue	Non-Executive Chairman
Huang Hanguang	Chief Executive Officer and Executive Director
Wang Yaoyu	Executive Director
Ng Fook Ai Victor	Independent Director
Tan Tew Han	Independent Director
Simon Littlewood	Independent Director

Company Address 65 Chulia Street #34-05 OCBC CentreSingapore 049513 Singapore, Singapore 049513 Telephone: (65) 6538 2598 Facsimile: (65) 6538 2896 Email: enquiry[at]asiawatertech.com Website: http://www.asiawatertech.com

Capital Issued & Paid-up Shares 196,799,000

Related News

19/08/07 - Chinese Water Companies – Very Murky, But A Possible Winner

Most Recent Statement

14/08/08 - Bond Subscription Agreement Dated 8 August 2007 ("BSA") Between The Company As The Issuer, The Subscribers And CLSA Mezzanine Management Limited As Arranger And Agent
14/08/08 - Second Quarter And First Half Year Financial Statement And Dividend Announcement
25/07/08 - Profit Guidance For The Second Quarter Ended 30 June 2008 And Full Year Ending 31 December 2008
09/06/08 - Asia Water Awarded RMB152.7 Million Contract For Wastewater Treatment Facility In Huangshi City, Hubei Province
20/05/08 - Change Of Registered Address
15/05/08 - FINANCIAL RESULTS ANNOUNCEMENT FOR FIRST QUARTER ENDED 31 MARCH 2008