History
Wuhan Kaidi Water is our subsidiary through which we carry out our businesses relating to water purification treatment, wastewater treatment, automated control systems and other miscellaneous projects.
Wuhan Kaidi Water was incorporated on 18 April 1996 in the PRC under the name "Wuhan Kaidi Power Engineering Co., Ltd"
("Wuhan Kaidi Power Engineering"). Wuhan Kaidi Water became a subsidiary of Wuhan Electric, (a company which has been listed on the Shenzhen Stock Exchange since 1999), in December 1996 when Wuhan Electric acquired a 66% shareholding interest in it. In December 1997, Wuhan Kaidi Water underwent a change of name from Wuhan Kaidi Power Engineering to Wuhan Kaidi Power Chemistry Co., Ltd. 
before adopting its present name in April 2003. Wuhan Electric's shareholding in Wuhan Kaidi Water subsequently underwent a series of changes and Wuhan Electric had a shareholding interest of 98.5% in Wuhan Kaidi Water by March 2000. In February 2003, Wuhan Electric divested its water treatment business by selling 88.5% of its shareholding interest in Wuhan Kaidi Water to Wuhan Huantai. In March 2003, our Company acquired a 90% stake in Wuhan Kaidi Water from Wuhan Huantai. We subsequently increased our shareholding in Wuhan Kaidi Water to 90.4% in September 2003 by an additional investment of RMB1.1 million and the conversion of undistributed profits of Wuhan Kaidi Water amounting to RMB3.6 million into the registered capital of Wuhan Kaidi Water.
Our Group has achieved several corporate milestones in the course of our operating history.
In April 1996, Wuhan Electric made a successful bid in an international tender for a contract for the boiler make-up water treatment for the Zhejiang Beilun 3 X 600 MW Power Plant Project and subsequently subcontracted the work to Wuhan Kaidi Water. This marked Wuhan Kaidi Water's first foray into the provision of such boiler make-up water treatment systems.
Wuhan Kaidi Water's first foray into the provision of condensate water treatment systems was a subcontract to install a condensate water treatment system for Phase 2 of the Jiangxi Fengcheng 4 X 300 MW Power Plant Project from Wuhan Electric, which had been awarded the contract in August 1997.
In 1998, Kennicott Water Systems Limited became our supplier of the CONESEP "S"
technology , a special technique applied to water condensate treatment systems which was developed by Christ-Kennicott Water Treatment Company. This technique was successfully applied by Wuhan Kaidi Water in the Jiangsu Taicang 2 X 300 MW Power Plant Project. In April 1999, Wuhan Electric was awarded a contract with the Shanxi Datong Coal Power Plant and subsequently sub-contracted the supply of a reverse osmosis system to Wuhan Kaidi Water, which signified our entry into the supply of such systems.
Wuhan Kaidi Water was also awarded a sub-contract from Wuhan Electric in April 1999 in relation to the Shanxi Qinling Power Plant Project. This contract is in relation to a pioneer project in the PRC involving the treatment and recycling of industrial wastewater for power plants that are able to generate one million kilowatts of energy. Our entry into this project marked our first foray into projects involving the treatment and recycling of industrial wastewater with zero discharge. In the same year, Wuhan Kaidi Water achieved ISO9000 certification in recognition of the high standards that we have imposed on our quality management systems in the course of running our business operations.
In May 2001, seeing the potential in the provision of automated control systems, Wuhan Kaidi Water started providing automated control systems through our previous subsidiary, Wuhan Kaidi Measure & Control, which secured a sub-contract from Wuhan Electric in relation to the Hunan Xiangtan 2 X 300 MW Power Plant Project to operate an ash removal control system.
In August 2001, Wuhan Kaidi Water was awarded a contract to provide condensate water treatment system for the Shanghai Waigaoqiao 2 X 900 MW Power Plant Project, which at the time of contract had the largest capacity in the PRC.
In the same month, our previous subsidiary, Wuhan Kaidi Measure & Control entered into a contract to provide a coal conveying control system for the Ningxia Shizuishan 4 X 300 MW Power Plant Project. This contract signified our official entry into business operations relating to such control systems.
In April 2002, our previous subsidiary, Wuhan Kaidi Measure & Control was awarded a sub-contract from Wuhan Electric to operate the control system for flue gas desulphurization for the Guangzhou Hengyun Power Plant Project. It was during this project that we upgraded our control systems from the PLC model to the DCS model.
In September 2002, Wuhan Kaidi Water introduced the EDI water purifying technology by General Electric (China) Co., Ltd. and applied such technology to the Henan Languang Power Plant Project in the course of providing treatment services for boiler make-up water. This signified the first time we supplied membrane technology for an entire project.
In April 2003, Wuhan Kaidi Water was appointed by Christ-Kennicott Water Technology Ltd as the exclusive distributor of the CONESEP "S" technology
in the PRC on a long-term basis until 12 December 2011. In October 2003, we ventured into the municipal wastewater treatment industry by entering into a contract with Huaneng International Power Co., Ltd to procure and install standard equipment for a municipal wastewater treatment system. We also obtained certificates for being a preferred supplier in relation to the provision of water treatment systems for power plants with capacity of 200 MW, 300 MW and 600 MW respectively. These certificates are awarded jointly by China Power Construction Consultancy Co., Ltd and China Power Equipment Co., Ltd, the consulting agencies which regulate the construction of power plants by state-owned enterprises.We believe that these certificates will strengthen our ability to tender for projects by state-owned enterprises relating to the construction of power plants with capacity of 200 MW, 300 MW and 600 MW respectively.
In March 2004, Wuhan Kaidi Water secured, through a tender, a contract from Wuhan New City Waste Water Treatment Co., Ltd. (a subsidiary of Wuhan Electric) to procure standard equipment to the wastewater treatment plant in the Wuhan New Economic Development Zone. Wuhan Kaidi Water had contracted with Seghers Keppel Technology Group NV to procure essential standard equipment for the wastewater treatment plant and to licence to us the UNITANK technology that was used to design such equipment. Wuhan Kaidi Water is currently negotiating with Seghers Keppel Technology Group NV for Seghers Keppel Technology Group NV to grant us a licence for the use of their UNITANK technology.We are keen to obtain a licence for the UNITANK technology as it enables us to develop new applications in the field of wastewater treatment.
In order to streamline our operations, our previous subsidiary, Wuhan Kaidi Measure & Control was dissolved on 11 June 2004 and its assets (including its automated control systems business) and liabilities were amalgamated with Wuhan Kaidi Water.
In July 2004, our associated company, Wuhan Hanxi, obtained a business licence to build and operate a municipal wastewater treatment plant in Wuhan City. The aggregate proposed investment value is approximately RMB463 million and its registered capital is RMB100 million, of which we will invest RMB43 million. The shareholders of Wuhan Hanxi are our Company, Wuhan Electric, Wuhan Gelin (a subsidiary of Wuhan Electric) and an unrelated party, Wuhan Urban Waste Water, which hold shareholding interests of 43%, 22%, 15% and 20% respectively.
In October 2004, Wuhan Kaidi Water was awarded a contract to provide condensate water treatment system services for the Huaneng Yuhuan 4 X 1,000 MW Power Plant Project, which was at the Latest Practicable Date, the power plant with the largest capacity in the PRC.
In December 2004, Wuhan Kaidi Water was awarded a ISO9001:2000 Certificate of Quality Management System, a Certificate of Occupation Health & Safety Management System and a ISO14001:1996 Certificate of Environmental Management System by the Quality Assurance Centre of China Association for Quality ("QAC"). These certificates were awarded in respect of Wuhan Kaidi Water's engineering design and technical services in relation to the treatment of municipal and industrial wastewater as well as the electronic and petrochemical industries.