Capital Environment : Circulars -

89209b5a-0f83-49e7-b0e2-e4461eeee328.pdf If you are in any doubt about 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 adviser. If you have sold or transferred all your shares in Capital Environment Holdings Limited, you should at once hand this circular, the 2015 annual report and the accompanying 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.

CAPITAL ENVIRONMENT HOLDINGS LIMITED

首創環境控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03989) PROPOSAL FOR GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES AND RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of Capital Environment Holdings Limited to be held at Unit 1613-1618, 16/F, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong on Thursday, 30 June 2016 at 11:00 a.m. is set out on pages 13 to 16 of this circular. A form of proxy for use at the Annual General Meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company's Hong Kong branch share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjourned meeting thereof (as the case may be). 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.

31 May 2016

Page

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

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I. General Mandates to Issue and Repurchase Shares . . . . . . . . . . . . . . . . . . . . 4

II. Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

III. Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

APPENDIX I - EXPLANATORY STATEMENT FOR REPURCHASE MANDATE . . . . . . . . . . . . . . . . . . . . 6 APPENDIX II - BIOGRAPHY OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . 9 NOTICE OF ANNUAL GENERAL MEETING 13

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

"Annual General Meeting" the annual general meeting of the Company to be held at

Unit 1613-1618, 16/F, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong on Thursday, 30 June 2016 at 11:00 a.m., notice of which is set out on pages 13 to 16 of this circular;

"Articles of Association" the articles of association of the Company; "Board" the board of Directors of the Company;

"Code" the Hong Kong Code on Takeovers and Mergers;

"Companies Law" the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands, as amended, supplemented or otherwise modified from time to time;

"Company" Capital Environment Holdings Limited, a company incorporated with limited liability in the Cayman Islands on 27 May 2004 under the Companies Law, the Shares of which are listed on the Stock Exchange;

"Directors" the directors of the Company for the time being, including executive directors, non-executive directors and independent non-executive directors;

"Group" the Company and its subsidiaries from time to time;

"HK$" Hong Kong dollars, the lawful currency of Hong Kong;

"Hong Kong" the Hong Kong Special Administrative Region of the PRC;

"Issue Mandate" a general mandate proposed to be granted to the Directors to exercise the powers of the Company to allot, issue and deal with Shares, during the period as set out in the relevant resolution, up to a maximum of 20% of the issued share capital of the Company as at the date of passing of the relevant resolution;

"Latest Practicable Date" 26 May 2016 being the latest practicable date prior to the

printing of this circular for ascertaining certain information contained herein;

"Listing Committee" the listing committee of the Stock Exchange;

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

"Registrar" the branch registrar of the Company in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong;

"Repurchase Mandate" a general mandate proposed to be granted to the Directors

to exercise the powers of the Company to repurchase Shares, during the period as set out in the relevant resolution, up to a maximum of 10% of the issued share capital of the Company as at the date of passing of the relevant resolution;

"Shareholders" registered holders of Shares;

"Shares" ordinary shares of HK$0.10 each (or of such other nominal amount as shall result from a sub-division or a consolidation of such shares from time to time) in the capital of the Company;

"Stock Exchange" The Stock Exchange of Hong Kong Limited; and

"Substantial Shareholder" has the meaning ascribed thereto in the Listing Rules.