Beijing Enterprises Water Group Limited — Proxy Solicitation & Information Statement 2004

Jun 30, 2004

SHANG HUA HOLDINGS

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SHANG HUA HOLDINGS LIMITED 上華控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 371)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Shang Hua Holdings Limited (the “Company”) will be held at 3:00 p.m. on Friday, 23 July 2004 at Room 701, 7th Floor, Sino Industrial Plaza, 9 Kai Cheung Road, Kowloon Bay, Kowloon, Hong Kong for the purpose of considering and, if thought fit, passing the following resolutions as special resolutions of the Company:

1. To approve the Capital Reduction and the Share Consolidation.

2. To approve the Share Premium Cancellation.

3. To amend the Bye-laws of the Company.

By order of the board of directors of Shang Hua Holdings Limited Zhou Liping Chairman

Hong Kong, 30 June 2004

As at the date hereof, the board of directors of the Company is comprised of six (6) directors, of which three (3) are executive directors, namely Ms. Zhou Liping, Mr. Huang Flynn Xuxian and Ms. Guan Mei and three (3) are independent non-executive directors, namely Mr. Shek Chun Lok, Quadrant, Mr. Chan Yiu Kwong and Mr. Ngai Chi Yung.

Notes:

• (1) This is a summary of the full text of the Notice of Special General Meeting. Please refer to the circular to be despatched to the shareholders on or about 30 June 2004 for the full text of the Notice.

• (2) A member entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend and vote instead of him. In the case of a recognised clearing house, it may authorise such person(s) as it thinks fit to act as its representative(s) at the Meeting and vote in its stead. A proxy need not be a member of the Company.

• (3) In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the branch share registrar of the Company in Hong Kong, Tengis Limited, of G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof.

• (4) Resolution numbered 1 is proposed to seek the approval of the shareholders to reduce the nominal value of all issued shares of HK$0.10 each of the Company by HK$0.095 each so that the credit arising from such reduction can be used to set off against the accumulated deficit of the Company. Approval will also be sought from the shareholders to consolidate every 20 issued shares of HK$0.005 each in the capital of the Company into one consolidated share of HK$0.10.

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• (5) Resolution numbered 2 is proposed to seek the approval of the shareholders to cancel the share premium of the Company such that the credit arising from such cancellation can be used to set off against the accumulated deficit of the Company

• (6) Resolution numbered 3 is proposed to seek the approval of the shareholders to amend the Company’s bye-laws to reflect certain recent amendments made to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and to make certain other technical changes.

• For identification purpose only

Please also refer to the published version of this announcement in China Daily.

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