CMON Limited — Board/Management Information 2003

Nov 17, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect 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 Shenyang Public Utility Holdings Company Limited, you should at once hand this circular, together with the enclosed form of proxy and reply slip, to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

������������ SHENYANG PUBLIC UTILITY HOLDINGS COMPANY LIMITED (a joint stock limited company incorporated in the People’s Republic of China with limited liability)

AMENDMENT TO ARTICLES OF ASSOCIATION

A notice convening an extraordinary general meeting of Shenyang Public Utility Holdings Company Limited to be held at Huaqiao City Seaview Hotel, No. 3-5 Guangqiao Street, Huaqiao City, Shenzhen, Guangdong Province, the People’s Republic of China on Tuesday, 30th December, 2003, at 10:00a.m. is set out on pages 6 to 7 of this circular and will be published on 17th November, 2003 in The Standard in English and the Hong Kong Economic Times in Chinese respectively. Whether or not you are able to attend the meeting, please complete and return the enclosed reply slip and form of proxy in accordance with the instructions printed thereon as soon as possible to the office of the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable but in any event for the reply slip, on or before 10th December, 2003, and for the form of proxy, not less than 24 hours before the time appointed for the holding of the extraordinary general meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting should you so wish.

14th November, 2003

LETTER FROM THE BOARD

������������ SHENYANG PUBLIC UTILITY HOLDINGS COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

Executive Directors:

Mr. Xu Er Hui (Chairman) Mr. Zhang Jian Bo Mr. Zhang Ying Jian Mr. Wang Se Mr. Geng Jian Wei Mr. Chen Shu Xin Mr. Chan Kam Ling

Non-executive Directors:

Mr. Lin Wen Bin Mr. Michel Detay Mr. Zhang Wan Zhong

Legal Address:

No.24-1 Mo Chou Hu Street Shenyang Economic and Technological Development Zone Shenyang

Principal Place of Business in the People’s Republic of China: No. 14 Shisiwei Road Heping District Shenyang The People’s Republic of China

Independent non-executive Directors:

Mr. Cheng Wei Mr. Choy Shu Kwan, Wilson

14th November, 2003

To the Shareholders

Dear Sir or Madam,

AMENDMENT TO ARTICLES OF ASSOCIATION

A. INTRODUCTION

The directors of Shenyang Public Utility Holdings Company Limited (the “Company”) propose to make certain amendments (the “Proposed Amendment”) to the Articles of Association of the Company (the “Articles”). The form of the Proposed Amendment is more particularly set out in the Notice of the Extraordinary General Meeting (“EGM”) on pages 6 and 7 of this circular. An announcement relating to the Proposed Amendment to the Articles and also containing the notice of the EGM will be published on 17th November, 2003 in The Standard in English and the Hong Kong Economic Times in Chinese respectively.

— 1 —

LETTER FROM THE BOARD

The purpose of this circular is to provide you with information on the Proposed Amendment to the Articles and to give you notice of the EGM to be held on Tuesday, 30th December, 2003 at which resolutions approving them will be considered and voted upon by the holders of the various classes of shares of the Company (together the “Shareholders”), namely State Shares, being ordinary shares with a nominal value of Renminbi 1.00 each in the share capital of the Company, issued by the Company to Shenyang Public Utility Group Company Limited, and H Shares, being overseas listed foreign invested shares in the issued share capital of the Company with a nominal value of Renminbi 1.00 each, which are listed on the Stock Exchange of Hong Kong Limited (“Stock Exchange”) and subscribed and traded in Hong Kong Dollars.

The Proposed Amendment shall become effective conditional upon the passing of a special resolution at the EGM of the shareholders of the Company approving the Proposed Amendment and the Proposed Amendment having been verified by, and thereafter registered with, the original approving authorities and other relevant regulatory authorities (the “Relevant Regulatory Authorities”) of the People’s Republic of China (the “PRC”), including but not limited to the Shenyang Administration Bureau of Industry and Commerce (���������� ).

B. PROPOSED AMENDMENT

Expansion of Business Scope of the Company

Since the listing of the H shares of the Company on the Stock Exchange in 1999, the Company is operated as an investment holding company holding various projects through operating companies which were subsidiaries of the Company. The Company itself does not conduct any separate businesses.

Major reorganization of the assets and businesses of the Company and its subsidiaries have also taken place in 2002, including the disposal of Shenyang Water Company Limited as described in the circular of the Company dated 5th July, 2002 and the Company’s investment in education related companies (the “ Investment in Education Related Companies ”), being the acquisition of 100% equity interest in Shanghai Beida Jade Bird Education Investment Company Limited and 70% equity interest in Zhuhai Beida Education Science Park Company Limited as described in the circular of the Company dated 23rd December, 2002.

The provisions relating to the business scope of the Company is found in the second paragraph of Article Number 13 of the Articles, which states that, “the scope of the major businesses of the Company include: investment in, and operation of, metropolitan public utility infrastructure and facilities and self-management of freehold assets.”

— 2 —

LETTER FROM THE BOARD

To better reflect and describe the current businesses carried on by the Company and its subsidiaries more accurately since the major asset reorganizations of the Company which took place since 2002, the directors of the Company (the “Directors”) believe that it will be desirable for the second paragraph of Article Number 13 to be amended in the form and manner set out in the Notice of the EGM on pages 6 and 7 of this circular. A special resolution to amend the Articles to the above effect will be proposed for the consideration and, if thought fit, approval by the Shareholders at the EGM.

As the Company has undergone reorganization of its assets, being the disposal of equity interest in Shenyang Water Company Limited and the Company’s Investment in Education Related Companies, the expansion of the business scope of the Company would better reflect and describe the current businesses carried on by the company and its subsidiaries more accurately. The various stages of the reorganization of the assets and businesses of the Company and its subsidiaries have been described in some detail in the announcement dated 13th June, 2002 and circular to shareholders dated 5th July, 2002 relating to the disposal of Shenyang Water Company Limited and later on in the announcement dated 28th November, 2002 and circular to shareholders dated 23rd December, 2002 relating to the Company’s Investment in Education Related Companies. At present, the Company’s main businesses are real estate development and education related investments now comprising mainly the Company’s Investment in Education Related Companies. The Annual Reports of the Company for 2001 and 2002 and the Interim Report of the Company for 2003 have also described such expansion in the main businesses of the Company and its subsidiaries at some length. The Proposed Amendment to the Articles relating to the Company’s business scope only follows the expansion in the businesses of the Company arising from the reorganization and to give the Company flexibility in making investments in other permitted industries which have good outlook and return. The expansion of the Company’s business scope will allow the Company more flexibility in future to look for and identify different investment opportunities that are beneficial to the Shareholders as a whole and possibly generate better return for the Company’s funds and the investments of the Shareholders as a whole. Whilst the expansion of the business scope of the Company would allow the Company to make investments outside its current major businesses of real estate development and education related investments and there may be additional business risks involved, for example, the Company may not be very familiar initially with such new businesses, the Company will use all reasonable efforts and resources and in a diligent manner carry out feasibility studies, market trend analyses, due diligence review and other forms of information gathering to help assess the feasibility and risks involved before the Company proceeds to make such new investments. The Directors will also, with assistance of professional advisers, carefully monitor such new investment’s compliance with relevant PRC laws and project risk management, balancing risks with return, with the aim of obtaining reasonable returns to investments of the Company and the Shareholders as a whole. Once the Company makes such new investments, it will also closely monitor the new investments and their operations, all with the aim of trying to minimize the aforesaid risks with new investments. At present, the Company has not targeted any particular project for investment.

— 3 —

LETTER FROM THE BOARD

The Company’s direction of business and development will still be real estate development and education related investments, but not ruling out development of other businesses which are beneficial to the Shareholders as a whole. However, for the purpose of the Proposed Amendment, the Company is only trying to have more flexibility in its development to the extent permissible under the laws of the PRC. It should not be taken as a message that the Company has concrete plans for, or expand into, and/or carry on businesses in, those industries now or in future or at all.

The legal adviser of the Company as to the laws of the PRC (the “ PRC Legal Adviser ”) has opined that the sale of Shenyang Water Company Limited is a business activity relating to its owned assets covered by the existing provisions of the Articles, the Company’s investments in other companies (including the business of real estate development established around 2000 when the Company made capital contributions to set up its subsidiary, Shenyang Development Real Estate Company Limited, and investment in education related companies) also complies with Article Number 10 of the Articles.

In summary, Article Number 10 of the Articles states that “the Company may invest in other companies with limited liability and other joint stock companies with limited liability, and the Company shall be liable up to the extent of its capital contribution to the investee company. After obtaining approval from the department in charge of companies as authorised by the State Council, the Company may in accordance with its business management needs, operate as a holding company in accordance with the Company’s Law (��� ) of the PRC.

Therefore, the PRC Legal Adviser is of the view that the aforesaid change to the scope of business of the Company and the present business activities of the Company both are not in breach of the provisions of the present Articles. Further, in summary, the PRC legal Adviser is of the view that the change of the Company’s business scope through the Proposed Amendment of the Articles complies with the laws of the relevant laws of the PRC and does not contravene the other provisions of the present Articles.

C. EGM

Set out on pages 6 and 7 of this circular is a notice convening the EGM to be held at 10:00a.m on Tuesday, 30th December, 2003 for the purpose of considering and, if thought fit, pass the special resolution to approve the Proposed Amendment to the Articles.

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LETTER FROM THE BOARD

A form of proxy and reply slip is herewith enclosed for use at the EGM. Whether or not you are able to attend the meeting, please complete and return the enclosed reply slip and form of proxy in accordance with the instructions printed thereon as soon as possible to the office of the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable but in any event for the reply slip, on or before 10th December, 2003, and for the form of proxy, not less than 24 hours before the time appointed for the holding of the EGM or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting should you so wish.

D. RESPONSIBILITY OF THE DIRECTORS

This circular includes particulars given in compliance with the Rules Governing the Listing of Securities on the Stock Exchange for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained herein the omission of which would make any statement herein misleading.

E. RECOMMENDATIONS

The Directors believes that the adoption of the Proposed Amendment to the Articles are in the best interests of the Company and the Shareholders as a whole. The Directors recommends that the Shareholders vote in favour of the special resolution for approving the Proposed Amendment to be proposed at the EGM.

F. MISCELLANEOUS

The Company will publish an announcement on the outcome of the EGM in respect of the Proposed Amendment to the Articles on the business day following the date of the EGM.

Yours faithfully,

For and on behalf of the board of directors of

Shenyang Public Utility Holdings Company Limited Xu Er Hui

Chairman

— 5 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

������������ SHENYANG PUBLIC UTILITY HOLDINGS COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the holders of State shares and H shares of ������������ (Shenyang Public Utility Holdings Company Limited) (the “Company”) will be held at Huaqiao City Seaview Hotel, No. 3-5 Guangqiao Street, Huaqiao City, Shenzhen, Guangdong Province, the People’s Republic of China on Tuesday, 30th December, 2003, at 10:00a.m. for the purpose of considering and, if thought fit, passing the following resolution as a special resolution:

“THAT the existing Articles of Association of the Company be and are hereby amended in the following manner, to be effected immediately after the original approving authorities and other relevant regulatory authorities of the People’s Republic of China (the “Relevant Regulatory Authorities”), including but not limited to the Shenyang Administration Bureau of Industry and Commerce (���������� ) having verified the amendment to the existing Articles of Association of the Company and the same being registered with the Relevant Regulatory Authorities:

by deleting the second paragraph of the existing Article Number 13 of the Articles of Association of the Company and inserting in its place in the Articles of Association of the Company a new second paragraph of Article Number 13 in the form finally verified by, and thereafter registered with, the Relevant regulatory Authorities, substantially in the following form:

“The scope of the major businesses of the Company include: investment related to metropolitan public utility infrastructure and facilities, investment related to real estate industry, investment related to education, investment related to technology, investment related to travel and cultural industries, investment related to new businesses and assets, investment related to manufacturing and other investments permitted under the laws of the People’s Republic of China and approved by the regulatory authorities of the People’s Republic of China.”

and that any director of the Company be and is hereby authorised to take such further action, make such applications, sign and execute such documents and make such filings as he/she may, in his/her sole and absolute discretion thinks fit for and on behalf of the Company to implement the aforesaid amendment to the Articles of Association of the Company.”

By order of the board of directors of

Shenyang Public Utility Holdings Company Limited Xu Er Hui Chairman

Shenyang, the People’s Republic of China, dated 14th November, 2003

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. The register of holders of H shares of the Company will be closed from 30th November, 2003 to 29th December, 2003 (both dates inclusive), during which period no transfer of H shares will be registered. Holders of State shares or H shares of the Company whose names appear in the register of members of the Company as at 4:00 p.m. on 28th November, 2003 shall be entitled to attend and to vote at the meeting.

2. Any holder of the State shares or H shares of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a holder of the State shares or H shares of the Company.

3. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority shall be deposited at the Company’s H share registrars in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 24 hours before the time appointed for holding the meeting or adjourned meeting.

4. Holders of State shares or H shares of the Company who intend to attend the Extraordinary General Meeting should complete the enclosed “REPLY SLIP FOR EXTRAORDINARY GENERAL MEETING” and return it to the Company’s H share register in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong on or before 10th December, 2003. This reply slip may be delivered by hand, by post or by fax to the number: (852) 2865 0990 / 2529 6087.

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������������ Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

Proxy Form for Extraordinary General Meeting (or at any adjourment thereof) to be held on 30th December, 2003

No. of shares to which this Proxy relates[2] Type of shares (State shares or H shares of the Company) to which this Proxy relates[2]

I/We[1]

(of

)

being the registered holder(s) of State share(s)/H share(s)[3] of Shenyang Public Utility Holdings Company Limited (the “Company”) HEREBY APPOINT the Chairman of the Extraordinary General Meeting or[4]

(of

) as my/our proxy at the Extraordinary General Meeting

(and at any adjournment thereof) of the Company to be held at Huaqiao City Seaview Hotel, No. 3-5 Guangqiao Street, Huaqiao City, Shenzhen, Guangdong Province, the People’s Republic of China, on Tuesday, 30th December, 2003 at 10:00a.m. for the purpose of considering and if thought fit, passing the Special Resolution as set out in the Notice of Extraordinary General Meeting dated 14th November, 2003 and at the Extraordinary General Meeting (or at any adjournment thereof) to vote on my/our behalf in respect of the resolution as directed below:-

Special Resolution	For5	Against5
To consider and approve the proposed amendment to the Articles of Association of the Company

Signed this	day of		~~.~~ Signature(s)
		~~,~~		Holder(s) of State shares or H shares

Notes:-

1. Full name(s) (in Chinese and English) and registered address(es) (as shown in the register of member(s) to be inserted in BLOCK LETTERS .

2. Please insert the number of State shares or H shares relates to this proxy form. If no number is inserted, this proxy form will be deemed to relate to all such shares in the capital of the Company registered in your name(s).

3. Please delete as appropriate.

4. A proxy need not be a member of the Company. A holder of State shares or H shares is entitled to appoint a proxy to attend and, in the event of a poll, vote in his stead. If such an appointment is made, you may delete the words “the Chairman of the Extraordinary General Meeting or” and insert the name and address of the person appointed as proxy in the space provided. ANY ALTERATION MADE TO THIS PROXY FORM MUST BE INTIALLED BY THE PERSON(S) WHO SIGN(S) IT.

5. Please indicate with a “✓“ in the appropriate space how you wish the proxy to vote on your behalf on a poll. If this form is returned duly signed, but without any such indication, the proxy will vote or abstain at his discretion. Your proxy will also be entitled to vote at his discretion on any resolution properly put to the Extraordinary General Meeting other than those referred to in the Notice of the Extraordinary General Meeting.

6. In the case of joint holders, the vote of the senior who tenders as vote, whether in person or by proxy or by representative, will be accepted to the execution of the votes of the other joint holder(s). For this purpose, seniority is determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding.

7. This proxy form must be signed by you or your attorney duly authorised in writing or, in the case of corporation, must be under its common seal or under the hand of an officer or attorney duly authorised.

8. To be valid, this proxy form together with any power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be deposited with the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 24 hours before the time appointed for holding the Extraordinary General Meeting or any adjournment thereof.

9. Completion and delivery of the proxy form will not preclude you from attending and voting at the Extraordinary General Meeting if you so wish.

10. The description of the resolutions are by way of summary only. The full text appears in the Notice of Extraordinary General Meeting dated 14th November, 2003.

������������ SHENYANG PUBLIC UTILITY HOLDINGS COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the holders of State shares and H shares of ���� �������� (Shenyang Public Utility Holdings Company Limited) (the “Company”) will be held at Huaqiao City Seaview Hotel, No. 3-5 Guangqiao Street, Huaqiao City, Shenzhen, Guangdong Province, the PRC on Tuesday, 30th December, 2003, at 10:00a.m. for the purpose of considering and, if thought fit, passing the following resolution as a special resolution:

“THAT the existing Articles of Association of the Company be and are hereby amended in the following manner, to be effected immediately after the original approving authorities and other relevant regulatory authorities of the People’s Republic of China (the “Relevant Regulatory Authorities”), including but not limited to the Shenyang Administration Bureau of Industry and Commerce (���������� ) having verified the amendment to the existing Articles of Association of the Company and the same being registered with the Relevant Regulatory Authorities:

by deleting the second paragraph of the existing Article Number 13 of the Articles of Association of the Company and inserting in its place in the Articles of Association of the Company a new second paragraph of Article Number 13 in the form finally verified by, and thereafter registered with, the Relevant regulatory Authorities, substantially in the following form:

“The scope of the major businesses of the Company include: investment related to metropolitan public utility infrastructure and facilities, investment related to real estate industry, investment related to education, investment related to technology, investment related to travel and cultural industries, investment related to new businesses and assets, investment related to manufacturing and other investments permitted under the laws of the People’s Republic of China and approved by the regulatory authorities of the People’s Republic of China.”,

and that any director of the Company be and is hereby authorised to take such further action, make such applications, sign and execute such documents and make such filings as he/she may, in his/her sole and absolute discretion thinks fit for and on behalf of the Company to implement the aforesaid amendment to the Articles of Association of the Company.”

By order of the board of directors of Shenyang Public Utility Holdings Company Limited Xu Er Hui Chairman

Shenyang, the People’s Republic of China, dated 14th November, 2003

Notes:

1. The register of holders of H shares of the Company will be closed from 30th November, 2003 to 29th December, 2003 (both dates inclusive), during which period no transfer of H shares will be registered. Holders of State shares or H shares of the Company whose names appear in the register of members of the Company as at 4:00 p.m. on 28th November, 2003 shall be entitled to attend and to vote at the meeting.

2. Any holder of the State shares or H shares of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a holder of the State shares or H shares of the Company.

3. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority shall be deposited at the Company’s H share registrars in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 24 hours before the time appointed for holding the meeting or adjourned meeting.

4. Holders of State shares or H shares of the Company who intend to attend the Extraordinary General Meeting should complete the enclosed “REPLY SLIP FOR EXTRAORDINARY GENERAL MEETING” and return it to the Company’s H share register in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong on or before 10th December, 2003. This reply slip may be delivered by hand, by post or by fax to the number: (852) 2865 0990 / 2529 6087.