CMON Limited — Board/Management Information 2003

Mar 11, 2003

�� ! " # $ % & ' ( Shenyang Public Utility Holdings Company Limited

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

CHANGE OF AUDITORS, CONVERSION TO FOREIGN INVESTMENT JOINT STOCK LIMITED COMPANY AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CHANGE OF AUDITORS

On 24th February, 2003, Shenyang Public Utility Holdings Company Limited (the "Company") received a letter of resignation from PricewaterhouseCoopers tendering its resignation as international auditors of the Company and its subsidiaries with effect from 24th February, 2003. Also, on 26th February, 2003, the Company received a letter of resignation from �� !"#$%&'( �� !"#� ("Yue Hua") tendering its resignation as domestic auditors of the Company and its subsidiaries with effect from 26th February, 2003. The resignation of PricewaterhouseCoopers and Yue Hua were both attributable to the fact that the parties could not reach an agreement on the fees for the audit of the Company's accounts for the financial year ended 31 December 2002.

Each of PricewaterhouseCoopers and Yue Hua had confirmed in their respective resignation letter that there were no circumstances connected with their resignation that they considered ought to be brought to the attention of the shareholders or creditors of the Company. Also, the board of directors of the Company (the "Board") was not aware of any matter that should be brought to the attention of the shareholders or creditors of the Company.

A meeting of the Board was convened on 7th March, 2003 to consider the resignation of PricewaterhouseCoopers and Yue Hua and the appointment of new international auditors and domestic auditors of the Company. It was resolved in the meeting that Deloitte Touche Tohmatsu and �� !"#$%&'()*+ ("Deloitte Hua Yung") be appointed as international auditors and domestic auditors of the Company to fill the vacancy left by the resignation of PricewaterhouseCoopers and Yue Hua respectively and that the matter be referred to the shareholders of the Company for approval in accordance with the Articles of Association of the Company.

In accordance with the Articles of Association of the Company, the Board shall as soon as practicable convene an extraordinary general meeting to approve the ordinary resolution and special resolution set out below.

CONVERSION TO FOREIGN INVESTMENT JOINT STOCK LIMITED COMPANY

At the 1999 annual general meeting of the Company held on 19th June, 2000, it was resolved that the proposal for the Company's conversion to a foreign investment joint stock limited company (the "Proposed Conversion") be approved and the Board was authorized to submit the relevant applications to the relevant authorities of the People's Republic of China ("PRC") for approval and record in respect of the Proposed Conversion. Also, it was resolved that conditional on the relevant authorities granting approval to the amendments to the Company's Articles of Association, the Company was authorized to make amendments to Articles 1, 6 and 7 of the Company's Articles of Association to reflect the Proposed Conversion.

Subsequent to the 1999 annual general meeting of the Company, the Company has made applications to relevant PRC authorities for the Proposed Conversion. However, given that the Company was engaged in major asset restructurings in year 2001 and 2002, the applications in relation to the Proposed Conversion were postponed. To enhance development of the Company and to obtain possible PRC tax benefits, the Board intends to reactivate the applications of the Proposed Conversion. In view of the fact that the aforementioned resolutions passed by the shareholders of the Company at the 1999 annual general meeting of the Company in relation to the Proposed Conversion are no longer valid, the Board would like to propose resolutions as set out below in relation to the Proposed Conversion for the consideration and approval by the shareholders of the Company at the forthcoming extraordinary general meeting.

1

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Extraordinary General Meeting”) of Shenyang Public Utility Holdings Company Limited (the "Company") will be held on Saturday, 26th April, 2003 at 9:00 a.m. at 4th Floor, No. 14 Shisiwei Road, Heping District, Shenyang, the PRC for the purpose of considering and, if thought fit, passing resolutions numbered 1 and 2 as ordinary resolutions of the Company and resolution numbered 3 as special resolution of the Company:

By way of Ordinary Resolutions of the Company

1. "THAT Deloitte Touche Tohmatsu and �� !"#$%&'()+ be appointed as international auditors and domestic auditors of the Company respectively to fill the vacancy left by the resignation of PricewaterhouseCoopers and � �� !"#$%&'()+,-)* to hold office until the conclusion of the forthcoming annual general meeting at a fee to be determined by the directors of the Company"; and

2. " THAT the proposal for the Company's conversion to a foreign investment joint stock limited company (the "Conversion") be approved and that the board of directors of the Company be and is hereby authorised to submit the relevant application to the relevant authorities of the People's Republic of China (the "PRC") for approval and record in respect of the Conversion subject to the approval being obtained from, and relevant filings being completed with, the relevant government authorities of the PRC, the Conversion shall take effect and the Company shall be converted to a foreign investment joint stock limited company.".

By way of a Special Resolution of the Companys

1. "THAT conditional on the relevant authorities granting approval to the amendments to the Company's Articles of Association, the following amendments to Articles 1, 6 and 7 be and hereby approved:-

   • (i) Paragraph 2 of Article 1 of the Company's Articles of Association be amended to read as

     • "The Company was established by way of promotion with the approval document Guo Jing Mao Qi Gai [1999] No. 589 of State Economic and Trade Commission and was registered with the Shenyang Municipal Administration for Industry and Commerce on 2nd July, 1999. The number of the Company's business licence is 2101311101078(1-1). In accordance with the "Interim Regulation concerning Several Issues on the Establishment of Foreign Investment Companies Limited by Shares" and with the approval of the Ministry of Foreign Trade and Economic Co-operation, the Company has become a foreign investment joint stock limited company."

   • (ii) Article 6 of the Company's Articles of Association be amended to read as

     • "In accordance with the "Company Law of the People's Republic of China" ("the Company Law"), "State Council's Special Regulations Regarding the issue of Shares Overseas and the Listing of Shares Overseas by Companies Limited by Shares" ("the Special Regulations"), "Mandatory Provisions for the Articles of Association of Companies to be Listed Outside China" ("the Mandatory Provisions") and other relevant laws and administrative regulations, the Company held an extraordinary general meeting on 13th August, 1999 to amend the Company's articles of association which were approved by the inaugural shareholders meeting on 1st July, 1999 ("the Original Articles of Association"). The Original Articles of Association was amended for the second time at a meeting of the shareholders held on 26th April, 2003 in accordance with the relevant stipulations of the "Interim Regulation concerning Several Issues on the Establishment of Foreign Investment Companies Limited by Shares."

   • (iii) Paragraphs 1 and 2 of Article 7 of the Company's Articles of Association be amended to read as

     • "The Original Articles of Association of the Company came into force on the date on which registration formalities with the Shenyang Municipal Administration for Industry and Commerce were completed. The first amendment to the Original Articles of Association took effect after approval was granted by the competent examination and approval department authorised by the State Council. The second amendment came into force after approval was granted by the Ministry of Foreign Trade and Economic Co-operation."

and that the board of directors of the Company be and is hereby authorised to submit the proposed amendments to the Company's Articles of Association to the relevant authorities of PRC for approval and record, and make any further amendments (if necessary) to the Company's Articles of Association pursuant to the requirements of the relevant authorities in charge of the approval of the Company's Articles of Association."

By Order of the Board Wang Se Executive Director

Shenyang, the PRC, 10th March, 2003

2

Notes:

1. The register of holders of H shares of the Company will be closed from Thursday, 27th March, 2003 to Friday, 25th April, 2003 (both days inclusive), during which period no transfer of H shares of the Company 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 4:00p.m. on Wednesday, 26th March, 2003 shall be entitled to attend and to vote at the Extraordinary General Meeting (and any adjournment thereof).

2. Any holder of the State shares or H shares of the Company entitled to attend and vote at the Extraordinary General Meeting (and any adjournment thereof) 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 business address at No. 14, Shisiwei Road, Heping District, Shenyang, the PRC or at the Company's H share registrars in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-1905, 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 (and any adjournment thereof).

4. Holders of State shares or H shares of the Company who intend to attend the Extraordinary General Meeting should complete the "Reply Slip for Extraordinary General Meeting to be held on 26th April, 2003 (and any adjournment thereof)" and return it to the Company's business address at No. 14, Shisiwei Road, Heping District, Shenyang, the PRC or at the Company's H share registrars in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong] on or before Sunday, 6th April, 2003. The reply slip may be delivered by hand, by post or by fax to the number (852) 2865 0990 / 2529 6087.

Please also refer to the published version of this announcement in The Standard.

3