CMON Limited — Proxy Solicitation & Information Statement 2004

Jan 19, 2004

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 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)

Discloseable Transaction Acquisition of 95% equity interest in Jingmei

Financial adviser

Tai Fook Capital Limited

19 January, 2004

CONTENTS

	Page
Definitions.....................................................................................................................................................	ii
Letter from the Board
Introduction ........................................................................................................................................	1
The Agreement ...................................................................................................................................	2
Information on Jingmei and Xili Muyuan........................................................................................	5
Information on Shenyang Education ................................................................................................	6
Reason for the Acquisition ................................................................................................................	7
General................................................................................................................................................	8
Further information ............................................................................................................................	8
Appendix — General information.......................................................................................................	9

— i —

DEFINITIONS

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

• “Acquisition” the acquisition of 95% equity interest in Jingmei by the Company from the Vendor pursuant to the Agreement

• “Agreement” the equity transfer agreement dated 31 December 2003 entered into between the Company and the Vendor in respect of the Acquisition

• “associates” has the meaning ascribed to it in the Listing Rules

• “Beida Hi-tech” ��������������� (Beijing Beida Hi-tech Industry Investment Company Limited), a company established in the PRC with limited liability and is beneficially held as to 50% by ���������������� (Beijing Tianqiao Beida Jade Bird Sci-Tech Company Limited), an A share listed company in the PRC, and as to 50% by ������������ (Beijing Beida Jade Bird Company Limited), a company beneficially controlled by Peking University

• “Board” the board of Directors “Company” ������������ (Shenyang Public Utility Holdings Company Limited), a joint stock limited company established in the PRC with limited liability, the H Shares of which are listed on the Stock Exchange, the controlling shareholder of which is SPU

• “Completion” the completion of the Agreement

• “Directors” the directors of the Company

• “Group” the Company and its subsidiaries, and “member of the Group” means any one of them

• “Hong Kong” The Hong Kong Special Administrative Region of the PRC

• “H Share(s)” overseas listed foreign invested shares in the registered share capital of the Company with a Renminbi-denominated nominal value of RMB1.00 each, which are listed on the Stock Exchange and subscribed for and traded in Hong Kong dollars

— ii —

DEFINITIONS

“Independent Third	a party/parties which is/are independent of and not connected with the directors, the
Party/Parties”	promotors, the supervisors, chief executive or substantial shareholder of the
	Company or any of its subsidiaries or an associate of any of them
“International	the business valuation of Xili Muyuan as at 31 October 2003 as prepared by Vigers
Valuation”	Appraisal & Consulting Limited, a professional valuer in Hong Kong which is an
	Independent Third Party
“Jingmei”	�������������(Shenzhen Jingmei Industrial Development
	Company Limited), a company with limited liability established in the PRC which is
	currently owned as to 95% by the Vendor and 5% by the Minority Shareholder
“Latest Practicable	16 January 2004, being the latest practicable date prior to printing of this circular
Date”	for the purpose of ascertaining certain information contained herein
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock Exchange
“Minority	the minority shareholder of Jingmei having a 5% equity interest in Jingmei, who is
Shareholder”	a natural person and an Independent Third Party
“PRC”	The People’s Republic of China which for the purpose of this circular, excludes
	Hong Kong, Macau Special Administrative Region and Taiwan
“PRC GAAP”	PRC Generally Accepted Accounting Principles
“PRC Valuation”	the business valuation of Xili Muyuan as at 31 October 2003 as prepared by���
	�������(Zhongshui Assets Appraisal Co., Ltd.), a professional valuer in
	the PRC with the securities industry valuation qualification approved by����
	�������(China Securities Regulatory Commission) and an Independent
	Third Party
“SFO”	The Securities and Futures Ordinance, Chapter 571 of The Laws of Hong Kong
“Share(s)”	State Share(s) and H Share(s)
“Share Transfer”	the transfer of 30% interest in Shenyang Education by the Group to the Vendor (or
	its nominee) to settle an amount of RMB70,500,000, being part of the consideration
	of the Acquisition pursuant to the Agreement

— iii —

DEFINITIONS

• “Shenyang ��������������� (Shenyang Development Beida Education Education” Science Park Company Limited), a company with limited liability established in the PRC on 9 September 2002 and an approximately 100% indirectly owned subsidiary of the Company

• “Shenyang Municipal ������� (Shenyang Municipal People’s Government) Government”

• “Shenyang Real ������������ (Shenyang Development Real Estate Company Estate” Limited), a 99.86% owned subsidiary of the Company with the remaining 0.14% equity interest owned by ���������� (Shenyang Hot-Electricity Development Company Limited), an Independent Third Party

• “Shenyang State������������� (Shenyang State-owned Assets Management owned Assets” Company Limited), a state-owned enterprise established in the PRC with limited liability and under the administrative control of Shenyang Municipal Government

• “Shenyang Urban ������������������� (Shenyang Urban Infrastructure Construction” Facility Construction Investment Development Company Limited), a state-owned enterprise established in the PRC with limited liability and under the administrative control of Shenyang Municipal Government

• “Shenzhen Municipal ��������� (Shenzhen Municipal Funeral Services Company), a Funeral Services” state-owned enterprise under the supervision of Shenzhen Municipal Bureau of Civil Affairs, an Independent Third Party

• “Shenzhen Municipal ������ (Shenzhen Municipal Bureau of Civil Affairs), an Independent Bureau of Civil Third Party Affairs”

• “SPU” ���������� (Shenyang Public Utility Group Company Limited), a company established in the PRC with limited liability and is owned as to 42.23% by Shenyang Urban Construction, 7.77% by Shenyang State-owned Assets and 50% by Beida Hi-tech

• “State Share(s)” ordinary shares with a nominal value of RMB1.00 each in the capital of the Company, issued by the Company to SPU credited as fully paid

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

— iv —

DEFINITIONS

• “Supervisor(s)” member(s) of the supervisory committee of the Company

• “Vendor” ������������� (Beijing Hengyu Real Estate Development Company Limited), a company established in the PRC. Each of its ultimate beneficial owners (who are three natural persons) and the Vendor is an Independent Third Party prior to the completion of the Share Transfer

• “Xili Muyuan” ��������������� (Shenzhen Xili Baoen Fu Di Cemetery Company Limited), a company established in the PRC and is currently owned as to 70% by Jingmei and 30% by Shenzhen Municipal Funeral Services

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “RMB” Renminbi, the lawful currency of the PRC

• “sq. m.” square meter “%” per cent

Unless otherwise specified in this circular, amounts dominated in RMB have been translated, for the purpose of illustration only, into Hong Kong dollars as follows:

HK$0.9346 = RMB1.00

No representaion is made that any amounts in RMB or HK$ have been or could be converted at the above rate or at any other rates or at all.

— v —

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 Mr. Zhang Jian Bo Mr. Zhang Ying Jian Mr. Wang Se Mr. Geng Jian Wei Mr. Chen Shu Xin Mr. Chan Kam Ling

Legal Address:

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

Place of business in the PRC:

Non-executive Directors

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

No. 14 Shisiwei Road Heping District Shenyang the PRC

Independent non-executive Directors:

Mr. Cheng Wei Mr. Choy Shu Kwan, Wilson

19 January, 2004

DISCLOSEABLE TRANSACTION

ACQUISITION OF 95% EQUITY INTEREST IN JINGMEI

INTRODUCTION

The Board announced on 6th January, 2004 that the Company entered into the Agreement with the Vendor on 31st December, 2003, pursuant to which the Vendor agreed to sell, and the Company agreed to acquire, 95% equity interest in Jingmei held by the Vendor at a cash consideration of RMB570 million (equivalent to approximately HK$532.7 million).

The purpose of this circular is to provide you with, among other things, details of the Agreement.

— 1 —

LETTER FROM THE BOARD

THE AGREEMENT

Date:

31 December, 2003

Parties:

• Vendor: ������������� (Beijing Hengyu Real Estate Development Company Limited). The Vendor and its ultimate beneficial owners (who are three natural persons) and their respective associates are Independent Third Parties prior to the completion of the Share Transfer.

Purchaser: the Company

Equity interest to be acquired:

Pursuant to the Agreement, the Company agreed to acquire 95% equity interest in Jingmei from the Vendor.

Consideration:

The consideration for the Acquisition is RMB570 million (equivalent to approximately HK$532.7 million). Pursuant to the Agreement, the consideration for the Acquisition shall be fully satisfied in the following manner:

1. first payment of RMB405,000,000 (equivalent to approximately HK$378,504,670) in cash was deposited by the Company on 31 December 2003 into an escrow account in a PRC bank and such amount shall be transferred to the Vendor within 3 days from the date of Completion;

2. second payment of RMB70,500,000 (equivalent to approximately HK$65,887,850) shall be satisfied by the transfer of 30% equity interest in Shenyang Education to the Vendor by the Company, which transfer shall be completed within 90 days from the date of Completion. Pursuant to the Agreement, if the Share Transfer cannot be completed by 30 June 2004, the Company has the option to settle the second payment in cash; and

3. final payment of RMB94,500,000 (equivalent to approximately HK$88,317,760) shall be paid by the Company in cash within 30 days after the first anniversary of the date of Completion.

— 2 —

LETTER FROM THE BOARD

Pursuant to the Agreement, the Company has the right to appoint an auditor to perform an audit on the assets and liabilities of Jingmei as at 31 October 2003, which audit shall be completed within 180 days from the date of Completion. If such audited net tangible assets figure is less than the unaudited consolidated net tangible assets of Jingmei as per its management accounts (which were prepared based on PRC GAAP) as at 31 October 2003 of approximately RMB2.0 million, the consideration for the Acquisition will be reduced by the amount of such shortfall and such shortfall will be deducted from the final payment of the consideration for the Acquisition.

The first payment of the consideration for the Acquisition of RMB405 million (equivalent to approximately HK$378.5 million) was funded by the Company’s internal resources. It is currently intended that the final payment of the consideration for the Acquisition of RMB94.5 million (equivalent to approximately HK$88.3 million) will be funded by either the Company’s internal resources or bank borrowings.

The consideration for the Acquisition, which was arrived at after arm’s length negotiations between the parties involved, was principally determined with reference to the International Valuation of RMB863 million and the PRC Valuation of approximately RMB860.7 million. Each of the International Valuation and the PRC Valuation is a business valuation, which appraises the value of Xili Muyuan based on its future earning ability (please refer to the paragraphs headed “International Valuation” and “PRC Valuation” below for further information). Based on the International Valuation and the PRC Valuation, the value of 95% equity interest in Jingmei, whose principal asset is the 70% equity interest in Xili Muyuan, is approximately RMB573.9 million and RMB572.4 million respectively.

International Valuation

As stated in the valuation report prepared by Vigers Appraisal & Consulting Limited (“Vigers”), the valuer of the International Valuation, the valuation was prepared in accordance with internationally recognised generally accepted appraisal procedures and practices and carried out based on a fair market value basis. The value was developed through the application of income approach (“Income Approach”) with the technique known as the discounted cash flow method to discount the future economic benefits of Xili Muyuan into a present market value. For the purpose of the valuation, Vigers made certain assumptions and the major ones are set out as follows:

• A discount rate of 9%;

• A valuation period from the end of year 2003 to the end of year 2030 , a total of approximately 27 years;

• The major investment costs will be incurred in the period from year 2003 to year 2009; and

• There will be a total of around 43,000 burial type tomb sets (the most significant source of future revenue of Xili Muyuan) to be developed and sold by Xili Muyuan.

— 3 —

LETTER FROM THE BOARD

PRC Valuation

As advised by Zhongshui Assets Appraisal Co., Ltd. (“Zhongshui”), the valuer of the PRC Valuation, the PRC Valuation was prepared based on generally accepted practices in the PRC’s valuation and appraisal industry and the value of Xili Muyuan was developed through the application of Income Approach. For the purpose of the valuation, Zhongshui made certain assumptions and the major ones are set out as follows:

• A discount rate of 9%;

• A valuation period from the end of year 2003 to the end of year 2030, a total of approximately 27 years;

• There will be a total of around 43,000 burial type tomb sets (the most significant source of future revenue of Xili Muyuan) to be developed and sold by Xili Muyuan.

The Directors consider that the above assumptions made by Vigers and Zhongshui in respect of the International Valuation and the PRC Valuation respectively are fair and reasonable.

Conditions precedent to Completion:

Completion is conditional upon the following:

1. approval of the disposal of 95% equity interest in Jingmei by the shareholders of the Vendor;

2. approval of the transfer of 95% equity interest in Jingmei to the Company by the shareholders of Jingmei;

3. waiver of the pre-emptive rights to acquire 95% equity interest in Jingmei by the Minority Shareholder;

4. signing of the amended articles of association of Jingmei to reflect the change in the shareholders by the Company and the Minority Shareholder;

5. approval being obtained by Jingmei from relevant PRC authorities in relation to the Acquisition and the corresponding amendments to the articles of association and business licence of Jingmei to reflect the change in the shareholders of Jingmei;

6. approval of the Acquisition by the Board;

7. approval of the Acquisition by the independent shareholders of the Company (if necessary);

— 4 —

LETTER FROM THE BOARD

1. approval of the Acquisition by the Stock Exchange (if necessary); and

2. execution of the agreement under which the Vendor will transfer out from Jingmei liabilities and assets not related to those of Xili Muyuan’s.

As at the Latest Practicable Date, the conditions no. 1, 2, 3, and 6 have been fulfilled.

Since the Acquisition is a discloseable transaction of the Company under the Listing Rules and is not subject to the approval of the shareholders of the Company, the condition no. 7 above is not applicable. Also, given the Acquisition is not subject to the approval by the Stock Exchange, the condition no. 8 above is not applicable.

Pursuant to the Agreement, Completion will take place on or before 28 February 2004 or such later date as agreed between the parties.

INFORMATION ON JINGMEI AND XILI MUYUAN

Jingmei is a limited liability company incorporated in the PRC on 30 August 1994 with a fully paid up registered capital of RMB10 million. Jingmei is currently owned as to 95% by the Vendor and 5% by the Minority Shareholder. Jingmei is principally engaged in investment in and development of property-related projects in the PRC. As at 31 October 2003, the principal asset of Jingmei is the 70% equity interest in Xili Muyuan. Jingmei’s accounts have not been audited since its establishment as it is not required under the PRC regulations to conduct audit of Jingmei’s accounts. According to its unaudited management accounts for the two years ended 31 December 2002 and the 10-month period ended 31 October 2003 (which were prepared based on PRC GAAP and consolidated the accounts of Xili Muyuan in the corresponding periods), Jingmei recorded (i) loss before tax of approximately RMB7.5 million and RMB1.2 million for the year ended 31 December 2001 and 2002 respectively; and (ii) profit before tax and profit attributable to shareholders for the 10-month period ended 31 October 2003 of approximately RMB54.6 million and RMB34.7 million respectively. The significant improvement in the operating performance of Jingmei in 2003 was due to the fact that Jingmei commenced commercial operations in January 2003 and recorded sales revenue generated from the sale of burial type tomb sets (to be described below). Jingmei has unaudited consolidated net tangible assets of approximately RMB2.0 million as at 31 October 2003.

Xili Muyuan is a limited liability company incorporated in the PRC on 29 April 2001 by Jingmei and Shenzhen Municipal Funeral Services with a fully paid up registered capital of RMB5 million. Xili Muyuan is currently owned as to 70% by Jingmei and 30% by Shenzhen Municipal Funeral Services, a state-owned enterprise under the supervision of Shenzhen Municipal Bureau of Civil Affairs. Each of Shenzhen Municipal Funeral Services and Shenzhen Municipal Bureau of Civil Affairs is an Independent Third Party.

— 5 —

LETTER FROM THE BOARD

Xili Muyuan is a private company approved by Guangdong Provincial Department of Civil Affairs (��� ���) to engage in the provision and sale of burial places to the public in the Shenzhen Special Economic Zone for profit purpose. At present, Xili Muyuan is principally engaged in the construction, development and sales of tomb sets and name-plates for the deceased as well as the provision of burial and storage services for the bone ashes for the deceased in the Shenzhen Special Economic Zone.

In 1998, Jingmei acquired a piece of land (the “Cemetery”) having a site area of over 270,000 sq. m. located within the Shenzhen Special Economic Zone. In April 2001, Xili Muyuan reimbursed Jingmei the full cost for the acquisition of the Cemetery. The ownership of the Cemetery has passed to Xili Muyuan, however the procedural requirement to file the transfer of the land title from Jingmei to Xili Muyuan with the relevant PRC authority remains outstanding (the “Filing”). It is intended that the Filing will be made as soon as practicable after Completion. Pursuant to the development plan of Xili Muyuan, it is intended that the Cemetery will be developed to comprise approximately 48,000 burial type tomb sets �������, 95 family towers �������, 10,000 mirror plates ������� and 940 indoor memorial booths �� ��������. Up to 31 October 2003, Xili Muyuan has completed the construction of approximately 10,400 burial type tomb sets, of which approximately 5,300 tomb sets have already been sold. To the best of the Directors’ knowledge, around 80% of these tomb sets were sold at a selling price ranging from RMB30,000 to RMB50,000 per set. It is estimated that Xili Muyuan so far has incurred investment costs in the amount of approximately RMB120 million.

Based on the Directors’ estimation, it will take approximately 6 more years to complete the development of the Cemetery and a further investment cost of approximately RMB70 million will be required, which is expected to be financed by internal funds to be generated from the business operations of Xili Muyuan and bank borrowings if necessary. Most of the further investment will be incurred in the next 3 years.

INFORMATION ON SHENYANG EDUCATION

Shenyang Education, an approximately 100% indirectly owned subsidiary of the Company, is a limited liability company incorporated by the Company and Shenyang Real Estate, a 99.86% subsidiary of the Company, in the PRC on 9 September 2002 with a registered capital of RMB50 million. Shenyang Education is principally engaged in the development and sale of properties and investment management of education projects in the PRC.

According to its audited accounts for the period from 9 September 2002 to 31 December 2002, Shenyang Education incurred net losses of approximately RMB2,782,000. Shenyang Education has unaudited net assets of approximately RMB47.2 million as at 30 November 2003.

— 6 —

LETTER FROM THE BOARD

Pursuant to the Agreement and subject to Completion, the Company will effect the Share Transfer (i.e. transfer 30% of the equity interest in Shenyang Education to the Vendor (or its nominee)) to settle part of the consideration for the Acquisition in the amount of RMB70,500,000, which amount was determined between the parties after arm’s length negotiation with the sole reference to the valuation of Shenyang Education’s assets and liabilities as at 30 November 2003. Such valuation was prepared by ������ ���������� (Beijing Long Yuan Zhi Bo Asset Appraisal Company Limited), which valued Shenyang Education at a value of approximately RMB236 million as at 30 November 2003. The valuation was prepared to assess the market value of the net assets of Shenyang Education as at 30 November 2003 and such value was determined based on generally accepted practices in the PRC’s valuation and appraisal industry.

After the Share Transfer, Shenyang Education will become an approximately 70% indirect non-wholly owned subsidiary of the Company. The Directors do not foresee any change to the business activity or management of Shenyang Education as a result of the Share Transfer.

The Directors consider that the disposal of 30% equity interest in Shenyang Education can release part of the cash payment burden of the Company in relation to the Acquisition and it will not affect the Company’s influence in Shenyang Education in terms of control and future development.

Based on the Directors’ estimation, which basis and calculation have not been reviewed by the Company’s auditors, the amount of gain on disposal of 30% equity interest in Shenyang Education will be approximately RMB50 million.

REASON FOR THE ACQUISITION

The Group is principally engaged in the development and sale of properties and investment and management of education projects.

The Directors consider that Xili Muyuan, being an approved private company to operate a cemetery and burial service project in the Shenzhen Special Economic Zone, has promising business potential. As such, the Directors are confident that the Acquisition will bring long-term stable income to the Group.

The Directors are of the view that the Acquisition will enable the Company to participate in a property project with focus in the development and sale of property for use as burial type tomb sets. Before the Acquisition, the Company has been engaging in the business in development and sale of property for residential use and for use in education purpose and the Directors do not consider the Acquisition constitutes a change in or a diversification of the principal business activities of the Group.

— 7 —

LETTER FROM THE BOARD

Given the fact that the Directors has no present intention to make any major change in the management of Xili Muyuan and certain of the existing employees of the Company possess experience in the business of cemetery management, the Directors are of the view that the Company has relevant experience in running the business operations of Xili Muyuan. The Company intends to involve in the management of Xili Muyuan in particular in the areas of overall business direction formulating and strategic planning. The Directors intend to appoint the Company’s representatives to the board of Jingmei to the extent that the Company is able to secure control in the board of Jingmei.

GENERAL

As the consideration for the Acquisition of RMB570 million represents approximately 31% of both the audited consolidated net tangible assets of the Company as at 31 December 2002 and the unaudited consolidated net tangible assets of the Company as at 30 June 2003 (based on the Company’s management accounts for the 6 months ended 30 June 2003), the Acquisition constitutes a discloseable transaction for the Company under the Listing Rules.

FURTHER INFORMATION

Your attention is drawn to the information set out in the appendix to this circular.

Yours faithfully

For and on behalf of the Board

Shenyang Public Utility Holdings Company Limited Xu Er Hui

Chairman

— 8 —

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules 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 the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

• (a) As at the Latest Practicable Date, none of the Directors, the promoters, the Supervisors or chief executive of the Company had any interests and/or short positions (as defined in Part XV of the SFO) in the Shares, underlying shares (as defined in Part XV of the SFO) and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which (i) are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or deemed to have under such provisions of the SFO); or (ii) are required, pursuant to section 352 of the SFO, to be entered in the register referred to in the SFO; or (iii) are required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to have been notified to the Company and the Stock Exchange.

• (b) Save as disclosed herein, as at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired by or disposed of or leased to any member of the Group since 31st December, 2002 (the date to which the latest published audited consolidated financial statements of the Company were made up) or proposed to be so acquired, disposed of or leased.

• (c) Save as disclosed herein, there is no contract or arrangement subsisting at the date of this circular in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

— 9 —

GENERAL INFORMATION

APPENDIX

3. SUBSTANTIAL SHAREHOLDERS

• (a) Interests of shareholders discloseable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to any Directors, Supervisors, promoters or chief executive of the Company, the following persons (other than a Director, Supervisor, promoter or chief executive of the Company) has an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

			Percentage
	Beneficial owners	Shares	of total issued
			share capital
1.	SPU	600,000,000	58.80%
		State Shares
2.	Shenyang Urban Construction (note 1)	600,000,000	58.80%
		State Shares
3.	Beida Hi-tech (note 2)	600,000,000	58.80%
		State Shares
4.	������������	600,000,000
	Beijing Beida Jade Bird Company Limited	State Shares	58.80%
	(“Beida Jade Bird”) (note 3)
5.	����������������	600,000,000	58.80%
	Beijing Tianqiao Beida Jade Bird	State Shares
	Sci-Tech Company Limited
	(“Beijing Tianqiao”) (note 4)
6.	Peking University (note 5)	600,000,000	58.80%
		State Shares
7.	HKSCC Nominees Limited (note 6)	419,201,990	41.08%
		H Shares

Notes:

1. Shenyang Urban Construction is a limited company established in the PRC. It holds 42.23% equity interest in SPU. Pursuant to section 316 of the SFO, Shenyang Urban Construction is regarded as holding interests in the underlying shares of the Company held by SPU.

2. Beida Hi-tech is a limited company established in the PRC. It holds 50% equity interest in SPU. Pursuant to section 316 of the SFO, Beida Hi-tech is regarded as holding interests in the underlying share of the Company held by SPU.

— 10 —

GENERAL INFORMATION

APPENDIX

1. Beida Jade Bird is a limited company established in the PRC. It holds 50% equity interest in Beida Hi-tech. Through Beida Hi-tech, it holds 50% equity interest in SPU. Pursuant to section 316 of the SFO, Beida Jade Bird is regarded as holding interests in the underlying shares of the Company held by SPU.

2. Beijing Tianqiao is a joint stock limited company established in the PRC and listed on Shanghai Stock Exchange. Beijing Tianqiao holds 50% equity interest in Beida Hi-tech. Through Beida Hi-tech, it holds 50% equity interest in SPU. Pursuant to section 316 of the SFO, Beijing Tianqiao is regarded as holding interests in the underlying shares of the Company held by SPU.

3. Peking University is a famous comprehensive university in the PRC. Through its subsidiary, Beijing Beida Jade Bird Software System Company, Peking University holds 46% equity interest in Beida Jade Bird. As Beida Jade Bird holds 50% equity interest in Bedia Hi-tech and Beida Hi-tech holds 50% equity interests in SPU, pursuant to section 316 of the SFO, Peking University is regarded as holding interests in the underlying shares of the Company held by SPU.

4. As notified by HKSCC Nominees Limited, as at 31st December 2003, the following participants in the central clearance system had interests amounting to 5% or more of the total issued H Shares as shown in the securities accounts in the central clearance system:

5. (1) Tai Fook Securities Company Limited as nominee holds 100,506,000 H Shares, representing approximately 23.91% of the issued H Shares, of which Sino-French Water Development (Liaoning) Company Limited beneficially owned 88,146,000 H Shares, representing approximately 20.97% of the issued H Shares.

6. (2) The Hong Kong and Shanghai Banking Corporation Limited as nominee holds 44,344,000 H Shares, representing approximately 10.55% of the issued H Shares.

7. (3) Shenyin Wanguo Securities (Hong Kong) Limited as nominee holds 23,880,000 H Shares, representing approximately 5.68% of the issued H Shares.

Save as disclosed herein it is not known to the Directors, Supervisors, promoters or chief executive of the Company that there is any person who, as at the Latest Practicable Date, has an interest or short position in the Share and underlying share of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

• (b) Substantial shareholder (as defined in the Listing Rules) in other members of the Group

Save as disclosed herein, none of the Directors, Supervisiors, promoters and the chief executive of the Company are aware that there is any person who, as at the Latest Practicable Date, is directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

— 11 —

GENERAL INFORMATION

APPENDIX

4. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2002, the date to which the latest published audited consolidated financial statements of the Group were made up.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and, as far as the Directors are aware, no litigation or claim of material importance is pending or threatened against the Company or any of its subsidiaries.

6. SERVICE CONTRACT

None of the Directors has any existing or proposed service contract with the Company or any member of the Group (excluding contracts expiring or determinable by the Company within one year without payment of compensation other than statutory compensation).

7. MISCELLANEOUS

• (i) The secretary of the Company is Mr. Wang Se. Mr. Wang Se is also an executive Director. Mr. Wang Se graduated from Northeast Heavy Machinery Institute in the PRC in 1982 with a bachelor’s degree in science and also obtained a master’s degree in economics in 1992 from Liaoning University. Mr. Wang Se has extensive experience in corporate reorganisation, assets management and investment.

• (ii) The H Share registrar of the Company in Hong Kong is Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopwell Centre, 183 Queen’s Road East, Hong Kong.

• (iii) The English text of this circular shall prevail over the Chinese text.

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