CMON Limited — Proxy Solicitation & Information Statement 2012

Jul 30, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of 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 (the “ Company ”), you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or the 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.

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited

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

(Stock code: 747)

MAJOR DISPOSAL

Financial Adviser to the Company

Karl Thomson Financial Advisory Limited

A notice convening an extraordinary general meeting of the Company to be held at the conference room of Lexington Shenyang Rich Gate Hotel, Shenyang, the People’s Republic of China at 10:00 a.m. on 23 August 2012 is set out on pages EGM-1 to EGM-2 of this circular. Whether or not you are able to attend such meeting, you are requested to complete the accompany form of proxy in accordance with the instructions printed thereon and return the same to the Company’s H share registrar, the Hong Kong Registrars Limited, at Rooms 1806-7, 18/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 24 hours before the time appointed for holding such 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 meeting or at any adjourned meeting should you so wish.

30 July 2012

CONTENTS

			Page
Definitions	. . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I	–	Financial information of the Group . . . . . . . . . . . . . . .	I-1
Appendix II	–	Property valuation report . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III	–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Notice of EGM . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

DEFINITIONS

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

• “Board” the board of Directors

• “Company” Shenyang Public Utility Holdings Company Limited

• “Completion” the completion of the Disposal

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

• “Consideration” consideration of the Disposal amounted to RMB150 million

• “Director(s)” means the directors of the Company

• “Disposal” the disposal of the Disposal Company by the Company to the Purchasers pursuant to the Disposal Agreement

• “Disposal Agreement” the sale and purchase agreement dated 13 June 2012 entered into between the Company and the Purchasers in relation to the Disposal

• “Disposal Company”

• Beijing ShenFa Property Management Company Limited* (北京瀋發物業管理有限公司), a wholly owned subsidiary of the Company

• “EGM”

• an extraordinary general meeting of the Company to be convened and held to approve the Disposal, the Disposal Agreement and the transactions contemplated thereunder

• “Group”

• the Company and its subsidiaries

• “Guangzhou Zhongzhan Acquisition”

• the acquisition of Guangzhou Zhongzhan Investment Holdings Company Limited by the Company as disclosed in the announcement of the Company dated 17 May 2012

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China

• “H-Share(s)”

ordinary share(s) of RMB1 each in the share capital of the Company

– 1 –

DEFINITIONS

• “Independent Third Party(ies)” the independent third party(ies) who is/are, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, independent of the Company and its connected persons (as defined under the Listing Rules)

• “Latest Practicable Date” 27 July 2012, being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to its publication

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” the People’s Republic of China

• “Property” property held by the Disposal Company comprising 2 office units on Level 1 and the whole of Level 2 of an 18-storey commercial building known as Huipu Building located at No.112, Jianguo Road, Chaoyang District, Beijing, the PRC

• “Purchasers” Xinjiang Dingxin Huayu Equity Investment Company Limited (新疆鼎新華域股權投資有限公司) and Xinjiang Shengshi Xintian Equity Investment Company Limited (新疆盛世新天股權投資有限公司), being the purchasers of the Disposal Agreement

• “Remaining Group” the Group immediately after Completion

• “Sale Shares”

• the shares of the Disposal Company pursuant to the Disposal Agreement, being the entire issued share capital of the Disposal Company

• “Shareholder(s)” holder(s) of the H-Shares

• “Shareholder’s Loan”

• Approximately RMB84.7 million being the aggregate amount due from the Target Company to the Company as at 31 December 2011

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “RMB”

• Renminbi, the lawful currency of the PRC

• “%”

• per cent.

• For identification purpose only

– 2 –

LETTER FROM THE BOARD

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited

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

(Stock code: 747)

Executive Directors: Registered office: Mr. An Mu Zong (Chairman) No.1-4, 20A, Central Street, Mr. Wang Zai Xing Shenyang Economic and Mr. Chow Ka Wo Alex Technological Development Zone, Mr. Wang Hui the PRC Non-executive Directors: Principal place of business in the PRC: Mr. Bao Yi Qiang 14/F., Jinmao International Apartment, Ms. Zhang Lei Lei No. 1 Xiao Dong Road, Da Dong District, Shenyang, Independent Non-executive Directors: the PRC Mr. Cai Lian Jun Mr. Wong Kai Tat Principal place of business in Hong Kong: Mr. Chan Ming Sun Jonathan 3rd Floor, Mr. Wei Jie Sheng Alliance Building, 130-136 Connaught Road Central, Hong Kong 30 July 2012

To the Shareholders

Dear Sir or Madam,

MAJOR DISPOSAL

INTRODUCTION

Reference is made to the announcement of the Company dated 13 June 2012 in relation to the Disposal.

The purpose of this circular is to provide the shareholders with, among other things, further information in respect of the Disposal, the notice of EGM and other information as required under the Listing Rules.

– 3 –

LETTER FROM THE BOARD

THE DISPOSAL

On 13 June 2012, the Company entered into the Disposal Agreement with the Purchasers, whereby the Purchasers have conditionally agreed to purchase and the Company has conditionally agreed to sell the entire issued share capital and the Shareholder’s Loan of the Disposal Company at the consideration of RMB150 million.

Since certain applicable percentage ratios for the Disposal are more than 25% but less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules.

THE DISPOSAL AGREEMENT

Date

13 June 2012 (after trading hours)

Parties

Vendor: The Company

• Purchasers: (1) Xinjiang Dingxin Huayu Equity Investment Company Limited* (新疆鼎新華域股權投資有限公司); and

• (2) Xinjiang Shengshi Xintian Equity Investment Company Limited* (新疆盛世新天股權投資有限公司)

The Purchasers are the investment holding companies incorporated in the PRC.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Purchasers and its ultimate beneficial owner(s) is an Independent Third Party.

Consideration

The Consideration for the Disposal of RMB150 million has been determined after arm’s length negotiations among the parties to the Disposal Agreement with reference to (i) the fair market value of the Property held by the Disposal Company as at 31 December 2011; (ii) the audited net asset value of the Disposal Company as at 31 December 2011; and (iii) the Shareholder’s Loan due from the Disposal Company to the Company.

– 4 –

LETTER FROM THE BOARD

The Consideration shall be satisfied in the following manner:–

• (a) a deposit of RMB60 million shall be paid by the Purchasers to the Company in 10 days upon entering into the Disposal Agreement; and

• (b) the remaining balance of RMB90 million shall be paid in cash by the Purchasers to the Company in 180 days upon fulfilling item (3) of the conditions precedent to the Disposal Agreement.

Asset to be disposed of

Pursuant to the Disposal Agreement, the Company has conditionally agreed to sell and the Purchasers have conditionally agreed to acquire the entire issued share capital and the Shareholder’s Loan of the Disposal Company. The Disposal Company holds a property in Huipu building, an 18-storey commercial building located at No. 112, Jianguo Road, Chaoyang District, Beijing, the PRC. The property comprises 2 office units on level 1 and the whole of level 2 of the building with a gross floor area of approximately 3,800 square meters. The Property is currently generating monthly rental income to the Company through leases under various tenancies. As at 31 December 2011, the fair market value of the Property was estimated to be RMB148.3 million.

Conditions precedent

Completion of the Disposal Agreement is conditional upon satisfaction of all of the following conditions:

1. the Disposal being approved by the Board;

2. the Disposal being approved by the Shareholders at the EGM;

3. the procedures of changing the registered shareholders being completed by the Disposal Company and the new business registration certificate records the Sale Shares being jointly owned by the Purchasers; and

4. the Consideration being fully paid by the Purchasers.

If any of the above conditions has not been fulfilled within 10 months upon entering into the Disposal Agreement or such later date as the Company and the Purchasers may agree in writing, the obligation of the parties under the Disposal Agreement shall cease and the Disposal Agreement shall be terminated.

Completion

Completion shall take place on the date on which the conditions precedent to the Disposal Agreement had been completely fulfilled or such other date as the Company and Purchasers may agree in writing.

– 5 –

LETTER FROM THE BOARD

INFORMATION OF THE DISPOSAL COMPANY

The Disposal Company is a limited company incorporated in the PRC and is principally engaged in property leasing and management.

Set out below summarises the audited financial information of the Disposal Company for the two financial years ended 31 December 2010 and 2011:

	**For the year **	ended
	31 December
	2011	2010
	(audited)	(audited)
	RMB	RMB
Revenue	10,834,861	8,227,715
Profit before taxation and extraordinary items	35,800,232	32,422,236
Profit after taxation and extraordinary items	26,863,148	24,316,677

As of 31 December 2011, the net asset value of the Disposal Company is RMB51,679,825.

FINANCIAL IMPACT ON THE GROUP AS A RESULT OF DISPOSAL

Upon the completion of Disposal, the Disposal Company will cease to be a subsidiary of the Company and its financial results will no longer be consolidated into the Group’s financial statements.

As a result of the Disposal, the Group is expected to record an unaudited gain of approximately RMB13,654,329, which is calculated on the basis of the Consideration of the Disposal of RMB150 million less the audited net asset value amounted to RMB51,679,825 and the Shareholder’s Loan amounted to RMB84,665,846 of the Disposal Company as at 31 December 2011.

Based on the audited consolidated accounts of the Group as at 31 December 2011, the total assets and total liabilities of the Group are expected to be decreased immediately after the completion of the Disposal. The decrease in total assets is mainly due to the deconsolidation of the value of the investment property held by the Disposal Company and the decrease in total liabilities is mainly due to the deconsolidation of the Shareholder’s Loan due from the Disposal Company to the Company and the deferred tax liability.

– 6 –

LETTER FROM THE BOARD

USE OF PROCEEDS

Part of the sale proceeds from the Disposal will be utilized for the settlement of consideration for the Guangzhou Zhongzhan Acquisition while the remaining balance will be used as additional working capital for the Group.

REASONS FOR AND BENEFITS OF THE DISPOSAL

As at the Latest Practicable Date, the Group is principally engaged in development, sale and leasing of real estate in the PRC. The Directors believe that the Disposal represents a good opportunity for the Group to realize the value of the Property with positive return. Moreover, the proceeds from the Disposal could enhance the Group’s financial position by providing additional capital resources for the Group to capture other investment opportunities in the real estate market, which would help maximise the Shareholders’ value.

The Directors also consider that the terms and conditions of the Disposal are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION OF THE DISPOSAL

Since certain applicable percentage ratios for the Disposal are more than 25% but less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules. As no Shareholders have any material interest in the Disposal, it is expected that no Shareholders will be required to abstain from voting at the EGM on the resolution to approve the Disposal Agreement and the transactions contemplated thereunder.

EGM

A notice convening the EGM with the resolutions, among other matters, is set out on page EGM-1 to EGM-2 in this circular. Whether or not the Shareholders are able to attend the meeting or any adjourned meeting, they are requested to complete the accompany form of proxy and return it to the Company’s H share registrar in Hong Kong, the Hong Kong Registrars Limited at Rooms 1806-7, 18/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not later than 24 hours before the time of the meeting or any adjourned meeting. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting at the meeting or at any adjourned meeting should they wish to do so.

– 7 –

LETTER FROM THE BOARD

RECOMMENDATION

The Board considers that the terms of the Disposal Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

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

By order of the Board

Shenyang Public Utility Holdings Company Limited An Mu Zong

Chairman

• For identification purposes only

– 8 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

STATEMENT OF INDEBTEDNESS

As at the close of business on 31 May 2012, being the latest practicable date for the purpose of this indebtedness prior to the printing of this circular, the Group had indebtedness as follows:

Other borrowings

HK$’000

Other borrowings

404,742

Disclaimer

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, normal trade and other payables, receipt in advance as at 31 May 2012, the Group did not have any loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities issued and outstanding, and authorized or otherwise created but unissued term loans or other borrowings, indebtedness in nature of borrowings, liabilities under acceptances (other than trade bills) or acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, which are either guaranteed, unguaranteed, secured, or unsecured, guarantees or other material contingent liabilities outstanding at the close of business on 31 May 2012.

The Directors confirmed that there has been no material change in the indebtedness and contingent liabilities of the Group since 31 May 2012.

WORKING CAPITAL

The Directors, are of the opinion that, taking into account its internal resources and the existing available credit facilities of the Remaining Group, the Remaining Group has sufficient working capital for its present requirements, that is for at least twelve months from the date of publication of this circular in the absence of unforeseen circumstances.

FINANCIAL AND TRADING PROSPECT OF THE GROUP

Upon completion of the Disposal, the Group will continue its principal business in development, sale and leasing of real estate in the PRC. During the financial year ended 31 December 2011, the Company has carried out a series of transactions including i) the acquisition (the “ Acquisition ”) of the entire issued share capital of Zhongfang Chaozhou Investment Development Company Limited (“ Zhongfang Chaozhou ”); ii) the disposal of the entire issued share capital of Shenzhen Jade Bird Shenfa Guangdian Company Limited; and iii) the disposal of 70% of the issued share capital of Zhuhai Beida Education and Science Park Company Limited. As at the Latest Practicable Date, the abovementioned transactions have been duly completed.

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Delay in completion of Acquisition

Due to the delay in obtaining the registration of the change of business from the PRC government, the Acquisition could not be completed before the financial year ended 31 December 2011 as originally expected by the Company and the vendors. And therefore the completion of the Acquisition had been delayed until 8 June 2012.

According to the acquisition agreement (the “ Acquisition Agreement ”) entered into the Company and the vendors in relation to the Acquisition, the vendors agreed to make the compensation on the profit guarantee if Zhongfang Chaozhou achieves a net profit of less than RMB30 million for the year ended 31 December 2011 (details of the Acquisition has been disclosed in the circular of the Company dated 25 September 2011 (the “ Acquisition’s Circular ”)). However, the profit guarantee has not been exercised given the facts that the Acquisition has not been completed before the financial year ended 31 December 2011 and the delay in completion of Acquisition is mainly due to the unforeseen external factor which was out of the expectation of both parties, the vendors and the Company acknowledged that the profit guarantee as stated in the Acquisition Agreement shall be postponed to the financial year ending 31 December 2012.

Accordingly, the vendors have issued an acknowledgment to the Company in relation to the postponement of the profit guarantee after the completion of Acquisition. Save as the postponed date of profit guarantee, other terms in relation to the profit guarantee remain unchanged.

Current Status of Chaozhou Project

As mentioned in the Acquisition’s Circular, Zhongfang Chaozhou is currently carrying out a land development project (“ Chaozhou Project ”) in Chaozhou. The construction on phase one of Chaozhou Project was originally targeted to be finished by November 2011. However, Due to the reasons including 1) some adjustments have been made on the construction design after the start of construction; 2) part of the land transferred by Chaozhou Jinshan required further demolition before construction, additional time has been utilized for demolishing the obstacles; and 3) bad weather condition resulted in the occurrence of landslides during construction which required extra time to repair and reinforce the slopes round land, the progress of the Chaozhou Project has been delayed and Zhongfang Chaozhou could only complete construction on 1,000 mu land in the first phase of the project.

The first phase of Chaozhou Project has been preliminarily completed by Zhongfang Chaozhou in early April of 2012. On 17 April 2012, Chaozhou Jinshan Investment and Development Company Limited (“ Chaozhou Jinshan ”) have entered into an agreement (the “ Agreement ”) with Zhongfang Chaozhou in relation to the transfer of 1000 mu constructed land from Zhongfang Chaozhou to Chaozhou Jinshan. Pursuant to the Agreement, Chaozhou Jinshan would only pay the entire land development cost and construction cost utilized in phase one with a premium of 18% only if the constructed land in the first phase of the project could reach the acceptance standard as agreed by both parties under the build transfer cooperation agreement. Since there was a delay and there are still details to be finalized in order to reach the acceptance standard, Chaozhou Jinshan

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

only agreed to prepay RMB140,000,000 to Zhongfang Chaozhou to settle part of the payment. The prepayment is determined based on 60% of the total land development cost and construction cost (i.e. RMB235,000 per mu) being paid by Zhongfang Chaozhou on the 1000 mu constructed land. Zhongfang Chaozhou is required to complete the remaining constructions in phase one so as to fully comply with the acceptance standard. Upon the acceptance standard has been fully met, Chaozhou Jinshan will settle the outstanding payment to Zhongfang Chaozhou.

According to the terms of the Agreement, the first installment of the prepayment amounted to RMB90 million shall be used to settle the loan of RMB60 million due from Zhongfang Chaozhou to Chaozhou Jinshan. The loan is originally provided by Chaozhou Jinshan to Zhongfang Chaozhou to finance the land development cost of the project.

The balance amounted to RMB30 million of the first installment of the prepayment (after deducting the payment of loan) has been received by Zhongfang Chaozhou on 19 April 2012. According to the management of the Company, the remaining balance for the prepayment of RMB50 million is expected to be received by Zhongfang Chaozhou in due course. The amount received by Zhongfang Chaozhou will be recognized as the income for the Group in the current financial year.

Due to the delay in Chaozhou Project, Zhongfang Chaozhou didn’t hand over any constructed land to Chaozhou Jinshan during the financial year ended 31 December 2011. As a result, Zhongfang Chaozhou recorded no income or profit for that year. Zhongfang Chaozhou is currently working on phase two of the project and it is expected to be finished by the financial year ending 2012. According to the management of Zhongfang Chaozhou, a total of 2000 mu land will be completed in phase two and the constructed land will be transferred to Chaozhou Jinshan upon completion. The whole project is targeted to be completed by June 2013.

Current Status of Guangzhou Project

Apart from the Chaozhou Project as mentioned above, the Company has also acquired a comprehensive real estate project in Guangzhou as disclosed in the announcement of the Company dated 17 May 2012 (the “ Announcement ”). According to the management of the Company, the conditions precedent to the acquisition agreement in relation to the acquisition of Guangzhou Zhongzhan Investment Holdings Company Limited (“ Guangzhou Zhongzhan ”) had been completely fulfilled and the acquisition has been completed on 13 June 2012. Therefore, Guangzhou Zhongzhan has become a wholly-owned subsidiary of the Company. The project engaged by Guangzhou Zhongzhan has been operating smoothly and the principal construction works including the construction of foundation, superstructure and electrical and mechanical installation have been started. As mentioned in the Announcement, the project will include the construction of government indemnificatory houses, residential apartments and commercial properties. The construction of the government indemnificatory houses is expected to be completed by the end of 2013 while the other parts of the project are expected to be completed by the end of 2014.

– I-3 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Future prospect of the Group

The PRC government has continued to facilitate the tightening control measures in order to regulate the speculation activities in the PRC real estate market. Although the tightening policy has imposed negative impacts on the market, the Company anticipated that the development of the real estate industry would become more stable and healthy in long term as a result of the tightening policies. In the meanwhile, the accelerating urbanization and the increase in personal consumable income of the PRC citizen have created stable demand for the real estate market. Taking into consideration the future prospects of the economy and real estate industry of the PRC, the Company believes that the new acquired projects could enable the Group to generate positive and secured returns in the coming future. Moreover, the Group will continue to capture investment opportunities in acquiring profitable property development projects in the PRC.

– I-4 –

APPENDIX II

PROPERTY VALUATION REPORT

The following is the text of a letter, summary of value and valuation certificate, prepared for the purpose of incorporation in this circular received from BMI Appraisals Limited, an independent valuer, in connection with its valuation as at 31 May 2012 of the property located in the PRC.

BMI Appraisals Limited 中和邦盟評估有限公司

33[rd] Floor, Shui On Centre, Nos. 6-8 Harbour Road, Wanchai, Hong Kong 香港灣仔港灣道 6-8 號瑞安中心 33 樓 Tel 電話： (852) 2802 2191 Fax 傳真： (852) 2802 0863 Email 電郵： info@bmintelligence.com Website 網址： www.bmi-appraisals.com

30 July 2012

The Directors Shenyang Public Utility Holdings Company Limited 14/F, Jin Mao International Apartment No.1 Xiao Dong Road Dadong District, Shenyang City Liaoning Province The People’s Republic of China

Dear Sirs,

INSTRUCTIONS

We refer to the instructions from Shenyang Public Utility Holdings Company Limited (the “ Company ”) for us to value the property to be disposed of by the Company and/or its subsidiaries (together referred to as the “ Group ”) located in the People’s Republic of China (the “ PRC ”). We confirm that we have performed an inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property as at 31 May 2012 (the “ date of valuation ”).

BASIS OF VALUATION

Our valuation of the concerned property has been based on the Market Value, which is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

VALUATION METHODOLOGY

We have adopted the Investment Approach to value the property by taking into account the current passing rents of the property being held under existing tenancies and the reversionary potential of the tenancies (with reference to current market rent) if it has been or would be let to tenants. We have not considered any profit forecasts in the valuation.

– II-1 –

APPENDIX II

PROPERTY VALUATION REPORT

We have also cross-checked our valuation by Comparison Approach assuming sale with the benefit of vacant possession and by making reference to comparable sale evidences as available in the relevant market. Appropriate adjustments have then been made to account for the differences between the property and the comparables in terms of age, time, size and other relevant factors.

TITLE INVESTIGATION

We have been provided with copies of title documents and have been advised by the Group that no further relevant documents have been produced. However, we have not examined the original documents to verify ownership or to ascertain the existence of any amendment documents, which may not appear on the copies handed to us. In the course of our valuation, we have relied upon the advice and information given by the Group’s PRC legal advisor – Grandway Law Offices (北京國楓凱文律師事務所) regarding the title of the property located in the PRC. All documents have been used for reference only.

VALUATION ASSUMPTIONS

Our valuation has been made on the assumption that the property is sold in the market in its existing state without the benefit of deferred terms contract, leaseback, joint venture, management agreement or any other similar arrangement which might serve to affect the value of the property.

In addition, no account has been taken of any option or right of pre-emption concerning or effecting sale of the property and no forced sale situation in any manner is assumed in our valuation.

VALUATION CONSIDERATIONS

The exterior and interior of the property were inspected by Mr. Zhang Nan (BEng in Surveying & Mapping) on 24 March 2012. In the course of our inspection, we did not note any serious defects. However, no structural surveys have been made nor have any tests been carried out on any of the services provided in the property. We are, therefore, unable to report that the property is free from rot, infestation or any other structural defects.

In the course of our valuation, we have relied to a considerable extent on the information given by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenures, particulars of occupancy, site/floor areas, identification of the property and other relevant information.

We have not carried out detailed on-site measurements to verify the correctness of the site/floor areas in respect of the property but have assumed that the site/floor areas shown on the documents handed to us are correct. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us by the Group and are therefore only approximations.

– II-2 –

APPENDIX II

PROPERTY VALUATION REPORT

We have no reason to doubt the truth and accuracy of the information provided to us by the Group and we have relied on your confirmation that no material facts have been omitted from the information provided. We consider that we have been provided with sufficient information for us to reach an informed view.

No allowances have been made in our valuation for any charges, mortgages or amounts owing on the property or for any expenses or taxation, which may be incurred in effecting a sale or purchase.

Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature, which could affect its value.

Our valuation has been prepared in accordance with the HKIS Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institute of Surveyors.

Our valuation has been prepared under the generally accepted valuation procedures and is in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

REMARKS

Unless otherwise stated, all money amounts stated herein are in Renminbi (RMB) and no allowances have been made for any exchange transfers.

Our Summary of Value and the Valuation Certificate are attached herewith.

Yours faithfully, For and on behalf of

BMI APPRAISALS LIMITED

Dr. Tony C. H. Cheng Joannau W. F. Chan BSc., MUD, MBA(Finance), MSc.(Eng), PhD(Econ), BSc., MSc., MRICS, MHKIS, RPS(GP) SIFM, FCIM, CPA UK, MHKIS, MCIArb, Senior Director MASCE, MIET, MIEEE, MASME, MIIE Managing Director

Notes:

Dr. Tony C.H. Cheng is a member of The Hong Kong Institute of Surveyors (General Practice) who has over 19 years’ experience in valuations of properties in Hong Kong and the People’s Republic of China.

Ms. Joannau W.F. Chan is a member of The Hong Kong Institute of Surveyors (General Practice) who has over 19 years’ experience in valuations of properties in Hong Kong and over 13 years’ experience in valuations of properties in the People’s Republic of China.

– II-3 –

APPENDIX II

PROPERTY VALUATION REPORT

SUMMARY OF VALUE

Property to be disposed of by the Group in the PRC

Property Units A and A1 on Level 1 and the whole of Level 2, Huipu Building, No. 112 Jianguo Road, Chaoyang District, Beijing, The PRC 中國北京市朝陽區 建國路112號 惠普大廈1層A、A1單位及2層全層 Total:	Market Value in existing state as at 31 May 2012 RMB 148,300,000
	148,300,000

– II-4 –

APPENDIX II

PROPERTY VALUATION REPORT

VALUATION CERTIFICATE

Property to be disposed of by the Group in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 31 May 2012 RMB

Units A and A1 on Level 1 and the whole of Level 2, Huipu Building, No. 112 Jianguo Road, Chaoyang District, Beijing, The PRC

中國北京市朝陽區 建國路112號 惠普大廈1層A、A1單位 及2層全層

The property comprises 2 office units on Level 1 and the whole of Level 2 of an 18-storey commercial building known as Huipu Building (惠普大廈) completed in about 1998. The building is located at the Central Business District of Beijing.

The property is subject to various tenancy agreements with various terms all expiring on 31 December 2013 at a total current monthly rent of approximately RMB912,886.49 exclusive of water, electricity, communication and management fees.

148,300,000

The total gross floor area (“ GFA ”) of the property is approximately 3,808.27 sq.m. The details are as follows:

Level 1 2	Unit A A1 – Total:	GFA sq.m. 1,300.10 235.79 2,272.38
		3,808.27

The land use rights of the property have been granted for a common term expiring on 28 August 2044 for office use.

Notes:

1. Pursuant to an Asset Purchase Agreement and the relevant Supplemental Agreement dated 5 January 2009 and 20 October 2009 respectively, the property was contracted to be transferred to Beijing ShenFa Property Management Company Limited (北京瀋發物業管理有限公司) (“ Beijing ShenFa ”) at a consideration of RMB93,000,000.

2. Pursuant to 2 State-owned Land Use Rights Certificates (國有土地使用證), Jing Chao Qi Guo Yong (2010 Chu) Di Nos. 0601579 and 0601580 (京朝其國用（2010出）第0601579及0601580號), both issued by The People’s Government of Beijing (北京市人民政府) dated 15 March 2010, the land use rights of the property with a total apportioned site area of approximately 256.28 sq.m. have been granted to Beijing ShenFa for a common term expiring on 28 August 2044 for office use.

3. Pursuant to 2 Building Ownership Certificates (房屋所有權證), X Jing Fang Quan Zheng Chao Zi Di Nos. 814488 and 814508 (X京房權證朝字第814488及814508號), both issued by Beijing Chaoyang District Housing Administration Bureau (北京市朝陽區房屋管理局), the building ownership rights of the property with a total GFA of approximately 3,808.27 sq.m. are legally owned by Beijing ShenFa.

– II-5 –

APPENDIX II

PROPERTY VALUATION REPORT

1. The opinion of the PRC legal advisor to the Group contains, inter alia, the following:

2. a. The property is legally vested in Beijing ShenFa and Beijing ShenFa has the rights to lease, mortgage and dispose of the property in the market; and

3. b. The property is not subject to mortgage or other material encumbrances.

4. Beijing ShenFa is a wholly-owned subsidiary of the Company.

– II-6 –

APPENDIX III

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Disclosure of interests and short positions in the securities of the Company and its associated corporations

The interest of the Directors, supervisors and chief executives in the issued share capital of the Company as at the Latest Practicable Date are set out as follows:

Beneficial Owner	Position	Number of Shares
Ms. Qian Fang Fang	Supervisor	132,000 H-Shares
		(Note 1)

• Note 1: The number of shares held by Ms. Qian Fang Fang represents approximately 0.031% of the total issued H-Shares of the Company as at the Latest Practicable Date.

Save as aforesaid, as at the Latest Practicable Date, none of the Directors, supervisors and chief executives of the Company had or was deemed to have any interests and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO), which was required to be (i) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests and short positions which they have taken or deemed to have taken under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Company as set out in Appendix 10 to the Listing Rules (which for this purpose shall be deemed to apply to the supervisors of the Company to the same extent as it applies to the Directors).

(b) Substantial Shareholders and other person’s interests and short position in the Shares, underlying Shares and securities of the Company

As at the Latest Practicable Date, so far as was known to the Directors or the chief executive of the Company, the following persons (other than Director or chief executive of the Company) had, an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the

– III-1 –

APPENDIX III

GENERAL INFORMATION

SFO or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstance at general meetings of any other member of the Company (if any) or had any options in respect of such capital:

		Number of
Beneficial owner	Class of Shares	Shares
Beijing Mingde Guangye Investment	Domestic Shares	600,000,000
Consultant Company Limited
(the “Controlling Shareholder”)
Beijing Mingyude Business and Trade	Domestic Shares	600,000,000
Company Limited (Note 1)
(“Beijing Mingyude”)
Li Peng (Note 2)	Domestic Shares	600,000,000
Shen Yun Xie (Note 3)	Domestic Shares	600,000,000
HKSCC Nominees Limited (Note 4)	H-Shares	418,421,200

• Note 1: Beijing Mingyude is a limited company established in the PRC which holds 90% equity interest in the Controlling Shareholder. Pursuant to SFO, Beijing Mingyude is regarded as holding interests in the shares of the Company held by the Controlling Shareholder.

• Note 2: Li Peng is a PRC legal person who holds 10% equity interest in the Controlling Shareholder and 60% equity interest in Beijing Mingyude, which holds 90% equity interest in the Controlling Shareholder. Pursuant to SFO, Li Peng is deemed to be interested in the shares of the Company held by the Controlling Shareholder.

• Note 3: Shen Yun Xie is a PRC legal person who holds 40% interest in Beijing Mingyude, which holds 90% equity interest in the Controlling Shareholder. Pursuant to SFO, Shen Yun Xie is deemed to be interested in the shares of the Company held by the Controlling Shareholder.

• Note 4: As notified by HKSCC Nominees Limited, as at 30 June 2012, the following participants in the central clearance system have interests amounting to 5% or more of the total issued H-Shares of the Company as shown in the securities accounts in the central clearance system:

• (a) Newpont Securities Limited as nominee holds 62,514,000 H-Shares representing 14.87% of the total issued H-Shares of the Company.

• (b) Bank of China (Hong Kong) Limited as nominee holds 50,712,000 H-Shares, representing 12.06% of the total issued H-Shares of the Company.

• (c) The Hong Kong and Shanghai Banking Corporation Limited as nominee holds 35,258,000 H-Shares, representing 8.38% of the total issued H-Shares of the Company.

• (d) Prudential Brokerage Limited as nominee holds 23,214,000 H-Shares, representing 5.52% of the total issued H-Shares of the Company.

Save as aforesaid, as at the Latest Practicable Date, so far as was known to the Directors, no person had any interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, 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 Company (if any) or who had any option in respect of such capital.

– III-2 –

APPENDIX III

GENERAL INFORMATION

3. INTERESTS IN GROUP’S ASSETS, CONTRACT OR ARRANGEMENT SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had any direct or indirect interests in any assets which have since 31 December 2011 (being the date to which the latest published audited accounts of the Company were made up) been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors or supervisors of the Company was materially interested in any contract or arrangement subsisting which was significant in relation to the business of the Group.

4. SERVICE CONTRACTS

The existing service contracts between the Company and the Directors are of a term of 3 years commencing on 12 February 2012, and will be expired on the date of the 2015 annual general meeting. The existing service contracts are subject to termination in certain circumstances as stipulated in the relevant service contracts.

Fixed remuneration of the Directors as set out in their respective existing service contract with the Company are as follows:

	Annual
Director	emoluments
	(RMB)
Mr. An Mu Zong	30,000
Mr. Wang Zai Xing	30,000
Mr. Chow Ka Wo Alex	120,000
Mr. Wang Hui	30,000
Mr. Bao Yi Qiang	30,000
Mr. Wei Jie Sheng	30,000
Ms. Zhang Lei Lei	30,000
Mr. Cai Lian Jun	30,000
Mr. Wong Kai Tat	120,000
Mr. Chan Ming Sun Jonathan	120,000

Save as disclosed above, none of the Directors had entered or proposed to entered into other service contracts with any member of the Group.

– III-3 –

APPENDIX III

GENERAL INFORMATION

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

To the best knowledge of the Directors, none of the Directors or their respective associates (within the meaning of the Listing Rules) had any interests in any business which competed or might compete with the business of the Group as at the Latest Practicable Date.

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Company or any of its subsidiaries) had been entered into by the Company within the two years preceding the Latest Practicable Date and are or may be material:

• (i) the Disposal Agreement;

• (ii) the acquisition agreement dated 17 May 2012 entered into between Zhongtou Chuangye (Beijing) Investment Holdings Company Limited (中投創業（北京） 投資控股有限公司), Shenzhen Zhongzhan Chuangzhan Investment Development Company Limited (深圳市中展創展投資發展有限公司) and the Company in relation to the acquisition of 90% equity interests of Guangzhou Zhongzhan Investment Company Limited* (廣州市中展投資控股有限公司) at a consideration of RMB115 million;

• (iii) the acquisition agreement dated 11 May 2011 entered into between Tianjin Zhongfang Yongyang Property Company Limited (天津中房雍陽置業有限公 司), Shenzhen Zhongfang Chuangzhan Investment Group Company Limited (深圳市中房創展投資集團有限公司) and the Company in relation to the acquisition of 100% equity interests of Zhongfang Chaozhou Investment Development Company Limited* (中房潮州投資開發有限公司) for a consideration of RMB310 million;

• (iv) the disposal agreement dated 23 May 2011 entered into between Beijing Sihai Huaao Trading Company Limited (北京四海華澳貿易有限公司) and the Company in relation to the disposal of the entire equity interests of Shenzhen Jade Bird Shenfa Guangdian Company Limited (深圳青鳥瀋發光電有限公司) at a consideration of RMB81 million; and

• (v) the disposal agreement dated 27 April 2011 entered into between the Company as the vendor and Shanghai Buotou Zongrenzong Environmental Science and Technology Company Limited (上海博投眾人眾環保科技有限公 司) as the purchaser in relation to the disposal of 70% of the issued share capital of Zhuhai Beida Education and Science Park Company Limited (珠海 北大教育科學園有限公司) at the consideration of approximately RMB231 million.

* For identification purposes only

– III-4 –

APPENDIX III

GENERAL INFORMATION

7. LITIGATION

As at the Latest Practicable Date, the Company was not engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against the Company.

8. QUALIFICATIONS AND CONSENT OF EXPERTS

The following is the qualification of the each of the experts who has given its opinion or advice which is contained in circular:

Name Qualifications BMI Appraisals Limited independent professional valuer Grandway Law Offices registered law firm in the PRC Zhong Lei (HK) CPA Certified Public Accountants Company Limited

Each of BMI Appraisals Limited, Grandway Law Offices and Zhong Lei (HK) CPA Company Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which they appear.

As at the Latest Practicable Date, each of the above experts was not beneficially interested in the share capital of the Company nor did it has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the Company nor did it have any interest, either direct or indirect, in any asset which has been, since the date to which the latest published audited consolidated financial statements of the Company were made up, acquired, disposed of by or leased to or are proposed to be acquired or disposed of by or leased to the Company.

9. CONTINGENT LIABILITIES

Save as disclosed in the paragraph headed “Statement of Indebtedness” in Appendix I to this circular, the Directors were not aware of any material changes in respect of the indebtedness or other contingent liabilities of the Group since 31 December 2011.

10. MISCELLANEOUS

• (i) The registered address of the Company is at No.1-4, 20A, Central Street, Shenyang Economic and Technological Development Zone, the PRC.

• (ii) The principal place of business of the Company in the PRC is at 14/F., Jinmao International Apartment, No. 1 Xiao Dong Road, Da Dong District, Shenyang, the PRC.

– III-5 –

APPENDIX III

GENERAL INFORMATION

• (iii) The principal place of business of the Company in Hong Kong is at 3rd Floor, Alliance Building, 130-136 Connaught Road Central, Hong Kong.

• (iv) The H-Share registrar and transfer office of the Company in Hong Kong is Hong Kong Registrars Limited at Rooms 1806-7, 18/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (v) The Joint Company Secretaries of the Company are Mr. Wong Zai Xing and Mr. Chow Cheuk Lap.

• (vi) Unless otherwise stated, in the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays and public holidays) at 3rd Floor, Alliance Building, 130-136 Connaught Road Central, Hong Kong and on the Company website at www.sygyfz.com.cn during normal business hours on any business day from the date of this circular up to and including the date of EGM:

• (i) the memorandum and articles of association of the Company;

• (ii) the “Letter from the Board”, the text of which is set out on pages 3 to 8 of this circular;

• (iii) the letter, summary of value and valuation certificate prepared by BMI Appraisals Limited, the text of which is set out in Appendix II to this circular;

• (iv) the written consents referred to in the section headed “Qualifications and Consent of Experts” in this Appendix;

• (v) the annual reports of the Company for the two years ended 31 December 2010 and 2011;

• (vi) the interim report of the Company for the six months ended 30 June 2011;

• (vii) the material contracts referred to in the section headed “Material Contracts” in this Appendix; and

• (viii) the service contracts referred to in the section headed “Service Contracts” in this Appendix.

– III-6 –

NOTICE OF EGM

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited (a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 747)

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING FOR 2012

NOTICE IS HEREBY GIVEN that the second extraordinary general meeting for 2012 (“ EGM ”) of Shenyang Public Utility Holdings Company Limited (the “ Company ”) will be held at the Conference Room of Lexington Shenyang Rich Gate Hotel, Shenyang, the People’s Republic of China on 23 August 2012 (Thursday) at 10:00 a.m. for the following purposes:

BY WAY OF ORDINARY RESOLUTION:

THAT

• (a) the disposal agreement (“ Disposal Agreement ”) dated 13 June 2012 between the Company as the vendor, and Xinjiang Dingxin Huayu Equity Investment Company Limited (新疆鼎新華域股權投資有限公司) and Xinjiang Shengshi Xintian Equity Investment Company Limited (新疆盛世新天股權投資有限公司) as the purchasers regarding the disposal of the 100% equity interests in Beijing ShenFa Property Management Company Limited* (北京瀋發物業管理有限公司) (a copy of which has been produced to the EGM marked “A” and signed by the chairman of the EGM for the purpose of identification) and the transactions contemplated thereunder, be and are hereby approved and confirmed; and

• (b) any one or more of the directors of the Company be and is/are hereby authorized to sign, execute, perfect, deliver and do all such documents, deeds, acts, matters and things, as the case may be, as they may in their discretion consider necessary, desirable or expedient to carry and implement the Disposal Agreement and all the transactions contemplated thereunder.

By order of the Board

Shenyang Public Utility Holdings Company Limited An Mu Zong Chairman

Shenyang, the PRC, 5 July 2012

• For identification purpose only

– EGM-1 –

NOTICE OF EGM

Notes:

1. Each shareholder entitled to attend and vote at the EGM is entitled to appoint in written form one or more proxies to attend and vote at the EGM on his/her behalf. A proxy need not be a member of the Company. Shareholders or their proxies are entitled to attend the EGM and vote.

2. To be valid, the proxy form together with the certified power of attorney or authority (if any) must be delivered to the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited at Rooms 1806-7, 18/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong or the place of operation of the Company at 14/F, Jin Mao International Apartment, No.1 Xiao Dong Road, Da Dong District, Shenyang, the People’s Republic of China not less than 24 hours before the time of the EGM.

3. Shareholders or their proxies shall produce their identity documents when attending the EGM.

4. The register of the members of the Company will be closed from 24 July 2012 to 23 August 2012 (both dates inclusive), during which period no transfers of H Shares will be effected.

5. Shareholders whose names appear on the register of members of the Company on 24 July 2012 will be entitled to attend and vote at the EGM.

6. Shareholders who intend to attend the EGM should complete the reply slip for attending the EGM and return it to the Company’s H Share registrar in Hong Kong, Hong Kong Registrars Limited at Rooms 1806-7, 18/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong or the place of operation of the Company at 14/F, Jin Mao International Apartment, No.1 Xiao Dong Road, Da Dong District, Shenyang, the People’s Republic of China on or before 3 August 2012. The reply slip may be delivered by hand, by post or by facsimile at facsimile number (852) 28650990. Completion and return of the reply slip shall not affect the shareholder’s right to attend the EGM pursuant to note 5 above.

7. The EGM is expected to last for less than one day. Shareholders and their proxies attending the EGM shall be responsible for their own traveling and accommodation expenses.

– EGM-2 –