10:08     SHANGHAI GROWTH<00770> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, makes no representation as to its      
    accuracy or completeness and expressly disclaims any liabilities          
    whatsoever for any loss howsoever arising from or in reliance upon        
    the whole or any part of the contents of this announcement.               
                                                                              
    Shanghai International Shanghai Growth Investment Limited                 
    (Incorporated in the Cayman Islands with limited liability)               
    (Stock code: 00770)                                                       
                                                                              
    CLARIFICATION ANNOUNCEMENT                                                
                                                                              
    The Board wishes to announce (i) the change in the custody arrangement    
    of the Unlisted Portfolio since October 1, 2002; (ii) the Other           
    Custodial Measures; and (iii) qualification relating to the types         
    of the Company's assets being held by the Custodian in its 2002 and       
    2003 annual reports.                                                      
                                                                              
    This announcement is made at the request of the Stock Exchange.           
                                                                              
    The Board wishes to announce a change in the custody arrangement of       
    the Unlisted Portfolio since October 1, 2002 as well as the Other         
    Custodial Measures. The Company has inadvertently omitted to disclose     
    these custody related matters, as it was of the view that such matters    
    were only of an internal and administrative nature and did not come       
    under its general obligation of disclosure under the Listing Rules        
    nor were there any requirements stated in its memorandum and articles     
    of association or prospectus requiring disclosure of such matters.        
    The disclosure in each of the 2002 and 2003 annual reports of the         
    Company is incomplete as there is no qualification relating to the        
    types of the Company's assets held by the Custodian. The change in        
    the custody arrangement of the Unlisted Portfolio since October 1,        
    2002 and the Other Custodial Measures have been previously approved       
    by the Board, which is empowered by the Shareholders to deal with         
    all administrative matters and the day-to-day operation of the            
    Company.                                                                  
                                                                              
    Since the listing of the Company as an investment company under Chapter   
    21 of the Listing Rules on November 30, 1993, the Custodian has acted     
    as custodian of the Company's assets, including listed investments,       
    unlisted investments and cash of the Company, pursuant to the             
    Custodian Agreement. The Custodian's primary functions consist of         
    the safe-keeping and custody of the investment agreements of the          
    Company, reporting all trades, settlements and valuations to the          
    Investment Manager, and arranging and be responsible for, inter alia,     
    physical settlement of trades, provision of regular prices of             
    securities held by the Company and receipt of dividends.                  
                                                                              
    As at the date of this announcement, there has been no changes to         
    the primary functions of the Custodian, save and except that the          
    custody of the assets as described below is not held by the Custodian.    
    In particular, the Board wishes to advise that the Unlisted Portfolio     
    and the investment agreements relating thereto are now being held         
    by the Company itself.                                                    
                                                                              
    CHANGE IN CUSTODY ARRANGEMENT IN RELATION TO THE UNLISTED PORTFOLIO       
                                                                              
    From October 1, 2002, the custody of the underlying assets of the         
    Unlisted Portfolio has been switched to the custody of the Company        
    from the Custodian. As at January 31, 2005, the unaudited and             
    unpublished value of the Unlisted Portfolio is approximately              
    US$25,882,000, being 45.85% of the NAV.                                   
                                                                              
    Prior to the year 2000, valuation of the Unlisted Portfolio had been      
    recorded at cost or at cost less any diminution in the value of the       
    unlisted investments. Accordingly, in practice, the valuations            
    recorded by the Custodian in relation to the Unlisted Portfolio were      
    simply at cost or at cost less any provisions as recommended by the       
    Investment Manager.                                                       
                                                                              
    However, in 2000, with the implementation of the accounting standard      
    SSAP 24 - Investment in Securities, fair valuation on all securities      
    investments had to be made. Negotiations were entered into with the       
    Custodian since then for the additional work to be carried out by         
    the Custodian for the fair valuation of the Unlisted Portfolio, which     
    in turn would have entailed additional costs for the Company because      
    such additional work was not contemplated by the parties to the           
    Custodian Agreement.