10:09 SHANGHAI GROWTH<00770> - Announcement (4) SITICO is a major financial institution in Shanghai, majority-owned by the Shanghai Municipal People's Government, with principal business activities including the provision of financial trust, asset management and investment banking services in the greater Shanghai region. SITICO is also the parent company of one of the joint venture partners of the Investment Manager with a 40% interest, and accordingly, is a connected person (as defined in the Listing Rules) of the Company. Further, SITICO is a Shareholder with an interest of 5.65% of the issued share capital of the Company. The Company confirms that the past annual fees which SITICO had received from the Company for the maintenance of the trust account in relation to the SITICO Deposits since August 2001 ranges from US$300 to US$5000. These payments are and will continue to be of a de minimis nature. The maintenance of the trust account in relation to the SITICO Deposits by SITICO on behalf of the Company did not or will not constitute connected transactions under the Listing Rules. (iii) The PRC Properties The net realizable value of the PRC Properties as at the balance sheet date of the Company's 2003 annual report was US$567,000. The Company purchased the PRC properties in 1994. Since then it was always the intention of the Directors that the PRC properties would only be held by the Company for resale. As at the date of this announcement, the PRC properties are held by the Company under long leases. (iv) The Unclaimed Dividend Balances As at January 31, 2005, the unaudited and unpublished balance of the Unclaimed Dividend Balances is approximately US$40,000, being 0.07% of the NAV. As at the date of this announcement, the Unclaimed Dividend Balances are held with the Standard Chartered Bank and are made up of small amounts of unclaimed dividends distributed by the Custodian. TYPES OF THE COMPANY'S ASSETS BEING HELD BY THE CUSTODIAN IN ITS 2003 ANNUAL REPORT As disclosed in the Company's prospectus dated November 15, 1993, the Custodian was appointed to act as custodian of all monies and assets of the Company, including all listed investments, unlisted investments and cash, pursuant to the Custodian Agreement. However, with the change in the custody arrangement of the Unlisted Portfolio since October 1, 2002 as well as the implementation of the Other Custodial Measures as described above, the types of the Company's assets not held by the Custodian in its 2003 annual report consist of: (i) the Unlisted Portfolio; (ii) the Listed Taiwanese Investments; (iii) the SITICO Deposits; (iv) the PRC Properties; and (v) the Unclaimed Dividend Balances. REASONS FOR THE CHANGES IN CUSTODY ARRANGEMENT The main reasons for implementation of the change in the custody arrangement of the Unlisted Portfolio since October 1, 2002 as well as the implementation of the Other Custodial Measures are to secure the Company's asset in more direct and effective ways and to ensure the close monitoring of the performance of the Company's investments. Simultaneously, the Company has also experienced significant costs savings. In relation to the 2003 financial year, the Company made a saving of approximately US$100,000 in terms of fees which would have been payable to the Custodian if the change in the custody arrangement of the Unlisted Portfolio since October 1, 2002 as well as the custodial measures in relation to the Listed Taiwanese Investments had not been in place. GENERAL The Directors consider that the changes in the custody arrangement of the Unlisted Portfolio since October 1, 2002 and the Other Custodial Measures to be in the best interests of the Shareholders and the Company as a whole. Save as disclosed above, the Board confirms that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable under rule 13.23, neither is the Board aware of any matter discloseable under the general obligation imposed by rule 13.09, which is or may be of a price-sensitive nature. Made by the order of Shanghai International Shanghai Growth Investment Limited, the Board of which individually and jointly accept responsibility for the accuracy of this statement.