10:09     SHANGHAI GROWTH<00770> - Announcement (3)                           

    OTHER CUSTODIAL MEASURES                                                  
                                                                              
    (i)     The Listed Taiwanese Investments                                  
                                                                              
    The Company only commenced trading in Taiwanese stocks in August 2000,    
    and did not previously entered into any custody arrangement,              
    specifically in relation to the custody of Listed Taiwanese               
    Investments, with the Custodian.                                          
                                                                              
    As at January 31, 2005, the unaudited and unpublished value of the        
    Listed Taiwanese Investments is approximately US$1,873,000, being         
    3.3% of the NAV. As at the date of this announcement, the Listed          
    Taiwanese Investments, which are listed on the TSE, consists of stocks    
    in Taiwan Semiconductor Manufacturing Co., Ltd., CMC Magnetics            
    Corporation, AU Optronics Corp and ENE Technology Inc.. The Listed        
    Taiwanese Investments have been divided and placed in the custody         
    of the Licensed Brokers, namely Core Pacific, FB Gemini and SinoPac       
    Securities, which provide assets custodial services.                      
                                                                              
    As required by the relevant Taiwanese laws and regulations, the           
    purchase of Taiwanese stocks listed on the TSE by foreigners are          
    required to be held in the custody of QFII registered with the TSE.       
    The Company considers that the QFII nominal stockholders nominated        
    by the Custodian do not offer competitive commission rates for both       
    transaction and custodial services and accordingly were not engaged       
    by the Company. The Company is required to incur a fixed transaction      
    charge in addition to a percentage transactional charge normally          
    charged by the Licensed Brokers for each Listed Taiwanese Investments     
    transaction made through the Custodian. Further, the Company also         
    notes that the percentage transactional charge negotiated with one        
    of the Licensed Brokers is 43% less than that processed through the       
    Custodian. More significantly, in relation to the custody holding         
    charges, the Company observed that the highest custody holding charges    
    imposed by one of the Licensed Brokers is only 40% of the custody         
    holding charge required by the Custodian, whereas the lowest custody      
    holding charges imposed by one of the Licensed Brokers is as low as       
    2.7% of the custody holding charge required by the Custodian.             
                                                                              
    To save costs, the Company directly opened brokerage accounts with        
    Core Pacific, FB Gemini and SinoPac Securities, which are licensed        
    brokers registered as QFII stockholders with the TSE to purchase          
    Taiwanese stocks listed on the TSE. However, despite the separate         
    custody arrangements in relation to the Listed Taiwanese Investments,     
    the valuation of these Listed Taiwanese Investments are provided by       
    the Custodian, because such services are the Custodian's scope of         
    responsibilities under the Custodian Agreement. All sale proceeds         
    and dividends distributed in relation to the Listed Taiwanese             
    Investments are also directly remitted to the custodian account held      
    with the Custodian.                                                       
                                                                              
    (ii)    The SITICO Deposits                                               
                                                                              
    As at January 31, 2005, the unaudited and unpublished balance of the      
    SITICO Deposits is approximately US$2,518,000, being 4.5% of the NAV.     
                                                                              
    As a foreign investor in the PRC, the Company usually insists that        
    the distributed dividends from its unlisted investments in the PRC        
    and sale proceeds on the disposals of such investments be made in         
    US$. However, commencing from August 2001, the Company has accepted       
    payments distributed dividends from its unlisted investments in the       
    PRC and sale proceeds on the disposals of such investments in RMB,        
    pending approval from the SAFE to be remitted in another acceptable       
    currency to the Company's custodian account, in order to secure the       
    payments of such monies from the relevant parties and to ensure that      
    such funds are not used by them in any other way. The SITICO Deposits     
    is made up of such monies in RMB, which the Custodian does not have       
    the required facility or arrangement in the PRC to receive and are        
    temporarily deposited in an interesting bearing trust account with        
    a PRC financial institution, SITICO, under the name of the Company        
    pending the receipt of the relevant approval from the SAFE for such       
    funds to be repatriated to the Custodian's custodian account in US$.