10:48 VP GREENCHIP<01186> - Announcement (2) "A" is the Net Asset Value per Share, calculated on the relevant Performance Fee Valuation Day, before the deduction of any provision for the performance fee and the underwriting fee and provided that for the purpose of this calculation only the Net Asset Value shall be calculated by including any distribution which has been declared or paid during the Relevant Performance Period. "B" is the Base Net Asset Value per Share which shall be the greater of the Net Asset value per Share on the day dealing in Shares of the Company on the Stock Exchange commences and the highest value for "A" as at the Valuation Point for any preceding Relevant Performance Period in relation to which a performance fee was last calculated and paid (after deduction of all fees including any performance fee in respect of such preceding Relevant Performance Period). "C" is the aggregate number of Shares in issue during the Relevant Performance Period, calculated by adding the total number of Shares in issue as at the Valuation Point on each Business Day of the Relevant Performance Period. "D" is 12% or, subject to the approval of the Shareholders by ordinary resolution in general meeting (which approval shall, for the avoidance of doubt, only be required in connection with a proposal to increase such rate), such other percentage figure agreed from time to time between the Manager and the Directors. "E" is the number of Business Days in the Relevant Performance Period. The maximum fees payable to the Manager under the Renewal Agreement, being the Cap Amount, is HK$13 million per annum, has been determined by taking into account the management fees and performance fees paid to the Manager for the three years ended 31 December 2002, 2003 and 2004. The management fees and performance fees paid to the Manager for the three years ended 31 December 2002, 2003 and 2004 were, HK$4,351,051, HK$43,584,322 and HK$9,879,571, respectively. The amount paid to the Manager in 2003 was higher than the other two years as a result of the better performance of the Company in that particular year. In the event that the Cap Amount is exceeded, the Manager shall be entitled to, under the terms of the Renewal Agreement, terminate its appointment under the Investment Management Agreement forthwith by giving notice in writing to the Company. INFORMATION OF THE PARTIES INVOLVED The Company is a close-ended investment company and is principally engaged in investments in listed and unlisted companies related to Greater China. The Manager is licensed for Types 1, 4, 5 and 9 regulated activities in Hong Kong. The Manager is deemed a connected person of the Company under Rule 21.13 of the Listing Rules. In addition, Mr Cheah Cheng Hye, a director of the Company, is also a director and the single largest shareholder of the Manager holding 31.82%. The Company confirms that, save as disclosed above, to the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Manager and their respective ultimate beneficial owners are Independent Third Parties. REASONS FOR THE TRANSACTION The Directors (including the independent non-executive Directors) are of the view that the entering into of the Renewal Agreement by the Company is in the interests of the Company and the Shareholders as a whole and in the ordinary and usual course of business of the Company and the terms of the Renewal Agreement are on normal commercial terms. The renewal of the Investment Management Agreement will benefit the Shareholders as a whole as such renewal will ensure there is continuous, uninterrupted management and supervision of the Investments and also continuous, uninterrupted provision of administrative services to the Company, thereby causing minimal disruption to the Company. CONTINUING CONNECTED TRANSACTION The transactions contemplated under the Renewal Agreement constitute continuing connected transactions of the Company under Rule 14A.34 of the Listing Rules and the aggregate value of consideration on an annual basis, being the Cap Amount, under the Renewal Agreement is less than 2.5% of the market capitalisation of the Company.