09:35     SHANGHAI GROWTH<00770> - Announcement (2)                           

    Under Clause 7.01 of the Investment Management Agreement, the Company     
    agreed to pay the Investment Manager the Management and Administration    
    Fee, calculated and to be paid in US$ quarterly in advance, of 0.5% per   
    quarter of the Net Asset Value (calculated before deduction of the fees   
    payable to the Investment Manager and the Company's investment adviser    
    and custodian for that quarter) which is calculated on each Quarter Day.  
                                                                              
    Pursuant to Clause 7.02 of the Investment Management Agreement, the       
    Investment Manager is also entitled to receive from the Company the       
    Incentive Fee, in respect of the direct investment portion of the         
    Company's portfolio only, calculated and payable on an annual basis for   
    each year ending 31 December at 15% of the amount by which the Net        
    Asset Value (comprising assets and rights of the Company which            
    represent unlisted securities or interests) at the end of each            
    accounting period exceeds 115% of the Net Asset Value (comprising         
    assets and rights of the Company which represent unlisted securities or   
    interests) for the immediately proceeding accounting period. No           
    Incentive Fee will be payable if the Net Asset Value per Share of the     
    Company is less than US$10.00.                                            
                                                                              
    The Investment Management Agreement is terminable by either the Company   
    or the Investment Manager giving not less than two months' written        
    notice to the other expiring after the fifth anniversary of the date of   
    appointment.                                                              
                                                                              
    THE SUPPLEMENTAL AGREEMENT                                                
                                                                              
    Date                                                                      
                                                                              
    22 January 2001                                                           
                                                                              
    Parties                                                                   
                                                                              
    The Company and the Investment Manager                                    
                                                                              
    Principal terms and conditions                                            
                                                                              
    Pursuant to the terms and conditions of the Supplemental Agreement:       
                                                                              
    (1)  the appointment of the Investment Manager under the Investment       
    Management Agreement is extended for a minimum term of five years         
    commencing from 1 January 2001 and expiring on the fifth anniversary of   
    1 January 2001, such appointment may be terminated by the Company or      
    the Investment Manager (as the case may be) by two months prior written   
    notice to expire on or within one month of the fifth anniversary of 1     
    January 2001;                                                             
                                                                              
    (2)  unless previously terminated by the Company or the Investment        
    Manager, the appointment of the Investment Manager shall continue for a   
    successive minimum term of five years commencing from the fifth           
    anniversary of 1 January 2001, such appointment may be terminated by      
    the Company or the Investment Manager (as the case may be) by two         
    months prior written notice to expire at any time after the fifth         
    anniversary of the commencement date for the successive term of five      
    years; and                                                                
                                                                              
    (3)  with effect from and after 30 June 2000, the threshold for any       
    Incentive Fee to become payable to the Investment Manager shall be        
    reduced from US$10.00 Net Asset Value per Share of the Company to         
    US$7.00 Net Asset Value per Share of the Company as at 31 December of     
    the relevant year.                                                        
                                                                              
    Subject to the above amendments, the other terms of the Investment        
    Management Agreement, including the Management and Administration Fee,    
    remained the same.                                                        
                                                                              
    THE WAIVER                                                                
                                                                              
    On 9 February 2001, the Stock Exchange granted the Waiver to the          
    Company. The Waiver is subject to the various conditions, inter alia,     
    that:                                                                     
                                                                              
    (1)  the Ongoing Connected Transactions are:                              
                                                                              
    (a)  entered into in the ordinary and usual course of business of the     
    Company;                                                                  
                                                                              
    (b)  entered into on normal commercial terms or on terms no less          
    favourable than terms available to (or from) independent third parties;   
                                                                              
    (c)  entered into on terms that are fair and reasonable so far as the     
    Shareholders are concerned; and                                           
                                                                              
    (d)  entered into in accordance with the terms and conditions of the