MOG Digitech Holdings Limited - Proxy Solicitation & Information Statement 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shanghai International Shanghai Growth Investment Limited, you should at once hand this circular with the enclosed form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 770)

(1) GENERAL MANDATES FOR REPURCHASE BY THE COMPANY OF ITS OWN SHARES AND FOR ISSUE OF SHARES, (2) RE-ELECTION OF RETIRING DIRECTORS,

(3) NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS, AND

NOTICE OF ANNUAL GENERAL MEETING

The purpose of this document is to provide you with information regarding resolutions to be proposed as special business at the Annual General Meeting to be held at Basement 1, Monaco Room, Regal Hong Kong Hotel, 88 Yee Wo Street, Causeway Bay, Hong Kong at 10:30 a.m. on 28 April 2008. These include resolutions relating to general mandates for the repurchase by the Company of its own shares and for the issue of shares, re-election of retiring directors and the non-exempt continuing connected transactions of the Company.

If you are unable to attend the Annual General Meeting in person, you are requested to complete and return the form of proxy enclosed with this circular in accordance with the instructions printed thereon as soon as possible and in any event not less than 24 hours before the time appointed for the Meeting. Completion and return of the proxy will not preclude any member from attending and voting in person.

2 April 2008

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2. General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3. General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4. Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
5. Non-exempt Continuing Connected Transactions . . . . . . . . . . . . . . . . . . . .	7
6. Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
7. Right to Demand a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
8. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
9. Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Appendix I – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Appendix II – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33
Appendix III – Details of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . .	38
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

“Annual General Meeting” or	the annual general meeting of the Company to be held at
“Meeting” or “AGM”	Basement 1, Monaco Room, Regal Hong Kong Hotel, 88
	Yee Wo Street, Causeway Bay, Hong Kong on 28 April
	2008 at 10:30 a.m. at which the 2007 Annual Report will
	be adopted and for the purpose of approving, inter alia,
	the Repurchase Mandate, the Share Issue Mandate and
	the Fifth Supplemental Agreement;
“Articles”	the existing articles of association of the Company;
“Board”	the Company’s board of Directors;
“Company”	Shanghai International Shanghai Growth Investment
	Limited;
“Director(s)”	Director(s) of the Company;
“Fifth Supplemental Agreement”	the fifth supplemental agreement dated 28 March 2008
	entered into between the Company and the Investment
	Manager;
“Fourth Supplemental	the fourth supplemental agreement dated 11 April 2005
Agreement”	entered into between the Company and the Investment
	Manager;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC;
“Incentive Fee”	an incentive fee payable by the Company to the
	Investment Manager pursuant to Clause 7.02 of the
	Investment Management Agreement;
“Independent Board Committee”	the independent board committee of the Company
	constituted for the purpose of the Ongoing Connected
	Transactions, comprising the three INEDs;

– 1 –

DEFINITIONS

“Independent Financial Adviser” Altus Capital Limited, a licensed corporation under the SFO authorised to carry out types 4, 6 and 9 regulated activities (as defined under the SFO) and the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Ongoing Connected Transactions and the New Caps;

“Independent Shareholders” the Shareholder(s) other than SITICO and its respective associates (as defined in the Listing Rules);

“INED(s)” Independent Non-Executive Director(s) of the Company;
“Investment Management the investment management and administration Agreement” agreement dated 12 November 1993 entered into between the Company and the Investment Manager, as and when amended and supplemented from time to time by the Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement, the Fourth Supplemental Agreement and the Fifth Supplemental Agreement;
“Investment Management Services”
the provision of investment management services of the Investment Manager in relation to the investment, realization and reinvestment of assets and rights of the Company and services of the Investment Manager in relation to the administration of the Company pursuant to the Investment Management Agreement;

“Investment Manager” Shanghai International Asset Management (HK) Co., Ltd., the Company’s investment manager;

“Latest Practicable Date”
31 March 2008, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular;
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time;
“Management and an annual aggregate management and administration fee Administration Fee” payable by the Company to the Investment Manager pursuant to Clause 7.01 of the Investment Management Agreement;

– 2 –

DEFINITIONS

“Net Asset Value(s)”	the net asset value(s) of the Company from time to time
	as calculated in accordance with the provisions of the
	Articles;
“New Cap(s)”	the maximum total fees, consisting of the Management
	and Administration Fee and the Incentive Fee, payable to
	the Investment Manager pursuant to Clauses 7.01 and
	7.02 of the Investment Management Agreement for each
	of the periods stipulated in Clause 7.03A of the
	Investment Management Agreement as amended by the
	Fifth Supplemental Agreement;
“Ongoing Connected	the provision of the Investment Management Services,
Transactions”	being connected transactions between the Company and
	the Investment Manager, on a continuing basis pursuant
	to the terms of the Investment Management Agreement;
“PRC”	the People’s Republic of China;
“Quarter Day”	31 March, 30 June, 30 September and 31 December in
	each year;
“Repurchase Mandate”	the general mandate to exercise the power of the
	Company to repurchase Shares up to a maximum of 10%
	of the issued share capital of the Company as at the date
	of the resolution approving the Repurchase Mandate;
“Second Supplemental	the second supplemental agreement dated 12 September
Agreement”	2001 entered into between the Company and the
	Investment Manager;
“SFO”	the Securities and Futures Ordinance (Cap. 571 of the
	Laws of Hong Kong);
“Share(s)”	ordinary share(s) of US$0.10 each in the share capital of
	the Company;
“Share Issue Mandate”	the general mandate to issue, allot and deal with Shares
	not exceeding 20% of the issued share capital of the
	Company as at the date of passing of the resolution
	approving the Share Issue Mandate;
“Shareholder(s)”	holder(s) of Share(s);

– 3 –

DEFINITIONS

“SITICO”	Shanghai International Trust & Investment Corporation, a
	company established in the PRC and controlled by the
	Shanghai Municipal People’s Government;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Supplemental Agreement”	the supplemental agreement dated 22 January 2001
	entered into between the Company and the Investment
	Manager;
“Takeovers Code”	the Codes on Takeovers and Mergers and Share
	Repurchases approved by the Securities and Futures
	Commission as amended from time to time;
“Third Supplemental Agreement”	the third supplemental agreement dated 3 November 2003
	entered into between the Company and the Investment
	Manager;
“US”	the United States of America;
“US$”	US dollars, the lawful currency of the US; and
“%” or “per cent.”	percent.

Note: For the purpose of this circular, unless indicated otherwise, all amounts denominated in US$ have been translated into HK$ at an exchange rate of US$1 = HK$7.80 for the purpose of illustration only.

– 4 –

LETTER FROM THE BOARD OF DIRECTORS

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 770)

Executive Directors: WANG Ching WU Bin

Non-Executive Directors: CAI Nongrui CHEN Chi-chuan LEE Tien-chieh LIN Bin TSENG Ta-mon WANG Changhong

Independent Non-Executive Directors: HUA Min ONG Ka Thai YICK Wing Fat Simon

Registered Office: Ugland House P.O. Box 309 George Town Grand Cayman Cayman Islands Principal Office: 23rd Floor Two International Finance Centre 8 Finance Street Central Hong Kong 2 April 2008

To the Shareholders

Dear Sir/Madam,

(1) GENERAL MANDATES FOR REPURCHASE BY THE COMPANY OF ITS OWN SHARES AND FOR ISSUE OF SHARES, (2) RE-ELECTION OF RETIRING DIRECTORS, (3) NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS, AND

NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

At the Annual General Meeting, resolutions will be proposed to (i) grant to the Directors the Repurchase Mandate and the Share Issue Mandate to repurchase and issue Shares; (ii) extend the Share Issue Mandate to issue and repurchase Shares; (iii) re-elect the retiring Directors; and (iv) approve the terms of the Fifth Supplemental Agreement and the Ongoing Connected Transactions. In compliance with the Listing Rules, this circular provides all the information reasonably necessary to enable the Shareholders to make informed decisions on

– 5 –

LETTER FROM THE BOARD OF DIRECTORS

whether to vote for or against the resolutions approving the granting to the Directors of the Repurchase Mandate and the Share Issue Mandate to repurchase and issue Shares, to re-elect the retiring Directors and to approve the terms of the Fifth Supplemental Agreement and the Ongoing Connected Transactions.

2. GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, an ordinary resolution will be proposed to grant to the Directors a general and unconditional mandate to exercise all the powers of the Company to repurchase issued Shares subject to the criteria set out in this circular. In particular, Shareholders should note that the maximum number of Shares that may be repurchased pursuant to the Share Repurchase Mandate will be such number which represents 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution subject to the Listing Rules. The Share Repurchase Mandate will end at the conclusion of the next annual general meeting of the Company unless it is renewed at such meeting or until revoked or varied by ordinary resolution of the Shareholders in general meeting prior to the next annual general meeting.

As at the Latest Practicable Date, the issued share capital of the Company comprised 8,905,000 Shares. Assuming that there is no change in the issued share capital of the Company between the period from the Latest Practicable Date and the date of passing the resolution approving the Share Repurchase Mandate, the maximum number of Shares which may be repurchased pursuant to the Share Repurchase Mandate on the date of passing the resolution approving the Share Repurchase Mandate will be 890,500 Shares.

An explanatory statement, as required under the Listing Rules to provide the requisite information in connection with the Share Repurchase Mandate, is set out in Appendix I to this circular.

3. GENERAL MANDATE TO ISSUE SHARES

At the AGM, an ordinary resolution will be proposed to grant to the Directors a general and unconditional mandate to allot, issue and deal with Shares representing up to 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the resolution.

As at the Latest Practicable Date, the issued share capital of the Company comprised 8,905,000 Shares. Assuming that there is no change in the issued share capital of the Company between the period from the Latest Practicable Date and the date of passing the resolution approving the Share Issue Mandate, the maximum number of Shares which may be issued pursuant to the Share Issue Mandate on the date of passing the resolution approving the Share Issue Mandate will be 1,781,000 Shares.

– 6 –

LETTER FROM THE BOARD OF DIRECTORS

The Share Issue Mandate will end up to the next annual general meeting of the Company. Subject to the passing of the following ordinary resolution regarding the Share Repurchase Mandate, an ordinary resolution will also be proposed at the AGM to authorize the Directors to issue new Shares in an amount not exceeding the aggregate nominal amount of the Shares repurchased pursuant to the Share Repurchase Mandate.

4. RE-ELECTION OF RETIRING DIRECTORS

Pursuant to articles 93, 98(b) and 98(c) of the Company’s Articles and code provisions on Appendix 14 of the Listing Rules, Dr. WANG Ching, Mr. WU Bin, Mr. LEE Tien-chieh, Mr. TSENG Ta-mon, Dr. WANG Changhong and Dr. HUA Min, (collectively, the “Retiring Directors”) will retire from office and, being eligible, offer themselves for re-election by the Shareholders at the AGM. The biographical details of the above-mentioned Directors are set out in Appendix III to this circular.

5. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Reference is made to the Company’s announcement dated 28 March 2008.

On 28 March 2008, the Company entered into the Fifth Supplemental Agreement to the Investment Management Agreement with the Investment Manager whereby the parties have agreed to, inter alia, amend and extend the term of appointment of the Investment Manager under the Investment Management Agreement.

The listing of the Company was approved by the Stock Exchange as an investment company under Chapter 21 of the Listing Rules. Pursuant to Rule 21.13 of the Listing Rules, the Investment Manager, acting as the Company’s investment manager licensed under the Securities and Futures Ordinance in Hong Kong, is a connected person for the purposes of the Listing Rules. Therefore, any transactions between the Company and the Investment Manager constitute connected transactions under Chapter 14A of the Listing Rules.

The Ongoing Connected Transactions are continuous in nature and were entered into in the ordinary course of business of the Company and constituted continuing connected transactions of the Company under Chapter 14A of the Listing Rules. The Ongoing Connected Transactions are subject to reporting, announcement and Independent Shareholders’ approval requirement pursuant to Rule 14A.35. The Independent Shareholders will be asked to consider and, if thought fit, approve by poll the Ongoing Connected Transactions and the New Caps for the periods commencing from 1 July 2008 and ending on 30 June 2011 at the Annual General Meeting. The New Caps for the period from 1 July 2008 to 31 December 2008 inclusive, for the year 2009, for the year 2010 and for the period from 1 January 2011 to 30 June 2011 inclusive will be US$400,000, US$1,800,000, US$2,000,000 and US$2,800,000 respectively.

– 7 –

LETTER FROM THE BOARD OF DIRECTORS

The Independent Board Committee has been formed to advise the Independent Shareholders on the terms of the Fifth Supplemental Agreement and the Ongoing Connected Transactions.

The Company has appointed Altus Capital Limited as an Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Ongoing Connected Transactions.

The purpose of this circular is (i) to give you details of the Fifth Supplemental Agreement and the Ongoing Connected Transactions; (ii) to set out the letter of advice from the Independent Financial Adviser to the Independent Board Committee containing its advice to the Independent Board Committee and Independent Shareholders on the approval of the Fifth Supplemental Agreement and the Ongoing Connected Transactions; (iii) to set out the recommendation of the Independent Board Committee regarding the approval of the Fifth Supplemental Agreement and the Ongoing Connected Transactions; and (iv) to seek your approval at the Annual General Meeting of the Fifth Supplemental Agreement and the Ongoing Connected Transactions.

The Investment Management Agreement

On 12 November 1993, the Company and the Investment Manager entered into the Investment Management Agreement. Pursuant to the Investment Management Agreement, the Investment Manager agreed to provide the Investment Management Services. The Investment Manager’s duties and responsibilities under the Investment Management Agreement include:

(1) managing, subject to the overall supervision of the Directors, the investment and reinvestment of the assets of the Company in order to achieve the investment objectives and policies of the Company;
(2) evaluating investment opportunities, implementing investment and realization decisions, monitoring and supervising investments and preparing valuations of the Company’s investments; and
(3) managing the corporate affairs of the Company and dealing with its day-to-day administration, including preparation of the annual and semi-annual statements on the performance of the Company’s investments for inclusion in the Company’s annual and semi-annual reports.

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.

– 8 –

LETTER FROM THE BOARD OF DIRECTORS

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

On 22 January 2001, the Company and the Investment Manager entered into the Supplemental Agreement. 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.

– 9 –

LETTER FROM THE BOARD OF DIRECTORS

The Second Supplemental Agreement

On 12 September 2001, the Company and the Investment Manager entered into the Second Supplemental Agreement whereby the parties agreed to amend the criteria, contained in Clause 7.02 of the Investment Management Agreement, for determining the Incentive Fee payable to the Investment Manager. The only amendment under the Second Supplemental Agreement is the inclusion of the listed investment under the securities portfolio of the Company for the purpose of determining the Incentive Fee, which previously prior to the Second Supplemental Agreement only took into account of the unlisted investment of the Company.

Apart from the above amendment to the Investment Management Agreement, the other terms of the Investment Management Agreement remained unchanged.

The Third Supplemental Agreement

In view of the annual payout of special dividends by the Company to its Shareholders, which permanently reduced the Net Asset Value, on 3 November 2003, the Company and the Investment Manager entered into the Third Supplemental Agreement whereby the parties again agreed to amend the criteria for determining the Incentive Fee payable to the Investment Manager. Pursuant to the Third Supplemental Agreement, the parties agreed that with effect from 30 June 2003, no Incentive Fee shall be payable to the Investment Manager if the Net Asset Value per Share of the Company (being the Net Asset Value as at 31 December of the relevant year divided by the number of Share in issue at such date) is less than US$6.20, and thereafter such threshold shall be adjusted annually (or such other period as the Board deems appropriate) according to the actual amount of special dividends paid out by the Company during the immediately preceding year(s) and that any such adjustments shall be approved by the Board in accordance with the Articles.

Apart from the above amendment to the Investment Management Agreement, the other terms of the Investment Management Agreement remained unchanged.

The Fourth Supplemental Agreement

On 11 April 2005, the Company and the Investment Manager entered into the Fourth Supplemental Agreement whereby the parties agreed to, inter alia, amend and extend the term of appointment of the Investment Manager under the Investment Management Agreement for a period of three years from 1 July 2005 and determine the annual caps for the periods commencing from 1 July 2005 to 30 June 2008 inclusive.

Apart from the above amendment to the Investment Management Agreement, the other terms of the Investment Management Agreement remained unchanged.

– 10 –

LETTER FROM THE BOARD OF DIRECTORS

The Fifth Supplemental Agreement

On 28 March 2008, the Company and the Investment Manager has entered into the Fifth Supplemental Agreement whereby the parties have agreed to, inter alia, amend and extend the term of appointment of the Investment Manager under the Investment Management Agreement, amend the basis for determining the incentive fee under the Investment Management Agreement and determine the annual caps in respect of the Ongoing Connected Transactions.

The Fifth Supplemental Agreement is conditional upon the receipt of all necessary approvals of the Independent Shareholders to be obtained at the AGM. In the event that the necessary approvals of the Independent Shareholders are not granted, the Fifth Supplemental Agreement shall lapse.

Upon the Fifth Supplemental Agreement becoming unconditional, the following amendments will be made to the Investment Management Agreement:

(1) that the appointment of the Investment Manager under the Investment Management Agreement is extended for a term of three years commencing from 1 July 2008 and the Investment Manager shall be entitled to resign its appointment under the Investment Management Agreement, and the Company may by resolution of the Board terminate the appointment of the Investment Manager, in either case by giving not less than two months notice in writing to the Company or the Investment Manager;
(2) that the Incentive Fee is to be calculated at 15% of the excess amount by which the Net Asset Value as at 31 December of each year of the term of the Investment Management Agreement exceeds 115% of the Net Asset Value as at 31 December of the immediately preceding year. The actual amount of special dividends (if any) paid out by the Company during the year shall be deducted from the Net Asset Value as at 31 December of the immediately preceding year when calculating the growth of the Net Asset Value;
(3) that with effect from 1 July 2008, after adjustment on payments of special dividend in each year from 2004 to 2008, no Incentive Fee shall be payable to the Investment Manager if the Net Asset Value per Share (being the Net Asset Value as at 31 December of the relevant year divided by the number of Shares in issue at such date) is less than US$2.60. Thereafter such threshold shall be adjusted annually (or such other period as the Board deems appropriate) according to the actual amount of special dividends paid out during the immediately preceding year(s). Any such adjustments shall be approved by the Board in accordance with the Articles.

– 11 –

LETTER FROM THE BOARD OF DIRECTORS

(4) that the total fees payable to the Investment Manager, consisting of the Management and Administration Fee calculated pursuant to Clause 7.01 of the Investment Management Agreement and the Incentive Fee, if payable according to Clause 7.02 of the Investment Management Agreement, for each of the following periods of the term of the Investment Management Agreement as amended by the Fifth Supplemental Agreement shall not exceed the corresponding amount set out in Clause 7.03A, as indicated below:

Period

Period Amount From 1 July 2008 to 31 December 2008 US$400,000 inclusive (approximately HK$3,120,000) For the year 2009 US$1,800,000 (approximately HK$14,040,000) For the year 2010 US$2,000,000 (approximately HK$15,600,000) From 1 January 2011 to 30 June 2011 US$2,800,000 inclusive (approximately HK$21,840,000)

Each of the above amounts is referred to as the “New Cap” or collectively, as the “New Caps” in this circular. Subject to the above amendments, the other terms of the Investment Management Agreement shall remain the same.

If the total fees payable to the Investment Manager (consisting of the Management and Administration Fee and, if any, the Incentive Fee) for each of the periods covered by the Fifth Supplemental Agreement exceed the corresponding New Cap, the Company will again have to fully comply with the provisions of Chapter 14A of the Listing Rules governing connected transactions, including making further announcement and obtaining further approval from its Independent Shareholders.

– 12 –

LETTER FROM THE BOARD OF DIRECTORS

Historical transaction amounts and the current annual caps

The following is a summary of the historical transaction amounts for the period commencing from 1 July 2005 to 31 March 2008 inclusive and the current annual caps for the Ongoing Connected Transactions for the periods commencing from 1 July 2005 to 30 June 2008 inclusive:

			For the				For the
			period from				period from
			1 July 2005 to			1 January 2008
			31 December				to 31 March
			2005	For the	For the		2008
			inclusive	year 2006	year 2007		inclusive
Amount			US$1,161,644	US$ 625,168	US$ 548,617		US$135,065
Current	annual	caps	US$1,400,000	US$1,200,000	US$1,200,000		US$600,000
							(Note: this
							annual cap
							covers the
							period from 1
						January 2008 to
							30 June 2008)

Reasons for the Fifth Supplemental Agreement

The Company, an investment company listed under Chapter 21 of the Listing Rules on the Stock Exchange, aims to achieve long-term capital appreciation through unlisted investments in the greater Shanghai region and listed China-related securities. Since 12 November 1993, the Company has appointed the Investment Manager to provide Investment Management Services to the Company. The three years term of appointment of the Investment Manager under the Fourth Supplemental Agreement will expire on 30 June 2008 and either party may terminate the Investment Management Agreement with two months prior written notice at any time. The Board considers that the AGM, expected to be held in April 2008, to be an appropriate time for the Independent Shareholders to consider and, if thought fit, approve, inter alia, the Fifth Supplemental Agreement and the Ongoing Connected Transactions.

The Directors are of the opinion that the Investment Manager will continue to have the necessary expertise in providing the Investment Management Services to the Company in the future. The Directors (excluding the independent non-executive Directors who will express their view after considering the independent financial adviser’s advice letter to be included in the circular) consider that the execution of the Fifth Supplemental Agreement and the Ongoing Connected Transactions to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole, on normal commercial terms and in the ordinary and usual course of business of the Company.

– 13 –

LETTER FROM THE BOARD OF DIRECTORS

Approval by Independent Shareholders

(1) The New Caps

The total estimated fees payable to the Investment Manager pursuant to the Investment Management Agreement for the period between 1 July 2008 and 30 June 2011 can be analysed with reference to the audited Net Asset Value of the Company of approximately US$27.0 million as at 31 December 2007 and the management’s projection in respect of movements in the Net Asset Value during the said periods. The management has taken into consideration (a) the projected increase in value of its listed investments portfolio; (b) the projected increase in value of its unlisted investments portfolio based on factors such as listing plans and initial public offering valuations; (c) projected return of capital to Shareholders in the form of special dividends; and (d) ongoing operating expenses of the Company, when arriving at the movements. The amount of Management and Administration Fee and Incentive Fee payable to the Investment Manager are then calculated based on their respective rates and methods.

(2) Approval by Independent Shareholders

The listing of the Company was approved by the Stock Exchange as an investment company under Chapter 21 of the Listing Rules. Pursuant to Rule 21.13 of the Listing Rules, for so long as the Investment Manager remains the investment manager of the Company for the purposes of the Listing Rules, all of the Ongoing Connected Transactions would constitute connected transactions. Pursuant to rule 14A.35 of the Listing Rules, the Fifth Supplemental Agreement would require disclosure by way of announcement, preparation and despatch of circulars to the Shareholders and prior approval by the Independent Shareholders by poll. The Independent Shareholders will also be asked to consider and, if thought fit, approve by poll the Fifth Supplemental Agreement at the AGM.

Conditions to the Approval

The Independent Shareholders’ approval for the Fifth Supplemental Agreement and the Ongoing Connected Transactions for the term of the Fifth Supplemental Agreement shall be subject to the following conditions:

(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 Investment Management Agreement and the Fifth Supplemental Agreement supplementary thereto.

– 14 –

LETTER FROM THE BOARD OF DIRECTORS

(2) The total consideration of the Ongoing Connected Transactions for any of the periods stipulated in Clause 7.03A of the Investment Management Agreement as amended by the Fifth Supplemental Agreement shall not exceed the corresponding New Cap set out in that clause.
(3) Details of the Ongoing Connected Transactions in each financial year shall be disclosed as required under rule 14A.46 of the Listing Rules in the Company’s next and each successive annual report, each accompanied with a statement of the opinion of the independent non-executive Directors and the auditors of the Company as referred in paragraphs (4) and (6) below.
(4) The independent non-executive Directors shall review annually the Ongoing Connected Transactions and confirm in the Company’s next and successive annual reports that the Ongoing Connected Transactions are conducted in the manner as stated in (1) and (2) above.
(5) The auditors of the Company will be given full access to its relevant records for the purpose of the auditor’s review; and
(6) The auditors of the Company shall review the Ongoing Connected Transactions annually and provide the Board (a copy of which shall be provided to the Stock Exchange) with a letter (the “Auditors’ Letter”) stating whether:
the Ongoing Connected Transactions have received the approval of the Board;
the Ongoing Connected Transactions have not exceeded the limit as stipulated in (2) above; and
the Ongoing Connected Transactions have been entered into on normal commercial terms or in accordance with the terms of the Investment Management Agreement as amended by the Fifth Supplemental Agreement.

Where, for whatever reason, the auditors decline to accept the engagement or is unable to provide the Auditors’ Letter, the Directors shall contact the Stock Exchange and publish an announcement immediately.

If any terms of the Ongoing Connected Transactions as mentioned above are altered or if the total consideration of the Ongoing Connected Transactions for any of the periods stipulated in Clause 7.03A of the Investment Management Agreement as amended by the Fifth Supplemental Agreement exceeds the corresponding New Cap set out in that clause, the Company will have to fully comply with the provisions of Chapter 14A of the Listing Rules governing connected transactions.

– 15 –

LETTER FROM THE BOARD OF DIRECTORS

Relationship between the Company and the Investment Manager

Therefore, any transactions between the Company and the Investment Manager constitute connected transactions under Chapter 14A of the Listing Rules. The Ongoing Connected Transactions contemplated under this circular constitute continuing connected transactions under Chapter 14A of the Listing Rules. Pursuant to rule 14A.35 of the Listing Rules, the Fifth Supplemental Agreement would require disclosure by way of announcement, preparation and despatch of circulars to the Shareholders and prior approval by the Independent Shareholders by poll.

Business of the Company

The Company is an investment company to enable investment in companies and other entities established or having significant operations in or business with the PRC by non-PRC persons.

Information about the Investment Manager and its Ultimate Beneficial Owners

The Investment Manager is an investment management company. The principal operations of the Investment Manager include: (i) management of investments and reinvestments of the assets of its clients in order to achieve the investment objectives and policies of its clients; (ii) evaluation of investment opportunities, implementation of investment and realization decisions, supervision of investments and preparation of valuations in relation to its clients’ investments; and (iii) management of the corporate affairs and day-to-day administration of its clients.

The Investment Manager is a joint venture company owned as to 40% by A.T.S. Co., Ltd. and 60% by SinoPac Capital (B.V.I.) Ltd..

– 16 –

LETTER FROM THE BOARD OF DIRECTORS

A.T.S. Co., Ltd. is a company incorporated in Japan and a wholly owned subsidiary of SITICO, which is a major financial institution in Shanghai. SITICO is majority-owned by the Shanghai Municipal People’s Government through Shanghai International Group Corporation Limited. SITICO’s principal business activities include the provision of financial trust, asset management and investment banking services in the greater Shanghai region. SITICO is also a Shareholder with an interest of 5.56% of the issued share capital of the Company.

SinoPac Capital (B.V.I.) Ltd. is a company incorporated in the British Virgin Islands and its ultimate parent company is SinoPac Financial Holdings Limited. SinoPac Financial Holdings Limited is a financial holding company listed on the Taiwan Stock Exchange. The operations of its subsidiaries include banking, securities, credit card, insurance agency, venture capital and asset management services. Neither SinoPac Financial Holdings Limited nor any of its associates have any shareholding in the Company.

General

SITICO is a 40% joint venture partner of the Investment Manager and is also a Shareholder with an interest of 5.56% of the issued share capital of the Company. Pursuant to the Listing Rules, SITICO and its associates will abstain from voting in the AGM to approve the Fifth Supplemental Agreement and all matters contemplated thereunder.

The Company has appointed Altus Capital Limited as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Ongoing Connected Transactions.

6. ANNUAL GENERAL MEETING

Set out in pages 41 to 45 of this circular, is a notice to convene the Annual General Meeting to consider and, if thought fit, approve, inter alia, the Repurchase Mandate, the Share Issue Mandate, the re-election of Retiring Directors, and the Fifth Supplemental Agreement and the Ongoing Connected Transactions. The Annual General Meeting of the Company will be held at Basement 1, Monaco Room, Regal Hong Kong Hotel, 88 Yee Wo Street, Causeway Bay, Hong Kong at 10:30 a.m. on 28 April 2008.

– 17 –

LETTER FROM THE BOARD OF DIRECTORS

There is enclosed a form of proxy for use at the Annual General Meeting. Whether or not you intend to be present at the Meeting, you are requested to complete the form of proxy and return it to the Company’s registrars in Hong Kong in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the Meeting. Completion and delivery of the form of proxy will not prevent Shareholders from attending, and voting at, the Meeting if they so wish.

7. RIGHT TO DEMAND A POLL

Pursuant to existing article 52 of the Articles, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless before, or on the declaration of the result of the show of hands, a poll is duly demanded:

(a) by the chairman of the meeting; or
(b) by not less than three Shareholders present in person or by proxy or authorized representative for the time being entitled to vote at the meeting; or
(c) by a Shareholder or Shareholders present in person or by proxy or authorized representative and representing not less than one-tenth of the total voting rights of all the Shareholders having the right to vote at the meeting; or
(d) by a Shareholder or Shareholders present in person or by proxy or authorized representative and holding Shares conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the Shares conferring that right.

8. RECOMMENDATION

The Directors consider that the granting of Repurchase Mandate, Share Issue Mandate, the extension of the Share Issue Mandate, re-election of Retiring Directors, the execution of the Fifth Supplemental Agreement and the Ongoing Connected Transactions, and the New Caps are in the best interests of the Company and its Shareholders as a whole, are fair and reasonable as far as the Independent Shareholders are concerned, on normal commercial terms and in the ordinary and usual course of business and so recommend that you vote in favor of the resolutions to be proposed at the Annual General Meeting.

– 18 –

LETTER FROM THE BOARD OF DIRECTORS

9. ADDITIONAL INFORMATION

In relation to the Ongoing Connected Transactions, your attention is drawn to:

(i) the letter from the Independent Board Committee as set out on page 20 to 21 of this circular which contains its recommendation to the Independent Shareholders on the terms of the Fifth Supplemental Agreement and the Ongoing Connected Transactions;
(ii) the letter of advice from the Independent Financial Adviser as set out on pages 22 to 28 of this circular which contains, amongst other matters, its advice to the Independent Board Committee and the Independent Shareholders in relation to the Fifth Supplemental Agreement and the Ongoing Connected Transactions and the principal factors and reasons considered by it in concluding its advice; and
(iii) the general information set out in Appendix II to this circular.

Yours faithfully, For and on behalf of the Board WANG Ching

Executive Director

– 19 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 770)

Independent Non-executive Directors

Dr. HUA Min Mr. ONG Ka Thai Mr. YICK Wing Fat, Simon

2 April 2008

To the Independent Shareholders

Dear Sir or Madam,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

We refer to this circular dated 2 April 2008 issued by the Company to its Shareholders, of which this letter forms part. Unless the context otherwise requires, terms defined in this circular shall have the same meanings when used in this letter.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the entering into of the Ongoing Connected Transactions is in the interests of the Company and the Shareholders as a whole and the terms of the Fifth Supplemental Agreement and the Ongoing Connected Transactions are fair and reasonable so far as the Independent Shareholders are concerned. None of the members of the Independent Board Committee have any direct or indirect interest in the Ongoing Connected Transactions. In addition, Altus Capital Limited has been appointed as Independent Financial Adviser.

We wish to draw your attention to (i) the letter of advice from the Independent Financial Adviser as set out on pages 22 to 28 of this circular; and (ii) the letter from the Board as set out on pages 5 to 19 of this circular, which set out information relating to, and the reasons for and benefits of the Ongoing Connected Transactions.

As the Company’s INEDs, we have discussed with the management of the Company the reasons for and benefits of the Ongoing Connected Transactions and the basis upon which the terms have been determined. We have considered the factors and reasons considered by, and the opinions and recommendations of, the Independent Financial Adviser as set out on pages 22 to 28 of this circular. We concur with the view of the Independent Financial Adviser that the entering into of the Ongoing Connected Transactions are in the interests of the Company and

– 20 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

the Shareholders as a whole and the terms of which are fair and reasonable as far as the Independent Shareholders are concerned and are on normal commercial terms. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution approving the Ongoing Connected Transactions and the New Caps to be proposed at the Annual General Meeting.

Yours faithfully,

The Independent Board Committee of

Shanghai International Shanghai Growth Investment Limited Dr. HUA Min Mr. ONG Ka Thai Mr. YICK Wing Fat, Simon

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter from Altus Capital Limited for the purpose of incorporation in this circular, in connection with the advice to the Independent Board Committee and the Independent Shareholders in relation to the Ongoing Connected Transactions:

8/F Hong Kong Diamond Exchange Building 8 Duddell Street, Central Hong Kong

2 April 2008

To the Independent Board Committee and Independent Shareholders of

Shanghai International Shanghai Growth Investment Limited

23/F Two International Finance Centre 8 Finance Street, Central Hong Kong

Dear Sirs,

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as independent financial adviser to the Independent Board Committee and Independent Shareholders in respect of the Ongoing Connected Transactions and the New Caps pertaining to the Fifth Supplemental Agreement entered into on 28 March 2008. Details of the Ongoing Connected Transactions and the terms of the conditions of the Fifth Supplemental Agreement are set out in the Letter from the Board (“Letter”) contained in the circular of the Company dated 2 April 2008 (the “Circular”) to the Shareholders, of which this letter forms part. Capitalised terms used in this letter have the same meanings ascribed to them in the Circular unless the context otherwise requires.

The Independent Board Committee has been established to give advice and recommendation to the Independent Shareholders in relation to the Ongoing Connected Transactions and the New Caps pertaining to the Fifth Supplemental Agreement.

We have been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Ongoing Connected Transactions and New Caps under the Fifth Supplemental Agreement are, on normal commercial terms and in the ordinary and usual course of business of the Company, and fair and reasonable so far as the Independent Shareholders are concerned, and to give our opinion to the Independent Board Committee in relation to the same for their consideration in making a recommendation to the Independent Shareholders.

– 22 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

In formulating our opinion and recommendation with regard to the Ongoing Connected Transactions and the New Caps, we have relied to a considerable extent on the information, statements, opinions and representations supplied to us by the Company and the Directors and we have assumed that all such information, statements, opinions and representations contained or referred to in the Circular were true, accurate and complete at the time they were made and continue to be true, accurate and complete at the date of the Circular. We have assumed that all statements of belief, opinion and intention of the Directors as set out in the Letter were reasonably made after due and careful inquiry. We have also sought and obtained confirmation from the Company that no material facts have been omitted from the information provided and referred to in the Circular. We have also relied on certain publicly available information and we have assumed such information to be accurate and reliable, and we have not carried out any independent verification on the accuracy of such information.

The Directors confirmed that they have provided us with all currently available information and documents which are available under present circumstances to enable us to reach an informed view and we have relied on the accuracy such information and the information contained in the Circular to provide a reasonable basis of our opinions. We have no reason to suspect that any material facts or information (which is known to the Company, its representatives and the Directors) have been omitted or withheld from the information supplied or opinions expressed in the Circular nor to doubt the truth and accuracy of the information, facts, and representation provided, or the reasonableness of the opinions expressed by the Company, its representatives and the Directors. We consider that we have reviewed sufficient information which enables us to form a reasonable basis for our opinion. We also consider that we have performed all reasonable steps as required under Rule 13.80 of the Listing Rules to ascertain the reliability of the information provided to us and to form our opinion. We have not, however, carried out any independent verification on the information provided to us by the Company, its representatives and the Directors, nor have we conducted an independent in-depth investigation into the business affairs, assets and liabilities, or the prospects of the Company.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation with regard to the Ongoing Connected Transactions, we have considered the following principal factors and reasons:

1. Background for the Ongoing Connected Transactions

The Company is an investment company listed under Chapter 21 of the Listing Rules of the Stock Exchange and is principally engaged in enabling investment in companies and other entities established or having significant operations in or business with the PRC by non-PRC persons. Since November 1993, the Company has appointed the Investment Manager to provide Investment Management Services to the Company, which is governed by the Investment Management Agreement (as supplemented by the Supplement Agreement, the Second Supplement Agreement, the Third Supplement Agreement, and the Fourth Supplement Agreement).

– 23 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Investment Manager is an investment management company. The principal operations of the Investment Manager include: (i) management of investments and reinvestments of the assets of its clients in order to achieve the investment objectives and policies of its clients; (ii) evaluation of investment opportunities, implementation of investment and realisation decisions, supervision of investments and preparation of valuation in relation to its clients’ investments; and (iii) management of the corporation affairs and day-to-day administration of its clients.

The appointment terms of the Investment Manager under the Fourth Supplement Agreement will expire on 30 June 2008. The provision of investment management services in relation to assets of the Company requires constant monitoring and reporting to the Company. The Directors, having considered the Investment Manager’s competence and satisfactory past performance for the Company and its extensive experience in the investment management industry of over 10 years, believe that the Investment Manager has the necessary resources and expertise in providing the Investment Management Services to the Company in the future. Consequently, the Fifth Supplemental Agreement was entered into so as to renew the terms of the Investment Management Agreement, as supplemented from time to time, for another three years from 1 July 2008.

We are of the view that the Investment Manager has demonstrated satisfactory performance in the past, which resulted in its entitlement to Incentive Fees in the financial years ended 31 December 2005 and 2007. The extension of the Investment Manager’s appointment can also ensure continuity in the investment management of the Company’s assets.

2. Listing Rules implications

Pursuant to Rule 21.13 of the Listing Rules, the Investment Manager, acting as the Company’s investment manager licensed under the SFO, is a connected person for the purpose of the Listing Rules. Consequently, for so long as the Investment Manager remaining as the investment manager of the Company, all of the Ongoing Connected Transactions would constitute connected transactions under the Listing Rules. These Ongoing Connected Transactions have been and will continue to be conducted between the Company and the Investment Manager in their usual and ordinary courses of business.

The Investment Management Services have been rendered under normal commercial terms and in the usual and ordinary course of business in the past; and such services are essential to the Company as an investment company. We therefore believe it is reasonable and in the interests of the Shareholders and the Company as a whole to extend the term of the Investment Manager’s appointment by entering into the Fifth Supplemental Agreement.

– 24 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Basis of determination

To assess the reasonableness of the fee structures of the Investment Management Agreement and for comparison purposes, we have reviewed, to the best of our knowledge, all investment companies listed under Chapter 21 of the Listing Rules, and have identified seven investment companies whose principal activities include investments in both listed and unlisted companies in Hong Kong and/or the PRC, which are similar to the Company (collectively the “Comparables”). A summary of their fee structures is as follows:

Management Fee Incentive/Performance charged by investment Fee of investment Company manager manager

a. Yu Ming 1.5% per annum of 20% of such amount, Investments Ltd audited consolidated net which exceeds the last (#666) asset value, payable in audited consolidated net arrears quarterly asset value at year end
b. Sino Technology 0.25% per annum of the Investments net asset value of the Company Limited company, payable on a (#1217) monthly basis
Bonus fee equivalent to 10% of the audited profit before tax of each financial year of the company
c. Prime Investments 2.5% per annum on net Holdings Limited asset value of the group (#721) at the agreed valuation date, subject to monthly minimum fee of HK$30,000

10% of the surplus in net asset value of the group should it be greater than HK$30 million

d. China Assets a. 2.75% per annum on Subject to performance (Holdings) Limited the aggregate cost of bonus (detailed (#170) the investments (less calculation not provisions in respect available) thereof); and
b. 1% per annum on the value of uninvested net assets (i.e. net asset value less the aggregate costs of investments)

– 25 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

		Management Fee	Incentive/Performance
		charged by investment	Fee of investment
	Company	manager	manager
e.	OPES Asia	Prior to 31 December	Prior to 31 December
	Development	2006: 1.25% per annum	2006: 5% of 15% of the
	Limited (#810)	of the net asset value of	surplus in net asset value
		the company, payable on	of latest year end less
		a monthly basis	net asset value of
			previous year end
		From 20 March 2007:	From 20 March 2007:
		new investment manager	N/A
		was appointed and
		management fee is
		charged at a fixed fee of
		HK$30,000 per month
f.	Incutech	1.5% of the consolidated	N/A
	Investments Limited	net asset value of the
	(#356)	company at the agreed
		valuation date, payable
		on a monthly basis
g.	UBA Investments	1.5% of the consolidated	N/A
	Limited (#768)	net asset value of the
		company at the agreed
		valuation date, payable
		on a monthly basis
h.	The Company	2% per annum of the	15% of the surplus
		net asset value of the	exceeds 115% of the
		Company	net asset value of the
			Company, net of special
			dividends (if any)

Source: Based on latest published annual or interim reports.

We noted that there is disparity in the fee arrangements for the above investment companies. In particular, arrangements on incentive fees vary from nil to 20% of profits or increases in net asset values. We are of the view that the Incentive Fee is an arrangement which serves to motivate the Investment Manager for better performance. This is especially the case in respect of the Investment Management Agreement where Incentive Fees are payable only if an annual hurdle rate of 15% is achieved by the Investment Manager.

On the basis above, we are of the view that the rates for the Management and Administration Fee, as well as the Incentive Fee under the Investment Management Agreement are fair and reasonable.

– 26 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. The New Caps

Set out below is the historical utilisation of the caps previous approved for the periods between 1 July 2005 and 30 June 2008 (“Previous Caps”):

Period Previous Caps Utilisation From 1 July 2005 to US$1.40 million US$1.16 million 31 December 2005 inclusive For the year 2006 US$1.20 million US$0.63 million For the year 2007 US$1.20 million US$0.55 million From 1 January 2008 to US$0.60 million US$0.14 million 30 June 2008 inclusive (from 1 January 2008 to 31 March 2008 inclusive)

The management explained that the utilisation of the Previous Caps was relatively lower during the year 2006 and 2007 due to reduction in Net Asset Value as a result of return of capital in the form of special dividends to the Shareholders. Also, no Incentive Fee was paid to the Investment Manager during those years. Pursuant to the Fifth Supplemental Agreement, the New Caps proposed are as follows:

Period

Period Amount From 1 July 2008 to 31 December 2008 inclusive US$0.40 million For the year 2009 US$1.80 million For the year 2010 US$2.00 million From 1 January 2011 to 30 June 2011 inclusive US$2.80 million

When considering the New Caps, we noted that the total fees payable to the Investment Manager in general comprise: (i) the Management and Administration Fee, which is a regular payment and is calculated based on 0.5% per quarter (or 2% per annum) of the Net Asset Value on each Quarter Day; and (ii) the Incentive Fee, which is calculated at 15% of the amount by which the portion of the Net Asset Value as at 31 December of each year during the term of the Investment Management Agreement (as supplemented) exceeds 115% of the Net Asset Value of the preceding year, net of special dividends (if any).

– 27 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

capital to Shareholders in the form of special dividends; and (d) ongoing operating expenses of the Company, when arriving at the movements. The amount of Management and Administration Fee and Incentive Fee payable to the Investment Manager are then calculated based on their respective rates and methods.

We are of the view that the above is a reasonable basis for estimating the fees and thus, determining the New Caps for the Ongoing Connected Transactions. It is noted that in the event that fees payable to the Investment Manager during the aforesaid relevant periods exceed the relevant New Caps, the Company will be required to separately seek approvals from Independent Shareholders at that point in time before making the payments.

5. Revised calculation method for Incentive Fees

It is noted that pursuant to the Fifth Supplemental Agreement, listed and unlisted investment portfolios are combined for the purpose of calculating the Incentive Fees. This contrasted with previous arrangements where Incentive Fees are computed separately for listed and unlisted investments. Given the Company’s strategy of focusing on both types of investments, we are of the view that it is fair and reasonable to view the performance of the Company as a whole and on a combined basis. The proposed calculation method eliminates the ambiguity where Incentive Fees are still payable in the event that the performance of the Company as a whole is unsatisfactory, even though individual portfolio may have good performance. On this basis, we are of the view that the proposed calculation method for Incentive Fees under the Fifth Supplemental Agreement is fair and reasonable.

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the Ongoing Connected Transactions are conducted in the usual and ordinary course of business of the Company. The terms and conditions of the Ongoing Connected Transactions, including the New Caps, are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned and are in the interest of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise and recommend the Independent Shareholders to vote in favour of the resolution to approve the Ongoing Connected Transactions and the New Caps to be proposed at the AGM.

Yours faithfully, For and on behalf of

Altus Capital Limited Arnold Ip

Executive Director

– 28 –

EXPLANATORY STATEMENT

APPENDIX I

References in this Explanatory Statement to “Shares” mean fully paid up ordinary shares of US$0.10 each in the capital of the Company.

1. SHARE CAPITAL

As at 31 March 2008 (being the Latest Practicable Date prior to the printing of this document), the issued share capital of the Company comprised 8,905,000 Shares in the Company. The passing of the Ordinary Resolution (5) as set out in the Notice of Annual General Meeting on pages 41 to 45 will allow the Company to repurchase up to a maximum of 890,500 Shares on the basis that no further Shares will be issued or repurchased prior to the date of the Annual General Meeting.

2. REASONS FOR REPURCHASE

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from Shareholders to enable the Directors to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per share and will only be made when the Directors believe that such repurchases will benefit the Company and its Shareholders.

3. FUNDING OF REPURCHASES

Repurchase Mandate would be funded from the available cash flow and/or working capital facilities of the Company. The funds employed by the Company in connection with a repurchase of Shares would be those legally available for such purpose under the Company’s Memorandum and Articles of Association and the laws of the Cayman Islands.

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited financial statements for the year ended 31 December 2007 contained in the 2007 Annual Report) in the event that the mandate to repurchase Shares were to be exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company at the time of the relevant repurchases unless the Directors determined that such repurchases were, taking into account all relevant factors, in the best interests of the Company.

4. GENERAL

To the best of the Directors’ knowledge after having made all reasonable enquiries, none of the Directors nor their associates currently intend to sell any Shares to the Company or its subsidiaries under the Repurchase Mandate if such Repurchase Mandate is approved by Shareholders.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules and the laws of the Cayman Islands.

– 29 –

EXPLANATORY STATEMENT

APPENDIX I

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company, nor have they undertaken not to do so in the event that the Repurchase Mandate is approved by Shareholders.

5. TAKEOVERS CODE CONSEQUENCES

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, the register of interests in Shares and short positions maintained by the Company pursuant to Section 336 of the SFO showed that the Company had been notified of the following interests, being 5% or more of the issued share capital of the Company:

			New shareholding
			% if the
		Current	Repurchase
		shareholding	Mandate were
Note	Name	%	fully exercised
(1)	Mr. Jacob Ezra Merkin	18.98	21.09
(1)	Gabriel Capital Corporation	13.74	15.26
	(“GCC”)
(1)	Gabriel Capital, L.P. (“Gabriel”)	5.25	5.83
(1)	Ariel Fund Limited (“Ariel”)	7.75	8.62
(2)	Mr. Hsu Sheng-yu	12.07	13.41
(2)	Chung Chia Company Limited	6.72	7.47
	(“Chung Chia”)
(2)	Kwang Shun Company Limited	5.35	5.94
	(“Kwang Shun”)
(3)	Ms. Hsu Tsui-hua	6.72	7.47
(4)	Ms. Chang Hsiu-yen	5.35	5.94
(5)	Shanghai International Group	5.56	6.18
	Corporation Ltd.
(5)	Shanghai International Trust &	5.56	6.18
	Investment Co., Ltd. (“SITICO”)
	Dover Street VI L.P.	5.61	6.24
(6)	Ruentex Industries Ltd.	6.93	7.69
(7)	Ruentex Development Co., Ltd.	6.71	7.46

– 30 –

EXPLANATORY STATEMENT

APPENDIX I

Notes:

(1) Mr. J. Erza Merkin is the General Partner of Gabriel, he is deemed to be interested in 1,690,500 shares by virtue of his 100% control over GCC and Gabriel. Besides. GCC is also deemed to be interested in the Company through its management of Ariel and other funds.
(2) Mr. Hsu Sheng-yu has an indirect interest in the Company through his 50% beneficial interest in each of Chung Chia and Kwang Shun.
(3) Ms. Hsu Tsui-hua has an indirect interest in the Company through her 50% beneficial interest in Chung Chia.
(4) Ms. Chang Hsiu-yen has an indirect interest in the Company through her 50% beneficial interest in Kwang Shun.
(5) Shanghai International Group Corporation Ltd has an indirect interest in the Company through its approximately 66.33% equity interest in SITICO.
(6) Apart from a direct holding of 257,000 shares in the Company, Ruentex Industries Limited holds an indirect interest in the Company through its 100% ownership in Full Shine Int’l Holdings Ltd..
(7) Apart from a direct holding of 228,000 shares in the Company, Ruentex Development Co., Ltd holds an indirect interest in the Company through its 100% ownership in Ruentex Construction Int’l (BVI) Ltd..

In the event that the Directors exercise the Repurchase Mandate in full, there will not be any consequences which may arise under the Takeovers Code, however, the public float of the Shares will fall below 25 per cent. and the Company will not be able to comply with Rule 8.08 of the Listing Rules. As a result of the above, the Company will not exercise the Repurchase Mandate should the public float requirement not be met.

6. SHARE REPURCHASE MADE BY THE COMPANY

The Company had not repurchased any Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

– 31 –

EXPLANATORY STATEMENT

APPENDIX I

7. MARKET PRICE OF SHARES

The following table shows the highest and lowest prices at which the Shares of the Company have been traded on the Stock Exchange in each of the last twelve months:

	Highest	Lowest
	US$	US$
2007
March	2.75	2.40
April	2.80	2.45
May	2.45	2.00
June	2.55	2.39
July	2.78	2.45
August	2.75	2.35
September	2.75	2.48
October	3.10	2.60
November	3.00	2.21
December	2.48	2.26
2008
January	2.29	2.05
February	2.16	2.01
March (up to the Latest Practicable Date)	2.40	2.00

– 32 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular, the omission of which would make any statement herein misleading.

2. SHARE CAPITAL

As at the Latest Practicable Date, the authorized and issued share capital of the Company were as follows:

==> picture [20 x 10] intentionally omitted <==

Authorised share capital
18,000,000 Shares @ US$0.10 each	1,800,000
Issued and fully paid
8,905,000 Shares @ US$0.10 each	890,500

3. DISCLOSURE OF INTERESTS

(i) Directors’ interests or short positions in the shares, underlying shares and debentures of the Company and its associated companies

As at the Latest Practicable Date, none of the Directors nor their associates had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated companies (within the meaning of Part XV of the SFO which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of SFO; or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

(ii) Directors’ interest in contracts

As at the Latest Practicable Date, other than the Investment Management Agreement, no contracts of significance to which the Company was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the Latest Practicable Date.

– 33 –

GENERAL INFORMATION

APPENDIX II

(iii) Directors’ interest in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to the Company since 31 December 2007, being the date of which the latest audited financial statements of the Company were made up.

4. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, the register of substantial shareholders maintained by the Company pursuant to section 336 of the SFO showed that the Company had been notified of the following interests:

			Percentage of
		Number of	total issued
Name	Capacity	shares	shares	Notes
Mr. J. Ezra Merkin	Held by controlled	1,690,500	18.98%	(1)
	corporation
Gabriel Capital	Held by controlled	1,223,239	13.74%	(1)
Corporation	corporation
(“GCC”)
Gabriel Capital, L.P.	Beneficial owner	467,261	5.25%	(1)
(“Gabriel”)
Ariel Fund Limited	Beneficial owner	690,578	7.75%	(1)
Mr. Hsu Sheng-yu	Held by controlled	1,075,040	12.07%	(2)
	corporation
Chung Chia Co., Ltd.	Beneficial owner	598,743	6.72%	(2)
(“Chung Chia”)
Kwang Shun Co.,	Beneficial owner	476,297	5.35%	(2)
Ltd. (“Kwang
Shun”)
Ms. Hsu Tsui-hua	Held by controlled	598,743	6.72%	(3)
	corporation
Ms. Chang Hsiu-yen	Held by controlled	476,297	5.35%	(4)
	corporation
Shanghai	Held by controlled	495,000	5.56%	(5)
International Group	corporation
Corporation Ltd.
Shanghai	Beneficial owner	495,000	5.56%	(5)
International Trust
Investment
Corporation
(“SITICO”)

– 34 –

GENERAL INFORMATION

APPENDIX II

			Percentage of
		Number of	total issued
Name	Capacity	shares	shares	Notes
Dover Street VI L.P.	Beneficial owner	500,000	5.61%
Ruentex Industries	Held by controlled	616,752	6.93%	(6)
Ltd.	corporation
Ruentex Development	Held by controlled	597,752	6.71%	(7)
Co., Ltd.	corporation

Notes:

(1) Mr. J. Erza Merkin is the General Partner of Gabriel, he is deemed to be interested in 1,690,500 shares by virtue of his 100% control over GCC and Gabriel. Besides. GCC is also deemed to be interested in the Company through its management of Ariel Fund Limited and other funds.
(2) Mr. Hsu Sheng-yu has an indirect interest in the Company through his 50% beneficial interest in each of Chung Chia and Kwang Shun.
(3) Ms. Hsu Tsui-hua has an indirect interest in the Company through her 50% beneficial interest in Chung Chia.
(4) Ms. Chang Hsiu-yen has an indirect interest in the Company through her 50% beneficial interest in Kwang Shun.
(5) Shanghai International Group Corporation Ltd has an indirect interest in the Company through its approximately 66.33% equity interest in SITICO.
(6) Apart from a direct holding of 257,000 shares in the Company, Ruentex Industries Limited has an indirect interest in the Company through its 100% ownership in Full Shine Int’l Holdings Ltd..
(7) Apart from a direct holding of 228,000 shares in the Company, Ruentex Development Co., Ltd has an indirect interest in the Company through its 100% ownership in Ruentex Construction Int’l (BVI) Ltd..

Save as disclosed above, so far as is known to the Directors and chief executive officers of the Company, as at the Latest Practicable Date, no other person, had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, and/or who was, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company.

5. LITIGATION

As at the Latest Practicable Date, the Company was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Company.

6. SERVICE AGREEMENTS

As at the Latest Practicable Date, none of the Directors of the Company had entered into, or proposed to enter into, a service contract with the Company which does not expire or is not terminable by the Company within one year without payment of compensation, other than statutory compensation.

– 35 –

GENERAL INFORMATION

APPENDIX II

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Company since 31 December 2007, being the date of which the latest audited financial statements of the Company were made up.

8. EXPERT

The following is the qualification of the expert who has given opinion or advice which are contained in this circular:

Name			Qualification
Altus	Capital	Limited	A licensed corporation authorised to carry out types 4, 6
			and 9 regulated activities of advising on securities,
			advising on corporate finance and asset management
			under the SFO.

As at the Latest Practicable Date, Altus Capital Limited did not have any shareholding interest in the Company or any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in the Company.

As at the Latest Practicable Date, Altus Capital Limited did not have any direct or indirect interest in any asset which had been acquired or disposed of by or leased to the Company, or was proposed to be acquired or disposed of by or leased to the Company, since 31 December 2007, being the date to which the latest published audited financial statements of the Company were made up.

Altus Capital Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and/or references to its name, in the form and context in which they respectively appear.

9. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors or their respective associates had any interest in any business which competed or was likely to compete, either directly or indirectly, with the business of the Company (as would be required to be disclosed under Rule 8.10 of the Listing Rules if each of them were a controlling shareholder).

10. MISCELLANEOUS

(a) The registered office of the Company is located at Ugland House, P.O. Box 309, George Town, Grand Cayman, Cayman Islands and the principal place of business of the Company in Hong Kong is located at 23rd Floor, Two International Finance Centre, 8 Finance Street, Central, Hong Kong.

– 36 –

GENERAL INFORMATION

APPENDIX II

(b) The company secretary of the Company is Mr. Liang Kwan Wah Andrew, a fellow member of the Hong Kong Institute of Certified Public Accountants.
(c) The qualified accountant of the Company is Miss Ngan Yuk Man, a fellow member of the Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants.
(d) The Company’s shares registrar and transfer office in Hong Kong is Tricor Secretaries Limited at 26/F Tesbury Centre, 28 Queen’s Road East, Hong Kong.
(e) The English text of this circular and form of proxy shall prevail over the Chinese text in the case of any inconsistency.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at 23rd Floor, Two International Finance Centre, 8 Finance Street, Central, Hong Kong during normal business hours on any weekday (except public holidays) from the date of this circular up to and including the date of the Annual General Meeting:

(a) the Investment Management Agreement;
(b) the Supplemental Agreement;
(c) the Second Supplemental Agreement;
(d) the Third Supplemental Agreement;
(e) the Fourth Supplemental Agreement;
(f) the Fifth Supplemental Agreement;
(g) the memorandum of association and articles of the Company;
(h) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out on pages 20 to 21 of this circular;
(i) the letter of advice from the Independent Financial Adviser to the Independent Shareholders, the text of which is set out on pages 22 to 28 of this circular; and
(j) the letter of consent from Independent Financial Adviser referred to in paragraph 8 of this appendix.

– 37 –

DETAILS OF RETIRING DIRECTORS

APPENDIX III

The biographical information of the Retiring Directors eligible for re-election at the Annual General Meeting is set out below.

Executive Directors

Dr. WANG Ching , aged 53, is newly appointed as an Executive Director of the Company on 1 July 2007. He is also the Managing Director of Shanghai International Asset Management (Hong Kong) Company Limited (the “Investment Manager”). He obtained his Master of Business Administration from the University of Houston in 1985 and was conferred the doctorate in Finance from Columbia University in 1992. Dr. Wang has over 15 years’ managerial experience in investment banking, securities, treasury and fund management sectors in the Unites States, Taiwan, Hong Kong and the PRC, with a wealth of experience in the securities and venture capital industries.

Prior to joining the Company, Dr. Wang was the Chief Executive of Investment and Proprietary Trading Group of Jih Sun Financial Holding Company Limited of Taiwan and Managing Director of JS Cresvale International Securities Limited in Hong Kong from 2003 to 2006. He was the Managing Director of SinoPac Securities (Asia) Limited in Hong Kong from 2001 to 2003. Dr. Wang was also a senior manager and a director of the Investment Banking Division of Standard Chartered Bank from 1996 to 1998. When he was with Jih Sun Securities Co., Ltd. in Taiwan since 1998, he was responsible for establishing its fund management business in Hong Kong and raised a private equity fund and two venture capital funds in 1999. Dr. Wang has been an INED of Minth Group Limited since December 2005, a company listed on the Stock Exchange.

Mr. WU Bin , aged 34, is newly appointed as an Executive Director of the Company on 30 May 2007. He is also the Deputy Managing Director of the Investment Manager. Mr. Wu holds an MBA degree in Finance from Shanghai Jiao Tong University and currently is a CFA charter holder. He also qualified as a PRC lawyer in 2000.

Prior to joining the Company, Mr. Wu was the Assistant General Manager of Center for International Business Management with Shanghai International Group Co., Ltd. (“SIG”). Before that, he had been the Assistant General Manager of Investment Banking Department with Shanghai International Trust & Investment Company since 2004, which is a subsidiary financial company of SIG. From 1996 to 2004, he had been a senior officer with The Sanwa Bank Limited and a deputy manager with Bohai Securities Co., Ltd. Mr. Wu has over 10 years’ managerial experience in banking, securities and trust investment sectors in PRC.

– 38 –

DETAILS OF RETIRING DIRECTORS

APPENDIX III

Non-Executive Directors

Mr. LEE Tien-chieh , aged 48, has been a Non-Executive Director since March 2005. Mr. Lee graduated with a Bachelor’s degree in Business Management from the Tatung Institute of Technology of Taiwan, and has over 18 years of experience in financial management. Mr. Lee is currently the Vice President of the Finance Division of Ruentex Industries Limited, which is a substantial shareholder of the Company.

Mr. TSENG Ta-mon , aged 49, has been a Non-Executive Director since March 2005. Mr. Tseng is a Barrister-at-Law. He is a law graduate from the National Chengchi University, Taiwan, and holds a Master’s degree in Law from London University, a Bachelor’s degree in Arts from Cambridge University and was called to the English Bar in 1985. Since 1993, Mr. Tseng is Special Assistant to the President and heads the legal department of the Ruentex Group of Companies in Taiwan and is currently an alternate director of APT Satellite Holdings Limited, a company listed on the Stock Exchange.

WANG Changhong , aged 49, has been a Non-Executive Director since March 1999. He joined Nomura International (Hong Kong) Limited in 1994 and is the director of the Equity Capital Market. Dr. Wang graduated with a Bachelor of Arts degree from Nanjing University in the PRC and holds a Ph.D. degree and a Juris Doctor degree from the University of Pennsylvania, U.S.A.

There is no service contract entered into between the Company and the aforesaid Dr. WANG, Mr. WU, Mr. LEE, Mr. TSENG and Dr. WANG respectively and they are not remunerated in fee for serving the office as Director. They will be subject to retirement by rotation and re-election at the Company’s annual general meetings in accordance with articles 93, 98(b) and 98(c) of the Company’s Articles.

Save as disclosed above, each of the aforesaid Dr. WANG, Mr. WU, Mr. LEE, Mr. TSENG and Dr. WANG has not held other directorship in any publicly listed companies in the last three years and are not related to any director, senior management or substantial or controlling Shareholder of the Company. They do not have any beneficial interest or short position in the Shares of the Company within the meaning of Part XV of the SFO. There are no other matters that needed to be brought to the attention of the Shareholders. There is no information to be disclosed pursuant to the requirements of Rules 13.51(2)(h) to (v) of the Listing Rules.

– 39 –

DETAILS OF RETIRING DIRECTORS

APPENDIX III

Independent Non-Executive Director

Dr. HUA Min , aged 58, has been an INED since September 2004. Dr. Hua graduated from Fudan University with a Bachelor’s degree in Economics and holds a Doctorate in World Economics from Fudan University. He is currently Chairman of the Institute of World Economy, Chief of World Economics Department and Chief of Academic Committee of Fudan University. Dr. Hua is an advisor for doctoral candidates. He has been teaching and conducting research in world economics, China economics and finance at Fudan University since 1990. He is also an advisor to the Policy-Making Committee of Shanghai Municipal government.

Dr. Hua has entered into a re-appointment agreement with the Company for a term of 2 years from September 28, 2006. He is subject to retirement by rotation and re-election at the Company’s annual general meetings in accordance with articles 98(b) and 98(c) of the Company’s Articles. He is entitled to an annual director’s fee of HK$100,000 and is not entitled to any bonus payments, whether fixed or discretionary in nature. The fee of INED is determined by the Board with reference to remuneration benchmark in the prevailing market.

Dr. Hua has not held other directorship in any publicly listed companies in the last three years and is not connected with any director, senior management or substantial or controlling Shareholder of the Company. He does not have any beneficial interest or short position in the Shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, there are no other matters that needed to be brought to the attention of the Shareholders of the Company. There is no information to be disclosed pursuant to the requirements of Rules 13.51(2)(h) to (v) of the Listing Rules.

– 40 –

NOTICE OF ANNUAL GENERAL MEETING

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 770)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Basement 1, Monaco Room, Regal Hong Kong Hotel, 88 Yee Wo Street, Causeway Bay, Hong Kong at 10:30 a.m. on 28 April 2008 for the following purposes:

To receive and consider the audited financial statements and the reports of the directors and the auditors for the year ended 31 December 2007.
To approve and declare a special final dividend for the year ended 31 December 2007.
To re-elect directors and to fix their remuneration.
To re-appoint auditors and to authorize the Board of Directors to fix their remuneration.

As special business, to consider and if thought fit, pass with or without amendments the following resolutions as Ordinary Resolutions:

ORDINARY RESOLUTIONS

“ THAT :
(a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares in the capital of the Company, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;
(b) the manner in which the shares in the capital of the Company may be repurchased shall be at the discretion of the directors of the Company as they may from time to time see fit provided that such repurchases shall be effected by on-market purchases on The Stock Exchange of Hong Kong Limited or on any other stock exchange recognized for this purpose by the Securities and Futures Commission and The Stock Exchange of Hong Kong Limited under the Hong Kong Code on Share Repurchases and in accordance with the relevant rules of The Stock Exchange of Hong Kong Limited or such other exchange and the aggregate nominal amount of the shares in the capital of the Company which may be repurchased pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this Resolution, and the said approval shall be limited accordingly; and

– 41 –

NOTICE OF ANNUAL GENERAL MEETING

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

  - (i) the conclusion of the next annual general meeting of the Company;

  - (ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; or

  - (iii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting.”

“ THAT :
(a) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;
(b) the approval in paragraph (a) above shall authorize the directors of the Company during the Relevant Period to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period;
(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined), (ii) any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, (iii) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed the aggregate of:
- (i) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this Resolution, plus

– 42 –

NOTICE OF ANNUAL GENERAL MEETING

(ii) Subject to passing of the following Ordinary Resolution (7), the number of shares in the capital of the Company repurchased by the Company subsequent to the passing of this Resolution (up to a maximum equivalent to 10 per cent. of the aggregate number of shares in the capital of the Company in issue at the date of passing this Resolution), and the said approval shall be limited accordingly; and
(d) for the purpose of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; or
(iii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to holders of shares in the capital of the Company or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof as at that date (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any recognized regulatory body or any stock exchange in, any territory outside Hong Kong).”

“ THAT the directors of the Company be and are hereby authorized to exercise the powers of the Company referred to in paragraph (a) of the resolution set out as Resolution 6 in the notice of this meeting in respect of the share capital of the Company referred to in sub-paragraph (ii) of paragraph (c) of such resolution.”
“ THAT :
(A) the fifth supplemental agreement (the “Fifth Supplemental Agreement”) dated 28 March 2008 entered into between the Company and Shanghai International Asset Management (HK) Co., Ltd. (a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purpose), which is supplemental to the investment management and administration agreement (the “Investment Management Agreement”) dated 12 November 1993 entered into between the Company and Shanghai International Asset Management (HK) Co., Ltd. (a copy of which is tabled at the meeting

– 43 –

NOTICE OF ANNUAL GENERAL MEETING

and marked “B” and initialled by the chairman of the meeting for identification purpose), pursuant to which the Company appointed Shanghai International Asset Management (HK) Co., Ltd. to provide Investment Management Services (as defined in the circular of the Company dated 2 April 2008 (the “Circular”), a copy of which is tabled at the meeting and marked “C” and initialled by the chairman of the meeting for identification purpose) to the Company, and the terms thereof and the transactions contemplated under the Investment Management Agreement as amended by the Fifth Supplemental Agreement and the implementation thereof be and hereby approved, ratified and confirmed; and

(B) the proposed New Caps (as defined in the Circular) in relation to the Ongoing Connected Transactions (as defined in the Circular) for each of the periods from 1 July 2008 to 31 December 2008 inclusive, for the year 2009, for the year 2010 and from 1 January 2011 to 30 June 2011 inclusive being US$400,000 (approximately HK$3,120,000), US$1,800,000 (approximately HK$14,040,000), US$2,000,000 (approximately HK$15,600,000) and US$2,800,000 (approximately HK$21,840,000) respectively be and are hereby approved;
(C) any one director of the Company, or any two directors of the Company if the affixation of the common seal is necessary, be and is/are hereby authorized for and on behalf of the Company to execute all such other documents, instruments and agreements and to do all such acts or things deemed by him/them to be incidental to, ancillary to or in connection with the matters contemplated in the Fifth Supplemental Agreement and/or the Ongoing Connected Transactions.”

By Order of the Board Andrew K. W. Liang Company Secretary

Hong Kong, 2 April 2008

– 44 –

NOTICE OF ANNUAL GENERAL MEETING

Notes:

A member entitled to attend and vote at the Meeting convened by the above notice is entitled to appoint a proxy to attend and, in the event of a poll, vote on his behalf. A proxy need not be a member of the Company.
In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney or authority must be lodged at the Company’s registrar in Hong Kong, Tricor Secretaries Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 24 hours before the time for holding the Meeting or adjourned meeting. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the Meeting or any adjourned meeting should he so wish.
The register of members of the Company will be closed from 18 April 2008 to 28 April 2008, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the proposed special final dividend and to determine entitlement to attend and vote at the Meeting, all transfers of shares, accompanied by the relevant share certificates, must be lodged with the Company’s Registrar, Tricor Secretaries Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong for registration no later than 4:00 p.m. on 17 April 2008.
In relation to Resolution 3, the retiring directors standing for re-election at the Meeting are Dr. WANG Ching, Mr. WU Bin, Mr. LEE Tien-chieh, Mr. TSENG Ta-mon, Dr. WANG Changhong and Dr. HUA Min. Biographical details of the above directors are disclosed in Appendix III to the circular (“Circular”) dated 2 April 2008 to be dispatched to members of the Company together with this notice and the 2007 Annual Report.
In relation to Resolution 5, an explanatory statement (as required by the Listing Rules) is set out in Appendix I to the Circular.
By Resolution 8(A), 8(B) and 8(C), approval is being sought from members of the Company in respect of non-exempt continuing connected transactions in relation to the fifth supplemental agreement which is supplement to investment management and administration agreement dated 12 November 1993 entered into between the Company and its investment manager, Shanghai International Asset Management (HK) Co., Ltd. A letter from the Company’s independent financial adviser, Altus Capital Limited, to the independent shareholders of the Company (as required by the Listing Rules) is set out in the Circular.

– 45 –

AI assistant

MOG Digitech Holdings Limited — Proxy Solicitation & Information Statement 2008

50286_rns_2008-04-01_de68b02b-8796-423d-b344-c44c387e4c30.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

(Stock code: 770)

(3) NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS, AND

NOTICE OF ANNUAL GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

LETTER FROM THE BOARD OF DIRECTORS

2. GENERAL MANDATE TO REPURCHASE SHARES

3. GENERAL MANDATE TO ISSUE SHARES

LETTER FROM THE BOARD OF DIRECTORS

4. RE-ELECTION OF RETIRING DIRECTORS

5. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

LETTER FROM THE BOARD OF DIRECTORS

The Investment Management Agreement

LETTER FROM THE BOARD OF DIRECTORS

The Supplemental Agreement

LETTER FROM THE BOARD OF DIRECTORS

The Second Supplemental Agreement

The Third Supplemental Agreement

The Fourth Supplemental Agreement

LETTER FROM THE BOARD OF DIRECTORS

The Fifth Supplemental Agreement

LETTER FROM THE BOARD OF DIRECTORS

Period

LETTER FROM THE BOARD OF DIRECTORS

Reasons for the Fifth Supplemental Agreement

Approval by Independent Shareholders

(1) The New Caps

(2) Approval by Independent Shareholders

Conditions to the Approval

LETTER FROM THE BOARD OF DIRECTORS

LETTER FROM THE BOARD OF DIRECTORS

Relationship between the Company and the Investment Manager

Business of the Company

Information about the Investment Manager and its Ultimate Beneficial Owners

LETTER FROM THE BOARD OF DIRECTORS

General

6. ANNUAL GENERAL MEETING

LETTER FROM THE BOARD OF DIRECTORS

7. RIGHT TO DEMAND A POLL

8. RECOMMENDATION

LETTER FROM THE BOARD OF DIRECTORS

9. ADDITIONAL INFORMATION

SHANGHAI INTERNATIONAL SHANGHAI GROWTH INVESTMENT LIMITED

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Yours faithfully,

Shanghai International Shanghai Growth Investment Limited

NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background for the Ongoing Connected Transactions

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Listing Rules implications

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Basis of determination

Management Fee Incentive/Performance charged by investment Fee of investment Company manager manager

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. The New Caps

Period

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Revised calculation method for Incentive Fees

RECOMMENDATION

1. SHARE CAPITAL

2. REASONS FOR REPURCHASE

3. FUNDING OF REPURCHASES

4. GENERAL

5. TAKEOVERS CODE CONSEQUENCES

MOG Digitech Holdings Limited Proxy Solicitation & Information Statement 2008