· State Street Bank and Trust Company will be appointed as Custodian on behalf of the Company and The China Heartland Fund (Mauritius) Limited ("the Subsidiary").
· State Street Bank Luxembourg, S.A. will be appointed as subscription, redemption and paying agent for the Company and, to the extent applicable, the Subsidiary. They will also act as accounting agent to the Company and the Subsidiary and provide various accounting services to the Company and the Subsidiary. They will act as first point of reference for all shareholder queries and the contact details are given below.
· Forum Fund Services Ltd. will be appointed by the Company as Registrar and will provide Company Secretarial services and Forum Securities Services Ltd. will act as Listing Sponsor for the Company to the Bermuda Stock Exchange.
· Martin Currie (Bermuda) Limited, a wholly owned subsidiary of Martin Currie Limited, will be appointed by the Company as Bermudian administrator and will be responsible for carrying out the functions of an administrator under Bermuda law or satisfying itself that such services required of an administrator under Bermuda law are being provided by appropriately qualified and experienced parties.
· The registered office of the Company will become Washington Mall I, 22 Church Street, Hamilton HM11, Bermuda.
· As part of these changes, Paul Thorne and Bente Ahern will be resigning as directors on 1 September 2000 and will be replaced by Edith Conyers and Paul Stevenson who will be appointed on that date.
The Board believes the above changes will bring the following advantages:
· a more efficient and integrated service for custody, transfer agency and accounting
· publication of daily net asset values on a t+1 or current day basis compared with t+2 at present
· a daily dealing capability in the future
· same time zone service for European investors plus ability to service Asian investors and North American investors.
Relevant material contracts
The Custodian
State Street Bank and Trust Company ("the Custodian") was appointed, pursuant to an agreement dated 1 September 2000, between the Company, the Subsidiary and Martin Currie Investment Management Limited, to act as the global custodian of the Company and the Subsidiary. Bermuda Commercial Bank Limited previously acted in such capacity and resigned with effect from 1 September 2000. The Custodian will not be holding any assets of the Company delivered to the China Securities Corporation. Under this agreement the Custodian has the power to appoint sub-custodians, agents or nominees and to delegate certain custodial and other functions where necessary to any such sub-custodians, agents or nominees. The agreement excludes the Custodian from any liability except in the case of negligence, fraud or wilful misconduct by it, its agents or sub-custodians and provides that the Company and the Subsidiary will jointly and severally indemnify the Custodian for any loss incurred by it in the performance of its obligations except in the case of fraud, negligence or wilful misconduct on its part.
The Custodian is a Massachusetts trust company with its principal place of business at 225 Franklin Street, Boston, Massachusetts, USA. As stated in their 1999 Annual Report, State Street Corporation had approximately US$ 6.0 trillion in assets under custody for both US and non-US customers. The Custodian may appoint sub-custodians to provide custody for the assets of the Company and the Subsidiary provided that the Custodian exercises reasonable skill, care and diligence in the selection of a suitable sub-custodian and shall be responsible to the Company and the Subsidiary for the duration for the sub-custody agreement for satisfying itself as to the ongoing suitability of the sub-custodian to provide custodial services to the Company and the Subsidiary. The Custodian will maintain an appropriate level of supervision over any such sub-custodian and make appropriate enquiries, periodically, to confirm that the obligations of the sub-custodian continue to be competently discharged.
The Custodian shall nevertheless not be liable or responsible for the safe-keeping of any assets of the Company or the Subsidiary held by a sub-custodian and in particular shall not be liable to the Company or the Subsidiary for the loss of any assets held by any sub-custodian.
The Custodian is responsible for all of the assets of the Company and the Subsidiary and has agreed that all assets of the Company and the Subsidiary held by the Custodian shall be held in segregated accounts identifiable as the assets of the Company or the Subsidiary and distinguishable from the Custodian's own assets. Accordingly, the Company's or the Subsidiary's assets would not be available, subject to applicable law, to the Custodian or its liquidators or creditors in the event of its insolvency. The Custodian shall seek so far as it is able to ensure that assets held by sub-custodians shall similarly be held in segregated accounts.
The Custodian will charge custody fees at varying rates, depending on the countries in which the Company and the Subsidiary has invested and such fees will accrue weekly and be payable monthly. Custody fee rates for investments vary between 0.02 per cent. and 0.60 per cent. per annum of the value of such assets and transaction fee rates vary between US$25 and US$160 for each transaction settled through the Custodian. The Custodian shall pay the fees of any sub-custodian appointed by the Custodian. This agreement may be terminated by 30 days' written notice on the part of the Company and the Subsidiary or 90 days' written notice from the Custodian or as soon as possible in the event of a material breach by or the insolvency of one of the parties.
Registrar, Company Secretary and Listing Agent
Forum Fund Services Ltd. (the "Registrar") was appointed, pursuant to an agreement dated 1 September 2000 with the Company, to act as registrar to the Company and also to be responsible for the provision of certain corporate secretarial services to the Company. They will also procure the provision of a Company Secretary and Forum Securities Services Ltd. will act as Listing Agent for the Company to the Bermuda Stock Exchange. Colleen Simmons will be the Company's Secretary. Forum Fund Services Ltd. succeeds International Corporate Management of Bermuda Limited, who previously acted in that capacity and resigned with effect from 1 September 2000.
The agreement excludes the Registrar from any liability except in the case of bad faith, fraud, negligence, wilful misfeasance or reckless disregard of its duties under this agreement and provides that the Company will indemnify the Registrar for any loss suffered in the performance or non-performance of its obligations except in the case of bad faith, fraud, negligence, wilful misfeasance or reckless disregard of its duties under this agreement.
Forum Fund Services Ltd., Hamilton, Bermuda is a wholly-owned Bermuda incorporated subsidiary of a US-based parent which is one of the US's top third-party mutual fund administrators and is based in Portland, Maine. The group has more than $76bn in assets under administration, 230 funds and more than 250 staff. Their base in Bermuda, which started 3 years ago, now comprises a team of 10.
The Company will pay the Registrar a fee of US$12,000 per annum for acting as registrar, providing corporate secretarial services, and providing two directors and the Secretary to the Company. The Company shall also pay any reasonable out-of-pocket expenses incurred by the Registrar in the performance of its duties. This agreement may be terminated by 60 days' written notice on either side.
Accounting Services
State Street Bank Luxembourg, S.A.("the Accounting Agent"), an indirect wholly owned subsidiary of the Custodian, was appointed pursuant to an agreement dated 1 September 2000 with the Company and the Subsidiary to provide certain accounting services and act as the subscription and redemption agent to the Company and the Subsidiary as relevant. As such it will be responsible for the calculation of the net asset value and all Subscription and Redemption Prices, for processing all applications for subscriptions and redemptions and for maintaining the accounting records of the Company and the Subsidiary to the extent relevant. The agreement excludes the Accounting Agent from any liability except in the case of fraud, gross negligence, wilful misconduct or wilful default on its part or that of its agent or employees.
The Accounting Agent will charge fees accruing weekly and payable monthly based on the month-end net assets of the Company and the Subsidiary. The fees range from 0.06 per cent. and 0.12 per cent. per annum depending on the size of the Company and the Subsidiary and there is a monthly minimum charge. The Accounting Agent will also charge separately for undertaking financial reporting and for its services as subscription and redemption agent. The Accounting Agent will be entitled to reclaim reasonable out-of-pocket expenses from the Company or the Subsidiary as relevant. This agreement may be terminated by 60 days' written notice from any party or as soon as practicable in the event of a material breach by or the insolvency of one of the parties.
Enhanced Accounting Services
Pursuant to an Enhanced Accounting Services agreement dated 1 September 2000, between the Accounting Agent, the Company and the Subsidiary, the Accounting Agent will also perform certain accounting calculations and tests as agreed with the Company. No additional fees are currently payable to the Accounting Agent in respect of this work. The Company and the Subsidiary jointly and severally indemnify the Accounting Agent from any losses in connection with the performance of its duties under this agreement, except in the case of gross negligence, fraud, recklessness or wilful misconduct on the part of the Accounting Agent or that of its agent or employees.
Bermuda Administrator
Pursuant to an agreement dated 1 September 2000, between the Company and Martin Currie (Bermuda) Limited, the latter agreed to provide all the services required to be performed by a Bermuda administrator under Bermuda law or to satisfy itself that such services are being performed by an appropriately experienced third party. No further fees are currently payable to Martin Currie (Bermuda) Limited in respect of these additional responsibilities.
Dealing in shares of the Company
The monthly dealing day (i.e. the last Thursday of each month) for the Company remains unchanged save that for the purposes of determining dealing days, a day which is a Bank Holiday in Luxembourg shall not be treated as a Business Day and all deadlines will now relate to Luxembourg times. Indicative net asset values will be issued on a daily basis. The first dealing day affected by these changes will be 28 September 2000.
Subscriptions
Investors wishing to subscribe should complete a subscription form and fax it to:
State Street Bank, Luxembourg, S.A.
Attn: Shareholder services / TA on fax number +352 264 31 325
by 5pm (Luxembourg time) on the relevant dealing day.
Transfers
All transfer documentation should also be sent to Shareholder Services / TA, State Street Bank Luxembourg, S.A.
Redemptions
Investors wishing to redeem shares should complete a redemption form and fax it to:
State Street Bank Luxembourg, S.A.
Attn: Shareholder Services / TA on fax number +352 264 31 325
by 5pm (Luxembourg time) on the business day before the dealing day. The original documentation should also be sent to State Street Bank Luxembourg, S.A. by post to the address shown below.
Redemption of shares held through Euroclear and Clearstream should be made in accordance with the procedures from time to time of Euroclear or Clearstream (as the case may be). Such Euroclear or Clearstream procedures require Shareholders to give notice to Euroclear or Clearstream to comply with the notice requirements of the Company.
Any specific queries on redemptions & subscriptions should now be directed towards:
Shareholder Services / TA
State Street Bank
47 Boulevard Royal
L-2449 Luxembourg
Tel : +352 464 010 489
Fax : +352 264 31 325
General queries on the Company should continue to be directed towards:
Anne Marie Kennedy
Martin Currie Investment Management Limited
Saltire Court, 20 Castle Terrace
Edinburgh EH1 2ES, Scotland
Tel: +44 131 479 5975
Fax: +44 131 479 5901
E-mail: amkennedy@martincurrie.com
Directors' responsibility statement
The Directors of the Company, whose names are listed above, accept responsibility for the information contained in this document. To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case) such information is in accordance with the facts and does not omit anything, which is likely to affect materially the import of such information. The Directors accept responsibility accordingly.