AMP Capital China Growth Fund - Distribution reinvestment plan

1.

Is there a distribution reinvestment plan?

Yes, the Fund has a distribution reinvestment plan (DRP). Under the DRP, 100% of your distributions will be reinvested in additional units unless you elect to receive a partial cash distribution before the record date. However, even if you have elected to receive a partial cash distribution, we may determine that 100% of your distribution must be reinvested. 

2.

Why must I participate in the distribution reinvestment plan?

The Fund has a long term capital growth focus; its objectives do not include the payment of regular income to investors.

Having at least part of all distributions automatically reinvested is aimed to increase the Fund’s potential to reinvest in the China A share market by retaining the maximum amount of funds in the investment portfolio.

The basis for this is that the opportunity to gain direct access to the China A share market is limited under the terms of our QFII licence and quota which require that:

a) the Fund can only initially invest a maximum of US$200 million in China A shares, and

b) after this amount is fully invested (which occurred in January 2007), the Fund can only further invest in China A shares by using earnings from the Fund’s existing Chinese investments.

Additionally, the repatriation of funds out of China to pay distributions may trigger the requirement to pay Chinese withholding tax.

3.

How do you elect to receive a partial cash distribution?

To receive a partial cash distribution, you will need to send a completed partial cash distribution election form to Computershare Investor Services Pty Limited at GPO Box 2975, MELBOURNE, VIC 3001. To obtain the partial cash distribution election form, you will need to contact the information line on 1300 855 080 or 61 3 9415 4000.

Notices take effect from when they are received by Computershare. To be effective for the next distribution, the form must be received no later than 5.00pm on 31 December 2007.

If your request is accepted, you will receive in cash that part of your distribution that is equivalent to the highest marginal rate of tax plus Medicare levy (currently 46.5%). The balance of your distribution will be reinvested in additional units.

What is the DRP issue price for the next distribution?

The DRP issue price of a unit to be allotted or transferred under the DRP is the average of the daily volume weighted average price of all sales of Units recorded on the ASX during the 10 trading days commencing on the first trading day following 31 December 2007, less a discount of 5% of this amount.

When can you expect to receive distributions?

Distributions are expected to be paid yearly, although you should be aware that there may be times when no distribution is payable on the scheduled distribution date. Units issued under the DRP will rank equally in all respects with existing units as from the date of issue.

The accounting period and tax periods for the fund have been changed to end on 31 December and subsequently, distributions will be scheduled for payment to investors in April for periods ending 31 December.

The distribution for the period to 31 December 2007, if any, is expected to be paid in April 2008.