KINGSTON RESOURCES LIMITED — Capital/Financing Update 2003

Oct 26, 2003

ABN 44 009 148 529

Registered Office

Level 1 Westcentre 1260 Hay Street West Perth Western Australia 6005 AUSTRALIA

Mailing Address

Private Box 1288 West Perth Western Australia 6872 ATISTRALIA

Telephone Facsimile Email Visit us at

$(+618)$ 9415 2212 $(*618)94152221$ info@synergylimited.com.au www.synergylimited.com.au

24 October 2003

Share Purchase Plan

Dear Shareholder

This is an offer (the "Offer") to you, as a shareholder of Synergy Equities Group Limited ("SYNERGY" or "the Company"), to purchase additional fully paid ordinary shares in the capital of the Company ("Shares") pursuant to the terms and conditions of the Company's Share Purchase Plan ("the Plan").

This letter and the enclosed Application Form set out the terms and conditions of the Offer. By accepting the Offer to purchase Shares under the Plan, you will have agreed to be bound by these terms and conditions.

The Offer will raise up to \$350,000 for the Company, subject to the right of the Company to accept oversubscriptions.

The \$350,000 will be used to provide funds for working capital and to finance the corporate and administrative activities of the Company.

The Company continues to progress towards the establishment of a viable and sustainable technology business built around the SYNERGY DataCentre, the SYNERGY TradeCentre, SYNERGY Ticketing and Data-inCrypt^®.

As reported in the 2003 Annual Report, the Company's financial performance shows that cash receipts from trading operations by the Company's wholly owned subsidiary Synergy Business Solutions Australia Pty Ltd ("SYNERGY Australia") for the quarter 01 April 2003 to 30 June 2003 increased by more than 110% on cash receipts for the third quarter. Furthermore, cash receipts by SYNERGY Australia from trading operations in the second quarter increased 59% on receipts in the first quarter and in the third quarter increased a further 19%.

SYNERGY Australia's cash receipts from trading operations for the quarter 01 July 2003 to 30 September 2003 have again increased by 50% on cash receipts for the fourth quarter representing five quarters of increased receipts from trading operations from SYNERGY Australia.

Cash receipts over the last fifteen months do not include receipts generated in relation to Data-in $Crypt^*$ . Cash receipts in relation to clients intending to contract to use Data-inCrypt^® have now commenced in this, the second quarter of the 2003 / 04 financial year.

The Directors of the Company see the following advantages to Shareholders in subscribing for Shares under the Plan:

• $\geqslant$ small Shareholders may top up their holdings;
• many Shareholders invested in the Company at a price higher than the current market price of SYNERGY ٧ Shares. The Plan gives those Shareholders a chance to significantly reduce the average cost of their Shares in the Company, whilst increasing their holding markedly;
• ⋗ no brokerage or transaction costs are payable on Shares subscribed for under the Plan;
• ↘ the price is at a discount to the recent market price of SYNERGY Shares on the ASX; and
• 运 there is no minimum shareholding requirement to qualify for participation in the Plan.

You are eligible to participate in the Plan if you were a registered holder of SYNERGY Shares as at the close of business on Friday, 24 October 2003, with a registered address in Australia or New Zealand. The Directors of the Company have determined that it is not practical for Shareholders in other jurisdictions to participate in the Plan.

The price for each Share under the Plan is \$0.007 (0.7 cents). The price has been calculated at a discount of approximately 45% to the weighted average market price of SYNERGY Shares quoted on the ASX during the period of 5 trading days immediately prior to the date of this Offer.

If you are eligible to purchase Shares under the Plan, you may accept the Offer for either 357,143 Shares or 714,285 Shares. That is, \$2,500 or \$5,000 worth of Shares. The maximum number of 714,285 Shares will apply even if you receive more than one Offer from the Company (for example because you are a joint holder of Shares or because you hold more than one shareholding under separate share accounts). The Company reserves the right to reject any application for Shares where it believes this rule has not been complied with.

The Plan has been designed to allow eligible Shareholders to purchase Shares at a price discounted to the market price. However, the market price of SYNERGY Shares may rise or fall between now and the date when the Shares are issued in accordance with the Plan. If the market price of SYNERGY Shares falls, the price of the Shares to be issued pursuant to this Offer may no longer be at a discount to the market price and may even exceed the then current market price for SYNERGY Shares.

The Offer under the Plan is non-renounceable. This means that you cannot transfer your right to purchase Shares under the Offer to anyone else.

Shareholders should note that the Shares offered under the Plan are speculative in nature.

The Company has targeted to issue up to 50,000,000 Shares pursuant to the Plan. The Company is seeking Shareholder approval to issue the 50,000,000 Shares at its Annual General Meeting to be held on 28 November 2003. In the event approval is not obtained, the Company reserves the right to use its available placement capacity to issue Shares pursuant to the Plan. If approval is granted and the Company receives acceptances for more than 50,000,000 Shares it will consider either using its placement capacity or seek Shareholder approval for the issue of the additional Shares. If the Company uses all of its placement capacity and does not obtain approval to issue the additional Shares it intends to scale back the applications received, on a pro rata basis.

Participation in the Plan is entirely at your option.

All new Shares issued under the Plan will rank equally with existing Fully Paid Ordinary Shares in the Company and will carry the same voting rights, dividend rights and other entitlements as at the allotment date.

It is anticipated that the Shares allotted to you under the Plan will be issued on or about Friday, 12 December 2003. The Company, however, reserves the right to extend the closing date of the Share Purchase Plan if it believes it is desirable to do so.

To purchase Shares under the Plan, please complete and sign the enclosed Payment Acceptance Slip and return it, together with your cheque payable to the "Synergy Share Purchase Plan Account", in the enclosed reply paid envelope. Applications must be received by 5.00pm on Friday, 5 December 2003. If the exact amount of money is not tendered with the Payment Acceptance Slip, the Company reserves the right to disregard your application and not allot any Shares to you, or alternatively issue that number of Shares that corresponds with the payment tendered.

If you have any questions in respect of the Plan, please contact me on:

Telephone:	$(+618)$ 9415 2212
Facsimile:	$(+618)$ 9415 2221
Email:	rmoir@synergylimited.com.au

Yours sincerely

Ronald Moir MANAGING DIRECTOR

Share Purchase Plan Application Form

Acknowledgments

ARN 44 009 148 529

I / We wish to apply for the number of Shares set out below in accordance with the terms and conditions of the Plan. and acknowledge that I / We have a registered address in Australia or New Zealand.

By forwarded my / our cheque(s) and completing the Payment Acceptance Slip on the bottom of this form, $1 /$ we acknowledge that 1 / we have read and understood the terms and conditions of the Plan as contained in the accompanying letter and this Application Form. 1/ we confirm that the total cost of all shares purchased by me / us (including through joint and beneficial holdings) does not exceed AU\$5,000,00.

I / we note that the market price of SYNERGY Shares may rise or fall between the date of this offer and the date when Share are allotted. This means that the price $\mathbf{I}$ / we pay per Share under this offer may no longer be at a discount to the market price and may even exceed the then current market price of SYNERGY shares.

Instructions to Applicants

Your cheque(s) should be made payable to the "Synergy Share Purchase Plan Account" and crossed "Not Negotiable". If the exact amount of money is not tendered with the acceptance slip, SYNERGY reserves the right to disregard your application and not allot any shares to you, or alternatively issue that number of Shares that corresponds with the payment tendered.

Application Form and cheque(s) should be returned in the enclosed reply paid envelope and must be received by Synergy Equities Group Limited no later than 5.00pm on Friday, 5 December 2003.

SYNERGY reserves the right to waive compliance with any provision of the Plan terms and conditions, or vary those terms and conditions. SYNERGY also reserves the right to scale back applications, including if required to comply with the ASX Listing Rules.

		Application Details
		This Offer is non-renounceable
	Return the Application Form and cheque(s) in the envelope provided
I / We apply to purchase
I/We lodge full application money S manufactured in this amount must equal the number of Shares applied for at \$0.007)
CHESS HIN (Holder Identification Number)
ОY Issuer Sponsored SRN (Security folder Reference Number)
Cheque Details: .
Drawer	Cheque no.	$BSB$ no.	Account no.	Amount
Complete Full Name Details
Mr/Mrs/Ms/Miss	Given Names or Company Name		Surname
Mr/Mrs/Ms/Miss	Joint Application #2		Surname
Complete Address Details
Number and Street
Suburb / City or Town
	) and the continuum contract of $\mathcal{L}$ ( ) and the contract of $\mathcal{L}$ ( ) and $\mathcal{L}$			$)$
Home Telephone	Work Telephone		Mobile