Synagistics Limited — Proxy Solicitation & Information Statement 2003

Jul 21, 2003

If you are in doubt about this document, you should consult your stock broker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Concepta Investments Limited, you should at once hand this letter to the purchaser or to the bank, stock broker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document, 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 document.

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CONCEPTA INVESTMENTS LIMITED 正奇投資有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Registered Office: ZHANG Zhi Ping (Chairman) P.O. Box 309 GT, Ugland House ZHANG Gaobo (Chief Executive Officer) South Church Street George Town, Grand Cayman Non-executive director: Cayman Islands LIU Hongru British West Indies Independent non-executive directors: Principal Place of Business KWONG Che Keung, Gordon in Hong Kong: HE Jia Units 4201–7, 42nd Floor

Principal Place of Business in Hong Kong: Units 4201–7, 42nd Floor COSCO Tower 183 Queen’s Road Central Hong Kong 21st July, 2003

To the shareholders

Dear Sir or Madam,

GENERAL MANDATES TO REPURCHASE AND TO ISSUE SHARES

INTRODUCTION

The purpose of this document is to provide you with information regarding resolutions to be proposed at the 2003 annual general meeting of the Company to be held on Monday, 18th August, 2003 at 10:00 a.m. (the “Annual General Meeting”). These include ordinary resolutions relating to granting to the directors of the Company (the “Directors”) general mandates for the issue of the Company’s shares of HK$0.10 each (the “Shares”) and the repurchase of the Shares.

• For identification purpose only

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GENERAL MANDATE TO REPURCHASE SHARES

At the Annual General Meeting, an ordinary resolution will be proposed that the Directors be given a general and unconditional mandate to exercise all powers of the Company to repurchase on the Stock Exchange of Hong Kong Limited (“Stock Exchange”) or on any other stock exchange on which the Shares of the Company may be listed, Shares up to a maximum of 10 per cent. of the nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution (the “Repurchase Mandate”).

An explanatory statement required by the Listing Rules to be sent to the Shareholders in connection with the proposed general mandate to repurchase Shares is set out in the Appendix to this document. The explanatory statement contains all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolutions at the Annual General Meeting.

GENERAL MANDATE TO ISSUE SHARES

At the Annual General Meeting, an ordinary resolution will also be proposed that the Directors be given a general and unconditional mandate to allot, issue and deal with Shares equal in aggregate up to 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution (the “Issue Mandate”).

In addition, an ordinary resolution will be proposed at the Annual General Meeting providing that any Shares repurchased under the Repurchase Mandate (up to a maximum of 10 per cent. of the issued Shares as at the date of the grant of the Repurchase Mandate) will be added to the total number of Shares which may be allotted and issued under the Issue Mandate.

The Repurchase Mandate and the Issue Mandate would continue in force until 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 resolutions of the shareholders of the Company (the “Shareholders”) in a general meeting prior to the next annual general meeting of the Company.

RECOMMENDATION

The Directors consider that the proposed granting of the general mandates to the Directors to issue Shares and to repurchase Shares are in the best interests of the Company and the Shareholders. The Directors therefore recommend the Shareholders to vote in favour of the relevant resolutions as set out in the notice of the Annual General Meeting.

GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendix to this document.

Yours faithfully, For and on behalf of the Board of ZHANG Gaobo Executive Director

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APPENDIX

EXPLANATORY STATEMENT

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide certain information to you for your consideration of the Repurchase Mandate.

1. SHARE CAPITAL

As at 16th July, 2003, being the latest practicable date prior to the printing of this document (the “Latest Practicable Date”), there was a total of 100,000,000 Shares in issue.

Subject to the passing of the resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased before the Annual General Meeting, the Company will be allowed to repurchase a maximum of 10,000,000 Shares during the period ending on the earliest of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by the articles of association of the Company or any applicable laws or the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting.

2. REASONS FOR REPURCHASES

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

3. FUNDING OF REPURCHASES

Repurchases made pursuant to the Repurchase Mandate would be funded out of funds legally available for the purpose in accordance with the Company’s memorandum and articles of association and the applicable 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 accounts contained in the Annual Report for the period ended 31st March 2003) in the event that the Repurchase Mandate were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse impact on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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4. SHARE PRICES

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange since 20th March 2003 (date of listing):

	Per Share
Month	Highest	Lowest
	HK$	HK$
2003
March	0.560	0.520
April	0.530	0.490
May	0.540	0.440
June	0.520	0.465

5. GENERAL

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates, has any present intention to sell any Shares to the Company, if the Repurchase Mandate is approved by the Shareholders.

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

The Company has not been notified by any connected person (as defined in the Listing Rules) that such a person has a present intention to sell any Shares to the Company, or has undertaken not to do so, if the Repurchase Mandate is approved by the Shareholders.

If, as a result of a repurchase of Shares, 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 Hong Kong Code on Takeovers and Mergers (the “Code”). Accordingly, a Shareholder, or a group of Shareholders acting in concert, 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 Code.

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So far as was known to any Director or chief executive of the Company, as at the Latest Practicable Date, the persons or companies who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance were as follows:

Long positions in Shares

				Approximate
				percentage of
				interest if
			Approximate	Repurchase
		Number	percentage	Mandate is
Name of Shareholder	Capacity	of shares	of interest	exercised in full
			(%)	(%)
Oriental Patron Financial	Registered and	25,000,000	25.00	27.78
Services Group Limited	beneficial owner
(“OPFSG”)(note)
Oriental Patron Holdings	Interest of a controlled	25,000,000	25.00	27.78
Limited_(note)_	Corporation
Best Future International	Interest of a controlled	25,000,000	25.00	27.78
Limited_(note)_	Corporation
Million West Limited_(note)_	Interest of a controlled	25,000,000	25.00	27.78
	Corporation
WANG Wen Cang	Beneficial owner	14,096,000	14.10	15.66
XIAO Wei	Beneficial owner	11,796,000	11.80	13.11
LI Luo Dan	Beneficial owner	9,000,000	9.00	10.00
POON Tak Chun Paul	Beneficial owner	9,000,000	9.00	10.00
SHUM Ka Sang	Beneficial owner	6,000,000	6.00	6.67
XU Yedong	Beneficial owner	5,000,000	5.00	5.56

Note:

Oriental Patron Financial Services Group Limited is a company incorporated in the Cayman Islands, the entire issued share capital of which is beneficially owned as to 95% by Oriental Patron Holdings Limited and 5% by Eldridge International Limited. The entire issued share capital of Oriental Patron Holdings Limited is beneficially owned by Million West Limited and Best Future International Limited in equal share. The entire issued share capital of Million West Limited is beneficially owned as to 90% by Mr. Zhang Gaobo and 10% by Mr. Zhang Zhi Ping. The entire issued share capital of Best Future International Limited is beneficially owned as to 89% by Mr. Zhang Zhi Ping and 11% by an independent party.

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In the event that the Directors should exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the Repurchase Mandate, the interest of OPFSG, WANG Wen Cang and XIAO Wei in the Company would be increased to approximately 27.78 per cent., 15.66 per cent. and 13.11 per cent. respectively of the issued share capital of the Company and such increase would not give rise to an obligation to make a mandatory offer under Rule 26 and Rule 32 of the Code or result in the aggregate amount of the share capital of the Company in public hands being reduced to less than 25 per cent., and/or resulted in non compilance with Rule 21.04 of the Listing Rules.

Save as disclosed above, the Directors are currently not aware of any consequences which will arise under the Code as a result of any purchase made under the Repurchase Mandate.

No Shares had been repurchased by the Company, whether on the Stock Exchange or otherwise, during the period from 20th March 2003 (date of listing) to the Latest Practicable Date.

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