Synagistics Limited — Proxy Solicitation & Information Statement 2006

Apr 3, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, 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 securities in the Company, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale 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.

==> picture [52 x 51] intentionally omitted <==

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

(incorporated in the Cayman Islands with limited liability)

(stock code: 1140)

CONTINUING CONNECTED TRANSACTION

INDEPENDENT FINANCIAL ADVISER

KINGSTON CORPORATE FINANCE LIMITED

A letter from the Independent Board Committee is set out on pages 13 to 14 of this circular. A letter from Kingston containing its advice to the Independent Board Committee and the Shareholders is set out on pages 15 to 27 of this circular.

A notice convening the EGM to be held at 27/F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong at 11:00 a.m. on 18 April 2006 is set out on pages 33 to 34 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the share registrar of the Company in Hong Kong, Abacus Share Registrars Limited at G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM (or any adjournment thereof) should you so wish.

* for identification purposes only

3 April 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter of advice from Kingston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

– i –

DEFINITIONS

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

“Annual Cap(s)”	the expected maximum amount of the fees payable to the
	Investment Manager under the Supplemental Investment
	Management Agreement for each of the three years ending
	31 March 2008, as defined in the section headed
	“Supplemental Investment Management Agreement – Caps
	for the fees payable to the Investment Manager under the
	Supplemental Investment Management Agreement” in the
	letter from the Board in this circular
“Board”	the board of Directors
“Business Day”	a day (other than Saturday) on which banks in Hong Kong
	are generally open for business
“Company”	Concepta Investments Limited, a company incorporated in
	the Cayman Islands with limited liability, the shares of
	which are listed on the main board of the Stock Exchange
“connected person”	has the meaning ascribed to it under the Listing Rules
“Continuing Connected	the connected transactions entered into between the
Transactions”	Company and the Investment Manager under the
	Supplemental Investment Management
“Director(s)”	the director(s) of the Company
“EGM”	extraordinary general meeting of the Company to be
	convened on 18 April 2006 for the purpose of approving
	the Continuing Connected Transactions and the Annual Caps
	by the Independent Shareholders
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC

– 1 –

DEFINITIONS

• “Independent Board Committee”

the independent board committee of the Company formed by the Company to advise the Independent Shareholders as to whether the terms of the Continuing Connected Transactions (including the proposed Annual Caps) are fair and reasonable and whether the Continuing Connected Transactions is in the interests of the Company and the shareholders of the Company as a whole

“Independent Shareholders” shareholders of the Company, other than the Investment Manager and its associates

“Investment Management the investment management agreement entered into between Agreement” the Company and the Investment Manager and dated 4 March 2003

“Investment Manager” or Oriental Patron Asia Limited, trading in the name of “Oriental Patron Fund “Oriental Patron Fund Management” in fund management Management” activities for the purposes of the Investment Management Agreement and the Supplemental Investment Management Agreement

“Kingston” or “IFA” Kingston Corporate Finance Limited, a deemed licensed corporation under the SFO permitted to engaged in type 6 of the regulated activities as defined in the SFO, being an independent financial adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders

“Latest Practicable Date” 31 March 2006, being the latest practicable date prior to the printing of this circular for ascertaining information contained in this circular

“Listing Date” the date on which dealings in the Shares commence, i.e. 20 March 2003

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

– 2 –

DEFINITIONS

“Net Asset Value”	the net asset value of the Company calculated in accordance
	with the provisions of the articles of association of the
	Company
“OPFSGL”	Oriental Patron Financial Services Group Limited, an
	exempted company incorporated in the Cayman Islands and
	a substantial shareholder of the Company
“Percentage Ratio”	the applicable percentage ratio, other than the profit ratio
	and equity capital ratio under Rule 14.07 of the Listing
	Rules
“Performance Fee Valuation Day”	the last Business Day of each financial year
“PRC”	the People’s Republic of China which, for the purposes of
	this circular, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Prospectus”	the prospectus issued by the Company and dated 7 March
	2003
“Relevant Performance Period”	the period commencing on 1 April of each year to 31 March
	of the following year
“SFO”	The Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial shareholder”	has the meaning ascribed to it under the Listing Rules
“Supplemental Investment	the supplemental investment management agreement entered
Manager Agreement”	into between the Company and the Investment Manager
	and dated 16 March 2006 in connection with the Investment
	Management Agreement
“Waiver”	a waiver from strict compliance with the disclosure
	requirements under the then Rule 14.25 (1) of the Listing
	Rules in respect of the transactions contemplated under the
	Investment Manager Agreement for a period of three years
	from the Listing Date granted by the Stock Exchange to
	the Company on 24 March 2003

– 3 –

LETTER FROM THE BOARD

==> picture [52 x 51] intentionally omitted <==

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

(incorporated in the Cayman Islands with limited liability)

(stock code: 1140)

Executive Directors Registered office Mr. Zhang Zhi Ping P.O. Box 309GT Mr. Zhang Gaobo Ugland House South Church Street Non-Executive Directors George Town Mr. Liu Hongru Grand Cayman Cayman Islands Independent Non-Executive Directors Mr. Kwong Che Keung, Gordon Principal Place of Business Professor He Jia 27/F, Two Exchange Square Mr. Wang Xiaojun 8 Connaught Place Central Hong Kong

3 April 2006

To the Shareholders,

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

The Company announced on 17 March 2006 that the Company had entered into the Supplemental Investment Management Agreement with the Investment Manager.

The primary purpose of this circular is to provide you with information regarding the Continuing Connected Transactions, the advice of the Independent Board Committee, the advice from Kingston to the Independent Board Committee and Independent Shareholders and to give you notice of the EGM. Resolution relating to the Continuing Connected Transactions and the related proposed Annual Caps are proposed at the EGM.

• for identification purposes only

– 4 –

LETTER FROM THE BOARD

SUPPLEMENTAL INVESTMENT MANAGEMENT AGREEMENT

Date

16 March 2006

Parties

• (i) the Company; and

• (ii) the Investment Manager.

Background

On 4 March 2003, the Company and the Investment Manager entered into the Investment Management Agreement pursuant to which the Investment Manager agreed to provide investment management services to the Company. Details of the Investment Management Agreement are set out in the paragraph headed “The Investment Manager” in the section headed “Investment management” in the Prospectus, for an initial fixed term of three years commencing on the Listing Date. The Investment Management Agreement expired on 19 March 2006.

Information relating to the Investment Management Agreement and the transactions thereunder were disclosed in the Prospectus. The Waiver was granted by the Stock Exchange to the Company, subject to certain conditions as set out in the Prospectus. Such Waiver expired on 19 March 2006.

Terms of the Supplemental Investment Management Agreement

Pursuant to the Supplemental Investment Management Agreement, upon the expiry of the current term of the Investment Management Agreement on 19 March 2006, the Investment Manager shall be, subject to the Independent Shareholders’ approval at the EGM, re-appointed for a further fixed term commencing from the date of the EGM and ending on 31 March 2008 on the same terms and conditions of the Investment Management Agreement. Save for the above, the other terms of the Investment Management Agreement remain unchanged and shall continue in full force and effect.

– 5 –

LETTER FROM THE BOARD

Management and performance fees

Under the Investment Management Agreement (as will be extended by the Supplemental Investment Management Agreement), the Investment Manager will (if the Continuing Connected Transactions are approved by the EGM) be entitled to:

• (a) a monthly investment management fee at 1.5 per cent. per annum (based on a 360-day year) of the Net Asset Value as at the immediately preceding Valuation Date, calculated and accrued daily and payable in Hong Kong dollars in arrears on or before the seventh Business Day of the immediately following month; and

• (b) a performance fee calculated by reference to the increase in the Net Asset Value per Share (as defined below) as at the relevant Performance Fee Valuation Day.

A performance fee will be payable to the Investment Manager if the Net Asset Value per Share (as defined below), calculated on the relevant Performance Fee Valuation Day, is greater than the Base Net Asset Value per Share (as defined below). Under the Supplemental Investment Management Agreement, such performance fee is payable as soon as practicable after the end of each Relevant Performance Period. The fee payable shall be 10% of the appreciation in the Net Asset Value per Share (as defined below), calculated as at the relevant Performance Fee Valuation Day over the Base Net Asset Value per Share (as defined below) for each Share then in issue, calculated as follows:

==> picture [92 x 24] intentionally omitted <==

where:

• “A” is the Net Asset Value per Share, calculated on the relevant Performance Fee Valuation Day, before the deduction of any provision for the performance fee and the underwriting fee and provided that for the purpose of this calculation only the Net Asset Value shall be calculated by including any distribution which has been declared or paid during the Relevant Performance Period.

• “B” is the Base Net Asset Value per Share which shall be the greater of the Net Asset Value per Share on the Listing Date and the value for “A” as at the immediately preceding Relevant Performance Period in relation to which a performance fee was calculated and paid (after deduction of all fees including any performance fee in respect of such preceding Relevant Performance Period).

– 6 –

LETTER FROM THE BOARD

• “C” is the aggregate number of Shares in issue during the Relevant Performance Period, calculated by adding the total number of Shares in issue on each Business Day of the Relevant Performance Period.

• “D” is 10% or, subject to the approval of the shareholders of the Company by ordinary resolution in general meeting (which approval shall, for the avoidance of doubt, only be required in connection with a proposal to increase such rate), such other percentage figure agreed from time to time between the Investment Manager and the Directors.

• “E” is the number of Business Days in the Relevant Performance Period.

The amount of fees (being management fees and performance fees) payable under the Supplemental Investment Management Agreement will be determined in accordance with the provisions and formula as set out above.

Upon the expiry of the Investment Management Agreement on 19 March 2006 and up to the date of the EGM, the Company will continue to appoint the Investment Manager as the Company’s investment manager on the same terms of the Investment Management Agreement. It is estimated that the aggregate of the investment management fee and performance fee payable by the Company to the Investment Manager for the period between 20 March 2006 and the date of the EGM will not be more than HK$150,000.

Historical transaction records

Set out below is a summary of the aggregate amount of fees paid by the Company to the Investment Manager under the Investment Management Agreement for the financial period from 26 July 2002 to 31 March 2005:

Investment management fees Performance fees Total	Financial period from 26 July 2002 to 31 March 2003 HK$ 23,150 – 23,150	Year ended 31 March 2004 HK$ 879,059 1,447,200 2,326,259	Year ended 31 March 2005 HK$ 729,346 –
			729,346

– 7 –

LETTER FROM THE BOARD

Annual Caps for the fees payable to the Investment Manager under the Supplemental Investment Management Agreement

The following table sets out the expected Annual Caps of the fees payable to the Investment Manager under the Supplemental Investment Management Agreement for each of the three years ending 31 March 2008:

	Year ending 31 March	Year ending 31 March
2006	2007	2008
HK$3,000,000	HK$4,500,000	HK$5,700,000

The basis of the Annual Caps is determined by reference to the net asset value of the Company as at 31 March 2005 and an expected annual growth rate of the net asset value of the Company of approximately 40% (having regard to historical growth trend of the Gross Domestic Product of the PRC, the potential appreciation of Renminbi, the performance of the stock markets of the Greater China region and the investment policy of the Company).

Reasons for entering into the Supplemental Investment Management Agreement

The Company is an investment company under Chapter 21 of the Listing Rules. The investment objective of the Company is to achieve earnings in the form of medium to long-term (i.e. one to five years) capital appreciation mainly through investments in listed and unlisted companies in the Greater China. The Investment Manager is a licensed corporation to carry out regulated activities of dealings in securities, advising on corporate finance and asset management under the SFO. The Investment Manager has been appointed to act as the Investment Manager since the Listing Date. The transactions contemplated under the Supplemental Investment Management Agreement will continue to be conducted in the ordinary and usual course of business of the Company.

The Directors consider that:

• (a) the terms and conditions of the Supplemental Investment Management Agreement were negotiated between the parties to it on an arm’s length basis and are normal commercial terms that are fair and reasonable;

• (b) the Annual Caps are fair and reasonable; and

• (c) the transactions contemplated under the Supplemental Investment Management Agreement are in the ordinary and usual course of business of the Company and in the interest of the Company and its shareholders as a whole.

– 8 –

LETTER FROM THE BOARD

CONTINUING CONNECTED TRANSACTIONS

Supplemental Investment Management Agreement

The Investment Manager is regarded as a connected person of the Company by virtue of Rule 21.13 of the Listing Rules. In addition, the Investment Manager is a wholly owned subsidiary of OPFSGL, which is a substantial shareholder of the Company. As at the Latest Practicable Date, OPFSGL was interested in about 29.8% of the issued share capital of the Company. The transactions contemplated under the Supplemental Investment Management Agreement constitute continuing connected transactions for the Company.

The relevant Percentage Ratio for the transactions contemplated under the Supplemental Investment Management Agreement is more than 25%. The Continuing Connected Transactions are non-exempt continuing connected transactions under Rule14A.14 of the Listing Rules and are subject to the reporting, announcement and independent shareholders’ approval as well as the annual review requirements.

The Supplemental Investment Management Agreement and the Continuing Connected Transactions (including the proposed Annual Caps) are conditional upon the approval by the Independent Shareholders at the EGM by ordinary resolution. The OPFSGL and its associates including Mr. Zhang Zhi Ping, Mr. Zhang Gaobo, who are executive chairman and managing director of OPFSGL respectively, Oriental Patron Holdings Limited, Best Future International Limited and Million West Limited, all of which together control and are entitled to exercise control over voting right in respect of the 29,800,000 Shares, representing approximately 29.80% of the issued share capital of the Company, will abstain from voting on the resolution for approving the Continuing Connected Transaction (including the proposed Annual Caps) at the EGM.

As far as the Company was aware having made all reasonable enquiries, as at the Latest Practicable Date:

• (a) there was no voting trusts or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any of OPSFGL or its associates;

• (b) there were no obligation or entitlement of OPSFGL or its associates,

whereby it/ they had or might have temporarily or permanently passed control over the exercise of the voting right in respect of its/ their Shares to a third party, either generally or on a case-by-case basis; and

– 9 –

LETTER FROM THE BOARD

• (c) there is no discrepancy between the beneficial shareholding interest of OPSFGL or its associates in the Company as disclosed in this circular and the number of Shares in respect of which it/ they would control or would be entitled to exercise control over the voting right at the EGM where an ordinary resolution will be proposed to approve the Connected Transaction (including the proposed Annual Caps).

The Company established the Independent Board Committee to advise the Independent Shareholders as to whether the Continuing Connected Transactions (including the proposed Annual Caps) are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and whether the Continuing Connected Transactions are in the interests of the Company and the shareholders of the Company as a whole, and to advise the Independent Shareholders on how to vote, taking into account the recommendations of the independent financial adviser. In this connection, the Company has appointed Kingston as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Continuing Connected Transactions (including the proposed Annual Caps) are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and whether the Continuing Connected Transactions are in the interests of the Company and the shareholders of the Company as a whole, and to advise the Independent Shareholders on how to vote.

EGM

Set put on pages 33 to 34 in this circular is a notice convening the EGM to be held on 18 April 2006 at 11:00 a.m. at 27/F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong at which ordinary resolution will be proposed to approve, if thought fit, the Continuing Connected Transactions and the Annual Caps.

You will find enclosed a form of proxy for use at the EGM. Whether or not you are able to attend the meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the principal place of business of the Company in Hong Kong at 27F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong as soon as possible and in any event not late than 48 hours before the time appointed for the holding of EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM (or any adjournment thereof) should you so wish.

– 10 –

LETTER FROM THE BOARD

PROCEDURES FOR DEMANDING A POLL

Pursuant to Articles 87 of the articles of association of the Company, a resolution put to the vote at any general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded:

• (i) by the chairman of the meeting; or

• (ii) by at least five shareholders present in person or, in the case of a corporation, by its duly authorised representative or by proxy and entitled to vote who represent in the aggregate not less than one-tenth of the total voting rights of all shareholders having the right to attend or vote at the meeting; or

• (iii) by any shareholder or shareholders of the Company present in person or by a duly authorised corporate representative or by proxy and representing not less than onetenth of the total voting rights of all the shareholders having the right to vote at the meeting; or

• (iv) by any shareholder or shareholders present in person or, in the case of a corporation, by its duly authorised representative or by proxy and holding shares in the Company conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

In accordance with Rules 13.39(4) of the Listing Rules, the vote of the Independent Shareholders taken at the EGM to approve the Continuing Connected Transactions and the proposed Annual Caps will be taken by poll, the results of which will be announced after the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to (a) the letter from the Independent Board Committee set out on pages 13 to 14 of this circular which contains the recommendation of the independent Board Committee to the Independent Shareholders regarding the Continuing Connected Transactions and the Annual Caps, and (b) the letter from Kingston set out on pages 15 to 27 of this circular which contains its recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Continuing Connected Transactions and the Annual Caps as well as the principal factors and reasons considered by Kingston in arriving at its recommendation.

– 11 –

LETTER FROM THE BOARD

The Independent Board Committee, having taken into account the advice of Kingston, considers that the terms of the Continuing Connected Transactions and the Annual Caps are fair and reasonable and in the interest of the Company and the Independent Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve, if thought fit, the Continuing Connected Transactions and the Annual Caps.

Your attention is also drawn to the additional information set out in the appendix to this circular

Yours faithfully,

By order of the Board

Concepta Investments Limited Zhang Gaobo Executive Director

– 12 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [52 x 51] intentionally omitted <==

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

(incorporated in the Cayman Islands with limited liability)

(stock code: 1140)

To the Independent Shareholders,

3 April 2006

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

We refer to the circular issued by the Company to its Shareholders and dated 3 April 2006 (“Circular”) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise the Shareholders in respect of the Continuing Connected Transactions and the Annual Caps, details of which are set out in the letter from the Board in the Circular.

Kingston has been appointed as an independent financial adviser to advise us and the independent Shareholders regarding the Continuing Connected Transactions and the Annual Caps.

We wish to draw your attention to the letter from the Board, and the letter from Kingston to us and the Independent Shareholders which contains its advice in relation to the Continuing Connected Transactions and the Annual Caps, together with the principal factors taken into consideration in arriving at such, as set out in the Circular.

* for identification purposes only

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the terms of the Supplemental Investment Management Agreement and the advice of Kingston in relation thereto, we are of the opinion that the terms and conditions of the Continuing Connected Transactions and the Annual Caps are on normal commercial terms, in the ordinary course of business, fair and reasonable and the Continuing Connected Transactions are in the interest of the Company and the Independent Shareholders as a whole. We therefore recommend that you vote in favour of the ordinary resolution to be proposed at the EGM to approve, if though fit, the Continuing Connected Transactions and the Annual Caps.

Yours faithfully,

For and on behalf of the Independent Board Committee

Mr. Kwong Che Keung, Gordon Prof. He Jia Mr. Wang Xiaojun

Independent Non-Executive Directors

– 14 –

LETTER OF ADVICE FROM KINGSTON

Set out below is the text of the letter from Kingston to the Independent Board Committee prepared for inclusion in this circular:

KINGSTON CORPORATE FINANCE LIMITED

Suite 2801, 28th Floor One International Finance Centre 1 Harbour View Street Central, Hong Kong

3 April 2006

To the Independent Board Committee and the Independent Shareholders

Dear Sirs

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Continuing Connected Transactions, particulars of which are set out in the “Letter from the Board” (the “Letter”) contained in the circular of the Company dated 3 April 2006 (the “Circular”) and in which this letter is reproduced. Unless the context requires otherwise, terms used in this letter shall have the same meanings as those defined in the Circular.

The Company entered into the Supplemental Investment Management Agreement with the Investment Manager on 16 March 2006. Pursuant to the Supplemental Investment Management Agreement, upon the expiry of the current term of the Investment Management Agreement on 19 March 2006, the Investment Manager shall be, subject to the Independent Shareholders’ approval at the EGM, re-appointed for a further fixed term commencing from the date of the EGM and ending on 31 March 2008 on the same terms and conditions of the Investment Management Agreement. Save for the above, the other terms of the Investment Management Agreement remain unchanged and shall continue in full force and effect. Given that the Investment Manager is regarded as a connected person of the Company by (i) virtue of Rule 21.13 of the Listing Rules; and (ii) being a wholly owned subsidiary of OPFSGL which is a substantial shareholder of the

– 15 –

LETTER OF ADVICE FROM KINGSTON

Company and therefore an associate of the connected person of the Company (OPFSGL was interested in about 29.8% of the issued share capital of the Company as at the Latest Practicable Date), the transactions contemplated under the Supplemental Investment Management Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

BASIS OF OUR OPINION

In formulating our opinion, we have relied to a considerable extent on the information, statements, opinions and representations supplied to us by the Company and the directors of the Company (the “Directors”) and we have assumed that all such information, statements, opinions and representations contained or referred to in the Circular were true and accurate and complete at the time they were made and continue to be true at the date of the Circular, and we have relied on the same. We have also 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 discussed with the management of the Company their plans for the Company and the prospects of the businesses of the Company.

We consider that we have been provided with, and we have reviewed, all currently available information and documents which are available under present circumstances to enable us to reach an informed view regarding the Continuing Connected Transactions and to justify reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis of our opinion. We believe that no material facts or information (which is known to the Company) have been omitted or withheld from the information supplied or opinions expressed in the Circular and have no reason to doubt the truth and accuracy of the information and facts, or the reasonableness of the opinions expressed by the Company and the Directors which have been provided to us. We have not, however, carried out any independent verification on the information provided to us by the Directors, nor have we conducted an independent in-depth investigation into the business and affairs of the Company.

– 16 –

LETTER OF ADVICE FROM KINGSTON

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation in respect of the terms of the Continuing Connected Transactions, we have taken the following principal factors and reasons into consideration:

1. Background and reasons for the Continuing Connected Transactions

The Company is an investment company under Chapter 21 of the Listing Rules. The investment objective of the Company is to achieve earnings in the form of medium to longterm (i.e. one to five years) capital appreciation mainly through investments in listed and unlisted companies in the Greater China.

The Investment Manager is a licensed corporation to carry out regulated activities of dealings in securities, advising on corporate finance and asset management under the SFO. Pursuant to the Investment Management Agreement, the Company has appointed the Investment Manager to provide investment management services to the Company since the Listing Date.

A waiver (the “Waiver”) from strict compliance with the disclosure requirements under Rule 14.25(1) of the old Listing Rules in respect of the transactions contemplated under the Investment Management Agreement for a period of three years from the Listing Date was granted by the Stock Exchange to the Company on 24 March 2003 and such waiver expired on 19 March 2006.

The Waiver was subject to a number of conditions including, among others, the annually review by the auditors of the Company (the “Auditors”) as to whether (i) the transactions contemplated under the Investment Management Agreement have been approved by the Directors; (ii) the transactions contemplated under the Investment Management Agreement have been conducted in accordance with the terms thereof; and (iii) the value of the annual investment management fee and performance fee payable by the Company to the Investment Manager do not exceed their respective cap amounts under the Waiver. Based on the letters to the Company from the Auditors dated 24 July 2003, 25 June 2004 and 7 July 2005 (the “Auditors’ Letters”), the Auditors have duly examined the Investment Management Agreement, accounting books and other records maintained by the Company relating to the transactions contemplated under the Investment Management Agreement. As set out in the Auditors’ Letters, the Auditors confirmed that (i) the Directors have approved the transactions contemplated under the Investment Management Agreement, (ii) the transactions contemplated under the Investment Management Agreement have been conducted in accordance with the terms thereof; and (iii) the value of the annual investment management fee and performance fee payable by the Company to the Investment Manager has not exceeded their respective cap amounts under the Waiver.

– 17 –

LETTER OF ADVICE FROM KINGSTON

On 16 March 2006, the Company entered into the Supplemental Investment Management Agreement and the Investment Manager shall be, subject to the Independent Shareholders approval at the EGM, re-appointed for a further fixed term commencing from the date of the EGM and ending on 31 March 2008. Given that the Investment Manager had been providing investment management services to the Company for more than 3 years and has an understanding towards the Company’s investment objectives, we consider that the continual engagement with the Investment Manager ensures a consistent roll-out of the investment plans of the Company and avoids unnecessary administrative burden in case of appointment of a new investment manager.

2. Major terms of the Supplemental Investment Management Agreement

The major terms and conditions of the Supplemental Investment Management Agreement are the same as those of the Investment Management Agreement, which are set out in the paragraph headed “The Investment Manager” in the section headed “Investment management” in the Prospectus.

The investment management services to be provided by the Investment Manager include identifying, reviewing, executing and evaluating potential investments for the Company. Details of the responsibilities of the Investment Manager were set out in the Prospectus.

Given that the payment terms (including the basis of the calculation of the management fee and the performance fee) and the provision of services under the Supplemental Investment Management Agreement are the same as those under the Investment Management Agreement, we consider the interest of the Company will not be altered. Details of the payment terms of the Investment Management Agreement were set out in the Letter.

In order to assess the fee structures of the Supplemental Investment Management Agreement and for comparison purposes, we have reviewed all the 27 investment companies listed under Chapter 21 of the Listing Rules as at the end of 2005 (with reference to the Stock Exchange Fact Book 2005) and selected 15 out of them whose (i) principal activities include investments in listed and unlisted companies in the Greater China; and (ii) investment

– 18 –

LETTER OF ADVICE FROM KINGSTON

management fees payable to their investment managers are more or less depending on the performance of the investment managers but not a fixed amount, being similar to the Company (collectively the “Comparables”). Set out below is a summary of the fee structures of the Comparables and the Company:

Company Name	Management Fee	Incentive/Performance Fee
	(Note 1&2)	(Note 1&2)
China Northern Enterprises	1.25% per annum of the net asset	Nil
Investments Fund	value or a fixed annual fee
Limited (2324)
China Treasure (Greater	2.5% per annum of the net	Nil
China) Investments	asset value
Limited (810)
Golden 21 Investment	2.5% per annum of the net	15% of the surplus in the net
Holdings Limited (2312)	asset value	asset value
Harmony Asset Limited (428)	1.5% per annum of the net	10% of the surplus in the net
	asset value	asset value
Haywood Investments	Higher of 1.5% per annum of	Nil
Limited (905)	the net asset value or
	a minimum monthly fee
Incutech Investments	1.5% per annum of the net	Nil
Limited (356)	asset value
New Capital International	2.0% per annum of the net	10% to 20% of the realized
Investment Limited (1062)	asset value	profit depending on
		the extend of the surplus
		in the realized profit
		per share
Prime Investments	2.0% per annum of the net	15% of the surplus in the net
Holdings Limited (721)	asset value	asset value

– 19 –

LETTER OF ADVICE FROM KINGSTON

Company Name	Management Fee	Incentive/Performance Fee
	(Note 1&2)	(Note 1&2)
Prosperity Investment	1.5% per annum of the net	Nil
Holdings Limited (310)	asset value
Radford Capital Investment	1.0% per annum of the net	Nil
Limited (910)	asset value
Shanghai International	2.0% per annum of the net	15% of the surplus which
Shanghai Growth	asset value	exceeds 115% of the net
Investment Limited (770)		asset value
Sino Technology	0.25% per annum of the net	10% of the audited profit
Investments Company	asset value	before tax
Limited (1217)
UBA Investment	1.5% per annum of the net	Nil
Limited (768)	asset value
Value Partners China	1.5% per annum of the net	12% of the surplus in the net
Greenchip Fund	asset value	asset value
Limited (1186)
Yu Ming Investments	1.5% per annum of the net	20% x (net profit minus 6%
Limited (666)	asset value	of the average monthly net
		asset value)
The Company	1.5% per annum of the net	10% of the surplus of the net
	asset value	asset value

Notes:

1. The fees are extracted from the respective latest published annual report and/or announcement of the Comparables.

2. Unless specified, the calculation basis of the fees is (i) based on the net asset value of the Comparables as at the immediately preceding financial year or (ii) modified to be based on the net asset value of the Comparables as at the immediately preceding financial year.

– 20 –

LETTER OF ADVICE FROM KINGSTON

As shown in the table above, (i) the management fees are generally, excluding the extreme of 0.25% per annum of the net asset value for Sino Technology Investments Company Limited (1217), within the range from 1.0% per annum to 2.5% per annum of the net asset value as at the immediately preceding financial year of the Comparables; and (ii) the incentive/ performance fees are generally, excluding those Comparables without incentive/performance fees, within the range from 10% to 15% of the surplus of the net asset value as at the immediately preceding financial year of the Comparables. Based on the above analysis, we consider that the calculation basis of the management and performance fees under the Supplemental Investment Management, which was set out in the Letter, is comparable to the Comparables. Furthermore, we consider that the provision of performance fee based on a certain percent of the surplus on the Net Asset Value, which is a direct indicator of the performance of the Investment Manager, is a good incentive for the Investment Manager to perform in its full capacity for the Company which is in the interest of the Company and the Shareholders as whole.

On the basis that (i) the Supplemental Investment Management Agreement was entered into the ordinary and usual course of business of the Company and on normal commercial terms; and (ii) the calculation basis of the management and performance fees under the Supplemental Investment Management is comparable to the Comparables and is in line with the market, we are of the view that the terms of the Supplemental Investment Management Agreement are fair and reasonable and are in the interest of the Company and the Shareholders as a whole.

3. Cap amount

Analysis of the basis for the Annual Caps

As stated in the Letter, the Annual Caps of the fees payable to the Investment Manager under the Supplemental Investment Management Agreement are expected not to exceed HK$3.0 million, HK$4.5 million and HK$5.7 million for each of the three financial years ending 31 March 2008.

We have reviewed and discussed with the Directors the Annual Caps set by the Company. According to the Directors, the Annual Caps are determined with reference to (i) the net asset value of the Company as at 31 March 2005; and (ii) an expected annual growth rate of the net asset value of the Company of approximately 40% (having regard to the historical growth trend of the Gross Domestic Product (“GDP”) of the PRC, the potential appreciation of Renminbi, the performance of the stock markets of the Greater China region and the investment policy of the Company).

– 21 –

LETTER OF ADVICE FROM KINGSTON

Set out below is an evaluation of the bases used by the Directors to estimate the annual growth rate of the net asset value of the Company:

The investment policy of the Company

We discussed with the Directors and were informed that the Company will continue to make investments in listed and unlisted companies in the Greater China Region, particularly in Hong Kong and the PRC, and in addition, with a view to capturing the potential economic growth in the PRC, it is looking for opportunities to increase its investments in Hong Kong listed China-related stocks. Given the investment policy of the Company focusing on China-related investments, we are of the view and concur with the Directors that the historical growth trend of the GDP of the PRC, the potential appreciation of Renminbi and the performance of the stock markets of the Greater China region are appropriate and principal bases for estimation of the future growth rate of the net asset value of the Company.

The historical growth trend of the GDP of the PRC

According to World Bank, the annual GDP growth rate of the PRC was 8.0%, 9.3% and 9.5% in 2002, 2003 and 2004 respectively. Such historical growth was generally attributed to the PRC’s accession to the World Trade Organisation which in turn benefits the foreign trade and investment activities in the mainland. In view of the upcoming events to be held in the PRC such as the Olympic 2008 and the Shanghai Expo 2010, we are of the view that a large number of infrastructure and investment projects will be launched in the PRC and the GDP of the PRC will keep on being driven by the growth momentum. We consider that the prospective future of the PRC will have a positive impact on the business of most of the Chinese enterprises. Therefore, we concur with the Directors that there is likely a growth in the net asset value of the Company whose investments are driven by the growing PRC economy.

The potential appreciation of Renminbi

According to the Federal Reserve Bank of New York, Renminbi has been appreciating (i.e. the USD/CNY exchange rate dropping from CNY8.2775 per USD to CNY8.0415 per USD) for the two years ended 28 February 2006. Such significant drop of approximately 2.85% in two-year time was principally due to the reformation of the USD/CNY exchange rate regime by the People’s Bank of China and the general public expectation on Renminbi being freely floated in the currency market.

– 22 –

LETTER OF ADVICE FROM KINGSTON

In view of (i) the possible continuing reformation of the USD/CNY exchange rate regime by the People’s Bank of China; and (ii) the increasing trade surplus of the PRC over its international trade partners including the United States of America which has been requesting appreciation in the value of the Renminbi to achieve a better balance of trade, we are of the view that there is a potential appreciation of Renminbi in the future. Given that HKD is under a linked exchange rate system with USD and pegged with USD, the effects of revaluation of Renminbi on USD shall reflect on HKD as well. Accordingly, an appreciation of Renminbi, if happens, will increase the value of the Company’s China-related stock investments which are denominated in HKD that in turn will boost up the net asset value of the Company.

The performance of the stock markets of the Greater China region

Hang Seng China Enterprises Index (the “HKCEI”) which is composed of H-shares is one of the most reliable indicators for assessing the performance of the China-related stocks. According to the Hang Seng Indexes Monthly Report for March 2006, the percentage change over one year and three years for the HKCEI is +26.3% and +196.1% respectively. Based on the statistics generated by the Stock Exchange, there were 65, 72 and 80 H-shares on the Main Board of the Stock Exchange at the end of February 2004, 2005 and 2006 respectively, representing an average annual growth rate of approximately 10.4%.

We consider the upward trend of the HKCEI and the growing number of H-shares reflect that the market sentiment is good for the China-related stocks and the general investing public has been anticipating a potential growth in the Chinarelated stocks. In view of the growing economy of the PRC and Hong Kong being positioned as the main door for fund raising for the China-related stocks, we consider the stock markets of the Greater China region will continue to be promising in the long term.

– 23 –

LETTER OF ADVICE FROM KINGSTON

In consideration of above evaluation on the (i) investment policy of the Company, (ii) the historical growth trend of the GDP of the PRC, (iii) the potential appreciation of Renminbi and (iv) the performance of the stock markets of the Greater China region as a whole, we are of the view that there is a potential appreciation of the net asset value of the Company. However, we consider it is difficult to justify on a prudent basis whether the net asset value of the Company can sustain an annual growth rate of approximately 40%. Nevertheless, as (i) the total fees payable to the Investment Manager will be ultimately determined according to the actual performance of the Investment Manager; (ii) the estimation of an annual growth rate of the net asset value of the Company of approximately of 40% only helps the Directors deriving the Annual Caps; and (iii) in the event that the total fees payable to the Investment Manager exceed the Annual Caps, the Company is required to obtain further approvals from the Independent Shareholders that in turn increase the administrative burden on the Company. Therefore, we are of the view that the bases for determining the Annual Caps are fair and reasonable.

Analysis of the monetary value of the Annual Caps

As set out in the Letter, the aggregate of investment management fee and performance fee paid by the Company to the Investment Manager under the Investment Management Agreement for the financial period from 26 July 2002 to 31 March 2003 and the two financial years ended 31 March 2005 are as follow:

	Financial
	period from	Financial	Financial
	26 July 2002 to	year ended	year ended
	31 March 2003	31 March 2004	31 March 2005
Investment management fees	HK$23,150	HK$879,059	HK$729,346
Performance fees	–	HK$1,447,200	–
Total	HK$23,150	HK$2,326,259	HK$729,346

– 24 –

LETTER OF ADVICE FROM KINGSTON

On the basis used by the Directors in determining the Annual Caps stated above, the total fees payable to the Investment Manager under the Supplemental Investment Management Agreement for each of the three financial years ending 31 March 2008 can be analysed as follows:

		Expected
Financial	Expected Net	management	Expected	Expected
year ended	Asset Value	fee	performance	total fee
31 March	(Note 1)	(Note 2)	fee	(Note 4)	Annual Cap
	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)	(HK$ million)
	Approx.	Approx.	Approx.	Approx.	Approx.
2005	46.3
	(extracted from
	the 2005
	Annual Report
	of the Company)
2006	64.8	0.97	1.41	2.38	3.0
			(Note 3)
2007	90.7	1.36	2.59	3.95	4.5
2008	127.0	1.91	3.63	5.54	5.7

Notes:

1. The expected Net Asset Value is calculated based on the assumption of an expected annual growth rate of the Net Asset Value of approximately 40%.

2. The expected management fee is calculated based on the management fee of 1.5% per annum of the Net Asset Value.

3. The expected performance fee for 2006 is calculated based on the Net Asset Value of 2004 of approximately HK$50 million (as stated in the 2005 Annual Report of the Company, HK$10,000,000 were paid out as dividend, it is excluded from the Net Asset Value of 2004 of HK$60,751,658 for the calculation of the expected performance fee for 2006).

4. The expected total fee is the summation of the expected management fee and the expected performance fee.

– 25 –

LETTER OF ADVICE FROM KINGSTON

Comparing the expected total fees and the Annual Caps as shown in the table above, we noted that the Annual Caps are higher than the expected total fees in a narrowing margin of approximately 26.1% in 2006 to approximately 2.89% in 2008. Given that (i) the estimation of the total fees payable to the Investment Manager is mainly based on an expected annual growth rate of the net asset value of the Company of approximately 40% (having regard to the historical growth trend of the GDP of the PRC, the potential appreciation of Renminbi, the performance of the stock markets of the Greater China region and the investment policy of the Company); (ii) the historical fluctuations of the total fees payable to the Investment Manager for the financial period from 26 July 2002 to 31 March 2003 and the two financial years ended 31 March 2005; and (iii) as expressed under the section headed “Management discussion and analysis” in the Company’s interim report 2005, the Directors are of the view that the existing market might become more volatile in the transition from 2005 to 2006, we consider it is reasonable for the Directors to leave a margin of not more than 26.1% for the Annual Caps as aforementioned and a relatively higher margin for the 2006 Annual Cap.

According to the Directors, the increase of the Annual Caps which is with respect to the expected total fees of the relevant years is a result of an expected annual growth rate of the net asset value of the Company of approximately 40% (having regard to the historical growth trend of the GDP of the PRC, the potential appreciation of Renminbi, the performance of the stock markets of the Greater China region and the investment policy of the Company) which is in line with the investment objective of the Company to achieve earnings in the form of medium to long-term (i.e. one to five years) capital appreciation mainly through investments in listed and unlisted companies in the Greater China. The Directors anticipate the economy in the Greater China region will continue to grow in the coming years and such economic growth of the Greater China region will lead to an increase in earnings of the Company. As such the Directors consider it is fair and reasonable that the Annual Caps shall increase annually with respect to the annual growth rate of the net asset value of the Company.

Having considered the historical fees paid to the Investment Manager and the reasons stated above, we consider that the Annual Caps are fair and reasonable.

In view of the above, we are of the view and concur with the view of the Directors that the Annual Caps, which will not exceed HK$3.0 million, HK$4.5 million and HK$5.7 million for each of the financial year until the year ending 31 March 2008, are fair ad reasonable.

– 26 –

LETTER OF ADVICE FROM KINGSTON

4. Independent Shareholders’ approval

As the Investment Manager is regarded as a connected person of the Company by (i) virtue of Rule 21.13 of the Listing Rules; and (ii) being a wholly owned subsidiary of OPFSGL which is a substantial shareholder of the Company and therefore an associate of the connected person of the Company as the Latest Practicable Date, the transactions contemplated under the Supplemental Investment Management Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. The Company would seek the approval of the Independent Shareholders for the Continuing Connected Transactions pursuant to rules 14A.35 and 14A.48 of the Listing Rules. Furthermore, the Company will ensure that the Continuing Connected Transactions is in compliance with the provisions of Chapter 14A of the Listing Rules and in particular rules 14A.35 to 14A.41 and 14A.46 governing continuing connected transactions.

On this basis, we consider that the Company has taken appropriate measures to govern itself in carrying out the Continuing Connected Transactions, thereby safeguarding the interest of the Independent Shareholders thereunder.

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the Continuing Connected Transactions are in the usual and ordinary course of business of the Company and the terms and conditions of the Continuing Connected Transactions, including the Annual Caps, are on normal commercial terms and 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 the Independent Shareholders and recommend the Independent Shareholders to vote in favour of the resolution to approve the Supplemental Investment Management Agreement and the Annual Caps to be proposed at the EGM.

Yours faithfully, For and on behalf of Kingston Corporate Finance Limited Elton Cheung Gregory Ho Director Director

– 27 –

GENERAL INFORMATION

APPENDIX I

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 the omission of which would make any statement herein misleading.

2. DIRECTORS AND CHIEF EXECUTIVE’S INTERESTS IN SHARES

• (a) As at the Latest Practicable Date, the interest or short position of the Directors in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO which are 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 they were taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained in accordance with Section 352 of the SFO, or as otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules.

(i) Long Positions in Shares

				Approximate
				percentage
		Nature of	Number of	of the
Name of Director	Capacity	Interest	Shares held	issued Share
Mr. Zhang Zhi Ping	Beneficial	Corporate	29,800,000	29.80%
	owner	interest
Mr. Zhang Gaobo	Beneficial	Corporate	29,800,000	29.80%
	owner	interest

Note:

These shares are held by OPFSGL, the entire issued share capital of which is beneficially owned as to 95% by Oriental Patron Holdings Limited and 8% by Eldridge International Limited. The entire issued share capital of Oriental Patron Holdings Limited is beneficially owned by Million

– 28 –

GENERAL INFORMATION

APPENDIX I

West Limited and Best Future International Limited in equal share. The entire issued share capital of Million West Limited is beneficially owned as 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.

Save as disclosed above, none of the Directors or chief executive of the Company had any interest or short position in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which 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 they were taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained in accordance with Section 352 of the SFO, or as otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules.

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

• (c) As as at the Latest Practicable Date, none of the Directors was materially interested in any contracts or arrangement subsisting as at the date hereof which was significant in relation to the business of the Company.

• (d) As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business apart from the Company’s business which competes or is likely to compete, either directly or indirectly, with the business of the Company.

– 29 –

GENERAL INFORMATION

APPENDIX I

3 SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, as far as it was known to any Directors or chief executive of the Company, the following entities (other than a Director or chief executive of the Company disclosed under “Directors and Chief Executive in the Share Capital of the Company” section above) had an interest or short position in the respective class of Shares and 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, or who was directly or indirectly interested in 10% or more of the nominal value of the respective class of share capital carrying rights to vote in all circumstances at general meetings of the Company:

(i) Long Position in the shares of the Company

	Number of
	ordinary
	shares of	Percentage of
Name of shareholder	the Company	share holding
OPFSGL_(note)_	29,800,000	29.80%
Oriental Patron Holdings Limited_(note)_	29,800,000	29.80%
Best Future International Limited_(note)_	29,800,000	29.80%
Million West Limited_(note)_	29,800,000	29.80%
Mr. Xiao Wei	16,796,000	16.80%
Mr. Wang Wencang	14,096,000	14.10%

Note:

OPFSGL 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 8% 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 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.

By virtue of the SFO, Oriental Patron Holdings Limited, Best Future International Limited and Million West Limited are deemed to be interested in the same 29,800,000 shares held by OPFSGL.

– 30 –

APPENDIX I

GENERAL INFORMATION

Save as disclosed above, there was no person or other entity known to the Directors or chief executive of the Company, who, as at the Latest Practicable Date, had an interest or short position in the respective class of Shares and 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, or who was directly or indirectly interested in 10% or more of the nominal value of the respective class of shares capital carrying rights to vote in all circumstances at general meetings of the Company

In addition, save as disclosed above, there are no Director or proposed Director is a director or employee of a company which has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO.

4. MATERIAL CHANGE

The Directors confirm that there has been no material adverse change in the financial or trading position of the Company since 31 March 2005, the date to which the latest published audited financial statements of the Company were made up to the Latest Practicable Date.

5. LITIGATION

As at the Latest Practicable Date, the Company was not engaged in any litigation, arbitration or claim 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. QUALIFICATIONS OF EXPERT

The following is the qualifications of the expert who has given opinion or advice which is contained or referred to in this circular:

Name Qualifications Kingston A licensed corporation under the SFO permitted to carry out type 6 regulated activities

7. EXPERT’S INTERESTS

As at the Latest Practicable Date, Kingston had no shareholding interest in the Company nor the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities of the Company. As at the Latest Practicable Date, Kingston had no direct or indirect interests in any assets which had since 31 March 2005 (being the date to which the latest published audited accounts of the Company were made up) been acquired or disposed of by or leased to the Company, or which are proposed to be acquired or disposed of by or leased to the Company.

– 31 –

GENERAL INFORMATION

APPENDIX I

8. CONSENT OF EXPERT

Kingston has given and has not withdrawn its written consent to the issue of this circular in the form and context in which it appears.

9. INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors or Kingston had any interest, direct or indirect, in any asset which had been since 31 March 2005, being the date to which the latest published audited accounts of the Company were made up, acquired or disposed of by or leased to any member of the Company or are proposed to be acquired or disposed of by or leased to any member of the Company.

10. GENERAL

The English text of this circular shall prevail over the Chinese text.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copy of the following documents are available for inspection at the offices of the Company at 27/F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong during normal business hours on any week day, except public holidays, from the date of this circular up to and including 18 April 2006:

• (a) the Supplemental Investment Management Agreement;

• (b) the Investment Management Agreement;

• (c) the letter from Kingston to the Independent Board Committee and the Independent Shareholders, the text of which is set out on page 15 to 27 of this circular;

• (d) the written consent of Kingston as referred to in the section headed “Consent of expert” in this appendix; and

• (e) the letter from the Independent Board Committee, the text of which is set out on pages 13 to 14 of this circular.

– 32 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [52 x 51] intentionally omitted <==

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

(incorporated in the Cayman Islands with limited liability)

(stock code: 1140)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Concepta Investments Limited will be held at 27/F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong on 18 April 2006 at 11:00 a.m. for the purpose of considering and, if thought fit, passing (with or without modifications) the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

the supplemental agreement to the investment management agreement dated 16 March 2006 (“Agreement”) (copy of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) and entered into between the Company and Oriental Patron Asia Limited (“Investment Manager”) relating to the appointment of the Investment Manager as the Company’s investment manager as set out in the circular (“Circular”) of the Company dated 3 April 2006 (a copy of which has been produced to the meeting marked “B” and signed by the chairman of the meeting for the purpose of identification) and all the transactions contemplated thereby; and the Annual Caps (as defined in the Circular) for the transactions contemplated under the Agreement for the three years ending 31 March 2008 as shown in the Circular,

be and they are hereby approved and that the directors of the Company be and they are hereby authorised to take any step as they consider necessary, desirable or expedient in connection with the Agreement or the transactions contemplated thereby.”

Yours faithfully,

By order of the Board

Concepta Investments Limited Zhang Gaobo Executive Director

Hong Kong, 3 April 2006

* for identification purposes only

– 33 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

• (1) Any member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote instead of him. A proxy need not be a member of the Company.

• (2) Where there are join holders of any share any one of such persons may vote, either personally of by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders is present at any meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company shall, in respect of such share, be entitled alone to vote in respect thereof.

• (3) A form of proxy for use at the meeting is enclosed with the circular to shareholders of the Company.

• (4) The instrument appointing a proxy must be in writing under the hand of the appointer or of his attorney duly authorized in writing, or if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.

• (5) To be valid, the form of proxy, together with the power of attorney or other authority, if any, under which it is signed or a certified copy of such power or authority, must be deposited at the principal place of the Company in Hong Kong at 27/F., Two Exchange Square, 8 Connaught Place, Central, Hong Kong, not less than 48 hours before the time appointed for the holding the meeting (or any adjournment thereof).

• (6) Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting or any adjournment thereof. If such member attends the meeting, his form of proxy will be deemed to have been revoked.

• (7) Since the transactions contemplated under the Agreement will constitute non-exempt continuing connected transactions for the Company under Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”), the resolution proposed at the meeting will be voted on a poll pursuant to Rule 13.39(4) of the Listing Rules.

• (8) The translation into Chinese of this notice is for reference only. In case of any inconsistency, the English version shall prevail.

• (9) As at the date of this notice, the board of directors of the Company comprises two executive directors, namely, Mr Zhang Zhi Ping and Mr Zhang Gaobo; a non-executive director, Mr Liu Hongru; and three independent nonexecutive directors, namely, Mr Kwong Che Keung, Gordon, Professor He Jia and Mr Wang Xiaojun.

– 34 –