Esprit Holdings Limited — Proxy Solicitation & Information Statement 2007

Jul 19, 2007

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 to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in The Grande Holdings Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer 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.

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THE GRANDE HOLDINGS LIMITED 嘉域集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 186)

DISCLOSEABLE TRANSACTION

DISPOSAL OF ALL THE ISSUED SHARES OF VIGERS INTERNATIONAL PROPERTIES PTE LTD AND THE GRANDE PROPERTIES LIMITED

20 July 2007

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“Board”

the board of Directors

• “Business Day”

a day (other than a Saturday, Sunday or public holiday in Singapore and Hong Kong) on which commercial banks are open for business

“Company” The Grande Holdings Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 186)

• “Completion” completion of the Sale and Purchase Agreement in accordance with its terms

• “Conditions Precedent” the conditions precedent to the Sale and Purchase Agreement as set out in the section headed “Conditions Precedent” in this circular

“Directors” the directors of the Company “GNL” The Grande (Nominees) Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company

“GPL” The Grande Properties Limited, a company incorporated in Hong Kong which is wholly-owned by TGL and GNL

“Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong” The Hong Kong Special Administrative Region of the People’s Republic of China

“Hong Kong Property” certain premises and carparking spaces located at Lucky (Kwun Tong) Industrial Building, 398-402 Kwun Tong Road, Hong Kong

• “Latest Practicable Date” 17 July 2007, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

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

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DEFINITIONS

“LTL”	Lafe Technology Limited, a company incorporated in Bermuda
	which shares are listed on the Singapore Stock Exchange and is
	64.31% – owned by the Company
“Sale and Purchase Agreement”	the conditional agreement dated 29 June 2007 entered into between
	GNL, TGL, the Company and LTL in relation to the disposal of
	the entire issued share capital of each of GPL and VIP
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Shareholders”	shareholders of the Company
“Singapore Stock Exchange”	The Singapore Exchange Securities Trading Limited
“Singapore Property”	the property located at Lot 99423A Town Sub Division 27, 119
	and 119 A Emerald Hill Road, Singapore
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“S$”	Singapore dollars, the lawful currency of Singapore
“TGL”	The Grande Limited, a company incorporated in the British Virgin
	Islands and a wholly-owned subsidiary of the Company
“VIP”	Vigers International Properties Pte Ltd., a company incorporated
	in Singapore which is wholly-owned by GNL

Note: the figures in S$ are converted into HK$ at the rate of S$1.00 = HK$5.098 throughout this circular for indication purposes only.

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LETTER FROM THE BOARD

THE GRANDE HOLDINGS LIMITED 嘉域集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability) (Stock Code: 186)

Executive Directors: Christopher W. Ho (Chairman) Adrian C. C. Ma (Managing Director) Christine L. S. Asprey Michael A. B. Binney C. F. Lam Paul K. F. Law

Independent Non-executive Directors: Herbert H. K. Tsoi Johnny W. H. Lau Martin I. Wright

Registered Office: 2 Reid Street, Hamilton HM 11, Bermuda

Principal Place of Business: 12th Floor, The Grande Building, 398 Kwun Tong Road, Kowloon, Hong Kong

20 July 2007

Dear Shareholders,

DISCLOSEABLE TRANSACTION

DISPOSAL OF ALL THE ISSUED SHARES OF VIGERS INTERNATIONAL PROPERTIES PTE LTD AND THE GRANDE PROPERTIES LIMITED

INTRODUCTION

On 29 June 2007, the Company announced that the Company and its wholly-owned subsidiaries, GNL and TGL, entered into the Sale and Purchase Agreement with LTL, a 64.31%-owned subsidiary of the Company listed on the Singapore Stock Exchange. Pursuant to the Sale and Purchase Agreement, subject to the fulfilment of the Conditions Precedent, GNL and TGL has each agreed to sell, and LTL has agreed to acquire, the entire issued share capital of each of VIP and GPL, at an aggregated consideration of approximately HK$418.34 million. The Company has also agreed to guarantee the obligations of GNL and TGL under the Sale and Purchase Agreement.

The transaction constitutes a discloseable transaction of the Company and is subject to the announcement and reporting requirement under the Listing Rules. The purpose of this circular is to provide you with further information in relation to the transaction outlined above.

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LETTER FROM THE BOARD

SALE AND PURCHASE AGREEMENT

Date

29 June 2007

Parties

Vendors: GNL and TGL, both are wholly-owned subsidiaries of the Company

Purchaser: LTL, a 64.31%-owned subsidiary of the Company whose shares are listed on the Singapore Stock Exchange

Guarantor: the Company

Subject: the entire issued share capital of both VIP and GPL

Subject Matters

Subject to the fulfilment of the Conditions Precedent, LTL has agreed to purchase, and GNL has agreed to sell the entire issued share capital of VIP, and, GNL and TGL have agreed to sell the entire issued share capital of GPL. The consideration in respect of the entire issued share capital of VIP and GPL are approximately S$67.885 million (equivalent to approximately HK$346.08 million) and HK$72.26 million respectively which will be payable by LTL in cash in one lump sum upon Completion.

In consideration for LTL agreeing to enter into the Sale and Purchase Agreement, the Company has agreed to irrevocably and unconditionally guarantee the obligations of GNL and TGL under the Sale and Purchase Agreement and jointly and severally with GNL and TGL, to provide representations and warranties to LTL under the Sale and Purchase Agreement.

Conditions Precedent

The Sale and Purchase Agreement is condition upon:

• (1) LTL being reasonably satisfied with the results of its commercial and legal due diligence of VIP and GPL including title to their respective assets including the Singapore Property and the Hong Kong Property;

• (2) the Sale and Purchase Agreement being approved by the shareholders of LTL at a general meeting of LTL;

• (3) the Sale and Purchase Agreement being approved by the shareholders of each of TGL and GNL at their respective general meeting;

• (4) the Sale and Purchase Agreement being approved by the shareholders of the Company at a general meeting of the Company, if required under the applicable laws and regulations;

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LETTER FROM THE BOARD

• (5) the approval of the shareholders of LTL at a general meeting of LTL for the entry of LTL into the business of property development and investment;

• (6) such other consents or approvals as may be necessary from any third party or governmental or regulatory body or competent authority having jurisdiction over the sale of VIP and GPL or the transactions contemplated in the Sale and Purchase Agreement or otherwise in relation to the Singapore Property and the Hong Kong Property, having been granted or obtained and not withdrawn or revoked, and if such consents or approvals are granted or obtained subject to any conditions, such conditions being reasonably acceptable to LTL; and

• (7) without limiting the generality of (6) above, certain consents from the Controller of Residential Property, the Urban Redevelopment Authority of Singapore and United Overseas Bank Limited, the mortgagee of the Singapore Property, having been granted or obtained, and not withdrawn or revoked and if such consents or approvals are granted or obtained subject to any conditions, such conditions being reasonably acceptable to LTL.

Completion

Completion is expected to take place on the seventh Business Day after the date of the fulfilment or waiver of the Conditions Precedent. LTL may at its sole discretion waive condition (1) above.

Upon Completion, VIP and GPL will each become a wholly-owned subsidiary of LTL and hence, they will continue to be consolidated into the Group’s accounts as LTL will remain as a 64.31%-owned subsidiary of the Company.

CONSIDERATION

The consideration in respect of the entire issued share capital of VIP and GPL are approximately S$67.885 million (equivalent to approximately HK$346.08 million) and HK$72.26 million respectively which will be payable by LTL in cash in one lump sum upon Completion.

The consideration has been agreed after arm’s length negotiations between the parties taking into consideration: (i) the market values of the major assets of VIP and GPL (i.e. the Singapore Property and the Hong Kong Property) with reference to the valuation reports recently prepared by independent qualified valuers (which valued the Singapore Property and the Hong Kong Property at approximately S$90.35 million (equivalent to approximately HK$460.6 million) and HK$210 million respectively), (ii) the outstanding mortgage loans in relation to the Singapore Property and the Hong Kong Property (which amounted to approximately S$22.6 million (equivalent to approximately HK$115.2 million) and HK$138.7 million, respectively) and (iii) the outstanding inter-company loans of VIP and GPL (which were approximately S$33.5 million (equivalent to approximately HK$170.8 million) and HK$110 million respectively) which would be discharged on or before Completion.

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LETTER FROM THE BOARD

INFORMATION ON VIP AND GPL

VIP is a company incorporated in Singapore and carries on business as a special purpose vehicle solely for the acquisition, ownership and development of the Singapore Property.

GPL is a company incorporated in Hong Kong and carries on business as a special purpose vehicle solely for the ownership and rental of the Hong Kong Property.

For the financial year ended 31 December 2005, there was no profit attributable to the shareholders of VIP as VIP was dormant during that period. For the financial year ended 31 December 2006, the audited net profits of VIP before and after taxation and extraordinary items were both S$5.99 million (equivalent to approximately HK$30.5 million).

The audited net profits of GPL before and after taxation and extraordinary items for the financial year ended 31 December 2005 amounted to HK$23.8 million and HK$23.6 million respectively. For the financial year ended 31 December 2006, the audited net profits of GPL before and after taxation and extraordinary items amounted to HK$32.0 million and HK$31.8 million respectively.

The net asset values of VIP and GPL as at 31 December 2006 were S$7.4 million (equivalent to approximately HK$37.7 million) and HK$90.0 million respectively.

Upon Completion, as the results of VIP and GPL will continue to be consolidated in the financial statements of the Group, the disposal will not have any material effect on the Group’s assets, liabilities, revenues and earnings. Upon Completion, the Company’s indirect interest in VIP and GPL will reduce to 64.31% and the results of VIP and GPL will continue to be consolidated into the Group’s accounts. Based on the estimated total net asset value of VIP and GPL as at the date of Completion, the Group estimates that a gain on disposal of approximately HK$741,000 would be recorded in the Group’s consolidated income statement upon Completion.

REASONS FOR AND BENEFITS OF THE TRANSACTION

The transaction was resulted from the Group’s internal reorganisation and restructuring as LTL will, upon obtaining all necessary approvals, diversify into property development and investment. The Directors believe the terms of the transaction are fair and reasonable and in the interests of the Shareholders as a whole.

It is expected that the transaction would create a gain of approximately HK$741,000 to the Group, representing the excess of the sales proceeds to be received at Completion over the carrying value of the assets as at 30 April 2007 to be transferred at Completion. The Company intends to use the net proceeds as general working capital.

GENERAL

The Group is principally engaged in the design, development, manufacture and distribution of electronic and computer products and components along with trading of audio and video products and shares.

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LETTER FROM THE BOARD

LTL is principally engaged in the design and manufacture of computer magnetic heads for use in hard disk drives and tape drives and is seeking shareholders’ approval to diversify into property development and investment business.

DISCLOSEABLE TRANSACTION

The transaction constitutes a discloseable transaction of the Company as the appropriate percentage ratios defined under the Listing Rules are more than 5% but less than 25%. The transaction is subject to the announcement and reporting requirement under the Listing Rules.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, LTL is not a connected person (as defined under the Listing Rules) of the Company.

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

Yours faithfully, By Order of the Board Christopher W. Ho Chairman

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GENERAL INFORMATION

APPENDIX

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’ INTERESTS

As at the Latest Practicable Date, the interests and short positions, if any, of each Director and chief executive of the Company in the shares, underlying shares and debentures of the Company and 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 the Directors and chief executives were deemed or taken to have under such provisions of the SFO); or which were required to be and are recorded in the register required to be kept by the Company pursuant to 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 Companies adopted by the Company (“Model Code”) were as follows:

Long position in shares of the Company:

		Number of
		issued ordinary
		shares of HK$0.10	% of
		each in the	the issued
Directors	Capacity	Company held	share capital
Mr. Christopher W. Ho	Interest in corporation	310,049,822	67.36%
		(note1)
Mr. C. F. Lam	Beneficial owner	303,600	0.07%
Mr. Adrian C. C. Ma	Beneficial owner	78,000	0.02%

Note 1: Mr. Christopher W. Ho had a 100% deemed beneficial interest in The Grande International Holdings Limited which owned 310,049,822 ordinary shares in the Company through its wholly owned subsidiary, Barrican Investments Corporation.

Save as disclosed above, none of the Directors or chief executive of the Company had, as at the Latest Practicable Date, any interests or short positions 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 would have 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 the Directors and chief executives were deemed or taken to have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.

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GENERAL INFORMATION

APPENDIX

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to any Director or chief executives of the Company, as at the Latest Practicable Date, Shareholders (other than Directors or chief executives of the Company) who had interests or short positions in the shares or 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 which were recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows:

Interest in the Company:

		Number of issued
		ordinary shares of
Name of substantial		HK$0.10 each in the	% of the issued
shareholders	Capacity	Company held	share capital
Mr. Gottfried Ludwig	Beneficial owner	28,324,022	6.15%
Prentice Jurick
Mr. Lawrence Y. L. Ho	Corporate	24,986,000_(note 1)_	5.42%

Note 1: Mr. Lawrence Y. L. Ho owned 24,986,000 ordinary shares in the Company through Grand Villa Assets Limited of which he has 100% control.

Interest in other member of the Group:

	Shareholding	Other substantial shareholder
Name of the company	interest of the Group	and its shareholding interest
Capetronic Group Ltd	85%	Starcom Pacific Trading
		Limited 15%

Save as disclosed above, as at the Latest Practicable Date, the Company had not been notified by any persons (other than Directors or chief executives of the Company) who had interests or short positions in the shares or 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 were interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group, or any options in respect of such capital.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any service contracts with the Company which were not expiring or determinable within one year without payment of compensation, other than statutory compensation.

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GENERAL INFORMATION

APPENDIX

5. COMPETING BUSINESS INTERESTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors was interested in any business apart from the Group’s businesses which competes or is likely to compete, either directly or indirectly, with businesses of the Group.

6. LITIGATION

So far as the Directors are aware, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was pending or threatened against the Company or any of its subsidiaries.

7. MISCELLANEOUS

• (a) The Company’s branch share registrar in Hong Kong is Tengis Limited at Level 25, Three Pacific Place, 1 Queen’s Road East, Hong Kong and its transfer office in Hong Kong is Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (b) The qualified accountant of the Company is Mr. Michael Andrew Barclay Binney, who is a fellow member of the Institute of Certified Accountant in England and Wales and a fellow member of the Hong Kong Institute of Certified Public Accountants.

• (c) The Secretary of the Company is Mr. Christopher Chiang, who is a member of the Hong Kong Institute of Certified Public Accountants.

• (d) This circular has been prepared in both Chinese and English. In the case of any discrepancy, the English text shall prevail.

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