Goldstone Capital Group Limited — Proxy Solicitation & Information Statement 2005

Jun 30, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in 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 Grand Investment International Ltd., you should at once hand this circular together with the accompanying form of proxy 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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(Stock Code: 1160)

PROPOSED GRANT OF GENERAL MANDATES TO

ISSUE AND REPURCHASE SHARES

RE-ELECTION OF DIRECTORS

A notice convening the annual general meeting of the Company to be held at Unit B, 22nd Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Friday, 22 July 2005 at 4:30 p.m. is set out on pages 18 to 22 of this circular.

Whether or not you are able to attend the meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same as soon as possible and in any event not later than 48 hours before the time of the meeting or any adjournment thereof to the Company’s Hong Kong branch share registrars, Computershare Hong Kong Investor Services Limited, at Rooms 19011905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjournment thereof should you so wish.

29 June 2005

* For identification purposes only

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board
–	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
–	Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
–	Repurchase Mandate and Extension Mandate . . . . . . . . . . . . . . . . . . . . . . . .	4
–	Re-election and appointment of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
–	Procedures for demanding a Poll by Shareholders . . . . . . . . . . . . . . . . . . . .	6
–	Actions to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
–	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
–	Documents available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I	– Explanatory statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix II – Particulars of the Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . .		13
Notice of the Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held
	at Unit B, 22nd Floor, Entertainment Building, 30
	Queen’s Road Central, Hong Kong on Friday, 22 July
	2005 at 4:30 p.m., the notice of which is set out on
	pages 18 to 22 of this circular, and any adjournment
	thereof
“associates”	has the meaning ascribed to it under the Listing Rules
“Board”	the Board of Directors
“Bye-Laws”	the bye-laws of the Company adopted pursuant to a
	written resolution passed by the then sole Shareholder
	on 13 February 2004
“Company”	Grand Investment International Ltd., an exempted
	company incorporated in Bermuda with limited
	liability, and the issued Shares of which are listed on
	the main board of the Stock Exchange
“Companies Act”	the Companies Act 1981 of Bermuda
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Director(s)”	director(s) of the Company
“Extension Mandate”	a general and unconditional mandate proposed to be
	granted to the Directors to the effect that the total
	number of Shares which may be allotted and issued
	under the Issue Mandate may be increased by an
	additional number representing such number of Shares
	actually repurchased under the Repurchase Mandate
“Issue Mandate”	a general and unconditional mandate proposed to be
	granted to the Directors to exercise the power of the
	Company to allot, issue or otherwise deal with new
	Shares up to a maximum of 20% of the aggregate
	nominal amount of the share capital of the Company
	in issue as at the date of passing the relevant resolution
	at the Annual General Meeting
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China

– 1 –

DEFINITIONS

“Latest Practicable Date” 22 June 2005, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Repurchase Mandate” a general and unconditional mandate proposed to be granted to the Directors to enable them to repurchase the Shares on the Stock Exchange, the aggregate nominal amount of which shall not exceed 10% of the aggregate nominal amount of the share capital in issue as at the date of passing the relevant resolution at the Annual General Meeting “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company “Shareholder(s)” holder(s) of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” Hong Kong Code on Takeovers and Mergers “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

– 2 –

LETTER FROM THE BOARD

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(Stock Code: 1160)

Executive Directors:

Mr Lee Tak Lun Ms Lee Wai Tsang, Rosa Ms Chung Wing Han Wendy Mr Fong Chi Wah Mr Chou Ping-chun, Benji

Registered office:

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place

Non-executive Director: Mr Lee Woo Sing (Chairman)

Independent non-executive Directors:

Mr Lu Fan Mr Yao Cho Fai Andrew Dr Zhang Hongru

of business in Hong Kong: Unit B, 22nd Floor Entertainment Building 30 Queen’s Road Central Hong Kong

29 June 2005

To the Shareholders

Dear Sir/Madam

PROPOSED GRANT OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES RE-ELECTION OF DIRECTORS

INTRODUCTION

The primary purpose of this circular is to provide you with information regarding the resolutions to be proposed at the Annual General Meeting and to give you notice of the Annual General Meeting. Resolutions to be proposed at the Annual General Meeting include ordinary resolutions relating to the grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate.

ISSUE MANDATE

At the Annual General Meeting, an ordinary resolution will be proposed that the Directors be granted the Issue Mandate, i.e. a general and unconditional mandate to allot, issue and deal with new Shares up to 20% of the aggregate nominal share capital of the Company in issue as at the date of passing of the relevant resolution. As at the Latest Practicable Date, a total of 60,000,000 Shares were in issue. Subject to the passing of the

* For identification purposes only

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LETTER FROM THE BOARD

proposed resolution granting the Issue Mandate to the Directors and on the basis that no Shares will be issued or repurchased by the Company prior to the Annual General Meeting, the Company will be allowed under the Issue Mandate to issue a maximum of 12,000,000 Shares.

REPURCHASE MANDATE AND EXTENSION MANDATE

At the Annual General Meeting, an ordinary resolution will also be proposed to give the Directors the Repurchase Mandate, i.e. a general and unconditional mandate to exercise all powers of the Company to repurchase, on the Stock Exchange, or on any other stock exchange on which the Shares may be listed, Shares up to a maximum of 10% of the nominal share capital of the Company in issue as at the date of passing of the relevant resolution. In addition, an ordinary resolution regarding the Extension Mandate will be proposed at the Annual General Meeting to authorise the increase in the total number of new Shares which may be allotted and issued under the Issue Mandate by an additional number representing such number of Shares actually repurchased under the Repurchase Mandate.

The Repurchase Mandate and the Issue Mandate would expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; or (b) the end of the period within which the Company is required by the Companies Act or the Bye-Laws to hold its next annual general meeting; or (c) when revoked or varied by ordinary resolution(s) of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

Under the Listing Rules, the Company is required to give to its Shareholders all information which is reasonably necessary to enable Shareholders to make an informed decision as to whether to vote for or against the resolution in respect of the Repurchase Mandate at the Annual General Meeting. An explanatory statement for such purpose is set out in the Appendix I to this circular.

The Directors wish to state that they have no immediate plans to repurchase any existing shares or to issue new shares pursuant to the Repurchase Mandate, the New Issue Mandate and the Extension Mandate. The mandates being proposed and if granted by the Shareholders will, however, give the Company the flexibility to do so. The Directors will not exercise the mandates in a way which would breach the minimum percentage of listed securities in public hands as prescribed by the Stock Exchange from time to time.

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LETTER FROM THE BOARD

RE-ELECTION AND APPOINTMENT OF DIRECTORS

The Board currently consists of nine Directors, namely:

Executive Directors:

Date of appointment:

Ms Chung Wing Han Wendy Mr Fong Chi Wah Mr Chou Ping-chun, Benji Mr Lee Tak Lun Ms Lee Wai Tsang, Rosa

22 April 2003 13 February 2004 13 February 2004 1 June 2005 1 June 2005

Non-Executive Director

Mr Lee Woo Sing (Chairman)

22 April 2003

Independent non-Executive Directors:

Mr Lu Fan 1 June 2005 Mr Yao Cho Fai Andrew 13 February 2004 Dr Zhang Hongru 13 February 2004

Three out of the nine Directors, namely Mr Lee Tak Lun, Ms Lee Wai Tsang, Rosa and Mr Lu Fan were additionally appointed as Directors by the Board after the last annual general meeting of the Company held on 2 September 2004.

According to Bye-Law 113(A) of the Bye-Laws, at each annual general meeting, one third of the Directors for the time being, or if their number is not three or a multiple of three, then the number nearest to but not exceeding one-third, shall retire from office by rotation provided that no Director holding office as Chairman or Deputy Chairman under Bye-Law 140 or the office of Managing Director or Joint Managing Director under Bye-Law 128 shall be subject to retirement by rotation or be taken into account in determining the number of Directors to retire. A retiring Director shall be eligible for re-election.

According to Bye-Law 113(B) of the Bye-Laws, the Directors to retire by rotation shall include (so far as necessary to obtain the number required) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot.

Pursuant to Bye-Law 113(A) of the Bye-Laws, Mr Fong Chi Wah will retire and, being eligible, offer himself for re-election at the Annual General Meeting.

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LETTER FROM THE BOARD

Further, according to Bye-Law 117 of the Bye-Laws, any Director appointed by the Directors as additional Director under Bye-Law 117 should hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election at the meeting. Accordingly, each of Mr Lee Tak Lun, Ms Lee Wai Tsang, Rosa and Mr Lu Fan would retire from office of Director at the conclusion of the Annual General Meeting. Each of them, being eligible, will offer themselves for re-election at the Annual General Meeting.

Particulars of the Directors who will retire and offer themselves for re-election at the Annual General Meeting are set out in Appendix II to this circular.

PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERRS

Bye-Law 73 of the Company’s Bye-Laws sets out the following procedure by which Shareholders may demand a poll.

At any general meeting, a resolution put to the vote of the 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. A poll may be demanded by:

• (i) the Chairman of the meeting; or

• (ii) at least three members present in person or by proxy for the time being entitled to vote at the meeting; or

• (iii) any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

• (iv) a member or members present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

ACTIONS TO BE TAKEN

At the Annual General Meeting, a special resolution and ordinary resolutions (as the case may be) will be proposed to approve, among other matters, the grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate.

Whether or not you are able to attend the Annual General Meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time for the Annual General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjournment thereof should you so wish.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors believe that the Issue Mandate, the Repurchase Mandate and the Extension Mandate are beneficial to the Company and the Shareholders as a whole.

The Directors believe that an exercise of the Issue Mandate will enable the Company to take advantage of market conditions to raise additional capital for the Company.

The Repurchase Mandate 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 exercised when the Directors believe that repurchases of Shares will benefit the Company and the Shareholders.

An exercise of the Repurchase Mandate in full may have a material adverse impact on the working capital and/or gearing position of the Company as compared with that as at 31 March 2005, being the date of its latest audited financial statements. The Directors do not, however, intend to make any repurchase in circumstances that would have a material adverse impact on the working capital or gearing of the Company.

Accordingly, the Directors recommend Shareholders to vote in favour of the ordinary resolutions for approving the Issue Mandate, the Repurchase Mandate and the Extension Mandate at the Annual General Meeting.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the memorandum of association of the Company and the Bye-Laws will be available for inspection at the head office and principal place of business in Hong Kong of the Company at Unit B, 22nd Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong during normal business hours on any business day from the date hereof up to and including the date of the Annual General Meeting.

GENERAL INFORMATION

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

Yours faithfully, For and on behalf of the Board

Grand Investment International Ltd. Chung Wing Han Wendy Executive Director

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APPENDIX I

EXPLANATORY STATEMENT

This Appendix I serves as an explanatory statement, as required by the Listing Rules, to provide requisite information as to the proposed Repurchase Mandate.

1. LISTING RULES RELATING TO THE REPURCHASE OF SHARES

The Listing Rules permit companies whose primary listing is on the Stock Exchange to repurchase their shares on the Stock Exchange and any other stock exchange on which the securities of the company are listed and such exchange is recognised by the Securities and Futures Commission of Hong Kong subject to certain restrictions. Among such restrictions, the Listing Rules provide that the shares of such company must be fully paid up and all repurchase of shares by such company must be approved in advance by an ordinary resolution of shareholders, either by way of a general repurchase mandate or by specific approval of a particular transaction.

2. SHARE CAPITAL

As at Latest Practicable Date, there were a total of 60,000,000 Shares in issue.

Subject to the passing of the proposed resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, the Company will be allowed under Repurchase Mandate to repurchase a maximum of 6,000,000 Shares.

3. REASONS FOR THE REPURCHASE

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from the Shareholders to enable the Company to repurchase the Shares on the Stock Exchange or any other stock exchange on which the Shares are listed. Share 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 repurchase will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

In repurchasing the Company’s securities, the Company may only apply funds legally available for the purpose in accordance with the Company’s memorandum of association, the Bye-Laws, the Companies Act and other applicable laws of Bermuda.

Taking into account the current working capital position of the Company, the Directors do not consider that, if the Repurchase Mandate were to be exercised in full, it might have a material adverse effect on the working capital and/or the gearing position of the Company as compared with the position as at 31 March 2005, being the date of its latest audited consolidated financial statements. However, the Directors do not intend to make any repurchases to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing position of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

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APPENDIX I

EXPLANATORY STATEMENT

5. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the previous twelve calendar months before the Latest Practicable Date were as follows:

	Highest	Lowest
	$	$
2004
June	1.03	1.00
July	1.02	1.00
August	1.00	1.00
September	1.02	1.00
October	1.02	1.01
November	1.01	1.00
December	1.01	1.01
2005
January	1.02	1.00
February	1.02	1.02
March	1.02	1.02
April	1.02	1.02
May	1.02	1.02
June_(Note)_	1.13	1.02

Note: Up to the Latest Practicable Date

6. THE TAKEOVERS CODE AND MINIMUM PUBLIC HOLDING

If a Shareholder’s proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert (as defined in the Takeovers Code) could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 or Rule 32 of the Takeovers Code.

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APPENDIX I

EXPLANATORY STATEMENT

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of the Securities and Futures Ordinance (“ SFO ”) (Chapter 571 of the Laws of Hong Kong) and so far as is known to, or can be ascertained after reasonable enquiry by the Directors, the following persons were directly or indirectly interested in 5% or more of the issued capital of the Company:

					Approximate	Approximate
					percentage of
				Approximate	shareholding if
				percentage of	the Repurchase
			Number of	existing		Mandate is
	Name	Capacity	Shares	shareholding	exercised in full
1.	Optimize Capital	Beneficial owner	5,000,000	8.33%		9.26%
	Investments Limited		(long position)
	(“Optimize Capital”)		(Note 1)
	(Note 1)
2.	Lee Tak Lun	Interest of a	5,000,000	8.33%		9.26%
	(Note 1)	controlled	(long position)
		corporation	(Note 1)
		(Note 1)
	(Notes 2 to 4)	Interest of a	11,000,000	18.33%		20.37%
		controlled	(long position)
		corporation	(Notes 2 to 4)
		(Notes 2 to 4)
				26.66%		29.63%
3.	Grand Finance Group	Registered and	11,000,000	18.33%		20.37%
	Company Limited	beneficial owner	(long position)
	(“Grand Finance”)	(Notes 2 to 5)	(Notes 2 to 5)
	(Notes 2 to 5)
4.	Jumbo China	Interest of a	11,000,000	18.33%		20.37%
	Holdings Limited	controlled	(long position)
	(Notes 2 to 4)	corporation	(Notes 2 to 4)
		(Notes 2 to 4)
5.	Bright Pearl Limited	Interest of a	11,000,000	18.33%		20.37%
	(Notes 2 to 5)	controlled	(long position)
		corporation	(Note 2 to 5)
		(Notes 2 to 5)

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APPENDIX I

EXPLANATORY STATEMENT

					Approximate
					percentage of
				Approximate	shareholding if
				percentage of	the Repurchase
			Number of	existing	Mandate is
	Name	Capacity	Shares	shareholding	exercised in full
6.	Billion Sky Limited	Interest of a	11,000,000	18.33%	20.37%
	(Notes 2 to 4)	controlled	(long position)
		corporation	(Notes 2 to 4)
		(Notes 2 to 4)
7.	Win Key Investments	Interest of a	11,000,000	18.33%	20.37%
	Limited	controlled	(long position)
	(Notes 2 to 4)	corporation	(Notes 2 to 4)
		(Notes 2 to 4)
8.	Chow Chuen Chung	Interest of a	11,000,000	18.33%	20.37%
	(Notes 2 and 5)	controlled	(long position)
		corporation	(Notes 2 and 5)
		(Notes 2 and 5)
9.	Ho Kin	Interest of a	11,000,000	18.33%	20.37%
	(Notes 2 and 5)	controlled	(long position)
		corporation	(Notes 2 and 5)
		(Notes 2 and 5)
10.	Kam Kin Ming	Interest of a	11,000,000	18.33%	20.37%
	(Notes 2 and 5)	controlled	(long position)
		corporation	(Notes 2 and 5)
		(Notes 2 and 5)

Notes:

1. Optimize Capital is a company incorporated in the British Virgin Islands, and is owned as to 90% by Mr Lee Tak Lun and as to 10% by his daughter, Ms Lee Wai Tsang Rosa. Mr Lee Tak Lun is the son of Mr Lee Woo Sing. Mr Lee Woo Sing is a non-executive Director.

2. Grand Finance is a company incorporated in Hong Kong, the entire issued capital of which is beneficially owned as to 58% by Jumbo China Holdings Limited and 42% by Bright Pearl Limited. Jumbo China Holdings Limited and Bright Pearl Limited are taken to be interested in these Shares.

3. The entire issued share capital of Jumbo China Holdings Limited is beneficially owned as to 79.31% by Billion Sky Limited, 7.76% by Ms Chung Wing Han Wendy, an executive Director and 12.93% by independent third parties. Billion Sky Limited is taken to be interested in these Shares.

4. The entire issued share capital of Billion Sky Limited is beneficially owned as to 52.42% by Win Key Investments Limited (the entire issued share capital of which is beneficially owned by Mr Lee Tak Lun), 23.79% by Lee Woo Sing Holdings Ltd. (which is owned as to 10% by Mr Lee Woo Sing and 90% by his wife, Yao Yuen Yuen) and 23.79% by independent third parties. Win Key Investments Limited and Mr Lee Tak Lun are taken to be interested in these shares.

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APPENDIX I

EXPLANATORY STATEMENT

1. The entire issued share capital of Bright Pearl Limited is beneficially owned as to 33.33% by Mr Chow Chuen Chung, 33.33% by Mr Ho Kin and 33.33% by Mr Kam Kin Ming.

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 each of Optimize Capital, Mr Lee Tak Lun, Grand Finance, Jumbo China Holdings Limited, Bright Pearl Limited, Billion Sky Limited, Win Key Investments Limited, Mr Chow Chuen Chung, Mr Ho Kin and Mr Kam Kin Ming would be increased to approximately 9.26%, 29.63%, 20.37%, 20.37%, 20.37%, 20.37%, 20.37%, 20.37%, 20.37% and 20.37% respectively of the issued share capital of the Company. Such increase would not give rise to an obligation to make a mandatory offer under Rule 26 and Rule 32 of the Takeovers 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-compliance with Rule 21.04 of the Listing Rules.

Save as disclosed above, the Directors are not aware of any consequence which would arise under the Takeovers Code as a result of any repurchases pursuant to the Repurchase Mandate.

The Directors have no intention to exercise the Repurchase Mandate to such an extent that will result in the number of Shares in the hands of public falling below the prescribed minimum percentage of 25%.

7. SHARE REPURCHASE MADE BY THE COMPANY

The Company had not purchased any of its Shares (whether on the Stock Exchange or otherwise) during the six months preceding the Latest Practicable Date.

8. GENERAL

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates have 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 they will only exercise the power of the Company to make repurchase pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

No connected person of the Company has notified the Company that he has a present intention to sell any Shares to the Company nor has any such connected person undertaken not to sell any Shares held by him to the Company in the event that the Repurchase Mandate is granted.

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APPENDIX II PARTICULARS OF THE RETIRING DIRECTORS

The following are the particulars of the Directors, who will retire at the Annual General Meeting and who being eligible, will offer themselves for re-election at the Annual General Meeting.

1. Mr Lee Tak Lun (李德麟 ) , aged 56, is an executive Director. Mr Lee has over 25 years of experience in the securities and financial industry. He is the founder of Grand Finance Group Company Limited (“ GFG ”) in early 1990s, which is a shareholder of the Company. GFG has gone through certain restructuring in around 2003 and is currently composed of subsidiary companies engaged in securities, futures, bullion and corporate finance. Mr Lee is a director of GFG and some of its subsidiaries. Mr Lee is a licensed person for regulated activities of dealing in securities and futures contracts under the Securities and Futures Ordinance (“SFO”). Mr Lee is also the vice-president of the Chinese Gold and Silver Exchange Society, and member of the Zhejiang Committee of Chinese People’s Political Consultative Conference.

As at the Latest Practicable Date, Mr Lee is deemed to be interested in 16,000,000 shares of the Company held by Optimize Capital Investments Limited (“ Optimize Capital ”), the controlling shareholder of the Company and GFG. Optimize Capital is owned as to 90% by Mr Lee and 10% by his daughter, Ms Lee Wai Tsang, Rosa. GFG is owned as to 58% by Jumbo China Holdings Limited which, in turn, is owned as to 79.31% by Billion Sky Limited. Billion Sky Limited is, in turn, owned as to 52.42% by Win Key Investments Limited, the entire issued share capital of which is beneficially owned by Mr Lee Tak Lun. Except as disclosed, Mr Lee does not have, directly and indirectly, any interest in shares in the Company within the meaning of Part XV of the SFO.

Mr Lee has entered into a service agreement with the Company commencing from 1 June 2005. Mr Lee is not appointed for a specific term except that he is subject to retirement by rotation in accordance with the Bye-Laws. Either party may at any time after the commencement of three months of the service agreement be entitled to terminate the service agreement by giving to the other party not less than three months notice in writing of such termination. According to the terms of the service agreement, Mr Lee is entitled to a director’s emoluments which was determined by the Board with reference to the prevailing market condition and comprising (i) a basic annual salary of HK$10,000 and (ii) a discretionary bonus provided that the aggregate amount of the bonuses payable to all the executive directors of the Company in respect of any financial year of the Company may not exceed 5% (or such rate as the Board may from time to time approve) of the audited net profit of the Company (or, where applicable, consolidated or combined net profit of the Company and its subsidiaries (if any)) after taxation, minority interests and payable of such bonuses (but before extraordinary or exception items) in respect of that financial year of the Company.

As the service agreement with Mr Lee did not commence until 1 June 2005, the Company did not pay to and Mr Lee did not receive any director’s emoluments pursuant to service agreement for the year ended 31 March 2005.

– 13 –

APPENDIX II

PARTICULARS OF THE RETIRING DIRECTORS

Mr Lee is the son of Mr Lee Woo Sing, the chairman and a non-executive Director, and the father of Ms. Lee Wai Tsang, Rosa, an executive Director. Apart from being an executive Director and except as disclosed, Mr Lee does not have any relationship with any other Directors, senior management or substantial shareholders (as defined in the Listing Rules), or controlling shareholders (as defined in the Listing Rules) of the Company.

As at the Latest Practicable Date, Mr Lee did not hold any directorship in any public listed companies in the last three years.

1. Ms Lee Wai Tsang, Rosa (李惟琤 ) , aged 27, is an executive Director. Ms Lee was the executive manager and a member of investment committee of the Company. She received her bachelor degree in Architecture in 2001 from the University of Southern California, USA. Ms Lee is principally responsible for, among others, assisting the Board in the implementation of any investment or divestment decisions approved by the Board on the recommendation/advice of the investment manager of the Company and making recommendations in respect of potential investments or divestments opportunities for consideration by the Board and the investment manager of the Company. Ms Lee has been working with the Company since its incorporation in April 2003 and assisting the executive Directors in overseeing the day-to-day administration of the Company. During her service with the Company, Ms Lee has accumulated practical experience in the management of the portfolio of investments of the Company. Ms Lee is a licensed person for the regulated activity of dealing in securities under the SFO.

As at the Latest Practicable Date, Ms Lee did not have, directly and indirectly, any interest in shares in the Company within the meaning of Part XV of the SFO.

Ms Lee has entered into a service agreement with the Company commencing from 1 June 2005. Ms Lee is not appointed for a specific term except that she is subject to retirement by rotation in accordance with the Bye-Laws. Either party may at any time after the commencement of three months of the service agreement be entitled to terminated the service agreement by giving to the other party not less than three months notice in writing of such termination. According to the terms of the service agreement, Ms Lee is entitled to a director’s emoluments which was determined by the Board with reference to the prevailing market condition and comprising (i) a basic annual salary of HK$120,000 and (ii) a discretionary bonus provided that the aggregate amount of the bonuses payable to all the executive Directors of the Company in respect of any financial year of the Company may not exceed 5% (or such rate as the Board may from time to time approve) of the audited net profit of the Company (or, where applicable, consolidated or combined net profit of the Company and its subsidiaries) after taxation, minority interests and payable of such bonuses (but before extraordinary or exception items) in respect of that financial year of the Company.

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APPENDIX II

PARTICULARS OF THE RETIRING DIRECTORS

As the service agreement with Ms Lee did not commence until 1 June 2005, the Company did not pay to and Ms Lee did not receive any director’s emoluments pursuant to service agreement for the year ended 31 March 2005.

Ms Lee is the daughter of Mr Lee Tak Lun and the granddaughter of Mr Lee Woo Sing. Apart from being an executive Director and except as disclosed, Ms Lee does not have any relationship with any other Directors, senior management or substantial shareholders (as defined in the Listing Rules), or controlling shareholders (as defined in the Listing Rules) of the Company.

As at the Latest Practicable Date, Ms Lee is a director of GFG and some of its subsidiaries. Ms Lee did not hold any directorship in any public listed companies in the last three years.

1. Mr Lu Fan (呂凡 ) , aged 49, is an independent non-executive Director and the Chairman of the Audit Committee. Mr Lu graduated from the Academy of Finance, Hangzhou University (now known as Zhejiang University). He had been a researcher at the Zhejiang Academy of Social Science for the period from 1980 to 1993. Mr. Lu previously held managerial positions in Zhejiang Securities Co. Ltd. whose principal business was securities brokerage and had been an independent supervisor of Zhejiang Expressway Co., Ltd., a company listed on the Main Board of the Hong Kong Stock Exchange (stock code: 0576) for the period from July 1997 to March 2003. He has also been the chief economist of the Zhejing Huating Group Co., Ltd. since 2004.

As at the Latest Practicable Date, Mr Lu did not have, directly and indirectly, any interest in shares in the Company within the meaning of Part XV of the SFO.

Except for a letter of appointment from the Company confirming its appointment of Mr Lu as independent non-executive Director, there is no service contract entered into between the Company and Mr Lu. Mr Lu is not appointed for a specific term except that he is subject to retirement by rotation in accordance with the Bye-Laws. Mr Lu is entitled to a director’s emolument which was determined by the Board with reference to the prevailing market condition and comprising only a director’s fee of HK$20,000 per annum. The director’s fee is subject to review by the Board from time to time pursuant to the power given to it under the Bye-Laws.

As Mr Lu’s appointment did not commence until 1 June 2005, the Company did not pay to and Mr Lu did not receive any director’s emoluments pursuant to service agreement for the year ended 31 March 2005.

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APPENDIX II

PARTICULARS OF THE RETIRING DIRECTORS

Other than the relationship arising from his being an independent nonexecutive Director, Mr Lu does not have any relationships with any other Directors, senior management, substantial shareholders (as defined in the Listing Rules), or controlling shareholders (as defined in the Listing Rules) of the Company.

As at the Latest Practicable Date, Mr Lu did not hold any directorship in any public listed companies in the last three years.

1. Mr Fong Chi Wah (方志華 ) , aged 42, is an executive Director. Mr Fong holds a bachelor’s degree majoring in management sciences (economics) from Lancaster University in the United Kingdom and holds three master’s degrees, including a master’s degree in business administration from Warwick University, United Kingdom, a master’s degree in investment management from Hong Kong University of Science and Technology, and a master’s degree in practicing accounting from Monash University, Australia. Mr Fong is a Chartered Financial Analyst, a Certified Practising Accountant (Australia), a member of the Institute of Certified Management Accountants, Australia, the Hong Kong Institute of Directors and the Institute of Management Consultants Hong Kong. He is a licensed person for the regulated activity of asset management under the SFO.

Mr Fong started his career as an accountant at KPMG, Peat Marwick in 1986. From January 1989 to August 1993, he joined AIA Capital Corporation Limited as an accountant and subsequently became an analyst in January 1990 until August 1993 during which period he was responsible for preparing financial analyses for the evaluation of various projects and assisting in the evaluation of investment opportunities. From September 1993 to May 1996, he was the general manager of ING Consultants Co., Ltd. in Beijing. His duties included proposing credit structures for financing requirements of enterprises and joint ventures operating in the PRC and providing financial advisory services related to foreign companies’ investments. From May 1996 to October 1998, Mr Fong was an assistant vice president at ING Barings, Hong Kong, whose responsibility was to develop business with multinational clients and their subsidiaries operating in the Greater China Region, propose credit structures and financial packages to meet the needs of clients. From July 1999 to December 2002, Mr Fong was a director of Baring Capital (China) Management Limited and on 19 December 2003, Mr Fong was appointed as an independent non-executive director of Syscan Technology Holdings Limited (stock code: 8083).

As at the Latest Practicable Date, Mr Fong was not interested or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

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APPENDIX II

PARTICULARS OF THE RETIRING DIRECTORS

Mr Fong has entered into a service agreement with the Company for an initial term of three years commencing from 2 April 2004. Either party may, however, at any time after the expiration of the first 24 months of the initial term of the service agreement be entitled to terminate the service agreement by giving to the other party not less than three months’ notice in writing of such termination provided that such notice shall only be given after the expiration of the first 24 months of the initial term of the service agreement. Except for sooner determination of the service agreement in accordance with the terms thereof, upon expiry of the initial term of the service agreement with the executive Director, the service agreement is renewable automatically thereafter for successive periods of one year until terminated by not less than three months’ notice in writing served by either party on the other. For the year ended 31 March 2005, Mr Fong received a fixed remuneration of HK$220,000 from the Company as director’s fee (which was determined by the Board on the basis of his working experience as well as the prevailing market conditions) pursuant to service agreement. Except for the director’s fee, the service agreement with Mr Fong does not provide for any bonus payments, whether fixed or discretionary in nature, or other emoluments.

Other than the relationship arising from his being an executive Director, Mr Fong does not have any relationships with any other Directors, senior management, substantial shareholders (as defined in the Listing Rules), or controlling shareholders (as defined in the Listing Rules) of the Company.

Except as disclosed, Mr Fong did not hold any directorship in any public listed companies in the last three years.

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NOTICE OF THE ANNUAL GENERAL MEETING

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(Stock Code: 1160)

NOTICE IS HEREBY GIVEN that an annual general meeting of Grand Investment International Ltd. (“ Company ”) will be held at Unit B, 22nd Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Friday, 22 July 2005 at 4:30 p.m. for the following purposes:

1. to receive and consider the audited financial statements and the reports of the directors of the Company (the “Directors”) and the Company’s auditors for the year ended 31 March 2005;

2. to declare a final dividend for the year ended 31 March 2005;

3. to re-elect retiring Directors of the Company, namely, Mr Lee Tak Lun, Ms Lee Wai Tsang, Rosa, Mr Lu Fan and Mr Fong Chi Wah (each as a separate resolution) and to authorise the board of directors of the Company to fix the directors’ remuneration;

4. to re-appoint the Company’s auditors and to authorise the Board of Directors to fix their remuneration;

and, as special business, to consider and, if thought fit, pass the following resolutions as ordinary (with or without modifications):

ORDINARY RESOLUTIONS

1. “ THAT :

   • (a) subject to paragraph (c) below, pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Listing Rules ”), the exercise by the Directors of Grand Investment International Ltd. (“ Company ”) during the Relevant Period of all the powers of the Company to allot, issue and deal with the unissued shares (each, a “ Share ”) of HK$0.10 each in the capital of the Company and to make or grant offers, agreements and options, including warrants to subscribe for Shares, which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

   • (b) the approval in paragraph (a) above shall authorise the Directors of the Company during the Relevant Period (as defined in paragraph (d) below) to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

2. For identification purposes only

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NOTICE OF THE ANNUAL GENERAL MEETING

• (c) the aggregate nominal amount of share capital allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to options or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue; or (ii) the exercise of any options granted under all share option schemes of the Company adopted from time to time in accordance with the Listing Rules; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Bye-Laws of the Company in force from time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares shall not exceed the aggregate of:

• (aa) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution; and

• (bb) (if the Directors of the Company are so authorised by a separate ordinary resolution of the shareholders of the Company) the aggregate nominal amount of any share capital of the Company purchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution),

and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (d) for the purposes of this resolution:

“ Relevant Period ” means the period from the date of the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-Laws of the Company or the applicable law of Bermuda to be held; or

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors of the Company by this resolution;

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NOTICE OF THE ANNUAL GENERAL MEETING

“ Rights Issue ” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors of the Company to holders of Shares on the Company’s register of members on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).”

1. “ THAT :

2. (a) subject to paragraph (b) below, the exercise by the Directors of Grand Investment International Ltd. (“ Company ”) during the Relevant Period of all powers of the Company to purchase shares (each, a “ Share ”) of HK$0.10 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”), or any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for such purpose, and otherwise in accordance with the rules and regulations of the Securities and Futures Commission of Hong Kong, the Stock Exchange, the Companies Act 1981 of Bermuda and all other applicable laws in this regard, be and the same is hereby generally and unconditionally approved;

3. (b) the aggregate nominal amount of Shares which may be purchased or agreed to be purchased by the Company pursuant to the approval in paragraph (a) during the Relevant Period (as defined in paragraph (c) below) shall not exceed 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

4. (c) for the purposes of this resolution, “ Relevant Period ” means the period from the date of the passing of this resolution until whichever is the earliest of:

   • (i) the conclusion of the next annual general meeting of the Company;

   • (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-Laws of the Company or the applicable law of Bermuda to be held; or

   • (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors of the Company by this resolution.”

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NOTICE OF THE ANNUAL GENERAL MEETING

1. “ THAT conditional on the passing of resolutions numbered 5 and 6 above, the general mandate granted to the Directors of Grand Investment International Ltd. (“ Company ”) pursuant to paragraph (a) of resolution numbered 5 above be and it is hereby extended by the addition to the aggregate nominal amount of the shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to or in accordance with such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company purchased or agreed to be purchased by the Company pursuant to or in accordance with the authority granted under paragraph (a) of resolution numbered 6 above.”

By order of the board of directors of Grand Investment International Ltd. Chung Wing Han Wendy Executive Director

Hong Kong, 22 June 2005

Registered office: Head office and principal place Clarendon House of business in Hong Kong: 2 Church Street Unit B, 22nd Floor Hamilton HM 11 Entertainment Building Bermuda 30 Queen’s Road Central Hong Kong

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more than one proxy to attend and, subject to the provisions of the Bye-Laws of the Company, vote in his stead. A proxy need not be a member of the Company.

2. To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of the Company’s Hong Kong branch registrar (“Branch Registrar”), Computershare Hong Kong Investor Services Limited, at Rooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 48 hours before the time of the above meeting or any adjourned meeting.

3. In relation to proposed resolution no. 2, the register of members of the Company will be closed from 20 July 2005 to 22 July 2005 (both dates inclusive) during which period no transfer of shares (“Shares”) in the Company will be registered. In order to qualify for the final dividend, all transfers of Shares accompanied by the relevant share certificates must be lodged with the Branch Registrar by no later than 4:00 pm on 19 July 2005.

4. In relation to proposed resolution no.3, Mr Lee Tak Lun, Ms Lee Wai Tsang, Rosa, Mr Lu Fan and Mr Fong Chi Wah will retire from their office of Directors at the above meeting pursuant to the Company’s Bye-Laws and, being eligible, all of them offer themselves for re-election.

5. In relation to proposed resolutions numbered 5 and 7 above, approval is being sought from the shareholders for the grant to the directors of a general mandate to authorise the allotment and issue of shares under the Listing Rules. The Directors have no immediate plans to issue any new shares of the Company other than shares which may fall to be issued under the share option scheme of the Company or any scrip dividend scheme which may be approved by shareholders.

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NOTICE OF THE ANNUAL GENERAL MEETING

1. In relation to proposed resolution numbered 6 above, the Directors wish to state that they will exercise the powers conferred thereby to purchase shares of the Company in circumstances which they deem appropriate for the benefit of the shareholders. An explanatory statement containing the information necessary to enable the shareholders to make an informed decision to vote on the proposed resolution as required by the Listing Rules is set out in the Appendix I to this circular of which this notice of the Annual General Meeting forms part.

2. Delivery of an instrument appointing a proxy should not preclude a member from attending and voting in person at the above meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

3. In the case of joint holders of a share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto if more than one of such joint holders are present at the above meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

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