WEIli Holdings Limited — Proxy Solicitation & Information Statement 2006

Dec 29, 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 to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Daiwa Associate Holdings Limited , you should at once hand this circular and the accompanying form of election to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

A copy of this circular, has been or will be as soon as reasonably practicable, filed with the Registrar of Companies in Bermuda pursuant to the Companies Act 1981 of Bermuda (as amended). The Registrar of Companies in Bermuda takes no responsibility as to the contents of this circular.

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

DAIWA ASSOCIATE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 1037)

Financial Adviser to Daiwa Associate Holdings Limited

INTERIM DIVIDEND WITH WARRANT ALTERNATIVE

28 December 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Expected timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Subscription Price and Subscription Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
General mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Shares to be issued upon exercise of the Warrants . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Information on existing warrants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Overseas Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Condition of the Warrant Alternative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Closure of register of members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Form of election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Certificates of the Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Reasons for the Warrant Alternative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I — Summary of terms and conditions of the Warrants . . . . . . . . . . . .	10

— i —

DEFINITIONS

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

“Board”	the board of Directors
“Business Day”	any day (other than Saturday) on which banks are
	generally open for business in Hong Kong
“Company”	Daiwa Associate Holdings Limited, an exempted
	company incorporated in Bermuda with limited liability,
	the shares of which are listed on the Stock Exchange
“Director(s)”	the director(s), including independent non-executive
	director(s), of the Company
“Form of Election”	the form of election to be sent to the Qualifying
	Shareholders for their use to elect to receive the Warrants
	in lieu of cash for the Interim Dividend under the Warrant
	Alternative
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Group”	the Company and its subsidiaries
“Instrument”	the deed poll to be executed by the Company creating
	the Warrants
“Interim Dividend”	an interim dividend of HK$0.01 per Share for the six
	months ended 30 September 2006
“Latest Practicable Date”	22 December 2006, 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
“Mr. Lau”	Mr. Lau Tak Wan, an executive Director and a
	Shareholder who, together with Ms. Chan, are
	beneficially interested in 148,758,494 Shares representing
	approximately 53.38% of the existing issued share capital
	of the Company as at the Latest Practicable Date

— 1 —

DEFINITIONS

• “Ms. Chan”

Ms. Chan Yuen Mei, Pinky, an executive Director and a Shareholder who, together with Mr. Lau, are beneficially interested in 148,758,494 Shares representing approximately 53.38% of the existing issued share capital of the Company as at the Latest Practicable Date. Ms. Chan is Mr. Lau’s spouse

• “Overseas Shareholders”

those Shareholders whose addresses (as shown on the branch register of members of the Company in Hong Kong at the close of business on the Record Date) are outside Hong Kong

• “Qualifying Shareholders”

the Shareholders on the branch register of members of the Company in Hong Kong at the close of business on the Record Date, other than the Overseas Shareholders where, if the Directors are of the view that, after the necessary legal enquiry regarding the legal restrictions under the laws of the relevant place and the requirements of the relevant regulatory body or stock exchange, in relation to the offer of the Warrant Alternative to the Overseas Shareholders, an exclusion of such Overseas Shareholder is necessary or expedient on account of either the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

• “Record Date” Friday, 22 December 2006, the date for the purpose of ascertaining the entitlements of Shareholders to the Interim Dividend

• “Registrar” Abacus Share Registrars Limited, the Company’s Hong Kong share registrar

“Share(s)” ordinary share(s) of par value of HK$0.10 each in the capital of the Company

• “Shareholder(s)”

the shareholder(s) of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription Period” the 5 years period during which the Subscription Rights may be exercised which is expected to commence on Tuesday, 23 January 2007 and end on Sunday, 22 January 2012 (both days inclusive)

— 2 —

DEFINITIONS

“Subscription Right(s)”	the subscription right(s) attaching to the Warrant(s)
“Warrant(s)”	the warrant(s) to be issued by the Company, in unit(s) of
	HK$0.40 of subscription rights, to subscribe for new
	Shares at an initial subscription price of HK$0.40 per
	new Share, subject to adjustments, at any time during
	the Subscription Period
“Warrant Alternative”	the option under which Qualifying Shareholders are
	entitled to elect to receive Warrants in lieu of cash as
	Interim Dividend
“Warrantholder(s)	registered holder(s) of the Warrant(s)
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong

— 3 —

EXPECTED TIMETABLE

2006

Last day of dealings in Shares on

cum entitlements to the Interim Dividend . . . . . . . . . . . . . . . . . . . . . . . . Friday, 15 December

First day of dealings in Shares on

ex-entitlements to the Interim Dividend . . . . . . . . . . . . . . . . . . . . . . . . Monday, 18 December

Latest time for registration of Share

transfers for entitlements to the

Interim Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 19 December Register of members closes

(both dates inclusive) from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 20 December to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 22 December

Record Date for entitlement of

Interim Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 22 December

Register of members re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 27 December

Despatch of Circular and Forms of Election . . . . . . . . . . . . . . . . . . . . . . Thursday, 28 December

2007

Latest time for return of the Form of Election

by Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 12 January

Despatch of Warrants certificates

or cheques for cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 23 January

Note: All times and dates refer to Hong Kong local time

Dates or deadlines stated in this circular for events in the timetable are indicative only and may be extended or varied. Any changes to the anticipated timetable for the Warrant Alternative will be announced as appropriate.

— 4 —

LETTER FROM THE BOARD

DAIWA ASSOCIATE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 1037)

Directors Executive Director: Lau Tak Wan (President) Chan Yuen Mei, Pinky (Vice-President) Wan Chor Fai Mak Hon Kai, Stanly

Registered Office Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head Office and Principal

Independent non-executive Director: Barry John Buttifant Choi Yuk Fan Liu Ngai Wing

Place of Business 11th Floor, Block G East Sun Industrial Centre 16 Shing Yip Street Kwun Tong, Kowloon Hong Kong

28 December 2006

To Shareholders,

Dear Sir or Madam,

INTERIM DIVIDEND WITH WARRANT ALTERNATIVE

INTRODUCTION

On 4 December 2006, the Company announced an Interim Dividend of HK$0.01 per Share for the six months ended 30 September 2006 to be paid in cash with the Warrant Alternative, under which Shareholders whose names appear on the register of members of the Company on the Record Date can elect to receive, in lieu of cash, all of their dividend entitlements in the form of Warrants on the basis of one Warrant for every seven Shares held.

The purpose of this circular is to provide you with further details on the Warrant Alternative.

— 5 —

LETTER FROM THE BOARD

SUBSCRIPTION PRICE AND SUBSCRIPTION PERIOD

The Warrants will be granted and issued on 23 January 2007 in registered form at an issue price of HK$0.07 per Warrant and each Warrant will entitle the holder thereof to subscribe for new Shares at a price of HK$0.40 per Share in cash, subject to adjustments, at any time during the Subscription Period. Fractional entitlements to the Warrants will not be granted to the Shareholders but will be aggregated and sold for the benefit of the Company.

The price of HK$0.47, being the sum of the issue price of HK$0.07 and the initial subscription price of HK$0.40, represents:

• i. the closing price of HK$0.47 per Share as quoted on the Stock Exchange on the Latest Practicable Date;

• ii. a discount of approximately 1.26% to the average closing price of approximately HK$0.476 per Share as quoted on the Stock Exchange for the past five trading days ended up to and including the Latest Practicable Date; and

• iii. a discount of approximately 2.29% to the average closing price of approximately HK$0.481 per Share as quoted on the Stock Exchange for the past ten trading days ended up to and including the Latest Practicable Date.

The price of HK$0.47 has been arrived at after taking into account, amongst others, the recent share price of the Company that ranged from HK$0.44 to HK$0.52 for the past 3 months prior to the Latest Practicable Date, the Subscription Period and the quantum of the Interim Dividend which is HK$0.01 per Share.

GENERAL MANDATE

The Warrants will be issued under the authority of the general mandate granted to the Board by the Shareholders at the Company’s annual general meeting held on 1 September 2006 to issue and allot new securities up to 20% of the issued share capital of the Company as at 1 September 2006. No Share has been allotted or issued pursuant to the general mandate since it was approved.

SHARES TO BE ISSUED UPON EXERCISE OF THE WARRANTS

On the basis of 278,666,937 Shares in issue on the Latest Practicable Date, a maximum of 39,809,562 Warrants will be issued. Should all Qualifying Shareholders elect to receive Warrants, full exercise of the Subscription Rights attaching to the 39,809,562 Warrants at the initial subscription price of HK$0.40 per Share would result in the issue of a total of 39,809,562 new Shares, representing approximately 14.29% of the issued share capital of the Company as at the Latest Practicable Date and approximately 12.50% of the enlarged issued share capital of the Company after the issue of such new Shares, and would result in the receipt by the Company of approximately HK$15,924,000 before expenses.

The new Shares falling to be issued upon exercise of the Subscription Rights will rank pari passu in all respects with the then existing issued Shares.

— 6 —

LETTER FROM THE BOARD

INFORMATION ON EXISTING WARRANTS OF THE COMPANY

As at the Latest Practicable Date, the Company has 13,238,938 unlisted warrants, each of which gives the entitlement to subscribe for one share at a subscription price of HK$0.50 each at any date from 25 February 2005 to 24 February 2008. Full exercising of the subscription rights under such outstanding warrants would result in an issue of a total of 13,238,938 new Shares, representing approximately 4.75% of the existing issued share capital of the Company. The maximum aggregate new Shares to be issued under the outstanding warrants of the Company and the Warrants would be 53,048,500 Shares, representing approximately 19.04% of the existing issued share capital of the Company. Save for the aforesaid warrants, the Company has no other outstanding options, warrants, derivatives or other securities that are convertible into Shares.

SHAREHOLDING STRUCTURE

The shareholding structure of the Company as at the Latest Practicable Date and immediately after the exercise of the Subscription Rights is set out below:

Mr. Lau and Ms. Chan Public Shareholders Total	As at the Latest Practicable Date Shares % 148,758,494 53.38 (Note) 129,908,443 46.62 278,666,937 100.00	As at the Latest Practicable Date Shares % 148,758,494 53.38 (Note) 129,908,443 46.62 278,666,937 100.00	Immediately following full exercise of the Subscription Rights by all Qualifying Shareholders (assuming all Qualifying Shareholders elect to receive the Warrants) Shares % 170,009,707 53.38 148,466,792 46.62 318,476,499 100.00	Immediately following full exercise of the Subscription Rights by all Qualifying Shareholders (assuming all Qualifying Shareholders elect to receive the Warrants) Shares % 170,009,707 53.38 148,466,792 46.62 318,476,499 100.00	Immediately following full exercise of the Subscription Rights (assuming only Mr. Lau and Ms. Chan elect to receive the Warrants) Shares % 170,009,707 56.69 129,908,443 43.31 299,918,150 100.00	Immediately following full exercise of the Subscription Rights (assuming only Mr. Lau and Ms. Chan elect to receive the Warrants) Shares % 170,009,707 56.69 129,908,443 43.31 299,918,150 100.00
		100.00		100.00		100.00

Note:

Out of these Shares, (i) 3,199,999 Shares are individually owned by Mr. Lau; (ii) 999,998 Shares are individually owned by Ms. Chan; (iii) 2,520,000 Shares are jointly held by Mr. Lau and Ms. Chan; (iv) 70,582,598 Shares are owned by China Capital Holdings Investment Limited, a company 60% owned by Mr. Lau and 40% owned by Ms. Chan; (v) 62,939,232 shares are owned by Leading Trade Limited, a company 50% owned by Mr. Lau and 50% owned by Ms. Chan; (vi) the remaining 8,516,667 Shares are owned by Cyber Concept Limited, a company 50% owned by Mr. Lau and 50% owned by Ms. Chan.

— 7 —

LETTER FROM THE BOARD

OVERSEAS SHAREHOLDERS

On the basis of the information made available to the Directors, as at the Record Date, no Shareholder is recorded as an Overseas Shareholder and the Warrant Alternative will be available to all Shareholders.

CONDITION OF THE WARRANT ALTERNATIVE

The Warrant Alternative will be conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in the new Shares falling to be issued upon exercise of the Subscription Rights.

The above condition cannot be waived. Hence, if the above condition is not fulfilled on or before 8 January 2007 (or such later date that the Board may determine), the Warrant Alternative will not proceed and all Shareholders will receive the Interim Dividend in cash. In the absence of the Warrant Alternative, total cash dividend to be payable to the Shareholders will be approximately HK$2,790,000 which will be funded by internal resources of the Company.

LISTING

The Warrants are freely transferable but will not be listed on the Stock Exchange or any other stock exchange. No application will be made to the Stock Exchange for the listing of, and the permission to deal in the Warrants on the Stock Exchange. An application has been made to the Stock Exchange for the listing of, and permission to deal in the new Shares falling to be issued upon exercise of the Subscription Rights. No part of the equity or debt securities of the Company is listed on or dealt in on any other stock exchange and no such listing of or permission to deal in is being or is proposed to be sought.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company has been closed from Wednesday, 20 December 2006 to Friday, 22 December 2006 (both days inclusive) in order to determine the entitlements to the Interim Dividend. No transfer of Shares was registered during this period.

FORM OF ELECTION

No action is required if you elect to receive your Interim Dividend wholly in cash.

If you elect to receive all your Interim Dividends in the form of Warrants in lieu of cash, you are required to complete the enclosed Form of Election and return to the share registrars of the Company, Abacus Share Registrars Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong by not later than 4:00 p.m. on Friday, 12 January 2007. No acknowledge of receipt of the Form of Election will be issued.

— 8 —

LETTER FROM THE BOARD

CERTIFICATES OF THE WARRANTS

Subject to the satisfaction of the condition of the Warrant Alternative, it is expected that certificates for the Warrants will be posted on or before Tuesday, 23 January 2007 to those entitled thereto at their own risks.

REASONS FOR THE WARRANT ALTERNATIVE

The Directors consider that the Warrant Alternative offer the Qualifying Shareholders an opportunity to either receive immediate cash dividend or to participate in the future growth of the Company via the subscription of the Warrants. The Warrant Alternative will also provide further working capital and strengthen the equity base of the Company if and when the Subscription Rights under the Warrant are exercised.

Shareholders who do not exercise the Warrants should note that their shareholdings in the Company will be diluted if other Warrant holders elect to exercise their Warrants.

The Company intends to apply any subscription money received as and when the Subscription Rights are exercised towards the general working capital of the Group or for such other purposes as the Directors deem necessary, taking into consideration the requirements of the Company prevailing at the relevant times. Such other purposes may include future development and expansion of business of the Group. The Directors currently has no specific plan in respect of such development or expansion.

ADDITIONAL INFORMATION

Your attention is drawn to the information contained in the Appendix I to this circular.

Yours faithfully, By order of the Board Daiwa Associate Holdings Limited Lau Tak Wan President

— 9 —

APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

The Warrants will be issued subject to and with benefit of the Instrument and they will be issued in registered form and will form one class and rank pari passu in all respects with each other.

The principal terms and conditions of the Warrants will be set out in the Warrant Certificates (as defined in the Instrument) and will include provisions to the effect set out below. Warrantholders will be entitled to the benefit of, be bound by, and be deemed to have notice of all such terms and conditions of the Instrument, copies of which will be available at the principal place of business for the time being of the Company in Hong Kong.

1. EXERCISE OF SUBSCRIPTION RIGHTS

• (A) The registered holder for the time being of a Warrant will have the right (the “Subscription Rights”) for each unit of the Warrants to subscribe in cash the whole or part (in integral multiples of HK$0.40) of the amount in respect of which the Warrant is issued for fully paid new Shares at an initial subscription price of HK$0.40 per Share (subject to the adjustments referred to below) (the “Subscription Price”). The Subscription Rights attaching to the Warrants may be exercised during the Subscription Period. The business day falling during the Subscription Period on which any of the Subscription Rights are duly exercised is referred to in this summary as a “Subscription Date”. Any Subscription Rights which have not been exercised during the Subscription Period will lapse and the relevant Warrant Certificates (as defined in the Instrument) will cease to be valid for any purpose. Reference in this summary to “Shares” are to the existing Shares of the Company and all other (if any) Shares from time to time and for the time being ranking pari passu therewith.

• (B) Each Warrant Certificate (as defined in the Instrument) will contain a subscription form. In order to exercise his Subscription Rights, a Warrantholder must complete and sign the subscription form (which shall, once signed and completed, be irrevocable) and deliver the Warrant Certificate (as defined in the Instrument) (and, if the subscription form used is not the form endorsed on the Warrant certificate, the separate subscription form) to the Registrar, together with a remittance for the relevant subscription monies (or in a case of a partial exercise, the relevant portion of the subscription monies), for the new Shares in respect of which the Subscription Rights are being exercised. In each case compliance must also be made with any exchange control, fiscal or other laws or regulations for the time being applicable.

• (C) No fraction of a Share will be allotted but any balance representing fractions of the subscription monies paid on the exercise of the Subscription Rights will be refunded to the person or persons whose name(s) stand(s) in the register of Warrantholders as the holder(s) of the relevant Warrant, provided always that if

— 10 —

APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

the Subscription Rights comprised in two or more Warrant Certificate (as defined in the Instrument) are exercised at the same time by the same Warrantholder then, for the purpose of determining whether any (and if so, what) fraction of a Share arises, the Subscription Rights represented by such Warrant Certificate (as defined in the Instrument) shall be aggregated.

• (D) The Company has undertaken in the Instrument that Shares falling to be issued upon the exercise of the Subscription Rights will be issued and allotted, subject to any shorter period as prescribed or required by the Stock Exchange from time to time, not later than 28 days after the relevant Subscription Date and will rank pari passu with the fully-paid Shares in issue on the relevant Subscription Date and accordingly shall entitle the holders to participate in all dividends or other distribution paid or made on or before the relevant Subscription Date and other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the relevant Subscription Date and notice of the amount and record date for which shall have been given to the Stock Exchange prior to the relevant Subscription Date.

• (E) As soon as practicable after the relevant allotment of Shares (and, subject to any shorter period as prescribed by the Stock Exchange from time to time, not later than 28 days after the relevant Subscription Date) there will be issued free of charge to the Warrantholder of the Warrant represented by this Warrant Certificate (as defined in the Instrument):

• (i) a certificate (or certificates) for the relevant Shares in the name of such Warrantholder;

• (ii) (if applicable) a balance Warrant Certificate (as defined in the Instrument) in registered form in the name of such Warrantholder in respect of any Subscription Rights represented by this Warrant Certificate (as defined in the Instrument) and remaining unexercised; and

• (iii) (if applicable) a refund cheque representing the fractional entitlement to Shares not allotted as mentioned in Sub-paragraph (C) above.

The certificate(s) for Shares arising on the exercise of Subscription Rights, the balance Warrant Certificate (as defined in the Instrument) (if any) and the refund cheque in respect of the fractional entitlements (if any) will be sent by post at the risk of such Warrantholder to the address of such Warrantholder or (in the case of a joint holding) to that one of them whose name stands first in the Register. If the Company agrees, such certificates and cheques may by prior arrangement be retained by the Registrar to await collection by the relevant Warrantholder.

— 11 —

APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

2. ADJUSTMENTS OF SUBSCRIPTION PRICE

The Instrument contains detailed provisions relating to the adjustment of the Subscription Price. The following is a summary of, and is subject to, the adjustment provisions of the Instrument:

• (A) The Subscription Price shall (except as mentioned in sub-paragraphs (B) and (C) below) be adjusted as provided in the Instrument in each of the following cases:

• (i) an alteration of the nominal amount of each Share by reason of any consolidation or sub-division;

• (ii) an issue (other than in lieu of a cash dividend) by the Company of Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund);

• (iii) a Capital Distribution (as defined in the Instrument) being made by the Company, whether on a reduction of capital or otherwise, to holders of its Shares in their capacity as such;

• (iv) a grant by the Company to Shareholders (in their capacity as such) of rights to acquire for cash assets of the Company or any of its subsidiaries;

• (v) an offer or grant being made by the Company to Shareholders of new Shares by way of rights or of options or warrants to subscribe for new Shares at a price which is less than 90 per cent. of the market price (calculation as provided in the Instrument);

• (vi) an issue wholly for cash being made by the Company or any other company of securities convertible into or exchangeable for or carrying rights of subscription for new Shares, if in any case the total Effective Consideration (as defined in the Instrument) per Share is less than 90 per cent. of the market price (calculated as provided in the Instrument), or the terms of any such issue being altered so that the said total Effective Consideration is less than 90 per cent. of the market price;

• (vii) an issue being made wholly for cash of Shares (other than pursuant to an Employee Share Option Scheme (as defined in the Instrument)) at a price less than 90 per cent. of the market price (calculated as provided in the Instrument); and

— 12 —

APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

• (viii) the purchase by the Company of Shares or securities convertible into Shares or any rights to acquire Shares (excluding any such purchases made on the Stock Exchange or any recognised stock exchange, being a stock exchange recognised for this purpose by SFC and the Stock Exchange) in circumstances where the directors of the Company consider that it may be appropriate to make an adjustment to the Subscription Price.

• (B) Except as mentioned in sub-paragraph (C) below, no such adjustment as is referred to in sub-paragraphs (ii) to (vii) of sub-paragraph (A) above shall be made in respect of:

• (i) an issue of fully-paid Shares upon the exercise of any conversion rights attached to securities convertible into Shares or upon the exercise of any rights (including the Subscription Rights) to acquire Shares;

• (ii) an issue of Shares or other securities of the Company or any of its subsidiaries wholly or partly convertible into, or rights to acquire, Shares to directors or employees of the Company or any of its subsidiaries pursuant to an Employee Share Option Scheme (as defined in the Instrument);

• (iii) an issue by the Company of Shares or by the Company or any of its subsidiaries of securities wholly or partly convertible into or rights to acquire Shares, in any such case in consideration or part consideration for the acquisition of any other securities, assets or business;

• (iv) an issue of fully paid Shares by way of capitalisation of all or part of the Subscription Right Reserve (as defined in the Instrument) (or other profits or reserves) to be established in certain circumstances pursuant to the terms and conditions contained in the Instrument (or any similar reserve which has been or may be established pursuant to the terms of any other securities wholly or partly convertible into, or rights to acquire, Shares); or

• (v) an issue of Shares pursuant to a scrip dividend scheme where an amount of not less than the nominal amount of the Shares so issued is capitalised and the market value (calculation as provided in the Instrument) of such Shares is not more than 110 per cent. of the amount of dividend which Shareholders could elect to or would otherwise receive in cash.

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

• (C) Notwithstanding the provisions referred to in sub-paragraphs (A) and (B) above, in any circumstances where the directors of the Company shall consider that an adjustment to the Subscription Price provided for under the said provisions should not be made or should be calculated on a different basis or that an adjustment to the Subscription Price should be made notwithstanding that no such adjustment is required under the said provisions or that an adjustment should take effect on a different date or with a different time from that provided for under the said provisions, the Company may appoint either an approved merchant bank (as defined in the Instrument) or auditors of the Company to consider whether for any reason whatever the adjustment to be made (or the absence of adjustment) would or might not fairly and appropriately reflect the relative interests of the persons affected thereby and, if such approved merchant bank (as defined in the Instrument) or the auditors of the Company (as the case may be) shall consider this to be the case, the adjustment shall be modified or nullified or an adjustment made instead of no adjustment in such manner (including, without limitation, making an adjustment calculated on a different basis) and/or the adjustment shall take effect from such other date and/or time as shall be certified by such approved merchant bank (as defined in the Instrument) or the auditors of the Company (as the case may be) to be in their opinion appropriate.

• (D) Any adjustment to the Subscription Price shall be made to the nearest one cent so that any amount under half a cent shall be rounded down and any amount of half a cent or more shall be rounded up. No adjustment shall be made to the Subscription Price in any case in which the amount by which the same would be reduced would be less than one cent and any adjustment which would otherwise then be required shall not be carried forward. No adjustment may be made (except on a consolidation of Share into Shares of a larger nominal amount) which would increase the Subscription Price.

• (E) Every adjustment to the Subscription Price will be certified by the auditors of the Company or an approved merchant bank (as defined in the Instrument) in accordance with sub-paragraph (C) above and notice of each adjustment (giving the relevant particulars) will be given to the Warrantholders. In giving any certificate or making any adjustment hereunder, the auditors of the Company or the approved merchant bank (as defined in the Instrument) shall be deemed to be acting as experts and not as arbitrators and in the absence of manifest error, their decision shall be conclusive and binding on the Company and Warrantsholders and all persons claiming through or under them respectively. Any such certificate of the auditors of the Company and/or approved merchant bank (as defined in the Instrument) will be available at the principal place of business for the time being of the Company in Hong Kong, where copies may be obtained without charge.

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

3. REGISTERED WARRANTS

The Warrants are issued in registered form. The Company shall be entitled to treat the registered holder of any Warrant as the absolute owner thereof and accordingly shall not except as ordered by a Court of competent jurisdiction or required by law be bound to recognise any equitable or other claim to or interest in such Warrant on the part of any other person, whether or not it shall have express or other notice thereof.

4 WINDING UP OF THE COMPANY

• (A) In the event a notice is given by the Company to its shareholders to convene a shareholders’ meeting for the purposes of considering, and if thought fit approving, a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to each Warrantholder and thereupon, every Warrantholder shall be entitled by irrevocable surrender of his Warrant Certificate(s) (as defined in the Instrument) to the Company (such surrender to occur not later than 2 business days prior to the proposed shareholders’ meeting referred to above) with the subscription form(s) duly completed, together with payment of the subscription moneys or the relative portion thereof, to exercise the Subscription Rights represented by such Warrants and the Company shall as soon as practicable and in any event not later than the day immediately prior to the date of the proposed shareholders’ meeting allot such number of Shares to the Warrantholder which fall to be issued pursuant to the exercise of the Subscription Rights represented by such Warrants. The Company shall give notice to the Warrantholder of the passing of such resolution within 7 days after the passing thereof.

• (B) If an effective resolution is passed during the Subscription Period for the voluntary winding-up of the Company for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the Warrantholders, or some persons designated by them for such purpose by special resolution, shall be a party or in conjunction with which a proposal is made to the Warrantholders and is approved by special resolution, the terms of such scheme of arrangement or (as the case may be) proposal shall be binding on all the Warrantholders.

Subject to the foregoing, if the Company is wound up, all Subscription Rights which have not been exercised at the commencement of the winding-up shall lapse and the Warrant Certificates (as defined in the Instrument) will cease to be valid for any purpose.

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

5. TRANSFER, TRANSMISSION AND REGISTER

The Subscription Rights represented by the Warrant Certificate (as defined in the Instrument) are transferable, in whole amounts or integral multiples of the Subscription Price for the time being in force, by instrument of transfer in any usual or common form or such other form as may be approved by the directors of the Company, by an instrument of transfer executed under the hands by the authorised person(s). For this purpose, the Company shall maintain the Register and the provisions of the Company’s Bye-laws for the time being in relation to the registration, transfer and transmission of Shares shall apply, mutatis mutandi, to the registration, transfer and transmission of the Warrants and shall have full effect as if the same had been incorporated herein. Additional costs and expenses may be incurred by the Warrantholders in connection with any expedited re-registration of the Warrants prior to transfer or exercise of the Warrants, in particular during the period commencing 10 business days prior to and including the last day of the Subscription Period, being 22 January 2012.

6. CLOSURE OF REGISTER OF WARRANTHOLDERS

The registration of transfers may be suspended and the Register may be closed for such period as the directors may from time to time direct, provided that the same shall not be closed for a period of more than 30 days in any one year. Any transfer or exercise of the Subscription Rights attached to the Warrants made while the Register is so closed shall, as between the Company and the person claiming under the relevant transfer of Warrants or, as the case may be, as between the Company and Warrantholder who has so exercised the Subscription Rights attached to his Warrants (but not otherwise), be considered as made immediately after the reopening of the Register.

7. PURCHASE AND CANCELLATION

The Company or any of its subsidiaries may at any time purchase Warrants:

• (i) in the open market or by tender (available to all Warrantholders alike) at any price; or

• (ii) by private treaty upon terms to be agreed between the parties, but the price of which shall in any event not exceeding 110 per cent. of the Exercise Moneys (as defined in the Instrument),

but not otherwise.

All Warrants purchased as aforesaid shall be cancelled forthwith and may not be reissued or re-sold.

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

8. MEETINGS OF WARRANTHOLDERS AND MODIFICATION OF RIGHTS

• (A) The Instrument contains provisions for convening meetings of Warrantholders to consider any matter affecting the interests of Warranthoders, including the modification by special resolution of the provisions of the Instrument and/or the terms and conditions endorsed in the Warrant Certificate (as defined in the Instrument). A special resolution duly passed at any such meeting shall be binding on the Warrantholders, whether present or not.

• (B) All or any of the rights for the time being attached to the Warrants (including any of the provisions of the Instrument) may from time to time whether or not the Company is being wound up, be altered or abrogated (including but without prejudice to that generality by waiving compliance with, or by waiving or authorising any past or proposed breach of, any of the provisions of these conditions and/or the Instrument) and the sanction of a special resolution shall be necessary and sufficient to effect such alteration or abrogation.

9. REPLACEMENT OF WARRANT CERTIFICATES

If a Warrant certificate is mutilated, defaced, lost or destroyed, it may, at the discretion of the Company, be replaced at the principal office of the Registrar on payment of such costs as may be incurred in connection therewith and on such terms as to evidence, indemnity and/or security as the Company may require and on payment of such scrip fee not exceeding HK$2.50 (or such higher fee as may from time to time be permitted under the rules prescribed by the Stock Exchange) as the Company may determine. Mutilated or defaced Warrant Certificates (as defined in the Instrument) must be surrendered before replacements will be issued.

In the case of lost Warrant Certificates (as defined in the Instrument), Sections 71A (2), (3), (4), (6), (7) and (8) of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) shall apply as if “shares” referred to therein included Warrants.

10. PROTECTION OF SUBSCRIPTION RIGHTS

The Instrument contains undertakings by and restrictions on the Company designed to protect the Subscription Rights.

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

11. CALL

If, at any time Warrants which have not been exercised carry rights to subscribe less than 10 per cent. in value of all Subscription Rights, being HK$1,592,382.48, the Company may, on giving not less than 3 months’ notice, require the Warrantholders either to exercise their Subscription Rights represented or to allow them to lapse. On expiry of such notice, all unexercised Warrants will be automatically cancelled without any compensation to the holders of such Warrants.

12. FURTHER ISSUE

The Company shall be at liberty to issue further subscription warrants, including warrants ranking pari passu with the Warrants.

13. UNDERTAKINGS BY THE COMPANY

In addition to the undertakings given by it in relation to the grant and exercise of the Subscription Rights and the protection thereof the Company has undertaken in the Instrument that:

• (i) it will send to each Warrantholder, at the same time as the same are sent to the holders of Shares, its audited accounts and all other notices, reports and communications despatched by it to the holders of Shares generally;

• (ii) it will pay (if applicable) all Bermuda and Hong Kong stamp duties, registration fees or similar charges in respect of the execution of the Instrument, the creation and initial issue of the Warrants in registered form, the exercise of the Subscription Rights and the issue of Shares upon the exercise of the Subscription Rights;

• (iii) it will keep available for issue sufficient ordinary capital to satisfy in full all rights for the time being outstanding of subscription for and conversion into Shares; and

• (iv) it will use all reasonable efforts to procure that all Shares allotted upon exercise of the Warrants may, upon allotment or as soon as reasonably practicable thereafter, be dealt in on the Stock Exchange (save that this obligation shall lapse in the event that the listing of the Shares on the Stock Exchange is withdrawn following an offer for all or any of the Shares (whether by way of scheme of arrangement or otherwise) where a like offer is extended to holders of the Warrants or to holders of any Shares issued on exercise of the Warrants during the period of the offer (whether by way of proposal to the Warrantholders or otherwise)).

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APPENDIX I SUMMARY OF TERMS AND CONDITIONS OF THE WARRANTS

14. NOTICES

• (A) The Instrument contains provisions relating to notices to be given to the Warrantholders.

• (B) Every Warrantholder shall register with the Company an address in Hong Kong or elsewhere to which notices can be sent and if any Warrantholder shall fail so to do notice may be given to such Warrantholder in any of the manners hereinafter mentioned to his last known place of business or residence or, if there be none, by posting the same for 3 days at the principal place of business for the time being of the Company in Hong Kong.

• (C) A notice may be given by advertisement of the same in both an English language newspaper circulating in Hong Kong and a Chinese language newspaper circulating in Hong Kong or by delivery, prepaid letter (airmail in the case of an overseas address).

• (D) All notices with respect to Warrants standing in the names of joint holders shall be given to whichever of such persons is named first in the Register and notice so given shall be sufficient notice to all the holders of such Warrants.

15. GOVERNING LAW

The Instrument and the Warrants are governed by and will be construed in accordance with the laws of Hong Kong.

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