WEIli Holdings Limited — Proxy Solicitation & Information Statement 2007

Aug 3, 2007

IMPORTANT

If you are in any doubt about this circular or as to the action to be taken, you should consult a stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Daiwa Associate Holdings Limited (the “Company”), you should at once hand this circular with the enclosed 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 the 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.

DAIWA ASSOCIATE HOLDINGS LIMITED 台和商事控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock code: 1037)

RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO ISSUE AND TO REPURCHASE SHARES

A notice convening the annual general meeting of the Company to be held at Academy Room I-II, 1/F., International Grand Stanford Hotel, 70 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Friday, 31 August 2007, at 3:30 p.m. is set out on pages 120 to 124 of the Company’s Annual Report.

Whether or not you propose to attend the meeting, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to Tricor Abacus Limited (previously known as Abacus Share Registrars Limited), the Company’s branch registrar in Hong Kong at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or adjourned meeting or poll (as the case maybe). Completion and return of the proxy form shall not preclude shareholders from attending and voting at the Annual General Meeting or any adjourned meeting should you so desire.

6 August 2007

* For identification purposes only

DEFINITION

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

“Annual General Meeting”	the annual general meeting of the Company for the year ended
	31 March 2007 to be held on Friday, 31 August 2007
“Annual Report”	the annual report for the year ended 31 March 2007
“Board”	the board of Directors of the Company
“Bye-law(s)”	the existing bye-law(s) of the Company
“Director(s)”	director(s) of the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong”	The Hong Kong Special Administrative Region of the People’s
	Republic of China
“Latest Practicable Date”	27 July 2007, 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
“Ordinary Resolutions”	the ordinary resolutions to be proposed and passed at the Annual
	General Meeting for the re-election of retiring directors and the
	granting of the general mandates to the Directors
“Outstanding Warrant(s)”	Warrant(s) not exercised as at 27 July 2007 (being the Latest
	Practicable Date prior to the printing of this circular)
“Share(s)”	ordinary share(s) of par value of HK$0.10 each in the capital of
	the Company
“Shareholder(s)”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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“Subscription Period”

the three year period for 2008 warrant shares during which the Subscription Rights may be exercised which is commenced on Friday, 25 February 2005 and ended on Sunday, 24 February 2008 (both days inclusive)

the five year period for 2012 warrant shares during which the Subscription Rights may be exercised which is commenced on Tuesday, 23 January 2007 and ended on Sunday, 22 January 2012 (both days inclusive)

• “Subscription Right(s)”

the subscription right(s) attaching to the Warrant(s)

“Subsidiary” a company which is for the time being and from time to time a subsidiary (within the meaning of section 2 of the Companies Ordinance of the Company whether incorporated in Hong Kong, Bermuda or elsewhere)

• “Takeover Code” the Hong Kong Code on Takeovers and Mergers

• “Warrant(s)”

2008 and 2012 warrant(s) issued by the Company, in unit(s) of HK$0.50 and HK$0.40 respectively of Subscription Rights, to subscribe for new Shares at the initial subscription price of HK$0.50 and HK$0.40 per new Share respectively, subject to adjustment, at any time during the Subscription Period

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LETTER FROM THE BOARD

DAIWA ASSOCIATE HOLDINGS LIMITED 台和商事控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock code: 1037)

Directors: Executive: LAU Tak Wan (President) CHAN Yuen Mei, Pinky (Vice-President) WAN Chor Fai MAK Hon Kai, Stanly

Independent non-executive: Barry John BUTTIFANT LIU Ngai Wing CHOI Yuk Fan

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

Head office and principal place of business: 11th Floor, Block G East Sun Industrial Centre 16 Shing Yip Street Kwun Tong, Kowloon Hong Kong

6 August 2007

To the Shareholders,

Dear Sir or Madam,

RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO ISSUE AND TO REPURCHASE SHARES

INTRODUCTION

The purpose of this circular is to provide you with information regarding the following resolutions to be proposed at the annual general meeting of the Company to be held at Academy Room I-II, 1/F., International Grand Stanford Hotel, 70 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Friday, 31 August 2007, at 3:30 p.m. relating to the re-election of retiring Directors, the renewal of the general mandates granted to the Directors to issue and repurchase Shares of the Company.

(A) Re-Election of Retiring Directors

Ordinary Resolutions will be proposed at the Annual General Meeting to re-elect directors of the Company.

Pursuant to Bye-law 99 of the Bye-Laws, Mr. LIU Ngai Wing and Mr. CHOI Yuk Fan shall retire at the Annual General Meeting. Both the retiring Directors, being eligible, will offer themselves for reelection.

Biographical details of the retiring Directors is set out in Appendix I to this circular.

* For identification purposes only

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(B) General Mandates to Issue Shares and to Repurchase Shares

This is an explanatory statement given to all shareholders of the Company relating to ordinary resolutions to be proposed at the Annual General Meeting authorising the Company to repurchase its own shares and to issue shares.

General Mandate to Issue Shares

Ordinary Resolutions will be proposed at the Annual General Meeting to grant to the directors of the Company a general mandate to allot, issue and deal with shares of the Company not exceeding 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of the resolution (“Share Issue Mandate”) and approving an extension of the Share Issue Mandate by adding to it the aggregate nominal amount of any Shares repurchased by the Company under the Share Repurchase Mandate (as hereinafter defined), details of which are set out in Ordinary Resolutions No. (1) and No. (3) of item 5 of the notice of Annual General Meeting.

General Mandate to Repurchase Shares

An ordinary resolution will also be proposed at the Annual General Meeting to grant to the Directors a general mandate to exercise the powers of the Company to repurchase Shares with an aggregate nominal amount of up to 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of the resolution (“Share Repurchase Mandate”) as set out in Ordinary Resolution No. (2) of item 5 of the notice of Annual General Meeting.

This explanatory statement contains all the information required pursuant to rule 10.06(1)(b) and other relevant provisions of the Securities Buy Back Rules in the Listing Rules which is set out as follows:

• (i) On the basis of 303,699,256 fully-paid up Shares in issue as at 27 July 2007 (being the Latest Practicable Date prior to the printing of this circular) and assuming no further shares will be issued or repurchased prior to Annual General Meeting, the Company may repurchase up to 30,369,925 Shares (being 10% of issued share capital as at date of approval) under the Share Repurchase Mandate during the period prior to the annual general meeting after Annual General Meeting of the Company following the passing of the resolution referred to above, or the expiration of the period within which such meeting is required by law to be held, or the revocation or variation of such mandate by an ordinary resolution of the shareholders of the Company in general meeting, whichever occurs first.

On 23 February 2005, that a total of 28,843,209 2008’ Warrants were issued. Each Warrant will entitle the holder thereof to subscribe in cash for one share at the initial subscription price of HK$0.50, subject to adjustment, at any time during the three year period which commenced on Friday, 25 February 2005 and ended on Sunday, 24 February 2008 (both days inclusive). (Please make reference to the announcement of the Company on 16 February 2005 and the circular of the Company dated 6 January 2005 in relation to the interim dividend with warrant alternative and the whitewash waiver). As at 27 July 2007 (being the Latest Practicable Date prior to the printing of this circular), there is a total of 1,166,959 2008’ Warrants not exercised.

On 23 January 2007, that a total of 26,070,000 2012’ Warrants were issued. Each Warrant will entitle the holder thereof to subscribe in cash for one share at the initial subscription price of HK$0.40, subject to adjustment, at any time during the five year period which

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commenced on Tuesday, 23 January 2007 and ended on Sunday, 22 January 2012 (both days inclusive). (Please make reference to the announcement of the Company on 7 December 2006 and the circular of the Company dated 28 December 2006 in relation to the interim dividend with warrant alternative). As at 27 July 2007 (being the Latest Practicable Date prior to the printing of this circular), there is a total of 12,371,660 2012’ Warrants not exercised.

If the Subscription Rights of the total of 13,538,619 Warrants is fully exercised before the Annual General Meeting, on the basis of 303,699,256 fully paid up Shares in issue as at 27 July 2007 (being the Latest Practicable Date prior to the printing of this circular) and assuming no further shares, except for the shares to be issued pursuant to the Outstanding Warrants, will be issued or repurchased prior to the Annual General Meeting then the fullypaid up Shares in issue would increase to 317,237,875. The exercise in full of the Share Repurchase Mandate would result in up to 31,723,787 Shares being 10% of issued share capital as at the date Annual General Meeting. (The detail of the Warrants are set out in circulars despatched on 6 January 2005 and 28 December 2006).

• (ii) The Directors believe that it is in the best interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase Shares on the market. Trading conditions of the Company’s shares on the Stock Exchange of Hong Kong Limited have sometimes been volatile in recent years. At any time in the future when Shares are trading at a discount to their underlying value, the ability of the Company to repurchase Shares will be beneficial to those shareholders who retain their investment in the Company since their percentage interest in the assets of the Company would increase in proportion to the number of shares repurchased by the Company and thereby resulting in an increase in net assets and/or earnings per share of the Company. Such repurchases will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders.

• (iii) In repurchasing shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and Bye-laws and the laws of Bermuda. The Companies Act 1981 of Bermuda (as amended) (the “Companies Act”) provides that the amount of capital repaid in connection with a share repurchase may only be paid from the distributable profits of the Company and/or the proceeds of a new issue of shares, made for the purpose of the repurchase to such extent allowable under the Companies Act.

• (iv) There might be a material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the latest published audited consolidated accounts contained in the Company’s annual report for the year ended 31 March 2007 in the event that the Share Repurchase Mandate is exercised in full. The Directors do not propose to exercise the Share Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse impact on the working capital requirement of the Company or the gearing level which in the opinion of the Directors are from time to time appropriate for the Company.

• (v) None of the Directors or, to the best of their knowledge having made all reasonable enquiries, any of their associates has any present intention, in the event that the Share Repurchase Mandate is approved by shareholders of the Company, to sell any Shares to the Company or its subsidiaries.

• (vi) The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Share Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

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• (vii) If a shareholder’s proportionate interest in the voting right of the company increases as a result of a share repurchase, such increase will be treated as an acquisition for the purposes of the Code on Takeovers and Mergers. In certain circumstances, a shareholder or a group of shareholders acting in concert could, as a result of such increase, obtain or consolidate control of the company and become obliged to make a mandatory offer in accordance with Rules 26 of the Takeover Code.

As at the Latest Practicable Date, to the best knowledge and belief of the Directors, the following substantial shareholders have direct or indirect interest in 10% or more of the issued share capital of the Company:

Substantial Shareholder

Shares before full exercise of Subscription Rights of Outstanding Warrants China Capital Holdings Investment Ltd_(Note 1) 74,431,436 Leading Trade Ltd(Note 2) 60,918,396 Cyber Concept Ltd(Note 3)_ 12,356,667 Mr. LAU Tak Wan 3,657,141 Ms. CHAN Yuen Mei, Pinky 1,142,854 Mr. LAU Tak Wan & Ms. CHAN Yuen Mei, Pinky jointly held 2,880,000 Total 155,386,494	Beneficially held in Shares after full exercise of Subscription Rights of % of Outstanding Interest Warrants 24.50% 82,293,824 20.06% 60,918,396 4.07% 12,356,667 1.20% 3,657,141 0.38% 1,142,854 0.95% 2,880,000 51.16% 163,248,882	% of Interest 25.94% 19.20% 3.90% 1.15% 0.36% 0.91%
		51.46%

The aggregate percentage of interest in shares of Mr. LAU Tak Wan and Ms. CHAN Yuen Mei, Pinky, represented 51.16% and 51.46% of issued share capital of the Company before and after the full exercise of the Subscription Rights of Outstanding Warrants respectively.

Shares to be issued after full exercise of Subscription Rights of Outstanding Warrants China Capital Holdings Investment Ltd (Note 1) 7,862,388 — Leading Trade Ltd (Note 2) — Cyber Concept Ltd (Note 3) 7,862,388

Note 1: The issued share capital of China Capital Holdings Investment Ltd is 60% owned by Mr. LAU Tak Wan, and 40% by Ms. CHAN Yuen Mei, Pinky (the spouse of Mr. LAU Tak Wan).

Note 2 : Leading Trade Ltd is a company 50% owned by Mr. LAU Tak Wan and 50% by Ms. CHAN Yuen Mei, Pinky.

Note 3 : Cyber Concept Ltd is a company 50% owned by Mr. LAU Tak Wan and 50% by Ms. CHAN Yuen Mei, Pinky.

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In the event that the Directors exercise in full the power to repurchase shares in accordance with the terms of the ordinary resolution to be proposed at the Annual General Meeting of the Company, the respective shareholdings together with the options of each of the above mentioned substantial shareholder and of the directors in the Company would be increased to:

	Shareholding	Shareholding
	Before full exercise	After full exercise
	of Subscription	of Subscription
	Rights of Warrants	Rights of Warrants
China Capital Holdings Investment Ltd	27.23%	28.82%
Leading Trade Ltd	22.29%	21.34%
Cyber Concept Ltd	4.52%	4.33%
Mr. LAU Tak Wan	1.34%	1.28%
Ms. CHAN Yuen Mei, Pinky	0.42%	0.40%
Mr. LAU Tak Wan &
Ms. CHAN Yuen Mei, Pinky jointly held	1.05%	1.01%
Total	56.85%	57.18%

The aggregate percentage of interest in shares of Mr. LAU Tak Wan and Ms. CHAN Yuen Mei, Pinky, represented 56.85% and 57.18% of issued share capital of the Company before and after the full exercise of Subscription Rights of Warrants, in the event that the Share Repurchase Mandate is exercised in full.

To the best knowledge and belief of the Directors, the Directors have no present intention to exercise the repurchase mandate to such extent as would give rise to the obligation to make a mandatory offer in accordance with Rules 26 of the Code.

The Directors are not aware of any consequences which may arise under the Takeover Code as a result of any repurchases made under the Share Repurchase Mandate. The Directors do not propose to repurchase shares which would result in the aggregate amount of the share capital of the Company in public hands reducing to below 25%.

• (viii) The Company had repurchased a total of 738,000 Shares on the Stock Exchange in the six months preceding the Latest Practicable Date.

	Number of	Purchase Price	Purchase Price	Total
Transaction Date of	Shares	Paid Per Share		Purchase
Shares Repurchased	Repurchased	Highest	Lowest	Price Paid
		HK$	HK$	HK$
25 January 2007	50,000	0.475	—	23,750
26 January 2007	50,000	0.485	—	24,250
30 January 2007	30,000	0.490	—	14,700
8 February 2007	10,000	0.485	—	4,850
15 February 2007	74,000	0.475	—	35,150
26 February 2007	58,000	0.485	—	28,130
28 February 2007	50,000	0.480	—	24,000
1 March 2007	80,000	0.495	—	39,600
5 March 2007	132,000	0.490	0.475	63,330

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Number of Purchase Price Transaction Date of Shares Paid Per Share Shares Repurchased Repurchased Highest Lowest HK$ HK$ 13 March 2007 20,000 0.490 — 25 May 2007 70,000 0.600 — 30 May 2007 80,000 0.600 0.590 1 June 2007 34,000 0.640 — 738,000	Total Purchase Price Paid HK$ 9,800 42,000 47,700 21,760
	379,020

Save as disclosed above, there was no other share repurchase made by the Company (whether on the Stock Exchange or otherwise) during the said six months period.

• (ix) The Listing Rules prohibit a company from knowingly repurchasing shares of the company on the Stock Exchange from a “connected person”, that is, a director or substantial shareholder or their associates (as defined in the Listing Rules). A connected person shall not knowingly sell his shares to the company.

No connected person (as defined in the Listing Rules) has notified the Company that he has a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the Share Repurchase Mandate is approved by shareholders of the Company.

• (x) The highest and lowest trading prices for Shares recorded on the Stock Exchange during each of the previous 12 months were as follows:

	Lowest	Highest
	(HK$)	(HK$)
July 2006	0.430	0.495
August 2006	0.430	0.490
September 2006	0.445	0.495
October 2006	0.455	0.510
November 2006	0.455	0.540
December 2006	0.390	0.520
January 2007	0.430	0.500
February 2007	0.460	0.560
March 2007	0.465	0.510
April 2007	0.465	0.490
May 2007	0.475	0.760
June 2007	0.600	0.850
July 2007 (up to the Latest Practicable Date)	0.620	0.900

(C) Annual General Meeting

The notice of Annual General Meeting is set out on pages 120 to 124 of the Company’s Annual Report.

A proxy form for use at the Annual General Meeting is enclosed with this circular. In order to be valid, the proxy form together with a power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited at the office of the Company’s branch registrar in Hong Kong (Tricor Abacus Limited, previously known as Abacus Share Registrars Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong), not less than 48 hours before the time appointed for holding of Annual General Meeting or adjourned meeting or poll (as the case may be).

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(D) Procedures to Demanding a Poll

Pursuant to Bye-laws 69, a poll may be demanded in relation to any resolution put to the vote of the Annual General Meeting before or on the declaration of the result of the show of hands by:

• (i) the chairman of the meeting;

• (ii) at least 3 Shareholders present in person or by proxy or authorized representative for the time being entitled to vote at the meeting;

• (iii) any Shareholders or Shareholders present in person or by proxy or authorized representative and holding between them not less than one-tenth of the total voting rights of all the members having the right to attend and vote at the meeting; or

• (iv) any Shareholders or Shareholders present in person or by proxy or authorized representative and holding shares in the Company conferring a right to attend and vote at the meeting being shares on which an aggregate sum has been paid up equal to no less than onetenth of the total sum paid up on all the shares conferring that right.

(E) Responsibility Statement

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

(F) Recommendation

The Directors are of the opinion that the re-election of retiring Directors, the renewal of the general mandates granted to the Directors to issue and repurchase shares of the Company are in the best interests of the Company and the shareholders as a whole and therefore recommend the Shareholders to vote in favour of the Ordinary Resolutions to be proposed at the Annual General Meeting.

For and on behalf of Daiwa Associate Holdings Limited LAU Tak Wan

President

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APPENDIX I BIOGRAPHICAL DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

The biographical details of Directors who are proposed to be re-elected at the Annual General Meeting are set out as follows:

Mr. LIU Ngai Wing

Mr. LIU Ngai Wing, aged 56, holds a Master of Science Degree in Global Business from the Chinese University of Hong Kong, a Master of Science Degree in Hotel and Tourism Management from the Hong Kong Polytechnic University and a Master Degree in Business Administration from the Open University of Hong Kong.

Mr. Liu is an executive director of eSun Holdings Ltd, independent non-executive director of New Smart Energy Holdings Limited and Hang Fung Gold Technology Ltd. He is an associate member of both the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Secretaries and Administrators, and is also a fellow member of Association of Chartered Certified Accountants.

As at the date of this circular, Mr. Liu has no interest of shares in the Company within the meaning of Part XV of the Securities and Futures Ordinance as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies. Mr. Liu has no service contract and no fixed terms of appointment with the Company and will be subject to retirement by rotation and reelection at the Company’s annual general meeting in accordance with Bye-law 99 of the Company’s Bye-laws. His annual emolument is HK$75,000 for the financial year ended 31 March 2007. Mr. Liu’s annual emolument is determined upon negotiation between Mr. Liu and the Company at arm’s length on the basis of his previous experience, professional qualifications, responsibility to be involved in the Company and the amount of time devoted to the Company’s business as well as the Company’s financial position and the prevailing market condition.

Mr. Liu does not have any relationship with any other Directors, senior management, or substantial shareholders of the Company.

Mr. CHOI Yuk Fan

Mr. CHOI Yuk Fan, aged 54, was awarded Bachelor of Laws Degree (LLB) by University of London in 1988 and Post-graduate Certificate in Laws (PCLL) by University of Hong Kong in 1991. Mr Choi was the Principal of Messrs. Y.F. Choi & Co., Solicitors from 2003 to 2005 but transferred to Messrs. Ong & Chung Co., Solicitors, as an associate providing professional legal services for customers of Hong Kong and foreign countries.

Mr. Choi was admitted as a Solicitor of the High Court of Hong Kong in 1993 and a Solicitor of the Supreme Court of England and Wales in 1994. Before Mr. Choi took up his legal career in 1993, he had served in the Home Affairs Department for about 13 years (1977-1990).

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Save as disclosed above, Mr. Choi has not held any directorship in other public listed company in the past three years.

As at the date of this circular, Mr. Choi has no interest of shares in the Company within the meaning of Part XV of the Securities and Futures Ordinance as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies. Mr. Choi has no service contract and no fixed terms of appointment with the Company and will be subject to retirement by rotation and re-election at the Company’s annual general meeting in accordance with Bye-law 99 of the Company’s Bye-laws. His annual emolument is HK$50,000 for the financial year ended 31 March 2007. Mr. Choi’s annual emolument is determined upon negotiation between Mr. Choi and the Company at arm’s length on the basis of his previous experience, professional qualifications, responsibility to be involved in the Company and the amount of time devoted to the Company’s business as well as the Company’s financial position and the prevailing market condition.

Mr. Choi does not have any relationship with any other Directors, senior management, or substantial shareholders of the Company.

Save as disclosed above, there are no other matters concerning Mr. Liu and Mr. Choi relating to their re-election that need to be brought to the attention of the Shareholders and there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

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