WEIli Holdings Limited — Proxy Solicitation & Information Statement 2008

Sep 19, 2008

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 your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

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

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(Incorporated in Bermuda with limited liability)

(Stock Code: 1037)

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

Financial Advisor to the Company

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* For identification purpose only

19 September 2008

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix — General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

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DEFINITIONS

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

“Board”	the board of the Directors
“Chun Yuen Loong”	Chun Yuen Loong Limited, the purchaser of the Property
“Company”	Daiwa Associate Holdings Limited（台和商事控股有限公
	司）*, a company incorporated in Bermuda with limited
	liability and the issued Shares of which are listed on the
	Stock Exchange
“connected persons”	has the meaning ascribed to this term under the Listing
	Rules
“Daiwa Technology”	Daiwa Technology Limited, an indirect wholly-owned
	subsidiary of the Company
“Directors”	directors (including the non-executive and independent
	non-executive directors) of the Company from time to
	time
“Disposal”	the disposal of the Property by Don Dynamic to Chun
	Yuen Loong pursuant to the Provisional Sale and
	Purchase Agreement
“Don Dynamic”	Don Dynamic Limited, an indirect wholly-owned
	subsidiary of the Company, the vendor of the Property
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	16 September 2008, being the latest practicable date
	prior the printing of this circular for ascertaining certain
	information contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange of Hong Kong Limited

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DEFINITIONS

“Property”	the property owned by Don Dynamic located on the 1st
	Floor, East Sun Industrial Building, No. 20 Shing Yip
	Street, Kwun Tong, Kowloon, Hong Kong
“Provisional Sale and Purchase	the legally binding provisional sale and purchase
Agreement”	agreement dated 1 September 2008 entered into between
	Don Dynamic and Chun Yuen Loong in relation to the
	Disposal
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

* For identification purpose only

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LETTER FROM THE BOARD

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*

(Incorporated in Bermuda with limited liability)

(Stock Code: 1037)

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

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

Independent Non-Executive Directors: Mr. Barry John BUTTIFANT Mr. LIU Ngai Wing Mr. CHOI Yuk Fan

Head office and principal place of business: 11th Floor, Block G East Sun Industrial Centre 16 Shing Yip Street Kwun Tong, Kowloon Hong Kong 19 September 2008

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

INTRODUCTION

Reference is made to the announcement of the Company dated 5 September 2008 in which the Board announced that on 1 September 2008, Don Dynamic, an indirectly wholly-owned subsidiary of the Company, entered into the legally binding Provisional Sale and Purchase Agreement with Chun Yuen Loong, pursuant to which Don Dynamic agreed to sell the Property to Chun Yuen Loong at a consideration of HK$10,900,000.

The Disposal and the transactions contemplated thereunder constitute a discloseable transaction on the part of the Company under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with further details regarding the Disposal and the transactions contemplated thereunder.

THE DISPOSAL

Date of the Provisional Sale and Purchase Agreement

1 September 2008

Parties

Vendor: Don Dynamic, an indirect wholly-owned subsidiary of the Company; and

Purchaser: Chun Yuen Loong, an independent third party.

Chun Yuen Loong is a corporation duly registered in Hong Kong. It is principally engaged in investment and construction sub-contracting business. The Directors confirm that to the best of their knowledge, information and belief having made all reasonable enquiries, Chun Yuen Loong and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

There was no previous transaction between the Company and Chun Yuen Loong (and its beneficial owners) which would require aggregation under the Listing Rules.

Asset to be disposed

The Property is located on the 1st Floor, East Sun Industrial Building, No. 20 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong with a gross floor area of 8,600 square feet. The Property was previously leased out to an independent third party at a monthly rental of HK$52,455 for the period from 27 July 2007 to 31 March 2008, however the tenant had terminated the tenancy agreement in December 2007. Subsequent to the termination of the said tenancy agreement, the Group used the Property as its warehouse.

Consideration

The consideration for the Disposal of the Property is HK$10,900,000 which is payable in cash in the following manner:

• (i) HK$50,000, being the initial deposit paid by Chun Yuen Loong to Don Dynamic upon signing of the Provisional Sale and Purchase Agreement on 1 September 2008;

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LETTER FROM THE BOARD

• (ii) HK$1,040,000, being further deposit to be paid by Chun Yuen Loong to Don Dynamic upon signing of the formal agreement for the sale and purchase of the Property to be entered by and among the parties on or before 17 September 2008; and

• (iii) HK$9,810,000, being the balance of the consideration to be paid by Chun Yuen Loong to Don Dynamic within 60 working days from the date of signing the formal agreement for the sale and purchase of the Property.

The consideration was determined after arm’s length negotiations among the parties by reference to the offer price of approximately HK$10,320,000 based on enquiries made with the real estate agent in May 2008. Prior to the sale of the Property, the Company conducted a research on recent transaction prices of nearby premises, consulted several real estate agents about the marketable prices of the Property and compared properties prices of similar size in the same location in order to ensure that the consideration for the sale of the Property was fair and reasonable. The Company considered several offers by the prospective purchasers and finally accepted the highest offer by Chun Yuen Loong at a consideration of HK$10,900,000.

Leaseback

Upon signing of the Provisional Sale and Purchase Agreement, a provisional tenancy agreement was entered into among Don Dynamic, Chun Yuen Loong and Daiwa Technology, an indirect wholly-owned subsidiary of the Company, pursuant to which Daiwa Technology shall enter into a 3 years irrevocable and 2 years optional tenancy agreement with Chun Yuen Loong in respect of the Property at a monthly rental of HK$50,000, which was agreed after arm’s length negotiations with reference to the prevailing market rates, upon completion of the sale and purchase of the Property. During the 2 years optional tenancy period, Daiwa Technology and Chun Yuen Loong have the rights to terminate the tenancy agreement by giving not less than six months prior notice to the other party.

The Property is currently occupied by the Group as its warehouse. The subsequent leaseback of the Property from Chun Yuen Loong after the Disposal will enable the Group to continue to use the Property as its warehouse.

Completion

Pursuant to the terms of the Provisional Sale and Purchase Agreement, the parties are required to enter into a formal agreement for the sale and purchase of the Property on or before 17 September 2008. Completion of the sale and purchase of the Property shall take place within 60 working days from the date of signing the said formal agreement.

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LETTER FROM THE BOARD

REASONS FOR THE DISPOSAL

In light of the gain expected to be generated from the Disposal, the Directors consider that it provides a good opportunity for the Group to realize its investment in the Property and to recognize the profit arising therefrom.

The audited net profit before and after taxation and extraordinary items attributable to the Property amounted to approximately HK$171,623 and HK$58,213 respectively for the year ended 31 March 2007.

The unaudited net profit before and after taxation and extraordinary items attributable to the Property amounted to approximately HK$41,000 and HK$42,000 respectively for the year ended 31 March 2008.

The Directors consider that the terms of the Disposal and the transactions contemplated thereunder have been entered into upon normal commercial terms and are in the interests of the Company and its Shareholders as a whole, and the terms are fair and reasonable as far as the Company and the Shareholders are concerned.

USE OF PROCEEDS FROM THE DISPOSAL

The net proceeds from the Disposal (after deducting the legal expenses) is estimated to be HK$10,885,000. Presently, the Board intends that the entire amount of the said proceeds will be retained by the Group as working capital.

FINANCIAL EFFECTS ON THE DISPOSAL

Subject to the confirmation from the Group’s auditors, it is estimated that, upon completion of the Disposal:

• (i) the Group will record a gain on disposal of approximately HK$7,680,000 based on the book value of the Property of approximately HK$3,205,000 as at 31 August 2008; and

• (ii) the total assets of the Group will be increased by approximately HK$7,554,000 and there will be no impact on the Group’s liabilities based on the management accounts of the Group as at 31 August 2008.

INFORMATION OF THE GROUP

The Group is principally engaged in the design, development, manufacturing and distribution of electronic components, contract electronic manufacturing services and consumer electronics, and manufacturing and distribution of personal computer and digital products.

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LETTER FROM THE BOARD

Don Dynamic is an indirect wholly-owned subsidiary of the Company and is principally engaged in property holding.

LISTING RULES IMPLICATION

The Disposal and the transactions contemplated thereunder constitute a discloseable transaction on the part of the Company under Chapter 14 of the Listing Rules.

ADDITIONAL INFORMATION

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

Yours faithfully By order of the Board Daiwa Associate Holdings Limited LAU Tak Wan

President

* For identification purpose only

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required, pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have taken under such provisions of the SFO), to be notified to the Company and the Stock Exchange, or which were required, pursuant to Section 352 of the SFO, to be entered in the register kept by the Company, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

(a) Long positions in shares and warrants of the Company

Number of issued ordinary shares/underlying shares attached to derivatives

	Unlisted
	warrants	Ordinary shares in issued			Total
	Corporate	Personal	Corporate	Other
Name of Directors	interests	interests	interests	interest	Interests	Percentage
Mr. LAU Tak Wan	7,862,388	6,537,141	147,706,499	1,142,854	155,386,494	51.15%
	(Note 2)	(Note 1)	(Notes 2,3,4)
Ms. CHAN Yuen	7,862,388	4,022,854	147,706,499	3,657,141	155,386,494	51.15%
Mei, Pinky	(Note 2)	(Note 1)	(Notes 2,3,4)
Mr. WAN Chor Fai	—	50,000	—	—	50,000	0.016%
Mr. Barry John	—	500,000	—	—	500,000	0.16%
BUTTIFANT

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GENERAL INFORMATION

APPENDIX

Notes:

1. 2,880,000 shares in the Company were jointly held by Mr. Lau Tak Wan (“Mr. Lau”) and Ms. Chan Yuen Mei, Pinky (“Ms. Chan”), the spouse of Mr. Lau.

2. 7,862,388 warrants and 74,431,436 shares in the Company were beneficially owned by China Capital Holdings Investment Limited (“China Capital”). The issued share capital of China Capital is 60% owned by Mr. Lau, and 40% owned by Ms. Chan.

3. 60,918,396 shares in the Company were beneficially owned by Leading Trade Limited (“Leading Trade”). The issued share capital of Leading Trade is 50% owned by Mr. Lau and 50% owned by Ms. Chan.

4. 12,356,667 shares in the Company were beneficially owned by Cyber Concept Limited (“Cyber Concept”). The issued share capital of Cyber Concept is 50% owned by Mr. Lau and 50% owned by Ms. Chan.

(b) Long position in shares of associated corporations of the Company

Dominion International Limited, which is 50% owned by Mr. Lau, and 50% owned by Ms. Chan:

	Number of non-voting
	deferred shares held
Cosmos Wires and Connectors Manufacturing Limited	50,000
Westpac Digital Limited	1
Vastpoint Industrial Limited	455,000
Daiwa Associate (H.K.) Limited	1,500,000

In addition, each of Mr. Lau and Ms. Chan beneficially owns 140,000 and 10,000 non-voting deferred shares respectively in Cosmotec Precision Industrial Limited.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, chief executives of the Company or their associates had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required, pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have taken under such provisions of the SFO), to be notified to the Company and the Stock Exchange, or which were required, pursuant to Section 352 of the SFO, to be entered in the register kept by the Company, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules, to be notified to the Company and the Stock Exchange.

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GENERAL INFORMATION

APPENDIX

3. INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, to the best knowledge of the Directors and save as disclosed in paragraph headed “2. Directors’ and Chief Executives’ Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations” in this appendix, the following parties (other than Directors or chief executives of the Company), had an interest or short position in the shares, underlying shares or debentures of the Company which are required to be disclosed to the Company under the provision of Divisions 2 and 3 and Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

Interests in the shares and warrants of the Company

			Interest in
			underlying
			shares —	% of
Name of substantial		Number of	unlisted	the total
shareholder	Note	shares held	warrants	issued shares
China Capital Holdings
Investment Limited	(1)	74,431,436	7,862,388	27.09%
Leading Trade Limited	(2)	60,918,396	—	20.05%
Mr. NG Hung Sang		36,502,198	—	12.02%
South China Holdings Limited		36,502,198	—	12.02%

Notes:

1. China Capital is 60% owned by Mr. Lau and 40% owned by Ms. Chan. Accordingly, China Capital, Mr. Lau and Ms. Chan were deemed by SFO to be interested in 74,431,436, 163,248,882 and 163,248,882 shares of the Company respectively.

2. Leading Trade is 50% owned by Mr. Lau and 50% owned by Ms. Chan. Accordingly, Leading Trade, Mr. Lau and Ms. Chan were deemed by SFO to be interested in 60,918,396, 163,248,882 and 163,248,882 shares of the Company.

Save as disclosed above, as at the Latest Practicable Date, the Directors are not aware of any other persons (other than Directors or chief executives of the Company) who have interests or short positions in the shares, underlying shares or debentures of the Company which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 and Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or any options in respect of such capital.

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GENERAL INFORMATION

APPENDIX

4. COMPETING INTEREST

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective associates had any interest in a business which competes or may compete, either directly or indirectly, with the business of the Group, or have or may have any other conflicts of interest with the Group pursuant to Rule 8.10 of the Listing Rules.

5. DIRECTORS’ SERVICE CONTRACTS

None of the Directors had entered or been proposed to enter into any service contracts with the Company or any other member of the Group (excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation)) as at the Latest Practicable Date.

6. LITIGATION

As at the Latest Practicable Date, neither the Company nor any other member of the Group is engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened against the Company or any of its members.

7. GENERAL

• (a) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.

• (b) The head office and principal place of business of the Company is situated at 11th Floor, Block G, East Sun Industrial Centre, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

• (c) The share registrar of the Company is Tricor Abacus Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (d) The company secretary and qualified accountant of the Company is Mr. Kwong Kwok Choi (“Mr. Kwong”). Mr. Kwong is an associate member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries. He is also an associate member of the Hong Kong Institute of Certified Public Accountants.

• (e) In the event of inconsistency, the English text of this circular shall prevail over the Chinese text thereof.

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