09:47 DAIWA ASSOCIATE<01037> - Announcement The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement. DAIWA ASSOCIATE HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock code: 1037) DESPATCH OF CIRCULAR IN RESPECT OF THE INTERIM DIVIDEND WITH WARRANT ALTERNATIVE AND WHITEWASH WAIVER Financial adviser to Daiwa Associate Holdings Limited Asian Capital (Corporate Finance) Limited The Circular of the Company containing, amongst other things, (i) details of the Warrant Alternative and the Whitewash Waiver; (ii) a letter from the independent board committee of the Company; (iii) a letter from VC Capital Limited, the independent financial adviser to the independent board committee of the Company and the Independent Shareholders; and (iv) a notice convening the SGM, will be despatched to the Shareholders on 6 January 2005. The Warrant Alternative is subject to conditions being fulfilled. Accordingly, the Warrant Alternative may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares and if they are in any doubt about their position, they are recommended to consult their professional advisers. Reference is made to the announcement of the Company dated 16 December 2004 (the "Announcement"). Unless otherwise stated, terms used in this announcement shall have the same meanings as those defined in the Announcement. DESPATCH OF THE CIRCULAR A circular of the Company (the "Circular") contains, amongst other things, (i) details of the Warrant Alternative and the Whitewash Waiver; (ii) a letter from the independent board committee of the Company; (iii) a letter from VC Capital Limited, the independent financial adviser to the independent board committee of the Company and the Independent Shareholders; and (v) a notice convening the SGM to be held at 10:00 a.m. on Tuesday, 25 January 2005, together with the proxy form for the SGM will be despatched to the Shareholders on 6 January 2005. A copy of the Circular has been registered with the Registrar of Companies in Hong Kong as required by Section 342C of the Company Ordinance of Hong Kong. A copy of the Circular will be filed with the Registrar of Companies in Bermuda pursuant to the Companies Act 1981 of Bermuda (as amended) as soon as practicable. Shareholders should read the Circular carefully and in particular the letter of advice from VC Capital Limited and the recommendation of the independent board committee of the Company to the Independent Shareholders before voting on the relevant resolutions to be proposed at the SGM. GENERAL As at the date of this announcement, the board of directors of the Company comprises Mr. Lau Tak Wan, Mr. Wan Chor Fai, Mr. Mak Hon Kai, Stanly, and Ms. Chan Yuen Mei, Pinky as executive Directors, Mr. Barry John Buttifant, Mr. Choi Yuk Fan and Mr. Liu Ngai Wing as independent non-executive Directors. The Warrant Alternative is subject to conditions being fulfilled. Accordingly, the Warrant Alternative may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares and if they are in any doubt about their position, they are recommended to consult their professional advisers. By order of the Board Lau Tak Wan President Hong Kong, 5 January 2005 The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration, and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.