DIT Group Limited — AGM Information 2005

Aug 30, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

If you are in any doubt as to any aspect of this circular, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in South East Group Limited (the “Company”), you should at once hand this circular and the enclosed proxy form to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

PROPOSALS INVOLVING

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES

AND

RE-ELECTION OF DIRECTORS

A letter from the Board of South East Group Limited is set out on pages 1 to 7 of this circular.

A notice convening the annual general meeting of South East Group Limited to be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Friday, 23 September 2005 at 10:00 a.m. is set out on pages 8 to 10 of this circular.

A form of proxy is also enclosed. Whether or not you are able to attend and vote at the annual general meeting, you are requested to complete the enclosed proxy form and return it to the Company’s share registrars in Hong Kong, Computershare Hong Kong Investor Services Limited, at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the annual general meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from subsequently attending and voting at the annual general meeting or any adjournment thereof should you so wish.

* For identification purposes only

26 August 2005

CONTENTS

	Page
Letter from the Board
– Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
– The Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
– The Share Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
– Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
– Procedure to Demand a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
– Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
– Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

LETTER FROM THE BOARD

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

Executive Directors: Budiman RAHARDJA (Chairman) KWAN Kei Chor, Samuel

Non-Executive Director: CHEN Zhi Yung

Registered Office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Principal place of

Independent Non-Executive Directors: LO Yuk Lam WONG Kam Wah NG Chun Hung, Lawrence

business in Hong Kong: Rooms 02-03, 9th Floor, Wyndham Place, 44 Wyndham Street Central, Hong Kong

26 August 2005

To the Shareholders

Dear Sir or Madam,

PROPOSALS INVOLVING GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SHARES AND RE-ELECTION OF DIRECTORS

INTRODUCTION

This circular is to provide information to shareholders of South East Group Limited (“Company”) required by the Rules Governing the Listing of Securities (“Listing Rules”) on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) concerning the proposed general mandates for the issue of shares and repurchase of shares to be granted to the Directors of the Company; and re-election of directors, to be approved by shareholders at the annual general meeting of the Company to be held on Friday, 23 September 2005 (“AGM”).

THE SHARE ISSUE MANDATE

Resolution no. 5 referred to in the notice of AGM (“AGM Notice”) dated 26 August 2005 will, if passed, give a general unconditional mandate (“Share Issue Mandate”) to the Directors authorizing the exercise by the Directors of the powers of the Company to allot additional shares of HK$0.10 each in the capital of the Company (“Shares”). This authority would apply to up to 20% of the issued share capital of the Company at the date of the AGM.

* For identification purposes only

– 1 –

LETTER FROM THE BOARD

THE SHARE REPURCHASE MANDATE

Resolution no. 6 (“Ordinary Resolution”) referred to in the AGM Notice will, if passed, give a general unconditional mandate (“Share Repurchase Mandate”) to the Directors to exercise the powers of the Company to repurchase Shares up to a maximum of 10% of the issued share capital of the Company at the date of the AGM (“Repurchase Proposal”).

The Directors propose to seek your approval of the Ordinary Resolution to be proposed at the AGM. The information set out below constitutes an Explanatory Statement in accordance with the relevant rules as set out in the Listing Rules to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities on the Stock Exchange (“Share Buy Back Rules”):

(1) Shareholders’ approval

The Share Buy Back Rules provide that all on-market share repurchase by company with its primary listing on the Stock Exchange must be of fully paid up shares and approved in advance by an ordinary resolution, either by way of a general mandate or by specific approval in relation to specific transactions.

(2) Share Capital

As at 25 August 2005 (the latest practicable date prior to the printing of this statement) (“Latest Practicable Date”) the issued share capital of the Company comprised 330,571,880 Shares.

Subject to the passing of the Ordinary Resolution and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed, under the Share Repurchase Mandate to repurchase a maximum of 33,057,188 Shares.

(3) Reasons for repurchase proposal

The directors of the Company believe that the Repurchase Proposal is in the best interests of the Company and its shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per share and will only be made when the directors of the Company believe that such a repurchase will benefit the Company and its shareholders.

(4) Funding of repurchases

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 applicable laws of Bermuda. The laws of Bermuda provide that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant Shares, or out of funds of the Company otherwise available for dividend or distribution or the proceeds of a fresh issue of Shares made for the purpose of the repurchase to such extent allowable under the Companies Act 1981 of Bermuda (as amended). The amount of premium payable on repurchase may only be paid out of funds of the Company otherwise available for dividend or distribution or out of the share premium account of the Company.

– 2 –

LETTER FROM THE BOARD

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 audited consolidated accounts contained in the annual report of the Company for the year ended 31 March 2005) in the event that the proposed share repurchases were to be carried out in full at any time during the proposed repurchase period. Such proposed repurchase period means the period from the passing of the Ordinary Resolution until whichever is the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the date on which the authority sets out in the Ordinary Resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting; and (iii) the expiration of the period within which the next annual general meeting of the Company is required to be held by Bermuda laws or the bye-laws of the Company. However, the directors of the Company do not propose to exercise the buy back mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirement of the Company or the gearing levels which, in the opinion of the directors of the Company, are from time to time appropriate for the Company.

(5) Share prices

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the printing of this statement were as follows:

	Highest	Lowest
	HK$	HK$
August 2004	0.305	0.082
September 2004	0.171	0.127
October 2004	0.135	0.096
November 2004	0.158	0.102
December 2004	0.188	0.120
January 2005	0.158	0.120
February 2005	0.135	0.120
March 2005	0.125	0.092
April 2005	0.130	0.095
May 2005	0.109	0.090
June 2005	0.090	0.080
July 2005*	0.093	0.078

* Trading was suspended from 29 July 2005 up to 19 August 2005

– 3 –

LETTER FROM THE BOARD

(6) Disclosure of interests

The directors of the Company have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the company to make repurchases pursuant to the Ordinary Resolution and in accordance with the Listing Rules and the applicable laws of Bermuda.

None of the directors of the Company nor, to the best of their knowledge having made all reasonable enquiries, their associates have any present intention to sell any Shares to the Company under the Repurchase Proposal if such is approved by the shareholders.

No connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares to the Company or its subsidiaries, or have undertaken not to do so, in the event that the Repurchase Proposal is approved by the shareholders.

(7) Substantial shareholders

If on the exercise of the power to repurchase Shares pursuant to the Repurchase Proposal a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Hong Kong Code on Takeovers and Mergers (the “Takeovers Code”). Accordingly, a shareholder or group of shareholders acting in concert could obtain or consolidate control of the Company and become obligated to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Budiman Rahardja and Easy Lead Corporation Limited, in which Mr. Rahardja and his mother, Madan Sri Wasi Hastuti are deemed to be interested, hold approximately 6.47% and 35.09% of the entire issued share capital of the Company respectively. In the event that the directors of the Company exercise in full the power to repurchase Shares in the Company in accordance with the terms of the Ordinary Resolution, the shareholding of Mr. Budiman Rahardja and Easy Lead Corporation Limited in the Company would be increased to approximately 7.19% and 38.98% respectively. The directors of the Company are aware that such increase may give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code. If any exercise of the powers of the Company to make repurchases pursuant to the Ordinary Resolution would, to the knowledge of the directors, result in takeovers obligations, the directors would not purchase Shares to such an extent.

(8) Share repurchase made by the Company

The Company has not repurchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of this statement.

– 4 –

LETTER FROM THE BOARD

RE-ELECTION OF DIRECTORS

In accordance with Bye-law 102(B) of the Company’s Bye-laws, Mr. Ng Chun Hung, Lawrence shall retire and, being eligible, offer himself for re-election at the AGM.

In accordance with Bye-law 182(vi) of the Company’s Bye-laws, Mr. Chen Zhi Yung and Mr. Wong Kam Wah shall retire by rotation at the AGM and, being eligible, offer themselves for re-election.

Information on the retiring directors proposed for re-election at the AGM is set out below:

Mr. Ng Chun Hung, Lawrence , aged 26, was appointed as an independent non-executive director of the Company in December 2004. He received his tertiary education at the Pace University in New York and the University of Southern California in Los Angeles respectively. Mr. Ng is a co-founder, chief executive officer and chief strategist of a U.S. company which provides services relating to online advertising, internet traffic patterns and search engine optimization. His expertise is on the U.S. hightech sector.

There is no service contract entered into by Mr. Ng with the Company and no fixed or proposed length of service with the Company, but he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with its bye-laws. Mr. Ng has not received any director’s fee from the Company for his directorship, although as an independent non-executive director, he will be entitled to receive emoluments as determined by the Board from time to time with reference to his services and contribution to the Company.

Mr. Ng does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company, nor does he have any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Saved as disclosed above, Mr. Ng has not held any directorships in listed public companies or other major appointments and qualifications in the last three years prior to the Latest Practicable Date.

Mr. Chen Zhi Yung , aged 38, was appointed as a non-executive director of the Company in September 2002. He is also a member of the Audit Committee of the Company. Mr. Chen has extensive experience in both local and overseas trading. He is currently running his own trading business.

There is no service contract entered into by Mr. Chen with the Company and no fixed or proposed length of service with the Company, but he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with its bye-laws. Mr. Chen has not received any director’s fee from the Company for his directorship, although as a non-executive director, he will be entitled to receive emoluments as determined by the Board from time to time with reference to his services and contribution to the Company.

Other than being a relative of Mr. Budiman Rahardja, Mr. Chen does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company, nor does he have any interest in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

– 5 –

LETTER FROM THE BOARD

Saved as disclosed above, Mr. Chen has not held any directorships in listed public companies or other major appointments and qualifications in the last three years prior to the Latest Practicable Date.

Mr. Wong Kam Wah , aged 47, was appointed as an independent non-executive director of the Company in December 2002. He is also a member of the Audit Committee of the Company. Mr. Wong is a fellow member of the Association of Chartered Certified Accountants and an associate member of each of the Hong Kong Institute of Certified Public Accountants, the Hong Kong Institute of Company Secretaries and the Institute of Chartered Secretaries and Administrators. Mr. Wong served in senior positions in a multinational corporation and an audit firm. He is currently the principal of a certified public accountants firm. He has extensive experience in accounting and auditing work.

There is no service contract entered into by Mr. Wong with the Company and no fixed or proposed length of service with the Company, but he is subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with its bye-laws. As an independent non-executive director, Mr. Wong will be entitled to receive emoluments as determined by the Board from time to time with reference to his services and contribution to the Company. The current director’s fee payable to Mr. Wong is HK$60,000 per annum.

Mr. Wong does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Wong has interest in an option to subscribe for 990,000 Shares within the meaning of Part XV of the Securities and Futures Ordinance.

Saved as disclosed above, Mr. Wong has not held any directorships in listed public companies or other major appointments and qualifications in the last three years prior to the Latest Practicable Date.

Saved as disclosed above, there are no other matters regarding the re-elected directors that need to be brought to the attention of the shareholders of the Company.

PROCEDURE TO DEMAND A POLL

Pursuant to Bye-law 70 of the Company’s Bye-laws, every resolution put to the vote of a general meeting shall be decided on a show of hands in the first instance, but a poll may be demanded (before or on the declaration of the result of the show of hands) by:

• (1) the chairman of the meeting; or

• (2) at least three members present in person or by proxy having the right to vote at the meeting; or

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

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

– 6 –

LETTER FROM THE BOARD

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 8 to 10 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein. A form of proxy is enclosed for use at the AGM. You are requested to complete and return the form of proxy to the Company’s share registrars in Hong Kong, Computershare Hong Kong Investor Services Limited, at 46th Floor, Hopewell Centre, 183 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 the holding of the AGM or any adjournment thereof. The lodging of a form of proxy will not preclude you from subsequently attending the AGM or any adjournment thereof and voting in person should you so wish.

RECOMMENDATION

The Directors consider that the Share Issue Mandate and the Share Repurchase Mandate are in the interests of the Company and its shareholders. The Directors are also pleased to recommend Mr. Ng Chun Hung, Lawrence, Mr. Chen Zhi Yung and Mr. Wong Kam Wah, the retiring Directors, for reelection at the AGM. Accordingly, the Directors recommend that shareholders of the Company vote in favour of the resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of the Board Kwan Kei Chor, Samuel Director

– 7 –

NOTICE OF ANNUAL GENERAL MEETING

SOUTH EAST GROUP LIMITED 東南國際集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of South East Group Limited (the “Company”) will be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Friday, 23 September 2005 at 10:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and the auditors of the Company for the year ended 31 March 2005;

2. To re-elect retiring directors and to authorise the board of directors to fix the remuneration of directors;

3. To determine the maximum number of directors for the financial year 2005/2006;

4. To re-appoint auditors and to authorise the board of directors to fix their remuneration;

5. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT:

• (a) the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of the Company, be and is hereby generally and unconditionally approved, provided that, otherwise than (i) pursuant to a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of shares of the Company as at that date (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body of any stock exchange, in any territory outside Hong Kong applicable to the Company); (ii) an issue of shares upon the exercise of rights of subscription or conversion under the terms of any securities which are convertible into shares of the Company; (iii) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time; or (iv) an issue of shares under any option scheme or similar arrangement for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, the aggregate nominal amount of share capital issued, allotted or disposed of or agreed conditionally or unconditionally to be issued, allotted or dealt with whether pursuant to an option or otherwise, shall not in total exceed 20 per cent of the nominal amount of share capital of the Company in issue on the date of passing this Resolution and the said approval shall be limited accordingly; and

* For identification purposes only

– 8 –

NOTICE OF ANNUAL GENERAL MEETING

• (b) for the purpose of this Resolution, “Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

  • (i) the conclusion of the next Annual General Meeting of the Company;

  • (ii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders of the Company in general meeting; and

  • (iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the bye-laws of the Company or any applicable law to be held.”

• As special business, to consider and, if thought fit, pass with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT:

• (a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase its shares on The Stock Exchange of Hong Kong Limited (“Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the total nominal amount of shares of the Company to be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10 per cent of the total nominal amount of the shares of the Company in issue on the date of passing this Resolution and the said approval shall be limited accordingly; and

• (c) for the purpose of this Resolution, “Relevant Period” means the period from the passing of this Resolution until whichever is the earlier of:

• (i) the conclusion of the next Annual General Meeting of the Company;

• (ii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders of the Company in general meeting; and

• (iii) the expiration of the period within which the next Annual General Meeting of the Company is required by the bye-laws of the Company or any applicable law to be held.”

– 9 –

NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT , subject to the passing of Resolutions Nos. 5 and 6 set out in the notice convening this meeting, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot and deal with additional shares and to make or grant offers, agreements and options which might or would require the exercise of such power pursuant to Resolution No. 5 set out in the notice convening this meeting, be and is hereby extended by the addition to the total nominal amount of the share capital of the Company which may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to such general mandate of an amount representing the total nominal amount of shares in the capital of the Company which has been repurchased by the Company under the authority granted pursuant to Resolution No. 6 set out in the notice convening this meeting provided that such amount of shares shall not exceed 10 per cent of the total nominal amount of the share capital of the Company in issue on the date of passing this Resolution.”

By Order of the Board Chan Sau Chee Company Secretary

Hong Kong, 26 August 2005

Notes:

• (i) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company.

• (ii) In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of the power of attorney or authority must be deposited with the Company’s share registrars in Hong Kong, Cmputershare Hong Kong Investor Services Limited, at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (iii) Completion and return of the form of proxy will not preclude a member of the Company from attending and voting in person at the meeting convened or any adjournment thereof and in such event, the authority of the proxy shall be deemed to be revoked.

The directors of the Company as at the date of this notice are Mr. Budiman Rahardja (Chairman) and Mr. Kwan Kei Chor, Samuel as executive directors, Mr. Chen Zhi Yung as non-executive director and Mr. Lo Yuk Lam, Mr. Wong Kam Wah and Mr. Ng Chun Hung, Lawrence as independent non-executive directors.

– 10 –