DIT Group Limited — AGM Information 2014

Jul 8, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong 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.

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, 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.

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(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 3 to 14 of this circular. A notice convening the annual general meeting of South East Group Limited to be held at 12th Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Thursday, 7 August 2014 at 10:00 a.m. is set out on pages 15 to 18 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 registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M 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.

9 July 2014

* For identification purposes only

CONTENTS

		Page
Definitions......................................................................................................................................		1
Letter from the Board
—	Introduction ................................................................................................................	3
—	The Share Issue Mandate...........................................................................................	4
—	The Share Repurchase Mandate ................................................................................	4
—	Re-election of Directors ............................................................................................	7
—	Annual General Meeting ...........................................................................................	13
—	Voting by Way of Poll................................................................................................	13
—	Responsibility Statement ...........................................................................................	14
—	Recommendation........................................................................................................	14
Notice of Annual General Meeting.............................................................................................		15

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DEFINITIONS

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

• “AGM”

• the annual general meeting of the Company to be held at 12th Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Thursday, 7 August 2014, the notice of which is set out on pages 15 to 18 of this circular;

• “AGM Notice”

• the notice of AGM dated 9 July 2014 which is set out on pages 15 to 18 of this circular;

• “associate(s)” has the meaning ascribed to it under the Listing Rules;

• “Board” the board of Directors of the Company;

• “Bondholder”

• any person whose name is for the time being registered in the register of Bondholder kept by the Company pursuant to the terms and conditions of the Convertible Bond and any person entitled by transmission to be registered as such;

• “Business Day” a day on which the Stock Exchange is open for business of dealing in securities;

• “Company”

• South East Group Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange;

• “connected person(s)” has the meaning ascribed to it under the Listing Rules;

• “Convertible Bond”

• the 3% coupon convertible bond of the Company due on 7 May 2016 with an outstanding principal amount of HK$68 million convertible into a maximum of 162,679,425 Shares at the price of HK$0.418 per Share (subject to adjustment).

• “Director(s)”

• the director(s) of the Company;

• “Group”

the Company and its subsidiaries;

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Latest Practicable Date”

• 4 July 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular;

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DEFINITIONS

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “SFO” the Securities and Futures Ordinance (Chapter 571) of the Laws of Hong Kong; “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company; “Shareholder(s)” holder(s) of Shares; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Takeovers Code” the Hong Kong Code on Takeovers and Mergers; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; and “%” per cent.

The English names of the PRC entities mentioned in this circular marked with “*” are translations from their Chinese names and are for identification purposes only. In case of any inconsistency, the Chinese names shall prevail.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability) (Stock Code: 726)

Executive Directors: YU Shengming (Chairman) MOCK Wai Yin (Deputy Chairman, Chief Executive Officer) CHAN Chi Yuen

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

Non-Executive Directors: CHEN Xiaoping

Independent Non-Executive Directors: NG Kwok Wai LEE Chi Hwa, Joshua LING Kit Wah, Joseph

Principal place of business in Hong Kong: 12th Floor, Entertainment Building 30 Queen’s Road Central Hong Kong

9 July 2014

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 the Shareholders with information required by the Listing Rules concerning the proposed general mandates for the issue of Shares, repurchase of Shares and an extension of the mandate for issuing Shares (to include those Shares repurchased) to be granted to the Directors since the general mandates granted on 7 August 2013 to the Directors will expire at the AGM. It is also to provide information relating to the re-election of Directors at the AGM. Resolutions in relation to the above, among others, are to be approved by the Shareholders at the AGM and this circular contains information reasonably necessary for the Shareholders to make an informed decision on whether to vote for or against such resolutions.

* For identification purposes only

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LETTER FROM THE BOARD

THE SHARE ISSUE MANDATE

Resolution no. 4 referred to in the AGM Notice will, if passed, give a general unconditional mandate (the “Share Issue Mandate”) to the Directors authorising the exercise by the Directors of the powers of the Company to allot additional Shares up to 20% of the issued share capital of the Company at the date of the AGM.

THE SHARE REPURCHASE MANDATE

Resolution no. 5 (the “Ordinary Resolution”) referred to in the AGM Notice will, if passed, give a general unconditional mandate (the “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 (the “Repurchase Proposal”).

The Directors also propose a separate ordinary resolution at the AGM to add to the Share Issue Mandate to issue those Shares purchased by the Company pursuant to the exercise of the Share Repurchase Mandate proposed to be granted to the Directors at the AGM (the “Extension of Share Issue Mandate”).

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 (the “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 the Latest Practicable Date, the issued share capital of the Company comprised 364,955,880 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 36,495,588 Shares.

(3) Reasons for the Repurchase Proposal

The Directors 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 believe that such a repurchase will benefit the Company and its Shareholders.

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LETTER FROM THE BOARD

(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.

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 2014) 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 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 do not propose to exercise the Share Repurchase 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, 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 Latest Practicable Date were as follows:

	Highest	Lowest
	HK$	HK$
July 2013	0.300	0.240
August 2013	0.310	0.255
September 2013	0.440	0.265
October 2013	0.590	0.305
November 2013	1.050	0.475
December 2013	0.900	0.640
January 2014	0.790	0.500
February 2014	0.720	0.540
March 2014	0.630	0.455
April 2014	0.640	0.445
May 2014	0.580	0.405
June 2014	0.590	0.410
July 2014 (up to and including the Latest Practicable Date)	0.440	0.405

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LETTER FROM THE BOARD

(6) Undertaking of the Directors

The Directors have undertaken to the Stock Exchange that, 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.

(7) Directors, associates and connected persons

None of the Directors 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 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.

(8) Effects of the Takeovers Code

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 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, Viva Shine Limited was beneficially interested in (i) 92,000,000 Shares representing approximately 25.21% of the issued share capital of the Company and (ii) the Convertible Bond convertible into a maximum of 162,679,425 Shares at the price of HK$0.418 per Share (subject to adjustment). (Note: According to the terms and conditions of the Convertible Bond, the Bondholder may only exercise the conversion rights attaching thereto, provided that, among others, the Bondholder and its associates will not be interested in an aggregate of 20% or more of the issued share capital of the Company then issued immediately before the conversion.) Viva Shine Limited is owned as to 50% by Mr. Yu Shengming (“Mr. Yu”), the chairman and an executive Director of the Company and 50% by Mr. Wang Guoli (“Mr. Wang”). Accordingly, Mr. Yu and Mr. Wang are taken to have an interest under the SFO in the same parcel of 92,000,000 Shares and the Convertible Bond beneficially owned by Viva Shine Limited, notwithstanding that such Shares and the Convertible Bond have been deposited and transferred to Kingston Securities Limited which comes to have interests by way of security. In the event that the Directors exercise in full the power to repurchase Shares in the Company in accordance with the terms of the Ordinary Resolution, then (if the present shareholdings otherwise remained the same) the attributable shareholdings of each of them in the Company would be increased to approximately 28.01% of the issued share capital of the Company. Such increase would not 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 obligation, the Directors would not purchase Shares to such an extent.

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LETTER FROM THE BOARD

(9) 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 Latest Practicable Date.

RE-ELECTION OF DIRECTORS

According to Bye-law 99 of the Company’s bye-laws, at each annual general meeting, one-third of the Directors for the time being (or, if their number is not three or a multiple of three, then the number nearest to but not less than one-third) shall retire from office by rotation, provided that every Director, including those appointed for a specific term, shall be subject to retirement by rotation at least once every three years. A retiring Director shall be eligible for re-election. Accordingly, Mr. Chen Xiaoping will retire by rotation at the AGM and, being eligible, offer himself for re-election.

According to Bye-law 102 of the Company’s bye-laws, any Director appointed by the Board shall hold office until the next following general meeting (in the case of the filling of casual vacancy) or the next following annual general meeting of the Company (in the case of an additional Director) and shall then be eligible for election at the meeting but shall not be taken into account in determining the Directors or the number of Directors who are to retire by rotation at such meeting. Accordingly, each of Mr. Yu Shengming, Mr. Mock Wai Yin, Mr. Chan Chi Yuen, Mr. Ng Kwok Wai, Mr. Lee Chi Hwa, Joshua and Mr. Ling Kit Wah, Joseph (all of them were appointed by the Board after the last annual general meeting) will retire from his office at the AGM and, being eligible, each of them will offer himself for re-election.

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

Mr. YU Shengming , aged 48, was appointed as the chairman and an executive director of the Company on 20 December 2013. Mr. Yu is currently the chairman of 招誠集團 (Zhao Cheng Group) in Shenzhen. 招誠集團 (Zhao Cheng Group) is a leading conglomerate engaged in diversified business such as trading of construction materials, leasing of property, project investment, tourist real estate and financial services. He also dedicates himself into social and public affairs and holds a number of important positions in political and business fields, namely the delegate of the 12th session of the People’s Congress of Guangdong Municipality, the honourable chairman of the Confederacy of Hong Kong Shan Wei Clansmen Limited and the deputy chairman of the China Furniture & Decoration Chamber of Commerce. Mr. Yu is a beneficial owner of 50% equity interests in and also a director of Viva Shine Limited which in turn is the beneficial owner of (i) 92,000,000 Shares representing approximately 25.21% of the issued share capital of the Company and (ii) the Convertible Bond. Mr. Yu is responsible for the overall strategic planning for business development and management of the Group. Save as disclosed, Mr. Yu did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

Mr. Yu entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance with the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$40,000 per

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LETTER FROM THE BOARD

month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Group and the prevailing market rate.

At as the Latest Practicable Date, Mr. Yu was beneficially interested in (i) 92,000,000 Shares representing approximately 25.21% of the issued share capital of the Company and (ii) the Convertible Bond convertible into a maximum of 162,679,425 Shares at the price of HK$0.418 per Share (subject to adjustment), both through a controlled corporation, Viva Shine Limited, within the meaning of Part XV of the SFO; notwithstanding that such Shares and the Convertible Bond have been deposited and transferred to Kingston Securities Limited. Viva Shine Limited is currently owned as to 50% by Mr. Yu and 50% by Mr. Wang Guoli. Save as disclosed, Mr. Yu does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Yu as a Director.

Mr. MOCK Wai Yin , aged 42, was appointed as the deputy chairman, chief executive officer and an executive director of the Company on 20 December 2013, and is a member of the Remuneration Committee and the Nomination Committee of the Company. He is also a director of various subsidiaries of the Company. Mr. Mock holds a Master of Philosophy in Biochemistry from The Chinese University of Hong Kong and a Master of Science in Hazard Analysis and Critical Control Point from University of Salford. He also holds a Postgraduate Diploma in Professional Accounting. Mr. Mock has 14 years of experience in research analysis and over 2 years of world-wide experience in natural resources, project investment and property development as well as project valuation and budget management. Currently, he is a director of a company which provides advisory services in relation to client’s project investments. Mr. Mock is responsible for overseeing the daily operations of the Group and in executing the corporate strategy. Save as disclosed, Mr. Mock did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

Mr. Mock entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance with the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$40,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Group and the prevailing market rate; and the employer’s contribution to mandatory provident fund.

As at the Latest Practicable Date, Mr. Mock does not have any interests in Shares within the meaning of Part XV of the SFO, nor does he have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Mock as a Director.

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LETTER FROM THE BOARD

Mr. CHAN Chi Yuen , aged 47, was appointed as an executive director of the Company on 20 December 2013. Mr. Chan holds a Bachelor degree with honours in Business Administration and a Master of Science degree in Corporate Governance and Directorship. He is a fellow of the Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants in the United Kingdom and an associate of The Institute of Chartered Accountants in England and Wales. Mr. Chan is a practising certified public accountant and has extensive experience in financial management, corporate development, corporate finance and corporate governance. Mr. Chan is currently an executive director and the chief executive officer of Noble Century Investment Holdings Limited, an independent non-executive director of Asia Energy Logistics Group Limited, China Gamma Group Limited, China Sandi Holdings Limited, Jun Yang Solar Power Investments Limited, Media Asia Group Holdings Limited, New Times Energy Corporation Limited and U-RIGHT International Holdings Limited. Mr. Chan was an executive director of Kong Sun Holdings Limited from February 2007 to November 2009 and from December 2011 to September 2013, and an independent nonexecutive director of The Hong Kong Building and Loan Agency Limited from October 2009 to February 2011, Richly Field China Development Limited from February 2009 to August 2010 and Superb Summit International Timber Company Limited (currently known as Superb Summit International Group Limited) from April 2007 to June 2010. The issued shares of all the aforesaid companies are listed and traded on The Stock Exchange of Hong Kong Limited. Save as disclosed, Mr. Chan did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

Mr. Chan entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance with the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$40,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Group and the prevailing market rate.

As at the Latest Practicable Date, Mr. Chan does not have any interests in Shares within the meaning of Part XV of the SFO, nor does he have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Chan as a Director.

Mr. CHEN Xiaoping , aged 62, was re-designated as a non-executive director of the Company on 20 December 2013, and is currently a member of the Audit Committee of the Company. Before his redesignation, Mr. Chen had assumed the roles of an executive director and the chief executive officer of the Company since September 2007. Mr. Chen worked at senior management positions in banking and other business fields in the past twenty five years, such as Director of Kleinwort Benson Group, Senior Adviser of Global Interactive Technology AG and Financial Adviser of CNT Group. Save as disclosed, Mr. Chen did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

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LETTER FROM THE BOARD

Mr. Chen had entered into a service agreement with the Company pursuant to which he agreed to act an executive Director for an initial period of three years from 1 October 2013. As Mr. Chen was redesignated from an executive Director to a non-executive Director on 20 December 2013, upon mutual consent between the Company and Mr. Chen, the service agreement was terminated on the same date. Mr. Chen then entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance with the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$10,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Company and the prevailing market rate.

As at the Latest Practicable Date, Mr. Chen has interests in 314,000 Shares in the issued share capital of the Company within the meaning of Part XV of the SFO. Save as disclosed, Mr. Chen does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Chen as a Director.

Mr. NG Kwok Wai , aged 37, was appointed as an independent non-executive director of the Company on 20 December 2013. He is the chairman of the Remuneration Committee and the Nomination Committee; and a member of the Audit Committee of the Company. Mr. Ng holds a bachelor degree in accounting and finance. He has over 10 years of experience in the field of accounting and finance. Save as disclosed, Mr. Ng did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

Mr. Ng entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$10,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Company and the prevailing market rate.

As at the Latest Practicable Date, Mr. Ng does not have any interests in Shares within the meaning of Part XV of the SFO, nor does he have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Ng as a Director.

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LETTER FROM THE BOARD

Mr. LEE Chi Hwa, Joshua , aged 41, was appointed as an independent non-executive director of the Company on 20 December 2013. He is the chairman of the Audit Committee and a member of the Remuneration Committee and the Nomination Committee of the Company. Mr. Lee is a fellow member of the Association of Chartered Certified Accountants and a member of Hong Kong Institute of Certified Public Accountants. Mr. Lee has extensive experience in the fields of auditing, accounting and finance. Mr. Lee currently serves as an independent non-executive director of China Fortune Investments (Holding) Limited (stock code: 8116) and Code Agriculture (Holdings) Limited (stock code: 8153), both are listed on the GEM Board of The Stock Exchange of Hong Kong Limited. He was an independent non-executive director of King Stone Energy Group Limited (stock code: 663) from January 2012 to April 2013. Save as disclosed, Mr. Lee did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

Mr. Lee entered into a letter of appointment with the Company on 20 December 2013, pursuant to the terms and conditions of which his service term is subject to retirement by rotation in accordance the Company’s bye-laws. The letter of appointment can be terminated by either party giving to the other party three months’ notice in writing. He is entitled to a fixed director’s fee of HK$10,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Company and the prevailing market rate.

As at the Latest Practicable Date, Mr. Lee does not have any interests in Shares within the meaning of Part XV of the SFO, nor does he have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Lee as a Director.

Mr. LING Kit Wah, Joseph , aged 57, was appointed as an independent non-executive director of the Company on 7 October 2013. Mr. Ling graduated from the University of Windsor with the Bachelor of Commerce (Hons) in business administration in June 1981. Mr. Ling has over 20 years’ experience in investment banking, direct investment and corporate finance in Hong Kong and Asia Pacific. During the period from January 1985 to September 2000, Mr. Ling worked for various banks, including, inter alia, Citigroup Australia Limited, The Hongkong and Shanghai Banking Corporation and Internationale Nederlanden Bank N.V. in private banking division. Mr. Ling was appointed as an executive director of Singapore Hong Kong Properties Investment Ltd. (currently known as China Seven Star Holdings Ltd., a company listed on the Main Board of The Stock Exchange of Hong Kong Limited) from October 2001 to November 2002, and then as a senior vice president of VXL Management Services Limited from March 2005 to April 2007. Then, he was appointed as an executive vice president of Pacific Star Group, a Singapore-based property investment company during the period from January 2008 to July 2009. Mr. Ling is currently an independent director of East Asia Sports International Limited, a company listed on the stock market in Korea. He is also an independent non-executive director, the chairman of the remuneration committee and a member of the audit committee of ZMFY Automobile Glass Services Limited (a company listed on the GEM Board of The Stock Exchange of Hong Kong Limited). Save as disclosed, Mr. Ling did not hold any directorship in other listed public companies in the last three years prior to the Latest Practicable Date.

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LETTER FROM THE BOARD

Mr. Ling entered into a letter of appointment with the Company on 7 October 2013 for a fixed term of three years therefrom (unless otherwise terminated earlier by either party giving to the other party one month’s notice in writing) and he is subject to retirement by rotation in accordance the Company’s bye-laws. He is entitled to a fixed director’s fee of HK$10,000 per month, which was determined by the Board with reference to the recommendation from the Remuneration Committee of the Company and his duties and responsibilities within the Company and the prevailing market rate.

As at the Latest Practicable Date, Mr. Ling does not have any interests in Shares within the meaning of Part XV of the SFO, nor does he have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

Save as disclosed below, there is no enterprise, company or unincorporated business enterprise that has been dissolved or put into liquidation (otherwise than by a member’s voluntary winding up when the company was solvent) or bankruptcy or been the object of an analogous proceeding, or entered into any form of arrangement or composition with creditors, or had a receiver, trustee or similar officer appointed over it (i) during the period when Mr. Ling was one of its directors or (ii) within 12 months after his ceasing to act as one of its directors:

• (1) Mr. Ling was appointed as an executive director of Leading Spirit High-Tech (Holdings) Company Limited (“Leading Spirit”) during the period from 4 September 2000 to 6 February 2001 to assist in the debt restructuring of Leading Spirit and its subsidiaries with the financial creditors. Mr. Ling resigned in February 2001 as he realized that his advice on the debt restructuring was not followed by and the debt restructuring plan was not adopted by the board of directors of Leading Spirit.

Leading Spirit was incorporated in Bermuda and was engaged in the principal business activities of trading of parts and components used in the manufacture of consumer electrical products and the manufacture, assembly and sale of consumer electrical products (including televisions and air conditioners) and electronic products.

Leading Spirit received statutory demand from its financial creditors for payment of an aggregate outstanding indebtedness of approximately HK$88,377,855.63 (as disclosed in the announcement of Leading Spirit dated 28 March 2001). Provisional liquidators were appointed to Leading Spirit on 10 May 2001 by one of its financial creditors in the Supreme Court of Bermuda. Listing of the shares of Leading Spirit on the Main Board of the Stock Exchange was cancelled on 19 January 2004 in accordance with the delisting procedures stipulated in the Listing Rules, and Leading Spirit was finally wound up due to its failure to repay the abovementioned bank debt pursuant to a winding up order granted by the Supreme Court of Bermuda on 18 June 2004. The winding-up of Leading Spirit was completed.

• (2) Mr. Ling was appointed as a director of G.K. Corporate Fashion (HK) Limited (“G.K. Corporate”) during the period from 8 September 2003 to 16 January 2004. Mr. Ling was appointed as a director of G.K. Corporate at his own request for the purpose of securing the repayment of the loan granted by him to G.K. Corporate. Mr. Ling resigned in January 2004 as he noted that G.K. Corporate went into further financial problem and it was not likely for him to be repaid of such loan.

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LETTER FROM THE BOARD

G.K. Corporate was incorporated in Hong Kong and was engaged in the principal business activities of uniform dyeing services.

A winding up petition was filed against G.K. Corporate on 13 December 2004 and a winding up order was granted by the Hong Kong Court on 16 February 2005.

As confirmed by Mr. Ling, he was not involved in the winding up of the above companies as such proceedings occurred after his resignation and he is not aware of any claims or potential claims against him in such connection.

Taking into account of the above and that although Mr. Ling has ever served as a director of the above wound-up companies, in both cases the winding up occurred after his resignation and there is no evidence that his honesty, integrity or competence has been questioned in relation to such winding up; the Board therefore considers Mr. Ling is fit to act as an independent non-executive director of the Company.

Save as disclosed, there is no other information that is required to be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules, and there are no other matters which need to be brought to the attention of the Shareholders in relation to the re-election of Mr. Ling as a Director.

ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 15 to 18 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 registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M 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.

VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman of the AGM, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, all resolutions to be considered and, if thought fit, passed at the AGM will be voted by way of poll by the Shareholders.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

RECOMMENDATION

The Directors consider that the proposed resolutions in respect of the Share Issue Mandate, the Share Repurchase Mandate, the Extension of Share Issue Mandate, and the proposed re-election of the retiring Directors are in the interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend that the Shareholders vote in favour of the resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of South East Group Limited Yu Shengming Executive Director and Chairman

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability) (Stock Code: 726)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of South East Group Limited (the “Company”) will be held at 12th Floor, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Thursday, 7 August 2014 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 2014;

2. (i) To re-elect Mr. Yu Shengming as an executive director of the Company;

3. (ii) To re-elect Mr. Mock Wai Yin as an executive director of the Company;

4. (iii) To re-elect Mr. Chan Chi Yuen as an executive director of the Company;

5. (iv) To re-elect Mr. Chen Xiaoping as a non-executive director of the Company;

6. (v) To re-elect Mr. Ng Kwok Wai as an independent non-executive director of the Company;

7. (vi) To re-elect Mr. Lee Chi Hwa, Joshua as an independent non-executive director of the Company;

8. (vii) To re-elect Mr. Ling Kit Wah, Joseph as an independent non-executive director of the Company; and

9. (viii) To authorise the board of directors of the Company to fix the remuneration of directors;

10. To re-appoint East Asia Sentinel Limited as auditors of the Company and to authorise the board of directors of the Company to fix their remuneration;

11. 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

* For identification purposes only

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NOTICE OF ANNUAL GENERAL MEETING

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 or 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 or any other eligible person(s) 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

• (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;

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NOTICE OF ANNUAL GENERAL MEETING

• (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.”

• 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 No. 4 and No. 5 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. 4 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. 5 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 of South East Group Limited Yu Shengming Executive Director and Chairman

Hong Kong, 9 July 2014

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NOTICE OF ANNUAL GENERAL MEETING

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 registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M 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.

• (iv) Biographical details of the directors proposed for re-election are set out in the section headed “Re-election of Directors” of this circular, of which this notice forms part.

The directors of the Company as at the date of this notice are Mr. Yu Shengming (Chairman), Mr. Mock Wai Yin (Deputy Chairman) and Mr. Chan Chi Yuen as executive directors; Mr. Chen Xiaoping as non-executive director; and Mr. Ng Kwok Wai, Mr. Lee Chi Hwa, Joshua and Mr. Ling Kit Wah, Joseph as independent non-executive directors.

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