DIT Group Limited — Capital/Financing Update 2000

Oct 12, 2000

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.

SOUTH EAST GROUP LIMITED

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT

The directors of the Company announce that there will be an extension of the schedule of capital injection into a joint venture whereby a wholly owned subsidiary of the Company is a party to such venture. The joint venture will be engaged in the production and trading of grape wine in the People's Republic of China.

Reference is made to the announcement (the "Announcement") and the circular (the "Circular") of South East Group Limited (the "Company") dated 23 September, 1998 and 14 October, 1998 respectively in relation to a discloseable transaction of the Company involving the formation of a joint venture (the "Joint Venture") for the production and trading of grape wine in the People's Republic of China. The Company is an investment holding company together with its subsidiaries are principally engaged in manufacturing and trading of magnetic media products and related equipment. Unless otherwise stated herein, terms defined in the Announcement and the Circular shall have the same meanings when used herein.

In accordance with the terms of the Joint Venture Agreement dated 22 September, 1998, the registered capital of the Joint Venture is US$3.89 million (approximately HK$30.34 million). A consideration of US$2.14 million (approximately HK$16.69 million) representing 55% of the registered capital of the Joint Venture has to be injected by South Perfect International Limited ("South Perfect"), a wholly owned subsidiary of the Company, within two years after the first date of issuance of the relevant business licence. Such consideration would be satisfied partly by provision of new machinery and equipment with a total value of approximately RMB9 million (approximately HK$8.19 million) and the balance would be satisfied in form of cash. The business licence was issued on 12 October, 1998.

As at the date of this announcement, South Perfect has invested US$750,000 (approximately HK$5.85 million) into the Joint Venture, which represents approximately 19.28% of the registered capital of the Joint Venture. During recent discussions between both parties to the Joint Venture Agreement, they believe that it will be beneficial to the future development of the Joint Venture if South Perfect can contribute the outstanding portion of US$1.39 million (approximately HK$10.84 million) of its capital commitment in the form of provision of new production machinery and equipment to the Joint Venture instead of cash in order to strengthen the production quality and quantity. The new product machinery and equipment will be acquired by the Group based on the requirements of the PRC party for injection into the Joint Venture. The capital verification will be done by an independent PRC accounting firm. With a view to evaluating the appropriate types of new production machinery and equipment and their respective manufacturers, both parties to the Joint Venture have principally agreed to extend the deadline for capital injection to on or before October 2001. The directors of the Company consider that such new arrangement has no material impact on the Group. Further announcement will be made by the Company as and when necessary.

By Order of the Board

South East Group Limited

William K. Jakel

Director

Note: The rates of exchange between US$ and HK$ and between RMB and HK$ are based on US$1 = HK$7.8 and RMB1 = HK$0.91 respectively.

Hong Kong, 11 October, 2000

Please also refer to the published version of this announcement in Hong Kong iMail.