DIT Group Limited — Capital/Financing Update 2006

Aug 24, 2006

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.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

VERY SUBSTANTIAL DISPOSAL REALISATION OF INTERESTS IN AN ASSOCIATED COMPANY AND RESUMPTION OF TRADING

BPDL (a wholly owned subsidiary of the Company) together with Heng Fa and Jin Yun entered into the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement on 26 May 2006 with the Transferees for transferring the ownership of the 100% equity interest in and the entire shareholders’ loan advanced to Ying Zhi Lun, in which BPDL holds a 33% equity interest and is an associated company of the Company. If the proposed transaction contemplated under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement takes place, 100% equity interest in Ying Zhi Lun will be transferred from the Transferors to the Transferees (which will result in Ying Zhi Lun being owned as to 90% by Zhong Cheng and 10% by Fung Dao) and the acquisition of the Lot by the Transferees for residential development will then become effective. On the other hand, BPDL will realize the value of its investment in Ying Zhi Lun, and it will no longer have any equity interest in Ying Zhi Lun which owns the Lot.

The Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement is conditional upon, among others, the successful obtaining by Zhong Cheng of the 35% equity interest in Ying Zhi Lun owned by Heng Fa in the public tender. Being a state-owned enterprise, Heng Fa is required to put its 35% equity interest in Ying Zhi Lun to public tender in order to transfer the ownership of asset. On 14 August 2006, the Company was informed that, other than Zhong Cheng, there was another bidder, the First Candidate, for the tender of the 35% equity interest in Ying Zhi Lun owned by Heng Fa. The First Candidate has been listed as the first candidate for winning the tender, followed by Zhong Cheng. The final result of the tender of the 35% equity interest in Ying Zhi Lun owned by Heng Fa has yet to be decided pending the acceptance by Heng Fa by entering into of an equity transfer agreement in respect of its 35% interest in Ying Zhi Lun. If the First Candidate wins the tender and enters into an equity transfer agreement with Heng Fa, the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement will be of no further force and effect. BPDL may or may not proceed with the realization of its investment in Ying Zhi Lun with the First Candidate, depending on the terms and consideration offered by the First Candidate.

The realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement constitutes a very substantial disposal of the Company pursuant to Rule 14.06(4) of the Listing Rules and is subject to approval by the Shareholders in the SGM. A circular containing, amongst other things, further details relating to the realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of

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Equity Interest and Shareholders’ Loan Agreement, a valuation report on the Lot, financial information on the Group and a notice of the SGM will be dispatched to the Shareholders as soon as practicable. The delay in publishing an announcement on a timely basis constitutes a breach of Rule 14.34 of the Listing Rules. The Company will make timely disclosure should there be any progress relating to the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement or any other agreements under which a notifiable transaction may arise. At the current stage, it is uncertain as to whether the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement or a new agreement with the First Candidate will proceed or not.

At the request of the Company, trading in shares of the Company on the Stock Exchange was suspended from 9:41 a.m. on 14 August 2006 pending the release of this announcement. The Company has applied for resumption of trading of its shares on the Stock Exchange with effect from 9:30 a.m. on 24 August 2006.

INTRODUCTION

Reference is made to the Company’s announcements dated 29 October 2003 and 8 September 2004 respectively, and a circular to the Shareholders dated 19 November 2003 in relation to the acquisition of 33% equity interest in Ying Zhi Lun by BPDL for the purpose of acquiring the right of the Property.

Affected by the decision of Heng Fa and Jin Yun to dispose of the Adjacent Land by way of transferring their ownership of the 67% equity interest in and shareholders’ loan advanced to Ying Zhi Lun, it has become not practicable for BPDL to develop the Property on its own because only one single title deed was issued to the Lot. To resolve the deadlock situation, BPDL together with Heng Fa and Jin Yun entered into the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement on 26 May 2006 with the Transferees for transferring the ownership of the 100% equity interest in and the entire shareholders’ loan advanced to Ying Zhi Lun, in which BPDL holds a 33% equity interest and is an associated company of the Company. If the proposed transaction contemplated under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement takes place, 100% equity interest in Ying Zhi Lun will be transferred from the Transferors to the Transferees (which will result in Ying Zhi Lun being owned as to 90% by Zhong Cheng and 10% by Fung Dao) and the acquisition of the Lot by the Transferees for residential development will then become effective. On the other hand, BPDL will realize the value of its investment in Ying Zhi Lun (including the 33% equity interest and the shareholder’ loan contributed), and it will no longer have any equity interest in Ying Zhi Lun which owns the Lot. The Property has been valued by Shanghai Urban & Rural Assets Appraisal Co., Ltd., a professional property valuer and is independent of the Company, the Transferors and the Transferees, at approximately HK$42,000,000 on an open market basis as at 31 March 2006. The audited net book value of BPDL’s interest in Ying Zhi Lun as at 31 March 2006 was approximately HK$36,909,000 (including the 33% equity interest and the shareholder’s loan contributed) according to the Company’s latest audited accounts for the year ended 31 March 2006. Based on the consideration of RMB46,822,105 (approximately HK$45,417,000) to be received by BPDL from realization of its investment in Ying Zhi Lun, it is estimated that a net gain of approximately RMB8.3 million (approximately HK$8 million) will be recognized from the realization of the interests in Ying Zhi Lun under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement. As disclosed in the Company’s announcements dated 29 October 2003 and 8 September 2004 respectively, and its circular dated 19 November 2003, BPDL invested in Ying Zhi Lun a total amount of RMB41,200,000 pursuant to the Transfer of Equity Interest Agreement and the Supplemental Agreement, both dated 23 October 2003, by acquiring a 33% equity interest in Ying Zhi Lun and by contributing to Ying Zhi Lun for the acquisition of the Property. Under the provisions of the Supplemental Agreement dated 23 October 2003, BPDL shall bear all development costs incurred from the development of the Property and receive all revenues from the unit

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sales of the residential buildings constructed thereon. On the other hand, BPDL shall not be responsible for the development of the Adjacent Land, nor be entitled to share any profits attributable thereto.

TRANSFER OF OWNERSHIP OF EQUITY INTEREST AND SHAREHOLDERS’ LOAN AGREEMENT

Date: 26 May 2006

Parties:

• (1) 上海浦東囱發房地產開發公司 (Shanghai Pudong Heng Fa Property Development Company)

• (2) Benelux Property Development (Shanghai) Limited

• (3) 上海金韻房地產發展有限公司 (Shanghai Jin Yun Property Development Limited)

• of the part of Transferors; and

• (1) 浙江中成建工集團有限公司 (Zhejiang Zhong Cheng Jian Gong Group Limited)

• (2) 上海豐道投資管理有限公司 (Shanghai Fung Dao Investment Management Limited)

• of the part of Transferees.

To the best knowledge of the Directors and having made all reasonable enquiries, the Transferees and their ultimate beneficial owners are not connected persons (as defined under the Listing Rules) of the Company and are third parties independent of the Company and connected persons of the Company.

Asset subject to the disposal:

The 100% equity interest in and the entire shareholders’ loan of RMB106,158,000 advanced to Ying Zhi Lun (by Heng Fa, BPDL and Jin Yun in the amounts of RMB37,184,000, RMB35,800,000 and RMB33,174,000 respectively according to the latest audited accounts of Ying Zhi Lun for the year ended 31 December 2005), which has acquired the rights of the Lot (BPDL is beneficially interested in approximately one-third of which).

Ying Zhi Lun was incorporated on 29 April 2003 in the PRC and is principally engaged in the business of property development in the PRC. Its net asset value at 31 December 2005 amounted to approximately RMB8 million according to its latest audited accounts for the year ended 31 December 2005. As there has been no development on the Lot, there has been no profit or loss since its incorporation. Except for the interest in the Lot, Ying Zhi Lun is not holding other major assets.

Consideration:

RMB141,376,500 in cash (of which BPDL will be entitled to RMB46,822,105) for the 100% equity interest in and the entire shareholders’ loan advanced to Ying Zhi Lun, which was arrived at after arm’s length negotiations between the parties to the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement with reference to the net assets value of Ying Zhi Lun as at 31 December 2005 according to its latest audited accounts for the year ended 31 December 2005.

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A 10% deposit has been paid by the Transferees to Shanghai Notary Public Office (上海市公證處) as stakeholders upon signing of the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement, the balance of 90% will be paid by the Transferees to Shanghai Notary Public Office (上海市 公證處) as stakeholders within 5 days after issuance of the documentary evidence of transaction fund settlement (產權交割單據) in respect of the transfer of 35% equity interest in Ying Zhi Lun from Heng Fa to Zhong Cheng.

If the conditions precedent have been fulfilled, the consideration of RMB141,376,500 (of which BPDL will be entitled to RMB46,822,105) will be released to the Transferors, subject to the following:

• (i) the granting of a two-year guarantee (from the date of issuance of a new business licence of Ying Zhi Lun to the Transferees) for any undisclosed liabilities of Ying Zhi Lun by the Transferors severally in accordance with their percentage ratios of equity interest in Ying Zhi Lun immediately before the equity transfer pursuant to the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement, and

• (ii) the granting of a two-year guarantee (from the date of issuance of a new business licence of Ying Zhi Lun to the Transferees) for any undisclosed liabilities of Ying Zhi Lun separately by the respective guarantors nominated by each of Heng Fa, BPDL and Jin Yun to accept liability of any possible claims made by the Transferees to the extent in accordance with the percentage ratios of equity interest in Ying Zhi Lun in which each of the Transferors was interested in immediately before the equity transfer pursuant to the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement. As in the case for BPDL, the Company will provide guarantee to the Transferees to an extent up to 33% of any possible claims made by the Transferees.

Conditions precedent:

The Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement is conditional upon, inter alia, (i) the approval from State-owned Assets Administration Office of Shanghai Municipal Government ( 上海市國有資產管理辦公室) authorizing Heng Fa (one of the Transferors), being a state-owned enterprise, to pursue with the transactions contemplated under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement and (ii) no tender other than from Zhong Cheng (one of the Transferees) is received during the period when 35% equity interest in Ying Zhi Lun owned by Heng Fa is offered for sale on the Assets Exchange (資產交易所). Heng Fa obtained the necessary approval from the State-owned Assets Administration Office of Shanghai Municipal Government (上海市國有資產管理辦公室) on 11 July 2006. The 35% equity interest in Ying Zhi Lun owned by Heng Fa was put on tender on the Assets Exchange from 13 July 2006 up to and including 11 August 2006. If no tender other than from Zhong Cheng is received during the tender period, the agreement will become unconditional after the expiry of the tender period.

PROPOSED USE OF PROCEEDS

At this stage, it is estimated that the net proceeds from the proposed transaction will be used as to 20% for the Group’s general working capital and 80% for investments when the Group identifies new business opportunities. As at the date of this announcement, no investment target has been identified.

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INDICATIVE RESULT IN RESPECT OF THE TENDER ON HENG FA’S 35% EQUITY INTEREST IN YING ZHI LUN

On 14 August 2006, the Company was informed that, other than Zhong Cheng, there was another bidder, the First Candidate, for the tender of the 35% equity interest in Ying Zhi Lun owned by Heng Fa. Being a state-owned enterprise, Heng Fa is required to put its 35% equity interest in Ying Zhi Lun to public tender in order to transfer the ownership of asset. The First Candidate has been listed as the first candidate for winning the tender, followed by Zhong Cheng. As informed by Heng Fa, they will assess the ability of the First Candidate to complete the transaction before deciding to accept their tender or not. Heng Fa and Jin Yun together with BPDL will engage in further negotiations with the First Candidate, which may lead to the entering into an agreement with the First Candidate for transferring the ownership of their equity interest in and shareholders’ loan of Ying Zhi Lun. It is expected that it will take about 2 weeks from the date of this announcement for deciding who will be the ultimate winner of the tender.

The final result of the tender of the 35% equity interest in Ying Zhi Lun owned by Heng Fa has yet to be decided pending the acceptance by Heng Fa by entering into of an equity transfer agreement in respect of its 35% interest in Ying Zhi Lun. If the First Candidate wins the tender and enters into an equity transfer agreement with Heng Fa, the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement will be of no further force and effect. BPDL may or may not proceed with the realization of its investment in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) with the First Candidate, depending on the terms and consideration offered by the First Candidate. Further announcement will be made by the Company as and when necessary and in compliance with the Listing Rules.

IMPLICATION UNDER CHAPTER 14 OF THE LISTING RULES

The Directors consider that the possible realization of the investment in Ying Zhi Lun is significant given that the interests in Ying Zhi Lun is a major asset of the Group. Because of the change in nature of the Lot held by Ying Zhi Lun, the Property has became a property held for re-sale rather than a property held for development in substance. The intention of Heng Fa and Jin Yun to realize their investment in Ying Zhi Lun has not become definite until the entering into of the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement on 26 May 2006. The Company has not made disclosure about the realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement in compliance with the Listing Rules before the close of the tender period lest it might affect the result of the tender. The realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement constitutes a very substantial disposal of the Company pursuant to Rule 14.06(4) of the Listing Rules and is subject to the approval by the Shareholders in the SGM. A circular containing, amongst other things, further details relating to the realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement, a valuation report on the Lot, financial information on the Group and a notice of the SGM will be dispatched to the Shareholders as soon as practicable. The delay in publishing an announcement on a timely basis constitutes a breach of Rule 14.34 of the Listing Rules. The Company will make timely disclosure should there be any progress relating to the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement or any other agreements under which a notifiable transaction may arise. At the current stage, it is uncertain as to whether the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement or a new agreement with the First Candidate will proceed or not.

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GENERAL

The Group is principally engaged in the business of property development and investment, manufacturing and trading of data storage media products and related equipment, manufacturing and trading of wine products and other strategic investment projects. BPDL is a wholly foreign-owned enterprise established under the laws of the PRC, which is a wholly owned subsidiary of the Company, and is principally engaged in property development and investment in the PRC.

To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, Heng Fa and Jin Yun are both principally engaged in property development in the PRC, while Zhong Cheng is principally engaged in the construction business and Fung Dao is principally engaged in property development and investment in the PRC.

Facing the change in the operating environment and the property market in Shanghai, as well as the intention of Heng Fa and Jin Yun to realize their interests in Ying Zhi Lun and the Adjacent Land, the Directors consider that it is to the benefit of the Group to take the opportunity to realize its interests in Ying Zhi Lun. Having regard to the proceeds of RMB46,822,105 to be received by BDPL under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement and the expected net gain of approximately HK$8 million, the Directors (including the independent non-executive directors) consider the terms of the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement (should it proceed) are fair and reasonable and in normal commercial terms and are in the interests of the Company and the Shareholders as a whole.

At the request of the Company, trading in shares of the Company on the Stock Exchange was suspended from 9:41 a.m. on 14 August 2006 pending the release of this announcement. The Company has applied for resumption of trading of its shares on the Stock Exchange with effect from 9:30 a.m. on 24 August 2006.

DEFINITIONS

• “Adjacent Land” a piece of land of approximately 70,952 square metres adjacent to the Property and is owned by Ying Zhi Lun, of which Heng Fa and Jin Yun have the right of development, accordingly shall bear all development costs incurred and receive all revenues derived therefrom

• “Board” the board of Directors

• “BPDL” Benelux Property Development (Shanghai) Limited, a wholly owned subsidiary of the Company

• “Company” South East Group Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange

• “Directors” the directors of the Company

• “First Candidate” the bidder listed as the first candidate for winning the tender of 35% equity interest in Ying Zhi Lun owned by Heng Fa

• “Fung Dao” 上海豐道投資管理有限公司(Shanghai Fung Dao Investment Management Limited)

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“Group”

the Company and its subsidiaries

• “Heng Fa”

• 上海浦東囱發房地產開發公司(Shanghai Pudong Heng Fa Property Development Company), being a state-owned enterprise and having a 35% equity interest in Ying Zhi Lun. To the best knowledge of the Directors and having made all reasonable enquiries, it and its ultimate beneficial owners are independent of the Company and connected persons (as defined under the Listing Rules) of the Company, save as its interest in Ying Zhi Lun

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC

• “Jin Yun”

• 上海金韻房地產發展有限公司 (Shanghai Jin Yun Property Development Limited) having a 32% equity interest in Ying Zhi Lun. To the best knowledge of the Directors and having made all reasonable enquiries, it and its ultimate beneficial owners are independent of the Company and connected persons (as defined under the Listing Rules) of the Company, save as its interest in Ying Zhi Lun

• “Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange

• “Lot” a vacant site of approximately 105,899 square metres situated in Songjiang District, Shanghai, the PRC (consists of the Property and the Adjacent Land) known as Shanghai Songjiang District Song Xin Jian Lot. No. 19-2 (上海市松江 區松新建19-2號地塊) owned by Ying Zhi Lun as evidenced by the Shanghai Certificate of Real Estate Ownership (上海市房地產權證) issued by Shanghai Housing and Land Resources Administration Bureau (上海市房屋土地資源管 理局) on 5 September 2005

• “PRC”

• the People’s Republic of China

• “Property” a parcel of land of approximately 34,947 square metres, which forms an integral part of the Lot, with its right of development obtained by BPDL through acquisition of a 33% equity interest in Ying Zhi Lun in October 2003, which has not been developed since its acquisition.

• “SGM” the special general meeting of the Company to be convened to approve the realization of interests in Ying Zhi Lun (including the 33% equity interest and the shareholder’s loan contributed by BPDL) under the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement and the transactions contemplated thereunder

• “Shareholder(s) registered holder(s) of the shares of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Transfer of Ownership a conditional agreement entered into on 26 May 2006 by BPDL together with of Equity Interest Heng Fa and Jin Yun with the Transferees for transferring the ownership of the and Shareholders’ 100% equity interest in and the entire shareholders’ loan advanced to Ying Zhi Loan Agreement” Lun

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“Transferees”

the transferees as referred to in the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement, being Zhong Cheng and Fung Dao

• “Transferors” the transferors as referred to in the Transfer of Ownership of Equity Interest and Shareholders’ Loan Agreement, being Heng Fa, BPDL and Jin Yun

• “Ying Zhi Lun” 上海英之倫房地產發展有限公司(Shanghai Ying Zhi Lun Property Development Limited), a company incorporated in Shanghai, the PRC, mainly engaged in property development, and owned as to 35% by Heng Fa, 33% by BPDL and 32% by Jin Yun

• “Zhong Cheng” 浙江中成建工集團有限公司(Zheijiang Zhong Cheng Jian Gong Group Limited)

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “RMB” Renminbi, the lawful currency of the PRC

• “%” Per cent.

By order of the Board Budiman Rahardja Chairman

23 August 2006

The directors of the Company as at the date of this announcement are Mr. Budiman Rahardja (Chairman) as executive director; 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.

If there is any inconsistency between the Chinese names of the PRC entities and their English translations, the Chinese version shall prevail.

• For identification purpose only

Please also refer to the published version of this announcement in The Standard.

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