DIT Group Limited — Capital/Financing Update 2014

Aug 11, 2014

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase, or subscribe for the securities of the Company.

==> picture [238 x 47] intentionally omitted <==

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

ANNOUNCEMENT PROPOSED RIGHTS ISSUE ON THE BASIS OF EIGHT RIGHTS SHARES FOR EVERY ONE EXISTING SHARE HELD ON THE RECORD DATE AT HK$0.1 PER RIGHTS SHARE AND CHANGE IN BOARD LOT SIZE

Financial Adviser to the Company

==> picture [54 x 49] intentionally omitted <==

Underwriter to the Rights Issue

==> picture [39 x 43] intentionally omitted <==

PROPOSED RIGHTS ISSUE

The Company proposes to raise approximately HK$292 million, before expenses, by issuing 2,919,647,040 Rights Shares to the Qualifying Shareholders by way of the Rights Issue at the Subscription Price of HK$0.1 per Rights Share on the basis of eight (8) Rights Shares for every one (1) existing Share held on the Record Date.

Subject to the Undertaking and the terms and conditions of the Underwriting Agreement, the Rights Issue will be fully underwritten by the Underwriter, details of which are set out in the section headed “Underwriting Agreement’’ of this announcement.

* For identification purposes only

— 1 —

The estimated net proceeds from the Rights Issue will be approximately HK$283 million. It is expected that the proceeds from the Rights Issue will be principally used for the development of the businesses of the Group, details of which are set out in the paragraph headed “Reasons for and benefits of the Rights Issue and intended use of proceeds” of this announcement.

An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms).

CHANGE IN BOARD LOT SIZE

The Board proposes that, subject to the completion of the Rights Issue, the board lot size of the Shares for trading on the Stock Exchange will be changed from 2,000 Shares to 20,000 Shares with effect from 9:00 a.m. on Friday, 31 October 2014. The Company will arrange odd lot matching services in order to facilitate the trading of odd lots (if any).

IMPLICATIONS UNDER THE LISTING RULES

In compliance with Rule 7.19(6) of the Listing Rules, the Rights Issue must be made conditional on approval of the Independent Shareholders by way of poll at the SGM on which any controlling Shareholders (as defined in the Listing Rules) and their associates or, where there are no controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue.

As at the date of this announcement, there is no controlling Shareholder (as defined in the Listing Rules); Accordingly, Viva Shine, which is owned as to 50% by Mr. Yu Shingming, the chairman of the Company and an executive Director, and is interested in 92,000,000 Shares, and Mr. Chen Xiaoping, a non-executive Director, who is interested in 314,000 Shares, will abstain from voting in favour of the resolution(s) approving the Rights Issue and the transactions contemplated thereunder at the SGM.

The Rights Issue is conditional on, among other things, the relevant resolutions being approved by the Independent Shareholders at the SGM. An independent board committee comprising all the independent non-executive Directors will be established by the Company to advise the Independent Shareholders as to whether the terms of the Rights Issue are fair and reasonable and as to voting in respect thereof at the SGM. An independent financial adviser will be appointed to advise the independent board committee of the Company and the Independent Shareholders in this regard.

GENERAL

A circular containing, among other things, (i) further details of the Rights Issue; (ii) a letter of recommendation from the independent board committee of the Company to the Independent Shareholders in respect of the Rights Issue; (iii) a letter of advice from the independent financial adviser to the independent board committee of the Company and the Independent Shareholders in respect of the Rights Issue; and (iv) the notice convening the SGM, will be despatched to the Shareholders on or before Friday, 5 September 2014.

Subject to, among other things, the approval of the Rights Issue by the Independent Shareholders at the SGM, the Prospectus Documents will be despatched to the Qualifying Shareholders and the Prospectus will be despatched to the Non-Qualifying Shareholders for information purposes only as soon as practicable.

— 2 —

WARNING OF THE RISK OF DEALINGS IN THE SHARESAND THE NIL-PAID RIGHTS SHARES

The Rights Issue is conditional upon, among other things, fulfillment of the conditions set out under the paragraph headed “Conditions of the Rights Issue” of this announcement. In particular, the Rights Issue is subject to the Underwriter not terminating the Underwriting Agreement in accordance with the terms set out therein. Accordingly, the Rights Issue may or may not proceed. Any Shareholders or potential investors contemplating selling or purchasing the Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue cannot become unconditional and may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares and/or nil-paid Rights Shares, and if they are in any doubt about their position, they should consult his/her/its own professional advisers.

PROPOSED RIGHTS ISSUE

Issue Statistics

Basis of the Rights Issue : Eight(8) Rights Shares for every one (1) existing Share held on the Record Date Subscription Price : HK$0.1 per Rights Share with nominal value of HK$0.1 Number of Shares in issue as at the : 364,955,880 Shares date of this announcement Number of Rights Shares : 2,919,647,040 Rights Shares (assuming no new Share being issued and no Share being repurchased by the Company on or before the Record Date)

As at the date of this announcement, there are outstanding Convertible Bond with an aggregate principal amount of HK$68,000,000 convertible into 162,679,425 new Shares at the conversion price of HK$0.418 per conversion share (subject to adjustments). Save for the Convertible Bond, the Company does not have any other derivatives, options, warrants and conversion rights or other similar rights which are convertible or exchangeable into Shares.

— 3 —

Assuming that no new Share being issued and no Share being repurchased by the Company on or before the Record Date, the total number of 2,919,647,040 Rights Shares represents:

• (i) approximately 800% of the Company’s existing issued share capital as at the date of this announcement; and

• (ii) approximately 88.89% of the Company’s issued share capital as enlarged by the issue of the Rights Shares.

Undertaking

As at the date of this announcement, Viva Shine, the substantial Shareholder, is interested in (i) 92,000,000 Shares, representing approximately 25.21% of the issued share capital of the Company; and (ii) the Convertible Bond. Pursuant to the Undertaking, Viva Shine has irrevocably undertaken in favour of the Company and the Underwriter, inter alia, that it will (i) save for the existing charges over the 92,000,000 Shares and the Convertible Bond, not to sell or convert the whole or any part of the outstanding principal amount of the Convertible Bond at any time from the date of the Undertaking up to the close of business on the Record Date; (ii) accept and pay for in full or procure the acceptance and payment in full by its associates or nominees for the 736,000,000 Rights Shares provisionally allotted to Viva Shine, prior to the Latest Time For Acceptance; (iii) not apply for any Rights Shares in excess of those provisionally allotted thereto as referred to paragraph (ii); and (iv) the 92,000,000 Shares shall remain beneficially owned by it as at the date of the Undertaking up to the close of business on the Record Date.

Subscription Price

The Subscription Price of HK$0.1 per Rights Share is payable in full upon acceptance and on application. The Subscription Price represents:

• (i) a discount of approximately 71.43% to the closing price of HK$0.350 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a discount of approximately 72.14% to the average closing price of approximately HK$0.359 per Share for the last five consecutive trading days up to and including the Last Trading Day; and

• (iii) a discount of approximately 21.88% to the theoretical ex-rights price of approximately HK$0.128 per Share after the Rights Issue, calculated based on the closing price of HK$0.350 per Share as quoted on the Stock Exchange on the Last Trading Day.

Basis of determining the Subscription Price

The determination of the Subscription Price and subscription ratio was a commercial decision made by the Company after arm’s length negotiation between the Company and the Underwriter, having considered the following factors:

— 4 —

i) the capital needs of the Group

The Group’s business operations were principally related to the selling of completed properties and leasing of properties for rental income in the PRC. As disclosed in the announcements of the Company dated 26 February 2014 and 23 May 2014 respectively, the Company entered into a Framework Agreement (as amended by a supplemental agreement) in relation to the Proposed Acquisition. The Properties are located in the Luohu district of Shenzhen which is a prosperous area and one of the most well developed districts in Shenzhen. The consideration of the Proposed Acquisition will be determined after further negotiation between the vendor (the “Vendor”) and the Company with reference to the finalized market value of the Properties to be evaluated by an independent valuer engaged by the Company. The preliminary valuation of the Properties as appraised by the independent valuer is approximately RMB400 million (equivalent to approximately HK$500 million at the exchange rate of RMB1: HK$1.25). As requested by the Vendor, the consideration will be satisfied by the Company in the combination of cash, the issuance of consideration shares, promissory notes or/and convertible notes by the Company, whereas the cash portion of the consideration shall be not less than HK$300 million. If (i) the Formal Agreement is not entered into on or before the long stop date of the Framework Agreement; or (ii) the Formal Agreement is entered into but completion of the Proposed Acquisition for whatever causes does not take place; or (iii) the Framework Agreement is terminated for whatever causes, the Earnest Money (if paid) shall be refunded forthwith to the Company. If the Formal Agreement is entered into and the parties thereto proceed to completion of the Proposed Acquisition, the Earnest Money will be treated as part payment of the consideration and will be dealt with pursuant to Formal Agreement. Pursuant to the Framework Agreement (as supplemented on 23 May 2014), the long stop date of the Framework Agreement will fall on 25 August 2014, the Company has approached the Vendor to enter into a supplemental framework agreement so that the long stop date can be further extended.

In order to finance the Proposed Acquisition, the Board has been actively seek for fund raising opportunities to raise sufficient funds to satisfy the cash portion of the consideration of the Proposed Acquisition.

ii) the financial position of the Group

For the year ended 31 March 2014, turnover of approximately HK$401,000 was recorded from property sales and rental income of approximately HK$416,000. As at 31 March 2014, a gross floor area of only 7,845 square meters of completed commercial properties in Zouping, Shandong Province, the PRC was remained at the Group. As at the date of this announcement, the Convertible Bond in the principal amount of HK$68 million due in May 2016 with an interest rate per annum of 3% remains outstanding and without significant improvement on the Group’s business performance, it is not expected that the Convertible Bond can be repaid in full upon the date of maturity in May 2016.

— 5 —

As at 31 March 2014, the Group recorded audited net assets of approximately HK$178,000 with cash and cash equivalents of approximately HK$27.15 million, which is retained for future administrative expenses of the Group as it is not expected that the existing businesses of the Group would be able to generate significant positive cash inflow to the Group. Accordingly, the Group is in need of new capital for its continual developments.

iii) the market value of the Shares

The Group recorded turnover of approximately HK$0.82 million and HK$0.73 million and net loss after taxation of approximately HK$6.70 million and HK$16.86 million respectively for the year ended 31 March 2014 and 31 March 2013. The Group’s financial performance in the past was unsatisfactory. Since December 2013, the closing prices of the Shares have demonstrated a sliding trend.

Taking into account all these factors, and the alternative financing methods the Company had considered as set out in other paragraphs of this announcement, the Board (excluding the independent non-executive Directors who will give their view on the Rights Issue after taking into account the advice of the independent financial adviser) is of the view that the terms of the Rights Issue, including the Subscription Price and the subscription ratio, are in the interests of the Company and the Shareholders as a whole.

The deep discount to the recent closing price of the Shares represented by the Subscription Price is made with a view to encourage the Qualifying Shareholders to participate in the Rights Issue and maintain their shareholdings in the Company accordingly and take part in the future growth of the Company. In addition, as indicated to the Company during the negotiation of the Underwriting Agreement, given the abovementioned factors, a subscription price with deeper discount to the closing price of the Shares is necessary to induce the Underwriter to take up the underwriting commitment of the Underwritten Shares, which is an essential part of the Rights Issue.

Qualifying Shareholders

The Rights Issue is only available to the Qualifying Shareholders. The Company will send (i) the Prospectus Documents to the Qualifying Shareholders; and (ii) the Prospectus to the Non-Qualifying Shareholders for information purposes only, but no PAL and EAF will be sent to the Non-Qualifying Shareholders.

To qualify for the Rights Issue, a Shareholder must:

• (i) be registered as a member of the Company at the close of business on the Record Date; and

(ii) not be a Non-Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, owners of the Shares must lodge any transfers of the Shares (together with the relevant share certificates) with the Registrar, being Computershare Hong Kong Investor Services Limited at shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong for registration no later than 4:30 p.m. on Monday, 29 September 2014. It is expected that the last day of dealings in the Shares on a cum-right basis is Thursday, 25 September 2014 and the Shares will be dealt with on an ex-rights basis from Friday, 26 September 2014.

— 6 —

Closure of Register of Member

The register of members of the Company will be closed from Tuesday, 30 September 2014 to Monday, 6 October 2014, both dates inclusive. No transfer of Shares will be registered during this period.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong.

In compliance with the necessary requirements of the Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue to the Overseas Shareholders (if any). If, based on legal advice, the Directors consider that it is necessary or expedient not to offer the Rights Shares to the Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place, the Rights Issue will not be available to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue, to be despatched to the Qualifying Shareholders on the Posting Date. The Company will send copies of the Prospectus to the Non-Qualifying Shareholders for their information only, but will not send any PAL and EAF to them on the Posting Date.

Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, of more than HK$100 will be paid pro rata to the Non-Qualifying Shareholders. The Company will retain individual amounts of HK$100 or less for the benefits of the Company. Any unsold entitlement of the Non-Qualifying Shareholders, together with any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders or otherwise not subscribed for by transferees of nil-paid Rights Shares, will be made available for excess application on EAFs by the Qualifying Shareholders.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue, subject to the results of enquiries made by the Directors pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

Basis of Provisional Allotment

The basis of the provisional allotment shall be eight(8) Rights Shares for every one (1) existing Share held on Record Date, being 2,919,647,040 Rights Shares (assuming no new Share being issued and no Share being repurchased by the Company on or before the Record Date). Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for by no later than the Latest Time For Acceptance.

Fractions of Rights Shares (if any)

On the basis of provisional allotment of eight (8) Rights Shares for every one (1) Share held by the Qualifying Shareholders on the Record Date, no fractional entitlements to the Rights Shares will arise under the Rights Issue.

— 7 —

Application for Excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements to the Rights Shares of the Non-Qualifying Shareholders and for any Rights Shares provisionally allotted but not accepted.

Applications for excess Rights Shares can only be made by Qualifying Shareholders and only by completing the EAFs (in accordance with the instructions printed thereon) for application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for by no later than the Latest Time For Acceptance. The Directors will allocate the excess Rights Shares at their discretion on a fair and equitable basis and as far as practicable on the following principles:

1. subject to availability of excess Rights Shares for all such applications, preference will be given to applications for less than a board lot of Rights Shares where they appear to the Directors that such applications are made to top-up odd lots holdings to whole lot holdings and that such applications are not made with the intention to abuse this mechanism; and

2. subject to availability of excess Rights Shares after allocation under principle (1) above, any further remaining excess Rights Shares will be allocated to the Qualifying Shareholders based on a sliding scale with reference to the number of the excess Rights Shares applied for by them with flexibility to round up to whole board lots at the discretion of the Directors (i.e. the Qualifying Shareholders applying for a smaller number of the Rights Shares will be allocated a higher percentage of the excess Rights Shares they have applied for; whereas the Qualifying Shareholders applying for a larger number of Rights Shares will be allocated a lower percentage of the excess Rights Shares than those applying for a smaller number).

In the event that the Company discovered that certain excess applications may have been made with the intention to abuse the mechanism under principle (1) above, the Board reserves the rights and absolute discretion to reject any excess applications which appears to them to be made with intention to abuse the top up odd lots mechanism while other applications are not affected and will be allocated according to the above principles (1) and (2).

Investors with their Shares held by a nominee company (including HKSCC) should note that the Board will regard the nominee company (including HKSCC Nominees Limited) whose name appears on the register of members of the Company as a single Shareholder under the aforesaid arrangement in relation to the top-up of odd-lots for allocation of excess Right Shares. Accordingly, the Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to individual beneficial owners who hold Shares through a registered nominee. Investors with their Shares held by a nominee company are advised to consider whether they would like to arrange for the registration of the relevant Shares in their own name prior to the Record Date. Shareholders and investors should consult their professional advisers if they are in any doubt as to their status.

Investors whose Shares are held by their nominee(s) (including HKSCC) and who would like to have their names registered on the register of members of the Company, must lodge all necessary documents with the Registrar for completion of the relevant registration by 4:30 p.m. on Monday, 29 September 2014.

— 8 —

Status of the Rights Shares

The Rights Shares, when fully paid, allotted and issued, will rank pari passu in all respects among themselves and with the existing Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of the allotment of the fully-paid Rights Shares.

Certificates of the Rights Shares

Subject to the fulfillment of the conditions of the Rights Issue, certificates for all fully-paid Rights Shares are expected to be posted to those entitled thereto by ordinary post at their own risk on or before Thursday, 30 October 2014.

Refund cheques for Rights Issue

Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on or before Thursday, 30 October 2014 by ordinary post to the applicants at their own risk.

Application for Listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms to be issued and allotted pursuant to the Rights Issue.

No part of the securities of the Company is listed or dealt in or on which listing or permission to deal is being or is proposed to be sought on any other stock exchange.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms) on the Stock Exchange, the Rights Shares (in both their nil-paid and fully-paid forms) will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in each of their nil-paid and fully-paid forms on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

All necessary arrangements will be made to enable the Rights Shares (in both their nil-paid and fully-paid forms) to be admitted into CCASS.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms (both in the proposed new board lots of 20,000) which are registered in the branch register of members of the Company in Hong Kong will be subject to the payment of stamp duty, Stock Exchange trading fee, transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

— 9 —

Conditions of the Rights Issue

The Rights Issue is conditional upon the following conditions being fulfilled or waived (as appropriate):

• (i) the passing of all the necessary resolution(s) by the Board to approve the Underwriting Agreement (including the Rights Issue and the transactions contemplated thereunder);

• (ii) the passing of the necessary resolutions(s) at the SGM to approve the Underwriting Agreement and the Rights Issue and the transactions contemplated thereunder (including but not limited to the allotment and issue of the Rights Shares) by the Independent Shareholders;

• (iii) the delivery to the Stock Exchange for authorisation and the registration by and filing with the Registrar of Companies in Hong Kong of one copy of each of the Prospectus Documents and otherwise in accordance with the Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance not later than the Posting Date;

• (iv) the posting of copies of the Prospectus Documents to the Qualifying Shareholders;

• (v) compliance with and performance by the Company of certain undertakings and obligations under the terms of the Underwriting Agreement;

• (vi) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) the listing of, and permission to deal in, the Rights Shares in their nil-paid and fully-paid forms and such listings and permission to deal not having been withdrawn or revoked by no later than the first day of their dealings on the Stock Exchange;

• (vii) the Shares remaining listed on the Stock Exchange at all times prior to the Settlement Date and the listing of the Shares not having been withdrawn or the trading of the Shares not having been suspended for a consecutive period of more than 5 trading days;

(viii) the Underwriting Agreement not being terminated by the Underwriter pursuant to the terms thereof; and

• (ix) the compliance by Viva Shine with its undertakings and obligations under the Irrevocable Undertaking given in favour of the Company and the Underwriter from the date of the Irrevocable Undertaking up to the Latest Time for Acceptance.

The conditions set out above (other than conditions (v) and (vii) which can only be waived by the Underwriter) are incapable of being waived. If the event that the above conditions (i), (ii), (iii) and (iv) have not been satisfied on or before the Posting Date or in the event that the above conditions (v), (vi), (vii), (viii) and (ix) have not satisfied and/or waived by the Underwriter in whole or in part (as the case may be) on or before 4:00 p.m. on the Settlement Date or such other time and date as specified therein (or, in each case, such later date as the Underwriter and the Company may agree in writing), the Underwriting Agreement shall terminate and all liabilities of the parties to the Underwriting Agreement shall cease and determine and neither party shall have any claim against the other, save for any antecedent breaches.

— 10 —

Underwriting Agreement

Date : 11 August 2014 (after trading hours) Underwriter : Kingston Securities Limited Total number of Rights Shares : 2,919,647,040 Rights Shares (assuming no new Share being issued and no Share being repurchased by the Company on or before the Record Date) Total number of Underwritten Shares : 2,183,647,040 Rights Shares (having taken into account the Undertaking and on the basis that no new Share being issued, and no Share being repurchased, on or before the Record Date), being the total number of Rights Shares less 736,000,000 Rights Shares that Viva Shine has undertaken to subscribe and pay for or procure subscription and payment for pursuant to the Undertaking.

• Underwriting commission : Payable by the Company to the Underwriter at 2.5% of the aggregate Subscription Price in respect of the Underwritten Shares. The commission rates were determined after arms’ length negotiations between the Company and the Underwriter with reference to, among other things, the scale of the Rights Issue and the market rate, and the Board considers (excluding the independent non-executive Directors who will give their view on the Rights Issue after taking into account the advice of the independent financial adviser) that the underwriting commission rate is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Pursuant to the Underwriting Agreement, the Underwriter shall not subscribe, for its own account, for such number of Untaken Shares which will result in the shareholding of it and parties acting in concert (within the meaning of the Takeovers Code) with it in the Company to exceed 19.9% of the voting rights of the Company upon the completion of the Rights Issue. The Underwriter shall also use its best endeavours to ensure that each of the subscribers or Sub-Underwriter(s) of the Untaken Shares procured by it (i) shall be an Independent Third Party of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the Directors or chief executive of the Company or substantial Shareholders or their respective associates; and (ii) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10.0% or more of the voting rights of the Company upon completion of the Rights Issue.

— 11 —

Termination of the Underwriting Agreement

If, prior to 4:00 p.m. on the Settlement Date:

• (i) in the absolute opinion of the Underwriter, the success of the Rights Issue would be materially and adversely affected by:

• (a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the absolute opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole or is materially adverse in the context of the Rights Issue; or

• (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic or other nature, or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the absolute opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (c) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out which would, in the absolute opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (ii) any material adverse change in market conditions (including without limitation, a change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or restriction of trading in securities, and a change in currency conditions for the purpose of this clause includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which in the absolute opinion of the Underwriter makes it inexpedient or in advisable to proceed with the Rights Issue; or

• (iii) the Prospectus when published contains information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may in the absolute opinion of the Underwriter be material to the Group as a whole upon completion of the Rights Issue and is likely to affect materially and adversely the success of the Rights Issue.

The Underwriter shall be entitled by notice in writing to the Company, served prior to 4:00 p.m. on the Settlement Date, to terminate the Underwriting Agreement.

— 12 —

The Underwriter shall be entitled by notice in writing to rescind the Underwriting Agreement if prior to 4:00 p.m. on the Settlement Date any material breach of any of the representations, warranties or undertakings contained in the Underwriting Agreement comes to the knowledge of the Underwriter.

Any such notice shall be served by the Underwriter prior to 4:00 p.m. on the Settlement Date.

If prior to 4:00 p.m. on the Settlement Date, any such notice as referred to above is given by any of the Underwriter, the obligations of all parties under the Underwriting Agreement shall terminate forthwith and no party shall have any claim against any other party for costs, damages, compensation or otherwise save for any antecedent breaches.

Shareholding structure of the Company in respect of the Rights Issue

Set out below is the shareholding structure of the Company immediately before and after completion of the Rights Issue (Assuming there is no new Share being issued and no Share being repurchased by the Company on or before the Record Date):

Immediately after completion of the Rights Issue

Viva Shine_(Note 3) Mr. Chen Xiaoping(Note 4) Public: Underwriter(Note 5)_ Other public Shareholders Total	As at the date of this announcement Number of Shares % 92,000,000 25.21 314,000 0.08 — — 272,641,880 74.71 364,955,880 100.00	None of the Rights Shares are subscribed by the All Rights Shares Qualifying Shareholders are subscribed by the (except for the Underwriter Qualifying Shareholders and Viva Shine) (Notes 1 & 2) Number of Number of Shares % Shares % 828,000,000 25.21 828,000,000 25.21 2,826,000 0.08 314,000 0.01 2,183,647,040 66.48 2,453,776,920 74.71 272,641,880 8.30 3,284,602,920 100.00 3,284,602,920 100.00	None of the Rights Shares are subscribed by the All Rights Shares Qualifying Shareholders are subscribed by the (except for the Underwriter Qualifying Shareholders and Viva Shine) (Notes 1 & 2) Number of Number of Shares % Shares % 828,000,000 25.21 828,000,000 25.21 2,826,000 0.08 314,000 0.01 2,183,647,040 66.48 2,453,776,920 74.71 272,641,880 8.30 3,284,602,920 100.00 3,284,602,920 100.00
			100.00

Notes:

1. The above scenario is for illustrative purpose only and will unlikely occur.

2. The Company will ensure the compliance with the public float requirements under Rule 8.08 of the Listing Rules upon completion of the Rights Issue.

3. Viva Shine is owned as to 50% by Mr. Yu Shengming and 50% by Mr. Wang Guoli. Viva Shine is also interested in the Convertible Bond of principal amount of HK$68,000,000 which are convertible into a maximum of 162,679,425 Shares at the price of HK$0.418 per Shares (subject to adjustment) as at the date of this announcement. Mr. Yu Shengming, being the chairman of the Company and an executive Director, and Mr. Wang Guoli are deemed to be interested in the Shares and the Convertible Bond held by Viva Shine. Both the 92,000,000 Shares and the Convertible Bond are subject to share charges.

— 13 —

1. Mr. Chen Xiaoping is a non-executive Director.

2. Under the Underwriting Agreement, in the event of the Underwriter being called upon to subscribe for or procure subscribers for the Underwritten Shares:

3. (i) the Underwriter shall not subscribe, for its own account, for such number of Underwritten Shares which will result in the shareholding of it and parties acting in concert (within the meaning of the Takeovers Code) with it in the Company to exceed 19.9% of the voting rights of the Company upon the completion of the Rights Issue; and

4. (ii) the Underwriter shall use its best endeavours to ensure that each of the subscribers of the Underwritten Shares procured by it (1) shall be Independent Third Party of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the Directors or chief executive or substantial Shareholders or their respective associates; and (2) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10.0% or more of the voting rights of the Company upon completion of the Rights Issue.

WARNING OF THE RISKS OF DEALING IN THE SHARES AND THE NIL-PAID RIGHTS SHARES

The last day of dealing in the Shares on a cum-rights basis is Thursday, 25 September 2014. The Shares will be dealt in on an ex-rights basis commencing from Friday, 26 September 2014. Dealings in the Rights Shares in the nil-paid form are expected to take place from Friday, 10 October 2014 to Tuesday, 14 October 2014 (both days inclusive). Shareholders and potential investors should note that dealing in the Shares and/or nil-paid Rights Shares will take place while the conditions to which the Underwriting Agreement is subject remain unfulfilled. If the conditions of the Underwriting Agreement are not fulfilled or the Underwriting Agreement is terminated by the Underwriter, the Rights Issue will not proceed.

Any dealings in the Shares from the date of this announcement and up to 4:00 p.m. on Tuesday, 28 October 2014, being the time and date by which all the conditions of the Rights Issue are to be fulfilled and when the right of the Underwriter to terminate the Underwriting Agreement is to lapse, and any dealings in the Rights Shares in their nil-paid form between Friday, 10 October 2014 and Tuesday, 14 October 2014, both days inclusive, are accordingly subject to the risk that the Rights Issue may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the Shares or the Rights Shares in their nil-paid form and, if they are in any doubt about their position, they should consult their professional adviser(s).

REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE AND INTENDED USE OF PROCEEDS

The Group is principally engaged in the business of property development and investment.

Since the year ended 31 March 2010, sales of properties have been the major focus and the only source of revenue for the Group. However, due to corrections in the property market and tightened credit policy in the PRC over the past few years, it became challenging for the Group to identify suitable investment opportunities in the property market and thus the Group relied on selling existing properties on hand to derive its income. As illustrated in the 2014 annual report of the Company, as at 31 March 2014, after the Group sold all its car park units and certain developed commercial properties in the previous years, there only remained a gross floor area of approximately 7,845 square meters of completed commercial properties in Zouping, Shandong Province, the PRC, which was held by the Group. Taking into account of the above, the Board is of the view that there is imminent need for the Group to develop new business and has therefore been actively and cautiously exploring suitable investment opportunities.

— 14 —

As disclosed in the announcements of the Company dated 26 February 2014 and 23 May 2014 respectively, the Company entered into a Framework Agreement (as amended by a supplemental agreement) in relation to the Proposed Acquisition. Set out below is the information on the Properties under the Proposed Acquisition:

			Current rental
Address	Gross Floor Area	Current usage	income monthly
No. 2010-2020,	Approximately	Commercial	Approximately
Chun Feng Road,	15,000 m2		RMB650,000
Luohu District,
Shenzhen,
Guangdong, PRC
(the “First Property”)
No. 2-16, Xiang Xi Road,	Approximately	Commercial/	Approximately
Luohu District, Shenzhen,	4,400 m2	Residential	RMB300,000
Guangdong, PRC
(the “Second Property”)

The Properties are multi-function commercial/residential properties located in the Luohu district of Shenzhen which is a prosperous area and one of the most well developed districts in Shenzhen and the Proposed Acquisition is one of the investment opportunities reviewed by the Board with prime location and enormous potentials for investment.

According to the information as provided by the Vendor, the First Property comprises an 8-storey commercial building completed in 2003 with a total gross floor area of approximately 15,000 square meters and it also includes 62 open car parking spaces on the ground floor. The Second Property comprises a 6-storey commercial/ residential building completed in 1991 with a gross floor area of approximately 4,400 square meters.

Based on the latest market statistics, the average rental income in such area for building with commercial usage could reach around RMB70 per square meters on average, while for building with residential usage could reach around RMB70 to RMB90 per square meters on average. As advised by the Vendor, the current rental income received from the Properties was below the market average and this is because some of the existing tenants have a long tenancy relationship with the Vendor and some units are for self-usage.

The preliminary valuation prepared by an independent valuer indicates that the Properties are valued at a total of approximately RMB400 million (equivalent to approximately HK$500 million at the exchange rate of RMB1: HK$1.25). The Company has been conducting a feasibility study on the re-development plan to rebuild/refurnish the Properties into scaled multi-function commercials/residential properties, which is expected to substantially increase the value of the Properties in the future, for rental and/or sale purpose (the proportion of which will be determined by the then market conditions). After the Proposed Acquisition is completed, the Company expects to obtain borrowings from banks/ financial institutions for the implementation of the re-development plan as mentioned above.

— 15 —

As at the date of this announcement, the Company does not have sufficient resources to finance the payment of the Earnest Money of HK$22 million under the Framework Agreement and thus it is difficult to make any significant progress on the negotiations on the terms and conditions in relation to the Proposed Acquisition. Accordingly, the Company is in imminent need for new capital to carry on its business expansion and developments.

Fund raising methods comparison

Since the entering into of the Framework Agreement, the Company has attempted to seek for debt financing from both commercial banks and financial institutions. However, the Company was unable to obtain any debt financing at terms acceptable to the Company due to the facts that (i) the Group do not have any significant assets as collaterals; and (ii) the size of the Convertible Bond, which to be due in May 2016. Given that debt financing is not available to the Company, the Board has considered other fund raising methods available to the Group. Among different fund raising methods, the Directors have focused on evaluating the possibilities of carrying out fund raising through rights issue or open offer as they are relatively larger in scale as compared to placing of new shares in view of the recent market capitalization of the Company of approximately HK$127.73 million as at the date of this announcement. In addition, rights issue or open offer are pre-emptive in nature, allowing Qualifying Shareholders to maintain their respective pro-rata shareholding through their participation and causes no interests burden to the Group.

In comparison between rights issue and open offer, the Rights Issue allows the Qualifying Shareholders who participate to (a) increase its interests in the shareholding of the Company by (i) acquiring additional rights entitlement in the open market (subject to the availability); and/or (ii) applying through excess applications for Rights Shares or (b) decreasing its interests in the shareholding of the Company by disposing their rights entitlements in the open market (subject to availability). As an open offer does not allow the trading of rights entitlements, the Rights Issue is preferred.

Benefits of the Rights Issue

The Rights Issue will allow the Company to strengthen its capital base and liquidity without incurring interest costs. The Rights Issue will also allow the Company to materially reduce its gearing ratio, thereby improving the financial health of the Group. Taking into account the capital needs of the Group, the benefits of the Rights Issue and the availability and comparison with other financing alternatives, the Board (excluding the independent non-executive Directors who will give their view on the Rights Issue after taking into account the advice of the independent financial adviser) is of the view that the Rights Issue is in the interests of the Company and the Shareholders as a whole.

Intended use of proceeds

The gross proceeds from the Rights Issue will be approximately HK$292 million before expenses. The estimated expenses in relation to the Rights Issue, including the financial, legal, and other professional advisory fees, underwriting commission, printing and translation expenses will be borne by the Company. The estimated net proceeds of the Rights Issue will be approximately HK$283 million. The Company intends to apply the net proceeds from the Rights Issue principally for future development of the Group, including but not limited to for the payment of the cash portion of the consideration of the Proposed Acquisition while the remaining proceeds (if not utilized) will be applied for other investment opportunities identified and/or the business development of the Group and/or general working capital.

— 16 —

Independent Shareholders and Qualifying Shareholders

The proposed Rights Issue shall be conducted on the basis of eight (8) Rights Shares for every one (1) existing Share held on the Record Date. The Board considers that any potential dilution impact should be balanced against by the following factors:

• Independent Shareholders are given the chances to express their views on the terms of the Rights Issue and the Underwriting Agreement through their votes at the SGM;

• Qualifying Shareholders have their choices whether to accept the Rights Issue or not;

• Qualifying Shareholders have the opportunity to realize their nil-paid rights to subscribe for the Rights Shares in the market;

• the Rights Issue offers Qualifying Shareholders a chance to subscribe for their pro-rata Rights Shares for the purpose of maintaining their respective existing shareholding interests in the Company at a relatively low price as compared to the historical and prevailing market price of the Shares; and

• those Qualifying Shareholders who choose to accept the Rights Issue in full can maintain their respective existing shareholding interests in the Company after the Rights Issue.

Having considered the above, the Board considers the potential dilution effect on the shareholding interests of the Qualifying Shareholders, which may only happen when the Qualifying Shareholders do not subscribe for their pro-rata Rights Shares, to be acceptable.

Having taken into account the terms of the Rights Issue, the Board (excluding the independent non-executive Directors who will give their view on the Rights Issue after taking into account the advice of the independent financial adviser) considers that the Rights Issue is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Furthermore, it also offers all the Qualifying Shareholders an equal opportunity to participate in the enlargement of the capital base of the Company and enables the Qualifying Shareholders to maintain their proportionate interests in the Company to participate in the future development of the Company should they wish to do so. However, those Qualifying Shareholders who do not take up the Rights Shares to which they are entitled should note that their shareholdings in the Company will be diluted.

FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

The Company has not conducted any other fund raising exercise in the past twelve months immediately prior to the date of this announcement.

POSSIBLE ADJUSTMENT TO THE CONVERSION PRICE OF THE CONVERTIBLE BOND

As a result of the Rights Issue, the conversion price of the Convertible Bond may be adjusted in accordance with the terms and conditions of the Convertible Bond. The Company will instruct its auditors or other firm of accountants to certify the adjustments, if any, to the Convertible Bond and will inform the holder of the Convertible Bond of the adjustments, if any, accordingly. Further announcement will be made by the Company in respect of such adjustments as and when appropriate.

— 17 —

CHANGE IN BOARD LOT SIZE

The Board proposes that, subject to the completion of the Rights Issue, the board lot size of the Shares for trading on the Stock Exchange will be changed from 2,000 Shares to 20,000 Shares with effect from 9:00 a.m. on Friday, 31 October 2014.

In order to facilitate the trading of odd lots (if any), the Company will arrange odd lot matching services during Friday, 31 October 2014 to Friday, 21 November 2014 (both dates inclusive). Shareholders should note that matching of the sale and purchase of odd lots of the Shares is on a best effort basis and successful matching of the sale and purchase of such odd lots is not guaranteed. Further details in respect of the odd lots arrangement will be set out in the Circular.

EXPECTED TIMETABLE

The expected timetable for the Rights Issue and the change in board lot size is set out below:

Expected timetable

Event 2014 (Hong Kong time)
Expected date of despatch of the Circular and form of proxy of the SGM .........................Friday, 5 September
Latest time for return of form of proxy for the SGM (not less than 48 hours) .............................. 10:00 a.m. on
Monday, 22 September
SGM .................................................................................................................................................. 10:00 a.m. on
Wednesday, 24 September
Announcement of results of the SGM ........................................................................ Wednesday, 24 September
Last day of dealings in the Shares on a cum-rights basis ..............................................Thursday, 25 September
First day of dealings in the Shares on an ex-rights basis ................................................... Friday, 26 September
Latest time for lodging transfer of the Shares in order to
be qualified for the Rights Issue .................................................................................................... 4:30 p.m. on
Monday, 29 September
Register of members closes (both dates inclusive) ......................................................... Tuesday, 30 September
to
Monday, 6 October
Record Date.............................................................................................................................. Monday, 6 October
Register of members re-opens ................................................................................................. Tuesday, 7 October

— 18 —

2014 (Hong Kong time)

Event

Prospectus Documents expected to be despatched............................................................ Wednesday, 8 October First day of dealings in nil-paid Rights Shares ................................................................................. 9:00 a.m. on Friday, 10 October Latest time for splitting nil-paid Rights Shares................................................................................. 4:30 p.m. on Tuesday, 14 October Last day of dealings in nil-paid Rights Shares ................................................................................... 4:00p.m. on Friday, 17 October Latest time for acceptance of and payment for the Rights Shares and application and payment for excess Rights Shares ................................................................ 4:00 p.m. on Wednesday, 22 October Rights Issue expected to become unconditional................................................................................ 4:00 p.m. on Tuesday, 28 October Announcement of results of acceptance and excess application of the Rights Shares ......................................................................................................Wednesday, 29 October Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares expected to be posted on or before ................... Thursday, 30 October Certificates for the Rights Shares expected to be despatched on or before ...................... Thursday, 30 October Dealings in fully-paid Rights Shares commence .............................................................................. 9:00 a.m. on Friday, 31 October Effective date of change of board lot size from 2,000 Shares to 20,000 Shares.............................. 9:00 a.m. on Friday, 31 October Designated brokers starts to stand in the market to provide matching services for sale and purchase of odd lots of Shares ................................................................................... 9:00 a.m. on Friday, 31 October Designated brokers ceases to stand in the market to provide matching services for sale and purchase of odd lots of shares..................................................................................... 4:00p.m. on Friday, 21 November All times and dates in this announcement refer to Hong Kong local times and dates. Dates or deadlines specified in expected timetable above are indicative only and may be extended or varied by the Company. Any changes to the expected timetable will be published or notified to the Shareholders as and when appropriate.

— 19 —

IMPLICATIONS UNDER THE LISTING RULES

In compliance with Rule 7.19(6) of the Listing Rules, the Rights Issue must be made conditional on approval of the Independent Shareholders by way of poll at the SGM on which any controlling Shareholders (as defined in the Listing Rules) and their associates or, where there are no controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue.

As at the date of this announcement, there is no controlling Shareholder (as defined in the Listing Rules). Accordingly, Viva Shine, which is owned as to 50% by Mr. Yu Shingming, the chairman of the Company and an executive Director, and is interested in 92,000,000 Shares, and Mr. Chen Xiaoping, a non-executive Director, who is interested in 314,000 Shares will abstain from voting in favour of the resolution(s) approving the Rights Issue and the transactions contemplated thereunder at the SGM.

The Rights Issue is conditional on, among other things, the relevant resolutions being approved by the Independent Shareholders at the SGM. An independent board committee comprising all the independent non-executive Directors will be established by the Company to advise the Independent Shareholders as to whether the terms of the Rights Issue are fair and reasonable and as to voting in respect thereof at the SGM. An independent financial adviser will be appointed to advise the independent board committee of the Company and the Independent Shareholders in this regard.

GENERAL

A circular containing, among other things, (i) further details of the Rights Issue; (ii) a letter of recommendation from the independent board committee of the Company to the Independent Shareholders in respect of the Rights Issue; (iii) a letter of advice from the independent financial adviser to the independent board committee of the Company and the Independent Shareholders in respect of the Rights Issue; and (iv) the notice convening the SGM, will be despatched to the Shareholders as soon as practicable.

Subject to, among other things, the approval of the Rights Issue by the Independent Shareholders at the SGM, the Prospectus Documents will be despatched to the Qualifying Shareholders and the Prospectus will be despatched to the Non-Qualifying Shareholders for information purposes only as soon as practicable.

DEFINITION

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

“acting in concert” has the meaning ascribed thereto under the Takeovers Code “associate(s)” has the meaning ascribed thereto under the Listing Rules “Board” the board of Directors “Business Day” a day (other than a Saturday, Sunday and public holiday) on which licensed banks are generally open for business throughout their normal business hours in Hong Kong

— 20 —

“CCASS”

the Central Clearing and Settlement System established and operated by HKSCC

“Circular” the circular to be despatched to the Shareholders in relation to the Rights Issue (together with the notice of the SGM)

• “Companies Ordinance”

the Companies Ordinance, Chapter 622 of the Laws of Hong Kong

• “Companies (Winding Up and the Companies (Winding Up and Miscellaneous Provision) Ordinance, Miscellaneous Provision) Chapter 32 of the Laws of Hong Kong Ordinance”

“Company” South East Group Limited, a company incorporated in Bermuda and the shares of which are listed on the main board of the Stock Exchange

• “Convertible Bond”

• the convertible bond in the principal amount of Hong Kong dollars sixty eight million (HK$68,000,000), issued by the Company carrying an interest of three per cent. (3%) per annum with conversion price of HK$0.418 per conversion share

• “Director(s)” director(s) of the Company “EAF(s)” the form(s) of application for use by the Qualifying Shareholders to apply for excess Rights Shares, being in such usual form as may be agreed between the Company and the Underwriter

• “Earnest Money” earnest money of HK$22 million payable by the Company to the Vendor, subject to the terms and conditions of the Framework Agreement

• “Formal Agreement” a formal sale and purchase agreement to be entered in relation to the Proposed Acquisition

• “Framework Agreement” the framework agreement dated 26 February 2014 entered into by the Company and the Vendor in relation to the Proposed Acquisition

• “Group”

the Company and its subsidiaries

Hong Kong Securities Clearing Company Limited

“HKSCC” Hong Kong Securities Clearing Company Limited “HK$” Hong Kong dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of PRC

“Independent Shareholder(s)” Shareholders other than those who are involved in or interested in the Underwriting Agreement and the Rights Issue, and who are required to abstain from voting in respect thereto at the SGM pursuant to the Listing Rules

— 21 —

“Independent Third Party(ies)” third parties independent of and not connected with the Directors, chief executive and substantial Shareholders of the Company or any of its subsidiaries, or any of their respective associates

“Last Trading Day”

11 August 2014, being the date of the Underwriting Agreement, which is a Stock Exchange trading day

• “Latest Time For Acceptance”

• 4:00 p.m. on Wednesday, 22 October 2014, or such later time or date as may be agreed between the Underwriter and the Company in writing, being the latest time for acceptance of, and payment for, the Rights Shares as described in the Prospectus Documents

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

• “Non-Qualifying Shareholders”

those Overseas Shareholders whom the Directors, based on legal advice provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Issue to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

• “Overseas Shareholder(s)” Shareholder(s) whose name(s) appear(s) on the register of members of the Company at the close of business on the Record Date and whose address(es) as shown on such register is (are) outside Hong Kong

“PAL(s)” the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue

• “Posting Date” Wednesday, 8 October 2014 or such other date as the Underwriter may agree in writing with the Company, as the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus for information only (as the case may be) to the Non-Qualifying Shareholders

• “PRC”

the People’s Republic of China

• “Proposed Acquisition” the proposed acquisition of the Properties in Shenzhen, the PRC as contemplated under the Framework Agreement

• “Properties” certain properties located in Shenzhen, the PRC under the Framework Agreement

“Prospectus” the prospectus to be despatched to the Shareholders containing details of the Rights Issue “Prospectus Documents” the Prospectus, PAL(s) and EAF(s)

— 22 —

“Qualifying Shareholders”	Shareholders, other than the Non-Qualifying Shareholders, whose
	name(s) appear on the register of members of the Company at the
	close of business on the Record Date
“Record Date”	Monday, 6 October 2014 (or such other date as the Underwriter may
	agree in writing with the Company), as the date by reference to which
	entitlements to the Rights Issue are expected to be determined
“Registrar”	the branch share registrar of the Company in Hong Kong, being
	Computershare Hong Kong Investor Services Limited at shops 1712-
	1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong
	Kong
“Rights Issue”	the proposed issue of the Rights Shares by way of rights issue to the
	Qualifying Shareholders for subscription at the Subscription Price on
	the terms and subject to the conditions set out in the Underwriting
	Agreement and the Prospectus Documents
“Rights Shares”	the 2,919,647,040 Shares to be issued and allotted under the Rights
	Issue
“Settlement Date”	Tuesday, 28 October, being the fourth Business Day following the
	Latest Time for Acceptance (or such other date as the Underwriter
	and the Company may agree in writing)
“SFC”	the Securities and Futures Commission of Hong Kong
“SFO”	The Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“SGM”	the special general meeting of the Company to be convened for the
	Shareholders to consider and, if thought fit, approve the Rights Issue
	and transactions respectively contemplated thereunder
“Share(s)”	ordinary share(s) of HK$0.1 each in the share capital of the Company
“Shareholder(s)”	the holder(s) of issued Share(s)
“Specified Event”	an event occurring or matter arising on or after the date of the
	Underwriting Agreement and prior to 4:00 p.m. on the Settlement Date
	which if it had occurred or arisen before the date of the Underwriting
	Agreement would have rendered any of the warranties contained in
	the Underwriting Agreement untrue or incorrect in any material respect
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription Price”	HK$0.1 per Rights Share with nominal value of HK$0.1 each

— 23 —

“Takeovers Code”

the Code on Takeovers and Mergers of SFC

“Underwriter” Kingston Securities Limited, a licensed corporation to carryout business in type 1 (dealing in securities) regulated activity under SFO “Underwriting Agreement” the underwriting agreement dated 11 August 2014 entered into between the Company and the Underwriter in relation to the underwriting arrangement in respect of the Rights Issue “Underwritten Shares” all the Rights Shares (other than the Rights Shares that will be provisionally allotted to Viva Shine) which are fully underwritten by the Underwriter on the terms and subject to the conditions set out in the Underwriting Agreement “Untaken Shares” the Underwritten Shares which have not been taken up by the Qualifying Shareholders “Undertaking” the irrevocable undertaking dated 11 August 2014 given by Viva Shine in favour of the Company and the Underwriter, details of which are set out in the section headed “Undertaking” in this announcement “Viva Shine” Viva Shine Limited, a company incorporated in the British Virgin Islands, who holds 92,000,000 Shares and the Convertible Bond as at the date of this announcement “%” or “per cent.” percentage or per centum

By order of the Board South East Group Limited Yu Shengming Executive Director and Chairman

Hong Kong, 11 August 2014

As at the date of this announcement, the Board comprises 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; Mr. Ng Kwok Wai, Mr. Lee Chi Hwa, Johsua and Mr. Ling Kit Wah, Joseph as independent non-executive Directors.

In the case of any inconsistency, the English text of this announcement shall prevail over the Chinese text.

— 24 —