DIT Group Limited — Capital/Financing Update 2014

Feb 26, 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.

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FRAMEWORK AGREEMENT RELATING TO THE PROPOSED ACQUISITION OF THE PROPERTIES IN SHENZHEN AND POSSIBLE ADVANCE TO AN ENTITY

On 26 February 2014 (after trading hours), the Company entered into a Framework Agreement with the Vendor 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 preliminary valuation of the Properties as appraised by the independent valuer is approximately RMB400 million (equivalent to approximately HK$512 million at the exchange rate of RMB1:HK$1.28). The consideration of the Proposed Acquisition will be determined after further negotiation between 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. 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.

In order to finance the Proposed Acquisition, the Board will actively seek for fund raising opportunities (including equity and debt financing, depending on the opportunities then available) to raise sufficient funds to satisfy the cash portion of the consideration of the Proposed Acquisition.

The Company wishes to emphasize that only the Framework Agreement has been entered into as at the date of this announcement. The Framework Agreement does not constitute a binding commitment on the Company in respect of the Proposed Acquisition and as the Proposed Acquisition may or may not proceed, Shareholders and potential investors are urged to exercise caution when dealing in the securities of the Company. If the Proposed Acquisition is materialised, it may constitute a notifiable transaction for the Company under the Listing Rules and the Company will make further announcement in respect of the Proposed Acquisition as and when appropriate.

• For identification purposes only

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This announcement is made pursuant to Rule 13.09 and Rule 13.13 of the Listing Rules and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

FRAMEWORK AGREEMENT

On 26 February 2014 (after trading hours), the Company entered into a Framework Agreement with the Vendor in relation to the Proposed Acquisition. The Vendor is a PRC resident and a merchant. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Vendor and his associates are Independent Third Parties.

The assets to be acquired by the Company are the Properties, details of which are disclosed in the section headed ‘‘Information on the Properties’’ below.

According to the information as provided by the Vendor, as at the date of this announcement, the Properties are entirely owned by Liangcheng, a company established in the PRC with limited liability. The entire equity interest of Liangcheng is held by the Vendor. Upon completion of the Restructuring, the Properties will be held by a holding company which is wholly owned by the Vendor. The Company shall procure its subsidiary to purchase and the Vendor shall sell the entire interest of the holding company, which solely and wholly owns the Properties upon completing of the Restructuring, subject to negotiation and execution of the Formal Agreement.

The consideration of the Proposed Acquisition will be determined after further negotiation between 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$512 million at the exchange rate of RMB1:HK$1.28). 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.

In order to finance the Proposed Acquisition, the Board will actively seek for fund raising opportunities (including equity and debt financing, depending on the opportunities then available) to raise sufficient funds to satisfy the cash portion of the consideration of the Proposed Acquisition.

Major terms of the Framework Agreement

Completion of the Formal Agreement is conditional upon, inter alia:

• (i) completion of the due diligence review to the satisfaction of the Company at its sole discretion;

• (ii) the Formal Agreement and the Proposed Acquisition being approved by the Shareholder pursuant to the Listing Rules, if required; and

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• (iii) all consents or approvals of any relevant governmental authorities or other relevant regulatory bodies in Hong Kong and the PRC or third parties which are required by both of the Company or the Vendor for the entry into and the implementation of the Formal Agreement and the Proposed Acquisition having been obtained.

The Company shall be entitled to carry out a due diligence review and investigation on Liangcheng, the holding company and/or the Properties, including but not limited to the completeness of the Restructuring. In order to facilitate such due diligence review, the Vendor shall co-operates with the Company to promptly provide all documents and information requested by the Company for the purpose of conducting the due diligence review. The Vendor undertakes that all such documents and information provided to the Company prior to the entering or pursuant to the Framework Agreement are complete and accurate in all material respects and give a true and fair view of the state of affairs of Liangcheng, the holding company and/or the Properties (as the case may be) at the dates to which they respectively relate.

Upon completion of a preliminary due diligence review on the Properties (to the satisfaction of the Company at its own discretion) on or before the Long Stop Date, the Company shall pay the Earnest Money in the amount of HK$22 million to the Vendor. If (i) the Formal Agreement is not entered into on or before the Long Stop Date; 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.

The amount of the Earnest Money exceeds 8% of the assets ratio of the Company as defined under Rule 14.07(1) of the Listing Rules and it constitutes an advance to an entity under Rule 13.13 of the Listing Rules.

In consideration of the Company’s commitment of time and personnel and its incurring of expenses for the purpose of the Proposed Acquisition, the Vendor shall grant to the Company an exclusive right during the Exclusivity Period to raise sufficient funds for the cash portion of the consideration and to finalise the Formal Agreement for the Proposed Acquisition. During the Exclusivity Period, the Vendor agrees and undertakes to the Company that it shall not, and shall procure that its subsidiaries and other companies under its control shall not, directly or indirectly initial or further approach to, entertain any approach from, or discuss or negotiate with any other party for the intended sale (whether direct or indirect) of part or all of the Properties.

If the Formal Agreement is not entered into by the Long Stop Date (the Long Stop Date can be extended for further three months, subject to mutual agreement between the parties to the Framework Agreement in writing), the Framework Agreement will automatically lapse whereupon the parties thereto shall have no liability whatsoever against each other arising out of or in respect of the Framework Agreement save for antecedent breach.

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The Company and the Vendor understand and agree that, save for and except for the clauses in relation to the consideration, the due diligence review, the Earnest Money, the Exclusivity Period, non-disclosure, binding effect, the Long Stop Date, superseding and the governing law and jurisdiction, which shall be binding and enforceable upon signing of the Framework Agreement, the Framework Agreement is not intended to and does not create any binding legal obligations between the parties thereto. For the avoidance of doubt, nothing in the Framework Agreement creates any obligation on the parties thereto to enter into the Proposed Acquisition and/or the Formal Agreement.

INFORMATION ON THE PROPERTIES

Based on the information as provided by the Vendor, the information on the Properties is set out below:

Address	Area	Usage
No. 2010–2020, Chun Feng Road, Luohu District,	Approximately	Commercial
Shenzhen, Guangdong, PRC	15,000 m2
No. 2–16, Xiang Xi Road, Luohu District, Shenzhen,	Approximately	Commercial/
Guangdong, PRC	4,400 m2	Residential

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.

REASONS FOR THE PROPOSED ACQUISITION

The Group is principally engaged in the business of property development and investment. After selling all its car park units in the financial year ended 31 March 2013, a gross floor area of 7,985 square meters of completed commercial properties in Zouping, Shandong Province, the PRC was remained at the Group for sale at 30 September 2013. Accordingly, the Group has been actively and cautiously exploring suitable investment opportunities to expand its scope of operations and to diversify its business development so as to broaden its income stream.

The Board notes the growing trend in the Shenzhen commercial and residential property market and believes that there will be a stable and healthy growth in the forthcoming years. The Proposed Acquisition provides an opportunity for the Group to invest in the property market in Shenzhen and to generate income for the Group’s continuous development. As such, the Directors consider the entering into of the Framework Agreement is in the interests of the Company and the Shareholders as a whole.

The Company wishes to emphasize that only the Framework Agreement has been entered into as at the date of this announcement. The Framework Agreement does not constitute a binding commitment on the Company in respect of the Proposed Acquisition and as the Proposed Acquisition may or may not proceed, Shareholders and potential investors are urged to exercise caution when dealing in the securities of the Company. If the Proposed Acquisition is materialised, it may constitute a notifiable transaction for the Company under the Listing Rules and the Company will make further announcement in respect of the Proposed Acquisition as and when appropriate.

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DEFINITION

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

• ‘‘Board’’ the board of Directors ‘‘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 of Hong Kong Limited

• ‘‘connected person(s)’’ has the meaning ascribed thereto under the Listing Rules and the word ‘‘connected’’ shall be construed accordingly

• ‘‘Directors’’ the directors of the Company ‘‘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

• ‘‘Exclusivity Period’’ a period of three months starting from the date of the Framework Agreement (unless the parties thereto agree to withdraw from negotiations in writing) and the last day of the Exclusivity Period shall be the Long Stop Date (the Long Stop Date can be extended for further three months, subject to mutual agreement between the parties to the Framework Agreement in writing)

• ‘‘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

• ‘‘Liangcheng’’ 深圳市聯城地產發展有限公司 (Shenzhen Liangcheng Real Estate Development Limited*), a company established in the PRC with limited liability

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘Long Stop Date’’ the date falling on the last day of third month starting from the date of the Framework Agreement (the Long Stop Date can be extended for further three months, subject to mutual agreement between the parties to the Framework Agreement in writing)

• For identification purposes only

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‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third Parties’’ third parties who are independent of, and not connected with, the Company and its connected persons ‘‘PRC’’ the People’s Republic of China ‘‘Properties’’ certain properties in Shenzhen, the PRC ‘‘Proposed Acquisition’’ the proposed acquisition of the Properties by the Company ‘‘Restructuring’’ the internal corporate restructuring to be procured by the Vendor and upon completion of such restructuring, the Properties will be held by a holding company which is wholly owned by the Vendor ‘‘RMB’’ Renminbi, the lawful currency of PRC ‘‘Shareholder(s)’’ the holder(s) of issued share(s) of the Company ‘‘Vendor’’ Mr. Liu Shu ‘‘%’’ per cent

By order of the Board South East Group Limited Mock Wai Yin Executive Director and Deputy Chairman

Hong Kong, 26 February 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; and Mr. Ng Kwok Wai, Mr. Lee Chi Hwa, Joshua 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.

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