DIT Group Limited — Proxy Solicitation & Information Statement 2009

Apr 21, 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in South East Group Limited, you should at once hand this circular together with the enclosed form of proxy to the purchaser or the transferee or to the bank or stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE EQUITY INTERESTS IN A SUBSIDIARY

A notice convening a special general meeting of South East Group Limited to be held at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong on 11 May 2009 at 10:00 a.m. is set out on pages 18 to 19 of this circular. A form of proxy for use in the special general meeting is enclosed. Whether or not you are able to attend and vote at the special general meeting, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company at its principal place of business at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the special general meeting or any adjourned meeting thereof. Completion and return of the proxy form shall not preclude you from attending and voting in person at the special general meeting or any adjourned meeting thereof should you so wish.

22 April 2009

* For identification purposes only

CONTENTS

	Page
Definitions......................................................................................................................................	1
Letter from the Board
Introduction ..........................................................................................................................	3
The Sale and Purchase Agreement ......................................................................................	4
Information on the Disposal Group.....................................................................................	7
Reasons for and benefits of the Disposal ............................................................................	7
Intended use of proceeds......................................................................................................	8
Effects of the transaction on the earnings and
assets and liabilities of the Company ..............................................................................	8
Financial and trading prospects of the Group.....................................................................	9
The SGM...............................................................................................................................	9
Recommendation ..................................................................................................................	10
Further information ..............................................................................................................	10
Appendix I — Financial information...................................................................................	11
Appendix II — General information.....................................................................................	12
Notice of SGM...............................................................................................................................	18

– i –

DEFINITIONS

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

“Agent” Yu Kwok Ho, Russell, the intermediary through whom the Purchaser was introduced to the Company “Business Day” any day (excluding Saturday and Sunday) on which banks in Hong Kong are open for business

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

• “Completion” completion of the Sale and Purchase Agreement in accordance with the terms and conditions of the Sale and Purchase Agreement

• “Consideration” HK$1,600,000, being the total consideration payable by the Purchaser to the Company (or its wholly owned subsidiary in the PRC) for the Disposal

• “Directors” the directors of the Company

• “Disposal” the disposal of the entire issued share capital of South Perfect by the Company pursuant to the Sale and Purchase Agreement

• “Disposal Group” South Perfect and its subsidiaries

• “Fushiwang” Qingdao Fushiwang Grape Wine Co., Ltd., a company incorporated in the PRC with limited liability, the equity capital of which is owned as to 55% by South Perfect and 45% by Yimin

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Independent Third Party” any person or company and their respective ultimate beneficial owner(s) which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons (as defined under the Listing Rules)

• “Latest Practicable Date” 20 April 2009, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

– 1 –

DEFINITIONS

“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Purchaser”	���(Luo Chengshan), the purchaser to the Sale and Purchase
	Agreement and an Independent Third Party
“Sale and Purchase Agreement”	the conditional sale and purchase agreement entered into
	between the Company and the Purchaser on 26 March 2009 in
	relation to the sale and purchase of the Sale Shares
“Sale Shares”	two (2) shares of HK$1.00 each in the share capital of South
	Perfect, representing the entire issued share capital of South
	Perfect, which will be transferred from the Company to the
	Purchaser or a transferee as specified by the Purchaser pursuant
	to the Sale and Purchase Agreement
“SGM”	the special general meeting of the Company to be convened to
	consider and, if thought fit, to approval the Disposal, the Sale
	and Purchase Agreement and the transactions contemplated
	thereunder
“Shares”	ordinary shares of HK$0.10 each in the share capital of the
	Company
“Shareholders”	registered holders of the Shares of the Company
“South Perfect”	South Perfect International Limited, a wholly owned subsidiary
	of the Company incorporated in Hong Kong with limited liability
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Yimin”	��������(Qingdao Yimin Grape Wine Factory), a
	state-owned enterprise established in the PRC
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent.

The English translation of the Chinese name(s) in this circular, where applicable, is for information purpose only, and should not be regarded as the official English name(s) for such Chinese name(s)

– 2 –

LETTER FROM THE BOARD

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

Executive Directors: WU Siu Chung (Chairman) CHEN Xiaoping

Non-executive Directors:

CHEN Yuan Shou, Budiman Eduard William Rudolf Helmuth WILL LO Yuk Lam WONG Kam Wah David R. PETERSON*

Registered Office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head office and Principal Place of Business in Hong Kong: 8A-B Entertainment Building 30 Queen’s Road Central Hong Kong

* Independent non-executive director

22 April 2009

To the Shareholders for information only

Dear Sir or Madam,

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE EQUITY INTERESTS IN A SUBSIDIARY

INTRODUCTION

The Company announced on 1 April 2009 that the Company entered the Sale and Purchase Agreement with the Purchaser on 26 March 2009, pursuant to which the Company agreed to sell and the Purchaser agreed to acquire the entire issued share capital of South Perfect, a wholly owned subsidiary of the Company, for a consideration of HK$1,600,000.

The purpose of this circular is to provide the Shareholders with further information relating to the Disposal and financial information of the Group in accordance with the Listing Rules. This circular also sets out a notice of the SGM to be convened to consider and, if thought fit, to approve, inter alia, the Sale and Purchase Agreement and the transactions contemplated thereunder.

* For identification purposes only

– 3 –

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Date: 26 March 2009

Parties: (1) Vendor : the Company (2) Purchaser : ��� (Luo Chengshan)

The Purchaser is a PRC citizen and a merchant.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser is an Independent Third Party, and is not related to the Agent.

The Purchaser was introduced to the Company by the Agent, being a Hong Kong resident who is an Independent Third Party having no relationship with the Company and does not have any shareholding in the Company, and is not related to the Purchaser. The Agent is a personal friend of Mr. Chen Yuan Shou, Budiman, a non-executive director of the Company, and was introduced to the Company when the Company was in the course of identifying potential purchaser for the Disposal. The Agent shall be entitled to receive from the Company a commission on the Consideration as detailed in the section headed “Consideration” below.

Asset subject to the disposal

The Company has agreed to dispose of and the Purchaser has agreed to acquire the Sale Shares, which represent the entire issued share capital of South Perfect, a wholly owned subsidiary of the Company. The Sale Shares will be transferred to the Purchaser or a transferee (the “Transferee”) as specified by the Purchaser pursuant to the Sale and Purchase Agreement. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, each of the Purchaser, the Transferee and the ultimate beneficial owner(s) of the Transferee (if applicable) is an Independent Third Party.

Consideration

The Consideration is HK$1,600,000, which shall be settled in cash by the Purchaser to the Company on/before 15 April 2009. Upon receipt of the Consideration by the Company (or its wholly owned subsidiary in the PRC), 50% of the Consideration shall be placed in an escrow account with a bank in the PRC agreed by both parties to the Sale and Purchase Agreement. The Company (through its wholly owned subsidiary in the PRC) will be able to access the funds in the escrow account after Completion.

On 15 April 2009, the Purchaser paid for the Consideration of HK$1,600,000 (equivalent to RMB1,413,120) to the Company through its wholly owned subsidiary in the PRC.

– 4 –

LETTER FROM THE BOARD

If the condition of the Sale and Purchase Agreement cannot be fulfilled, payment of the Consideration shall be refunded to the Purchaser by the Company in the following manner:

• (i) Under an escrow agreement to be entered with the PRC bank for operating the abovementioned escrow account, the amount under escrow (i.e. HK$800,000 or its equivalent in RMB) shall be paid to the Purchaser; and

• (ii) the remaining balance of the Consideration (i.e. HK$800,000 or its equivalent in RMB) shall be refunded to the Purchaser by the Company.

The Consideration was determined between the parties to the Sale and Purchase Agreement after arm’s length negotiations taking into consideration of various factors, in particular, the current financial situation of the Disposal Group as detailed in the section headed “Information on the Disposal Group” below; and also with reference to the negative capital of approximately RMB124,736 of Fushiwang at 30 June 2008 according to the business appraisal carried out on a going concern basis by an independent valuer, Shanghai Shenwei Appraisal Company Limited.

Taking into account of the above factors and the reasons and benefits of the Disposal as stated in the section headed “Reasons for and benefits of the Disposal” below, the Directors consider that the terms and conditions of the Sale and Purchase Agreement and the transactions contemplated thereunder are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

To explore the opportunity for the disposal of the investment in Fushiwang by the Company, an agency agreement (the “Agency Agreement”) was negotiated at arm’s length and executed between the Company and the Agent on 18 December 2008. Under the Agency Agreement, the Agent is entitled to receive a commission of 50% of the gross sale proceeds of the Sale Shares from the Company on success basis. The Agency Agreement is conditional upon, among others, the passing by the Shareholders of the necessary resolution(s) to approve the Sale and Purchase Agreement and the transactions contemplated thereunder. By a supplemental agreement dated 30 March 2009 entered into between the parties to the Agency Agreement, the commission of HK$800,000 shall be payable to the Agent within three Business Days after Completion when the Company has free access to the Consideration (including the HK$800,000 (or its equivalent in RMB) in the escrow account as mentioned above). Hence, the commission shall be paid to the Agent only after the Consideration has become non-refundable. As the Sale Shares (being shares of a private company) are not freely traded in the open market, there is no reference readily available as to the rate of commission charged for successfully introducing a purchaser for the Sales Shares. In view of the adverse global financial situation and the financial position and operating environment of Fushiwang, it is believed that the Disposal has to be done as expeditiously as possible to avoid further deterioration of the position of Fushiwang. The Disposal will be a one-off solution to the issues relating to Fushiwang. As the Agent is able to procure a purchaser who is willing to pay for a considerable amount for the Disposal Group despite of its negative assets value, the Directors believe that the rate of commission is justifiable under such circumstance. Giving consideration to the above factors including poor marketability of the Sale Shares, the consideration offered by the Purchaser and the expected gain arising therefrom, the Directors believe that the commission is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 5 –

LETTER FROM THE BOARD

Condition to the Sale and Purchase Agreement

The Sale and Purchase Agreement is conditional upon fulfillment of the following:

• the passing of the necessary resolution(s) by the Shareholders at the SGM to be convened to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

If the condition above shall not have been fulfilled in its entirety within one hundred Business Days from the date of the Sale and Purchase Agreement (or such later date as the parties may agree), the Sale and Purchase Agreement shall cease and terminate and thereafter neither party shall have any obligations and liabilities towards each other, save for any antecedent breaches of the terms of the Sale and Purchase Agreement. Under such circumstance, payment of the Consideration shall be refunded to the Purchaser in the manner as stated in the section headed “Consideration” above.

Transitional arrangement in respect of Fushiwang

Pursuant to the Sale and Purchase Agreement, on the next Business Day following full settlement of the Consideration by the Purchaser, representatives nominated by South Perfect shall resign from Fushiwang, and representatives nominated by the Purchaser shall be appointed to fill such vacancies. By then, management of Fushiwang shall be handed over to the Purchaser who shall have all rights and bear all liabilities in respect of Fushiwang thereafter. In the event that the Sale and Purchase Agreement shall cease and terminate and the transactions contemplated thereunder fall through, the Purchaser’s right of management of Fushiwang shall be reversed. The Purchaser shall be responsible for any liabilities incurred in respect of Fushiwang since the date of handover until the reversal of management of Fushiwang.

As the Purchaser made full payment of the Consideration on 15 April 2009, the resignations and appointments in respect of Fushiwang as mentioned above took effect from 16 April 2009.

Completion

Completion will take place on the second Business Day after fulfillment of the condition as set out above, or such later date as the parties may agree but not exceeding twenty eight Business Days after such fulfillment. If all necessary procedures in relation to the handover of management in Fushiwang and the transfer of the entire equity interest in South Perfect contemplated under the Sale and Purchase Agreement cannot be duly completed within this period, the Sale and Purchase Agreement shall cease and terminate, and the defaulting party shall be responsible for any loss incurred by the other party.

Upon Completion, South Perfect will cease to be a wholly owned subsidiary of the Company and the Company will cease to have any interests in South Perfect; and hence the Disposal Group (including Fushiwang) will no longer form part of the Group and its financial results will be deconsolidated from those of the Group.

– 6 –

LETTER FROM THE BOARD

The principal activities of the remaining Group (i.e. excluding the Disposal Group) following completion of the Disposal will be property development and investment. According to the audited consolidated financial statements of the Group for the year ended 31 March 2008, the turnover of the property business was approximately HK$3,495,000, representing approximately 48.4% of the Group’s turnover for the year ended 31 March 2008; the turnover of the Disposal Group was HK$2,206,000, approximately 30.6% of the turnover of the Group of that year.

INFORMATION ON THE DISPOSAL GROUP

South Perfect was incorporated on 31 October 1997 in Hong Kong and its principal activity is investment holding. The major assets of South Perfect are attributable to its investment in Fushiwang. Fushiwang is a Sino-foreign equity joint venture incorporated in the PRC on 12 October 1998 and is owned as to 55% by South Perfect and 45% by Yimin. Fushiwang is principally engaged in wine production and distribution in the PRC.

Financial information of the Disposal Group according to its audited consolidated financial statements which were prepared in accordance with Hong Kong Financial Reporting Standard issued by the Hong Kong Institute of Certified Public Accountants, for the two financial years ended 31 March 2007 and 31 March 2008 is as follows:

	Year ended 31 March	Year ended 31 March
	2007	2008
	HK$	HK$
Turnover	9,425,401	2,206,363
Net (loss)/profit before taxation	(8,190,314)	26,214
Net (loss)/profit after taxation	(8,190,314)	26,214
Net Liabilities	(22,507,420)	(20,419,949)

The total assets of the Disposal Group as at 31 March 2008 were approximately HK$14,306,255.

REASONS FOR AND BENEFITS OF THE DISPOSAL

At the Latest Practicable Date and before Completion, the Group is principally engaged in the business of property development and investment, and manufacturing and trading of wine products.

As reported in the Group’s interim report for the six months ended 30 September 2008, the Group’s wine business conducted by Fushiwang continued to be disappointing. Fushiwang was in serious financial distress due to lower demand, increasing market competition, upsurge of operating costs and inadequate financial resources. The Directors believe that with reference to the financial position of the Disposal Group, in particular the losses on operations and the size of net liabilities, it is highly unlikely for the Disposal Group to contribute positively to the profitability of the Group in short and medium term.

– 7 –

LETTER FROM THE BOARD

Taking into account of the negative net asset value of the Disposal Group and the accumulated losses recorded by the Disposal Group, which were mainly due to the operating losses of the Disposal Group in the past years, the Directors consider it is in the best interest of the Company and the Shareholders as a whole to dispose of the entire issued share capital of South Perfect, and hence the investment in Fushiwang, pursuant to the terms and conditions of the Sale and Purchase Agreement. After the Disposal, the Company will be able to deploy its resources to new business opportunities which could generate good revenue for the Group.

Based on the audited consolidated financial statements of the Disposal Group for the year ended 31 March 2008, it is estimated that, upon completion of the Disposal, the Group will record a gain on Disposal of approximately HK$21,049,000 for the year ending 31 March 2010, after deducting the commission payable to the Agent and other expenses. Such gain is estimated based on (i) the consideration under the Sale and Purchase Agreement and (ii) reversal of net liabilities attributable to the deconsolidation of the Disposal Group. The final amount of the actual gain as a result of the Disposal will be determined upon completion of the Disposal and subject to review by the Company’s auditors.

INTENDED USE OF PROCEEDS

The sale proceeds from the Disposal will be applied to general working capital of the Group.

EFFECTS OF THE TRANSACTION ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE COMPANY

It is estimated the net proceeds from the Disposal will be amounted to approximately HK$630,000, after deducting the commission payable to the Agent and other expenses. Save for the net sale proceeds, it is expected that Group will record an additional gain of approximately HK$20,419,000 upon completion of the Disposal, being difference between total assets of approximately HK$14,306,255 and total liabilities of the approximately HK$34,726,204, based on the audited consolidated financial statements of the Disposal Group for the year ended 31 March 2008. The expected total gain is approximately HK$21,049,000, which is subject to review and confirmation by the Company’s auditors and will be recognized in the consolidated profit and loss account of the Group for the year ending 31 March 2010.

Upon Completion, the financial results of the Disposal Group will no longer be consolidated in the Group’s financial statements. Accordingly, it is expected that the total assets and total liabilities of the Group will be decreased by approximately HK$14,306,255 and HK$34,726,204 respectively as result of the Disposal, based on the audited consolidated financial statements of the Disposal Group for the year ended 31 March 2008.

The Directors are of the view that the Disposal will not have any material adverse impact on the business operations and financial position of the Group, given that the Disposal represents an opportunity for the Group to realize its investment in Fushiwang so as to deploy its resources to invest in new businesses that could broaden the revenue base and increase profitability of the Group.

– 8 –

LETTER FROM THE BOARD

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

After Completion, the Group will discontinue its operations in manufacturing and trading of wine products. The Group will continue its property development and investment businesses, and will take efforts to identify new opportunities in the PRC and/or Hong Kong to further expand its property business.

The Company has been actively looking for investment opportunities that might result in diversification into new lines of business that would bring new sources of revenue to the Group. In view of the current global financial situation, the management will adopt a prudent policy and strict criteria for the selection of investment alternatives. The Group has sufficient cash reserves to capitalize on any profitable business opportunity that may arise under the current environment.

THE SGM

The Disposal, hence the entering into of the Sale and Purchase Agreement and the transactions contemplated thereunder, constitute a major transaction of the Company under Chapter 14 of the Listing Rules and are therefore subject to approval by the Shareholders in the SGM. So far as is known to the Directors, no Shareholder has a material interest in the Disposal and accordingly no Shareholder is required to abstain from voting at the SGM to approve the Disposal, hence the entering into of the Sale and Purchase Agreement and the transactions contemplated thereunder.

A notice convening the SGM is set out on pages 18 to 19 of this circular for the purpose of considering and, if thought fit, passing the resolution(s) set out therein.

A form of proxy is enclosed for use at the SGM. Whether or not you are able to attend and vote at the SGM, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company’s principal place of business at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the special general meeting or any adjourned meeting thereof. Completion and return of the proxy form shall not preclude you from attending and voting in person at the special general meeting or any adjourned meeting thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at a general meeting of the Company must be taken by way of a poll. Accordingly, the resolution(s) to be considered and, if thought fit, passed at the SGM will be voted by way of a poll by the Shareholders.

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LETTER FROM THE BOARD

RECOMMENDATION

Taking into consideration of the reasons set out in the section headed “Reasons for and benefits of the Disposal” above, the Directors consider that the terms of the Disposal and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolution(s) as set out in the notice of the SGM.

FURTHER INFORMATION

Your attention is drawn to the further information set out in the appendices to this circular.

Yours faithfully, For and on behalf of the Board South East Group Limited Chen Xiaoping Executive Director

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FINANCIAL INFORMATION

APPENDIX I

1. INDEBTEDNESS

As at 31 March 2009, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$73,225,000, comprising a convertible bond in the principal amount of HK$68,000,000 and a secured bank loan of approximately HK$5,225,000.

The convertible bond bearing an interest of 2.5% per annum was issued by Company on 7 May 2008 and will expire on the third anniversary of the issue date.

The secured bank loan is relating to Fushiwang and is pledged by the land and buildings of Fushiwang with net book value of HK$8,291,000 at 31 March 2008.

Save as disclosed above and apart from intra-group liabilities, as at 31 March 2009, the Group did not have any outstanding mortgages, charges, debentures, or other loan capital or bank overdrafts, term loans, debt securities issued and outstanding, and authorised or otherwise created but unissued or other similar indebtedness, liabilities under acceptances or acceptances credits or hire purchase commitments, or any guarantees or other material commitment or any material contingent liabilities.

The Directors have confirmed that there have been no material changes in the indebtedness and contingent liabilities of the Group since 31 March 2009 up to the Latest Practicable Date.

2. WORKING CAPITAL

As at the Latest Practicable Date, the Directors of the Company are of the opinion that, after taking into account the internal resources available to the Group, the net estimated proceeds from the major transaction and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements and for the next twelve months from the date of this circular.

– 11 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors

As at the Latest Practicable Date, details of the interests of the Directors and chief executive of the Company in the equity and debt securities of the Company or any associated corporation (within the meaning of the Securities and Futures Ordinance (the “SFO”) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Director is taken or deemed to have under such provisions of the SFO); or (b) were required pursuant to section 352 of the SFO to be entered in the register referred to therein; or (c) were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) to be notified to the Company and the Stock Exchange as follows:

• (i) Long positions in ordinary shares of the Company

			Percentage
			of the
			Company’s
			existing
		Number of	issued share
Name of Director	Capacity	ordinary shares	capital
WU Siu Chung	Through a controlled	92,000,000	26.98%
	corporation	(Note 1)
CHEN Yuan Shou,	Beneficially owned	25,582,820	7.50%
Budiman
LO Yuk Lam	Beneficially owned and	207,000	0.06%
	through family interest	(Note 2)
WONG Kam Wah	Beneficially owned	82,000	0.02%

Notes:

1. These shares were held by Brilliant Express International Limited, a company wholly owned by Mr. Wu Siu Chung.

2. Of these shares, 7,000 shares were personally held by Mr. Lo Yuk Lam and 200,000 shares were held by his wife, Ms. Pang Wai Bing, Cecilia.

– 12 –

GENERAL INFORMATION

APPENDIX II

• (ii) Long positions in underlying shares — share options

Exercise price per Name of Director Date of grant Share Exercise period HK$ WU Siu Chung 23/01/2008 1.200 23/01/2008- 22/01/2011 23/01/2008 1.200 23/01/2009- 22/01/2012 CHEN Xiaoping 23/01/2008 1.200 23/01/2008- 22/01/2011 CHEN Yuan Shou, 18/12/2003 0.106 18/12/2004- Budiman 17/12/2014 18/12/2003 0.106 18/12/2005- 17/12/2015 16/04/2007 0.177 01/11/2007- 31/10/2010 16/04/2007 0.177 01/11/2008- 31/10/2011 16/04/2007 0.177 01/11/2009- 31/10/2012 23/01/2008 1.200 23/01/2008- 22/01/2011 Eduard William 23/01/2008 1.200 23/01/2008- Rudolf Helmuth 22/01/2011 WILL LO Yuk Lam 18/12/2003 0.106 18/12/2004- 17/12/2014 18/12/2003 0.106 18/12/2005- 17/12/2015 23/01/2008 1.200 23/01/2008- 22/01/2011 WONG Kam Wah 18/12/2003 0.106 18/12/2005- 17/12/2015 23/01/2008 1.200 23/01/2008- 22/01/2011

Attributable number of underlying Attributable Shares percentage of comprised in Total the Company’s outstanding interest existing issued options (Shares) share capital 3,000,000 800,000 3,800,000 1.11% 500,000 500,000 0.15% 3,305,000 3,305,000 3,305,000 3,305,000 3,305,000 200,000 16,725,000 4.90% 200,000 200,000 0.06% 323,000 330,000 200,000 853,000 0.25% 330,000 200,000 530,000 0.16%

– 13 –

GENERAL INFORMATION

APPENDIX II

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company was interested in the equity and debt securities of the Company or any associated corporations (within the meaning of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 & 8 of Part XV of the SFO (including interests and short positions which the Director is taken or deemed to have under such provisions of the SFO); or (b) were required pursuant to section 352 of the SFO to be entered in the register referred to therein; or (c) were required pursuant to the Model Code to be notified to the Company and the Stock Exchange.

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial shareholders

As at the Latest Practicable Date, so far as was known to the Directors and the chief executive of the Company, the following parties (not being Directors or chief executive of the Company) had an interest or short position in the shares and underlying shares of the Company, which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who were directly and indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

			Percentage
			of the
			Company’s
			existing
		Number of	issued share
Name of Shareholder	Capacity	ordinary shares	capital
Brilliant Express	Directly beneficially	92,000,000	26.98%
International Limited	owned	(Note)

Note: Mr. Wu Siu Chung (“Mr. Wu”), the chairman and a director of the Company, is the ultimate beneficial owner of Brilliant Express International Limited. Under Part XV of the SFO, Mr. Wu is deemed to have interest in these shares, as disclosed in the section headed “Directors” above.

Save as disclosed above, as at the Latest Practicable Date, as far as the Directors were aware, no other person had an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of the Divisions 2 and 3 of Part XV of the SFO, or who was directly and indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

– 14 –

GENERAL INFORMATION

APPENDIX II

As at the Latest Practicable Date, there was no Directors or proposed directors of the Company who was an employee of a company which had interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO.

• (c) As at the Latest Practicable Date, none of the Directors had any interest, either direct or indirect, in any assets which have been, since 31 March 2008, being the date to which the latest published audited accounts of the Group were made up, acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

• (d) As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which is subsisting as at the date of this circular and is significant in relation to the business of the Group.

3. DIRECTORS’ SERVICE CONTRACTS

Each of Mr. Wu Siu Chung and Mr. Chen Xiaoping has entered into a service agreement with the Company for a period of three years from 1 October 2007 and will continue thereafter unless and until terminated by either party by three months’ prior notice.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable within one year without payment of compensation other than statutory compensation).

4. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors nor their respective associates had any business which competed or was likely to compete, either directly or indirectly, with the business of the Group.

5. LITIGATION

No member of the Group was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened against any member of the Group as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX II

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) which have been entered into by the Company or its subsidiaries within the two years immediately preceding the Latest Practicable Date, which are or may be considered to be material:

• (a) the supplementary agreement dated 9 July 2007 entered into between ��� (Huang Jianrong) and ��(��)������(South East Property (Shangdong) Limited, a wholly owned subsidiary of the Company, for the purpose of revising certain terms of the cooperation for development agreement entered into on 31 July 2006 between the aforementioned parties in relation to, among others, the divestment of the Group’s residential property development project in Zouping County, Shandong Province, the PRC (“Cooperation for Development Agreement”), and a termination agreement entered into between the parties to the Cooperation for Development Agreement on 22 December 2008 when the Cooperation for Development Agreement was fully completed.

• (b) The subscription agreement dated 9 April 2008 (as amended by a supplemental agreement dated 14 April 2008) entered into between the Company as issuer and Loyal Delight Group Limited as subscriber in relation to the issuance of a convertible bond in the principal amount of HK$68,000,000 bearing interest of 2.5% per annum with a threeyear term; and

• (c) the Sale and Purchase Agreement and the agreement (as amended) with the Agent as referred to in this Circular.

7. MISCELLANEOUS

• (a) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda and its principal place of business in Hong Kong is situated at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong. The Company’s Hong Kong share registrar and transfer office is Computershare Hong Kong Investor Services Limited at Shops 1712 - 1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (b) The secretary of the Company is Ms. Chan Sau Chee who is an associate member of the Hong Kong Institute of Company Secretaries and the Institute of Chartered Secretaries and Administrators.

• (c) The English text of this circular shall prevail over the Chinese text.

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GENERAL INFORMATION

APPENDIX II

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s head office and principal place of business in Hong Kong at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong during normal business hours on any week day (except public holidays) from the date of this circular up to and including 11 May 2009 and will also be available for inspection at the SGM:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the annual report of the Company for each of the two years ended 31 March 2007 and 2008;

• (c) the service agreements referred to in the section headed “Directors’ Service Contracts” in this appendix;

• (d) the contracts referred to in the section headed “Material Contracts” in this appendix; and

• (e) this circular.

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NOTICE OF SGM

==> picture [242 x 40] intentionally omitted <==

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

NOTICE IS HEREBY GIVEN that a special general meeting of South East Group Limited (the “Company”) will be held at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong on Monday, 11 May 2009 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution which will be proposed as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (a) the sale and purchase agreement dated 26 March 2009 (the “Sale and Purchase Agreement”) entered into between the Company as vendor and ��� (Luo Chengshan) as purchaser in relation to the sale and purchase of the two (2) shares of HK$1.00 each in the issued share capital of South Perfect International Limited (“South Perfect”), a wholly owned subsidiary of the Company, representing 100% of the issued capital of South Perfect (the “Sale Shares”), for a total consideration of HK$1,600,000 (the “Consideration”) (a copy of which has been produced to this meeting marked “A” and initialed by the chairman of this meeting for the purpose of identification), and the transactions contemplated thereunder (the “Disposal”) be and are hereby approved, confirmed and ratified;

• (b) subject to the approval of the shareholders of the Company of the Disposal, the agreement dated 18 December 2008 (which is supplemented by a supplemental agreement dated 30 March 2009) entered into between the Company and Yu Kwok Ho Russell relating to procurement of purchaser for the Sale Shares for a commission of 50% of the Consideration (copies of which have been produced to this meeting marked “B” and “C” and initialed by the chairman of this meeting for the purpose of identification), and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

• (c) any one director of the Company, and if the affixation of the common seal of the Company is necessary, any two directors of the Company or any one director of the Company and the secretary of the Company or such other person(s) as the board of director of the Company may appoint, be and is/are hereby authorised for and on behalf of the Company to do all such acts and to enter into all such transactions, arrangements and agreements in his/her absolute discretion as he/she deems fit or appropriate to give effect to the Sale and Purchase Agreement and for the implementation of all transactions contemplated thereunder.”

By order of the Board South East Group Limited Chan Sau Chee Company Secretary

Hong Kong, 22 April 2009

• For identification purposes only

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NOTICE OF SGM

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney or authority must be deposited at the Company at its principal place of business in Hong Kong at 8A-B, Entertainment Building, 30 Queen’s Road Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. Completion and return of the form of proxy will not preclude a member of the Company from attending and voting in person at the meeting convened and any adjournment thereof and in such event, the authority of the proxy shall be deemed to be revoked.

4. For joint registered holders of any share attending the meeting on the same occasion, the vote of the holder whose name stands first on the register who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.

The directors of the Company as at the date of this notice are Mr. Wu Siu Chung (Chairman) and Mr. Chen Xiaoping as executive directors; Mr. Chen Yuan Shou, Budiman and Mr. Eduard William Rudolf Helmuth Will as non-executive directors; Mr. Lo Yuk Lam, Mr. Wong Kam Wah and Mr. David R. Peterson as independent non-executive directors.

The English translation of the Chinese name is for information purpose only and should not be regarded as the official English name for such Chinese name.

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