Hybrid Kinetic Group Limited — Proxy Solicitation & Information Statement 2014

May 21, 2014

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Hybrid Kinetic Group Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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 disclaim any liability whatsoever for any loss however arising from or in reliance upon the whole or any part of the contents of this circular.

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HYBRID KINETIC GROUP LIMITED 正道集團有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 1188)

REFRESHMENT OF THE 10% GENERAL SCHEME LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME NOTICE OF SPECIAL GENERAL MEETING

A notice convening the Special General Meeting to be held at Suite 1408, 14th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong at 10:30 a.m. on Thursday, 12 June 2014 is set out on pages 10 to 11 of this circular.

A form of proxy for use by the Shareholders at the Special General Meeting is enclosed with this circular for despatch to the Shareholders. Whether or not you intend to attend the Special General Meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event not later than 48 hours before the time for holding the Special General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjournment thereof should you so wish.

22 May 2014

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Proposed refreshment of the 10% General Scheme Limit under
the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Actions to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

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DEFINITIONS

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

“Board”

the board of Directors

• “Branch Share Registrar”

Computershare Hong Kong Investor Services Limited, the branch share registrar and transfer office of the Company in Hong Kong

• “Company”

Hybrid Kinetic Group Limited（正道集團有限公司）, an exempted company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange

• “Director(s)”

the director(s) of the Company

• “Group”

the Company and its subsidiaries

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China

• “Latest Practicable Date”

• 16 May 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

• “Old Scheme”

the share option scheme of the Company adopted on 12 June 2003 and expired on 11 June 2013

• “Proposed Refreshment”

the 10% General Scheme Limit proposed to be refreshed by the Shareholders at the Special General Meeting pursuant to which the Board may grant options to eligible participants under the Share Option Scheme and any other share option scheme(s) of the Company to subscribe for up to 10% of the Shares in issue as at the date of the Special General Meeting

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DEFINITIONS

• “Schemes”

the Old Scheme and the Share Option Scheme collectively

• “Share(s)”

ordinary share(s) with a nominal value of HK$0.10 each in the capital of the Company

• “Share Option Scheme”

the share option scheme currently in force and adopted by the Company on 13 June 2013 pursuant to an ordinary resolution passed at the 2013 AGM

• “Shareholder(s)” holder(s) of Share(s)

• “Special General Meeting”

the special general meeting of the Company to be convened and held at Suite 1408, 14th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong on Thursday, 12 June 2014 at 10:30 a.m. or any adjournment thereof (as the case may be) to consider and, if thought fit, approve the Proposed Refreshment, the notice of which is set out on pages 10 to 11 of this circular

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “10% General Scheme Limit”

the limit imposed under the rules of the Share Option Scheme on the total number of Shares which may be issued upon the exercise of all options granted under the Share Option Scheme and any other share option scheme(s) of the Company, being 10% of the Company’s issued share capital as at the date of adoption of the Share Option Scheme at the 2013 AGM, which may be “refreshed” upon and pursuant to the rules of the Share Option Scheme

• “2013 AGM”

the annual general meeting of the Company held on 13 June 2013

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong

• “%”

per cent.

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LETTER FROM THE BOARD

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HYBRID KINETIC GROUP LIMITED 正道集團有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 1188)

Executive Directors: Dr Yeung Yung (Chairman) Dr Huang Chunhua (Deputy Chairman) Dr Jang Bor Zeng Bohr (Deputy Chairman) Dr Wang Chuantao (Chief Executive Officer) Mr Liu Stephen Quan Mr Hui Wing Sang, Wilson Dr Zhamu Aruna Dr Zhu Shengliang Mr Xu Jianguo Mr Li Zhengshan

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

Head office and principal place of business in Hong Kong: Suites 1407-8, 14th Floor Great Eagle Centre 23 Harbour Road Wanchai, Hong Kong

Non-executive Director: Dr Xia Tingkang, Tim

Independent non-executive Directors:

Mr Wong Lee Hing Dr Song Jian Mr Cheng Tat Wa Dr Zhu Guobin Dr Li Jianyong Mr Chan Sin Hang

22 May 2014

To the Shareholders

Dear Sir or Madam

REFRESHMENT OF THE 10% GENERAL SCHEME LIMIT ON THE GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

The Directors would like to put forward to the Shareholders for approval at the Special General Meeting the proposal regarding the refreshment of the 10% General Scheme Limit on the grant of options under the Share Option Scheme.

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LETTER FROM THE BOARD

The primary purpose of this circular is to set out information regarding (i) the Proposed Refreshment; and (ii) the notice of the Special General Meeting at which ordinary resolution will be proposed to the Shareholders to consider and, if thought fit, approve the Proposed Refreshment.

PROPOSED REFRESHMENT OF THE 10% GENERAL SCHEME LIMIT UNDER THE SHARE OPTION SCHEME

Schemes adopted by the Company

At the 2013 AGM, an ordinary resolution was passed by the then Shareholders for the termination of the Old Scheme upon its expiry and the adoption of the Share Option Scheme. Except for the Old Scheme and the Share Option Scheme, the Company has not adopted other share option scheme(s) pursuant to which options to subscribe for Shares had been granted and remained outstanding as at the Latest Practicable Date.

Outstanding options under the Schemes (including the Old Scheme and the Share Option Scheme)

As at the Latest Practicable Date, there were outstanding options attaching subscription rights to subscribe for an aggregate of 1,292,070,000 Shares pursuant to the Schemes (representing approximately 10.43% of the 12,390,909,756 Shares in issue as at the Latest Practicable Date), of which:

• (a) subscription rights to subscribe for 254,070,000 Shares (representing approximately 2.05% of the Shares in issue as at the Latest Practicable Date) were granted under the Old Scheme. The particulars of options granted, lapsed, exercised and/or outstanding under the Old Scheme as at the Latest Practicable Date are set out in Table A below; and

• (b) subscription rights to subscribe for 1,038,000,000 Shares (representing approximately 8.38% of the Shares in issue as at the Latest Practicable Date) pursuant to the Share Option Scheme. The particulars of options granted, lapsed, exercised and/or outstanding under the Share Option Scheme as at the Latest Practicable Date are set out in Table B below.

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LETTER FROM THE BOARD

Table A – particulars of options granted, lapsed, exercised and/or outstanding under the Old Scheme

(A) Date of grant 9 August 2005 6 February 2008 4 December 2012 24 June 2009 10 July 2009 17 November 2009 Total:	(B) Options granted under the Old Scheme 189,400,000 270,000,000 100,000,000 299,400,592 72,000,000 101,000,000 1,031,800,592	(C) Options lapsed 36,010,000 67,200,000 0 204,422,000 58,000,000 81,000,000 446,632,000	(D) (E) Options exercised Adjustment (if any) and the adjusted number of Shares which may be granted under the outstanding options 120,395,000 Yes From 32,995,000 to 48,670,000 (Note) 97,400,000 N/A 0 N/A 94,978,592 N/A 14,000,000 N/A 20,000,000 N/A 346,773,592	(F) Number of Shares which may be granted under the outstanding options as at the Latest Practicable Date 48,670,000 105,400,000 100,000,000 0 0 0 254,070,000

Note: The number of Shares which may fall to be allotted and issued pursuant to the outstanding options granted under the Old Scheme was adjusted on 1 February 2008 following the completion of a rights issue conducted by the Company as disclosed in its prospectus dated 14 January 2008 and its announcement dated 4 February 2008.

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LETTER FROM THE BOARD

Table B – particulars of options granted, lapsed, exercised and/or outstanding under the Share Option Scheme

(A)	(B)	(C)	(D)	(E)	(F)
				Adjustment	Number of
				(if any) and	Shares
				the adjusted	which may be
				number of Shares	granted under
	Options granted			which may be	the outstanding
	under the			granted under	options as at
	Share Option	Options	Options	the outstanding	the Latest
Date of grant	Scheme	lapsed	exercised	options	Practicable Date
6 September 2013	1,039,000,000	0	1,000,000	N/A	1,038,000,000

As regards the grant of options under the Old Scheme, no further options could be granted consequent upon its expiry on 11 June 2013.

As regards the grant of options under the Share Option Scheme, the current 10% General Scheme Limit is 1,041,015,975 Shares, being 10% of the Shares in issue as at the date of adoption of the Share Option Scheme at the 2013 AGM. Unless the 10% General Scheme Limit is refreshed, the Company may only grant Options to subscribe for up to 2,015,975 Shares, representing only approximately 0.02% of the Shares in issue as at the Latest Practicable Date.

Rules of the Share Option Scheme

Under the rules of the Share Option Scheme and in accordance with the provisions of Chapter 17 of the Listing Rules:

• (a) the maximum number of Shares which may be allotted and issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option schemes adopted by the Group must not in aggregate exceed 30% of the relevant class of securities of the Company (or the subsidiary) in issue from time to time;

• (b) the total number of Shares which may be allotted and issued upon exercise of all options (excluding, for this purpose, options which have lapsed in accordance with the terms of the Share Option Scheme and any other share option schemes of the Group) to be granted under the Share Option Scheme and any other share option schemes of the Group must not in aggregate exceed 10% of the Shares in issue as at the date of passing the relevant resolution adopting the Share Option Scheme (the “ General Scheme Limit ”);

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LETTER FROM THE BOARD

• (c) subject to (a) above and without prejudice to (d) below, the Company may seek approval of the Shareholders at general meeting to refresh the General Scheme Limit provided that the total number of Shares which may be allotted and issued upon exercise of all options to be granted under the Share Option Scheme and any other share option schemes of the Group must not exceed 10% of the Shares in issue as at the date of approval of the “refreshed” limit and, for the purpose of calculating the refreshed limit, options (including those outstanding, cancelled, lapsed or exercised in accordance with the Share Option Scheme and any other share option schemes of the Group) previously granted under the Share Option Scheme and any other share option schemes of the Group will not be counted;

• (d) subject to (a) above and without prejudice to (c) above, the Company may seek separate Shareholders’ approval at general meeting to grant options beyond the General Scheme Limit or, if applicable, the refreshed limit referred to in (c) above to participants specifically identified by the Company before such approval is sought.

Effect of the Proposed Refreshment on the Company’s shareholding structure

As at the Latest Practicable Date, the total number of Shares in issue was 12,390,909,756.

Upon the Proposed Refreshment and assuming the total number of Shares in issue remains unchanged as at the date of the Special General Meeting, the Company may grant options to eligible participants under the Share Option Scheme to subscribe for a maximum of 1,239,090,975 Shares, being 10% of the Shares in issue as at the date of approval of the Proposed Refreshment.

Reasons for and benefits of the Proposed Refreshment

The purpose of the Share Option Scheme is to enable the Group to grant options to participants who are eligible to participate in the Share Option Scheme (including but not limited to employees of the Group and other eligible participants as specified in the Share Option Scheme) as incentives or rewards for their contribution or potential contribution to the Group.

Given that the existing 10% General Scheme Limit is nearly depleted, the Share Option Scheme cannot continue to serve its intended purpose for the benefits of the Group and the Shareholders unless the 10% General Scheme Limit is refreshed in accordance with the rules of the Share Option Scheme.

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LETTER FROM THE BOARD

The Directors consider that it will be for the benefit of the Company and the Shareholders as a whole that eligible participants of the Share Option Scheme are granted rights to obtain equity holdings of the Company through the grant of options under the Share Option Scheme. This would incentivize the eligible participants to contribute to the success of the Group.

For the above reasons, an ordinary resolution will be proposed to the Shareholders at the Special General Meeting to approve the Proposed Refreshment so that the total number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and all other share option scheme(s) of the Company shall not exceed 10% of the Shares in issue as at the date of approval of the Proposed Refreshment by the Shareholders at the Special General Meeting.

Conditions for the Proposed Refreshment

The Proposed Refreshment is conditional upon:

• (a) the Shareholders passing an ordinary resolution to approve the Proposed Refreshment at the Special General Meeting; and

• (b) the Stock Exchange granting the approval of the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of any options that may be granted pursuant to the Share Option Scheme under the Proposed Refreshment not exceeding 10% of the Shares in issue as at the date of approval of the Proposed Refreshment by the Shareholders at the Special General Meeting.

Application for listing

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares which may be fall to be issued upon the exercise of any options that may be granted pursuant to the Share Option Scheme under the Proposed Refreshment.

ACTIONS TO BE TAKEN

Set out on pages 10 to 11 of this circular is a notice convening the Special General Meeting at which an ordinary resolution will be proposed to approve the Proposed Refreshment.

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LETTER FROM THE BOARD

A form of proxy for use at the Special General Meeting is enclosed with this circular. Whether or not you intend to attend the Special General Meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Branch Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as practicable and in any event not later than 48 hours before the time of the Special General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjournment thereof should you so wish.

The voting at the Special General Meeting will be taken by poll.

RECOMMENDATION

The Directors consider that the Proposed Refreshment is in the best interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the relevant resolution at the Special General Meeting.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

Yours faithfully

By order of the Board

Hybrid Kinetic Group Limited Yeung Yung

Chairman

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NOTICE OF SPECIAL GENERAL MEETING

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HYBRID KINETIC GROUP LIMITED 正道集團有限公司

(incorporated in Bermuda with limited liability)

(Stock code: 1188)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting (the “ Meeting ”) of Hybrid Kinetic Group Limited (the “ Company ”) will be held at Suite 1408, 14th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong on Thursday, 12 June 2014 at 10:30 a.m. to consider and, if thought fit, transact the following businesses:

“ THAT pursuant to the rules of the share option scheme (the “ Share Option Scheme ”) adopted by the Company on 13 June 2013, approval be and is hereby generally and unconditionally granted for “refreshing” the 10% limit (the “ 10% General Scheme Limit ”) under the Share Option Scheme provided that (i) the total number of shares of HK$0.10 each in the capital of the Company which may be issued upon the exercise of all options to be granted under the Share Option Scheme and any other share option schemes of the Company under the limit as “refreshed” hereby shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution and (ii) options previously granted under the Share Option Scheme and any other share option schemes of the Company (including options outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option schemes of the Company) shall not be counted for the purpose of calculating the 10% General Scheme Limit as “refreshed” hereby.”

Yours faithfully By order of the Board

Hybrid Kinetic Group Limited 正道集團有限公司

Yeung Yung Chairman

Hong Kong, 22 May 2014

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NOTICE OF SPECIAL GENERAL MEETING

Registered office: Head office and principal place Canon’s Court of business in Hong Kong: 22 Victoria Street Suites 1407-8, 14th Floor Hamilton HM12 Great Eagle Centre Bermuda 23 Harbour Road Wanchai, Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint another person as his/her proxy to attend and vote in his/her stead. A member who is the holder of two or more shares (the “ Shares ”) in the Company may appoint more than one proxy to represent him and vote on his behalf at the Meeting. A proxy need not be a member of the Company.

2. In the case of joint holders of Shares, any one of such joint holders may vote, either in person or by proxy, in respect of such Shares as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the above meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

3. In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his/her attorney duly authorised in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorised, and must be deposited with the Hong Kong branch share registrar and transfer office (the “ Branch Share Registrar ”) of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) not less than 48 hours before the time fixed for holding of the Meeting (or any adjournment thereof).

4. Delivery of an instrument appointing a proxy should not preclude a member from attending and voting in person at the Meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

As at the date of this notice, the board of directors of the Company comprises ten executive directors, namely Dr Yeung Yung (Chairman), Dr Huang Chunhua (Deputy Chairman), Dr Jang Bor Zeng Bohr (Deputy Chairman), Dr Wang Chuantao (Chief Executive Officer), Mr Liu Stepehen Quan, Mr Hui Wing Sang, Wilson, Dr Zhamu Aruna, Dr Zhu Shengliang, Mr Xu Jianguo and Mr Li Zhengshan, one non-executive director, namely Dr Xia Tingkang, Tim and six independent nonexecutive directors, namely Mr Wong Lee Hing, Dr Song Jian, Mr Cheng Tat Wa, Dr Zhu Guobin, Dr Li Jianyong and Mr Chan Sin Hang.

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