Kinetic Development Group Limited — AGM Information 2019

Apr 29, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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 howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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

If you have sold or transferred all your shares in Kinetic Mines and Energy Limited , you should at once hand this circular with the enclosed form of proxy to the purchaser or 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.

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KINETIC MINES AND ENERGY LIMITED 力量礦業能源有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1277)

PROPOSAL FOR DECLARATION AND PAYMENT OF FINAL DIVIDEND RE-ELECTION OF DIRECTORS PROPOSED CHANGE OF AUDITORS GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the AGM of Kinetic Mines and Energy Limited to be held at Carlton Room One, 2/F, The Ritz-Carlton, Guangzhou, 3 Xing An Road, Pearl River New City, Tianhe District, Guangzhou, PRC on Wednesday, 29 May 2019 at 11: 30 a.m. is set out on pages 14 to 18 of this circular. A form of proxy for use at the AGM is also enclosed. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk). Whether or not you are able to attend such meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar 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 possible and in any event not less than 48 hours (i.e. 11: 30 a.m. 27 May 2019) before the time appointed for the holding of such meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting at such meeting or any adjourned meeting thereof should you so wish.

29 April 2019

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
INTRODUCTION . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
DECLARATION AND PAYMENT	OF FINAL DIVIDEND . . . . . . . . . . . . . . . . . .	4
CLOSURE OF REGISTER OF MEMBERS OF THE COMPANY
FOR ATTENDING THE AGM	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
RE-ELECTION OF DIRECTORS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
PROPOSED CHANGE OF AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
GENERAL MANDATE AND REPURCHASE MANDATE . . . . . . . . . . . . . . . . . .		5
NOTICE OF AGM . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
VOTING PROCEDURES . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
PROXY . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
RECOMMENDATION . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
RESPONSIBILITY STATEMENT	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
MISCELLANEOUS . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I — INFORMATION ON THE DIRECTORS PROPOSED
FOR RE-ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8
APPENDIX II — EXPLANATORY STATEMENT FOR THE REPURCHASE
MANDATE . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		14

– i –

DEFINITIONS

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

• “AGM” the annual general meeting of the Company to be held at Carlton Room One, 2/F, The Ritz-Carlton, Guangzhou, 3 Xing An Road, Pearl River New City, Tianhe District, Guangzhou, PRC on Wednesday, 29 May 2019 at 11: 30 a.m.

• “Articles” the articles of association of the Company as amended from time to time

• “Board” the board of Directors

• “BVI” the British Virgin Islands

• “Close Associates” has the meaning ascribed thereto in the Listing Rules “Company” Kinetic Mines and Energy Limited, a company incorporated in the Cayman Islands and whose Shares are listed on the Main Board of the Stock Exchange

• “Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and for the purposes of this circular, means each of King Lok and Mr. Zhang Liang, Johnson

• “Director(s)” the director(s) of the Company

• “General Mandate” a general mandate proposed to be granted to the Directors to exercise the powers of the Company to allot, issue and deal with Shares in the manner as set out in resolution no. 8(1) in the notice of the AGM

• “Group” the Company and its subsidiaries

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

“King Lok” King Lok Holdings Limited, a BVI business company incorporated under the laws of BVI on 9 December 2009 and a Controlling Shareholder

– 1 –

DEFINITIONS

“Latest Practicable Date”	24 April 2019, being the latest practicable date before the
	printing of this circular for ascertaining certain information
	contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC” or “China”	The People’s Republic of China, which for the purposes of
	this circular excludes Hong Kong, Macau Special
	Administrative Region and Taiwan Region
“Repurchase Mandate”	a general mandate proposed to be granted to the Directors to
	exercise all the powers of the Company to repurchase
	Shares in the manner as set out in resolution no. 8(2) in the
	notice of the AGM
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	ordinary share(s) of nominal value of US$0.001 each in the
	capital of the Company
“Shareholder(s)”	shareholder(s) of the Company
“Final dividend”	the proposed final dividend of HK$0.03 per share as
	proposed by the Board on 21 March 2019
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Codes on Takeovers and Mergers and Share Buy-backs
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	US dollars, the lawful currency of the United States of
	America
“%”	per cent

– 2 –

LETTER FROM THE BOARD

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KINETIC MINES AND ENERGY LIMITED 力量礦業能源有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1277)

Executive Directors: Mr. Zhang Li (Chairman) Mr. Gu Jianhua (Chief Executive Officer) Mr. Zhang Liang, Johnson

Non-executive Director: Ms. Zhang Lin

Independent Non-Executive Directors: Ms. Liu Peilian Mr. Zheng Ercheng Ms. Xue Hui

Registered Office: Clifton House 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands

Principal Place of Business in Hong Kong: Unit B, 20/F Two Chinachem Plaza 68 Connaught Road Central Hong Kong

29 April 2019

Dear Sir/Madam,

PROPOSAL FOR DECLARATION AND PAYMENT OF FINAL DIVIDEND RE-ELECTION OF DIRECTORS PROPOSED CHANGE OF AUDITORS GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the forthcoming AGM in relation to (i) the proposal for declaration and payment of a final dividend, (ii) the re-election of Directors, (iii) the proposed change of auditors and (iv) the granting of the General Mandate and the Repurchase Mandate. A notice of the AGM is set out on pages 14 to 18 of this circular.

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LETTER FROM THE BOARD

DECLARATION AND PAYMENT OF FINAL DIVIDEND

In the annual results announcement of the Company on 21 March 2019, the Board proposed and recommended to pay a final dividend of HK$0.03 per share, payable to Shareholders of the Company whose names appear on the register of members of the Company on 6 June 2019, subject to the Shareholder’s approval at the AGM. The final dividend, if approved, will be paid in cash on or before Friday, 28 June 2019.

CLOSURE OF REGISTER OF MEMBERS OF THE COMPANY FOR ATTENDING THE AGM

The register of members of the Company will be closed from Friday, 24 May 2019 to Wednesday, 29 May 2019 (both days inclusive), during which period no transfer of Shares will be effected. In order to be entitled to attend and vote at the AGM, all transfer instruments accompanied by the relevant share certificates must be lodged by holders of the Shares with the Company’s branch share registrar in Hong Kong, namely, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4: 30 p.m. on Thursday, 23 May 2019.

RE-ELECTION OF DIRECTORS

In accordance with Article 108(a) of the Articles, the Directors, Mr. Zhang Li, Ms. Liu Peilian and Mr. Zheng Ercheng, will retire at the AGM, and being eligible, will offer themselves for re-election at the AGM. Information required to be disclosed under the Listing Rules in relation to the Directors for re-election is set out in Appendix I to this circular.

PROPOSED CHANGE OF AUDITORS

As disclosed in the announcement of the Company dated 23 April 2019, Ernst & Young will retire as the auditors of the Company upon expiration of its current term of office with effect from the conclusion of the AGM as the Company and Ernst & Young could not reach a consensus on the audit fee in respect of the financial year ending 31 December 2019.

After due consideration, the Board has resolved, with the recommendation from the audit committee of the Company, to propose the appointment of KPMG as the new auditors of the Company following the retirement of Ernst & Young to hold office until the conclusion of the annual general meeting of the Company to be held in 2020, subject to the approval by the Shareholders at the AGM.

The Company has received a letter from Ernst & Young confirming that there are no matters in relation to its retirement that need to be brought to the attention of the Shareholders. The Board has confirmed that there is no disagreement between Ernst & Young and the Company and there are no matters in respect of the proposed change of auditors that need to be brought to the attention of the Shareholders.

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LETTER FROM THE BOARD

Accordingly, an ordinary resolution will be proposed at the AGM in relation to the approval of the appointment of KPMG as the new auditors of the Company in place of the retiring auditors, Ernst & Young, which shall come into effect at the conclusion of the AGM.

GENERAL MANDATE AND REPURCHASE MANDATE

By resolutions of the Shareholders passed on 23 May 2018, the Directors were granted general mandates to issue Shares and to repurchase Shares. Each such mandate will expire at the conclusion of the forthcoming AGM.

In order to ensure flexibility and discretion to the Directors in the event that it becomes desirable to issue any Shares, approval is sought from the Shareholders, pursuant to the Listing Rules, for granting of the General Mandate. In this regard, an ordinary resolution set out as resolution no. 8(1) in the notice of the AGM will be proposed at the AGM to grant the General Mandate to the Directors to allot and issue new Shares up to an amount not exceeding 20% of the number of issued shares of the Company as at the date of the passing of the resolution. In addition, subject to a separate approval under ordinary resolution no. 8(3), the number of issued shares purchased by the Company under ordinary resolution no. 8(2) will also be added to the 20% general mandate as mentioned in the ordinary resolution no. 8(1).

In accordance with the Listing Rules, the Company may not make a new issue of Shares or announce a proposed new issue of Shares for a period of 30 days after any purchase by it of Shares, whether on the Stock Exchange or otherwise, other than an issue of securities pursuant to the exercise of warrants, share options or similar instruments requiring the Company to issue securities which were outstanding prior to that purchase of its own securities, without the prior approval of the Stock Exchange.

At the AGM, another ordinary resolution set out as resolution no. 8(2) in the notice of the AGM will be proposed to the Shareholders that the Directors be granted a Repurchase Mandate to repurchase Shares up to 10% of the number of issued shares of the Company as at the date of the passing of the resolution. An explanatory statement as required by the Listing Rules to be sent to the Shareholders in connection with the Repurchase Mandate is set out in Appendix II to this circular. This explanatory statement contains all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolution at the AGM.

NOTICE OF AGM

The AGM will be held at Carlton Room One, 2/F, The Ritz-Carlton, Guangzhou, 3 XingAn Road, Pearl River New City, Tianhe District, Guangzhou, PRC on Wednesday, 29 May 2019 at 11:30 a.m., at which, inter alia, ordinary resolutions will be proposed to the Shareholders to consider the re-election of the Directors and the grant to the Directors of the General Mandate and the Repurchase Mandate. The notice of AGM is set out on pages 14 to 18 of this circular.

– 5 –

LETTER FROM THE BOARD

VOTING PROCEDURES

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, all resolutions will be put to vote by way of poll at the AGM. An announcement on the poll results will be made by the Company after the AGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

PROXY

A form of proxy for use at the AGM is enclosed with this circular. Whether or not you intend to attend the AGM, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours (i.e. 11:30 a.m. 27 May 2019) before the time appointed for holding the AGM or any adjournment thereof. The completion and return of the form of proxy will not prevent you from attending and voting in person at the AGM or any adjourned meeting should you so desire.

RECOMMENDATION

The Board believes that the resolutions set out in the notice of AGM including the proposed declaration and payment of the final dividend, the re-election of Directors, the proposed change of auditors and the granting of the General Mandate and the Repurchase Mandate are all in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends you to vote in favour of all the ordinary resolutions as set out in the notice of the AGM.

RESPONSIBILITY STATEMENT

This circular, for which the Directors of the Company 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.

Your attention is drawn to additional information as set out in the Appendices.

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LETTER FROM THE BOARD

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 Kinetic Mines and Energy Limited Zhang Li

Chairman and Executive Director

– 7 –

APPENDIX I INFORMATION ON THE DIRECTORS PROPOSED FOR RE-ELECTION

The particulars of Mr. Zhang Li, Ms. Liu Peilian and Mr. Zheng Ercheng, who will offer themselves for re-election at the AGM, disclosed pursuant to Rule 13.74 of the Listing Rules are as follows:

Mr. Zhang Li (張力) , aged 66, has been the chairman and an executive Director of our Company since 6 March 2012. He graduated from Guangzhou Open University (廣州市廣播電 視大學) in 1986 and is responsible for our Group’s overall business strategy and corporate development and the identification of potential acquisition targets for our Group which he founded in 2006. Mr. Zhang is the father of Mr. Zhang Liang, Johnson and the brother of Ms. Zhang Lin.

Mr. Zhang was the secretary of the Youth League Committee of Guangzhou Second Light Industry Bureau (廣州市二輕局) from 1975 to 1981 and the head of production department of Guangzhou Baiyun District Rural Enterprise Administration (廣州市白雲區鄉鎮企業管理局) from 1981 to 1985 and the general manager of Guangzhou Meihuacun Hotel (廣州市梅花村酒 店) and Guangzhou Tianli Property Development Corp. (廣州天力房地產開發公司), the predecessor of Guangzhou R&F Properties Co., Ltd. (廣州富力地產股份有限公司), a company listed on the Stock Exchange, from 1985 to 1994 and from 1994 to 2000, respectively. As one of the co-founders and controlling shareholders of Guangzhou R&F Properties Co., Ltd. (廣州富 力地產股份有限公司), he is currently its chief executive officer and one of the co-chairmen and executive directors. Mr. Zhang is a member of the 11th and 12th National Committee of the Chinese People’s Political Consultative Conference (中國人民政治協商會議全國委員會), the chairman of the China Real Estate Chamber of Commerce (全國工商聯房地產商會) and a director and a part-time professor of Jinan University (暨南大學) in China.

Mr. Zhang has entered into a service contract with the Company for an initial fixed term of three years with effect from 6 March 2018 and he is subject to retirement by rotation and reelection at the AGM of the Company in accordance with the Articles, provided that either party may terminate the service contract by three months’ notice. Under the service contract, Mr. Zhang is entitled to a fixed salary of RMB3,000,000 per annum plus a discretionary bonus. His emolument is determined by the Board having regard to his duties and responsibilities.

As at the Latest Practicable Date, Mr. Zhang has personal interest in 882,850,000 Shares within the meaning of Part XV of the SFO.

Ms. Liu Peilian (劉佩蓮) , aged 65, has been an independent non-executive Director of the Company since 6 March 2012. She completed her undergraduate education in finance and accounting from Guangzhou Open University (廣州市廣播電視大學) in 1990 and obtained her master’s degree in business administration from Murdoch University in Australia in 2002. Ms. Liu is an accountant, a certified public accountant and a certified tax agent in the PRC and has approximately 40 years of experience in finance and accounting. She worked in the Guangzhou Financial Bureau (廣州市財政局) from 1971 to 1985 and held various senior positions with Shu Lun Pan Yangcheng Certified Public Accountants Co., Ltd. (立信羊城會計師事務所有限公司) and its predecessor firms including director, deputy chief accountant and consultant between

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INFORMATION ON THE DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX I

1985 to 2009. She has been a consultant of Qinghai Huading Industrial Co., Ltd. (青海華鼎實業 股份有限公司), a manufacturer of mechanical products listed on the Shanghai Stock Exchange, since 2010 and an independent director of Keda Industrial Co., Ltd. (廣東科達機電股份有限公 司) from 2009 to 2015, another manufacturer of mechanical products listed on the Shanghai Stock Exchange, and GRG Banking Equipment Co., Ltd. (廣州廣電運通金融電子股份有限公 司), an automatic teller machine supplier listed on the Shenzhen Stock Exchange, since 2011. Moreover, she has been an independent director of Guangzhou Hongteo Accurate Technology Co., Ltd. (廣東鴻特精密技術股份有限公司), a company listed on the Shenzhen Stock Exchange, from 2013 to 2016.

Ms. Liu has renewed her contract with the Company for an initial fixed term of three years with effect from 6 March 2018 and she is subject to retirement by rotation and re-election at the AGM of the Company in accordance with the Articles. Under the letter of appointment, Ms. Liu is entitled to a fixed director’s fee of RMB240,000 per annum. Her emolument is determined by the Board having regard to her duties and responsibilities.

As at the Latest Practicable Date, Ms. Liu does not have any interest in the Company.

Mr. Zheng Ercheng (鄭爾城) , aged 61, has been appointed as an executive Director since 24 March 2015. He has extensive experience in China’s banking industry and financial sector. He was the sub-branch deputy governor and then governor of China Construction Bank, Guangzhou Branch, Tianhe Sub-branch from 1987 to 1997, the general manager of the International Business Department of the Guangzhou Branch of the China Construction Bank from 1997 to 1999 and the general manager of the Guangzhou Branch of Cinda Asset Management Company from 1999 to 2000. He was also a supervisor of the supervisory committee of Guangzhou R&F Properties Co., Ltd. (Stock Code: 2777), which is a company listed on the Stock Exchange from June 2004 to May 2014 and a director of PCI-Suntek Technology Co., Ltd., (佳都新太科技股份有限公司) (Stock Code: 600728), which is a company listed on the Shanghai Stock Exchange, from February 2008 to April 2014. Mr. Zheng has retired from active employment since 2000.

Mr. Zheng is currently an independent non-executive director, the chairman of the remuneration committee, a member of the audit committee and nomination committee of Guangzhou R&F Properties Co., Ltd., a position he has held since May 2014.

Mr. Zheng has entered into an appointment letter with the Company for a fixed term of three years commencing from 24 March 2018 and he is subject to retirement by rotation and re-election at the AGM of the Company in accordance with the Articles. Under the appointment letter, Mr. Zheng is entitled to a fixed director’s fee of RMB240,000 per annum. His emolument is determined by the Board having regard to his responsibilities and duties as well as the prevailing market conditions.

As at the Latest Practicable Date, Mr. Zheng does not have any interest in the Company within the meaning of Part XV of the SFO.

– 9 –

APPENDIX I INFORMATION ON THE DIRECTORS PROPOSED FOR RE-ELECTION

Save as disclosed, each of the above Directors:

• (i) does not have any relationship with any Directors, senior management, substantial Shareholders or Controlling Shareholders; and

• (ii) does not have any interests in the Shares within the meaning of Part XV of the SFO as at the Latest Practicable Date.

Save as disclosed above, there are no other matters that are required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules and there are no other matters that need to be brought to the attention of the Shareholders and each of the above Directors did not hold any directorship in any other listed company in Hong Kong or overseas in the past three years before the Latest Practicable Date.

– 10 –

EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX II

This Appendix serves as the explanatory statement required under Rule 10.06(1)(b) of the Listing Rules to provide you with the information necessary for your consideration of the Repurchase Mandate to be granted to the Directors.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 8,430,000,000 Shares.

Subject to the passing of the relevant ordinary resolution and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 843,000,000 Shares (representing not more than 10% of the number of issued shares of the Company as at the date of passing the resolution to approve the Repurchase Mandate).

REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders that they should have a general authority from the Shareholders to enable the Company to repurchase the Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or its earning per Share and will only be made where the Directors believe that such repurchases will benefit the Company and the Shareholders.

FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Articles, the Listing Rules and the applicable laws and regulations of the Cayman Islands.

A listed company is prohibited from repurchasing its own securities on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time. Under the applicable laws and regulations of the Cayman Islands, any repurchase by the Company may be made out of the profits or out of the proceeds of a fresh issue of Shares made for the purpose of the repurchase or, if so authorised by the Articles and subject to the applicable laws and regulations of the Cayman Islands, out of capital. Any premium payable on a redemption or purchase over the par value of the Shares to be purchased must be provided for out of profits of the Company or from sums standing to the credit of the Company’s share premium account or, if authorised by the Articles and subject to the provisions of the applicable laws and regulations of the Cayman Islands, out of capital.

– 11 –

EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX II

On the basis of the current financial position of the Company as disclosed in its annual results announcement on 21 March 2019 and taking into account the Company’s current working capital position, the Directors consider that, if the Repurchase Mandate is exercised in full, it may have a material adverse effect on the Company’s working capital and/or gearing position as compared with the position disclosed in this annual results announcement. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the Company’s working capital requirements or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

GENERAL

The Directors have undertaken to the Stock Exchange that, so far as the same may be applied, they will exercise the Repurchase Mandate in accordance with the Listing Rules and applicable laws and regulations of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their Close Associates, currently intends to sell any Shares to the Company in the event that the Repurchase Mandate is approved by the Shareholders.

No core connected person (as defined in the Listing Rules) have notified the Company that he or she has a present intention to sell Shares to the Company, or have undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders.

As at the Latest Practicable Date, King Lok directly held 5,307,450,000 Shares, representing an effective interest of approximately 62.96% in the issued share capital of the Company. Mr. Zhang Liang, Johnson, by virtue of his interest in King Lok, was deemed to be interested in the said 5,307,450,000 Shares. King Lok is held as to 100% by Mr. Zhang Liang, Johnson. Accordingly, each of King Lok and Mr. Zhang Liang, Johnson is interested in 5,307,450,000 Shares, representing an effective interest of approximately 62.96% in the issued share capital of the Company.

In the event that the Directors should exercise in full the Repurchase Mandate, the effective interests of King Lok in the issued share capital of the Company would be increased to approximately 69.95%, and the effective interests of Mr. Zhang Liang, Johnson in the issued share capital of the Company would be increased to approximately 69.95%. The Directors have no present intention to repurchase the Shares to the extent it will trigger the obligations under the Takeovers Code for King Lok or Mr. Zhang Liang, Johnson to make a mandatory offer. The Directors are not aware of any consequences which will arise under the Takeovers Code as a result of any purchases made under the Repurchase Mandate.

The Listing Rules prohibit a company from repurchase of shares on the Stock Exchange if the result of the repurchase would be that the Company’s public float will fall below 25%. The Directors do not intend to repurchase Shares to such an extent that the public float of the Company will fall below 25%.

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EXPLANATORY STATEMENT FOR THE REPURCHASE MANDATE

APPENDIX II

SHARE PRICES

The highest and lowest traded prices for Shares recorded on the Stock Exchange in each of the last twelve months were as follows:

Month	Highest	Lowest
	HK$	HK$
2018
April	0.540	0.490
May	0.550	0.475
June	0.500	0.400
July	0.510	0.420
August	0.510	0.465
September	0.490	0.470
October	0.485	0.455
November	0.495	0.465
December	0.480	0.430
2019
January	0.475	0.440
February	0.475	0.450
March	0.470	0.400
April (up to the Latest Practicable Date)	0.470	0.450

No repurchase of Shares has been made by the Company in the six months preceding the Latest Practicable Date (whether on the Stock Exchange or otherwise).

– 13 –

NOTICE OF ANNUAL GENERAL MEETING

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KINETIC MINES AND ENERGY LIMITED 力量礦業能源有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1277)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of the shareholders of Kinetic Mines and Energy Limited (the “Company”) will be held at Carlton Room One, 2/F, The Ritz-Carlton, Guangzhou, 3 Xing An Road, Pearl River New City, Tianhe District, Guangzhou, People’s Republic of China on Wednesday, 29 May 2019 at 11: 30 a.m. (the “Annual General Meeting”) for the following purposes:

1. To receive and consider the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors and the auditors of the Company for the year ended 31 December 2018.

2. To declare a final dividend of HK$0.03 per share for the year ended 31 December 2018 (the “Final Dividend”).

3. To re-elect Mr. Zhang Li as an executive director of the Company.

4. To re-elect Ms. Liu Peilian as an independent non-executive director of the Company.

5. To re-elect Mr. Zheng Ercheng as an independent non-executive director of the Company.

6. To authorise the board of directors to fix the remuneration of the directors of the Company (the “Directors”).

7. To approve the appointment of KPMG as the new auditors in place of the retiring auditors and to authorise the board of Directors to fix their remuneration.

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NOTICE OF ANNUAL GENERAL MEETING

1. To consider, and if thought fit, pass with or without modifications, the following resolutions as ordinary resolutions:

(1) “ THAT :

• (a) subject to paragraph (c) below and pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company or securities convertible into shares, or options, warrants or similar rights to subscribe for any shares or such securities in the capital of the Company, and to make or grant offers, agreements, options and rights of exchange or conversion which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements, options and rights of exchange or conversion which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option, warrant or otherwise) and issued by the Directors pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the articles of association of the Company; or (iii) the exercise of any options under any share option scheme or similar arrangement for the time being adopted for the grant or issue of Shares or right to acquire shares of the Company; or (iv) the exercise of any rights under the bonds, warrants and debentures convertible into shares of the Company, shall not exceed 20 per cent of the number of issued shares of the Company as at the date of this resolution and the said approval shall be limited accordingly; and

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NOTICE OF ANNUAL GENERAL MEETING

• (d) for the purposes of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

• i. the conclusion of the next annual general meeting of the Company;

• ii. the expiration of the period within which the next annual general meeting of the Company is required by applicable law or the articles of association of the Company to be held; or

• iii. the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the Directors to holders of shares of the Company on the register of shareholders of the Company on a fixed record date in proportion to their then holdings of such shares of the Company (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in any territory outside Hong Kong).”

(2) “ THAT :

• (a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase its own issued shares in the capital of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and which is recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with Cayman Islands law and all applicable laws and/or the Listing Rules or the rules of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors on behalf of the Company during the Relevant Period to procure the Company to repurchase its shares at a price determined by the Directors;

• (c) the aggregate nominal amount of the shares to be repurchased by the Directors pursuant to the approval in paragraph (a) of this resolution during the Relevant Period shall not exceed 10 per cent of the number of issued shares of the Company in issue as at the date of this resolution and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly; and

• (d) for the purposes of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

• i. the conclusion of the next annual general meeting of the Company;

• ii. the expiration of the period within which the next annual general meeting of the Company is required by applicable law or the articles of association of the Company to be held; or

• iii. the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

(3) “ THAT :

conditional upon the passing of Ordinary Resolutions Nos. 8(1) and 8(2) as set out in the notice convening this meeting, the general unconditional mandate granted to the Directors pursuant to Ordinary Resolution No. 8(1) as set out in the notice convening this meeting be extended by the addition to the aggregate nominal value of the share capital of the Company which may be allotted or agreed to be allotted by the Directors pursuant to such general mandate of an amount representing the aggregate nominal value of the shares repurchased by the Company pursuant to the authority to repurchase shares granted pursuant to Ordinary Resolution No. 8(2) as set out in the notice convening this meeting, provided that such extended amount shall not

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NOTICE OF ANNUAL GENERAL MEETING

exceed 10 per cent of the number of issued shares of the Company in issue as at the date of this resolution.”

By Order of the Board Kinetic Mines and Energy Limited Zhang Li

Chairman and Executive Director

Hong Kong, 29 April 2019

As at the date of this notice, the board of directors of the Company comprises seven directors, of whom three are executive directors, namely Mr. Zhang Li (Chairman), Mr. Gu Jianhua (Chief Executive Officer), Mr. Zhang Liang, Johnson; one is a non-executive director, namely Ms. Zhang Lin, and three are independent non-executive directors, namely Ms. Liu Peilian, Mr. Zheng Ercheng and Ms. Xue Hui.

Notes:

1. Resolution numbered 8(3) will be proposed to the shareholders for approval provided that ordinary resolutions numbered 8(1) and 8(2) are passed by the shareholders.

2. The register of members of the Company will be closed from Tuesday, 4 June 2019 to Thursday, 6 June 2019 (both days inclusive), during which period no transfer of shares will be registered for the purpose of determining Shareholders’ entitlement to the proposed Final Dividend. To qualify for the Final Dividend, all share transfers documents accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Monday, 3 June 2019.

3. The register of members of the Company will be closed from Friday, 24 May 2019 to Wednesday, 29 May 2019, both days inclusive, during which period no share transfers will be effected. In order to determine the identity of the shareholders who are entitled to attend the Company’s forthcoming Annual General Meeting, all share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4: 30 p.m. on Thursday, 23 May 2019.

4. A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company.

5. To be effective, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, must be deposited at the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

6. In accordance with Article 108(a) of the Company’s articles of association, Mr. Zhang Li, Ms. Liu Peilian and Mr. Zheng Ercheng will retire as Directors at the above meeting and being eligible, all the retiring Directors will offer themselves for re-election. Particulars of the said retiring Directors are set out in the Appendix I to the circular to the shareholders of the Company dated 29 April 2019.

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