Kingworld Medicines Group Limited — Proxy Solicitation & Information Statement 2016

Apr 22, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your 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 Kingworld Medicines Group Limited, you should at once hand this circular, together with the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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 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.

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• (1) PROPOSED RE-ELECTION OF RETIRING DIRECTORS, (2) PROPOSED DECLARATION OF FINAL DIVIDEND, (3) PROPOSED GRANTING OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES,

AND

(4) NOTICE OF ANNUAL GENERAL MEETING

A letter from the Board is set out on pages 3 to 6 of this circular.

A notice convening the annual general meeting of Kingworld Medicines Group Limited to be held at the Conference Room, Units 1906-1907, 19th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Monday, 30 May 2016 at 10:00 a.m. is set out on pages 14 to 18 of this circular. A form of proxy for use at the annual general meeting is enclosed in this circular. Whether or not you are able to attend such meeting, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible, and in any event not less than 48 hours before the time appointed for holding of the annual 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 annual general meeting or any adjournment thereof should you so wish.

22 April 2016

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
(1)	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
(2)	Proposed Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
(3)	Proposed Declaration of Final Dividend and Closure of Register of Members . . . . .	4
(4)	General Mandates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
(5)	Annual General Meeting and Proxy Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . .	5
(6)	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
(7)	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
**Appendix **	I — Biographical Details of the Retiring Directors Proposed to be
	Re-elected at the Annual General Meeting . . . . . . . . . . . . . . . . . . . .	7
**Appendix **	II — Explanatory Statement for Repurchase Mandate . . . . . . . . . . . . . . . .	11
**Notice of **	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

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DEFINITIONS

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

“AGM” the annual general meeting of the Company for the year ended 31 December 2015 to be held at the Conference Room, Units 1906-1907, 19th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Monday, 30 May 2016 at 10:00 a.m., notice of which is set out on pages 14 to 18 of this circular and any adjournment thereof

“associates” has the meaning ascribed to it under the Listing Rules “Board” the board of directors of the Company “BVI” the British Virgin Islands “Company” Kingworld Medicines Group Limited (金活醫藥集團有限公司), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange

“connected person(s)” has the meaning ascribed to it under the Listing Rules “Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules “Crowe Horwath (HK)” Crowe Horwath (HK) CPA Limited “Director(s)” the director(s) of the Company “Golden Land” Golden Land International Limited (金國國際有限公司), a limited liability company incorporated under the laws of the BVI “Golden Morning” Golden Morning International Limited (金辰國際有限公司), a limited liability company incorporated under the laws of the BVI “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administration Region of the PRC “Issue Mandate” a general and unconditional mandate to allot, issue and deal with the Shares up to a maximum of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant ordinary resolution to grant such mandate “Latest Practicable Date” 18 April 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

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DEFINITIONS

“Listing Date” the date of commencement of trading of the Shares of the Company on the Stock Exchange, i.e. 25 November 2010 “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Main Board” the stock market operated by the Stock Exchange which excludes the Growth Enterprise Market of the Stock Exchange and the options market “Memorandum and Articles” the memorandum and articles of association of the Company as amended from time to time “Mr. Zhao” Zhao Li Sheng (趙利生), the chairman, an executive Director, a co-founder and Controlling Shareholder of the Company “Ms. Chan” Chan Lok San (陳樂燊), an executive Director, a co-founder and Controlling Shareholder of the Company “PRC” the People’s Republic of China “Prospectus” the Company’s prospectus dated 12 November 2010 “Repurchase Mandate” a general and unconditional mandate to repurchase Shares up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant ordinary resolution to grant such mandate “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended, supplemented or otherwise modified from time to time “Share(s)” ordinary share(s) of nominal value of HK$0.10 each in the issued share capital of the Company “Shareholder(s)” the holders of the shares of the Company “Share Options” share options that can be granted under the share option scheme adopted by the Company on 5 November 2010 “Stock Exchange” The Stock Exchange of Hong Kong Limited “SZ Industry” 深圳市金活實業有限公司 (Shenzhen Kingworld Industry Company Limited), a company established in the PRC with limited liability “SZ Kingworld” 深圳市金活醫藥有限公司 (Shenzhen Kingworld Medicine Company Limited), a company established in the PRC with limited liability “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “%” per cent

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LETTER FROM THE BOARD

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Executive Directors: Mr. Zhao Li Sheng Ms. Chan Lok San Mr. Zhou Xuhua

Non-executive Director: Mr. Zhang Yi

Registered Office: Clifton House 75 Fort Street PO Box 1350 Grand Cayman KY 1-1108 Cayman Islands

Independent Non-executive Directors: Mr. Duan Jidong Mr. Zhang Jianbin Mr. Wong Cheuk Lam

Principal Place of Business in Hong Kong: Units 1906-1907, 19th Floor Shui On Centre 6-8 Harbour Road Wanchai Hong Kong 22 April 2016

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED RE-ELECTION OF RETIRING DIRECTORS,

(2) PROPOSED DECLARATION OF FINAL DIVIDEND, (3) PROPOSED GRANTING OF GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, AND

(4) NOTICE OF ANNUAL GENERAL MEETING

(1) INTRODUCTION

The main purpose of this circular is to provide you with, among other things:

• (i) further information as is necessary to enable you to make an informed decision on whether to vote for or against the resolutions to be proposed at the AGM relating to;

• (a) the re-election of retiring Directors in accordance with the Memorandum and Articles;

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LETTER FROM THE BOARD

• (b) the declaration of final dividend for the year ended 31 December 2015;

• (c) the granting to the Directors the Issue Mandate and the Repurchase Mandate; and

• (ii) the notice of the AGM.

(2) PROPOSED RE-ELECTION OF RETIRING DIRECTORS

According to Articles 108(a) and (b) of the Memorandum and Articles, each of Ms. Chan Lok San, Mr. Zhang Yi and Mr. Duan Jidong, being executive Director, non-executive Director and independent non-executive Director respectively, shall hold office until the AGM and, being eligible, will offer themselves for re-election at the AGM. At the AGM, ordinary resolutions set out in resolution numbered 3 to 5 of the notice of the AGM will be proposed to re-elect Ms. Chan Lok San, Mr. Zhang Yi and Mr. Duan Jidong as executive Director, non-executive Director and independent non-executive Director respectively.

Biographical details of each of the retiring Directors who are proposed to be re-elected at the AGM are set out in Appendix I to this circular.

(3) PROPOSED DECLARATION OF FINAL DIVIDEND AND CLOSURE OF REGISTER OF MEMBERS

As mentioned in the announcement of the Company dated 30 March 2016, the Board has resolved to recommended a final dividend of HK1.53 cents per Share for the year ended 31 December 2015 to the Shareholders whose names appear on the register of members of the Company on Wednesday, 8 June 2016, amounting to approximately HK$9,524,000 in aggregate, subject to the approval from the Company’s forthcoming AGM to be held on Monday, 30 May 2016. Total dividend payout ratio is 25.5% of the profit for the year attributable to owners of the Company. The above-mentioned final dividend is expected to be paid on or before Thursday, 30 June 2016.

The register of members of the Company will be closed from Monday, 6 June 2016 to Wednesday, 8 June 2016 (both days inclusive) during which period no transfer of shares will be registered. To be qualified for receiving the above dividend, all share transfer documents must be lodged with the Company’s share registrar in Hong Kong, Tricor Investors Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration on or before 4:30 p.m. on Friday, 3 June 2016.

(4) GENERAL MANDATES

At the annual general meeting of the Company held on 29 May 2015, ordinary resolutions were passed to grant to the Directors general and unconditional mandates to allot, issue and deal with the Shares of up to a maximum of 20% of the issued share capital of the Company as at the date of the passing of the ordinary resolution approving the relevant mandate at the meeting and to repurchase Shares of up to a maximum of 10% of the issued share capital of the Company as at the date of the passing of the ordinary resolution approving the relevant mandate at the meeting respectively and to

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LETTER FROM THE BOARD

extend the general mandate to allot, issue and deal with the Shares to include Shares repurchased under the general mandate to repurchase Shares. These general mandates will lapse at the conclusion of the AGM. It is therefore proposed to renew these general mandates at the AGM.

(a) Issue Mandate

At the AGM, an ordinary resolution set out in resolution numbered 7 of the notice of the AGM will be proposed to the Shareholders to consider and, if thought fit, to grant to the Directors a new general and unconditional mandate to allot, issue and deal with the Shares up to a maximum of 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such ordinary resolution. As at the Latest Practicable Date, the total number of Shares in issue was 622,500,000. Up to the Latest Practicable Date, no outstanding Share Options have been exercised. Subject to the passing of the proposed resolution, the maximum number of new Shares to be issued under the Issue Mandate will be 124,500,000 Shares (assuming that no outstanding Share Options are exercised and no further Shares will be issued or repurchased by the Company prior to the AGM).

Subject to the passing of the Issue Mandate and the Repurchase Mandate, an ordinary resolution set out in resolution numbered 9 of the notice of the AGM will be proposed to extend the Issue Mandate to increase the limit of the Issue Mandate by adding to it the number of Shares repurchased under the Repurchase Mandate.

(b) Repurchase Mandate

At the AGM, an ordinary resolution set out in resolution numbered 8 of the notice of the AGM will be proposed to the Shareholders to consider, and if thought fit, to grant to the Directors a new general and unconditional mandate to exercise all powers of the Company to repurchase, subject to the criteria set out in the circular, Shares up to a maximum of 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of such ordinary resolution.

An explanatory statement containing relevant information relating to the Repurchase Mandate as required by the Listing Rules to be sent to the Shareholders is set out in Appendix II to this circular. The explanatory statement contains all the information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the resolution relating to the Repurchase Mandate at the AGM.

(5) ANNUAL GENERAL MEETING AND PROXY ARRANGEMENT

A notice convening the AGM to be held at the Conference Room, Units 1906-1907, 19th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Monday, 30 May 2016 at 10:00 a.m. is set out on pages 14 to 18 of this circular. At the AGM, ordinary resolutions will be proposed to approve, inter alia, (i) the proposed re-election of retiring directors, (ii) the proposed declaration of final dividend and (iii) the general mandates to issue Shares and to repurchase Shares.

A form of proxy for use at the AGM is enclosed in this circular. Whether or not you are able to attend such meeting, please complete, sign and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar in Hong Kong, Tricor Investor

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LETTER FROM THE BOARD

Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible, and in any event not less than 48 hours before the time appointed for holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, all votes of the Shareholders at the AGM must be taken by poll. The Chairman of the meeting will therefore demand a poll for every resolution to be passed at the AGM pursuant to the Memorandum and Articles. The Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

Pursuant to the Memorandum and Articles, for the purpose of holding the AGM, the Register of Members of the Company will be closed from Thursday, 26 May 2016 to Monday, 30 May 2016 (both days inclusive), during which period no transfer of Shares of the Company will be registered.

In order to be qualified for attending and voting at the AGM, Shareholders shall lodge all share transfer documents with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30p.m. on Wednesday, 25 May 2016.

(6) RESPONSIBILITY STATEMENT

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

(7) RECOMMENDATION

The Directors consider that the proposed re-election of retiring Directors, the proposed declaration of final dividend and the general mandate to repurchase Shares and issue Shares are in the interests of the Company and the Shareholders as a whole, and accordingly, recommend the Shareholders to vote in favour of the relevant resolutions at the AGM.

By order of the Board Kingworld Medicines Group Limited Zhao Li Sheng Chairman

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APPENDIX I BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

The biographical details of the three retiring Directors proposed to be re-elected at the AGM are set out as follows:

Ms. Chan Lok San (陳樂燊) , aged 52, was appointed as an executive Director of the Company on 25 September 2008. She is the co-founder of the Group. She is primarily responsible for the Group’s financial planning and human resources management. She has over 20 years of experience in the pharmaceutical industry as well as over 11 years of experience in property management. Ms. Chan has been working for SZ Industry since 1994 and SZ Kingworld since 1996. She has been the vice chairlady of SZ Kingworld and SZ Industry since 2005 and 2006 respectively, and the vice chairlady of Shenzhen Kingworld Lifeshine Pharmaceutical Company Limited since 2005 and the legal representative of Shenzhen Kingworld Department Store Property Management Company Limited and Shenzhen King Gibson Golf Company Limited. She received a master degree in business administration of senior management from Sun Yat-Sen University in 2010. In 2011, she was appointed as a committee of Shenzhen Golf Society and a vice-chairlady of Shenzhen Clothing Society. She was also a member of the Global Foundation of Distinguished Chinese (世界傑出華人基 金會) in 2003. Since 25 December 2012, she has served as the chairlady of the EMBA Alumni Association of Sun Yat-Sen University. Currently, she is also the director (理事) of Sun Yat-Sen University Entrepreneur Alumni Association (Third Session) (第三屆中山大學企業家校友聯合會). Save as disclosed above, Ms. Chan did not hold any directorships in listed public companies or any other major appointments in Hong Kong or overseas in the three years preceding the Latest Practicable Date.

Ms. Chan is the spouse of Mr. Zhao Li Sheng, an executive Director. She is also the sole shareholder and director of Golden Morning, a Controlling Shareholder of the Company. Save as disclosed above, Ms. Chan does not have any relationships with any other Directors, senior management, substantial Shareholders (as defined in the Listing Rules) or Controlling Shareholders of the Company.

Ms. Chan has entered into a service contract with the Company for a term of three years commencing from the Listing Date and may be terminated by not less than three months’ prior notice in writing served by either party on the other. Under the service agreement, Ms. Chan is currently entitled to an annual basic salary of RMB956,000 and a discretionary year-end bonus of an amount to be determined by the Board and approved by the remuneration committee. She will also be entitled to reimbursement of reasonable travelling, hotel, entertainment and other expenses properly incurred in the performance of her duties under the service contract. The Board determined the remuneration package of Ms. Chan on the basis of the Company’s performance, together with Ms. Chan’s qualifications, responsibilities, experience, contributions to and positions held with the Company.

By virtue of the SFO, as at the Latest Practicable Date, Ms. Chan is deemed to be interested in the 90,000,000 Shares directly held by Golden Morning, which is wholly owned by her and the 9,392,000 shares are held by Mr. Zhao Li Sheng, the spouse of Ms. Chan, in his own name and 297,812,250 Shares directly held by Golden Land, which is wholly owned by her husband, Mr. Zhao. These Shares represent approximately 63.81% of the issued share capital of the Company. Save as disclosed above, Ms. Chan did not have any other interests in the Shares or underlying Shares of the Company or its associated corporations pursuant to Part XV of the SFO.

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APPENDIX I BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

Save as disclosed above, the Board is not aware of any other information relating to Ms. Chan that needs to be brought to the attention of the Shareholders and there is no information which is required to be disclosed pursuant to any of the requirements of the provisions under paragraphs (h) to (v) of the Rule 13.51(2) of the Listing Rules.

Mr. Zhang Yi (張翼) , aged 40, has 16 years of experience in the area of operational management, business development and equity investment in pharmaceutical and health industry. He is currently a founding partner and managing director of Sinopharm Capital Management Company Limited. Mr. Zhang completed a 7-year clinical professional graduate programme jointly organised by Fudan University and Shanghai University of Traditional Chinese Medicine, receiving a Master degree in clinical study in July 1999. Mr. Zhang previously worked in Sanofi-Aventis as a marketing manager from June 2003 to July 2007. He served as the senior investment manager in Greater China for Burrill & Company from August 2007 to February 2009. Mr. Zhang also worked for 建銀國際醫療產業股權 投資有限公司 (CCB International Medical Industry Equity Investment Limited Company) and served successively as deputy director, director and head of the Investment Department from March 2009 to March 2012. He was appointed as a non-executive Director of the Company on 17 December 2014.

Mr. Zhang has entered into a letter of appointment with the Company for a term of three years commencing from 17 December 2014. The letter of appointment may be terminated by three months’ prior notice in writing served by either party on the other. Under the letter of appointment, Mr. Zhang is currently entitled to an annual basic salary of HK$176,400. Mr. Zhang will also be entitled to reimbursement of reasonable travelling, hotel and other expenses properly incurred in the performance of his duties under the letter of appointment. The Board determined the remuneration package of Mr. Zhang on the basis of the Company’s performance, together with his qualification, duties and experience and the range of prevailing directors’ fee for director of the Company and other listed companies in Hong Kong and the recommendation of the remuneration committee.

Save as disclosed above, Mr. Zhang has not previously held any positions in the Company or any of its subsidiaries and did not hold any directorships in listed public companies or any other major appointments in Hong Kong or overseas in the three years preceding the Latest Practicable Date.

Mr. Zhang does not have any relationships with any Directors, senior management, substantial Shareholders or Controlling Shareholders (as defined in the Listing Rules) of the Company.

As at the Latest Practicable Date, Shine Light Investment Fund is deemed to be interested in 62,250,000 shares / underlying shares of the Company within the meaning of Part XV of the SFO, representing 10% of the issued share capital of the Company, by virtue of a concert party agreement with Legend Times Corporation Limited. Hwabao Trust Co. Ltd (華寶信託有限責任公司) holds 95,000 non-voting shares in Shine Light Investment Fund, representing approximately 99.89% of the issued share capital of Shine Light Investment Fund, as the trustee of a fixed trust which the beneficiary is Shanghai Shengzhong Investment Management Partnership Enterprise (Limited Partnership) (上海聖眾投資管理合夥企業). Mr. Zhang Yi controls one-third of the voting power at matters of Shanghai Shengzhong Investment Management Partnership Enterprise (Limited Partnership). Hence, Mr. Zhang Yi is deemed to be interested in 62,250,000 shares / underlying shares

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APPENDIX I BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

of the Company (within the meaning of Part XV of the SFO), representing 10% of the issued share capital of the Company. Save as disclosed above, Mr. Zhang Yi does not have any interest in shares nor underlying shares of the Company or its associated corporations within the meaning of Part XV of the SFO.

Save as disclosed above, the Board is not aware of any other information relating to Mr. Zhang that needs to be brought to the attention of the Shareholders of the Company and there is no information which is required to be disclosed pursuant to any of the requirements of the provisions under paragraphs (h) to (v) of the Rule 13.51(2) of the Listing Rules.

Mr. Duan Jidong (段繼東) , aged 50, was appointed as an independent non-executive Director of the Company on 5 November 2010. He has approximately 25 years of experience in the pharmaceutical industry. Mr. Duan received a bachelor degree in medicine at The Shanghai Railway Medical Institute (上海鐵道醫學院) in 1989, and was a surgeon with the Central Hospital of Shenyang Railway Bureau (原瀋陽鐵路局中心醫院) from 1989 to 1994 and worked in the Beijing Mundipharma Pharmaceutical Company Limited (北京萌蒂製藥有限公司) from 1994 to 1998. Mr. Duan served as the chairman and legal representative of Kunming Baker Norton Pharmaceutical Company Limited from December 2002 to April 2006, a director of Holley Pharmaceutical (Chongqing) Co., Ltd. (重慶 華立藥業股份有限公司, stock code : 000607), a company listed on the Shenzhen Stock Exchange, from 2005 to 2006, and a director of Wuhan Jianmin Pharmaceutical Groups Corp, Ltd. (武漢 健民藥業集團股份有限公司, stock code: 600976), a company listed on the Shanghai Stock Exchange, from 2004 to 2006. He was a chief executive officer from 2002 to 2005, and a director from 2004 to 2006, of Kunming Pharmaceutical Group Corporation, Ltd. (昆明製藥集團股份有限公司, stock code: 600422), a company listed on the Shanghai Stock Exchange. From April 2008 to April 2011, he was an independent non-executive director of Zhejiang CONBA Pharmaceutical Company Limited (浙江 康恩貝製藥股份有限公司, stock code: 600572), a company listed on the Shanghai Stock Exchange. Since February 2013, he has been appointed as an independent non-executive Director of Yan He Medicines Company Limited (仁和藥業股份有限公司, stock code : 000650), a company listed on the Shenzhen Stock Exchange. Currently, he is the chairman of Beijing Strategy & Action Enterprise Management Consulting Company Limited (北京時代方略企業管理諮詢有限公司). Save as disclosed above, Mr. Duan did not hold any directorships in listed public companies or any other major appointments in Hong Kong or overseas in the three years preceding the Latest Practicable Date.

Mr. Duan does not have any relationships with any other Directors, senior management, substantial Shareholders (as defined in the Listing Rules) or Controlling Shareholders of the Company.

Mr. Duan has entered into a letter of appointment with the Company for a term of three years commencing from the Listing Date and may be terminated by not less than three months’ prior notice in writing served by either party on the other. Subject to the retirement and re-election at the annual general meeting of the Company in accordance with (inter alia) the Memorandum and Articles, the letter of appointment had been renewed until being terminated pursuant to the terms of the letter of appointment. Under the letter of appointment, Mr. Duan is currently entitled to an annual basic salary of RMB130,000. Mr. Duan will also be entitled to reimbursement of reasonable travelling, hotel,

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APPENDIX I BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE ANNUAL GENERAL MEETING

entertainment and other expenses properly incurred in the performance of his duties under the letter of appointment. The Board determined the remuneration package of Mr. Duan on the basis of the Company’s performance, together with his qualifications, responsibilities, experience, contributions to and positions held with the Company.

As at the Latest Practicable Date, Mr. Duan did not have any interests or short positions in the Shares or underlying Shares of the Company or its associated corporations pursuant to Part XV of the SFO.

Save as disclosed above, the Board is not aware of any other information relating to Mr. Duan that needs to be brought to the attention of the Shareholders and there is no information which is required to be disclosed pursuant to any of the requirements of the provisions under paragraphs (h) to (v) of Rule 13.51(2) of the Listing Rules.

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EXPLANATORY STATEMENT FOR REPURCHASE MANDATE

APPENDIX II

This appendix serves as an explanatory statement, as required by the Listing Rules, to provide the requisite information to you for your consideration in respect of the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised of 622,500,000 Shares. Subject to the passing of the relevant resolution(s) as set out in the notice of the AGM and assuming that no outstanding Share Options are exercised and no further Shares are issued or repurchased by the Company prior to the AGM, the Directors will be authorized to repurchase up to 62,250,000 Shares (being 10% of the issued share capital of the Company as at the date of the AGM) pursuant to the Repurchase Mandate during the period ending on the earliest 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 law to be held; or (iii) the revocation and variation of the authority given under this resolution by an ordinary resolution of the Shareholders in general meeting.

2. REASONS FOR REPURCHASE

The Directors believe that it is in the best interests of the Company and its Shareholders to seek a general authority from the Shareholders to enable the Company to repurchase its Shares on the Stock Exchange. 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 earnings per share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purposes in accordance with its Memorandum and Articles, the laws of the Cayman Islands and the Listing Rules. The laws of the Cayman Islands provide that the amount of capital paid in connection with a share repurchase may only be paid out of either the profits of the company or out of the proceeds of a fresh issue of shares made for such purpose or, if so authorised by its articles of association and subject to the provisions of the Cayman Islands laws, out of capital. The amount of premium payable on repurchase may be paid out of profits of the company or out of the share premium account of the company, or, if so authorised by its articles of association and subject to the provisions of the Cayman Islands laws, out of capital before the shares are repurchased. A listed company may not repurchase 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.

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EXPLANATORY STATEMENT FOR REPURCHASE MANDATE

APPENDIX II

4. IMPACT OF REPURCHASES

Based on the financial position disclosed in the recently published audited accounts of the Company for the year ended 31 December 2015, the Directors consider that there will not be any material adverse impact on the working capital or gearing position of the Company in the event that the Repurchase Mandate is to be carried out in full at any time during the proposed repurchase period. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time having regard to the circumstances then prevailing and in the best interests of the Company.

5. SHARE PRICES

The following table shows the highest and lowest prices at which the Shares have traded on the Stock Exchange for each of the previous twelve calendar months immediately preceding (and including) the Latest Practicable Date:

	**Share Price **	Per Share
	Highest	Lowest
	HK$	HK$
2015
April	2.70	1.86
May	2.75	2.22
June	2.55	2.21
July	2.43	1.31
August	1.89	1.29
September	1.40	1.20
October	1.47	1.25
November	1.96	1.29
December	1.83	1.49
2016
January	1.80	1.32
February	1.47	1.27
March	1.45	1.21
April (up to the Latest Practicable Date)	1.42	1.34

6. GENERAL

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their respective associates, has any present intention to sell any Shares to the Company, if the Repurchase Mandate is approved by the Shareholders.

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EXPLANATORY STATEMENT FOR REPURCHASE MANDATE

APPENDIX II

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise power of the Company to repurchase the Shares pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands in the event that it is granted by the Shareholders.

The Company has not been notified by any connected person that such a person has a present intention to sell, or has undertaken not to sell, any Shares to the Company, if the Repurchase Mandate is approved by the Shareholders.

7. EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of securities, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert, depending on the level of such increase, may obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Zhao (a Director), Golden Land and Golden Morning are the Controlling Shareholders of the Company and they hold 9,392,000 Shares, 297,812,250 Shares and 90,000,000 Shares respectively. As Golden Land is wholly owned by Mr. Zhao and Golden Morning is wholly owned by Ms. Chan (a Director and the spouse of Mr. Zhao), all of them will be deemed to be interested in an aggregate of 397,204,250 Shares, representing approximately 63.81% of the issued share capital of the Company. In the event that the Directors exercise in full the power to repurchase Shares under the Repurchase Mandate and if there is no other change in the issued share capital of the Company, their collective shareholdings in the Company will be increased to approximately 70.90% of the issued share capital of the Company. The exercise of the Repurchase Mandate in full will not result in Mr. Zhao, Golden Land and Golden Morning being obliged to make a mandatory offer under Rule 26 of the Takeovers Code.

The Directors do not propose to exercise the Repurchase Mandate to such an extent which would result in the aggregate number of Shares held by the public Shareholders falling below the prescribed minimum percentage required by the Stock Exchange, which is currently 25% of the entire issued share capital of the Company.

8. SHARE REPURCHASE BY THE COMPANY

The Company has not repurchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

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NOTICE OF ANNUAL GENERAL MEETING

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting for the year 2015 (the “ AGM ”) of Kingworld Medicines Group Limited (the “ Company ”) will be held at the Conference Room, Units 1906-1907, 19th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Monday, 30 May 2016 at 10:00 a.m. for the following purposes, and unless otherwise defined herein, the terms herein shall have the same meanings as defined in the circular to the shareholders of the Company dated 22 April 2016 (the “ Circular ”):

As ordinary business,

1. To consider and adopt the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors (the “ Directors ”) of the Company and auditor of the Company for the year ended 31 December 2015.

2. To declare a final dividend of HK1.53 cents per share for the year ended 31 December 2015.

3. To re-elect Ms. Chan Lok San as an executive Director of the Company and to authorize the board (the “ Board ”) of Directors of the Company to fix her remuneration.

4. To re-elect Mr. Zhang Yi as a non-executive Director of the Company and to authorize the Board to fix his remuneration.

5. To re-elect Mr. Duan Jidong as an independent non-executive Director of the Company and to authorize the Board to fix his remuneration.

6. To re-appoint Crowe Horwath (HK) CPA Limited as the auditor of the Company to hold office until the conclusion of the next annual general meeting, and to authorise the Board to fix their remuneration.

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NOTICE OF ANNUAL GENERAL MEETING

As a special business, to consider and, if thought fit, pass, with or without amendments, the following resolutions as ordinary resolutions:

1. “ THAT:

2. (a) subject to paragraph (c) of this resolution, 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 ordinary shares of the Company and to make or grant offers, agreements and options (including but not limited to bonds, warrants and debentures convertible into ordinary shares of the Company) which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) of this resolution shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options (including but not limited to bonds, warrants and debentures convertible into ordinary shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

4. (c) the aggregate nominal amount of ordinary shares of the Company allotted, issued or dealt with or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Rights Issue (as defined in paragraph (d) of this resolution), (ii) the exercise of the subscription or conversion rights attaching to any warrants, preference shares, convertible bonds or other securities issued by the Company which are convertible into ordinary shares of the Company, (iii) the exercise of options granted by the Company under any share option agreements and/or option scheme or similar arrangement for the time being adopted for the grant to Directors, officers and/or employees of the Company and/or any of its subsidiaries and/or other eligible person (if any) of rights to acquire the ordinary shares of the Company, or (iv) any scrip dividend or similar arrangement providing for the allotment of the ordinary shares of the Company in lieu of the whole or part of a dividend on the ordinary shares in accordance with the articles of association of the Company (the “ Articles of Association ”), shall not exceed 20% of the aggregate nominal amount of the shares in issue as at the date of the passing of this resolution, and the said approval shall be limited accordingly; and

5. (d) for the purpose of this resolution, “ Relevant Period ” means the period from the passing of this resolution until whichever is the earliest 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 the Articles of Association of the Company or any applicable laws to be held; or

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NOTICE OF ANNUAL GENERAL MEETING

• (iii) the revocation and variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

“ Rights Issue ” means an offer of ordinary shares open for a period fixed by the Company (or by the Directors) to holders of ordinary shares on the Register of Members (ordinary shares) of the Company on a fixed record date in proportion to their then holdings of such ordinary shares (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 authorized regulatory body or any stock exchange in, any territory outside Hong Kong).”

1. “ THAT:

2. (a) subject to paragraph (b) of this resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase the ordinary shares of the Company on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or on any other stock exchange on which the ordinary shares of the Company may be listed and which is recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirement of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange, as amended from time to time, be and is hereby generally and unconditionally approved;

3. (b) the aggregate nominal amount of the ordinary shares of the Company authorised to be repurchased by the Company pursuant to the approval in paragraph (a) of this resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of this resolution; and

4. (c) for the purpose of this resolution, “ Relevant Period ” means the period from the passing of this resolution until whichever is the earliest 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 the Articles of Association of the Company or any applicable laws to be held; and

   • (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.”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT conditional upon the passing of resolutions numbered 7 and numbered 8 set out in the notice convening this meeting, the aggregate nominal amount of the number of ordinary shares which are repurchased by the Company under the authority granted to the Directors as mentioned in the said resolution numbered 8 shall be added to the aggregate nominal amount of share capital that may be allotted, issued or dealt with or agreed conditionally or unconditionally to be allotted, issued or dealt with by the Directors pursuant to the approval in the said resolution numbered 7.”

By order of the Board Kingworld Medicines Group Limited Zhao Li Sheng Chairman

Hong Kong, 22 April 2016

Notes:

1. A shareholder entitled to attend and vote at the meeting convened by the above notice is entitled to appoint another person as his proxy to attend and vote instead of him. A shareholder who is the holder of two or more shares 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 but must be present in person to represent him.

2. To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited (“ Branch Registrar ”) at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no less than 48 hours before the time appointed for holding of the meeting or any adjournment thereof.

3. Completion and return of the form of proxy will not preclude a shareholder 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.

4. In the case of joint registered holders of a share in the Company, any one of such joint holders may vote, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

5. The register of members of the Company will be closed from Thursday, 26 May 2016 to Monday, 30 May 2016 (both days inclusive) during which period no transfer of shares will be registered. To be qualified for attending and voting at the forthcoming annual general meeting, all share transfer documents must be lodged with the Branch Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration on or before 4:30 p.m. on Wednesday, 25 May 2016.

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NOTICE OF ANNUAL GENERAL MEETING

1. The register of members of the Company will be closed from Monday, 6 June 2016 to Wednesday, 8 June 2016 (both days inclusive) during which period no transfer of shares will be registered. To be qualified for receiving the proposed final dividend, all share transfer documents must be lodged with the Branch Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration on or before 4:30 p.m. on Friday, 3 June 2016.

2. In relation to the proposed resolutions numbered 7 and 9 above, approval is being sought from the shareholders for the grant to the Directors of a general mandate to authorise the allotment and issue of shares under the Listing Rules. The Directors have no immediate plans to issue any new shares other than shares which may fall to be issued under the share option scheme of the Company.

3. In relation to the proposed resolution numbered 8 above, the Directors wish to state that they will exercise the powers conferred thereby to purchase shares in circumstances which they deem appropriate for the benefit of the shareholders. An explanatory statement containing the information necessary to enable the shareholders to make an informed decision to vote on the proposed resolution as required by the Listing Rules is set out in the Circular.

As at the date of this notice, the executive Directors are Mr. Zhao Li Sheng, Ms. Chan Lok San and Mr. Zhou Xuhua, the non-executive Director is Mr. Zhang Yi and the independent non-executive Directors are Mr. Duan Jidong, Mr. Zhang Jianbin and Mr. Wong Cheuk Lam.

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