CWT International Limited — Proxy Solicitation & Information Statement 2010

Mar 1, 2010

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

If you have sold or transferred all your shares in Sinofert Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer 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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SINOFERT HOLDINGS LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

CONNECTED TRANSACTION WITH CANPOTEX LIMITED

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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SOMERLEY LIMITED

A letter from the Board is set out on pages 4 to 8 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on page 9 of this circular. A letter from Somerley, the independent financial adviser, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 10 to 14 of this circular.

A notice convening the SGM of Sinofert Holdings Limited to be held at Lounge, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 18 March 2010 at 2:30 p.m. is set out on pages 19 to 20 of this circular. Whether or not you are able to attend and vote at the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy as instructed will not preclude you from subsequently attending and voting at the meeting or any adjourned meeting if you so wish.

• For identification purposes only

2 March 2010

CONTENTS

		Page
Definitions . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Sales Contract . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Implications under	the Listing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Information on the	Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
SGM . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Letter from Somerley	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		19

– i –

DEFINITIONS

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

• “associate(s)” has the meaning ascribed to it in the Listing Rules “Board” the board of Directors of the Company “Bonds” the HK$1,300,000,000 listed zero coupon convertible bonds due 2011 issued by the Company on 7 August 2006

• “Canpotex” Canpotex Limited, an associate of Potash under the Listing Rules by virtue of it being 33.33% owned by Potash

• “Company” Sinofert Holdings Limited, a company incorporated in Bermuda with limited liability, the ordinary shares of which are listed on the Stock Exchange

• “connected person(s)” has the meaning ascribed to it in the Listing Rules “Director(s)” the director(s) of the Company “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency in Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee” the independent board committee of the Company formed to consider the terms of the Sales Contract (together with the transaction contemplated thereunder)

• “Independent Shareholders” Shareholders other than Potash and its associates “Latest Practicable Date” 23 February 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Macao” the Macao Special Administrative Region of the PRC

– 1 –

DEFINITIONS

• “MOUs” the SPM MOU and the MP MOU “MP MOU” a legally binding memorandum of understanding entered into on 21 December 2009 by and on behalf of Sinochem Macao and PCS Sales under which the parties agreed to enter into transactions for the supply by PCS Sales of muriate of potash for a maximum term of three years ending 31 December 2012

• “PCS Sales” PCS Sales (USA), Inc., an associate of Potash under the Listing Rules by virtue of it being a wholly-owned subsidiary of Potash

• “Potash” Potash Corporation of Saskatchewan Inc., a corporation incorporated in Canada with its shares listed on the Toronto Stock Exchange and the New York Stock Exchange, and a substantial shareholder of the Company

• “PRC” the People’s Republic of China and for the purpose of this circular excluding Taiwan, Hong Kong and Macao

• “RMB” Renminbi, the lawful currency of the PRC

• “Sales Contract” the sales contract entered into between Sinochem Macao and Canpotex dated 8 February 2010 as amended and supplemented from time to time

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “SGM” the special general meeting of the Company to be held at Lounge, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 18 March 2010 at 2:30 p.m., or any adjournment thereof, the notice of which is set out on pages 19 to 20 of this circular

• “Share(s)” ordinary share(s) of HK$0.10 each in the capital of the Company

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

– 2 –

DEFINITIONS

• “Sinochem Fertilizer”

• (Sinochem Fertilizer Company

• Limited), a wholly foreign owned enterprise established in the PRC and an indirect wholly-owned subsidiary of the Company

• “Sinochem Group”

  • (Sinochem Group), a state-owned

• enterprise established in the PRC

• “Sinochem Macao”

• Sinochem Fertilizer Macao Commercial Offshore Limited, a company incorporated in Macao, an indirect wholly-owned subsidiary of the Company

• “Somerley” or “Independent Financial Adviser”

• Somerley Limited, a licensed corporation to carry out type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO, the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Sales Contract

• “SPM MOU”

• a legally binding memorandum of understanding entered into on 21 December 2009 by and on behalf of Sinochem Macao and PCS Sales under which the parties agreed to enter into transactions for the supply by PCS Sales of sulfate of potash magnesia for a maximum term of three years ending 31 December 2012

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “subsidiary(ies)”

• has the same meaning ascribed to it in the Listing Rules

• “substantial shareholder”

• has the same meaning ascribed to it in the Listing Rules

• “US$” United States dollars, the lawful currency of the United States of America

For the purposes of illustration only, US$ is translated into HK$ and RMB at the rates of US$1.00 = HK$7.7705 and US$1.00 = RMB6.8366, respectively. No representation is made that any amount in US$ has been or could be converted at the above rates or at any other rates or at all.

– 3 –

LETTER FROM THE BOARD

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SINOFERT HOLDINGS LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

Executive Directors: DU Ke Ping (Chief Executive Officer) Harry YANG

Non-executive Directors: LIU De Shu (Chairman) CHEN Guo Gang Stephen Francis DOWDLE Wade FETZER III

Independent non-executive Directors: KO Ming Tung, Edward TANG Tin Sek TSE Hau Yin, Aloysius

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Principal place of business: Units 4601-4610, 46th Floor Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong

2 March 2010

To the Shareholders and, for information only, holders of share options and the Bonds

Dear Sir or Madam,

CONNECTED TRANSACTION WITH CANPOTEX LIMITED

INTRODUCTION

Reference is made to the announcement of the Company dated 10 February 2010 in relation to the Sales Contract and the transaction contemplated thereunder, which are subject to the reporting, announcement and independent shareholders’ approval requirements as set out in Chapter 14A of the Listing Rules.

On 8 February 2010, Sinochem Macao, an indirect wholly-owned subsidiary of the Company, entered into the Sales Contract with Canpotex under which Canpotex agreed to supply, and Sinochem Macao agreed to purchase, the potash fertilizers.

• For identification purposes only

– 4 –

LETTER FROM THE BOARD

Canpotex is a Canadian corporation equally owned by Potash and two other Canadian potash producers, while Sinochem Macao is an indirect wholly-owned subsidiary of the Company. As Potash is a substantial shareholder of the Company, Canpotex is a connected person of the Company by virtue of being an associate of Potash. Accordingly, the transaction between Sinochem Macao and Canpotex represents a connected transaction for the Company under the Listing Rules.

The purpose of this circular is to provide you with (i) further information on the details of the Sales Contract and the transaction contemplated thereunder; (ii) the letter of recommendation from the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from Somerley to the Independent Board Committee and the Independent Shareholders; (iv) the notice of the SGM and (v) other information as required under the Listing Rules.

SALES CONTRACT

Date: 8 February 2010

• Parties: (i) Canpotex (a Canadian corporation equally owned by Potash and two other Canadian potash producers), which is principally engaged in offshore marketing of potash products for its three owners. Potash is one of the largest potash producers in the world; and

• (ii) Sinochem Macao, which is principally engaged in sourcing fertilizer products and other related agricultural products for the Group from overseas suppliers.

Nature of transaction

Under the Sales Contract, Canpotex agreed to supply, and Sinochem Macao agreed to purchase, an aggregate volume of 350,000 metric tons of potash fertilizers, plus or minus 5% at Canpotex’s option.

Consideration

The aggregate consideration under the Sales Contract (which takes into account the exercise of the option by Canpotex) will not exceed US$150 million (approximately HK$1.17 billion). The aggregate consideration was determined after arm’s length negotiations based on the prevailing market price of potash fertilizers. Payment would be made by way of irrevocable letter of credit with reference to the date of issuance of the bill of lading.

The Directors, other than the independent non-executive Directors, who will express their opinion in a separate letter to be included in this circular, consider that the pricing reflects normal commercial terms and is on terms no less favourable than those available from other independent third parties.

– 5 –

LETTER FROM THE BOARD

REASONS FOR THE TRANSACTION

With the rising demand for potash in the PRC, by entering into the Sales Contract, the Group would further enrich the operational resources of Sinochem Fertilizer and ensure a stable supply of the relatively rare mineral fertilizer of potash. The production of potash in the PRC falls short of domestic demand. Each year the PRC needs to import large quantities of potash to meet the rising demand of potash for agricultural production. The import of potash products from Canpotex under the Sales Contract will help enrich the operational resources of the Company.

The Directors, other than the independent non-executive Directors, who have expressed their opinion in a separate letter included in this circular, consider the Sales Contract between Canpotex and Sinochem Macao necessary and conducive to its sales operations. The Directors, other than the independent non-executive Directors, who have expressed their opinion in a separate letter included in this circular, therefore consider that it would be in the interest of the Group to enter into the Sales Contract.

IMPLICATIONS UNDER THE LISTING RULES

Canpotex is a Canadian corporation equally owned by Potash and two other Canadian potash producers, while Sinochem Macao is an indirect wholly-owned subsidiary of the Company. As Potash is a substantial shareholder of the Company, Canpotex is a connected person of the Company by virtue of being an associate of Potash. Accordingly, the transaction between Sinochem Macao and Canpotex represents a connected transaction for the Company under the Listing Rules. As the applicable percentage ratios for the Sales Contract are more than 2.5% and the total consideration for the Sales Contract is more than HK$10,000,000, the Sales Contract and the transaction contemplated thereunder are subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

INFORMATION ON THE COMPANY

The Company is principally engaged in the production, procurement and sale of fertilizers and related products in the PRC. The main business comprises research and development, production, procurement and distribution of fertilizers and forms a vertically integrated business model combining upstream and downstream businesses. The Company aims to serve the agricultural industry in the PRC by introducing quality resources from overseas and to ensure food safety in the PRC.

– 6 –

LETTER FROM THE BOARD

SGM

Reference is made to the announcement of the Company dated 22 December 2009 and the circular of the Company dated 12 January 2010 in relation to the MOUs and the transactions contemplated thereunder, which constitute continuing connected transactions of the Company. Given that the abovementioned transactions are subject to the reporting, announcement and independent shareholder approval requirements as set out in Rule 14A.35 of the Listing Rules, the resolution approving the MOUs and the transactions contemplated thereunder shall be proposed at the SGM, together with a separate resolution approving the Sales Contract and the transaction contemplated thereunder.

In view of Potash’s interests in the MOUs and the Sales Contract, Potash, which is interested in 22.05% of the total issued share capital of the Company as at the Latest Practicable Date, and the other associates of Potash are required to abstain and shall abstain from voting on the resolution to be proposed at the SGM to approve the MOUs and the transactions contemplated thereunder, and the separate resolution to be proposed at the SGM to approve the Sales Contract and the transaction contemplated thereunder. A notice convening the SGM to be held at the Lounge, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 18 March 2010 at 2:30 p.m. is set out on pages 19 to 20 of this circular.

A form of proxy for the SGM is enclosed herewith. Whether or not Shareholders are able to attend and vote at the SGM, they are requested to complete the enclosed form of proxy and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy as instructed will not prevent Shareholders from subsequently attending and voting at the SGM or any adjourned meeting if they so wish.

RECOMMENDATION

The Directors, other than the independent non-executive Directors, who will express their opinion in a separate letter to be included in this circular, consider that the transaction between Sinochem Macao and Canpotex was entered into after arm’s length negotiations and reflect normal commercial terms and that the terms of such transaction (including the option exercisable by Canpotex) are fair and reasonable so far as the Independent Shareholders of the Company are concerned and are in the interests of the Company and its Shareholders as a whole. The Directors therefore recommend all Shareholders to vote in favour of all the resolutions set out in the notice of the SGM.

– 7 –

LETTER FROM THE BOARD

FURTHER INFORMATION

The Independent Board Committee comprising all three independent non-executive Directors has been appointed to advise the Independent Shareholders in respect of the transaction between Sinochem Macao and Canpotex. Somerley has been appointed to advise the Independent Board Committee and the Independent Shareholders in such regard. Accordingly, your attention is drawn to the letter from the Independent Board Committee set out on page 9 of this circular, which contains its recommendation to the Independent Shareholders and the letter from Somerley set out on pages 10 to 14 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders.

Yours faithfully, For and on behalf of the Board of Sinofert Holdings Limited Du Ke Ping

Executive Director and Chief Executive Officer

– 8 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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SINOFERT HOLDINGS LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

2 March 2010

To: the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION WITH CANPOTEX LIMITED

We refer to the circular of the Company dated 2 March 2010 (the “Circular”) to the Shareholders, of which this letter forms part. Terms defined in the Circular have the same meanings in this letter unless the context otherwise requires.

In compliance with the Listing Rules, we have been appointed to advise the Independent Shareholders in relation to the entering into of the Sales Contract and the transaction contemplated thereunder which constitute a connected transaction of the Company under the Listing Rules. In this connection, Somerley has been appointed as an independent financial adviser to advise on whether the terms and conditions under the Sales Contract and the transaction contemplated thereunder are on normal commercial terms, fair and reasonable so far as the Company and the Independent Shareholders are concerned, and whether the Sales Contract and the transaction contemplated thereunder are in the interests of the Company and the Shareholders as a whole. Details of, and the reasons for, the entering into of the Sales Contract and the transaction contemplated thereunder are contained in the letter from the Board set out on pages 4 to 8 of the Circular.

Having considered the terms of the Sales Contract and the transaction contemplated thereunder, and the advice of Somerley, the independent financial adviser to us and the Independent Shareholders, set out on pages 10 to 14 of the Circular, we consider that the Sales Contract and the transaction contemplated thereunder are on normal commercial terms and are fair and reasonable so far as the Company and the Independent Shareholders are concerned, and the entering into of the Sales Contract and the transaction contemplated thereunder are in the interests of the Company and the Shareholders as a whole.

Yours faithfully, Independent Board Committee of Sinofert Holdings Limited Tse Hau Yin, Aloysius Ko Ming Tung, Edward Tang Tin Sek

• For identification purposes only

– 9 –

LETTER FROM SOMERLEY

The following is the text of the letter of advice from Somerley to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of inclusion in this circular.

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SOMERLEY LIMITED

10th Floor The Hong Kong Club Building 3A Chater Road Central Hong Kong

2 March 2010

To: the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION WITH CANPOTEX LIMITED

INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders on the terms of the Sales Contract which involves the purchase of potash fertilizers by Sinochem Macao from Canpotex. Details of the Sales Contract and the transaction contemplated thereunder are set out in the circular dated 2 March 2010 issued by the Company (the “Circular”) to the Shareholders, of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as defined in the Circular.

Sinochem Macao is an indirect wholly-owned subsidiary of the Company. Potash was interested in 22.05% of the entire issued share capital of the Company as at the Latest Practicable Date and is a substantial shareholder of the Company. Canpotex was 33.33% owned by Potash and is therefore an associate of Potash. By virtue of being an associate of Potash, Canpotex is a connected person of the Company as defined under the Listing Rules. Accordingly, the transaction contemplated under the Sales Contract constitutes a connected transaction for the Company and is subject to the approval of the Independent Shareholders under Chapter 14A of the Listing Rules. Potash and its associates are required to abstain and shall abstain from voting in relation to the ordinary resolution to be put forward at the SGM for the purpose of, among others, approving the Sales Contract and the transaction contemplated thereunder.

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Tse Hau Yin, Aloysius, Mr. Ko Ming Tung, Edward and Dr. Tang Tin Sek, has been established to advise the Independent Shareholders on whether the terms of the

– 10 –

LETTER FROM SOMERLEY

Sales Contract are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We, Somerley, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

In formulating our opinion and recommendation, we have relied on the information and facts supplied, and the opinions expressed, by the Directors and management of the Company and have assumed that such information, facts and opinions are true, accurate and complete and will remain so up to the date of the SGM. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed to us. We consider that the information we have received is sufficient for us to reach an informed view and have no reason to believe that any material information has been withheld, or to doubt the truth, accuracy or completeness of the information provided. We have not, conducted any independent investigation into the business and affairs of the Group nor have we carried out any independent verification of the information supplied.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinions, we have taken into consideration the following principal factors and reasons:

1. Information on the Group

The Group is principally engaged in the production, procurement and sale of fertilizers and related products in the PRC. Its main business comprises research and development, production, procurement and distribution of fertilizers and forms a vertically integrated business model combining upstream and downstream businesses. The Company aims to serve the agricultural industry in the PRC by introducing quality resources from overseas and to ensure food safety in the PRC. Sinochem Macao is the Group’s international procurement arm which sources fertilizer products and other related agricultural products for the Group from overseas suppliers. The Group continued to strengthen its strategic cooperation with major international fertilizer suppliers, and consolidated its market position as the largest fertilizer importer in the PRC, with potash imported by the Group accounting for more than half of the national total import in 2008.

2. Information on Potash and Canpotex

Potash is incorporated in Canada with its shares listed on the Toronto Stock Exchange and the New York Stock Exchange. Potash is one of the largest potash producers in the world. Potash produces three primary crop nutrients, potash, phosphate and nitrogen.

Canpotex is a Canadian corporation equally owned by Potash and two other Canadian potash producers. It is principally engaged in offshore marketing of potash products for its three owners.

– 11 –

LETTER FROM SOMERLEY

3. Background to and reasons for the Sales Contract

Canpotex and Sinochem Macao entered into a memorandum of understanding on 10 April 2006 (the “2006 MOU”) to govern the supply arrangement of potash fertilizers between the parties during the three years ended 31 December 2009. Pursuant to the 2006 MOU, Canpotex shall not sell potash fertilizers to any Chinese buyers other than Sinochem Macao unless otherwise agreed between the parties. Sinochem Macao purchased potash fertilizers of approximately HK$3,201 million and HK$4,167 million from Canpotex for the years ended 31 December 2007 and 2008 respectively, accounting for approximately 12.14% and 8.83% of the Group’s total cost of sales of the relevant years. We are advised by the management of the Company that international potash trading was virtually stagnant following the outbreak of financial crisis in September 2008 and purchases by the Group from Canpotex for the year ended 31 December 2009 dropped to approximately HK$620 million. The Company believes that domestic fertilizer consumption will realize recovery growth in the next couple of years as the global economy extricates from the downturn. It has been the Group’s strategy to centre on marketing and distribution and integrate production for synergistic development.

The Directors believe the entering into of the Sales Contract would further enrich the operational resources of Sinochem Fertilizer, the Group’s principal distribution arm of potash fertilizer in the PRC, and ensure a stable supply of the relatively rare mineral fertilizer of potash. The production of potash in the PRC falls short of domestic demand. Each year the PRC needs to import large quantities of potash to meet the rising demand of potash for agricultural production. The Sales Contract between Canpotex and Sinochem Macao is therefore necessary and conducive to the Group’s sales operations.

4. Principal terms of the Sales Contract

Pursuant to the Sales Contract, Sinochem Macao agreed to purchase and Canpotex agreed to supply potash fertilizers of an aggregate volume of approximately 350,000 metric tons, plus or minus 5% at the option of Canpotex. We are confirmed by the management of the Company that such an option gives the parties a flexibility on the quantity since the actual size of the vessels available for goods delivery is yet to be confirmed. The aggregate consideration under the Sales Contract (which takes into account the exercise of the option by Canpotex) will not exceed US$150 million (approximately HK$1.17 billion) and was determined after arm’s length negotiations based on the prevailing market price of potash fertilizers. Payment would be made by way of irrevocable letter of credit with reference to the date of issuance of the bill of lading.

We have reviewed similar contracts on purchase of potash fertilizers by Sinochem Macao from independent suppliers and noted that the terms of the Sales Contract are no less favourable to Sinochem Macao than the terms offered to Sinochem Macao by the independent suppliers. Based on our own research from the official website under the Ministry of Agriculture of the PRC Government, which states that a Russian potash fertilizer supplier and several prime PRC fertilizer traders reached an agreement in December 2009 on the price of potash fertilizers imported to the PRC (the “Import Price”), we noted that the selling price of potash fertilizer under the Sales Contract is comparable to the Import Price.

– 12 –

LETTER FROM SOMERLEY

5. Outlook of potash fertilizers market in the PRC

Consumption of fertilizers relates to population size and the demand for agricultural products. According to the China Statistical Yearbook 2008, population of the PRC rose by 6.9% to approximately 1.32 billion at the year end of 2007 when compared to 1997. Consumption of potash fertilizer increased by a much larger extent of 65.7% to approximately 5.3 million tons in the aforesaid ten years. The PRC Government has been promoting the utilization of fertilizer to increase agricultural output for improving the living standard.

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Source: China Statistic Yearbook 2008

The Directors expect that demand for fertilizer products, including potash fertilizer in the PRC, will resume after the slow market momentum following the outbreak of the global financial meltdown in the second half of 2008 when the economy recovers. It was announced at the 11th annual session of the National People’s Congress held on 5 March 2009 that the PRC Government would invest RMB716.1 billion in the agricultural sector in 2009, of which RMB123 billion would be subsidies to farmers, representing a rise of about 20% over 2008. In addition, the PRC Government launched a program which targets to enhance the nationwide production capacity for grain by 50 billion kilograms to above 550 billion kilograms by year 2020 through improving irrigation, farming methods and technologies, selection of quality seeds, promotion of training on farming technologies, etc. It is expected that all these supportive PRC Government policies will stimulate the development of the farming industry in the PRC in the coming years.

We noted from the official website of General Administration of Customs of People’s Republic of China that the PRC has been relying on import to satisfy its demand of potash fertilizer given its insufficient resources.

– 13 –

LETTER FROM SOMERLEY

6. Financial effect

Effect on net assets

The purchase of potash fertilizers with an aggregate consideration of not exceeding US$150 million (approximately HK$1.17 billion) will not have any effect on the net assets of the Group. The acquired potash fertilizers will be accounted for as inventories of the Group before sales take place. According to the accounting policies of the Group, inventories are stated at the lower of cost and net realizable value. Write down in value of inventories will be recognized in the period when the price of potash fertilizers falls below cost which would then affect the net assets position of the Group.

Effect on cashflow

In view of the bank balances and cash of the Group amounting to approximately RMB190 million and the undrawn banking facilities of approximately RMB12 billion as at 30 June 2009, the Group’s payment for consideration of approximately US$150 million (approximately RMB1,025 million) is not expected to have a significant adverse effect on the Group’s working capital.

As confirmed by the Directors, as at the Latest Practicable Date, the Group has sufficient financial resources to settle the payment of purchase of potash fertilizers and to finance its operation and financial obligation when it falls due.

RECOMMENDATION

Having taken into account the above principal factors and reasons, we consider that the Sales Contract has been entered into by the Group in its ordinary and usual course of business and on normal commercial terms. We further consider that the terms of the Sales Contract are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, that the Independent Shareholders vote in favour of the ordinary resolution to be proposed at the SGM to approve the Sales Contract and the transaction contemplated thereunder.

Yours faithfully, for and on behalf of SOMERLEY LIMITED Maggie Chan Director

– 14 –

GENERAL INFORMATION

APPENDIX

1. 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 confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. INTEREST IN SECURITIES

As at the Latest Practicable Date, the Directors and chief executives of the Company had the following interests and short positions in the Shares, underlying Shares and debt securities of the Company and its associated corporations (within the meaning of Part XV of the SFO), and the details of any right to subscribe for Shares in the Company, which had to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

(a) Ordinary shares of HK$0.1 each of the Company

As at the Latest Practicable Date, a director of the Company had long positions in the shares of the Company as follows:

			Number	Percentage of
			of issued	the issued share
			ordinary	capital of the
**Name **	of Director	Capacity	Shares held	Company
Harry	Yang	Beneficial owner	600	0.000008%

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GENERAL INFORMATION

APPENDIX

(b) Share options of the Company

As at the Latest Practicable Date, certain Directors of the Company had interest in the share options granted under the Company’s share option schemes as follows:

			Number of
		Number	underlying
		of share	Shares of the
Name of Director	Capacity	options held	Company
Liu De Shu	Beneficial owner	421,900	421,900
Du Ke Ping	Beneficial owner	4,209,900	4,209,900
Chen Guo Gang	Beneficial owner	256,600	256,600
Harry Yang	Beneficial owner	420,600	420,600
Wade Fetzer III	Beneficial owner	256,000	256,000

(c) Derivative interests in the Shares of the Company

As at the Latest Practicable Date, Mr. Du Ke Ping and Mr. Harry Yang have derivative interests in respect of 362,526 Shares and 253,711 Shares, respectively, in the Company within the meaning of Part XV of the SFO. These derivative interests represent Mr. Du’s and Mr. Yang’s respective entitlement to receive an equivalent value in cash of 362,526 Shares and 253,711 Shares in the Company, subject to, among other things, satisfaction of certain performance targets.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executives of the Company had any interest or short position in the Shares, underlying Shares and debt securities of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) nor had any interest in the right to subscribe for Shares in the Company which had to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Director and the chief executive was taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register of the Company referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

3. DIRECTORS’ SERVICE CONTRACTS

During the year 2008, Mr. Du Ke Ping, executive Director and Chief Executive Officer of the Company, and Mr. Harry Yang, executive Director and Deputy General Manager of the Company, renewed their respective service contracts with the Company for a term of another three years, up to 27 July 2011. Pursuant to the terms stipulated in their service contracts, the respective service contract with the Company may be (i) terminated prior to its expiry if either

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GENERAL INFORMATION

APPENDIX

party serves two months’ prior notice to the other in writing; or (ii) terminated by the Company in case of bankruptcy, diseases and any other significant faults of a director as described in the respective service contract. Should the Company terminate the respective service contract with Mr. Du Ke Ping or Mr. Harry Yang prior to its expiry, Mr. Du or Mr. Yang will be entitled to receive a cash compensation equivalent to 11 months of his annual director’s salary, save for circumstances described in item (ii) above.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into any service contract with the Company or any of its subsidiaries (excluding contracts expiring or determinable by the employer within one year without payment of compensation, other than statutory compensation).

4. COMPETING INTERESTS

As at the Latest Practicable Date, Mr. Harry Yang, an executive Director and Deputy General Manager of the Company, is also a director of US Agri-Chemicals Corporation, which is a wholly-owned subsidiary of Sinochem Group. Although US Agri-Chemicals Corporation ceased its operation in November 2005, as at the Latest Practicable Date, it still maintained its company registration with the relevant authorities in the United States. As at the same date, other than Mr. Yang, none of the directors of US Agri-Chemicals Corporation held any positions or assumed any role in the Group.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and their respective associates was interested in any business apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with the business of the Group.

5. OTHER ARRANGEMENTS INVOLVING DIRECTORS

As at the Latest Practicable Date:

• (a) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date and which was significant in relation to the business of the Group; and

• (b) none of the Directors had any direct or indirect interest in any assets which had been since 31 December 2008 (the date to which the latest published audited consolidated financial statements of the Company were made up), (i) acquired or disposed of by; (ii) leased to; or (iii) are proposed to be acquired or disposed of by; or (iv) are proposed to be leased to any member of the Group.

6. MATERIAL ADVERSE CHANGES

Save as disclosed in the Company’s interim report 2009 dated 18 August 2009 and the Company’s announcement dated 20 January 2010, as at the Latest Practicable Date, the Directors were not aware of any material adverse changes in the financial or trading position

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GENERAL INFORMATION

APPENDIX

of the Company since 31 December 2008, being the date to which the latest published audited financial statements of the Group were made up.

7. EXPERTS

The following is the qualification of the expert who has given its opinions or advice, which are contained or referred to in this circular:

Name

Qualification

Somerley a corporation licensed to carry out business in type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities as defined under the SFO

As at the Latest Practicable date, Somerley:

• (a) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name, in the form and context in which it appears;

• (b) did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

• (c) did not have any direct or indirect interest in any assets which had been since 31 December 2008 (the date to which the latest published audited consolidated financial statements of the Company were made up), acquired, disposed of by, or leased to any member of the Group or were proposed to be acquired or disposed of by, or leased to any member of the Group.

8. GENERAL

In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

9. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of each of the Sales Contract and the service contracts mentioned in paragraph 3 above is available for inspection during normal business hours on any weekday (excluding Saturdays, Sundays and public holidays) at the principal place of business of the Company at Units 4601-4610, 46th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong up to and including the date of the SGM.

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NOTICE OF SPECIAL GENERAL MEETING

==> picture [63 x 61] intentionally omitted <==

SINOFERT HOLDINGS LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Sinofert Holdings Limited (the “Company”) will be held at Lounge, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Hong Kong on 18 March 2010 at 2:30 p.m. (or any adjournment thereof) to consider and, if thought fit, pass, with or without modifications, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT :

2. (a) the MOUs (as defined and described in the circular to the shareholders of the Company dated 12 January 2010 (the “Circular”), a copy of which has been produced to the meeting marked “A” and signed by the Chairman of the meeting for the purpose of identification) and the execution thereof and implementation of all transactions thereunder be and are hereby approved, ratified and confirmed;

3. (b) the proposed maximum aggregate annual values of the transactions under the MOUs as described in the Circular be and are hereby approved, ratified and confirmed; and

4. (c) the directors of the Company be and are hereby authorized to sign, execute, perfect and deliver all such documents and do all such deeds, acts, matters and things as they may in their absolute discretion consider necessary or desirable for the purpose of or in connection with the implementation of the MOUs and all transactions and other matters contemplated thereunder or ancillary thereto, to waive compliance from and/or agree to any amendment or supplement to any of the provisions of the MOUs which in their opinion is not of a material nature and to effect or implement any other matters referred to in this resolution.”

5. For identification purposes only

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NOTICE OF SPECIAL GENERAL MEETING

1. “ THAT :

2. (a) the Sales Contract (as defined and described in the circular to the shareholders of the Company dated 2 March 2010, a copy of which has been produced to the meeting marked “B” and signed by the Chairman of the meeting for the purpose of identification) and the execution thereof and implementation of all transactions thereunder be and are hereby approved, ratified and confirmed; and

3. (b) the directors of the Company be and are hereby authorized to sign, execute, perfect and deliver all such documents and do all such deeds, acts, matters and things as they may in their absolute discretion consider necessary or desirable for the purpose of or in connection with the implementation of the Sales Contract and all transactions and other matters contemplated thereunder or ancillary thereto, to waive compliance from and/or agree to any amendment or supplement to any of the provisions of the Sales Contract which in their opinion is not of a material nature and to effect or implement any other matters referred to in this resolution.”

For and on behalf of the Board of Sinofert Holdings Limited Du Ke Ping

Executive Director and Chief Executive Officer

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

2 March 2010

Notes:

1. The register of members of the Company will be closed from 17 March 2010 to 18 March 2010, both days inclusive, during which period no transfer of shares of the Company will be registered. In order to qualify for voting at the special general meeting of the Company, all transfers of shares of the Company accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, by not later than 4:30 p.m. on 16 March 2010.

2. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a member of the Company.

3. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of that power or authority, must be deposited at the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 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 the holding of the meeting or any adjournment thereof.

4. Where there are joint holders of any ordinary share of the Company, any one of such holders may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such holders be present at the meeting personally or by proxy, that one of such holders 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. Voting of the ordinary resolutions set out in this notice will be by poll.

As at the date of this notice, the executive directors of the Company are Mr. Du Ke Ping (Chief Executive Officer) and Mr. Harry Yang; the non-executive directors are Mr. Liu De Shu (Chairman), Dr. Chen Guo Gang, Dr. Stephen Francis Dowdle and Mr. Wade Fetzer III; and the independent non-executive directors are Mr. Ko Ming Tung, Edward, Dr. Tang Tin Sek and Mr. Tse Hau Yin, Aloysius.

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