CWT International Limited - Proxy Solicitation & Information Statement 2015

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 中化化肥控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

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

SOMERLEY CAPITAL LIMITED

A letter from the Board is set out on pages 5 to 17 of this circular. A letter from the Independent Board Committee containing its advice to the Independent Shareholders is set out on pages 18 to 19 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 20 to 34 of this circular.

A notice convening the SGM of Sinofert Holdings Limited to be held at Drawing Room, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 12 February 2015 at 10:15 a.m. (or immediately after the conclusion or adjournment of the special general meeting of the Company scheduled to be convened on the same day at 10:00 a.m. at the same venue, whichever is the later) is set out on pages 39 to 41 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, Level 22, Hopewell Centre, 183 Queen’s Road East, 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.

27 January 2015

* For identification purposes only

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM	THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . .	18
LETTER FROM	SOMERLEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
APPENDIX 1	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .	35
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . .		39

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DEFINITIONS

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

“associate(s)”
has the same meaning ascribed to it under the Listing Rules
“Board” the board of Directors of the Company
“Company”
Sinofert Holdings Limited, a company incorporated on 26 May 1994 in Bermuda with limited liability, the ordinary shares of which are listed on the Stock Exchange
“connected person”
has the same meaning ascribed to it under the Listing Rules
“controlling shareholder”
has the same meaning ascribed to it under the Listing Rules
“Director(s)” the director(s) of the Company
“Dohigh Trading”
敦尚貿易有限公司 (Dohigh Trading Limited), a limited liability company incorporated in Hong Kong and an indirect wholly-owned subsidiary of the Company
“Fertilizer Sales Co-operation Framework Agreement”
the fertilizer sales co-operation framework agreement dated 9 December 2014 entered into among Sinochem Macao, Sinochem Fertilizer and Sinochem Group
“Group”
the Company and its subsidiaries
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”
Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”
the independent board committee of the Company formed to consider the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps

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DEFINITIONS

“Independent Financial Adviser” or “Somerley”
“Independent Shareholders”
“Latest Practicable Date”
“Listing Rules”
“Macao”
“PRC”
“RMB”
“SFO”
“SGM”
Somerley Capital Limited, a licensed corporation to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO, the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps
shareholders other than Sinochem Group and its associates
19 January 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
the Rules Governing the Listing of Securities on the Stock Exchange
Macao Special Administrative Region of the PRC
the People’s Republic of China, which for the purposes of this circular only, excludes Hong Kong, Macao and Taiwan
Renminbi, the lawful currency of the PRC
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
the special general meeting of the Company to be held at Drawing Room, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 12 February 2015 at 10:15 a.m. (or immediately after the conclusion or adjournment of the special general meeting of the Company scheduled to be convened on the same day at 10:00 a.m. at the same venue, whichever is the later), or any adjournment thereof, the notice of which is set out on pages 39 to 41 of this circular

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DEFINITIONS

“Share(s)”
“shareholder(s)”
“Sinochem Corporation”
“Sinochem Fertilizer”
“Sinochem Group”
“Sinochem HK”
“Sinochem Macao”
“Stock Exchange”
“subsidiary(ies)”
“Sulphur Import Framework Agreement”
ordinary share(s) of HK$0.10 each in the capital of the Company
registered holder(s) of Shares
中國中化股份有限公司 (Sinochem Corporation), a joint stock company with limited liability established under the laws of the PRC, an immediate holding company of Sinochem HK, and a subsidiary of Sinochem Group
中化化肥有限公司 (Sinochem Fertilizer Company Limited), a limited liability company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company
中國中化集團公司 (Sinochem Group), a state-owned enterprise incorporated in the PRC and the ultimate controlling shareholder of the Company
Sinochem Hong Kong (Group) Company Limited, a company incorporated in Hong Kong with limited liability, which is wholly-owned by Sinochem Corporation and is the immediate controlling shareholder of the Company
中化化肥澳門離岸商業服務有限公司 (Sinochem Fertilizer Macao Commercial Offshore Limited), a company incorporated in Macao on 16 November 2004 and an indirect wholly-owned subsidiary of the Company
The Stock Exchange of Hong Kong Limited
has the same meaning ascribed to it under the Listing Rules
the sulphur and other fertilizer raw materials import framework agreement dated 12 December 2014 entered into among Dohigh Trading, Sinochem Fertilizer and Sinochem Group

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DEFINITIONS

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

For the purposes of illustration only, US$ is translated into HK$ at the rate of US$1.00 = HK$7.751, while RMB is translated into HK$ at the rate of RMB1.00 = HK$1.266. No representation is made that any amount in US$ or RMB has been or could be converted at the above rates or at any other rates or at all.

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LETTER FROM THE BOARD

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**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

Executive Directors: WANG Hong Jun (Chief Executive Officer) Harry YANG

Non-executive Directors: LIU De Shu (Chairman) YANG Lin Stephen Francis DOWDLE XIANG Dandan

Independent Non-executive Directors: KO Ming Tung, Edward TSE Hau Yin, Aloysius

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

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

27 January 2015

To: the shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

INTRODUCTION

Reference is made to (i) the announcement of the Company dated 9 December 2014 in relation to the Fertilizer Sales Co-operation Framework Agreement, and (ii) the announcement of the Company dated 12 December 2014 in relation to the Sulphur Import Framework Agreement. The transactions contemplated under the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement

For identification purposes only

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LETTER FROM THE BOARD

constitute continuing connected transactions of the Company, and are subject to the reporting, announcement, annual review and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The purpose of this circular is to provide you with (i) further information on the details of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps; (ii) the letter of advice from the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from the Independent Financial Adviser 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.

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT

Reference is made to the announcement of the Company dated 13 December 2013 in relation to the fertilizer sales co-operation framework agreement entered into between Sinochem Macao and Sinochem Fertilizer, two indirect wholly-owned subsidiaries of the Company, and Sinochem Group on 13 December 2013. Such agreement expired on 31 December 2014.

On 9 December 2014, Sinochem Macao and Sinochem Fertilizer entered into the Fertilizer Sales Co-operation Framework Agreement with Sinochem Group, pursuant to which Sinochem Group will continue to import fertilizer products sourced by Sinochem Macao and sell them to Sinochem Fertilizer during the period from 1 January 2015 to 31 December 2015 (both days inclusive).

Principal Terms of the Fertilizer Sales Co-operation Framework Agreement

Date

9 December 2014

Parties

(a) Sinochem Macao
(b) Sinochem Fertilizer
(c) Sinochem Group

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LETTER FROM THE BOARD

Nature of transactions

Pursuant to the Fertilizer Sales Co-operation Framework Agreement, fertilizer products sourced from overseas by Sinochem Macao for Sinochem Fertilizer will first be sold to Sinochem Group. Sinochem Group, as an approved importer of fertilizer products in the PRC, will import the products sourced by Sinochem Macao and sell all of such products to Sinochem Fertilizer. Sinochem Group will also import a small amount of fertilizer products direct from overseas from time to time. Sinochem Group has undertaken that, except for any fertilizer products imported by it on behalf of its other customers, it will sell all the fertilizer products it imports to Sinochem Fertilizer exclusively. On the other hand, Sinochem Fertilizer is free to purchase fertilizer products from any authorized importers.

Pricing

Under the Fertilizer Sales Co-operation Framework Agreement, unless otherwise determined by the PRC government, the pricing principles for the sale and purchase of fertilizer products between the parties are as follows:

(i) the price to be paid by Sinochem Group to Sinochem Macao for fertilizer products sold by Sinochem Macao to Sinochem Group will be determined in accordance with the prevailing international market price;
(ii) the price to be paid by Sinochem Fertilizer to Sinochem Group for fertilizer products sourced from overseas by Sinochem Macao will be determined in accordance with the purchasing price paid by Sinochem Group plus reasonable costs incurred by Sinochem Group in relation to the import of fertilizer products; and
(iii) the price to be paid by Sinochem Fertilizer to Sinochem Group for fertilizer products sourced by Sinochem Group direct from overseas suppliers will be determined in accordance with the domestic wholesale price at port.

In determining the prevailing international market price and the domestic wholesale price at port, the parties generally make reference to weekly reports published by certain independent commodity information providers such as Argus Media and Baichuan (百川資訊). Such reports, usually updated on a weekly basis and available to the Company by subscription, provide up to date information on market trend and prevailing market prices.

In addition, the Group maintains regular contacts with domestic and overseas fertilizer producers, distributors and traders, keeping abreast of the latest international bidding price and spot price and the latest domestic port price and factory price. Before placing a purchase order with Sinochem Group, the Group usually obtains reference prices from three or more suppliers. The Group also takes into account the demand of its

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LETTER FROM THE BOARD

downstream customers when determining the prices of the transactions. Such prices will be reported to the manager of the fertilizer department, and then submitted to the vice president in charge of the fertilizer business for approval.

As the procurement and approval process involves reference to industry reports as well as up to date market prices as mentioned above, the Company considers that methods and procedures adopted above can ensure that the transactions will be conducted on normal commercial terms and not prejudicial to the interests of the Company and its minority shareholders.

Payment

Sinochem Fertilizer and Sinochem Group shall enter into specific agreements in relation to the type, specification, quantities, packaging and price of the fertilizer products, and Sinochem Fertilizer shall make the full payment to Sinochem Group for its purchase of the fertilizer products. Upon receipt of the payment made by Sinochem Fertilizer, Sinochem Group shall enter into specific agreements with Sinochem Macao in relation to the import of the fertilizer products.

The parties shall enter into specific agreements setting out detailed terms of the transactions including the payment terms. Payments are usually made by telegraphic transfer within 90 days upon signing of the specific agreements. The payment terms, subject to further negotiation between the parties, will be in line with the market practices.

Termination and expiration

The Fertilizer Sales Co-operation Framework Agreement will expire on 31 December 2015. The term of the Fertilizer Sales Co-operation Framework Agreement can be extended with the consent of Sinochem Macao, Sinochem Fertilizer and Sinochem Group.

Where a party to the Fertilizer Sales Co-operation Framework Agreement has breached any terms of the Fertilizer Sales Co-operation Framework Agreement and such breach is not remedied within 60 days of the date of written notice from the other party(ies) requesting remedy of the breach, the other party(ies) may terminate the Fertilizer Sales Co-operation Framework Agreement. In addition, during the term of the Fertilizer Sales Co-operation Framework Agreement, Sinochem Macao and Sinochem Fertilizer are entitled to terminate the Fertilizer Sales Co-operation Framework Agreement by giving one month’s notice to the other parties.

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LETTER FROM THE BOARD

Annual caps

Annual cap for continuing connected transactions between Sinochem Macao and Sinochem Group

The Company estimates that the annual cap for the year ending 31 December 2015 in respect of the continuing connected transactions between Sinochem Macao and Sinochem Group under the Fertilizer Sales Co-operation Framework Agreement will be US$1,265,000,000 (equivalent to approximately HK$9,805,015,000). Such cap is estimated based on the projected quantities of purchase by Sinochem Group for Sinochem Fertilizer through the arrangement with Sinochem Macao and the projected average price per tonne of fertilizer products (which is determined in accordance with the prevailing international market price) during the term of the Fertilizer Sales Cooperation Framework Agreement.

The historical amounts of such continuing connected transactions for the two years ended 31 December 2013 and the eleven months ended 30 November 2014 were approximately US$1,009,252,000 (equivalent to approximately HK$7,822,712,000), US$855,205,000 (equivalent to approximately HK$6,628,694,000) and US$849,032,000 (equivalent to approximately HK$6,580,847,000), respectively.

Annual cap for continuing connected transactions between Sinochem Fertilizer and Sinochem Group

The Company estimates that the annual cap for the year ending 31 December 2015 in respect of the continuing connected transactions between Sinochem Fertilizer and Sinochem Group under the Fertilizer Sales Co-operation Framework Agreement will be RMB7,796,000,000 (equivalent to approximately HK$9,869,736,000). Such cap is estimated based on:

(i) the projected quantities of sales of fertilizer products sourced from overseas by Sinochem Macao, and the projected average price per tonne of fertilizer products (which is determined on a cost basis) and the estimated costs incurred by Sinochem Group for the import of such fertilizer products during the term of the Fertilizer Sales Co-operation Framework Agreement; and
(ii) the projected quantities of sales of fertilizer products sourced by Sinochem Group direct from overseas suppliers to Sinochem Fertilizer and the projected average price per tonne of fertilizer products (which is determined in accordance with the domestic wholesale price at port) during the term of the Fertilizer Sales Cooperation Framework Agreement.

The historical amounts of such continuing connected transactions for the two years ended 31 December 2013 and the eleven months ended 30 November 2014 were approximately RMB6,730,908,000 (equivalent to approximately HK$8,521,330,000), RMB5,431,805,000 (equivalent to approximately HK$6,876,665,000) and RMB5,712,579,000 (equivalent to approximately HK$7,232,125,000), respectively.

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LETTER FROM THE BOARD

CONTINUING CONNECTED TRANSACTIONS UNDER SULPHUR IMPORT FRAMEWORK AGREEMENT

Reference is made to the announcements of the Company dated 5 December 2013 and 3 April 2014 in relation to the sulphur import framework agreement entered into between Dohigh Trading and Sinochem Fertilizer, two indirect wholly-owned subsidiaries of the Company, and Sinochem Group on 5 December 2013. Such agreement expired on 31 December 2014.

On 12 December 2014, Dohigh Trading and Sinochem Fertilizer entered into the Sulphur Import Framework Agreement with Sinochem Group, pursuant to which Sinochem Group will continue to import sulphur and other fertilizer raw materials sourced by Dohigh Trading and sell them to Sinochem Fertilizer during the period from 1 January 2015 to 31 December 2015 (both days inclusive).

Principal Terms of the Sulphur Import Framework Agreement

Date

12 December 2014

Parties

(a) Dohigh Trading
(b) Sinochem Fertilizer
(c) Sinochem Group

Nature of transactions

Pursuant to the Sulphur Import Framework Agreement, Sinochem Group shall import sulphur and other fertilizer raw materials sourced by Dohigh Trading only, and sell them all to Sinochem Fertilizer except for any sulphur and other fertilizer raw materials imported by Sinochem Group on behalf of its other customers.

Pricing

Under the Sulphur Import Framework Agreement, unless otherwise determined by the PRC government, the pricing principles for the sale and purchase of sulphur and other fertilizer raw materials between the parties are as follows:

(i) the price to be paid by Sinochem Group to Dohigh Trading for sulphur and other fertilizer raw materials sold by Dohigh Trading to Sinochem Group shall be determined in accordance with the prevailing international market price; and

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LETTER FROM THE BOARD

(ii) the price to be paid by Sinochem Fertilizer to Sinochem Group for sulphur and other fertilizer raw materials sold by Sinochem Group to Sinochem Fertilizer shall be determined in accordance with the domestic wholesale price at port.

In determining the prevailing international market price and the domestic wholesale price at port, the parties generally make reference to weekly sulphur reports published by certain independent commodity information providers such as Argus Media and Baichuan (百川資訊). Such reports, usually updated on a weekly basis and available to the Company by subscription, provide up to date information on market trend and prevailing market prices.

In addition, the Group maintains regular contacts with domestic and overseas sulphur producers, distributors and traders, keeping abreast of the latest international bidding price and spot price and the latest domestic port price and factory price. Before placing a purchase order with Sinochem Group, the Group usually obtains reference prices from three or more suppliers. The Group also takes into account the demand of its downstream customers when determining the prices of the transactions. Such prices will be reported to the manager of the sulphur department, and then submitted to the vice president in charge of the sulphur business for approval.

Payment

Sinochem Fertilizer and Sinochem Group shall enter into specific agreements in relation to the type, specification, quantities, packaging and price of the sulphur and other fertilizer raw materials, and Sinochem Fertilizer shall make the full payment to Sinochem Group for its purchase of the sulphur and other fertilizer raw materials. Upon receipt of the payment made by Sinochem Fertilizer, Sinochem Group shall enter into specific agreements with Dohigh Trading in relation to the import of sulphur and other raw fertilizer materials.

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LETTER FROM THE BOARD

Termination and expiration

The Sulphur Import Framework Agreement will expire on 31 December 2015. The term of the Sulphur Import Framework Agreement can be extended with the consent of Dohigh Trading, Sinochem Fertilizer and Sinochem Group.

Where a party to the Sulphur Import Framework Agreement has breached any terms of the Sulphur Import Framework Agreement and such breach is not remedied within 60 days of the date of written notice from the other party(ies) requesting remedy of the breach, the other party(ies) may terminate the Sulphur Import Framework Agreement. In addition, during the term of the Sulphur Import Framework Agreement, Dohigh Trading and Sinochem Fertilizer are entitled to terminate the Sulphur Import Framework Agreement by giving one month’s notice to the other parties.

Annual Caps

Annual cap for continuing connected transactions between Dohigh Trading and Sinochem Group

The Company estimates that the annual cap for the year ending 31 December 2015 in respect of the import of sulphur and other fertilizer raw materials by Sinochem Group from Dohigh Trading will be US$120,000,000 (equivalent to approximately HK$930,120,000). Such cap has been estimated based on the projected quantities of purchase by Sinochem Group for Sinochem Fertilizer through the arrangement with Dohigh Trading and the projected average price per tonne of products during the term of the Sulphur Import Framework Agreement (which is determined in accordance with the prevailing international market price).

The historical amounts of such continuing connected transactions for the two years ended 31 December 2013 and the eleven months ended 30 November 2014 were approximately US$13,293,000 (equivalent to approximately HK$103,034,000), US$17,727,000 (equivalent to approximately HK$137,402,000) and US$121,547,000 (equivalent to approximately HK$942,111,000), respectively.

Annual cap for continuing connected transactions between Sinochem Fertilizer and Sinochem Group

The Company estimates that the annual cap for the year ending 31 December 2015 in respect of the sale of sulphur and other fertilizer raw materials by Sinochem Group to Sinochem Fertilizer will be RMB900,000,000 (equivalent to approximately HK$1,139,400,000). Such cap has been estimated based on the projected quantities of sale of sulphur and other fertilizer raw materials by Sinochem Group to Sinochem Fertilizer and the projected average price per tonne of products during the term of the Sulphur Import Framework Agreement (which is determined in accordance with the domestic wholesale price at port).

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LETTER FROM THE BOARD

The historical amounts of such continuing connected transactions for the two years ended 31 December 2013 and the eleven months ended 30 November 2014 were approximately RMB78,635,000 (equivalent to approximately HK$99,552,000), RMB99,291,000 (equivalent to approximately HK$125,702,000) and RMB693,582,000 (equivalent to approximately HK$878,075,000), respectively.

It is currently estimated that the sales quantities of sulphur and other fertilizer raw materials of 2015 will remain at similar level as that of 2014, and the average price per tonne of the sulphur and other fertilizer raw materials of 2015 is estimated to be lower than that of 2014. On such basis, the Company considers that the annual caps for the transactions between Dohigh Trading and Sinochem Group as well as the transactions between Sinochem Fertilizer and Sinochem Group for the year ending 31 December 2015, though lower than the historical transaction amounts of 2014, will still be sufficient.

Measures taken by the Company to ensure compliance with the relevant Listing Rules requirements

As disclosed in the announcement of the Company dated 12 December 2014, the contracted transaction amounts of the transactions between Dohigh Trading and Sinochem Group as well as the contracted transaction amounts of the transactions between Sinochem Fertilizer and Sinochem Group in 2014 exceeded the 2014 annual caps as disclosed in the announcement of the Company dated 3 April 2014. With a view to further enhancing its compliance checks on the annual caps and compliance with the relevant Listing Rules requirements in respect of continuing connected transactions in the future, the Company will take the following measures:

(i) The Company will set a lower threshold as an internal monitoring cap. If the contracted transaction amounts reach the lower threshold, an alert message will be sent by the legal department to the business department, who will assess whether the annual cap of the continuing connected transaction will be sufficient for the remainder of the financial year.
(ii) The business department of the Company, together with the finance department and the legal department, will continue to review the transaction amounts (including the contracted transaction amounts) of all continuing connected transactions on a regular basis. The above monitoring work can enable the Company to assess the sufficiency of the relevant annual cap at an early stage and to take action to comply with the Listing Rules requirements, if necessary.
(iii) The Company will continue to arrange trainings to the relevant personnel, including personnel of the business department who are responsible for the continuing connected transactions and those personnel who are responsible for reviewing and monitoring the Company’s compliance with the connected transactions rules, with particular emphasis on, among others, enhancing the co-ordination and communication between the business, finance and legal departments in monitoring the transaction amounts of all continuing connected transactions and overall compliance with the Listing Rules.

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LETTER FROM THE BOARD

REASONS AND BENEFITS FOR THE CONTINUING CONNECTED TRANSACTIONS

Under PRC law, the Group is not allowed to import fertilizer products into the PRC (except for small amount trade in border areas (邊境小額貿易) as approved under the PRC law) and the right to import fertilizer products is only granted to Sinochem Group and several other importers. As the Group needs to import fertilizer products through authorized importers, such as Sinochem Group, the Fertilizer Sales Co-operation Framework Agreement was therefore entered into between the parties.

As a state-owned enterprise in the PRC, Sinochem Group enjoyed domestic preferential policies issued by the PRC government from time to time. The Sulphur Import Framework Agreement is entered into for the purchase of sulphur and other fertilizer raw materials through Sinochem Group as importer so as to make full use of domestic preferential policies, such as import-related preferential policies.

The Directors (including the independent non-executive Directors) are of the view that the continuing connected transactions contemplated under each of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement have been conducted on normal commercial terms, were entered into in the ordinary and usual course of business of the Group, are fair and reasonable and in the interests of the Company and the shareholders as a whole, and that the annual caps for the continuing connected transactions contemplated under each of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement are fair and reasonable.

Mr. Liu De Shu and Mr. Yang Lin are regarded as having a material interest in the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and have abstained from voting on the Board resolutions passed to approve the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and the transactions contemplated thereunder.

IMPLICATIONS OF THE LISTING RULES

Each of Sinochem Macao, Dohigh Trading and Sinochem Fertilizer is an indirect wholly-owned subsidiary of the Company. Sinochem Group is the ultimate controlling shareholder of the Company holding an effective interest of approximately 52.65% of the Company, and is therefore a connected person of the Company. Pursuant to Chapter 14A of the Listing Rules, the transactions contemplated under each of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement constitute continuing connected transactions of the Company. Given that the relevant applicable percentage ratios in respect of the annual caps under each of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement are more than 5%, such transactions are subject to the reporting, announcement, annual review and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

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LETTER FROM THE BOARD

The transaction amounts of the continuing connected transactions under each of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement will be closely monitored to ensure that they fall within 5% of the applicable percentage ratios as defined in the Listing Rules, prior to obtaining approval from the Independent Shareholders at the SGM.

GENERAL INFORMATION

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 security in the PRC.

Sinochem Macao is principally engaged in sourcing fertilizer products and other related agricultural products for the Group from overseas.

Dohigh Trading is principally engaged in the trading of fertilizers and other agrichemical products.

Sinochem Fertilizer is engaged in the production, import, export, distribution, wholesale and retail of fertilizer raw materials and products, as well as research and development and services in the field of fertilizer-related business and products.

Sinochem Group is a key state-controlled enterprise established in 1950. It indirectly holds a 98% equity interest in Sinochem HK, which in turn owns approximately 52.65% of the Company. Sinochem Group’s core business is as follows: trade, distribution and logistics of petroleum, fertilizer, chemicals, crude oil, fuel oil and natural rubber futures; overseas oil and gas exploitation and production, refinery, chemical mining and washing, fertilizer and chemicals production; hotel and real estate development and operation.

SGM

Resolutions approving (i) the Fertilizer Sales Co-operation Framework Agreement, the transactions contemplated thereunder and the proposed annual caps, and (ii) the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps, shall be proposed at the SGM.

In view of Sinochem Group’s interests in the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, Sinochem Group and its associates are required to abstain and shall abstain from voting on the resolutions to be proposed at the SGM to approve the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps.

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LETTER FROM THE BOARD

A notice convening the SGM to be held at Drawing Room, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 12 February 2015 at 10:15 a.m. (or immediately after the conclusion or adjournment of the special general meeting of the Company scheduled to be convened on the same day at 10:00 a.m. at the same venue, whichever is the later), is set out on pages 39 to 41 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, Level 22, Hopewell Centre, 183 Queen’s Road East, 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

FURTHER INFORMATION

The Independent Board Committee comprising two independent non-executive Directors has been appointed to advise the Independent Shareholders in respect of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, the transactions contemplated thereunder and the proposed annual caps. Somerley has been appointed as the Independent Financial Adviser 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 pages 18 to 19 of this circular, which contains its advice to the Independent Shareholders and the letter from the Independent Financial Adviser set out on pages 20 to 34 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders.

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LETTER FROM THE BOARD

Your attention is also drawn to the additional information set out in the Appendix to this circular.

Yours faithfully, For and on behalf of the Board of Sinofert Holdings Limited Wang Hong Jun

Executive Director and Chief Executive Officer

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 297)

27 January 2015

To: the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

We refer to the circular of the Company dated 27 January 2015 (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 as to whether, in our opinion, the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and the transactions contemplated thereunder (including the proposed annual caps) are entered into by the Group in its ordinary and usual course of business, on normal commercial terms, in the interests of the Company and the shareholders as a whole and are fair and reasonable so far as the Independent Shareholders are concerned. In this connection, Somerley has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and the transactions contemplated thereunder (including the proposed annual caps).

We wish to draw your attention to the letter from the Board set out on pages 5 to 17 of the Circular, and the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders set out on pages 20 to 34 of the circular which contains its opinion in respect of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and the transactions contemplated thereunder (including the proposed annual caps).

For identification purposes only

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of the Independent Financial Adviser and its recommendation in relation thereto, we consider that the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement and the transactions contemplated thereunder (including the proposed annual caps) are entered into by the Group in its ordinary and usual course of business, on normal commercial terms, in the interests of the Company and the shareholders as a whole and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend that you vote in favour of the relevant resolutions set out in the notice of the SGM.

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

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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 CAPITAL LIMITED

20th Floor China Building 29 Queen’s Road Central Hong Kong

27 January 2015

To: the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders in relation to the import of (i) fertilizer products for Sinochem Fertilizer by Sinochem Group through the arrangement with Sinochem Macao pursuant to the terms of the Fertilizer Sales Co-operation Framework Agreement and (ii) sulphur and other fertilizer raw materials for Sinochem Fertilizer by Sinochem Group through the arrangement with Dohigh Trading pursuant to the terms of the Sulphur Import Framework Agreement for the year 2015 (the “ Continuing Connected Transactions ”), for which the Independent Shareholders’ approval is being sought, including the relevant annual caps (the “ Annual Caps ”). Details of the Continuing Connected Transactions and the Annual Caps are contained in the circular of the Company to the Shareholders dated 27 January 2015 (the “ Circular ”), 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.

As at the Latest Practicable Date, each of Sinochem Macao, Dohigh Trading and Sinochem Fertilizer is an indirectly wholly-owned subsidiary of the Company. Since Sinochem Group is the ultimate controlling shareholder of the Company holding an interest of approximately 52.65% of the Company, it is a connected person of the Company under the Listing Rules. Accordingly, the Continuing Connected Transactions constitute continuing connected transactions of the Company under the Listing Rules. As the relevant applicable percentage ratios in respect of the Annual Caps are more than 5%,

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LETTER FROM SOMERLEY

the Continuing Connected Transactions (including the Annual Caps) are subject to the reporting, announcement, annual review and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

In view of Sinochem Group’s interests in the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement, Sinochem Group and its associates are required to abstain from voting on the resolutions to be proposed at the SGM to approve the Continuing Connected Transactions (including the Annual Caps).

The Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Tse Hau Yin, Aloysius and Mr. Ko Ming Tung, Edward, has been established to advise the Independent Shareholders whether the terms of the Continuing Connected Transactions (including the Annual Caps) 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.

During the past two years, Somerley and Somerley Limited (presently known as “Somerley International Limited” and a fellow subsidiary of Somerley) have acted as independent financial advisers to the independent board committee and independent shareholders of the Company in relation to certain continuing connected transactions of the Group (details of which were set out in the circulars of the Company dated 8 January 2014 and 25 April 2014). The past engagements were limited to providing independent advisory services to the independent board committee and independent shareholders of the Company pursuant to the Listing Rules. Under the past engagements, Somerley and Somerley Limited received normal professional fees from the Company. Notwithstanding the past engagement, as at the Latest Practicable Date, there were no relationships or interests between (a) Somerley and (b) the Group, Sinochem Group and their respective subsidiaries and associates that could reasonably be regarded as a hindrance to our independence as defined under Rule 13.84 of the Listing Rules to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions as detailed in the Circular.

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 Group and have assumed that they are true, accurate and complete and will remain so up to the time 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 have no reason to believe that any material information has been withheld from us, or to doubt the truth, accuracy or completeness of the information provided. We have relied on such information and consider that the information we have received is sufficient for us to reach an informed view. We have, however, not conducted any independent investigation into the business and affairs of the Group and the Sinochem Group, nor have we carried out any independent verification of the information supplied.

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LETTER FROM SOMERLEY

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation on the terms of the Continuing Connected Transactions (including the Annual Caps), we have taken the following principal factors and reasons into consideration:

1. Information on the Group and Sinochem Group

The Group

The Company 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.

Sinochem Macao is incorporated in Macao and is principally engaged in sourcing fertilizer products and other related agricultural products for the Group from overseas suppliers.

Dohigh Trading is incorporated in Hong Kong and is principally engaged in the trading of fertilizers and other agri-chemical products.

Sinochem Fertilizer is incorporated in the PRC and is engaged in the production, import, export, distribution, wholesale and retail of fertilizer raw materials and products, as well as research and development and services in the field of fertilizer-related business and products.

Sinochem Group

Sinochem Group is the controlling shareholder of the Company. It is a key state-controlled enterprise and a Global Fortune 500 Company. Its core business involves petroleum, fertilizer, trade, distribution and logistics of chemicals, crude oil, fuel oil and natural rubber futures; overseas oil and gas exploitation and production, refinery, chemical mining and washing, fertilizer and chemicals production; hotel and real estate development and operation.

2. Background to and reasons for the Continuing Connected Transactions

(i) Fertilizer Sales Co-operation Framework Agreement

Pursuant to the PRC law, only approved importers are allowed to import fertilizer products into the PRC. The Group is not allowed to import fertilizer products into the PRC except for a small amount of trade in border areas as approved under the PRC law. Over the years, only Sinochem Group, and a few other importers, have been granted the right to import fertilizer products into the PRC.

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LETTER FROM SOMERLEY

The Group needs to import fertilizer products through authorised importers for its ordinary course of business. Since 2005, Sinochem Macao has been sourcing fertilizer products from overseas and selling them to Sinochem Group, after which Sinochem Group imports the products and sells them (except for products imported by Sinochem Group as an agent for other customers) to Sinochem Fertilizer. At present, the arrangements between the three parties are governed by the existing fertilizer sales co-operation framework agreement dated 13 December 2013, for a term of one year (the “ Former Fertilizer Sales Co-operation Framework Agreement ”), which expired on 31 December 2014. The Former Fertilizer Sales Co-operation Framework Agreement was approved by the then independent shareholders at a shareholders’ meeting held on 24 January 2014.

In view of the long term business relationships between the Group and Sinochem Group and Sinochem Group being one of the approved PRC fertilizer importers, the Fertilizer Sales Co-operation Framework Agreement has been entered into between Sinochem Macao, Sinochem Group and Sinochem Fertilizer on 9 December 2014 to govern and continue the aforementioned import services for the year ending 31 December 2015.

(ii) Sulphur Import Framework Agreement

As a state-owned enterprise in the PRC, Sinochem Group enjoys domestic preferential policies issued by the PRC government from time to time, such as import-related preferential policies. In order to make full use of such policies that may reduce the Group’s cost of import, since 2009, Dohigh Trading has been sourcing overseas sulphur and other fertilizer raw materials and selling them to Sinochem Group, after which Sinochem Group imports the products and sells them (except for products imported by Sinochem Group as an agent for other customers) to Sinochem Fertilizer.

At present, the arrangements between the three parties are governed by the existing sulphur import framework agreement dated 5 December 2013, for a term of one year (the “ Former Sulphur Import Framework Agreement ”), which expired on 31 December 2014. In view of the significant increase in the international market price of sulphur at the beginning of 2014 which exceeded the Company’s original estimation of the relevant annual caps in the Former Sulphur Import Framework Agreement, the Company increased the relevant annual caps on 3 April 2014. Revision of the relevant annual caps was approved by the then independent shareholders at a shareholders’ meeting held on 15 May 2014.

In view of the long term business relationships between the Group and Sinochem Group and Sinochem Group, the Sulphur Import Framework Agreement has been entered into between Dohigh Trading, Sinochem Group and Sinochem Fertilizer on 12 December 2014 to govern and continue the aforementioned import services for the year ending 31 December 2015.

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LETTER FROM SOMERLEY

3. Principal terms of the Continuing Connected Transactions

Set out below is the principal terms of the Fertilizer Sales Co-operation Framework Agreement and the Sulphur Import Framework Agreement. Further details are disclosed in the Letter from the Board of the Circular.

(i) Fertilizer Sales Co-operation Framework Agreement

General

Pursuant to the Fertilizer Sales Co-operation Framework Agreement, fertilizer products sourced from overseas by Sinochem Macao for Sinochem Fertilizer will first be sold to Sinochem Group, an approved importer of fertilizer products into the PRC, which will import the products sourced by Sinochem Macao and then sell them to Sinochem Fertilizer. Sinochem Group will also import a small amount of fertilizer products directly from overseas from time to time. Sinochem Group has undertaken that except for fertilizer products imported by it on behalf of other customers, it will sell all the fertilizer products it imports to Sinochem Fertilizer exclusively. On the other hand, Sinochem Fertilizer is free to purchase fertilizer products from any authorised supplier.

Pricing

Pursuant to the Fertilizer Sales Co-operation Framework Agreement, the pricing principles for the sale and purchase of fertilizer products between the three parties are as follows:

(i) for products sourced by Sinochem Macao for Sinochem Fertilizer, the price to be paid by Sinochem Group to Sinochem Macao will be set in accordance with prevailing international market price;
(ii) for fertilizer products sold to Sinochem Fertilizer by Sinochem Group sourced from overseas by Sinochem Macao, Sinochem Group will charge Sinochem Fertilizer on a cost basis, that is, based on the price of the imported fertilizer products purchased from Sinochem Macao plus product inspection costs, customs and excise handling charges, import duty, value-added tax, and reasonable administrative costs incurred by Sinochem Group in relation to the import of the fertilizers; and
(iii) for fertilizer products sourced by Sinochem Group directly from overseas, Sinochem Group will charge Sinochem Fertilizer in accordance with prevailing domestic wholesale price at port.

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LETTER FROM SOMERLEY

Payment

Sinochem Fertilizer and Sinochem Group shall enter into specific agreements in relation to the fertilizer products, and Sinochem Fertilizer shall make the full payment to Sinochem Group for its purchase of the fertilizer products. Upon receipt of the payment made by Sinochem Fertilizer, Sinochem Group shall enter into specific agreements with Sinochem Macao in relation to the importation of the fertilizer products. Payments are usually made by telegraphic transfer within 90 days upon signing of the specific agreements.

(ii) Sulphur Import Framework Agreement

General

Pursuant to the Sulphur Import Framework Agreement, Sinochem Group will import sulphur and other fertilizer raw materials sourced by Dohigh Trading only, and sell them to Sinochem Fertilizer, except for any sulphur and other fertilizer raw materials imported by Sinochem Group on behalf of its other customers.

Pricing

Unless otherwise determined by the PRC Government, the pricing principles of sulphur and other fertilizer raw materials under the Sulphur Import Framework Agreement are as follows:

(i) the price to be paid by Sinochem Group to Dohigh Trading for its overseas purchases of sulphur and other fertilizer raw materials shall be determined in accordance with the prevailing international market price; and
(ii) the price to be paid by Sinochem Fertilizer to Sinochem Group for its domestic purchases of sulphur and other fertilizer raw materials shall be determined in accordance with the domestic wholesale price at port.

Payment

Sinochem Fertilizer and Sinochem Group shall enter into specific agreements in relation to the type, specification, quantities, packaging and price of the sulphur and other fertilizer raw materials, and Sinochem Fertilizer shall make the full payment to Sinochem Group for its purchases. Upon receipt of the payment made by Sinochem Fertilizer, Sinochem Group shall enter into specific agreements with Dohigh Trading in relation to the importation of sulphur and other fertilizer raw materials. Payments are usually made by telegraphic transfer within 90 days upon signing of the specific agreements.

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LETTER FROM SOMERLEY

(iii) Comparison on terms of with independent third parties

We have discussed with the management of the Group and reviewed sample contracts for the purchases and sales of fertilizer products under the Fertilizer Sales Co-operation Framework Agreement and sulphur and other fertilizer raw materials under the Sulphur Import Framework Agreement between the Group and Sinochem Group, and compared them with (i) contracts for similar purchase and sales from/to independent fertilizer importers and customers and (ii) the respective international market price and domestic wholesale price at port sourced from Baichuan, an independent commodity information provider. We note that the terms for the transactions contemplated under the Continuing Connected Transactions are similar to the transaction terms between the Group and the independent third parties.

4. Annual caps of the Continuing Connected Transactions

Set out below are the historical transaction amounts and the relevant annual caps under the Continuing Connected Transactions for the two years ended 31 December 2013 and for the eleven months ended 30 November 2014, and the Annual Caps for 2015:

(i) Fertilizer Sales Co-operation Framework Agreement

(a) Review of historical figures

			For the eleven
	For the financial year		months ended
	ended 31	December	30 November
	2012	2013	2014
	Audited	Audited	Unaudited
	(’000)	(’000)	(’000)
Transactions between
Sinochem Macao and
Sinochem Group
Historical amounts	US$1,009,252	US$855,205	US$849,032*
Relevant annual caps	US$1,625,200	US$1,939,792	US$1,140,000*
Utilisation rates	62.1%	44.1%	74.5%
Transactions between
Sinochem Fertilizer and
Sinochem Group
Historical amounts	RMB6,730,908	RMB5,431,805	RMB5,712,579*
Relevant annual caps	RMB14,162,276	RMB17,164,235	RMB7,340,000*
Utilisation rates	47.5%	31.6%	77.8%

Historical transactions covered the period from 1 January 2014 to 30 November 2014, whereas the relevant annual caps govern the relevant transactions for the full year of 2014.

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LETTER FROM SOMERLEY

We note that sales of imported fertilizer product by Sinochem Group to Sinochem Fertilizer decreased by approximately 19.3% from approximately RMB6,730.9 million in 2012 to approximately RMB5,431.8 million in 2013. We are advised by the management of the Group that such decrease was principally due to the general oversupply situation in the global fertilizer industry and the overall decline in sales price for fertilizer products in 2013. Similarly, there was a decrease of the dollar values of the relevant purchases by Sinochem Group from Sinochem Macao by approximately 15.3% from approximately US$1,009.3 million in 2012 to approximately US$855.2 million in 2013.

For the eleven months ended 30 November 2014, sales by Sinochem Group to Sinochem Fertilizer amounted to approximately RMB5,712.6 million, whereas purchases by Sinochem Group from Sinochem Macao amounted to approximately US$849.0 million. As shown in the above table, we note that the relevant annual caps have been fairly utilised, amounting to approximately 74.5% and 77.8% respectively.

(b) Assessment of the Annual Caps

Transactions between Sinochem Macao and Sinochem Group

The annual cap in respect of the transaction between Sinochem Macao and Sinochem Group under the Fertilizer Sales Co-operation Framework Agreement is US$1,265 million for the year ending 31 December 2015.

In assessing the reasonableness of the annual cap, we have discussed with the management of the Group the bases and assumptions underlying the projections for the purchase of the fertilizer products by Sinochem Group from Sinochem Macao. The annual cap is estimated based on (i) the projected quantities of purchase by Sinochem Group for Sinochem Fertilizer through the arrangement with Sinochem Macao; and (ii) the projected average price per tonne of fertilizer products (which is determined in accordance with the prevailing international market price) for 2015.

In estimating the sales quantities of fertilizer products from Sinochem Macao to Sinochem Group in 2015, the management of the Group has in general made reference to the actual sales quantities of fertilizer products from Sinochem Macao to Sinochem Group in 2014, projected with an increase of approximately 5–10% in 2015. According to the “Central No. 1 Document” issued by the State Council of the People’s Republic of China in January 2014, the PRC government focuses on agriculture, highlighting the importance of developing

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LETTER FROM SOMERLEY

modern agriculture and raising its agricultural production capacity. In deriving the annual cap in 2015, the Directors have taken into account a potential increase in domestic sales quantities to capture the growth potential of the fertilizer market in the PRC.

The annual cap for the sales of fertilizer products from Sinochem Macao to Sinochem Group is also in general determined by making reference to the average international market price of fertilizer products in 2014, and taking into account potential price changes for the estimated import prices of fertilizer products in 2015. According to the management of the Group, such projected price change is based on market information on the estimated change in import price of the main component of the fertilizer products expected by the overseas suppliers. Based on our review of the independent research report on fertilizer industry, such price forecast for 2015 is in line with the Group’s estimation.

Transactions between Sinochem Fertilizer and Sinochem Group

The annual cap in respect of the transaction between Sinochem Fertilizer and Sinochem Group under the Fertilizer Sales Co-operation Framework Agreement is RMB7,796 million for the year ending 31 December 2015.

In assessing the reasonableness of the annual cap, we have discussed with the management of the Group the bases and assumptions underlying the projections for the sales of the fertilizer products by Sinochem Group to Sinochem Fertilizer. The annual cap is estimated based on:

(i) the projected quantities of sales of fertilizer products sourced from overseas by Sinochem Macao, and the projected average price per tonne of fertilizer products for 2015 (which is determined on a cost basis) and the estimated costs incurred by Sinochem Group for the importation of such fertilizer for 2015; and
(ii) the projected quantities of sales of fertilizer products sourced by Sinochem Group direct from other overseas suppliers to Sinochem Fertilizer and the projected average price per tonne of fertilizer products (which is determined in accordance with the domestic wholesale price at port) for 2015.

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LETTER FROM SOMERLEY

The quantity of fertilizer products expected to be purchased by Sinochem Fertilizer from Sinochem Group under the Fertilizer Sales Co-operation Framework Agreement is principally based on the quantity of products expected to be sold by Sinochem Macao to Sinochem Group as discussed in the sub-section above, plus the quantity that Sinochem Group sourced directly from other overseas suppliers from time to time. The expected average price of products for the purpose of the annual cap are based on the prices of products to be sold by Sinochem Macao to Sinochem Group as estimated on the bases discussed above, plus an additional cost per tonne which is estimated based on the actual administrative and other direct costs incurred for the import of fertilizer products.

Having considered (i) the estimated price change of fertilizer products in 2015 and (ii) the Group’s estimated purchase quantities of fertilizer products after taking account into the future growth potential of the fertilizer market in the PRC, we consider it reasonable for the Directors to set the annual caps of (i) US$1,265 million for transactions between Sinochem Macao and Sinochem Group and (ii) RMB7,796 million for transactions between Sinochem Fertilizer and Sinochem Group for the year ending 31 December 2015.

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LETTER FROM SOMERLEY

(ii) Sulphur Import Framework Agreement

(a) Review of historical figures

				For the eleven
	For the financial	year	ended 31	months ended
	December			30 November
	2012		2013	2014
	Audited		Audited	Unaudited
	(’000)		(’000)	(’000)
Transactions between
Dohigh Trading and
Sinochem Group
Historical amounts	US$13,293	US$17,727		US$121,547*
Relevant annual caps	N/A	US$25,000		US$110,000*
Utilisation rates	N/A		71.0%	110.5%
Transactions between
Sinochem Fertilizer and
Sinochem Group
Historical amounts	RMB78,635	RMB99,291		RMB693,582*
Relevant annual caps	N/A	RMB153,488		RMB675,000*
Utilisation rates	N/A		64.7%	102.8%

Historical transactions covered the period from 1 January 2014 to 30 November 2014, whereas the relevant annual caps govern the relevant transactions for the full year of 2014. Such historical amounts for the eleven months have exceeded the relevant annual caps in 2014, details of which have been stated in the announcement of the Company published on 12 December 2014.

We note that the domestic sales of sulphur and other fertilizer raw materials by Sinochem Group to Sinochem Fertilizer were approximately RMB78.6 million in 2012 and approximately RMB99.3 million in 2013. Overseas purchases of the related products by Sinochem Group from Dohigh Trading were also at similar levels, with amounts of approximately US$13.3 million in 2012 and approximately US$17.7 million in 2013. We note that the relevant annual caps for 2013 had been fairly utilised, with utilisation rates of approximately 71.0% and 64.7% respectively.

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LETTER FROM SOMERLEY

Due to the increase in external sales of sulphur by the Group and the increase in average international market price of sulphur in 2014, there was a significant increase in transaction value under the Former Sulphur Import Framework Agreement in 2014, which resulted in the utilisation rate of over 100% and consequently the exceeding of the relevant 2014 annual cap. As disclosed in the announcement of the Company on 12 December 2014, the price level of sulphur experienced intense volatility for 2014, which fluctuated between US$130 per tonne and US$220 per tonne.

(b) Assessment of the annual caps

Transactions between Dohigh Trading and Sinochem Group

The annual cap in respect of the transaction between Dohigh Trading and Sinochem Group under the Sulphur Import Framework Agreement is US$120 million for the year ending 31 December 2015.

In assessing the reasonableness of the annual cap, we have discussed with the management of the Group the bases and assumptions underlying the projections for the purchase of the sulphur and other fertilizer raw materials by Sinochem Group from Dohigh Trading. The annual cap is estimated based on (i) the projected quantities of purchase by Sinochem Group for Sinochem Fertilizer through the arrangement with Dohigh Trading; and (ii) the projected average price per tonne of products (which is determined in accordance with the prevailing international market price) for 2015.

In estimating the purchase quantities of sulphur and other fertilizer raw material by Sinochem Fertilizer in 2015, the management of the Group has made reference to the actual sales quantities by the Group to its external customers in 2014. Based on our review, we noted that the estimated purchase quantities in 2015 are approximately the same as such actual sales quantities in 2014, and are significantly higher than the historical sales quantities in 2012 and 2013. According to the management of the Group, it is expected that the Group will continue to maintain such purchase quantities in 2015 compared to 2014.

In estimating the price level of sulphur in 2015, the management of the Group has made reference to the latest and more relevant average price level in the fourth quarter of 2014, which is lower than the average price level in 2014. Based on our review, the average price of sulphur in the fourth quarter of 2014 is similar to the Group’s price forecast for 2015.

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LETTER FROM SOMERLEY

Transactions between Sinochem Fertilizer and Sinochem Group

The annual cap in respect of the transaction between Sinochem Fertilizer and Sinochem Group under the Sulphur Import Framework Agreement is RMB900 million for the year ending 31 December 2015.

In assessing the reasonableness of the annual cap, we have discussed with the management of the Group the bases and assumptions underlying the projections for the sales of sulphur and other fertilizer raw materials by Sinochem Group to Sinochem Fertilizer. The annual cap is estimated based on (i) the projected quantities of sale of sulphur and other fertilizer raw materials by Sinochem Fertilizer from Sinochem Group; and (ii) the projected average price per tonne of products (which is determined in accordance with the domestic wholesale price at port) for 2015.

The quantity of sulphur and other fertilizer raw materials expected to be sold domestically by Sinochem Group to Sinochem Fertilizer under the Sulphur Import Framework Agreement is principally based on the quantity of products expected to be sourced from overseas by Dohigh Trading to Sinochem Group as discussed in the sub-section above. The average price of products to be sold by Sinochem Group to Sinochem Fertilizer for the purpose of the annual cap is based on the domestic wholesale price at port.

Having considered (i) the historical sales quantities of sulphur and the Group’s expectation that such sales quantities in 2015 would be similar to that in 2014, and (ii) the lower estimation of average price level of sulphur in 2015 compared to 2014, based on the latest price trend of sulphur, we consider it reasonable for the Directors to set the annual caps of (i) US$120 million for transactions between Dohigh Trading and Sinochem Group and (ii) RMB900 million for transactions between Sinochem Fertilizer and Sinochem Group for the year ending 31 December 2015.

(iii) General comments

Generally speaking, in our opinion, it is in the interests of the Group and the Shareholders to determine the Annual Caps in a way that can accommodate the potential growth of the Group’s business. Provided that the Continuing Connected Transactions are subject to annual review by the independent non-executive Directors and auditors of the Company (as discussed below) as required under the Listing Rules, the Group would have desirable flexibility in conducting its businesses if the Annual Caps are tailored to future business growth. In assessing the reasonableness of the Annual Caps, we have discussed with the management of the Group the factors taken into account as stated earlier in this section. We

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LETTER FROM SOMERLEY

consider it reasonable for the Company to use the above factors in determining the Annual Caps.

5. Reporting requirements and conditions of the Continuing Connected Transactions

Pursuant to Rules 14A.55 to 14A.59 of the Listing Rules, the Continuing Connected Transactions are subject to the following annual review requirements:

(a) the independent non-executive Directors must review the Continuing Connected Transactions and confirm in the annual report and accounts that the Continuing Connected Transactions have been entered into:
(i) in the ordinary and usual course of business of the Group;
(ii) on normal commercial terms or better; and
(iii) according to the agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole;
(b) the Company must engage its auditors to report on the Continuing Connected Transactions every year. The Company’s auditors must provide a letter to the Board (with a copy to be provided to the Stock Exchange at least ten business days before the bulk printing of the Company’s annual report) confirming whether anything has come to their attention that causes them to believe that the Continuing Connected Transactions:
(i) have not been approved by the Board;
(ii) were not, in all material respects, in accordance with the pricing policies of the Group if the Continuing Connected Transactions involve the provision of goods or services by the Group;
(iii) were not entered into, in all material respects, in accordance with the relevant agreements governing the Continuing Connected Transactions; and
(iv) have exceeded the Annual Caps;
(c) the Company must allow, and ensure that the counterparties to the Continuing Connected Transactions allow, the Company’s auditors sufficient access to their records for the purpose of the reporting on the Continuing Connected Transactions as set out in paragraph (b);
(d) the Company must promptly notify the Stock Exchange and publish an announcement if the independent non-executive Directors and/or auditors of the Company cannot confirm the matters as required.

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LETTER FROM SOMERLEY

In light of the reporting requirements attached to the Continuing Connected Transactions, in particular, (i) the restriction of the value of the Continuing Connected Transactions by way of the Annual Caps; and (ii) the ongoing review by the independent non-executive Directors and auditors of the Company of the terms and the Annual Caps not being exceeded, we are of the view that appropriate measures will be in place to monitor the conduct of the transactions and assist to safeguard the interests of the Independent Shareholders.

RECOMMENDATION

Having taken into account the above principal factors and reasons, we consider that the Continuing Connected Transactions are on normal commercial terms, in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole. We also consider that the Continuing Connected Transactions (including the Annual Caps) are fair and reasonable. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, that the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the SGM to approve the Continuing Connected Transactions (including the Annual Caps).

Yours faithfully, for and on behalf of SOMERLEY CAPITAL LIMITED John Wong Director

Mr. John Wong is a licensed person registered with the SFC and as a responsible officer of Somerley to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO and has over six years of experience in the corporate finance industry.

– 34 –

GENERAL INFORMATION

APPENDIX 1

1. RESPONSIBILITY STATEMENT

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

2. INTEREST IN SECURITIES

Save as disclosed below, 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 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.

As at the Latest Practicable Date, a Director of the Company had long position in the Shares of the Company as follows:

				Percentage
				of the issued
				share capital
			Number of	of the
Name	of Director	Capacity	Shares held	Company
Harry	Yang	Beneficial owner	600	0.000009%

3. DIRECTORS’ SERVICE CONTRACTS

On 15 May 2014, Mr. Wang Hong Jun, executive Director and Chief Executive Officer of the Company, entered into a service contract with the Company for a term of three year. On 15 May 2014, Mr. Harry Yang, executive Director and Deputy General Manager of the Company, renewed his service contract with the Company for a term of three years. Pursuant to the terms stipulated in the service contracts of Mr. Wang and Mr. Yang, the respective service contract with the Company may be (i) terminated prior to its expiry if either 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

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GENERAL INFORMATION

APPENDIX 1

faults of a director as described in the respective service contract. Should the Company terminate the respective service contract with Mr. Wang Hong Jun or Mr. Harry Yang prior to its expiry, Mr. Wang Hong Jun or Mr. Harry Yang will be entitled to receive a cash compensation equivalent to 11 months of his annual director ‘s salary, save for the circumstances described in item (ii) above.

Saved 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 which is not determinable by the Group within one year without payment of compensation (other than statutory compensation).

4. COMPETING INTERESTS

As at the Latest Practicable Date, Mr. Harry Yang, 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 and was engaged in the production of fertilizer prior to its cessation of business in November 2005. Although US Agri-Chemicals Corporation still maintained its company registration with the relevant authorities in the United States, as at the Latest Practicable Date, it had ceased its operation and accordingly, there is no competing business with the Group. As at the same date, other than Mr. Harry Yang, none of the directors of US Agri-Chemicals Corporation held any positions or assumed any role in the Group.

In addition, as at the Latest Practicable Date, Dr. Stephen Francis Dowdle, non-executive Director of the Company, is a director of Canpotex Limited, a Canadian corporation equally owned by Potash Corporation of Saskatchewan Inc. and two other potash producers. Canpotex Limited is principally engaged in offshore marketing of potash products for its three owners and is currently one of the major suppliers of fertilizer products to the Group. Since the Group and Canpotex Limited currently focus on different sales regions, the Company believes that there is no competition between the Group and Canpotex Limited. As at the same date, other than Dr. Stephen Francis Dowdle, none of the directors of Canpotex Limited 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 close associates were 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

– 36 –

GENERAL INFORMATION

APPENDIX 1

(b) none of the Directors had any direct or indirect interest in any assets which had been since 31 December 2013 (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 announcements dated 5 August and 21 August 2014, as at the Latest Practicable Date, the Directors were not aware of any material adverse changes in the financial or trading position of the Company since 31 December 2013, being the date to which the latest published audited consolidated 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 licenced corporation to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) 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 2013 (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.

– 37 –

GENERAL INFORMATION

APPENDIX 1

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 (i) the Fertilizer Sales Co-operation Framework Agreement, (ii) the Sulphur Import Framework Agreement, and (iii) 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.

– 38 –

NOTICE OF SPECIAL GENERAL MEETING

==> picture [77 x 76] intentionally omitted <==

**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

(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 Drawing Room, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 12 February 2015 at 10:15 a.m. (or immediately after the conclusion or adjournment of the special general meeting of the Company scheduled to be convened on the same day at 10:00 a.m. at the same venue, whichever is the later), 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:

(a) the Fertilizer Sales Co-operation Framework Agreement (as defined and described in the circular to the shareholders of the Company dated 27 January 2015 (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;
(b) the proposed annual caps of the transactions contemplated under the Fertilizer Sales Co-operation Framework Agreement as described in the Circular be and are hereby approved, ratified and confirmed; and
(c) the directors of the Company or any other person authorized by 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

For identification purposes only

– 39 –

NOTICE OF SPECIAL GENERAL MEETING

necessary or desirable for the purpose of or in connection with the implementation of the Fertilizer Sales Co-operation Framework Agreement 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 Fertilizer Sales Co-operation Framework Agreement which in their opinion is not of a material nature and to effect or implement any other matters referred to in this resolution.”

2. “THAT:

(a) the Sulphur Import Framework Agreement (as defined and described in the Circular, 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;
(b) the proposed annual caps of the transactions contemplated under the Sulphur Import Framework Agreement as described in the Circular be and are hereby approved, ratified and confirmed; and
(c) the directors of the Company or any other person authorized by 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 Sulphur Import Framework Agreement 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 Sulphur Import Framework Agreement 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 Wang Hong Jun

Executive Director and Chief Executive Officer

Hong Kong Special Administrative Region of the People’s Republic of China
27 January 2015

– 40 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

The register of members of the Company will be closed from 11 February 2015 to 12 February 2015, 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, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by not later than 4:30 p.m. on 10 February 2015.
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.
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 Level 22, Hopewell Centre, 183 Queen’s Road East, 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.
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.
Voting of the ordinary resolution set out in this notice will be by way of poll.

As at the date of this notice, the executive directors of the Company are Mr. Wang Hong Jun (Chief Executive Officer) and Mr. Harry Yang; the non-executive directors of the Company are Mr. Liu De Shu (Chairman), Mr. Yang Lin, Dr. Stephen Francis Dowdle and Ms. Xiang Dandan; and the independent non-executive directors of the Company are Mr. Ko Ming Tung, Edward and Mr. Tse Hau Yin, Aloysius.

– 41 –

AI assistant

CWT International Limited — Proxy Solicitation & Information Statement 2015

49269_rns_2015-01-26_fdeff4ae-ea56-4530-8892-2ccd11602188.pdf

SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

SOMERLEY CAPITAL LIMITED

CONTENTS

DEFINITIONS

DEFINITIONS

SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

INTRODUCTION

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT

Principal Terms of the Fertilizer Sales Co-operation Framework Agreement

Date

Parties

Nature of transactions

Pricing

Payment

Termination and expiration

Annual caps

Annual cap for continuing connected transactions between Sinochem Macao and Sinochem Group

Annual cap for continuing connected transactions between Sinochem Fertilizer and Sinochem Group

CONTINUING CONNECTED TRANSACTIONS UNDER SULPHUR IMPORT FRAMEWORK AGREEMENT

Principal Terms of the Sulphur Import Framework Agreement

Date

Parties

Nature of transactions

Pricing

Payment

Termination and expiration

Annual Caps

Annual cap for continuing connected transactions between Dohigh Trading and Sinochem Group

Annual cap for continuing connected transactions between Sinochem Fertilizer and Sinochem Group

Measures taken by the Company to ensure compliance with the relevant Listing Rules requirements

REASONS AND BENEFITS FOR THE CONTINUING CONNECTED TRANSACTIONS

IMPLICATIONS OF THE LISTING RULES

GENERAL INFORMATION

SGM

RECOMMENDATION

FURTHER INFORMATION

SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

SOMERLEY CAPITAL LIMITED

CONTINUING CONNECTED TRANSACTIONS UNDER FERTILIZER SALES CO-OPERATION FRAMEWORK AGREEMENT AND SULPHUR IMPORT FRAMEWORK AGREEMENT

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Information on the Group and Sinochem Group

The Group

Sinochem Group

2. Background to and reasons for the Continuing Connected Transactions

(i) Fertilizer Sales Co-operation Framework Agreement

LETTER FROM SOMERLEY

(ii) Sulphur Import Framework Agreement

3. Principal terms of the Continuing Connected Transactions

(i) Fertilizer Sales Co-operation Framework Agreement

General

Pricing

Payment

(ii) Sulphur Import Framework Agreement

General

Pricing

Payment

(iii) Comparison on terms of with independent third parties

4. Annual caps of the Continuing Connected Transactions

(i) Fertilizer Sales Co-operation Framework Agreement

LETTER FROM SOMERLEY

(b) Assessment of the Annual Caps

LETTER FROM SOMERLEY

(ii) Sulphur Import Framework Agreement

LETTER FROM SOMERLEY

(b) Assessment of the annual caps

(iii) General comments

5. Reporting requirements and conditions of the Continuing Connected Transactions

LETTER FROM SOMERLEY

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. INTEREST IN SECURITIES

3. DIRECTORS’ SERVICE CONTRACTS

CWT International Limited Proxy Solicitation & Information Statement 2015

**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**

**SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司[*]**