Ko Yo Chemical (Group) Limited — Proxy Solicitation & Information Statement 2011

Mar 28, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your Shares in Ko Yo Ecological Agrotech (Group) Limited , you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) 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.

Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技（集團）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0827)

RE-ELECTION OF DIRECTORS, PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, PROPOSED CHANGE OF COMPANY NAME, PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening an annual general meeting of Ko Yo Ecological Agrotech (Group) Limited (the “Company”) to be held at Suite No. 02, 31st Floor, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong on 5 May 2011, at 3:00 p.m., notice of which is set out on pages 13 to 16 of this circular. A form of proxy for use at the annual general meeting is also enclosed.

If you are unable to attend the annual general meeting, please complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the share registrar of the Company in Hong Kong, Union Registrars Limited at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, together with any power of attorney or other authority, under which it is signed, or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or any adjournment thereof. The completion and return of the form of the proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjourned meetings should you so desire.

25 March 2011

DEFINITIONS

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

• “Annual General Meeting”

the annual general meeting of the Company to be held at Suite No. 02, 31st Floor, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong on 5 May 2011, at 3:00 p.m., notice of which is set out on pages 13 to 16 of this circular

• “Board” the Board of Directors

• “Change of Company Name”

• The change of Company’s name from “Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技（集團）有限公 司 ” to “Ko Yo Chemical (Group) Limited 玖源化工（集團）有 限公司”

• “Company”

Ko Yo Ecological Agrotech (Group) Limited, incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the main board of the Stock Exchange

• “Director(s)”

• the director(s) of the Company

• “Existing Issue Mandate”

the general mandate granted to the Directors on 4 June 2010 to exercise the powers of the Company to allot, issue and otherwise deal with Shares during the relevant period of up to 20% of the aggregate nominal value of the issued share capital of the Company as at date of relevant resolution

• “Existing Repurchase Mandate”

the general mandate granted to the Directors on 4 June 2010 to exercise the powers of the Company to repurchase Shares during the relevant period of up to 10% of the aggregate nominal value of the issued share capital of the Company as at date of relevant resolution

• “Latest Practicable Date” 24 March 2011, being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to dispatch of its circular

• “Listing Rules”

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

• “Ordinary Resolution(s)”

means the proposed ordinary resolution(s) in respect of the special business as referred to in the notice of Annual General Meeting

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DEFINITIONS

“Proposed Issue Mandate”	a general mandate proposed to be granted to the Directors to
	exercise the powers of the Company to allot, issue and
	otherwise deal with Shares during the relevant period of up to
	a maximum of 20% of issued share capital of the Company as
	at the date of passing the Resolution No. 5 as set out in the
	notice of the Annual General Meeting
“Proposed Repurchase Mandate”	a general mandate proposed to be granted to the Directors to
	exercise the powers of the Company to repurchase Shares
	during the relevant period up to a maximum of 10% of issued
	share capital of the Company as at the date of passing the
	Resolution No. 6 as set out in the notice of the Annual
	General Meeting
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Shareholder(s)”	shareholder(s) of the Company
“Share(s)”	ordinary share(s) of par value HK$ 0.02 each in the capital of
	the Company
“Special Resolution”	means the proposed special resolution to approve the Change
	of Company Name as referred to in the notice of Annual
	General Meeting
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	Hong Kong Codes on Takeovers and Mergers issued by the
	Securities and Futures Commission of Hong Kong

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LETTER FROM THE BOARD

Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技（集團）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0827)

Executive Directors: Registered Office: Mr. Li Weiruo (Chairman) Cricket Square Mr. Yuan Bai Hutchins Drive Ms. Chi Chuan P.O. Box 2681 GT Ms. Man Au Vivian Grand Cayman KY1-1111, Mr. Li Shengdi Cayman Islands

Independent Non-executive Directors: Principal place of business in Hong Kong : Mr. Hu Xiaoping Suite No. 02, 31st Floor Mr. Woo Che-wor, Alex Sino Plaza 255-257 Gloucester Road Mr. Qian Laizhong Causeway Bay, Hong Kong

25 March 2011

To the Shareholders

Dear Sir or Madam,

RE-ELECTION OF DIRECTORS, PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, PROPOSED CHANGE OF COMPANY NAME, PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information in respect of the resolutions to be proposed at the Annual General Meeting for (a) the re-election of retiring Directors; (b) the renewal of the Existing Issue Mandate; (c) the renewal of the Existing Repurchase Mandate; (d) the extension of the Proposed Issue Mandate by adding to it the aggregate number of the Shares to be repurchased under the Proposed Repurchase Mandate; (e) proposed increase in authorised capital of the Company; and (f) the proposed Change of Company Name.

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LETTER FROM THE BOARD

RE-ELECTION OF RETRING DIRECTORS

In accordance with Article 87 of the articles of association of the Company, Ms. Chi Chuan and Ms. Man Au Vivian will retire at the Annual General Meeting.

Pursuant to Rule 13.74 of the Listing Rules, a listed issuer shall disclose the details required under Rule 13.51(2) of the Listing Rules of any director(s) proposed to be re-elected or proposed new director in the notice or accompanying circular to its shareholders of the relevant general meeting, if such re-election or appointment is subject to shareholders’ approval at the relevant general meeting. Brief biographical details of the retiring directors proposed to be re-elected at the Annual General Meeting are set out in Appendix II to this circular.

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the annual general meeting of the Company held on 4 June 2010, ordinary resolutions were passed granting the Existing Issue Mandate and Existing Repurchase Mandate to the Directors. In accordance with the provisions of the Listing Rules and the terms of the Existing Issue Mandate and Existing Repurchase Mandate, the Existing Issue Mandate and Existing Repurchase Mandate will expire at the conclusion of the Annual General Meeting.

Resolutions set out in Resolution No. 5 in the notice of the Annual General Meeting will be proposed at the Annual General Meeting to renew the Existing Issue Mandate. The Proposed Issue Mandate will confer on the Directors the power to allot, issue and otherwise deal with Shares of up to 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing the relevant resolution granting such mandate. The number of new Shares can be allotted under the Proposed Issue Mandate is 1,409,080,000 based on the issued Shares at the Latest Practicable Date. Resolutions set out in Resolution No. 6 in the notice of the Annual General Meeting will also be proposed at the Annual General Meeting to renew the Existing Repurchase Mandate. Moreover, resolutions as set out in Resolution No. 7 will be proposed to extend the Proposed Issue Mandate only after exercised the Proposed Repurchase Mandate, provide that such extended amount representing the aggregate nominal amount of the share capital of the Company purchased under the Proposed Repurchase Mandate shall not exceed 10% of the aggregate nominal value of the share capital of the Company at the date of passing the Resolution No. 6. Such mandates will continue in force until the conclusion of the next annual general meeting of the Company, or the expiration of the period within the next annual general meeting of the Company is required by law or the articles of association to be held, or until the general mandates are revoked or varied by an ordinary resolution of Shareholders in general meeting, whichever is the earliest. With reference to the proposed new general mandates, the Directors wish to state that they have no immediate plans to issue or repurchase any Shares pursuant to the relevant mandates.

An explanatory statement required by the Listing Rules to be sent to the Shareholders in connection with the Proposed Repurchase Mandate containing all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolutions at the Annual General Meeting is set out in the Appendix I to this circular.

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LETTER FROM THE BOARD

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

The current authorized share capital of the Company is HK$200,000,000 divided into 10,000,000,000 ordinary shares of HK$0.02 each. As at the Latest Practicable Date, the issued share capital of the Company was 7,045,400,000 Shares. In order to accommodate the future expansion and growth of the Company, the Directors proposed to increase the authorized share capital of the Company to HK$400,000,000 divided into 20,000,000,000 ordinary shares of HK$0.02 each by creation of an additional 10,000,000,000 ordinary shares of HK$0.02 each. The additional ordinary shares shall rank pari passu in all respects with existing ordinary shares. The increase in the authorized share capital of the Company is conditional upon the approval of the Shareholders by way of an ordinary resolution.

The Directors confirm that the Company has no present intention of issuing any part of the increased authorized share capital.

PROPOSED CHANGE OF COMPANY NAME

The Board proposed to change the Company’s name from “ Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技(集團)有限公司” to “Ko Yo Chemical (Group) Limited 玖源化工(集團)有 限公司” at the Annual General Meeting.

Reasons for the Change of Company Name

The proposed Change of Company Name signifies to the completion of the new urea plant in Dazhou city, Sichuan Province and the Company enters a new stage. The Group’s business will be diversify to chemical industry.

Conditions of the Change of Company Name

The proposed Change of Company Name is subject to (i) the passing of a special resolution by the Shareholders at the Annual General Meeting to approve the proposed Change of Company Name; and (ii) the approval by the Registrar of Companies in the Cayman Islands for the use of the proposed new name by the Company.

Once the special resolution on the proposed Change of Company Name has been passed, the Company will file a certified copy of the said resolution with the Registrar of Companies in the Cayman Islands to effect the change. The proposed Change of Company Name will take effect from the date on which the Registrar of the Companies in the Cayman Islands enters the new name of the Company into the register of companies in place of the existing name. Upon the Change of Company Name taking effect and the receipt of Certificate of Incorporation on Change of Company Name from the Registry of Companies in the Cayman Islands, the Company will carry out the necessary filing procedures in Hong Kong as required under the applicable laws, rules and regulations of Hong Kong.

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LETTER FROM THE BOARD

Effects of the Change of Company Name

The proposed Change of Company Name, once approved and after becoming effective, will not, in any way affect any of the rights of the Shareholders. All existing share certificates and warrant certificates of the Company in issue bearing the existing name of the Company shall continue to be evidence of the title and valid for trading, settlement, registration and delivery purposes. As such, no arrangement will be made for the exchange of aforesaid certificates of the Company as a result of the proposed Change of Company Name.

After the Change of Company Name becomes effective, all new certificates for Shares or other securities issued by the Company will be issued in the new name of the Company. The English and Chinese stock short names of the Company will not be changed.

The Company will make a further announcement on the effective date of the Change of Company Name.

ANNUAL GENERAL MEETING

A notice of the Annual General Meeting is set out on pages 13 to 16 of this circular. At the Annual General Meeting, in addition to the ordinary business of the meeting, resolutions will be proposed as special businesses to approve the general mandate for the issue of Shares, the Proposed Repurchase Mandate, the extension of the general mandate for the issue of Shares, the re-election of retiring Directors, the proposed increase in authorised share capital of the Company and the proposed Change of Company Name.

A form of proxy for use at the Annual General Meeting is enclosed with the Company’s annual report. If you are unable to attend the meeting in person, please complete the form of proxy in accordance with the instructions printed thereon and return the same to the share registrar of the Company in Hong Kong, Union Registrars Limited at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, together with any power of attorney or another authority, under which it is signed, or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or any adjournment thereof. The completion and return of the form of the proxy will not preclude you from attending and voting in person at the Annual General Meeting or any adjourned meetings should you so desire.

In accordance with the Rule 13.39(4) of Listing Rules, all votes of the Shareholders to be taken at the Annual General Meeting must be taken by poll, and an announcement of the results of which will be published on the date of the Annual General Meeting or the business day following the Annual General Meeting as prescribed under Rule 13.39(5) of the Listing Rules.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors are of the opinion that the proposals referred to above are in the best interests of the Company and therefore recommend you to vote in favour of the relevant resolutions in relation to the Proposed Issue Mandate, Proposed Repurchase Mandate, the extension of the Proposed Issue Mandate, re-election of directors, the proposed increase in authorized share capital of the Company, and the proposed Change of Company Name at the Annual General Meeting.

Yours faithfully, For and on behalf of the Board of

Ko Yo Ecological Agrotech (Group) Limited Li Weiruo Chairman

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EXPLANATORY STATEMENT

APPENDIX I

The explanatory statement contains all the information required to be given to the Shareholders pursuant to the requirement of Listing Rules. The purpose of this explanatory statement is to provide the Shareholders with all information reasonably necessary for them to make an informed decision as to whether to pass the resolution approving the Proposed Repurchase Mandate at the Annual General Meeting.

1. Relevant Legal and Regulatory Requirements in Hong Kong

(a) Shareholders’ approval

All repurchase of Shares, which must be fully paid up, on the Stock Exchange, by the Company on the Stock Exchange must be approved in advance by an ordinary resolution of Shareholders of the Company, either by way of a general mandate or by specific approval in relation to specific transactions.

(b) Source of funds

All repurchases by the Company must be funded out of funds legally available for the purpose in accordance with the applicable laws of the Cayman Islands and the articles of association of the Company. The Company may not repurchase its own Shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange. Under Cayman Islands law, any repurchases by the Company may be made out of profits of the Company or out of the proceeds of a fresh issue of Shares made for the purposes of the repurchase or, under certain circumstances, out of capital. Any premium payable on a repurchase must be made out of the profits of the Company or out of the Company’s share premium account before or at the time the shares are purchased or, under certain circumstances, out of capital. If payment is made out of capital, the Company must be able to pay its debts as they fall due in the ordinary course of business.

There might be a material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the latest published audited consolidated accounts contained in the annual report for the year ended 31 December 2010 in the event that the Proposed Repurchase Mandate is exercised in full. However, the Directors do not propose to exercise the Proposed Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

(c) Connected parties

The Company shall not knowingly repurchase Shares on the Stock Exchange from a “connected person”, that is, a director, chief executive, substantial shareholder or management shareholder of the Company or any of their associates (as defined in the Listing Rules) and a connected person shall not knowingly sell his Shares to the Company on the Stock Exchange. As at the Latest Practicable Date, so far as is known to the Company, no connected persons have notified the Company that they have a present intention to sell the Shares.

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EXPLANATORY STATEMENT

APPENDIX I

(d) Takeovers code

If a Shareholder’s proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase securities pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purpose of Rule 32 of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, Mr. Li Weiruo who held approximately 41.51% of the issued share capital of the Company, was substantial shareholders (within the meaning of the Listing Rules) of the Company. In the event that the Directors exercise in full the power to repurchase Shares in accordance with the terms of the ordinary resolution to be proposed at the Annual General Meeting, the shareholding of Mr. Li Weiruo would be increased to approximately 46.12% and such increase will rise to an obligation to make a mandatory offer under the Takeovers Code.

The Listing Rules prohibit a company from making repurchase on the Stock Exchange if the result of the repurchase would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the issued share capital would be in public hands. The Directors do not propose to repurchase Shares which would result in less than the prescribed minimum percentage of Shares in public hands.

2. Reasons for repurchases

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

3. Share capital

As at the Latest Practicable Date, the issued share capital of the Company comprised 7,045,400,000 Shares of par value HK$ 0.02 each. Subject to the passing of the resolution granting the Proposed Repurchase Mandate and on the basis that no further Shares are issued or repurchased before the Annual General Meeting, the Company will be allowed to repurchase a maximum of 704,540,000 Shares during the period ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by applicable laws of the Cayman Islands or the date upon which such authority is revoked or varied by a resolution of the Shareholders in general meeting.

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EXPLANATORY STATEMENT

APPENDIX I

4. Securities Prices

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous twelve months before the Latest Practicable Date:

Month	Highest trade price	Lowest trade price
	HK$	HK$
2010
March	0.260	0.212
April	0.242	0.189
May	0.197	0.129
June	0.166	0.129
July	0.147	0.130
August	0.175	0.130
September	0.168	0.141
October	0.177	0.154
November	0.255	0.167
December	0.247	0.181
2011
January	0.241	0.189
February	0.217	0.193
March (up to the Latest Practicable Date)	0.225	0.183

5. General

To the best of their knowledge, having made all reasonable enquiries, none of the Directors nor any of their associates currently intends to sell any Shares to the Company or its subsidiaries in the event that the Proposed Repurchase Mandate is approved.

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules and the laws of the Cayman Islands.

There have been no repurchases of any securities of the Company made in the previous six months (whether on the Stock Exchange or otherwise). The Directors have no present intention to exercise in full the power to repurchase Shares proposed to be granted pursuant to the Proposed Repurchase Mandate.

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APPENDIX II DETAILS OF RETIRING DIRECTORS PROPOSEDTO BE RE-ELECTED

The details of the retiring directors proposed to be re-elected at the Annual General Meeting are set out as follows:

Chi Chuan

Executive Director

Ms. Chi Chuan aged 55, is the Compliance Officer and Executive Vice President of the Group. She graduated from Sichuan Normal College with a bachelor degree in science in 1982. Ms. Chi has over 10 years’ experience in finance and accounting. Prior to joining the Group in July 1999, Ms. Chi was the finance manager of Leshan Economic and Trade General Company, a trading company in the PRC. Ms. Chi is primarily responsible for the financial management and general operations of the Group since she joined the Group in July 1999.

Ms. Chi does not have any relationship with any directors, senior management, management shareholders, substantial shareholders or controlling shareholders of the Company. Other than the personal interests of 62,640,000 shares and 23,000,000 share options of the Company, and long and short position of 120,000 non-voting deferred shares of Ko Yo Development Company Limited (a wholly-owned subsidiary of the Company), she does not have any interest in shares of the Company within the meaning of Part XV of the SFO.

Ms. Chi has entered in to a service agreement with the Company for a period of three years commencing on 10 June 2006 and shall continue thereafter until terminated by either party giving to the other not less than three months’ prior written notice, but is subject to retirement by rotation and re-election at annual general meetings of the Company in accordance with the Articles of the Company. A director’s fee in the amount of HK$300,000 together with a salary and bonus in the amount of RMB642,000 were paid for her services for the year ended 31 December 2010.

Man Au Vivian

Executive Director

Ms. Man Au Vivian, aged 47, is responsible for business development and investment activities of the Group. Ms. Man graduated from the University of International Business and Economics with a bachelor degree in economics in 1986. Ms. Man has over 15 years’ experience in international trade. She formerly worked for China National Light Industrial Products Import and Export Corporation of MOFTEC. She joined the Group in January 1997.

Ms. Man does not have any relationship with any directors, senior management, management shareholders, substantial shareholders or controlling shareholders of the Company. Other than the personal interests of 31,320,000 shares and 23,000,000 share options of the Company, and long and short position of 60,000 non-voting deferred shares of Ko Yo Development Company Limited (a wholly-owned subsidiary of the Company), she does not have any interest in shares of the Company within the meaning of Part XV of the SFO.

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APPENDIX II DETAILS OF RETIRING DIRECTORS PROPOSEDTO BE RE-ELECTED

Ms. Man has entered in to a service agreement with the Company for a period of three years commencing on 10 June 2006 and shall continue thereafter until terminated by either party giving to the other not less than three months’ prior written notice, but is subject to retirement by rotation and re-election at annual general meetings of the Company in accordance with the Articles of the Company. A director’s fee in the amount of HK$300,000 together with a salary and bonus in the amount of HK$456,000 were paid for her services for the year ended 31 December 2010.

Save as disclosed above, there is no information to be disclosed pursuant to any of the requirements of the provisions under Rule 13.51(2)h to 13.51(2)v of the Listing Rules and there are other matters that need to be brought to the attention of the Shareholders in respect of the re-election of the Directors stated in this Appendix.

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NOTICE OF ANNUAL GENERAL MEETING

Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技（集團）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 0827)

Registered Office: Principal place of business in Hong Kong : Cricket Square Suite No. 02, 31st Floor Hutchins Drive Sino Plaza P.O. Box 2681 GT 255-257 Gloucester Road Grand Cayman KY1-1111 Causeway Bay Cayman Islands Hong Kong

NOTICE IS HEREBY GIVEN that the annual general meeting of the members of Ko Yo Ecological Agrotech (Group) Limited (the “Company”) will be held at Suite No. 02, 31st Floor, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong on 5th May 2011 at 3:00 p.m. for the following purposes:

1. To receive and consider the audited consolidated financial statements of the Company and its subsidiaries, the report of the directors and the auditors, and the corporate governance report for the year ended 31st December 2010;

2. To consider the re-election of the retiring directors of the Company;

3. To consider and authorize the board of directors (the “Board”) of the Company to fix the directors’ remunerations;

4. To consider the re-appointment of PricewaterhouseCoopers as auditors of the Company and to authorize the Board to fix their remuneration; and

As special business, to consider and if thought fit, pass the Resolutions No. 5, 6 and 7 as ordinary resolutions:

1. “ THAT :

2. (a) subject to sub-paragraph (c) below, the exercise by the directors of the Company (“Directors”) during the Relevant Period (as defined below) of all the powers of the

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NOTICE OF ANNUAL GENERAL MEETING

Company to allot, issue and deal with the ordinary shares of par value HK$0.02 each (the “Shares”) in the capital of the Company and to make an offer or agreement or grant an option which would or might require such Shares to be allotted and issued be generally and unconditionally approved;

• (b) the Directors be authorized to make an offer or agreement or grant an option during the Relevant Period which would or might require Shares in the capital of the Company to be allotted and issued either during or after the end of the Relevant Period pursuant to sub-paragraph (a) above;

• (c) the aggregate nominal value of the Shares in the capital of the Company allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approvals in sub-paragraphs (a) and (b) above, otherwise than pursuant to a rights issue (as defined below) or pursuant to the exercise of options which may be granted under the share option schemes adopted by the Company or an issue of Shares of the Company in lieu of the whole or part of a dividend on Shares of the Company in accordance with the articles of association of the Company, shall not exceed the aggregate of:

• (i) 20% of the aggregate nominal value of the share capital of the Company in issue; and

• (ii) conditional on the passing of Resolution No. 7 below, the aggregate nominal amount of the share capital of the Company purchased under the authority referred to in Resolution No. 6;

• (d) for the purpose of this resolution:

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

• (i) the conclusion of the next annual general meeting of the Company following the passing of this resolution; or

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the laws of the Cayman Islands or the articles of association of the Company to be held; or

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution; and

“rights issue” means the allotment or issue of Shares in the Company or other securities which would or might require Shares to be allotted and issued pursuant to an offer made to all the shareholders of the Company (excluding for such purpose any shareholder who is resident in a place where such offer is not permitted under the laws of that place) and, where appropriate, the holders of other equity securities of the Company entitled to such offer, pro rata (apart from fractional entitlements) to their existing holdings of Shares or such other equity securities.”

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) the Directors be granted a general mandate to exercise all the powers of the Company to purchase its own securities on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which shares in the capital of the Company may be listed and which is recognized by the Securities and Futures Commission and the Stock Exchange for this purpose, such number of securities as will represent up to 10% of the aggregate nominal value of the share capital of the Company in issue, during the Relevant Period (defined below) in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange (“Listing Rules”) (as amended from time to time) (or of such other stock exchange);

3. (b) for the purpose of this resolution:

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

• (i) the conclusion of the next annual general meeting of the Company following the passing of this resolution; or

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the laws of the Cayman Islands or the articles of association of the Company to be held; or

• (iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution.”

• “ THAT the unconditional general mandate referred to in Resolution No. 5 above be extended by the addition to the aggregate nominal amount of the share capital of the Company which may be allotted or agreed to be allotted by the Directors pursuant to such unconditional general mandate of an amount representing the aggregate nominal amount of the securities of the Company purchased by the Company pursuant to the mandate to purchase securities referred to in Resolution No. 6 above, provided that such extended amount shall not exceed 10% of the aggregate nominal value of the share capital of the Company in issue.

• As special business, to consider, and if thought fit, pass with or without modifications, the following resolution as an ordinary Resolution:

ORDINARY RESOLUTION

“THAT , the authorized share capital of the Company be increased from HK$200,000,000 divided into 10,000,000,000 ordinary shares of HK$0.02 each to HK$400,000,000 divided into 20,000,000,000 ordinary shares of HK$0.02 each by creation of an additional 10,000,000,000 ordinary shares of HK$0.02 each.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and if thought fit, pass with or without modifications, the following resolution as a Special Resolution:

SPECIAL RESOLUTION

“ THAT , the name of the Company be changed from “Ko Yo Ecological Agrotech (Group) Limited 玖源生態農業科技(集團)有限公司” to “Ko Yo Chemical (Group) Limited 玖源化工(集 團)有限公司”.”

On behalf of the board Chung Tin Ming Company Secretary

Hong Kong, 25th March 2011

Notes:

• (1) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and, in the event of, a poll, vote instead of him. A proxy need not be a member of the Company.

• (2) In order to be valid, the form of proxy must be deposited with the Company’s share registrar in Hong Kong, Union Registrars Limited, at 18th Floor, Fook Lee Commerical Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, together with any power of attorney or other authority, under which it is signed, or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or any adjournment thereof.

• (3) Where there are joint holders of any shares in the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such shares as if he were solely entitled thereto, but if more than one of such joint holders are present at the meeting, the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

• (4) Concerning Resolutions No. 5 and No. 6, the Board wishes to state that there is no immediate plan to issue any new shares or to repurchase any shares of the Company. The general mandates are being sought from shareholders in compliance with the Companies Law (Law 3 of 1961, as revised and consolidated) of the Cayman Islands and the Listing Rules.

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