Yadea Group Holdings Ltd. — Proxy Solicitation & Information Statement 2006

Jan 27, 2006

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 your stockbroker or other registered dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Chaoda Modern Agriculture (Holdings) Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 超大現代農業（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 682)

REFRESHMENT OF THE SCHEME MANDATE

A notice convening the extraordinary general meeting of Chaoda Modern Agriculture (Holdings) Limited to be held at Room 2705, 27th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on Tuesday, 14 February 2006 at 10:00 a.m is set out on pages 8 to 9 of this circular.

Whether or not you are able to attend the extraordinary general meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the extraordinary general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending, and voting at, the extraordinary general meeting or any adjournment thereof should you so wish.

26 January 2006

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Refreshment of the Scheme Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

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DEFINITIONS

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

“Adoption Date” 19 June 2002, being the date on which the Share Option Scheme was adopted by the Shareholders in general meeting;

“Articles” the existing articles of association of the Company;

• “Board” the board of Directors;

“Company” Chaoda Modern Agriculture (Holdings) Limited 超大現代農 業（控股）有限公司 , a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange;

• “Controlling Shareholder”

any person who has the power, directly or indirectly, to secure:

• (i) by means of the holding of shares entitling him to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Takeovers Code (approved by the Securities and Futures Commission as amended from time to time) as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the Company, or

• (ii) by means of controlling the composition of a majority of the Board, or

• (iii) by virtue of any powers conferred by the constitutional document of the Company or any other corporation,

that the affairs of the Company are conducted in accordance with the wishes of such person;

• “Directors”

the directors of the Company;

• “EGM”

the extraordinary general meeting of the Company to be held at Room 2705, 27th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on Tuesday, 14 February 2006 at 10:00 a.m, notice of which is set out on pages 8 to 9 of this circular, or any adjournment thereof;

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DEFINITIONS

• “Eligible Person”

• (i) (a) any director (whether executive or non-executive, including any independent non-executive director) or employee (whether full time or part time) of, or

• (b) any individual for the time being seconded to work for,

any member of the Group or any Controlling Shareholder or any company controlled by a Controlling Shareholder; or

• (ii) any holder of any securities issued by any member of the Group or any Controlling Shareholder or any company controlled by a Controlling Shareholder; or

• (iii) (a) any business or joint venture partner, contractor or agent of,

• (b) any person or entity that provides research, development or other technological support or any advisory, consultancy, professional services to,

• (c) any supplier, producer or licensor of any goods or services to,

• (d) any customer, licensee or distributor of any goods or services of, or

• (e) any landlord or tenant of,

any member of the Group or any Controlling Shareholder or any company controlled by a Controlling Shareholder;

and, for the purposes of the Share Option Scheme, shall include any company controlled by one or more persons belonging to any of the above classes of participants;

“Group”

“Hong Kong”

the Company and its subsidiaries;

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

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DEFINITIONS

• “Latest Practicable Date” 26 January 2006, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

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

• “Scheme Mandate” the limit imposed under Rule 4(A) of the rules of the Share Option Scheme on the maximum number of Shares issuable upon the exercise of all options which may be granted under the Share Option Scheme and any other share option scheme(s) of the Company, being 10% of the Shares in issue as at the Adoption Date;

• “Share Option Scheme” the share option scheme of the Company adopted by the Company on 19 June 2002;

• “Shareholder(s)” holder(s) of Shares; “Share(s)” ordinary share(s) of HK$0.10 each in the issued share capital of the Company;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Takeovers Code” the Hong Kong Code on Takeovers and Mergers as amended from time to time; and

“%”

per cent.

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LETTER FROM THE BOARD

CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 超大現代農業（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 682)

Executive Directors: Kwok Ho (Chairman) Ip Chi Ming Lee Yan Wong Hip Ying Fong Jao Chen Jun Hua Chan Chi Po, Andy

Independent Non-executive Directors: Fung Chi Kin Tam Ching Ho Lin Shun Quan Luan Yue Wen

Registered Office: P.O. Box 309, Ugland House South Church Street George Town Grand Cayman Cayman Islands British West Indies

Principal Office in Hong Kong: Room 2705, 27th Floor China Resources Building 26 Harbour Road Wanchai, Hong Kong

26 January 2006

To the Shareholders

Dear Sir or Madam,

REFRESHMENT OF SCHEME MANDATE

INTRODUCTION

The purpose of this circular is to provide you information regarding the proposed refreshment of the Scheme Mandate to enable you to make a decision on whether to vote for or against the resolution in connection with such matter to be proposed at the EGM.

REFRESHMENT OF THE SCHEME MANDATE

Pursuant to the Share Option Scheme adopted by the Company on 19 June 2002, the maximum number of Shares in respect of which options may be granted under the Share Option Scheme and any other share option schemes of the Company shall not exceed 192,000,000 Shares,

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LETTER FROM THE BOARD

representing 10% of the total number of issued Shares as at the Adoption Date, that is, the Scheme Mandate. Apart from the Share Option Scheme, the Company had no other share option scheme as at the Latest Practicable Date. The Company may refresh the Scheme Mandate by ordinary resolution of the Shareholders at general meeting provided that:

• (i) the Scheme Mandate so refreshed shall not exceed 10% of the total number of issued Shares as at the date of the Shareholders’ approval of the refreshed Scheme Mandate; and

• (ii) options previously granted under any schemes (including options exercised, outstanding, cancelled, or lapsed in accordance with the terms of the Share Option Scheme) or any other share option schemes of the Company shall not be counted for the purpose of calculating the total number of Shares subject to the refreshed Scheme Mandate.

Notwithstanding the foregoing, the aggregate number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option schemes of the Company must not exceed 30% of the Shares in issue from time to time (the “Scheme Overall Limit”).

The total number of issued Shares as at the Adoption Date was 1,920,000,000 Shares and the Scheme Mandate was 192,000,000 Shares (representing 10% of the Shares in issue as at the Adoption Date). As at the Latest Practicable Date, options in respect of 192,477,500 Shares were granted under the Share Option Scheme, of which options in respect of 500,000 Shares had lapsed. The total number of Shares issued by the Company pursuant to the exercise of the options granted by the Company pursuant to the Share Option Scheme amounted to 73,762,650 Shares, and, as at the Latest Practical Date, options in respect of 118,214,850 Shares granted by the Company under the Share Option Scheme remained unexercised and outstanding. As at the Latest Practical Date, the Scheme Mandate which remained unused by the Company amounted to 22,500 Shares.

Since the purpose of the Share Option Scheme is to provide incentive or reward to Eligible Persons for their contribution to, and continuing efforts to promote the interests of, the Company, the Board proposes to refresh the Scheme Mandate. The Directors consider that the refreshment of the Scheme Mandate is in the interests of the Company and the Shareholders as it enables the Company to have more flexibility in providing incentives to those Eligible Persons by way of granting of the options.

As at the Latest Practicable Date, there were 2,364,080,250 Shares in issue. Assuming no further issue or repurchase of Shares prior to the EGM, upon refreshment of the Scheme Mandate by Shareholders at the EGM, the Company may grant options entitling holders thereof to subscribe for up to a maximum of 236,408,025 Shares, representing 10% of the

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LETTER FROM THE BOARD

issued share capital of the Company as at the date of the EGM (the “Refreshed Scheme Mandate”). No options may be granted if this will result in the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option schemes of the Company exceed the Scheme Overall Limit. On the basis of 2,364,080,250 Shares in issue as at the Latest Practicable Date, the Scheme Overall Limit represents 709,224,075 Shares and, upon refreshment of the Scheme Mandate by Shareholders at the EGM, the aggregate of (i) the total number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and (ii) the maximum number of Shares in respect of which options may be granted pursuant to the Refreshed Scheme Mandate under the Share Option Scheme, which amounted to a total of 354,622,875 Shares, does not exceed the Scheme Overall Limit as at the Latest Practicable Date.

The refreshment of the Scheme Mandate is conditional on:

• (i) the passing of an ordinary resolution to approve the refreshment of the Scheme Mandate by the Shareholders at the EGM; and

• (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares (representing a maximum of 10% of the Shares in issue as at the date of passing the resolution of refreshment of the Scheme Mandate at the EGM) which may fall to be issued pursuant to the exercise of the options under the Share Option Scheme and any other share option schemes of the Company.

Application will be made to the Stock Exchange for the listing of, and permission to deal in, any Shares, representing 10% of the Shares in issue at the EGM, which may fall to be issued upon the exercise of any options that may be granted under the refreshed Scheme Mandate.

EXTRAORDINARY GENERAL MEETING

A notice dated 27 January 2006 convening the EGM, which contains the ordinary resolution to approve the refreshment of Scheme Mandate is contained in this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM. Completion and return of the form of proxy shall not preclude you from attending, and voting at, the EGM or any adjournment thereof should you so wish.

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LETTER FROM THE BOARD

Pursuant to Article 80 of the Articles, a resolution put to the vote of a general meeting of the Company shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by:

• (i) the chairman of the meeting; or

• (ii) at least five Shareholders present in person or, in the case of a corporation, by its duly authorised representative or by proxy and entitled to vote; or

• (iii) any Shareholder or Shareholders present in person or, in the case of a corporation, by its duly authorised representative or by proxy and representing in aggregate not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

• (iv) any Shareholder or Shareholders present in person or, in the case of a corporation, by its duly authorised representative or by proxy and holding Shares conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all Shares conferring that right.

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Directors consider that the refreshment of the Scheme Mandate is in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend you to vote in favour of the ordinary resolution to be proposed at the EGM.

By Order of the Board Kwok Ho Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 超大現代農業（控股）有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 682)

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Chaoda Modern Agriculture (Holdings) Limited (the “ Company ”) will be held at Room 2705, 27th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on Tuesday, 14 February 2006 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments the following resolution as an Ordinary Resolution:

“ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting approval of the listing of, and permission to deal in, any ordinary shares of HK$0.10 each in the share capital of the Company (“ Shares ”) to be issued pursuant to the exercise of options which may be granted under the Refreshed Limit (as defined below), the existing scheme limit under the share option scheme of the Company adopted by a resolution of the shareholders of the Company passed on 19 June 2002 (the “ Existing Share Option Scheme ”) be refreshed so that the total number of Shares to be allotted and issued pursuant to the grant or exercise of the options under the Existing Share Option Scheme and any other share option scheme(s) of the Company (excluding options previously granted, outstanding, cancelled, lapsed or exercised under the Existing Share Option Scheme or any other share option scheme(s) of the Company) shall not exceed 10 % of the total number of Shares in issue as at the date of passing this resolution (“ Refreshed Limit ”) and that the directors of the Company be and are hereby authorised, subject to compliance with the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time), to grant options under the Existing Share Option Scheme up to the Refreshed Limit and to exercise all the powers of the Company to allot, issue and deal with Shares pursuant to the exercise of such options.”

By Order of the Board Ching Che Man, Susanna Company Secretary

Hong Kong, 27 January 2006

Notes:

(a) The register of members of the Company will be closed from 10 February 2006 to 14 February 2006 (both days inclusive), during which period no transfer of shares in the Company can be registered.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (b) All completed transfer documents accompanied by the relevant share certificates must be lodged with the Company’s Share Registrars in Hong Kong, Abacus Share Registrars Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:00 p.m. on 9 February 2006.

• (c) Any shareholder of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his behalf. A proxy need not be a shareholder of the Company.

• (d) To be valid, a form of proxy in the prescribed form together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy thereof, must be deposited at the Company’s principal office in Hong Kong at Room 2705, 27th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time fixed for holding the meeting or any adjourned meeting. Delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

Registered Office: Principal Office in Hong Kong: P.O. Box 309, Ugland House Room 2705, 27th Floor South Church Street China Resources Building George Town 26 Harbour Road Grand Cayman Wanchai, Hong Kong Cayman Islands British West Indies

As at the date hereof, the Board comprises seven executive directors, namely, Mr Kwok Ho, Mr Ip Chi Ming, Dr Lee Yan, Ms Wong Hip Ying, Mr Fong Jao, Mr Chen Jun Hua and Mr Chan Chi Po, Andy and four independent non-executive directors, namely, Mr Fung Chi Kin, Mr Tam Ching Ho, Professor Lin Shun Quan and Ms Luan Yue Wen.

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