China Agri : Certain Matters relating to the Non-competition Deed

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

(Incorporated in Hong Kong with limited liability)

This is an announcement made by the Company in connection with certain matters relating to the Non-competition Deed.
The Company decided not to take up the New Business Opportunity offered by COFCO (HK) and accordingly COFCO (HK) became entitled to proceed with the Proposed Acquisition. Further, the option for the Company to acquire the Competing Business will become effective once the Proposed Acquisition is completed and a further announcement will be made pursuant to the disclosure obligations set out in the section headed "Relationship with COFCO and COFCO International" in the prospectus of the Company dated 8 March 2007.

COFCO, COFCO (HK) and the Company entered into the Non-competition Deed on 16
February 2007, pursuant to which each of COFCO and COFCO (HK) undertook that other than certain Retained Interests, and for so long as COFCO and its associates in aggregate hold not less than 30% of the issued shares of the Company, they would not, and would procure that none of their subsidiaries (other than the Company and its subsidiaries) will, at any time, either on their own behalf or as agent of any person, directly or indirectly, be employed or otherwise engaged or interested in any business which competes with the business of the Company or any part of it in any country in the world in which the Company carries on its business from time to time.
Pursuant to the Non-competition Deed, if any new business opportunity is offered to COFCO and/or COFCO (HK) which would potentially compete with the business of the Company, COFCO and/or COFCO (HK) shall refer the new business opportunity to the Company upon terms and conditions which are not less favourable than those offered to each of them. If such

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offer is not accepted by the Company in writing within 30 days of its receiving of the written notice of the new business opportunity, COFCO and/or COFCO (HK) shall be entitled to accept the new business opportunity upon terms and conditions that are not more favourable than those offered to the Company.
In the event COFCO and/or COFCO (HK) proceed with the acquisition after the Company has indicated its refusal to accept the offer of the new business opportunity, pursuant to the Non-competition Deed, COFCO and COFCO (HK) have granted to the Company options to acquire all or part of the Retained Interests held by COFCO on the basis of a valuation to be conducted by an independent valuer jointly appointed by COFCO and/or COFCO (HK) and the Company subject to any applicable laws and rules, relevant authorities' approvals and existing third-party pre-emptive rights (if any).

COFCO (HK) is offered to acquire (either via itself or one of its subsidiaries) 51% of the equity interest currently held by the Vendor in Noble Agri. Immediately after the completion of the Proposed Acquisition, COFCO (HK) will directly or indirectly hold 51% of the equity interest in Noble Agri.
Noble Agri Group primarily conducts its business activities in the following three key agricultural product categories across South America, Africa, Europe, Asia (including India and the PRC) and Australia:
- Grains & Oilseeds, which involves the processing and distribution of key products of grains (wheat, sorghum, barley and corn) and seeds (soybeans, sunflower seed, rapeseed, proteins, soybean meal, sunflower meal, rape meal, vegetable oils (including soybean oil, sunflower oil, rapeseed oil, all degummed or refined crude palm oil and refined palm oil));
- Softs, which involves the trading of cocoa, sugar, cotton and coffee; and
- Sugar Assets, which involves the processing and sale of self-produced sugar, ethanol and electricity.
Noble Agri Group currently has certain business including five oilseeds pressing and distillation plants operating in the PRC, located in Qinzhou, Longkou, Chongqing, Nantong and Taixing, which may directly or indirectly compete with the oilseeds processing business of the Company and its subsidiaries in the PRC (the "Competing Business"). The Vendor of the Proposed Acquisition will only dispose of a 51% stake in Noble Agri as a whole and it will not consider disposing of the Competing Business separately. Based on the information provided to us by COFCO (HK), the consideration for the Proposed Acquisition will be equal to 1.15x of 51% of the audited book value of Noble Agri Group for the financial year ending
31 December 2014 (the "Consideration"). On completion of the Proposed Acquisition, COFCO (HK) will make an initial payment of US$1,500,000,000, which amount will be adjusted after the completion.
As such, the Proposed Acquisition constitutes a new business opportunity for COFCO (HK) (the "New Business Opportunity") under the Non-competition Deed. In compliance with the Non-competition Deed, COFCO (HK) offered the New Business Opportunity to the Company for its consideration as to whether or not to accept it.
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In accordance with Article 131A of the Company's Articles of Association, matters relating to exercise of option or pre-emptive right under an existing non-competition agreement between COFCO, COFCO (HK) and the Company shall be voted on solely by the Independent Non-executive Directors and decided by majority votes of the Independent Non-executive Directors. After discussion among the Independent Non-executive Directors, it was resolved that the Company would not take up the New Business Opportunity. The Independent Non- executive Directors' decision was made on the following premises:
- Since the Vendor of the Proposed Acquisition will only dispose 51% of its stake in Noble Agri as a whole and it will not consider disposing of the Competing Business separately, should the Company accept the New Business Opportunity, it would be required to acquire the entire 51% equity interest in Noble Agri, which, in addition to the Competing Business in the PRC, includes other agricultural products and other geographical regions where the Company does not currently operate.
- The Consideration would have significant financial impact on the Company's mid-term and long-term financial planning should the Company proceed to take up the 51% equity interest in Noble Agri.

According to the Non-competition Deed and the relevant schedule thereof, the Competing Business to be acquired under the Proposed Acquisition by COFCO (HK) will, upon completion of the Proposed Acquisition, fall within the scope of Retained Interests. Upon completion of the Proposed Acquisition, the option for the Company to acquire the Competing Business in Noble Agri (the "New Option") will become effective in accordance with the Non-competition Deed and its schedule thereof, and a further announcement will be made pursuant to the disclosure obligations set out in the section headed "Relationship with COFCO and COFCO International" in the prospectus of the Company dated 8 March 2007.

Pursuant to the Non-competition Deed, the decision as to whether or not to exercise the New Option shall be voted on solely by the Independent Non-executive Directors and be decided by majority votes of the Independent Non-executive Directors.
The Independent Non-executive Directors will review the New Option and decide whether to exercise the same on an annual basis. A final and definitive decision as to whether to exercise the New Option will be made by the Independent Non-executive Directors on the fifth anniversary (being the last year of the option period) of the New Option having become effective, if such decision has not been made before such time. If for any reason further time after the fifth anniversary is deemed necessary for the proper evaluation of the New Option, the decision to extend would be voted on solely by the Independent Non-executive Directors and be decided by majority votes.
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As the expansion of the Retained Interests gives the Company more operational flexibility in its future development without harming its potential interests in the Competing Business, the Independent Non-executive Directors considered such expansion of Retained Interests beneficial for the Company and its shareholders (including the minority shareholders) as a whole.

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
"Board" The Board of Directors of the Company;
"COFCO" COFCO Corporation, a wholly state-owned company established in the PRC currently under the purview of the State-owned Assets Supervision and Administration Commission of the State Council of the PRC, the ultimate controlling shareholder of the Company;
"COFCO (HK)" COFCO (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability, a controlling shareholder of the Company and a directly wholly-owned subsidiary of COFCO;
"Company" China Agri-Industries Holdings Limited, a company incorporated in Hong Kong with limited liability;
"Independent Non-executive
Directors"
The independent non-executive directors of the Company;
"Noble Agri" Noble Agri Limited, a company incorporated in Bermuda with limited liability;
"Noble Agri Group" Noble Agri and its subsidiaries;
"Non-competition Deed" T h e non-competition deed entered into among COFCO, COFCO (HK) and the Company on 16 February 2007;
"PRC" People's Republic of China;
"Proposed Acquisition" The proposed acquisition, either directly or indirectly, by COFCO (HK) of a total of 51% equity interest in Noble Agri currently held by the Vendor;
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"Retained Interests" The businesses under possession of COFCO and/or COFCO (HK) which competes with the Company and, pursuant to the Non-competition Deed, also include the Competing Business under the New Business Opportunity if the Proposed Acquisition proceeds to completion; and
"Vendor" Noble Agri International Limited, a limited company incorporated in Bermuda which, together with its beneficial owner, are independent of and not connected with director, chief executive or substantial shareholder of the Company or any of its subsidiaries or an associate of any of them (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).
By Order of the Board

Chairman

1 April 2014

As at the date of this announcement, the Board comprises: Mr. YU Xubo as chairman of the Board and executive director; Mr. YUE Guojun and Mr. SHI Bo as executive directors; Mr. NING Gaoning, Mr. MA Wangjun and Mr. WANG Zhiying as non-executive directors; and Mr. LAM Wai Hon, Ambrose, Mr. Victor YANG and Mr. Patrick Vincent VIZZONE as independent non-executive directors.

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