China Shengmu Organic Milk : PROPOSED GRANTING OF GENERAL MANDATES TO ISSUE NEW SHARES AND TO REPURCHASE SHARES, PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND NOTICE OF THE 2021 AGM

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DEFINITIONS

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

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LETTER FROM THE BOARD

CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

To the Shareholders,

Dear Sir or Madam,

PROPOSED GRANTING OF GENERAL MANDATES

TO ISSUE NEW SHARES AND TO REPURCHASE SHARES, PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS AND

NOTICE OF THE 2021 AGM

1. INTRODUCTION

The purpose of this circular is to provide Shareholders with information in respect of certain resolutions to be proposed at the 2021 AGM for (i) the granting of the Issuance Mandate to the Directors; (ii) the granting of Repurchase Mandate to the Directors; (iii) the granting of Extension Mandate to the Directors; and (iv) the re-election of the retiring Directors.

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LETTER FROM THE BOARD

2. PROPOSED GRANTING OF THE ISSUANCE MANDATE, REPURCHASE MANDATE AND EXTENSION MANDATE

The Company's existing mandates to issue and repurchase Shares were approved by the Shareholders pursuant to the ordinary resolutions duly passed at the last annual general meeting on 19 June 2020. Unless otherwise renewed, the existing mandates to issue and repurchase Shares will lapse at the conclusion of the 2021 AGM.

Ordinary resolutions will be proposed at the 2021 AGM to approve the granting of the new general mandates to the Directors that would enable the Company:

1. to allot, issue or deal with new Shares not exceeding 20% of the total number of issued Shares as at the date of passing such resolution at the 2021 AGM (the "Issuance Mandate");
2. to repurchase Shares, on the Stock Exchange or on any other stock exchange recognized by the Securities and Futures Commission and the Stock Exchange, not exceeding 10% of the total number of issued Shares as at the date of passing such resolution at the 2021 AGM (the "Repurchase Mandate"); and
3. to extend the Issuance Mandate by an amount representing the total number of Shares repurchased by the Company pursuant to, and in accordance with, the Repurchase Mandate referred to in paragraph (b) above (the "Extension Mandate").

In accordance with the requirements of the Listing Rules, the Company is required to send to the Shareholders an explanatory statement containing all the information reasonably necessary to enable them to make an informed decision on whether to vote for or against the granting of the Repurchase Mandate. The explanatory statement as required by the Listing Rules in connection with the Repurchase Mandate is set out in Appendix I to this circular.

The Issuance Mandate, the Repurchase Mandate and the Extension Mandate would expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; or (b) the expiration of the period which the next annual general meeting of the Company is required by the Articles or the applicable laws of Cayman Islands to be held; or (c) revocation or variation by an ordinary resolution of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

The Directors have no present immediate plan to exercise the Issuance Mandate, the Repurchase Mandate and the Extension Mandate (if granted to the Directors at the 2021 AGM).

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LETTER FROM THE BOARD

3. PROPOSED RE-ELECTION OF THE RETIRING DIRECTORS

Pursuant to Article 16.2 of the Articles, any Director appointed by the Board to fill a casual vacancy or as an addition to the existing Directors shall hold office only until the next following general meeting of the Company and shall then be eligible for the re-election.

As such, Mr. Zhang Ping and Mr. Wu Liang shall retire at the 2021 AGM and they, being eligible, offer themselves for re-election at the 2021 AGM.

Pursuant to Article 16.18, at every annual general meeting of the Company one-third of the Directors for the time being (or, if their number is not three or a multiple of three, then the number nearest to, but not less than, one-third) shall retire from office by rotation provided that every Director (including those appointed for a specific term) shall be subject to retirement by rotation at least once every three years. Any Director appointed pursuant to Article 16.2 shall not be taken into account in determining which Directors are to retire by rotation. A retiring Director shall retain office until the close of the meeting at which he retires and shall be eligible for re-election thereat.

As such, Mr. Zhang Jiawang, Mr. Sun Qian and Mr. Wang Liyan, shall retire at the 2021 AGM and they, being eligible, offer themselves for re-election at the 2021 AGM.

The Board has received from each of Mr. Wang Liyan ("Mr. Wang") and Mr. Wu Liang ("Mr. Wu") an annual confirmation on his independence pursuant to the Listing Rules. The Board is not aware of any circumstance that might influence the independence of Mr. Wang and Mr. Wu and considers Mr. Wang and Mr. Wu to be independent. The Board is satisfied that, taking into account, among others, the valuable insights, useful guidance and independent judgment provided to the Board by each of Mr. Wang and Mr. Wu, each of Mr. Wang and Mr. Wu is of such character, integrity and experience commensurate with office of an independent non-executive Director. Mr. Wang's and Mr. Wu's professional background, knowledge and experience have also contributed to the diversity of the Board. Based on the above mentioned considerations, the Board, on the recommendation of the nomination committee of the Company, would recommend each of Mr. Wang and Mr. Wu for re-election at the 2021 AGM.

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 is subject to shareholders' approval at that relevant general meeting. The requisite details of the above Directors proposed to be re-elected at the 2021 AGM are set out in Appendix II to this circular.

4. 2021 AGM AND PROXY ARRANGEMENT

A notice convening the 2021 AGM to be held at Conference Room, 2/F, Shengmu Building, Shaerqin Industrial Park, Southern District of Ruyi Development New Zone, Tumotezuoqi, Hohhot, Inner Mongolia Autonomous Region, PRC at 10:00 a.m. on 28 June 2021 is set out on pages 16-20 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein.

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LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, all the proposed resolutions will be put to vote by way of poll at the 2021 AGM. An announcement on the poll vote results will be published by the Company after the 2021 AGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

You will find enclosed with this circular a form of proxy for use at the 2021 AGM and such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.youjimilk.com). Whether or not you are able to attend the 2021 AGM, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority, to the office of the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for holding the 2021 AGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the 2021 AGM or any adjourned meeting thereof if you so wish, in which event your proxy form shall be deemed to be revoked.

5. RECOMMENDATION

The Directors consider that the granting of the Issuance Mandate, the Repurchase Mandate, the Extension Mandate and the re-election of the retiring Directors are all in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions as set out in the AGM Notice to be proposed at the 2021 AGM.

Your attention is drawn to the additional information set out in the appendices to this circular: Appendix I - Explanatory Statement on the Repurchase Mandate; and Appendix II - Details of the Retiring Directors Proposed to be Re-elected at the 2021 AGM.

6. CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining Shareholders' entitlements to attend and vote at the 2021 AGM, the register of members of the Company will be closed from 23 June 2021 to 28 June 2021, (both days inclusive), during which period no transfer of Shares will be effected. In order to be eligible to attend and vote at the 2021 AGM, all transfers, accompanied by the relevant share certificates, must be lodged with the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong no later than 4:30 p.m. on 22 June 2021.

Yours faithfully,

By Order of the Board

China Shengmu Organic Milk Limited

SHAO Genhuo

Chairman

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APPENDIX I EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

The following is an explanatory statement required by the Listing Rules to be sent to Shareholders to enable them to make an informed decision on whether to vote for or against the ordinary resolution to be proposed at the 2021 AGM in relation to the granting of the Repurchase Mandate.

1. REASON FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders to have a general authority from the Shareholders to enable the Company to repurchase Shares on the Stock Exchange or any other stock exchange recognized by the Securities and Futures Commission and the Stock Exchange. 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 when the Directors believe that such repurchases will benefit the Company and the Shareholders.

The Directors are seeking the granting of the Repurchase Mandate to give the Company the flexibility to do so if and when appropriate. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time, having regard to the circumstances then pertaining.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 8,381,295,229 Shares.

Subject to the passing of the ordinary resolution set out in item 6 of the AGM Notice of the 2021 AGM in respect of the granting of the Repurchase Mandate and on the basis that the issued ordinary share capital of the Company as at the Latest Practicable Date remains unchanged up to the date of the 2021 AGM, i.e. being 8,381,295,229 Shares, the Directors would be authorised to exercise the Repurchase Mandate to repurchase, during the period in which the Repurchase Mandate remains in force, a maximum of 838,129,522 Shares, being 10% of the total number of issued shares of the Company as at the date of the 2021 AGM.

3. FUNDING AND IMPACT OF REPURCHASES

Any repurchase will be funded from the Company's internal resources, which shall be funds legally available for such purpose in accordance with the Articles, the Listing Rules, the applicable laws of the Cayman Islands and/or any other applicable laws, as the case may be.

Under the Cayman Islands law, any repurchases by the Company may only be made out of profits of the Company or out of the proceeds of a fresh issue of shares made for the purpose or, if authorised by the Articles and subject to the Companies Law, out of capital. Any premium payable on a redemption or purchase over the par value of the shares to be repurchased must be provided for out of profits or the share premium account of the Company or, if authorized by the Articles and subject to the Companies Law, out of capital. In accordance with the laws of the Cayman Islands, the shares repurchased would be treated as cancelled.

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APPENDIX I EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

As compared with the financial position of the Company as at 31 December 2020 (being the date to which the latest audited accounts of the Company have been made up), the Directors consider that there might be a material adverse impact on the working capital and on the gearing position of the Company in the event that the proposed repurchases were to be carried out in full during the proposed repurchase period.

The Directors do not intend to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or the gearing position which in the opinion of the Directors are from time to time appropriate for the Company.

4. EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder's proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code.

Accordingly, a Shareholder or a group of Shareholders acting in concert (as that term is defined in the Takeovers Code), depending on the level of increase of the Shareholder's interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 or Rule 32 of the Takeovers Code for all the Shares not already owned by such Shareholder or group of Shareholders.

The Directors are not aware of any person who would be obliged to make a mandatory offer in accordance with Rule 26 or Rule 32 of the Takeovers Code, if the Repurchase Mandate was exercised in full. Moreover, the Directors do not intend to exercise the power of the Repurchase Mandate to repurchase Shares to an extent which would render any Shareholder or group of Shareholders obliged to make a mandatory offer under Rule 26 or Rule 32 of the Takeovers Code.

The Directors have no intention to exercise the Repurchase Mandate to such an extent that results in a public shareholding of less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the Shares in public hands.

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APPENDIX I EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

5. LISTING RULES RELATING TO REPURCHASE OF SHARES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange and any other stock exchange on which the securities of the Company are listed and such exchange is recognized by the Securities and Futures Commission and the Stock Exchange subject to certain restrictions.

The Listing Rules provide that all proposed repurchases of shares must be approved by shareholders in advance by an ordinary resolution at a general meeting, either by way of a general repurchase mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

6. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of the Cayman Islands and in accordance with the Articles.

7. DIRECTORS, THEIR CLOSE ASSOCIATES AND CORE CONNECTED PERSONS

None of the Directors or, to the best knowledge and belief of the Directors having made all reasonable enquiries, any of their respective close associates (as defined in the Listing Rules) have any present intention, in the event that the proposed Repurchase Mandate is granted, to sell Shares to the Company. No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he has a present intention to sell Shares to the Company, or that he has undertaken not to sell any of the Shares held by him to the Company in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases of Shares pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

8. SHARE REPURCHASE MADE BY THE COMPANY

The Company had not purchased any of the Shares (whether on the Stock Exchange or otherwise) during the six months preceding the Latest Practicable Date.

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APPENDIX I EXPLANATORY STATEMENT ON THE REPURCHASE MANDATE

9. SHARE PRICES

The highest and lowest prices of the Shares during each of the twelve months preceding the Latest Practicable Date were as follows:

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2021 AGM

The biographical details of the Directors proposed to be retired and be re-elected at the 2021 AGM are set out as follows:

1. ZHANG Jiawang (張家旺)

Mr. ZHANG Jiawang, aged 42, is an executive Director and chief executive officer of the Company. Mr. ZHANG Jiawang was a non-executive Director of the Company from 26 September 2016 to 29 June 2018. He was appointed to our Board as an executive Director on 25 January 2019.

Mr. ZHANG Jiawang joined Beijing Dabeinong Technology Group Co., Ltd. (北京大北農科技 集團股份有限公司) in August 2001 and has held various positions, including outreach director, president's assistant, development and investment manager, manager of strategy and development, and vice president since then. Mr. ZHANG Jiawang received his bachelor's degree from Inner Mongolia Agricultural University (內蒙古農業大學) in July 2001, majoring in horticulture and his master degree in executive master of business administration from Renmin University of China (中國人民大學) in January 2010.

Save as disclosed above, Mr. ZHANG Jiawang did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware and save as disclosed above, Mr. ZHANG Jiawang does not have any relationships with other Directors, senior management, Substantial Shareholders or Controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. ZHANG Jiawang held 138,130,000 Shares pursuant to Part XV of the SFO.

The Company has entered into a service contract with Mr. ZHANG Jiawang for a term of three years commencing from 25 January 2019. Mr. ZHANG Jiawang is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

Mr. ZHANG Jiawang is entitled to a director fee and salary. The emoluments paid to Mr. ZHANG Jiawang for the year ended 31 December 2020 is RMB926,000. The emoluments of Mr. ZHANG Jiawang have been determined with reference to his role and duties, performance and responsibilities as well as the prevailing market conditions and are subject to revision in future by the decision of the Board based on the recommendation of the Company's remuneration committee.

As far as the Directors are aware, there is no information of Mr. ZHANG Jiawang to be disclosed pursuant to any of the requirements under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. ZHANG Jiawang that need to be brought to the attention of the Shareholders.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2021 AGM

2. SUN Qian (孫謙)

Mr. SUN Qian, aged 47, is a non-executive Director. He was appointed to our Board on 26 March

2014 and he is a member of the remuneration committee. Mr. SUN Qian currently is a partner of Sequoia Capital China.

Mr. SUN Qian received a bachelor' s degree in applied mathematics from Harvard University in the United States in June 1997, and a master's degree in business administration from Harvard University and a juris doctor degree from Harvard Law School in the United States both in June 2003.

Mr. SUN Qian was a director of Bona Film Group Limited (principally engaged in film distribution business), a company listed on NASDAQ, from 2007 to 2011 and a director of 500.com Limited (principally engaged in online sports lottery services) since October 2013. Mr. SUN Qian is a director of COOTEK (NASDAQ:CTK), a company with input method being its core business, since September 2018. Mr. SUN Qian has been appointed as a director of Guangdong Dongpeng Holdings Co. Ltd, a company incorporated in the PRC whose shares are listed on the Shenzhen Stock Exchange and is primarily engaged in the developing ceramic products since 19 October 2020.

Save as disclosed above, Mr. SUN Qian did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware and save as disclosed above, Mr. SUN Qian does not have any relationships with other Directors, senior management, Substantial Shareholders or Controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. SUN Qian was not interested or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Pursuant to the Director's service contract entered into between the Company and Mr. SUN Qian, his initial current term of office is for a period of three years commencing from the date of appointment and shall be automatically renewed upon expiry, unless terminated by either party giving to the other not less than three months' prior notice in writing. Mr. SUN Qian is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles. Pursuant to such service contract, Mr. SUN Qian is not entitled to any director fee and is subject to revision in future by the decision of the Board based on the recommendation of the Company's remuneration committee.

As far as the Directors are aware, there is no information of Mr. SUN Qian to be disclosed pursuant to any of the requirements under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. SUN Qian that need to be brought to the attention of the Shareholders.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2021 AGM

3. ZHANG Ping (張平)

Mr. ZHANG Ping, aged 56, is a non-executive Director. He was appointed to our Board on 25 August 2020.

Mr. ZHANG Ping is currently the vice president and chief financial officer of China Mengniu Dairy Company Limited (a company incorporated in Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange (stock code: 2319), and together with its subsidiaries, the "Mengniu Group"). China Mengniu Dairy Company Limited is a substantial shareholder of our Company. He joined the Mengniu Group in 2014 and has over 25 years of experience in the fast-moving consumer goods industry, specialising in management of operation, finance and audit as well as risk control. He successively worked as manager of internal audit and system development and finance director at Swire Beverages Co., Ltd., general manager of its bottler manufacturing company and chief executive officer of Coca-Cola Bottlers Manufacturing Holdings Limited. Mr. ZHANG Ping graduated from Beijing Information Science and Technology University (北京信息科技大學) with a master's degree in management engineering. Mr. ZHANG Ping is also a non-executive director of Yashili International Holdings Limited (a company incorporated in Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange (stock code: 1230)) and China Modern Dairy Holdings Limited (a company incorporated in Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange (stock code: 1117)).

Save as disclosed above, Mr. ZHANG Ping did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware and save as disclosed above, Mr. ZHANG Ping does not have any relationships with other Directors, senior management, Substantial Shareholders or Controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. ZHANG Ping was not interested or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

The Company has entered into a service contract with Mr. ZHANG Ping for a term of three years commencing from 25 August 2020. Mr. ZHANG Ping is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

Mr. ZHANG Ping is not entitled to any remuneration at the present. No emoluments has been paid to Mr. ZHANG Ping for the year ended 31 December 2020. The emoluments of Mr. ZHANG Ping have been determined with reference to his role and duties, performance and responsibilities as well as the prevailing market conditions and are subject to revision in future by the decision of the Board based on the recommendation of the Company's remuneration committee.

As far as the Directors are aware, there is no information of Mr. ZHANG Ping to be disclosed pursuant to any of the requirements under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. ZHANG Ping that need to be brought to the attention of the Shareholders.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2021 AGM

4. WANG Liyan (王立彥)

Mr. WANG Liyan, aged 63, is an independent non-executive Director. He was appointed to our Board on 28 June 2017. Mr. WANG Liyan is also the chairman of the audit committee and a member of the nomination committee of the Company.

Mr. Wang Liyan is currently a professor of the Department of Accounting, a doctoral advisor, and a director of Center for Responsibility and Social Value, of Guanghua School of Management in Peking University and a certified public accountant in the PRC. He obtained his doctor's degree from Peking University, and is a visiting scholar at University of Hertfordshire in England and Hong Kong University of Science and Technology, a visiting professor at Menlo College in California, US. and a visiting scholar at the World Resources Institute. His major research area lies in accounting information and corporate value, overseas listing, dual financial report and corporate governance system. He also serves as the chief editor of China Accounting Review and China Management Accounting. Mr. Wang Liyan has been an independent director of Huaxin Cement Co., Ltd., a company listed on the Shanghai Stock Exchange (stock code: 600801), since 23 April 2015 and an independent director of Unigroup Guoxin Co., Ltd., a company listed on the Shenzhen Stock Exchange (stock code: 002049), since 23 March 2017. Mr. Wang Liyan has been an independent director of the Gettop Acoustic Co., Ltd., a company listed on the Shenzhen Stock Exchange (stock code: 002655), since 12 April 2018. Mr. Wang Liyan has been appointed as an independent non-executive director of Jinshang Bank Co., Ltd., a joint stock company incorporated in the PRC with limited liability whose shares are listed on the Stock Exchange (stock code: 2558), since 5 November 2019. He has served as an independent director of Beijing Dabeinong Technology Group Co., Ltd (北京大北農科技集團股份有限公司), a company listed on Shenzhen Stock Exchange (stock code: 002385) since 20 March 2020.

Save as disclosed above, Mr. WANG Liyan did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware and save as disclosed above, Mr. WANG Liyan does not have any relationships with other Directors, senior management, Substantial Shareholders or Controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. WANG Liyan did not hold any interest or was not deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

Pursuant to the service contract entered into between the Company and Mr. WANG Liyan, his initial current term of office is for a period of three years commencing from the date of appointment, unless terminated by either party giving to the other not less than three months' prior notice in writing. Mr. WANG Liyan is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

Mr. WANG Liyan is entitled to a fixed director fee of RMB100,000 per annum. The emoluments paid to Mr. WANG Liyan for the year ended 31 December 2020 is RMB100,000. The emoluments of Mr. WANG Liyan have been determined with reference to his role and duties, performance and responsibilities as well as the prevailing market conditions and are subject to revision in future by the decision of the Board based on the recommendation of the Company's remuneration committee.

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APPENDIX II DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED AT THE 2021 AGM

As far as the Directors are aware, there is no information of Mr. WANG Liyan to be disclosed pursuant to any of the requirements under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. WANG Liyan that need to be brought to the attention of the Shareholders.

5. WU Liang (吳亮)

Mr. WU Liang, aged 50, is an independent non-executive Director. He was appointed to our Board on 22 December 2020. Mr. WU Liang is also a member of each of the audit committee and remuneration committee of the Company.

Mr. WU Liang is currently a distinguished professor of Tongji University and the executive dean of the National Research Institute of Modernization of Tongji University (同濟大學國家現代化研究

Save as disclosed above, Mr. WU Liang did not hold directorships in any public listed companies in the last three years.

As far as the Directors are aware and save as disclosed above, Mr. WU Liang does not have any relationships with other Directors, senior management, Substantial Shareholders or Controlling Shareholders.

As far as the Directors are aware, as at the Latest Practicable Date, Mr. WU Liang was not interested or deemed to be interested in any Shares or underlying Shares pursuant to Part XV of the SFO.

The Company has entered into a service contract with Mr. WU Liang for a term of three years commencing from 22 December 2020. Mr. WU Liang is also subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles.

Mr. WU Liang is entitled to a fixed director fee of RMB100,000 per annum. The emoluments paid to Mr. WU Liang for the year ended 31 December 2020 is Nil. The emoluments of Mr. WU Liang have been determined with reference to his role and duties, performance and responsibilities as well as the prevailing market conditions and are subject to revision in future by the decision of the Board based on the recommendation of the Company's remuneration committee.

As far as the Directors are aware, there is no information of Mr. WU Liang to be disclosed pursuant to any of the requirements under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; and there are no other matters concerning Mr. WU Liang that need to be brought to the attention of the Shareholders.

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NOTICE OF THE 2021 AGM

CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

NOTICE IS HEREBY GIVEN that an annual general meeting (the "Meeting'') of China Shengmu Organic Milk Limited (the "Company") will be held at 10:00 a.m. on 28 June 2021 at Conference Room, 2/F, Shengmu Building, Shaerqin Industrial Park, Southern District of Ruyi Development New Zone, Tumotezuoqi, Hohhot, Inner Mongolia Autonomous Region, PRC for considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. To receive, consider and adopt the audited consolidated financial statements of the Company and the reports of the directors of the Company (the "Directors") and auditors of the Company for the year ended 31 December 2020.
2. To re-appoint Ernst & Young as auditors of the Company and the board of directors of the Company (the "Board") be authorized to fix their remuneration.
3. (a) To re-elect Mr. Zhang Jiawang as an executive Director.
4. 1. To re-elect Mr. Sun Qian as a non-executive Director.
   2. To re-elect Mr. Zhang Ping as a non-executive Director.
   3. To re-elect Mr. Wang Liyan as an independent non-executive Director.
   4. To re-elect Mr. Wu Liang as an independent non-executive Director.
5. To authorize the Board to fix the respective Directors' remuneration.
6. "THAT:
7. 1. subject to paragraph (c) of this resolution below, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with authorized and unissued shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved;
   2. the Directors be and are hereby authorized during the Relevant Period to make or grant offers, agreements and options which might or would require the exercise of such powers (including but not limited to the power to allot, issue and deal with additional shares of the Company (the "Shares")) during or after the end of the Relevant Period;

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NOTICE OF THE 2021 AGM

1. the total number of Shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraphs (a) and (b) of this resolution above, otherwise than pursuant to:
2. 1. a Rights Issue (as defined below);
   2. the exercise of the outstanding conversion rights attached to any convertible securities issued by the Company, which are convertible into Shares;
   3. the exercise of any options granted under the share option scheme(s) adopted by the Company or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to subscribe for Shares; or
   4. any scrip dividend scheme or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend in accordance with the articles of association of the Company (the "Articles") from time to time,

shall not exceed 20% of the total number of issued Shares as at the date of passing this resolution and the said approval shall be limited accordingly; and

1. for the purposes of this resolution:
   "Relevant Period" means the period from the time of the passing of this resolution until whichever is the earliest of:
2. 1. the conclusion of the next annual general meeting of the Company;
   2. 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 to be held; or
   3. the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.

"Rights Issue" means an offer of Shares open for a period fixed by the Directors to holders of Shares on the register of members on a fixed record date in proportion to their then holdings of such Shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction, or the requirements of any recognized regulatory body or any stock exchange)."

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NOTICE OF THE 2021 AGM

1. "THAT:
2. 1. subject to paragraph (c) of this resolution below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase its Shares on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") or on any other stock exchange recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange, subject to and in accordance with the applicable laws, rules and regulations, be and is hereby, generally and unconditionally approved;
   2. the approval in paragraph (a) of this resolution above shall be in addition to any other authorization given to the Directors and shall authorize the Directors on behalf of the Company during the Relevant Period to procure the Company to repurchase its Shares at a price determined by the Directors;
   3. the total number of Shares to be repurchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total number of issued Shares as at the date of passing this resolution and the said approval shall be limited accordingly; and
   4. for the purposes of this resolution:
      "Relevant Period" means the period from the time of the passing of this resolution until whichever is the earliest of:
   5. 1. the conclusion of the next annual general meeting of the Company;
      2. 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 to be held; or
      3. the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting."
3. "THAT conditional upon the passing of the ordinary resolutions 5 and 6 as set out in this notice convening the Meeting (the "Notice"), the general mandate granted to the Directors pursuant to ordinary resolution 5 as set out in the Notice be and is hereby extended by the addition thereto of an amount representing the total number of Shares repurchased by the Company under the authority granted pursuant to ordinary resolution 6 as set out in this Notice, provided that such amount shall not exceed 10% of the total number of issued Shares as at the date of passing this resolution."

By Order of the Board

China Shengmu Organic Milk Limited

SHAO Genhuo

Chairman

Hong Kong, 28 April 2021

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NOTICE OF THE 2021 AGM

As at the date of this notice, the Board comprises Mr. Yao Tongshan and Mr. Zhang Jiawang, as executive Directors; Mr. Sun Qian, Mr. Shao Genhuo, Mr. Zhao Jiejun and Mr. Zhang Ping, as non-executive Directors; Mr. Fu Wenge, Mr. Wang Liyan and Mr. Wu Liang, as independent non-executive Directors.

Notes:

1. Any member of the Company entitled to attend and vote at the Meeting shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more Shares may appoint more than one proxy to represent him and vote on his behalf at the Meeting. A proxy need not be a member of the Company. On a poll, votes may be given either personally or by proxy.
2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorized in writing or, if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.
3. In order to be valid, the instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, shall be delivered to the office of the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the Meeting and, in such event, the form of proxy shall be deemed to be revoked.
4. No instrument appointing a proxy shall be valid after expiration of 12 months from the date named in it as the date of its execution, except at an adjourned Meeting or on a poll demanded at the Meeting or any adjournment thereof in cases where the Meeting was originally held within 12 months from such date.
5. Where there are joint holders of any Shares, any one of such joint holders may vote at the Meeting, either in person or by proxy, in respect of such Share as if he/she were solely entitled thereto, but if more than one of such joint holders be present at the Meeting, the vote of 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 of members of the Company in respect of the joint holding.

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NOTICE OF THE 2021 AGM

1. To ascertain shareholders' eligibility to attend and vote at this Meeting, the register of members of the Company will be closed from 23 June 2021 to 28 June 2021 (both days inclusive), during which period no share transfer will be effected. In order to qualify for attending and voting at the annual general meeting, unregistered holders of Shares should ensure that all completed transfer forms accompanied by the relevant share certificates must be lodged with the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration no later than 4:30 p.m., on 22 June 2021.
2. An explanatory statement containing the information necessary to enable the members to make an informed decision as to whether to vote for or against the ordinary resolution 6 as set out in this notice is set out in Appendix I to the circular of the Company dated 28 April 2021 to its shareholders.
3. Details of the retiring Directors proposed to be re-elected as Directors and the new Directors proposed to be elected at the Meeting are set out in Appendix II to the circular of the Company dated 28 April 2021 to its shareholders.
4. A form of proxy for use at the Meeting is enclosed.

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