China Shengmu Organic Milk : Announcements and Notices - Notice of Extraordinary General Meeting

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.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

CHINA SHENGMU ORGANIC MILK LIMITED ʕ਷໋ىϞዚุ̲Ϟࠢʮ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the extraordinary general meeting (the "Meeting") of China Shengmu Organic Milk Limited (the "Company") will be held at 19/F, No. 27 Zhong Guan Cun Street, Hai Dian District, Beijing, PRC on 24 January 2019 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

• (1) "THAT:

  • (i) the share purchase agreement dated 23 December 2018 (the "Share Purchase Agreement") entered into among the Company, Inner Mongolia Shengmu High-tech Dairy Co., Ltd. (ʫ ႆ໋̚ى৷߅ุ̲Ϟࠢʮ̡) (the "Target Company"), Inner Mongolia Shengmu Holding Co., Ltd. (ʫႆ໋̚ىછٰϞࠢʮ̡ ) (" Shengmu Holding"), Inner Mongolia Shengmu High-tech Farming Co., Ltd. (ʫႆ໋̚ى৷߅ىุϞࠢʮ̡ )(" Shengmu High-tech") and Inner Mongolia Mengniu Dairy (Group) Co., Ltd. (ʫႆ̚ႆˬԪุ€ණྠٰ΅Ϟࠢʮ̡) ("Inner Mongolia Mengniu"), pursuant to which Shengmu Holding agreed to sell and Inner Mongolia Mengniu agreed to buy 26.67% interest in the Target Company, and Shengmu High-tech agreed to sell and Inner Mongolia Mengniu agreed to buy 24.33% interest in the Target Company, representing in aggregate 51% interest in the entire issued share capital of the Target Company (a copy of which has been produced to the Meeting and marked "A" and initiated by the chairman of the Meeting for the purpose of identification) and the transactions contemplated thereunder be and is hereby approved, confirmed and ratified; and

  • (ii) the directors of the Company (the "Directors") be and are hereby authorised to do all such further things and acts and execute all such further documents and take all such steps which he/she considers necessary, desirable or expedient to implement and give effect to any matters relating to or in connection with the Share Purchase Agreement and any transactions contemplated thereunder."

• (2) "THAT:

  (i) the warrant subscription agreement A dated 23 December 2018 (the "Warrant

Subscription Agreement A") entered into between the Company and Start Great Holdings Limited (the "Subscriber A"), pursuant to which the Company has agreed to issue, and the Subscriber A has agreed to subscribe for, an aggregate of 1,197,327,890 unlisted warrants (the "Warrants A") entitling the holder of the Warrants A to subscribe for up to 1,197,327,890 new ordinary shares of nominal value of HK$0.00001 each in the share capital of the Company (the "Warrant Shares A") at the subscription price of HK$0.33

(subject to adjustment) (a copy of which has been produced to the Meeting and marked "B" and initiated by the chairman of the Meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

(ii) the creation and the issuance of the Warrants A by the Company in accordance with the terms and conditions of the Warrant Subscription Agreement A be and are hereby approved, confirmed and ratified;

• (iii) the Directors be and hereby granted a specific mandate for the allotment and issue of the Warrant Shares A at the subscription price of HK$0.33 per Warrant Share A (subject to adjustment and the terms and conditions as set out in the Warrant Subscription Agreement A), which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the Warrants A; and

• (iv) the directors of the Company be and are hereby authorised to do all such further things and acts and execute all such further documents and take all such steps which he/she considers necessary, desirable or expedient to implement and give effect to any matters relating to or in connection with Warrant Subscription Agreement A and any transactions contemplated thereunder."

(3)

"THAT:

(i) the warrant subscription agreement B dated 23 December 2018 (the "Warrant

Subscription Agreement B") entered into between the Company and Greenbelt Global Limited (the "Subscriber B"), pursuant to which the Company has agreed to issue, and the Subscriber B has agreed to subscribe for, an aggregate of 140,862,105 unlisted warrants (the "Warrants B") at the issue price of HK$0.0427 per Warrant B entitling the holder of the Warrants B to subscribe for up to 140,862,105 new ordinary shares of nominal value of HK$0.00001 each in the share capital of the Company (the "Warrant Shares B") at the subscription price of HK$0.33 (subject to adjustment) (a copy of which has been produced to the Meeting and marked "C" and initiated by the chairman of the Meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

• (ii) the creation and the issuance of the Warrants B by the Company in accordance with the terms and conditions of the Warrant Subscription Agreement B be and are hereby approved, confirmed and ratified;

• (iii) the Directors be and hereby granted a specific mandate for the allotment and issue of the Warrant Shares B at the subscription price of HK$0.33 per Warrant Share B (subject to adjustment and the terms and conditions as set out in the Warrant Subscription Agreement B), which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the Warrants B; and

(iv) the directors of the Company be and are hereby authorised to do all such further things and acts and execute all such further documents and take all such steps which he/she considers necessary, desirable or expedient to implement and give effect to any matters relating to or in connection with Warrant Subscription Agreement B and any transactions contemplated thereunder."

By the order of the Board of China Shengmu Organic Milk Limited

Shao Genhuo

Chairman

Hong Kong, 7 January 2019

As at the date of this notice, the Board comprises Mr. Yao Tongshan, Mr. Wu Jianye and Mr. Wang Yuehua, as executive Directors; Mr. Shao Genhuo, Mr. Wen Yongping and Mr. Sun Qian, as non-executive Directors; Mr. Fu Wenge, Mr. Wang Liyan and Mr. Li Xuan 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, a form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed must be deposited at the Company's branch registrar in Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong not less than 48 hours before the time fixed 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.

• 6. To ascertain shareholders' eligibility to attend and vote at the Meeting, the register of members of the Company will be closed from 18 January 2019 to 24 January 2019, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for attending and voting at the 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 22, Hopewell Centre, 183

  Queen's Road East, Hong Kong for registration no later than 4:30 p.m. on 17 January 2019.

• 7. A form of proxy for use at the Meeting is enclosed.