Cayman Islands | 0115 | Not Applicable | ||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Z. Julie Gao, Esq.
Latham & Watkins LLP 41st Floor, One Exchange Square 8 Connaught Place, Central Hong Kong (852) 2522-7886 |
Jonathan Stone, Esq.
Skadden, Arps, Slate, Meagher & Flom 42nd Floor, Edinburgh Tower The Landmark 15 Queens Road Central Hong Kong (852) 3740-4700 |
Proposed Maximum
|
||||||||||||
Title of Each Class of
|
Amount to be
|
Offering Price
|
Proposed Maximum Aggregate
|
Amount of
|
||||||||
Securities to be Registered | Registered(1) | Per Share | Offering Price(1) | Registration Fee(2) | ||||||||
Ordinary shares, par value $0.0000001 per share (3)(4)
|
39,445,000 | $8.25 | $325,421,250 | $9,991 | ||||||||
(1) | Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended. |
(2) | $5,373 was paid on October 18, 2007. |
(3) | Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes ordinary shares that may be purchased by the underwriters pursuant to an over-allotment option. These ordinary shares are not being registered for the purpose of sales outside the United States. |
(4) | American depositary shares issuable upon deposit of the ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333- ). Each American depositary share represents two ordinary shares. |
The
information in this prospectus is not complete and may be
changed. Neither we nor the selling shareholder may sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and we are not
soliciting offers to buy these securities in any jurisdiction
where the offer or sale is not permitted.
|
Proceeds,
|
||||||||||||||||
Underwriting
|
Before
|
Proceeds,
Before
|
||||||||||||||
Price to
|
Discounts and
|
Expenses,
|
Expenses, to
the
|
|||||||||||||
Public | Commissions | to Agria | Selling Shareholder | |||||||||||||
Per ADS
|
$ | $ | $ | $ | ||||||||||||
Total
|
$ | $ | $ | $ |
HSBC | Piper Jaffray | CIBC World Markets |
Page
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12
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75
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96
102
104
107
112
119
121
126
131
132
133
134
F-1
EX-4.3 DEPOSIT AGREEMENT
EX-23.1 CONSENT OF ERNST & YOUNG HUA MING
EX-23.2 CONSENT OF MAPLES AND CALDER
EX-23.3 CONSENT OF LATHAM & WATKINS LLP
EX-23.4 CONSENT OF COMMERCE & FINANCE LAW OFFICES
i
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1
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fast-growing China-based agri-solutions provider;
a diversified portfolio of commercially successful products;
strategic locations and extensive local knowledge and experience;
strong marketing and customer support and extensive distribution
network;
effective operations management and quality control system;
2
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strong research and development capabilities; and
an experienced management team and skilled staff.
increase our product sales in existing and new geographic
markets;
expand the variety of our products;
expand our research and development capabilities; and
selectively pursue strategic acquisitions and alliances and
expand into new agricultural sectors.
our limited operating history makes it difficult to evaluate our
future prospects and results of operations;
natural or man-made disasters could damage our seed production,
which would cause us to suffer production losses and a material
reduction of our revenues;
outbreaks of disease in livestock
and/or
food
scares in China would materially and adversely affect our sheep
breeding business;
we primarily rely on arrangements with village collectives to
produce our corn seed products, and if we are unable to continue
these arrangements or enter into new arrangements with other
village collectives to increase our production, our total land
acreage devoted to corn seed production may decrease and our
growth may be inhibited;
our growth prospects may be materially and adversely affected if
we are unable to continue to develop or acquire products to meet
the demands of Chinese farmers or to produce our existing
products in sufficient quantities; and
one or more of our distributors may engage in activities that
are harmful to our brand and to our business.
3
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4
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exercise effective control over P3A;
receive substantially all of the earnings and other economic
benefits from P3A to the extent permissible under PRC law in
consideration for the services provided by Agria China; and
have an exclusive option to purchase all or part of the equity
interests in P3A in each case when and to the extent permitted
by PRC law.
5
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6
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no exercise by the underwriters of their option to purchase up
to 2,572,500 additional ADSs representing 5,145,000 ordinary
shares;
conversion of all outstanding preferred shares into ordinary
shares immediately prior to the closing of this
offering; and
all share and per share data have been adjusted to reflect a
10,000-for-1 share split of our ordinary shares and our
preferred shares that became effective on August 15, 2007.
we, us, our company,
our and Agria refer to Agria
Corporation, a Cayman Islands company, and its predecessor
entities, subsidiaries and consolidated affiliated entity;
P3A refers to our consolidated affiliated entity,
Primalights III Agriculture Development Co., Ltd., which is
a limited liability company established in China;
China or PRC refers to the Peoples
Republic of China, excluding, for purposes of this prospectus,
Taiwan, Hong Kong and Macau;
shares or ordinary shares refers to our
ordinary shares, and preferred shares refers to our
series A redeemable convertible preferred shares;
ADSs refers to our American depositary shares, each
of which represents two ordinary shares, and ADRs
refers to the American depositary receipts that evidence our
ADSs;
all references to RMB or Renminbi are to
the legal currency of China; all references to $,
dollars and U.S. dollars are to the
legal currency of the United States;
breeder sheep refers to pure breed sheep that are
used primarily in rapid reproduction or artificial reproduction
methods to spread desired genes widely in a flock and have
received official variety recognition in China or another
country; and
upstream refers to the production and sale of
agricultural products (e.g., seeds, sheep semen and sheep
embryos) to be used by other participants in the agricultural
industry to produce other agricultural products, such as corn
and sheep, which in turn are used to manufacture products, such
as animal feed, mutton and wool.
7
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We currently estimate that the initial public offering price
will be between $14.50 and $16.50 per ADS.
12,000,000 ADSs
5,150,000 ADSs
17,150,000 ADSs
126,400,000 shares
Each ADS represents two ordinary shares, par value $0.0000001
per share.
To better understand the terms of the ADSs, you should carefully
read the Description of American Depositary Shares
section of this prospectus. You should also read the deposit
agreement, which is filed as an exhibit to the registration
statement that includes this prospectus.
We have granted to the underwriters an option, which is
exercisable within 30 days from the date of this
prospectus, to purchase up to an additional 2,572,500 ADSs.
Our net proceeds from this offering are expected to be
approximately $167.7 million, assuming an initial public
offering price per ADS of $15.50, which is the midpoint of the
estimated public offering price range. We plan to use the net
proceeds we receive from this offering to fund capital
expenditures and expansion of our business, expand our research
and development capability and for other general corporate
purposes, including funding potential strategic acquisitions.
See Use of Proceeds for additional information.
We will not receive any of the proceeds from the sale of ADSs by
the selling shareholder.
8
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We have agreed with the underwriters to a
lock-up
of
shares for a period of 180 days after the date of this
prospectus. In addition, our executive officers, directors and
existing shareholders have also agreed with the underwriters to
a
lock-up
of
shares for a period of 180 days after the date of this
prospectus. See Shares Eligible For Future Sale and
Underwriting.
We have applied to have the ADSs listed on the New York Stock
Exchange under the symbol GRO. Our ADSs and shares
will not be listed on any other exchange or traded on any other
automated quotation system.
At our request, the underwriters have reserved for sale, at the
initial public offering price, up to an aggregate of
1,300,000 ADSs to our directors, officers, employees,
business associates and related persons through a directed share
program.
See Risk Factors and other information included in
this prospectus for a discussion of risks you should carefully
consider before investing in our ADSs.
The Bank of New York
assumes the conversion of all outstanding preferred shares into
2,400,000 ordinary shares immediately prior to the completion of
this offering;
assumes the underwriters over-allotment option is not
exercised;
excludes 7,500,000 ordinary shares issuable upon exercise of
options outstanding as of the date of this prospectus, at a
weighted average exercise price of US$2.912 per
share; and
excludes ordinary shares reserved for future issuances under our
2007 share incentive plan.
9
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11
For the Year Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
RMB
RMB
$
RMB
RMB
$
(In thousands, except share, per share and per ADS
data)
48,560
245,601
245,634
32,269
142,126
133,853
17,584
92,904
119,468
193,054
25,362
97,518
110,599
14,530
10,820
19,020
51,015
6,702
29,594
34,955
4,592
152,284
384,089
489,703
64,333
269,238
279,407
36,706
(33,311
)
(147,723
)
(144,730
)
(19,013
)
(81,378
)
(80,395
)
(10,562
)
(31,196
)
(37,716
)
(52,287
)
(6,869
)
(26,629
)
(30,543
)
(4,012
)
(9,053
)
(5,932
)
(10,357
)
(1,361
)
(4,212
)
(10,679
)
(1,403
)
(73,560
)
(191,371
)
(207,374
)
(27,243
)
(112,219
)
(121,617
)
(15,977
)
78,724
192,718
282,329
37,090
157,019
157,790
20,729
(16,635
)
(18,372
)
(25,169
)
(3,306
)
(13,610
)
(12,524
)
(1,646
)
62,089
174,346
257,160
33,784
143,409
145,266
19,083
57,772
169,080
253,903
33,356
142,110
143,351
18,832
57,772
169,080
253,903
33,356
142,110
143,351
18,832
0.58
1.69
2.54
0.33
1.42
1.43
0.19
0.58
1.69
2.54
0.33
1.42
1.43
0.19
1.16
3.38
5.08
0.66
2.84
2.86
0.38
1.16
3.38
5.08
0.66
2.84
2.86
0.38
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,119,337
100,119,337
RMB2.48
US$0.33
RMB1.40
US$0.18
10
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For the Year Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
RMB
RMB
$
RMB
RMB
$
(In thousands, except share, per share and per ADS
data)
102,400,000
102,400,000
102,400,000
102,400,000
(1)
Each ADS represents two ordinary shares.
(2)
The pro forma earnings per share are calculated based on an
assumption that the conversion of 2,400,000 Series A
convertible redeemable preferred shares outstanding as of
June 30, 2007 into the same number of ordinary shares had
occurred on January 1, 2006 and 2007.
As of December 31,
As of June 30,
2006
2007
RMB
$
RMB
$
(In thousands)
42,782
5,620
325,562
42,770
156,440
20,552
166,954
21,933
490,476
64,434
871,500
114,490
127,344
16,729
344,636
45,275
65,111
8,555
155,928
20,484
354,136
46,523
296,829
38,994
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maintain our competitive position in China and compete in each
of our business segments with Chinese and international
companies, many of which have longer operating histories and
greater financial resources than us;
continue to offer commercially successful products to attract
and retain a larger base of direct customers and ultimate users;
retain access to the farmland we currently use for production of
our products and obtain access to additional farmland for
expansion;
continue our existing arrangements with village collectives that
grow our corn seed products and enter into new arrangements with
additional village collectives;
maintain effective control of our costs and expenses; and
retain our management and skilled technical staff and recruit
additional key employees.
12
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13
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14
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15
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16
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17
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18
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19
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20
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21
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revoking P3As business and operating licenses;
confiscating relevant income and imposing fines and other
penalties;
discontinuing or restricting P3As operations in China;
requiring us or P3A to restructure P3As ownership
structure or operations;
restricting or prohibiting our use of the proceeds of this
offering to finance our businesses and operations in
China; or
imposing conditions or requirements with which we or our
subsidiary or P3A may not be able to comply.
22
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23
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24
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25
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26
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27
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announcements of technological or competitive developments;
regulatory developments in our target markets affecting us, our
customers or our competitors;
actual or anticipated fluctuations in our quarterly operating
results;
changes in financial estimates by securities research analysts;
changes in the economic performance or market valuations of
other corn seed, sheep products or seedling companies;
additions or departures of our executive officers and key
personnel;
fluctuations in the exchange rates between the U.S. dollar
and RMB;
release or expiration of
lock-up
or
other transfer restrictions on our outstanding ADSs; and
sales or perceived sales of additional ADSs.
28
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29
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30
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Our board of directors has the authority to establish from time
to time one or more series of preferred shares without action by
our shareholders and to determine, with respect to any series of
preferred shares, the terms and rights of that series, including
the designation of the series; the number of shares of the
series; the dividend rights, dividend rates, conversion rights,
voting rights; and the rights and terms of redemption and
liquidation preferences.
Our board of directors may issue a series of preferred shares
without action by our shareholders to the extent of available
authorized but unissued preferred shares. Accordingly, the
issuance of preferred shares may adversely affect the rights of
the holders of the ordinary shares. Issuance of preference
shares may dilute the voting power of holders of ordinary shares.
Subject to applicable regulatory requirements, our board of
directors may issue additional ordinary shares or rights to
acquire ordinary shares without action by our shareholders to
the extent of available authorized but unissued shares.
31
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our anticipated growth strategies, including expanding sales
into new regions, increasing the farmland to which we have
access, and expanding our product offerings;
our strategy to expand our research and development capability;
the growth in demand in China for high-quality corn seeds, sheep
and seedlings;
our future business development, results of operations and
financial condition;
changes in our revenues, cost and expense items;
our ability to attract customers and end users and enhance our
brand recognition;
future changes in government regulations affecting our business,
including regulation of genetically modified corn; and
trends and competition in the corn seed, sheep breeding and
seedling industries.
32
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approximately $50 million to fund expansion of our
production capacity through leasing of additional land and
acquisitions of new facilities and equipment;
approximately $15 million to fund establishment of our
research and development center and expansion of our research
and development capability;
approximately $27 million to repay the shareholders
loan;
approximately $3.5 million to repay all of our bank
loans; and
the remainder for general corporate purposes, including funding
potential strategic acquisitions, although we have not entered
into any agreement with respect to any acquisition.
33
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34
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on an actual basis;
on a pro forma basis to reflect the automatic conversion of all
of our outstanding preferred shares into 2,400,000 ordinary
shares and the cessation of the redeemable ordinary shares
redemption rights immediately upon the closing of this offering;
and
on a pro forma as adjusted basis to reflect the automatic
conversion of all of our outstanding preferred shares into
2,400,000 ordinary shares and the cessation of the
redeemable ordinary shares redemption rights immediately upon
the closing of this offering, and the sale of 24,000,000
ordinary shares in the form of ADSs by us in this offering at an
assumed initial public offering price of $7.75 per share,
after deducting the underwriting discounts and commissions and
estimated offering expenses payable by us.
As of June 30, 2007
Pro Forma
Pro Forma
Actual
Actual
Pro Forma
Pro Forma
As Adjusted(1)
As Adjusted(1)
RMB
$
RMB
$
RMB
$
(In thousands, except share and per share data)
65,111
8,555
155,928
20,484
85,253
11,200
1,361,277
178,880
76,953
10,109
76,953
10,109
76,953
10,109
219,876
28,885
355,662
46,724
355,662
46,724
296,829
38,994
517,868
68,033
1,793,776
235,713
517,868
68,033
517,868
68,033
1,793,776
235,713
(1)
The pro forma as adjusted information discussed above is
illustrative only. Our additional paid-in capital, total
shareholders equity (deficit) and total capitalization
following the completion of this offering are subject to
adjustment based on the actual initial public offering price and
other terms of this offering determined at pricing.
(2)
Assuming the number of ADSs offered by us as set forth on the
cover page of this prospectus remains the same, and after
deduction of underwriting discounts and commissions and the
estimated offering expenses payable by us, a $1.00 increase
(decrease) in the assumed initial public offering price of
$15.50 per ADS would increase (decrease) each of additional
paid-in capital, total shareholders equity and total
capitalization by $11.2 million.
35
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$
7.75
$
1.78
$
5.97
$
11.94
Ordinary Shares Purchased*
Total Consideration
Average Price per
Average Price per
Number
Percent
Amount
Percent
Ordinary Share
ADS
102,400,000
81
%
$
11,200,000
6
%
$
0.11
$
0.22
24,000,000
19
186,000,000
94
7.75
15.5
126,400,000
100
%
$
197,200,000
100
%
*
The number of ordinary shares
purchased by existing shareholders takes into account the
conversion of all of our preferred shares into 2,400,000
ordinary shares and the cessation of the redeemable ordinary
shares redemption rights immediately upon the closing of this
offering.
36
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Noon Buying Rate
Period End
Average(1)
Low
High
(RMB per $1.00)
8.2800
8.2772
8.2800
8.2700
8.2767
8.2771
8.2800
8.2765
8.2765
8.2768
8.2774
8.2764
8.0702
8.1826
8.2765
8.0702
7.8041
7.9579
8.0702
7.8041
7.6120
7.7014
7.8127
7.6120
7.7090
7.7247
7.7345
7.7090
7.6516
7.6773
7.7065
7.6463
7.6120
7.6333
7.6680
7.6120
7.5720
7.5757
7.6055
7.5580
7.5462
7.5734
7.6181
7.5420
7.4928
7.5196
7.5540
7.4928
7.5020
7.5095
7.5158
7.5000
(1)
Annual averages are calculated from month-end rates. Monthly
averages are calculated using the average of the daily rates
during the relevant period.
37
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political and economic stability;
an effective judicial system;
a favorable tax system;
the absence of exchange control or currency
restrictions; and
the availability of professional and support services.
the Cayman Islands has a less-developed body of securities laws
as compared to the United States and these securities laws
provide significantly less protection to investors; and
Cayman Islands companies may not have the standing to sue before
the federal courts of the United States.
recognize or enforce judgments of United States courts obtained
against us or our directors or officers predicated upon the
civil liability provisions of the securities laws of the United
States or any state in the United States; or
entertain original actions brought in each respective
jurisdiction against us or our directors or officers predicated
upon the securities laws of the United States or any state in
the United States.
38
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39
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exercise effective control over P3A;
receive substantially all of the earnings and other economic
benefits from P3A to the extent permissible under PRC law in
consideration for the services provided by Agria China; and
40
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have an exclusive option to purchase all or part of the equity
interests in P3A in each case when and to the extent permitted
by PRC law.
41
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our shareholding structures, both currently and immediately
after giving effect to this offering, are in compliance with
existing PRC laws and regulations;
the contractual arrangements among Agria China and P3A and its
shareholders governed by PRC law as described under
Corporate History and Structure in this prospectus
are valid, binding and enforceable, and will not result in any
violation of PRC laws or regulations currently in
effect; and
the business operations of Agria China and P3A, as described in
this prospectus, are in compliance with existing PRC laws and
regulations in all material respects.
42
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43
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45
For the Year Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
RMB
RMB
$
RMB
RMB
$
(In thousands, except share, per share and per ADS data)
48,560
245,601
245,634
32,269
142,126
133,853
17,584
92,904
119,468
193,054
25,362
97,518
110,599
14,530
10,820
19,020
51,015
6,702
29,594
34,955
4,592
152,284
384,089
489,703
64,333
269,238
279,407
36,706
(33,311
)
(147,723
)
(144,730
)
(19,013
)
(81,378
)
(80,395
)
(10,562
)
(31,196
)
(37,716
)
(52,287
)
(6,869
)
(26,629
)
(30,543
)
(4,012
)
(9,053
)
(5,932
)
(10,357
)
(1,361
)
(4,212
)
(10,679
)
(1,403
)
(73,560
)
(191,371
)
(207,374
)
(27,243
)
(112,219
)
(121,617
)
(15,977
)
78,724
192,718
282,329
37,090
157,019
157,790
20,729
(4,874
)
(11,349
)
(14,031
)
(1,843
)
(7,542
)
(7,937
)
(1,043
)
(6,015
)
(4,199
)
(7,472
)
(982
)
(3,445
)
(3,562
)
(468
)
(7,203
)
(2,974
)
(3,746
)
(492
)
(2,623
)
(1,025
)
(135
)
1,457
150
80
11
(16,635
)
(18,372
)
(25,169
)
(3,306
)
(13,610
)
(12,524
)
(1,646
)
62,089
174,346
257,160
33,784
143,409
145,266
19,083
115
218
280
37
150
150
20
(4,731
)
(5,537
)
(4,923
)
(647
)
(2,414
)
(2,239
)
(294
)
(37
)
(7
)
336
60
1,386
182
965
174
23
44
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For the Year Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
RMB
RMB
$
RMB
RMB
$
(In thousands, except share, per share and per ADS data)
57,772
169,080
253,903
33,356
142,110
143,351
18,832
57,772
169,080
253,903
33,356
142,110
143,351
18,832
0.58
1.69
2.54
0.33
1.42
1.43
0.19
0.58
1.69
2.54
0.33
1.42
1.43
0.19
1.16
3.38
5.08
0.66
2.84
2.86
0.38
1.16
3.38
5.08
0.66
2.84
2.86
0.38
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,000,000
100,119,337
100,119,337
RMB2.48
US$
0.33
RMB1.40
US$
0.18
102,400,000
102,400,000
102,400,000
102,400,000
(1)
Each ADS represents two ordinary shares.
(2)
The pro forma earnings per share are calculated based on an
assumption that the conversion of 2,400,000 Series A
convertible redeemable preferred shares outstanding as of
June 30, 2007 into the same number of ordinary shares of
the Company had occurred on January 1, 2006 and 2007.
As of December 31,
As of June 30,
2005
2006
2007
RMB
RMB
$
RMB
$
(In thousands)
29,477
42,782
5,620
325,562
42,770
67,200
156,440
20,552
166,954
21,933
351,866
490,476
64,434
871,500
114,490
141,532
127,344
16,729
344,636
45,275
65,111
8,555
155,928
20,484
6,262
8,098
1,064
208,834
354,136
46,523
296,829
38,994
Table of Contents
46
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47
Table of Contents
48
Table of Contents
49
Table of Contents
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
% of
% of
% of
% of
% of
Corn
% of
Corn
% of
Corn
% of
Corn
% of
Corn
% of
Seed
Total
Seed
Total
Seed
Total
Seed
Total
Seed
Total
RMB
Revenues
Revenues
RMB
Revenues
Revenues
RMB
$
Revenues
Revenues
RMB
Revenues
Revenues
RMB
$
Revenues
Revenues
(In thousands except percentages)
13,822
28.5
%
9.1
%
136,534
55.6
%
35.5
%
137,062
18,006
55.8
%
28.0
%
74,197
52.2
%
27.6
%
86,421
11,353
64.6
%
30.9
%
34,738
71.5
22.8
109,067
44.4
28.4
108,572
14,263
44.2
22.2
67,929
47.8
25.2
47,432
6,231
35.4
17.0
48,560
100.0
%
31.9
%
245,601
100.0
%
63.9
%
245,634
32,269
100.0
%
50.2
%
142,126
100.0
%
52.8
%
133,853
17,584
100.0
%
47.9
%
50
Table of Contents
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
% of
% of
% of
% of
% of
Sheep
% of
Sheep
% of
Sheep
% of
Sheep
% of
Sheep
% of
Breeding
Total
Breeding
Total
Breeding
Total
Breeding
Total
Breeding
Total
RMB
Revenues
Revenues
RMB
Revenues
Revenues
RMB
$
Revenues
Revenues
RMB
Revenues
Revenues
RMB
$
Revenues
Revenues
(In thousands except percentages)
52,427
56.4
%
34.4
%
67,359
56.4
%
17.6
%
120,395
15,817
62.4
%
24.6
%
60,214
61.7
%
22.3
%
70,807
9,302
64.0
%
25.3
%
12,601
13.6
8.3
5,133
4.3
1.3
9,366
1,230
4.8
1.9
5,252
5.4
2.0
5,481
720
5.0
2.0
26,262
28.3
17.3
27,669
23.2
7.2
18,909
2,484
9.8
3.9
10,235
10.5
3.8
10,660
1,401
9.6
3.8
1,614
1.7
1.0
19,307
16.1
5.0
44,384
5,831
23.0
9.0
21,817
22.4
8.1
23,651
3,107
21.4
8.5
92,904
100.0
%
61.0
%
119,468
100.0
%
31.1
%
193,054
25,362
100.0
%
39.4
%
97,518
100.0
%
36.2
%
110,599
14,530
100.0
%
39.6
%
51
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52
Table of Contents
For the Years Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
%
RMB
%
RMB
$
%
RMB
%
RMB
$
%
(In thousands except percentages)
(4,874
)
(29.3
)%
(11,349
)
(61.8
)%
(14,031
)
(1,843
)
(55.7
)%
(7,542
)
(55.4
)%
(7,937
)
(1,043
)
(63.4
)%
(6,015
)
(36.2
)
(4,199
)
(22.8
)
(7,472
)
(982
)
(29.7
)
(3,445
)
(25.3
)
(3,562
)
(468
)
(28.4
)
(7,203
)
(43.3
)
(2,974
)
(16.2
)
(3,746
)
(492
)
(14.9
)
(2,623
)
(19.3
)
(1,025
)
(135
)
(8.2
)
1,457
8.8
150
0.8
80
11
0.3
(16,635
)
(100.0
)%
(18,372
)
(100.0
)%
(25,169
)
(3,306
)
(100.0
)%
(13,610
)
(100.0
)%
(12,524
)
(1,646
)
(100.0
)%
53
Table of Contents
the nature of our business and the contracts and agreements
relating to our business;
our financial conditions;
the economic outlook in general and the specific economic and
competitive elements affecting our business;
the growth of our operations; and
our financial and business risks.
Weighted average costs of capital, or WACC: WACC of 15.86% as at
July 4, 2007 was used. This was the combined result of the
changes in risk-free rate and industry average beta and our
company-specific risks.
WACC: WACC of 15.83% was used as at July 19, 2007. This was
the combined result of the changes in risk-free rate and
industry average beta and our company-specific risks.
54
Table of Contents
55
Table of Contents
For the Three Months Ended
September 30,
December 31,
March 31,
June 30,
September 30,
December 31,
March 31,
June 30,
2005
2005
2006
2006
2006
2006
2007
2007
(in RMB thousands)
1,355
90,541
85,330
56,796
6,137
97,371
92,986
40,867
29,164
29,721
25,444
72,074
52,868
42,668
19,748
90,851
3,194
3,283
9,332
20,262
12,254
9,167
5,960
28,995
33,713
123,545
120,106
149,132
71,259
149,206
118,694
160,713
(1,560
)
(41,325
)
(45,806
)
(35,572
)
(5,489
)
(57,863
)
(53,257
)
(27,138
)
(9,727
)
(9,553
)
(8,311
)
(18,318
)
(13,054
)
(12,604
)
(6,336
)
(24,207
)
(811
)
(870
)
(328
)
(3,884
)
(2,995
)
(3,150
)
(1,153
)
(9,526
)
(12,098
)
(51,748
)
(54,445
)
(57,774
)
(21,538
)
(73,617
)
(60,746
)
(60,871
)
21,615
71,797
65,661
91,358
49,721
75,589
57,948
99,842
(1,699
)
(3,311
)
(3,510
)
(4,032
)
(2,402
)
(4,087
)
(3,560
)
(4,377
)
(453
)
(1,104
)
(1,356
)
(2,089
)
(1,243
)
(2,784
)
(1,645
)
(1,917
)
(368
)
(368
)
(1,310
)
(1,313
)
(562
)
(561
)
(513
)
(512
)
150
80
(2,520
)
(4,633
)
(6,176
)
(7,434
)
(4,127
)
(7,432
)
(5,718
)
(6,806
)
19,095
67,164
59,485
83,924
45,594
68,157
52,230
93,036
74
76
60
90
63
67
79
71
(1,443
)
(1,290
)
(1,059
)
(1,355
)
(1,345
)
(1,164
)
(1,400
)
(839
)
5
54
66
899
79
342
174
17,731
66,004
58,552
83,558
44,391
67,402
50,909
92,442
17,731
66,004
58,552
83,558
44,391
67,402
50,909
92,442
56
Table of Contents
For the Years Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
% of
% of
% of
% of
% of
RMB
Revenues
RMB
Revenues
RMB
$
Revenues
RMB
Revenues
RMB
$
Revenues
(In thousands except percentages)
48,560
31.9
%
245,601
63.9
%
245,634
32,269
50.2
%
142,126
52.8
%
133,853
17,584
47.9
%
92,904
61.0
119,468
31.1
193,054
25,362
39.4
97,518
36.2
110,599
14,530
39.6
10,820
7.1
19,020
5.0
51,015
6,702
10.4
29,594
11.0
34,955
4,592
12.5
152,284
100.0
%
384,089
100.0
%
489,703
64,333
100.0
%
269,238
100.0
%
279,407
36,706
100.0
%
(33,311
)
(21.9
)%
(147,723
)
(38.5
)%
(144,730
)
(19,013
)
(29.5
)%
(81,378
)
(30.2
)%
(80,395
)
(10,562
)
(28.8
)%
(31,196
)
(20.5
)
(37,716
)
(9.8
)
(52,287
)
(6,869
)
(10.7
)
(26,629
)
(9.9
)
(30,543
)
(4,012
)
(10.9
)
(9,053
)
(5.9
)
(5,932
)
(1.5
)
(10,357
)
(1,361
)
(2.1
)
(4,212
)
(1.6
)
(10,679
)
(1,403
)
(3.8
)
(73,560
)
(48.3
)%
(191,371
)
(49.8
)%
(207,374
)
(27,243
)
(42.3
)%
(112,219
)
(41.7
)%
(121,617
)
(15,977
)
(43.5
)%
78,724
51.7
%
192,718
50.2
%
282,329
37,090
57.7
%
157,019
58.3
%
157,790
20,729
56.5
%
(4,874
)
(3.2
)%
(11,349
)
(3.0
)%
(14,031
)
(1,843
)
(2.9
)%
(7,542
)
(2.8
)%
(7,937
)
(1,043
)
(2.8
)%
(6,015
)
(4.0
)
(4,199
)
(1.0
)
(7,472
)
(982
)
(1.5
)
(3,445
)
(1.3
)
(3,562
)
(468
)
(1.3
)
(7,203
)
(4.7
)
(2,974
)
(0.8
)
(3,746
)
(492
)
(0.8
)
(2,623
)
(1.0
)
(1,025
)
(135
)
(0.4
)
1,457
0.9
150
0.0
80
11
0.0
(16,635
)
(11.0
)%
(18,372
)
(4.8
)%
(25,169
)
(3,306
)
(5.2
)%
(13,610
)
(5.1
)%
(12,524
)
(1,646
)
(4.5
)%
62,089
40.7
%
174,346
45.4
%
257,160
33,784
52.5
%
143,409
53.2
%
145,266
19,083
52.0
%
115
0.1
218
0.1
280
37
0.1
150
0.1
150
20
0.0
(4,731
)
(3.1
)
(5,537
)
(1.5
)
(4,923
)
(647
)
(1.1
)
(2,414
)
(0.9
)
(2,239
)
(294
)
(0.8
)
299
0.2
53
0.0
1,386
182
0.3
965
0.4
174
23
0.1
57,772
37.9
%
169,080
44.0
%
253,903
33,356
51.8
%
142,110
52.8
%
143,351
18,832
51.3
%
57,772
37.9
%
169,080
44.0
%
253,903
33,356
51.8
%
142,110
52.8
%
143,351
18,832
51.3
%
57
Table of Contents
58
Table of Contents
59
Table of Contents
60
Table of Contents
61
Table of Contents
62
Table of Contents
For the Year Ended December 31,
For the Six Months Ended June 30,
2004
2005
2006
2006
2007
RMB
RMB
RMB
$
RMB
RMB
$
(In thousands)
58,062
140,447
162,051
21,289
73,316
94,234
12,380
(51,197
)
(99,130
)
(51,309
)
(6,741
)
(15,318
)
(27,134
)
(3,565
)
(1,160
)
(32,849
)
(97,437
)
(12,800
)
(39,095
)
215,680
28,335
5,705
8,468
13,305
1,748
18,903
282,780
37,150
15,304
21,009
29,477
3,872
29,477
42,782
5,620
21,009
29,477
42,782
5,620
48,380
325,562
42,770
add-back of non-cash expenses including depreciation of fixed
assets and other assets of RMB4.8 million
($0.6 million) and amortization of intangible assets of
RMB2.6 million ($0.3 million), respectively, and
(3) an add-back of imputed interest on ultimate controlling
shareholders loan of RMB1.0 million
($0.1 million). The foregoing effects were offset in part
by (1) an increase in prepayments and other current assets
of RMB54.1 million ($7.1 million) primarily due to the
increase in advances to village collectives; (2) an
increase in accounts receivable of RMB9.3 million
($1.2 million) due to an increase in our sales and the
longer credit terms provided to selected customers in order to
attract larger orders from them and (3) a
63
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64
Table of Contents
Payment Due by December 31,
Total
2007
2008
2009
2010
Thereafter
(in RMB thousands)
39,311
39,311
40,591
4,217
4,231
2,891
499
28,753
338,482
32,138
30,974
30,974
30,974
213,422
8,996
204
204
204
8,384
427,380
75,666
35,409
34,069
31,677
250,559
Payment Due
Six
months
ending
December 31,
Year ending December 31,
Total
2007
2008
2009
2010
Thereafter
(in RMB thousands)
8,881
8,881
157,698
35,057
46,435
45,095
1,366
29,745
446,738
20,854
41,708
41,708
41,708
300,760
8,996
204
204
204
8,384
622,313
64,792
88,347
87,007
43,278
338,889
(1)
Includes short term borrowings,
current portion of long-term debt and future interest
obligations.
(2)
Includes lease obligations for our
office premises and buildings under non-cancelable leases.
65
Table of Contents
(3)
Represents commitments for the
purchase of corn seeds, property, plant and equipment and
acquired intangible assets and payments for research and
development services. These commitments are not recorded on our
balance sheet as of December 31, 2006 or June 30,
2007, as we have not received related goods or services or taken
title to the properties.
66
Table of Contents
67
Table of Contents
68
Table of Contents
69
Table of Contents
Production Volume
Corn Consumption
Annual Production Volume
Annual Yield
CAGR (from 2000 to 2005)
per Capita (2005)
(Million tonnes)
(Kg/hectare)
(g/capita/day)
1
USA
280.2
9,316
2.0
%
158
2
China
131.1
5,001
4.3
%
29
3
Brazil
34.9
3,040
1.7
%
78
4
Mexico
20.5
2,563
1.8
%
326
5
Argentina
19.5
7,117
4.0
%
36
70
Table of Contents
2000
2001
2002
2003
2004
2005
60.4
63.5
67.9
71.3
75.5
78.8
47.7
49.8
52.9
55.2
58.1
60.3
2000
2001
2002
2003
2004
2005
2006
10.5
6.0
11.7
16.4
2.3
8.6
3.1
0.3
36.0
6.3
0.1
2.3
3.9
65.1
71
Table of Contents
CAGR
2000
2001
2002
2003
2004
2005
(2000-2005)
106.0
114.1
121.3
115.8
130.3
131.1
4.3
%
23.1
24.3
24.6
24.1
25.4
26.4
2.7
%
CBT Price
Source:
CBT - No. 2 Yellow Corn SPOT Price
72
Table of Contents
Goat Flock of Top 10 Countries (2005)
(goats in millions)
Source:
FAOSTAT
Total Mutton
Consumption
(000 tonnes)
5,074
696
545
525
384
355
306
293
249
238
Source:
FAOSTAT
Total Wool
Consumption
(000 tonnes)
425
260
85
18
14
447
1,249
Source:
International Wool Trade
Organization; Economist Intelligence Unit
*
Year ended June 30, 2006
73
Table of Contents
74
Table of Contents
75
Table of Contents
We produce four types of proprietary corn seed products with one
or more of the following special characteristics: high yield,
disease resistance; drought resistance; high starch content; and
stress tolerance. We are developing more varieties of corn seeds
with these characteristics, as well as seeds for corn with a
high oil content and pest resistance corn.
We produce sheep breeding products from various well-recognized
foreign pure breeds including Poll Dorset, Suffolk, Texel,
Merino and Dorper, as well as domestic pure breed sheep. Our
sheep breeding business consists primarily of the production and
sale of frozen semen, embryos, purebred breeder sheep and our
Primalights hybrid III sheep.
We produce a selected variety of seedlings including raspberry,
blackberry, date and white bark pine, using advanced techniques
such as tissue culture technologies for date, raspberry and
blackberry seedlings, nutritional technologies for pine, and
branch grafting for date seedlings.
76
Table of Contents
We have multiple growth areas within each of our three
agribusiness segments.
The diversity of our products may mitigate risks arising from
one particular segment of our agribusiness.
We share management, marketing and research and development
resources across our product lines, including working with
academic and research institutions that engage in research
across different agricultural product lines.
We have dedicated teams that provide marketing and customer
service at the pre-sales, sales and post-sales stages. We
organize site visits and field demonstrations to educate farmers
and distributors. Our customer service at the sales stage
includes assisting customers in selecting the products suitable
for their particular needs. When sales are carried out by
distributors, we work to ensure that the distributors have a
solid knowledge of our products, the needs of our end customers,
and how our products serve those needs. Our customer service at
the post-sales stage includes continued consultation and site
visits to both farmers and distributors.
We also have an extensive third-party distribution network for
our corn seeds, consisting of over 110 local and regional
distributors in 12 provinces. Similarly, we distribute our
sheep breeding products through an extensive network of breed
improvement and reproductive stations, plant cultivation
companies and government operated entities within Shanxi that
serve farmers directly. We sell our seedling products through
different distribution channels for each of our seedling
products. Our distribution network for our three business
segments covers 15 provinces throughout China.
77
Table of Contents
We currently offer corn seed products that are suited to four
corn growing regions in China, namely, the North, the Northwest,
the Southwest and the Yellow-Huai River Valley regions. We have
produced seed types with different traits, such as high-yield,
disease-resistant corn, drought-resistant corn and high-starch,
and severe stress-tolerant corn. We plan to develop corn seeds
that are suitable for the remaining two corn growing regions in
China, namely, the Southern Mountain and the Plateau of Qinghai
and Tibet regions, to cover all major corn plantation areas in
China. Within each of the regions, we plan to further enhance
the existing characteristics of our products by developing
additional attributes such as a high-yield of oil and
pest-resistance, as well as improving the existing traits we
have developed.
We plan to expand our breeding business to cultivate cashmere
breeder goats for semen and embryo production, as well as to
grow flocks of cashmere goats for the production of super-fine
cashmere.
We plan to grow herb seedlings for use in healthcare-related
products and to produce a new type of date tree that is expected
to have an extended lifespan.
78
Table of Contents
have access to more land resources in different climate zones to
broaden our geographic presence;
add additional or complementary product varieties;
add additional or complementary business lines;
add expanded distribution capabilities to enhance our sales or
increase our market penetration; and
have access to more advanced agricultural technologies.
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High starch, resistant to severe weather, geographically
adaptable corn
Anhui, Gansu, Guizhou, Hebei, Heilongjiang, Henan, Hubei, Hunan,
Inner Mongolia, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi,
Shandong, Shanxi, Sichuan, Yunnan
Drought-resistant corn
Hebei, Heilongjiang, Inner Mongolia, Jilin, Liaoning, Qinghai,
Shanxi, Tibet
High-yielding, disease-resistant corn
Anhui, Guizhou, Hebei, Heilongjiang, Henan, Hubei, Hunan, Inner
Mongolia, Jiangxi, Jilin, Liaoning, Shaanxi, Shandong, Shanxi,
Sichuan, Yunnan
High-yielding corn
Anhui, Guizhou, Hebei, Heilongjiang, Henan, Hubei, Hunan, Inner
Mongolia, Jiangxi, Jilin, Liaoning, Shaanxi, Shandong, Shanxi,
Sichuan, Yunnan
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Identification of appropriate parental
genes.
We identify the desired genetic
characteristics in existing corn varieties and use those seeds
as the parent or grandparent generation in developing crosses of
corn varieties. We currently have approximately 6,700 varieties
of potential parent or grandparent genes.
Development of inbreds from the parental
populations.
We often use second cycle inbreeding
and backcross inbreeding to establish the parent lines and
molecular marker techniques to select the lines with desired
attributes.
Evaluation of inbreds in experimental hybrid
combinations.
We cross the parental corn genes by
growing both varieties (a mother gene corn and a
father gene corn) together in one field. We repeat
this process many times in various combinations, examining which
crosses produce the most likely commercially viable corn seeds.
We have produced approximately 21,000 crosses.
Identification of superior hybrid
combinations.
We use molecular-marker-assisted
selection to identify a few combinations that we consider to be
superior hybrids and which have the likeliest commercial value.
We have identified approximately 290 combinations that we
believe may have commercial value.
Multi-location testing of the pre-commercial
hybrids.
We develop those varieties that we
believe are superior and test them in various locations and
conditions to study their traits and determine their commercial
viability, including for which regions and conditions they are
most suited.
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Cleaning and sterilization.
The extraction
process begins with our workers cleaning and disinfecting
themselves, the sheep and sterilizing the equipment used.
Semen extraction.
Semen is collected with a
collection receptacle and examined for contaminants. It is also
analyzed for sperm density and motility at the same laboratory.
If the sperm collected does not attain the required standard of
vivacity, it is immediately discarded.
Dilution.
Collected sperm which meets the
required standards is diluted or extended with a
specially-formulated solution in order to enhance the sperm
survival rate and extend the life of the sperm during the
cooling process. This process also helps to increase the volume
and efficiency of the extracted semen.
Tubing and storage.
After the dilution
process, the sheep semen is cooled, frozen and packed for
storage. Generally, the diluted sheep semen is stored in plastic
straws, each containing over 100 million sperm. These
plastic straws are then placed into a freezing machine that is
cooled by liquid nitrogen. The temperature is progressively
reduced to approximately negative 35°C to negative
40°C, for the purpose of deactivating sperm cells to
prevent damage by the second stage of the freezing process. The
temperature of the diluted sheep semen is then further reduced
to approximately negative 197°C, in preparation for
long-term storage.
Cleaning and sterilization.
Prior to each
collection, workers must disinfect themselves and put on special
garments. All surgical equipment are sterilized and the sheep
are sprayed with sanitizing fluid.
Superovulation.
We use hormone treatments to
stimulate the ovulation in ewes to increase the production of
eggs and to better manage the timing of estrus in the ewes. The
recognition of estrus by the operator during this period of
superovulation, which lasts for approximately seven days, is
critical because insemination must be carried out during this
period to achieve successful fertilization of the eggs at the
stage of ovulation.
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Artificial insemination.
Plastic straws
containing semen are fitted into an insemination gun which is
used to introduce semen beyond the cervix of the donor ewe.
Usually, the insemination of the superovulated ewe will be
carried out within 12 to 24 hours after the beginning of
estrus.
Surgery and flushing.
This is the most
important process for embryo collection. A two-way catheter is
inserted into the donor ewe, for flushing fluid to be introduced
into the uterine horn or fallopian tube to flush out the embryos
of the donor ewe. At this stage, special care is taken to ensure
that all flushing fluid is recovered and that the donor ewe is
subject to minimum stress and trauma. The fertilized embryos are
subsequently flushed out with this fluid.
Processing and evaluation.
After the flushing
fluid is collected, it is then taken to a laboratory for
inspection of the embryos under a microscope. The fertilized
embryos collected are evaluated for their quality and classified
by grades based on the potential likelihood of viability if
transplanted to a recipient ewe.
Freezing and storage.
Embryos can be
transferred immediately upon recovery and evaluation or cooled,
frozen and packed for storage by procedures similar to those
used for sheep semen. Generally, one embryo is contained in each
plastic straw. The frozen and dormant embryos kept in liquid
nitrogen can be stored without significant impairment for an
indefinite period and can be ready for use by thawing the
plastic straw in warm water for a few seconds.
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Local and regional distributors
Farmers
Breed Improvement and Reproductive Stations, or BIRS; Veterinary
stations; Breeding companies; Large sheep farms
Other breeding companies; Farmers; Sheep farms
Breeding companies; Large sheep farms
Other breeding companies; Sheep farms
Foreign pure-bred breeder sheep; Primalights III hybrid
sheep
Government poverty alleviation and good-breed promotion
projects; Husbandry Bureaus; Breeding companies; Large sheep
farms
Breeding companies; Sheep farms; Farmers
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Number of Full-time
Percentage of
Employees
Total Employees
109
32.7
%
113
34.0
46
13.8
65
19.5
333
100.0
%
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F-21
F-22
43
Chairman of the Board/Co-Chief Executive Officer
40
Director
45
Director/Chief Operating Officer
41
Director/Chief Financial Officer
48
Director
63
Independent Director Appointee
57
Independent Director Appointee
45
Independent Director Appointee
45
Co-Chief Executive Officer
31
Chief Technology Officer
44
Chief Strategy Officer
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selecting the independent auditors and pre-approving all
auditing and non-auditing services permitted to be performed by
the independent auditors;
reviewing with the independent auditors any audit problems or
difficulties and managements response;
reviewing and approving all proposed related party transactions,
as defined in Item 404 of
Regulation S-K
under the Securities Act;
discussing the annual audited financial statements with
management and the independent auditors;
reviewing major issues as to the adequacy of our internal
controls and any special audit steps adopted in light of
material control deficiencies;
annually reviewing and reassessing the adequacy of our audit
committee charter;
meeting separately and periodically with management and the
independent auditors; and
reporting regularly to the board of directors.
reviewing and recommending total compensation packages to the
board for our three most senior executives;
approving and overseeing the total compensation packages for our
other executives other than the three most senior executives;
reviewing and recommending director compensation to the
board; and
periodically reviewing and approving any long-term incentive
compensation or equity plans, programs or similar arrangements,
annual bonuses, employee pension and welfare benefit plans.
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selecting and recommending nominees for election or re-election
to the board or appointments to fill any vacancy;
annually reviewing with the board the current composition of the
board with regards to characteristics such as independence, age,
skills, experience and availability of service to us;
selecting and recommending to the names of directors the board
to serve as members of the audit committee, the compensation
committee, and the corporate governance and nominating committee;
periodically advising the board with regard to significant
developments in the law and practice of corporate governance as
well as our compliance with applicable laws and regulations, and
making recommendations to the board on all matters of corporate
governance and on any remedial action to be taken; and
monitoring compliance with our code of business conduct and
ethics, including reviewing the adequacy and effectiveness of
our procedures to ensure proper compliance.
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Ordinary Shares
Underlying
Exercise Price
Date of
Options Awarded
($/Share)
Date of Grant
Expiration
600,000
2.40
July 4, 2007
July 4, 2017
600,000
2.40
July 19, 2007
July 19, 2017
600,000
2.40
July 19, 2007
July 19, 2017
600,000
2.40
July 4, 2007
July 4, 2017
600,000
2.40
July 19, 2007
July 19, 2017
400,000
2.40
July 19, 2007
July 19, 2017
2,500,000
2.40
July 19, 2007
July 19, 2017
1,600,000
4.80
July 19, 2007
July 19, 2017
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each of our directors and executive officers;
each person known to us to own beneficially more than 5.0% of
our ordinary shares; and
each selling shareholder.
Ordinary Shares
Beneficially Owned
Prior to
Ordinary Shares Being
Shares Beneficially Owned
This Offering
Sold in This Offering
After This Offering(1)
Number(2)
%(3)
Number
%
Number
%
86,630,000
84.6
10,300,000
10.1
76,330,000
60.4
86,630,000
84.6
10,300,000
10.1
76,330,000
60.4
86,630,000
84.6
10,300,000
10.1
76,330,000
60.4
86,630,000
84.6
10,300,000
10.1
76,330,000
60.4
8,650,000
8.4
8,650,000
6.8
6,600,000
6.4
6,600,000
5.2
(1)
Assumes that the underwriters do not exercise the over-allotment
option and no other change to the number of ADSs offered by us
as set forth on the cover page of this prospectus.
(2)
Beneficial ownership is determined in accordance with
Rule 13d-3
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, and includes voting or
investment power with respect to the securities.
(3)
For each person and group included in this table, percentage
ownership is calculated by dividing the number of shares
beneficially owned by such person or group by the sum of
102,400,000, being the number of ordinary shares outstanding as
of this prospectus, and the number of ordinary shares underlying
share options held by such person or group that are exercisable
within 60 days after the date of this prospectus, if any.
Percentage ownership after this offering is calculated by
dividing the number of shares beneficially owned by such person
or group by the sum of 126,400,000, being the number of ordinary
shares outstanding immediately after the completion of this
offering, and the number of ordinary shares underlying share
options held by such person or group that are exercisable within
60 days after the date of this prospectus, if any, assuming
that underwriters will not exercise their option to purchase
additional ADSs in the offering.
(4)
Includes 86,630,000 ordinary shares owned by Brothers Capital
Limited, a British Virgin Islands company of which Mr. Lai
is a director. The business address of Mr. Lai is
Room 706, 7/F, Huantai Building, No. 12A, South Street
Zhongguancw Haidian District, Beijing 100081, Peoples
Republic of China.
(5)
Includes 86,630,000 ordinary shares held by Brothers Capital
Limited of which Mr. Qian is a director and the president.
Mr. Qian disclaims beneficial ownership of these shares.
The business address of Mr. Qian is Room 706, 7/F,
Huantai Building, No. 12A, South Street Zhongguancw Haidian
District, Beijing 100081, Peoples Republic of China.
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(6)
Certain directors and executive officers have been granted
options pursuant to our 2007 Share Incentive Plan. No such
options are exercisable within 60 days after the date of
the prospectus. See Management Share
Incentives.
(7)
Brothers Capital Limited is a company incorporated in the
British Virgin Islands with two directors, Guanglin Lai and
Zhaohua Qian. The registered address of Brothers Capital Limited
is Palm Grove House, P.O. Box 438, Road Town, Tortola,
British Virgin Islands.
(8)
Includes 4,170,000 ordinary shares and 1,600,000 ordinary shares
convertible from series A preferred shares held by TPG
Growth AC Ltd. and 2,080,000 ordinary shares and 800,000
ordinary shares convertible from series A preferred shares
held by TPG Biotech II, Ltd. TPG Biotech II, Ltd. is a
company incorporated in the Cayman Islands, whose sole
shareholder is TPG Biotechnology Partners II, L.P., a
Delaware limited partnership, which is managed by its general
partner, TPG Biotechnology GenPar II, L.P., a Delaware
limited partnership, which is managed by its general partner,
TPG Biotech Advisors II, LLC, a Delaware limited liability
company, whose sole member is TPG Ventures Holdings, LLC, a
Delaware limited liability company, whose managing member is TPG
Ventures Partners, L.P., a Delaware limited partnership, which
is managed by its general partner, TPG Ventures Professionals,
L.P., a Delaware limited partnership, which is managed by its
general partner, Tarrant Advisors, Inc., a Texas company, whose
sole shareholder is Tarrant Capital Advisors, Inc., a Delaware
company, whose shareholders are David Bonderman and James
Coulter. TPG Growth AC Ltd. is a company incorporated in the
Cayman Islands, whose sole shareholder is TPG Star, L.P., a
Delaware limited partnership, which is managed by its general
partner, TPG Star GenPar, L.P., a Delaware limited partnership,
which is managed by its general partner, TPG Star Advisors, LLC,
a Delaware limited liability company, whose sole member is TPG
Ventures Holdings, LLC, whose managing member is TPG Ventures
Partners, L.P., which is managed by its general partner, TPG
Ventures Professionals, L.P., which is managed by its general
partner, Tarrant Advisors, Inc., whose sole shareholder is
Tarrant Capital Advisors, Inc., whose shareholders are David
Bonderman and James Coulter. The registered address for both of
these companies is c/o M&C Corporate Services Limited,
PO Box 309GT, Ugland House, South Church Street,
George Town, Grand Cayman, Cayman Islands.
(9)
Dubai Investment Group L.L.C. is a company incorporated in
United Arab Emirates and controlled by Saud Ahmad Abdulrahman
Baalawi. The address for Dubai Investment Group L.L.C. is
Level 38, Emirates Towers (Offices),
P.O. Box 73311 Sheikh Zayed Road, Dubai, United Arab
Emirates.
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the statutory provisions as to majority vote have been met;
the shareholders have been fairly represented at the meeting in
question;
the arrangement is such that a businessman would reasonably
approve; and
the arrangement is not one that would more properly be
sanctioned under some other provision of the Companies Law.
a company is acting or proposing to act illegally or ultra vires;
the act complained of, although not ultra vires, could be
effected duly if authorized by more than a special resolution
that vote which has not been obtained; and
those who control the company are perpetrating a fraud on
the minority.
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Cash.
The depositary will convert any cash
dividend or other cash distribution we pay on the shares into
U.S. dollars, if it can do so on a reasonable basis and can
transfer the U.S. dollars to the United States. If that is
not possible or if any government approval is needed and cannot
be obtained, the deposit agreement allows the depositary to
distribute the foreign currency only to those ADR holders to
whom it is possible to do so. It will hold the foreign currency
it cannot convert for the account of the ADS holders who have
not been paid. It will not invest the foreign currency and it
will not be liable for any interest.
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Shares.
The depositary may distribute
additional ADSs representing any shares we distribute as a
dividend or free distribution. The depositary will only
distribute whole ADSs. It will sell shares which would require
it to deliver a fractional ADS and distribute the net proceeds
in the same way as it does with cash. If the depositary does not
distribute additional ADSs, the outstanding ADSs will also
represent the new shares.
Rights to purchase additional shares.
If we
offer holders of our securities any rights to subscribe for
additional shares or any other rights, the depositary may make
these rights available to you. If the depositary decides it is
not lawful and feasible to make the rights available but that it
is practical to sell the rights, the depositary may sell the
rights and distribute the proceeds in the same way as it does
with cash. The depositary will allow rights that are not
distributed or sold to lapse.
In that case, you will receive
no value for them.
Other Distributions.
The depositary will send
to you anything else we distribute on deposited securities by
any means it thinks is equitable and practical. If it cannot
make the distribution in that way, the depositary has a choice.
It may decide to sell what we distributed and distribute the net
proceeds, in the same way as it does with cash. Or, it may
decide to hold what we distributed, in which case ADSs will also
represent the newly distributed property. However, the
depositary is not required to distribute any securities (other
than ADSs) to you unless it receives satisfactory evidence from
us that it is legal to make that distribution.
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Persons depositing or withdrawing shares must pay
:
For
:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
$0.02 (or less) per ADS
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A fee equivalent to the fee that would be payable if securities
distributed to you had been shares and the shares had been
deposited for issuance of ADSs
$0.02 (or less) per ADSs per calendar year
Registration or transfer fees
Expenses of the depositary
Taxes and other governmental charges the depositary or the
custodian have to pay on any ADS or share underlying an ADS, for
example, stock transfer taxes, stamp duty or withholding taxes
Any charges incurred by the depositary or its agents for
servicing the deposited securities
If we:
Then:
The cash, shares or other securities received by the depositary
will become deposited securities. Each
ADS will automatically represent its equal share of the new
deposited securities.
The depositary may, and will if we ask it to, distribute some or
all of the cash, shares or other securities it received. It may
also deliver new ADSs or ask you to surrender your outstanding
ADSs in
exchange for new ADSs identifying the new deposited securities.
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are only obligated to take the actions specifically set forth in
the deposit agreement without negligence or bad faith;
are not liable if either of us is prevented or delayed by law or
circumstances beyond our control from performing our obligations
under the deposit agreement;
are not liable if either of us exercises discretion permitted
under the deposit agreement;
have no obligation to become involved in a lawsuit or other
proceeding related to the ADSs or the deposit agreement on your
behalf or on behalf of any other party;
may rely upon any documents we believe in good faith to be
genuine and to have been signed or presented by the proper party.
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payment of stock transfer or other taxes or other governmental
charges and transfer or registration fees charged by third
parties for the transfer of any shares or other deposited
securities;
satisfactory proof of the identity and genuineness of any
signature or other information it deems necessary; and
compliance with regulations it may establish, from time to time,
consistent with the deposit agreement, including presentation of
transfer documents.
When temporary delays arise because: (i) the depositary has
closed its transfer books or we have closed our transfer books;
(ii) the transfer of shares is blocked to permit voting at
a shareholders meeting; or (iii) we are paying a
dividend on our shares.
When you or other ADS holders seeking to withdraw shares owe
money to pay fees, taxes and similar charges.
When it is necessary to prohibit withdrawals in order to comply
with any laws or governmental regulations that apply to ADSs or
to the withdrawal of shares or other deposited securities.
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1% of the then outstanding ordinary shares, in the form of ADSs
or otherwise, which will equal approximately 1,264,000 ordinary
shares immediately after this offering; or
the average weekly trading volume of our ordinary shares in the
form of ADSs or otherwise, during the four calendar weeks
preceding the date on which notice of the sale is filed with the
Securities and Exchange Commission.
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certain financial institutions;
insurance companies;
broker dealers;
traders that elect to mark to market;
tax-exempt entities;
persons liable for alternative minimum tax;
persons holding an ADS or ordinary share as part of a straddle,
hedging, conversion or integrated transaction;
persons that actually or constructively own 10% or more of our
voting stock;
persons who acquired ADSs or ordinary shares pursuant to the
exercise of any employee stock options or otherwise as
compensation; or
persons holding ADSs or ordinary shares through partnerships or
other pass-through entities.
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an individual who is a citizen or resident of the United States;
a corporation (or other entity taxable as a corporation for U.S.
federal income tax purposes) organized under the laws of the
United States, any state or the District of Columbia;
an estate whose income is subject to U.S. federal income
taxation regardless of its source; or
a trust that (1) is subject to the primary supervision of a
court within the United States and the control of one or more
U.S. persons or (2) has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a U.S.
person.
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at least 75% of its gross income is passive income, or
at least 50% of the value of its assets (based on an average of
the quarterly values of the assets during a taxable year) is
attributable to assets that produce or are held for the
production of passive income (the asset test).
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the excess distribution or gain will be allocated ratably over
your holding period for the ADSs or ordinary shares,
the amount allocated to the current taxable year, and any
taxable year prior to the first taxable year in which we were a
PFIC, will be treated as ordinary income, and
the amount allocated to each other year will be subject to the
highest tax rate in effect for that year and the interest charge
generally applicable to underpayments of tax will be imposed on
the resulting tax attributable to each such year.
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Number of
ADSs
Per ADS
Total
Without
With
Without
With
Over-Allotment
Over-Allotment
Over-Allotment
Over-Allotment
$
$
$
$
$
$
$
$
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Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.
Over-allotment involves sales by the underwriters in excess of
the number of ADSs the underwriters are obligated to purchase,
which creates a syndicate short position. The short position may
be either a covered short position or a naked short position. In
a covered short position, the number of ADSs over-allotted by
the underwriters is not greater than the number of ADSs that
they may purchase in the over-allotment option. In a naked short
position, the number of ADSs involved is greater than the number
of ADSs in the over-allotment option. The underwriters may close
out any covered short position by either exercising their
over-allotment option
and/or
purchasing ADSs in the open market.
Syndicate covering transactions involve purchases of the ADSs in
the open market after the distribution has been completed in
order to cover syndicate short positions. In determining the
source of ADSs to close out the short position, the underwriters
will consider, among other things, the price of ADSs available
for purchase in the open market as compared to the price at
which they may purchase ADSs through the over-allotment option.
If the underwriters sell more ADSs than could be covered by the
over-allotment option, a naked short position, the position can
only be closed out by buying ADSs in the open market. A naked
short position is more likely to be created if the underwriters
are concerned that there could be downward pressure on the price
of the ADSs in the open market after pricing that could
adversely affect investors who purchase in the offering.
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Penalty bids permit the representative to reclaim a selling
concession from a syndicate member when the ADSs originally sold
by the syndicate member is purchased in a stabilizing or
syndicate covering transaction to cover syndicate short
positions.
the history of and prospects for the industry in which, and the
companies with which, we compete generally;
an assessment of our management;
our present operations;
our historical results of operations;
the trend of our revenues and earnings; and
our earnings prospects.
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$
9,991
150,000
33,042
200,000
2,000,000
1,400,000
1,500,000
$
5,293,033
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Page
F-2
F-3
F-4
F-5
F-6
F-7
F-29
F-30
F-32
F-33
F-34
F-1
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Agria Corporation
F-2
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CONSOLIDATED BALANCE SHEETS
As of December 31, 2005 and 2006
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$),
except for number of shares)
F-3
Table of Contents
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2004, 2005 and 2006
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$),
except for number of shares and per share data)
Note
2004
2005
2006
2006
(RMB)
(RMB)
(RMB)
(US$)
48,560
245,601
245,634
32,269
92,904
119,468
193,054
25,362
10,820
19,020
51,015
6,702
152,284
384,089
489,703
64,333
(33,311
)
(147,723
)
(144,730
)
(19,013
)
(31,196
)
(37,716
)
(52,287
)
(6,869
)
(9,053
)
(5,932
)
(10,357
)
(1,361
)
(73,560
)
(191,371
)
(207,374
)
(27,243
)
78,724
192,718
282,329
37,090
(4,874
)
(11,349
)
(14,031
)
(1,843
)
(6,015
)
(4,199
)
(7,472
)
(982
)
(7,203
)
(2,974
)
(3,746
)
(492
)
1,457
150
80
11
(16,635
)
(18,372
)
(25,169
)
(3,306
)
62,089
174,346
257,160
33,784
115
218
280
37
(4,731
)
(5,537
)
(4,923
)
(647
)
(37
)
(7
)
336
60
1,386
182
57,772
169,080
253,903
33,356
13
57,772
169,080
253,903
33,356
14
RMB 0.58
RMB 1.69
RMB 2.54
US$
0.33
14
100,000,000
100,000,000
100,000,000
100,000,000
RMB2.48
US$
0.33
102,400,000
102,400,000
F-4
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2004, 2005 and 2006
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$))
2004
2005
2006
2006
(RMB)
(RMB)
(RMB)
(US$)
57,772
169,080
253,903
33,356
42
21
(185
)
(24
)
5,133
8,091
8,855
1,163
338
3,293
4,535
596
200
1,469
1,546
203
1,893
1,674
1,674
1,836
241
2,419
2,443
675
89
2,914
(2,000
)
492
1,508
198
(10,980
)
(50,672
)
(90,786
)
(11,927
)
(2,492
)
(39,992
)
24,651
3,238
(11,825
)
4,635
(14,471
)
(1,901
)
489
(1,589
)
1,446
190
9,175
38,747
(29,233
)
(3,840
)
3,245
2,760
950
125
3
(13
)
62
8
(3,179
)
(418
)
58,062
140,447
162,051
21,289
(49,527
)
(37,357
)
(43,699
)
(5,741
)
(1,670
)
(61,773
)
(16,180
)
(2,126
)
9,470
1,244
(900
)
(118
)
(51,197
)
(99,130
)
(51,309
)
(6,741
)
15,900
26,500
45,300
5,951
(11,000
)
(23,300
)
(21,300
)
(2,798
)
3,500
(1,000
)
(1,000
)
(131
)
(24,269
)
(110,437
)
(14,508
)
(9,560
)
(10,780
)
(10,000
)
(1,314
)
(1,160
)
(32,849
)
(97,437
)
(12,800
)
5,705
8,468
13,305
1,748
15,304
21,009
29,477
3,872
21,009
29,477
42,782
5,620
115
218
280
37
641
1,288
2,284
300
37,161
5,947
31,168
4,095
F-5
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY
For the years ended December 31, 2004, 2005 and 2006
(Amounts in thousands of Renminbi (RMB) except for
number of shares)
Number of
Additional
Retained
Total
Ordinary
Ordinary
Paid-in
Statutory
Earnings/
Shareholders
Note
Shares
Shares
Capital
Reserves
(Deficit)
Equity
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
100,000,000
(11
)
(11
)
1,674
1,674
57,772
57,772
12,142
(12,142
)
100,000,000
1,674
12,142
45,619
59,435
16
2,914
2,914
1,674
1,674
169,080
169,080
26,553
(26,553
)
(24,269
)
(24,269
)
100,000,000
6,262
38,695
163,877
208,834
1,836
1,836
253,903
253,903
38,258
(38,258
)
(110,437
)
(110,437
)
100,000,000
8,098
76,953
269,085
354,136
1,064
10,109
35,350
46,523
F-6
Table of Contents
1.
Organization
and Basis of Presentation
F-7
Table of Contents
Date of
Place of
Percentage of
incorporation
incorporation
shareholdings
Principal Activities
July 6, 2005
BVI
100
%
Investment holding
September 19, 2003
Hong Kong
100
%
Investment holding
Date of
Place of
incorporation
incorporation
Principal Activities
April 20, 2000
PRC
Development, production and sale of
corn seeds, sheep breeding products
and seedlings
2.
Summary
of Significant Accounting Policies
F-8
Table of Contents
20 years
5-10 years
5 years
6 years
F-9
Table of Contents
5 years
30-46 years
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
3.
Accounts
receivable
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
69,121
159,907
21,007
(1,921
)
(3,467
)
(455
)
67,200
156,440
20,552
2004
2005
2006
2006
(RMB000)
(RMB000)
(RMB000)
(US$000)
(252
)
(452
)
(1,921
)
(252
)
(200
)
(1,469
)
(1,546
)
(203
)
(452
)
(1,921
)
(3,467
)
(455
)
4.
Inventories
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
5,680
8,707
1,144
11,997
9,348
1,228
64,982
39,952
5,248
82,659
58,007
7,620
5.
Prepayments
and other current assets
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
5,637
16,352
2,148
1,957
4,070
535
519
2,162
284
8,113
22,584
2,967
F-14
Table of Contents
6.
Property,
plant and equipment, net
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
32,559
32,559
4,277
8,033
6,908
907
997
1,004
132
1,554
1,554
204
4,708
5,038
662
47,851
47,063
6,182
(4,886
)
(6,937
)
(911
)
42,965
40,126
5,271
7.
Intangible
assets, net
Gross Carrying
Accumulated
Net Carrying
Value
Amortization
Value
(RMB000)
(RMB000)
(RMB000)
55,934
(1,925
)
54,009
10,931
(2,147
)
8,784
66,865
(4,072
)
62,793
Gross Carrying
Accumulated
Net Carrying
Net Carrying
Value
Amortization
Value
Value
(RMB000)
(RMB000)
(RMB000)
(US$000)
67,874
(4,102
)
63,772
8,378
15,171
(4,506
)
10,665
1,401
83,045
(8,608
)
74,437
9,779
F-15
Table of Contents
(RMB000)
(US$000)
5,012
659
4,787
629
4,291
564
2,925
384
2,210
290
55,212
7,253
74,437
9,779
8.
Other
assets, net
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
26,531
10,892
1,431
38,212
91,012
11,956
64,743
101,904
13,387
(9,402
)
(7,068
)
(928
)
55,341
94,836
12,459
9.
Bank
borrowings
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
15,400
38,400
5,045
12,900
36,900
4,848
1,000
1,500
197
13,900
38,400
5,045
1,500
15,400
38,400
5,045
F-16
Table of Contents
10.
Accrued
expenses and other liabilities
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
3,000
2,400
4,037
530
2,936
6,105
802
1,286
1,286
169
1,527
856
113
931
420
55
566
572
75
838
1,631
214
13,484
14,907
1,958
(a)
Note payable was issued to purchase corn seeds. The note was
non-interest bearing and secured with a pledge in restricted
cash. The note was repaid and the pledge was released in 2006.
11.
Ordinary
shares
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
F-17
Table of Contents
12.
Statutory
reserves
(i)
Statutory common reserve fund
(ii)
Statutory common welfare fund
13.
Income
taxes
F-18
Table of Contents
2004
2005
2006
2006
(RMB000)
(RMB000)
(RMB000)
(US$000)
57,772
169,080
253,903
33,356
8,666
25,362
38,085
5,003
3,182
3,073
2,813
370
(11,848
)
(28,435
)
(40,898
)
(5,373
)
2004
2005
2006
2006
(RMB)
(RMB)
(RMB)
(US$)
0.12
0.28
0.41
0.05
14.
Earnings
per Share
2004
2005
2006
2006
(RMB)
(RMB)
(RMB)
(US$)
(Amounts in thousands except for number of shares and per
share data)
57,772
169,080
253,903
33,356
100,000,000
100,000,000
100,000,000
100,000,000
RMB0.58
RMB1.69
RMB2.54
US$
0.33
F-19
Table of Contents
2006
2006
(RMB)
(US$)
(Amounts in thousands except for number of shares and per
share data)
253,903
33,356
100,000,000
100,000,000
2,400,000
2,400,000
102,400,000
102,400,000
RMB2.48
US$0.33
15.
Related
Party Transactions
A company owned by a director of P3A
A subsidiary of Taiyuan Relord
(Taiyuan Baojia)
A subsidiary of Taiyuan Relord
A director of P3A
A director of P3A
A director of P3A
A director of P3A
2004
2005
2006
2006
(RMB000)
(RMB000)
(RMB000)
(US$000)
2,183
2,980
391
52,800
6,936
38,212
38,212
52,800
6,936
520
F-20
Table of Contents
2004
2005
2006
2006
(RMB000)
(RMB000)
(RMB000)
(US$000)
2,560
5,430
4,000
525
1,000
640
4,000
525
6,000
4,710
2,000
263
9,560
10,780
10,000
1,313
900
118
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
1,590
900
118
52
7
53
7
39
5
15
15
2
1,605
1,059
139
810
1,332
175
16,884
2,218
14,061
3,919
3,900
1,884
23,764
16,884
2,218
35,154
20,324
2,670
Table of Contents
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
8,996
1,182
4,498
591
29,992
29,992
3,940
29,992
29,992
3,940
16.
Contribution
from controlling shareholder
17.
Employee
defined contribution plan
Table of Contents
18.
Commitments
and contingencies
(RMB000)
(US$000)
4,217
554
4,231
556
2,891
380
499
66
430
56
28,323
3,721
40,591
5,333
(RMB000)
(US$000)
30,974
4,069
30,974
4,069
30,974
4,069
30,974
4,069
30,191
3,966
183,231
24,072
337,318
44,314
F-23
Table of Contents
F-24
Table of Contents
19.
Segment
reporting
Sheep
Breeding
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
48,560
92,904
10,820
152,284
(33,311
)
(31,196
)
(9,053
)
(73,560
)
15,249
61,708
1,767
78,724
(16,635
)
(4,317
)
57,772
Sheep
Corn Seeds
Breeding
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
245,601
119,468
19,020
384,089
(147,723
)
(37,716
)
(5,932
)
(191,371
)
97,878
81,752
13,088
192,718
(18,372
)
(5,266
)
169,080
F-25
Table of Contents
Sheep
Corn Seeds
Breeding
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
245,634
193,054
51,015
489,703
(144,730
)
(52,287
)
(10,357
)
(207,374
)
100,904
140,767
40,658
282,329
(25,169
)
(3,257
)
253,903
Sheep
Corn Seeds
Breeding
Seedlings
Consolidated
(US$000)
(US$000)
(US$000)
(US$000)
32,269
25,362
6,702
64,333
(19,013
)
(6,869
)
(1,361
)
(27,243
)
13,256
18,493
5,341
37,090
(3,306
)
(428
)
33,356
20.
Subsequent
Events
a)
Impact
of the new tax law in the PRC
b)
Convertible
preferred shares issuance
F-26
Table of Contents
c)
Share
Option Plan
20.
Subsequent
Events (continued)
d)
Establishment
of a new subsidiary
e)
Loan
from the controlling shareholder
21.
Condensed
Financial Information of the Company
F-27
Table of Contents
2004
2005
2006
2006
(RMB000)
(RMB000)
(RMB000)
(US$000)
57,772
169,080
253,903
33,356
57,772
169,080
253,903
33,356
57,772
169,080
253,903
33,356
57,772
169,080
253,903
33,356
2005
2006
2006
(RMB000)
(RMB000)
(US$000)
208,834
354,136
46,523
6,262
8,098
1,064
202,572
346,038
45,459
208,834
354,136
46,523
(a)
Basis
of presentation
F-28
Table of Contents
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2006 and June 30, 2007
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$),
except for number of shares)
F-29
Table of Contents
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
For the six months ended June 30, 2006 and 2007
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$),
except for number of shares and per share data)
Six Months Ended June 30
Note
2006
2007
2007
(RMB)
(RMB)
(US$)
(unaudited)
(unaudited)
(unaudited)
142,126
133,853
17,584
97,518
110,599
14,530
29,594
34,955
4,592
269,238
279,407
36,706
(81,378
)
(80,395
)
(10,562
)
(26,629
)
(30,543
)
(4,012
)
(4,212
)
(10,679
)
(1,403
)
(112,219
)
(121,617
)
(15,977
)
157,019
157,790
20,729
(7,542
)
(7,937
)
(1,043
)
(3,445
)
(3,562
)
(468
)
(2,623
)
(1,025
)
(135
)
(13,610
)
(12,524
)
(1,646
)
143,409
145,266
19,083
150
150
20
(2,414
)
(2,239
)
(294
)
965
174
23
142,110
143,351
18,832
15
142,110
143,351
18,832
16
RMB1.42
RMB1.43
US$0.19
RMB1.42
RMB1.43
US$0.19
16
100,000,000
100,000,000
100,000,000
100,000,000
100,119,337
100,119,337
F-30
Table of Contents
Six Months Ended June 30
Note
2006
2007
2007
(RMB)
(RMB)
(US$)
(unaudited)
(unaudited)
(unaudited)
16
RMB1.40
US$0.18
16
102,400,000
102,400,000
F-31
Table of Contents
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the six months ended June 30, 2006 and 2007
(Amounts in thousands of Renminbi (RMB) and U.S.
dollar (US$))
Six Months Ended June 30
2006
2007
2007
(RMB)
(RMB)
(US$)
(unaudited)
(unaudited)
(unaudited)
142,110
143,351
18,832
4,580
4,756
625
2,112
2,600
342
515
(1,241
)
(195
)
918
1,000
131
519
314
41
1,508
(60,254
)
(9,273
)
(1,186
)
42,036
4,737
622
(30,738
)
(54,088
)
(7,105
)
586
(8
)
(1
)
(28,848
)
(6,177
)
(811
)
(1,889
)
4,836
635
3,366
442
161
61
8
73,316
94,234
12,380
(3,478
)
(16,274
)
(2,138
)
(10,940
)
(11,760
)
(1,545
)
(900
)
900
118
(15,318
)
(27,134
)
(3,565
)
76,155
10,005
(2,377
)
(312
)
36,900
8,400
1,104
(12,900
)
(36,900
)
(4,848
)
(1,500
)
(197
)
(53,095
)
(50,470
)
(6,630
)
222,372
29,213
(10,000
)
(39,095
)
215,680
28,335
18,903
282,780
37,150
29,477
42,782
5,620
48,380
325,562
42,770
914
799
105
900
5,568
731
F-32
Table of Contents
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN
SHAREHOLDERS EQUITY
For the six months ended June 30, 2006 and 2007
(Amounts in thousands of Renminbi (RMB) except for
number of shares)
Number of
Additional
Total
Ordinary
Ordinary
Paid-in
Statutory
Retained
Shareholders
Shares
Shares
Capital
Reserves
Earnings
Equity
(unaudited)
(RMB)
(RMB)
(RMB)
(RMB)
(RMB)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
100,000,000
6,262
38,695
163,877
208,834
918
918
142,110
142,110
(53,095
)
(53,095
)
100,000,000
7,180
38,695
252,892
298,767
100,000,000
8,098
76,953
269,085
354,136
1,000
1,000
143,351
143,351
7,426
7,426
3,618
3,618
(6,250,000
)
(20,142
)
(135,786
)
(155,928
)
(56,774
)
(56,774
)
93,750,000
76,953
219,876
296,829
10,109
28,885
38,994
F-33
Table of Contents
1.
The
Company and Basis of Presentation
Date of
Place of
Percentage of
Incorporation
Incorporation
Shareholdings
Principal Activities
March 29, 2007
PRC
100
%
Research and development
July 6, 2005
BVI
100
%
Investment holding
September 19, 2003
Hong Kong
100
%
Investment holding
Date of
Place of
Incorporation
Incorporation
Principal Activities
Development Co., Ltd. (P3A)
April 20, 2000
PRC
Development, production and sale of
corn seeds, sheep breeding products
and seedlings
2.
Summary
of Significant Accounting Policies
F-34
Table of Contents
F-35
Table of Contents
3.
Accounts
receivable
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
159,907
168,934
22,193
(3,467
)
(1,980
)
(260
)
156,440
166,954
21,933
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
(1,921
)
(3,467
)
(455
)
(1,546
)
1,241
163
246
32
(3,467
)
(1,980
)
(260
)
4.
Inventories
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
8,707
7,071
929
9,348
13,329
1,751
39,952
32,870
4,318
58,007
53,270
6,998
F-36
Table of Contents
5.
Prepayments
and other current assets
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
16,352
69,414
9,120
4,070
5,286
694
2,162
1,972
258
22,584
76,672
10,072
6.
Property,
plant and equipment, net
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
32,559
32,559
4,277
6,908
6,908
908
1,004
1,612
212
1,554
2,210
290
5,038
5,223
686
47,063
48,512
6,373
(6,937
)
(8,366
)
(1,099
)
40,126
40,146
5,274
7.
Intangible
assets, net
Gross
Accumulated
Net Carrying
Carrying Value
Amortization
Value
(RMB000)
(RMB000)
(RMB000)
67,874
(4,102
)
63,772
15,171
(4,506
)
10,665
83,045
(8,608
)
74,437
F-37
Table of Contents
Gross
Accumulated
Net Carrying
Net Carrying
Carrying Value
Amortization
Value
Value
(RMB000)
(RMB000)
(RMB000)
(US$000)
76,274
(5,190
)
71,084
9,339
20,771
(6,017
)
14,754
1,938
97,045
(11,207
)
85,838
11,277
(RMB000)
(US$000)
4,263
560
10,422
1,369
9,310
1,223
4,643
610
3,928
516
53,272
6,999
85,838
11,277
8.
Deferred
share issuance cost
9.
Other
assets, net
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
10,892
27,765
3,648
91,012
91,012
11,956
101,904
118,777
15,604
(7,068
)
(10,395
)
(1,366
)
94,836
108,382
14,238
F-38
Table of Contents
10.
Bank
borrowings
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
38,400
8,400
1,104
36,900
8,400
1,104
1,500
38,400
8,400
1,104
38,400
8,400
1,104
11.
Accrued
expenses and other liabilities
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
4,037
5,032
661
6,105
7,952
1,045
1,286
2,044
269
856
856
112
572
575
75
420
11,927
1,567
1,631
3,284
431
14,907
31,670
4,160
12.
Series A
Redeemable convertible preferred shares
F-39
Table of Contents
13.
Redeemable
ordinary shares
F-40
Table of Contents
14.
Ordinary
shares
15.
Income
taxes
Six Months Ended June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
142,110
143,351
18,832
21,317
21,503
2,825
1,855
2,344
308
(23,172
)
(23,847
)
(3,133
)
Six Months Ended June 30
2006
2007
2007
(RMB)
(RMB)
(US$)
0.23
0.24
0.03
F-41
Table of Contents
16.
Earnings
per Share
Six Months Ended June 30
2006
2007
2007
(RMB)
(RMB)
(US$)
(Amounts in thousands except for number of shares and per
share data)
142,110
143,351
18,832
100,000,000
100,000,000
100,000,000
119,337
119,337
100,000,000
100,119,337
100,119,337
RMB1.42
RMB1.43
US$0.19
RMB1.42
RMB1.43
US$0.19
Six Months Ended June 30,2007
(RMB)
(US$)
(Amounts in thousands except for number of shares and per
share data)
143,351
18,832
100,000,000
100,000,000
2,400,000
2,400,000
102,400,000
102,400,000
RMB 1.40
US$0.18
F-42
Table of Contents
17.
Related
Party Transactions
A company owned by a director of P3A
A subsidiary of Taiyuan Relord
A subsidiary of Taiyuan Relord
A director of P3A
A director of P3A
A director of P3A (note (i))
A director of P3A (note (i))
Employee of Aero Biotech Science & Technology Co., Ltd.
(1)
The Company had the following significant related party
transactions during the periods presented:
Six Months Ended June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
3,300
433
4,000
4,000
2,000
10,000
900
900
118
F-43
Table of Contents
(2)
The Company had the following related party balances at the end
of the period:
December 31
June 30
June 30
2006
2007
2007
(RMB000)
(RMB000)
(US$000)
900
52
71
9
53
53
7
39
28
4
15
15
2
1,059
167
22
16,884
14,181
1,863
1,799
236
16,884
15,980
2,099
8,996
8,996
1,182
29,992
255,730
33,596
18.
Employee
defined contribution plan
F-44
Table of Contents
19.
Commitments
and contingencies
(RMB000)
(US$000)
35,057
4,606
46,435
6,100
45,095
5,924
1,366
180
1,144
150
28,601
3,757
157,698
20,717
F-45
Table of Contents
F-46
Table of Contents
20.
Segment
reporting
Sheep
Breeding
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
142,126
97,518
29,594
269,238
(81,378
)
(26,629
)
(4,212
)
(112,219
)
60,748
70,889
25,382
157,019
(13,610
)
(1,299
)
142,110
F-47
Table of Contents
Sheep
Breeding
Corn Seeds
Products
Seedlings
Consolidated
(RMB000)
(RMB000)
(RMB000)
(RMB000)
133,853
110,599
34,955
279,407
(80,395
)
(30,543
)
(10,679
)
(121,617
)
53,458
80,056
24,276
157,790
(12,524
)
(1,915
)
143,351
Sheep
Breeding
Corn Seeds
Products
Seedlings
Consolidated
(US$000)
(US$000)
(US$000)
(US$000)
17,584
14,530
4,592
36,706
(10,562
)
(4,012
)
(1,403
)
(15,977
)
7,022
10,518
3,189
20,729
(1,646
)
(251
)
18,832
21.
Subsequent
Events
a)
Share
Option Plan
F-48
Table of Contents
F-49
Table of Contents
Table of Contents
Table of Contents
ITEM 6.
INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
ITEM 7.
RECENT
SALES OF UNREGISTERED SECURITIES.
Underwriting
Date of Sale or
Number of
Consideration
Discount and
Issuance
Securities*
(US$)
Commission
June 13, 2007
10,000 ordinary shares
0.001
Not applicable
June 21, 2007
76,740,000 ordinary shares
7.675
Not applicable
June 22, 2007
1,600,000 preferred shares
6,666,667
Not applicable
June 22, 2007
800,000 preferred shares
3,333,333
Not applicable
July 19, 2007
**
Options to purchase
5,900,000 ordinary shares
2.40 per share
Not applicable
Options to purchase
1,600,000 ordinary shares
4.80 per share
Not applicable
*
The share numbers have been adjusted to reflect a 10,000-for-1
share split of our ordinary shares and our preferred shares that
became effective on August 15, 2007.
**
Our board of directors initially granted options on July 4,
2007 and amended the material terms of the options on
July 19, 2007.
II-1
Table of Contents
ITEM 8.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES.
ITEM 9.
UNDERTAKINGS.
II-2
Table of Contents
By:
Title:
Chairman of the Board and Co-Chief Executive Officer
Chairman of the Board and
Co-Chief Executive Officer
(principal executive officer)
October 24, 2007
Co-Chief Executive Officer
October 24, 2007
Chief Financial Officer
(principal financial and accounting officer) and Director
October 24, 2007
Director
October 24, 2007
Director and Chief Operating Officer
October 24, 2007
Director
October 24, 2007
Title: Manager, Law Debenture Corporate Services Inc.
Authorized U.S.
Representative
October 24, 2007
By:
II-3
Table of Contents
Exhibit
1
.1
Form of Underwriting Agreement.
3
.1*
Memorandum and Articles of Association of the Registrant, as
currently in effect.
3
.2*
Amended and Restated Memorandum and Articles of Association of
the Registrant.
4
.1
Registrants Specimen American Depositary Receipt (included
in Exhibit 4.3).
4
.2*
Registrants Specimen Certificate for Ordinary Shares.
4
.3
Form of Deposit Agreement among the Registrant, the Depositary
and [Owners and Holders] of the American Depositary Shares.
4
.4*
English translation of Exclusive Technology Development,
Technology Support and Technology Services Agreement, dated
June 8, 2007.
4
.5*
English translation of Exclusive Consultancy Service Agreement,
dated June 8, 2007.
4
.6*
English translation of Proprietary Technology License Agreement,
dated June 8, 2007.
4
.7*
English translation of Power of Attorney, dated June 8,
2007.
4
.8*
English translation of Equity Pledge Agreement, dated
June 8, 2007.
4
.9*
English translation of Exclusive Call Option Agreement, dated
June 8, 2007.
4
.10*
English translation of Agreement on Equity Interest of
Primalights III Agriculture Development Co., Ltd., dated
June 8, 2007.
4
.11*
English translation of Letter of Undertaking, dated
July 13, 2007.
4
.12*
English translation of Spouse Statement, dated July 13,
2007.
4
.13*
Share Purchase Agreement, dated June 22, 2007, in respect
of the sale of shares of the Registrant.
4
.14*
Shareholders Agreement, dated June 22, 2007.
4
.15*
Registration Rights Agreement, dated June 22, 2007.
4
.16*
Undertaking Letter, dated June 22, 2007.
4
.17*
Deed of Adherence, dated August 30, 2007
4
.18*
English translation of Lease of Land between P3A and Taiyuan
Relord, dated October 25, 2006.
5
.1*
Opinion of Maples and Calder regarding the validity of the
Ordinary Shares being registered.
8
.1*
Opinion of Latham & Watkins LLP regarding certain U.S.
tax matters.
10
.1*
2007 Share Incentive Plan.
10
.2*
Form of Indemnification Agreement with the Registrants
Directors.
10
.3*
Form of Employment Agreement.
21
.1*
Subsidiaries of the Registrant.
23
.1
Consent of Ernst & Young Hua Ming, Independent
Registered Public Accounting Firm.
23
.2
Consent of Maples and Calder
23
.3
Consent of Latham & Watkins LLP
23
.4
Consent of Commerce & Finance Law Offices
23
.5*
Consent of Sallmanns (Far East) Ltd.
23
.6*
Consent of Terry McCarthy.
23
.7*
Consent of Shangzhong Xu.
23
.8*
Consent of Jiuran Zhao.
24
.1*
Powers of Attorney (included on signature page).
99
.1*
Code of Business Conduct and Ethics of the Registrant.
99
.2*
Opinion of Commerce & Finance Law Offices.
To be filed by amendment
*
Previously filed
II-5
EXHIBIT 4.3
AGRIA CORPORATION
AND
THE BANK OF NEW YORK
As Depositary
AND
OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES
Deposit Agreement
Dated as of [ ], 2007
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.....................................................................................1 SECTION 1.01 AMERICAN DEPOSITARY SHARES....................................................................1 SECTION 1.02 COMMISSION....................................................................................2 SECTION 1.03 COMPANY.......................................................................................2 SECTION 1.04 CUSTODIAN.....................................................................................2 SECTION 1.05 DELIVER; SURRENDER............................................................................2 SECTION 1.06 DEPOSIT AGREEMENT.............................................................................2 SECTION 1.07 DEPOSITARY; CORPORATE TRUST OFFICE............................................................2 SECTION 1.08 DEPOSITED SECURITIES..........................................................................3 SECTION 1.09 DOLLARS.......................................................................................3 SECTION 1.10 DTC...........................................................................................3 SECTION 1.11 FOREIGN REGISTRAR.............................................................................3 SECTION 1.12 HOLDER........................................................................................3 SECTION 1.13 OWNER.........................................................................................3 SECTION 1.14 RECEIPTS......................................................................................3 SECTION 1.15 REGISTRAR.....................................................................................4 SECTION 1.16 RESTRICTED SECURITIES.........................................................................4 SECTION 1.17 SECURITIES ACT OF 1933........................................................................4 SECTION 1.18 SHARES........................................................................................4 ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES .........................................................................................4 SECTION 2.01 FORM OF RECEIPTS; REGISTRATION AND TRANSFERABILITY OF AMERICAN DEPOSITARY SHARES..............4 SECTION 2.02 DEPOSIT OF SHARES.............................................................................5 SECTION 2.03 DELIVERY OF AMERICAN DEPOSITARY SHARES .......................................................6 SECTION 2.04 REGISTRATION OF TRANSFER OF AMERICAN DEPOSITARY SHARES; COMBINATION AND SPLIT-UP OF RECEIPTS; INTERCHANGE OF CERTIFICATED AND UNCERTIFICATED AMERICAN DEPOSITARY SHARES...........6 SECTION 2.05 SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF DEPOSITED SECURITIES................7 SECTION 2.06 LIMITATIONS ON DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES.................8 SECTION 2.07 LOST RECEIPTS, ETC............................................................................9 SECTION 2.08 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS..........................................9 SECTION 2.09 PRE-RELEASE OF AMERICAN DEPOSITARY SHARES.....................................................9 SECTION 2.10 DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM...............................10 ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES........................11 SECTION 3.01 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION............................................11 SECTION 3.02 LIABILITY OF OWNER FOR TAXES.................................................................11 SECTION 3.03 WARRANTIES ON DEPOSIT OF SHARES..............................................................12 ARTICLE 4. THE DEPOSITED SECURITIES.......................................................................12 SECTION 4.01 CASH DISTRIBUTIONS...........................................................................12 SECTION 4.02 DISTRIBUTIONS OTHER THAN CASH, SHARES OR RIGHTS..............................................12 SECTION 4.03 DISTRIBUTIONS IN SHARES......................................................................13 SECTION 4.04 RIGHTS.......................................................................................13 SECTION 4.05 CONVERSION OF FOREIGN CURRENCY...............................................................15 SECTION 4.06 FIXING OF RECORD DATE........................................................................16 SECTION 4.07 VOTING OF DEPOSITED SECURITIES...............................................................16 SECTION 4.08 CHANGES AFFECTING DEPOSITED SECURITIES.......................................................17 SECTION 4.09 REPORTS......................................................................................17 |
SECTION 4.10 LISTS OF OWNERS..............................................................................18 SECTION 4.11 WITHHOLDING..................................................................................18 ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY.................................................18 SECTION 5.01 MAINTENANCE OF OFFICE AND TRANSFER BOOKS BY THE DEPOSITARY...................................18 SECTION 5.02 PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY OR THE COMPANY..........................19 SECTION 5.03 OBLIGATIONS OF THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.................................19 SECTION 5.04 RESIGNATION AND REMOVAL OF THE DEPOSITARY....................................................21 SECTION 5.05 THE CUSTODIANS...............................................................................21 SECTION 5.06 NOTICES AND REPORTS..........................................................................22 SECTION 5.07 DISTRIBUTION OF ADDITIONAL SHARES, RIGHTS, ETC...............................................22 SECTION 5.08 INDEMNIFICATION..............................................................................23 SECTION 5.09 CHARGES OF DEPOSITARY........................................................................24 SECTION 5.10 RETENTION OF DEPOSITARY DOCUMENTS............................................................25 SECTION 5.11 EXCLUSIVITY..................................................................................25 SECTION 5.12 LIST OF RESTRICTED SECURITIES OWNERS.........................................................25 ARTICLE 6. AMENDMENT AND TERMINATION......................................................................25 SECTION 6.01 AMENDMENT....................................................................................25 SECTION 6.02 TERMINATION..................................................................................26 ARTICLE 7. MISCELLANEOUS..................................................................................27 SECTION 7.01 COUNTERPARTS.................................................................................27 SECTION 7.02 NO THIRD PARTY BENEFICIARIES.................................................................27 SECTION 7.03 SEVERABILITY.................................................................................27 SECTION 7.04 OWNERS AND HOLDERS AS PARTIES; BINDING EFFECT................................................27 SECTION 7.05 NOTICES......................................................................................27 SECTION 7.06 SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; JURY TRIAL WAIVER...28 SECTION 7.07 GOVERNING LAW................................................................................29 |
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of [ ], 2007, among AGRIA CORPORATION, incorporated under the laws of the Cayman Islands (herein called the Company), THE BANK OF NEW YORK, a New York banking corporation (herein called the Depositary), and all Owners and holders from time to time of American Depositary Shares issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of Shares (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Deposit Agreement, for the creation of American Depositary Shares representing the Shares so deposited and for the execution and delivery of American Depositary Receipts evidencing the American Depositary Shares; and
WHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as follows:
ARTICLE 1.
DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:
SECTION 1.01 American Depositary Shares.
The term "American Depositary Shares" shall mean the securities created under this Deposit Agreement representing rights with respect to the Deposited Securities. American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to both certificated and uncertificated American Depositary Shares. Each American Depositary Share shall represent the number of Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional American Depositary Shares are not delivered, and thereafter American Depositary Shares shall represent the amount of Shares or Deposited Securities specified in such Sections.
SECTION 1.02 Commission.
The term "Commission" shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.
SECTION 1.03 Company.
The term "Company" shall mean AGRIA CORPORATION, organized under the laws of the Cayman Islands, and its successors.
SECTION 1.04 Custodian.
The term "Custodian" shall mean the Hong Kong office of The
Hongkong and Shanghai Banking Corporation Limited, as agent of the Depositary
for the purposes of this Deposit Agreement, and any other firm or corporation
which may hereafter be appointed by the Depositary pursuant to the terms of
Section 5.05, as substitute or additional custodian or custodians hereunder, as
the context shall require and shall also mean all of them collectively.
SECTION 1.05 Deliver; Surrender.
(a) The term "deliver", or its noun form, when used with respect to Shares or other Deposited Securities, shall mean (i) book-entry transfer of those Shares or other Deposited Securities to an account maintained by an institution authorized under applicable law to effect transfers of such securities designated by the person entitled to that delivery or (ii) physical transfer of certificates evidencing those Shares or other Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments of transfer to, the person entitled to that delivery.
(b) The term "deliver", or its noun form, when used with respect to American Depositary Shares, shall mean (i) book-entry transfer of American Depositary Shares to an account at DTC designated by the person entitled to such delivery evidencing American Depositary Shares registered in the name requested by that person (ii) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (iii) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts.
(c) The term "surrender", when used with respect to American Depositary Shares, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (ii) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (iii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.
SECTION 1.06 Deposit Agreement.
The term "Deposit Agreement" shall mean this Agreement, as the same may be amended from time to time in accordance with the provisions hereof.
SECTION 1.07 Depositary; Corporate Trust Office.
The term "Depositary" shall mean The Bank of New York, a New York banking corporation, and any successor as depositary hereunder. The term "Corporate Trust Office", when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Deposit Agreement is 101 Barclay Street, New York, N.Y. 10286.
SECTION 1.08 Deposited Securities.
The term "Deposited Securities" as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement, including without limitation Shares that have not been successfully delivered upon surrender of American Depositary Shares, and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held under this Deposit Agreement, subject as to cash to the provisions of Section 4.05.
SECTION 1.09 Dollars.
The term "Dollars" shall mean United States dollars.
SECTION 1.10 DTC.
The term "DTC" shall mean The Depository Trust Company or its successor.
SECTION 1.11 Foreign Registrar.
The term "Foreign Registrar" shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other agent of the Company for the transfer and registration of Shares, including without limitation any securities depository for the Shares.
SECTION 1.12 Holder.
The term "Holder" shall mean any person holding a Receipt or a security entitlement or other interest in American Depositary Shares, whether for its own account or for the account of another person, but that is not the Owner of that Receipt or those American Depositary Shares.
SECTION 1.13 Owner.
The term "Owner" shall mean the person in whose name American Depositary Shares are registered on the books of the Depositary maintained for such purpose.
SECTION 1.14 Receipts.
The term "Receipts" shall mean the American Depositary Receipts issued hereunder evidencing certificated American Depositary Shares, as the same may be amended from time to time in accordance with the provisions hereof.
SECTION 1.15 Registrar.
The term "Registrar" shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, that is appointed by the Depositary to register American Depositary Shares and transfers of American Depositary Shares as herein provided.
SECTION 1.16 Restricted Securities.
The term "Restricted Securities" shall mean Shares, or ADSs
representing such Shares, which (i) have been acquired directly or indirectly
from the Company or any of its affiliates (as defined in Rule 144 under the
Securities Act) in a transaction or chain of transactions not involving any
public offering, or are subject to resale limitations under Regulation D under
that Act or both, (ii) are held directly or indirectly by an officer, director
(or persons performing similar functions) or other affiliate of the Company,
(iii) would require registration under the Securities Act in connection with the
public offer and sale thereof in the United States, or (iv) are subject to other
restrictions on sale or deposit under the laws of the United States, the
People's Republic of China, the Cayman Islands or Hong Kong, or under a
shareholder agreement or the Company's Memorandum and Articles of Association or
under the regulations of an applicable securities exchange unless, in each case,
(x) the sale of such Shares in the United States would be covered by an
effective registration statement under the Securities Act or (y) the transaction
is exempt from the registration requirements of the Securities Act (as
hereinafter defined), and the Shares are not, when deposited, Restricted
Securities.
SECTION 1.17 Securities Act of 1933.
The term "Securities Act of 1933" shall mean the United States Securities Act of 1933, as from time to time amended.
SECTION 1.18 Shares.
The term "Shares" shall mean ordinary shares of the Company, that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding securities of the Company; provided, however, that, if there shall occur any change in nominal value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Shares of the Company, the term "Shares" shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.
ARTICLE 2.
FORM OF RECEIPTS, DEPOSIT OF SHARES,
DELIVERY, TRANSFER AND SURRENDER OF AMERICAN DEPOSITARY SHARES
SECTION 2.01 Form of Receipts; Registration and Transferability of American Depositary Shares.
Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been (i) executed by the Depositary by the manual signature of a duly authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or a Registrar. The Depositary shall maintain books on which (x) each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered and (y) all American Depositary Shares delivered as hereinafter provided and all registrations of transfer of American Depositary Shares shall be registered. A Receipt bearing the facsimile signature of a person that was at any time a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary, notwithstanding that such person was not a proper officer of the Depositary on the date of issuance of that Receipt.
The Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulations thereunder or with the rules and regulations of any securities exchange upon which American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.
American Depositary Shares evidenced by a Receipt, when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under this Deposit Agreement to any Holder of a Receipt unless such Holder is the Owner thereof.
SECTION 2.02 Deposit of Shares.
Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights to receive Shares may be deposited by delivery thereof to any Custodian hereunder, accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated in such order, the number of American Depositary Shares representing such deposit.
No Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the Cayman Islands or the People's Republic of China which is then performing the function of the regulation of currency exchange. If required by the Depositary, Shares presented
for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive other property which any person in whose name the Shares are or have been recorded may thereafter receive upon or in respect of such deposited Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.
At the request and risk and expense of any person proposing to deposit Shares, and for the account of such person, the Depositary may receive certificates for Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Share certificates to the Custodian for deposit hereunder.
Upon each delivery to a Custodian of a certificate or certificates for Shares to be deposited hereunder, together with the other documents specified above, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.
Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.
SECTION 2.03 Delivery of American Depositary Shares .
Upon receipt by any Custodian of any deposit pursuant to
Section 2.02 hereunder, together with the other documents required as specified
above, such Custodian shall notify the Depositary of such deposit and the person
or persons to whom or upon whose written order American Depositary Shares are
deliverable in respect thereof and the number of American Depositary Shares to
be so delivered. Such notification shall be made by letter or, at the request,
risk and expense of the person making the deposit, by cable, telex or facsimile
transmission (and in addition, if the transfer books of the Company or the
Foreign Registrar, if applicable, are open, the Depositary may in its sole
discretion require a proper acknowledgment or other evidence from the Company or
the Foreign Registrar that any Deposited Securities have been recorded upon the
books of the Company or the Foreign Registrar, if applicable, in the name of the
Depositary or its nominee or such Custodian or its nominee). Upon receiving such
notice from such Custodian, or upon the receipt of Shares or evidence of the
right to receive Shares by the Depositary, the Depositary, subject to the terms
and conditions of this Deposit Agreement, shall deliver, to or upon the order of
the person or persons entitled thereto, the number of American Depositary Shares
issuable in respect of that deposit, but only upon payment to the Depositary of
the fees and expenses of the Depositary for the delivery of such American
Depositary Shares as provided in Section 5.09, and of all taxes and governmental
charges and fees payable in connection with such deposit and the transfer of the
Deposited Securities.
SECTION 2.04 Registration of Transfer of American Depositary Shares; Combination and Split-up of Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of American Depositary Shares on its transfer books from time to time, upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall deliver those American Depositary Shares to or upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
The Depositary, upon surrender of a Receipt for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.
The Depositary may, with notice given as promptly as practicable to the Company, appoint one or more co-transfer agents for the purpose of effecting registration of transfers of American Depositary Shares and combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the Depositary. The Depositary shall require each co-transfer agent that it appoints under this Section 2.04 to give notice in writing to the Depositary accepting such appointment and agreeing to abide by the applicable terms of this Deposit Agreement.
SECTION 2.05 Surrender of American Depositary Shares and Withdrawal of Deposited Securities.
Upon surrender at the Corporate Trust Office of the Depositary of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of the fee of the Depositary for the surrender of American Depositary Shares as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the Owner of those American Depositary
Shares shall be entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Delivery of such Deposited Securities may be made by the delivery of (a) certificates or account transfer for Shares in the name of such Owner with proper endorsement or accompanied by proper instruments or instructions of transfer to such Owner or pursuant to proper delivery instructions and (b) any other securities, property and cash to which such Owner is then entitled in respect of those American Depositary Shares to such Owner or such person or persons as instructed. Such delivery shall be made, as hereinafter provided, without unreasonable delay.
A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank. The Depositary may require the surrendering Owner to execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order in the manner provided in the preceding paragraph. Thereupon the Depositary shall direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American Depositary Shares, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by those American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
At the request, risk and expense of any Owner so surrendering American Depositary Shares, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates, if applicable, and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares (evidenced by such Receipt, if applicable) to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.
The Depositary shall not deliver the Deposited Securities
except (i) upon surrender of American Depositary Shares under this Section 2.05,
(ii) in a surrender of the Deposited Securities to the Company or its agent in a
transaction to which Section 4.08 applies or (iii) in connection with a sale of
the Deposited Securities permitted under Section 3.02, 4.03, 4.04, 4.11 or 6.02.
SECTION 2.06 Limitations on Delivery, Transfer and Surrender of American Depositary Shares.
As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Shares or the presenter of the Receipt or instruction for registration of transfer or
surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature or other information it deems necessary and may also require compliance with any regulations the Depositary may establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.
The delivery of American Depositary Shares against deposit of Shares generally or against deposit of particular Shares may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Notwithstanding anything to the contrary in this Deposit Agreement, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares in connection with voting at a shareholders' meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares which would be required to be registered under the provisions of the Securities Act of 1933 for public offer and sale in the United States, unless a registration statement is in effect as to such Shares for such offer and sale.
SECTION 2.07 Lost Receipts, etc.
In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.
SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled.
SECTION 2.09 Pre-Release of American Depositary Shares.
Unless requested by the Company to cease doing so, the Depositary may, notwithstanding Section 2.3, deliver American Depositary Shares prior to the receipt of Shares
pursuant to Section 2.2 ("Pre-Release"). The Depositary may, pursuant to Section 2.5, deliver Shares upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation and agreement from the person to whom American Depositary Shares are to be delivered (the "Pre-Releasee") that the Pre-Releasee, or its customer, (i) owns the Shares or American Depositary Shares to be remitted, as the case may be (ii) assigns all beneficial rights, title and interest in such Shares or American Depositary Shares, as the case may be, to the Depositary in its capacity as such and for the benefit of the Owners, and (iii) will not take any action with respect to such Shares or American Depositary Shares, as the case may be, that is inconsistent with the transfer of beneficial ownership (including, without the consent of the Depositary, disposing of such Shares or American Depositary Shares, as the case may be), other than in satisfaction of such Pre-Release, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary determines, in good faith, will provide substantially similar liquidity and security, (c) terminable by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of Shares not deposited but represented by American Depositary Shares outstanding at any time as a result of Pre-Releases will not normally exceed thirty percent (30%) of the Shares deposited hereunder; provided, however, that the Depositary reserves the right to disregard such limit from time to time as it deems reasonably appropriate, and may, with the prior written consent of the Company, change such limit for purposes of general application. The Depositary will also set Dollar limits with respect to Pre-Release transactions to be entered into hereunder with any particular Pre-Releasee on a case-by-case basis as the Depositary deems appropriate. For purposes of enabling the Depositary to fulfill its obligations to the Owners under the Deposit Agreement, the collateral referred to in clause (b) above shall be held by the Depositary as security for the performance of the Pre-Releasee's obligations to the Depositary in connection with a Pre-Release transaction, including the Pre-Releasee's obligation to deliver American Depositary Shares upon termination of a Pre-Release transaction (and shall not, for the avoidance of doubt, constitute Deposited Securities hereunder).
The Depositary may retain for its own account any compensation received by it in connection with the foregoing.
The Depositary may retain for its own account any compensation received by it in connection with the foregoing.
SECTION 2.10 DTC Direct Registration System and Profile Modification System
(a) Notwithstanding the provisions of Section 2.04, the parties acknowledge that the Direct Registration System ("DRS") and Profile Modification System ("Profile") shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic
statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.
(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary's reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.
ARTICLE 3.
CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES
SECTION 3.01 Filing Proofs, Certificates and Other Information.
Any person presenting Shares for deposit or any Owner or holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. If requested in writing, the Depositary shall, as promptly as practicable, provide the Company, at the expense of the Company, with copies of any such proofs, certificates or other information it receives pursuant to this section, unless prohibited by applicable law.
SECTION 3.02 Liability of Owner for Taxes.
If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner of such American Depositary Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the
Owner thereof any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner of such American Depositary Shares shall remain liable for any deficiency.
SECTION 3.03 Warranties on Deposit of Shares.
Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such Shares and the sale of American Depositary Shares representing such Shares by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and delivery of American Depositary Shares.
ARTICLE 4.
THE DEPOSITED SECURITIES
SECTION 4.01 Cash Distributions.
Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes or other governmental charges, the amount distributed to the Owner of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in the Cayman Islands or the People's Republic of China all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners.
SECTION 4.02 Distributions Other Than Cash, Shares or Rights.
Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Sections 4.01, 4.03 or 4.04, the Depositary shall cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or
any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act of 1933 in order to be distributed to Owners or holders) the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto as in the case of a distribution received in cash. The Depositary may refuse to effect any distribution of securities under this Section 4.2 unless it has received an opinion of United States counsel for the Company that is satisfactory to the Depositary that the distribution does not require registration under the Securities Act. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Section 4.02 that is sufficient to pay it fees and expenses in respect of that distribution.
SECTION 4.03 Distributions in Shares.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, an aggregate number of American Depositary Shares representing the amount of Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and the issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09 (and the Depositary may sell, by public or private sale, an amount of the Shares received sufficient to pay its fees and expenses in respect of that distribution). The Depositary may withhold any such delivery of American Depositary Shares if it has not received satisfactory assurances from the Company that such distribution does not require registration under the Securities Act of 1933. In lieu of delivering fractional American Depositary Shares in any such case, the Depositary shall sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.
SECTION 4.04 Rights.
In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and
making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its reasonable discretion that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.
In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.
If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Shares, and the Company shall cause the Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Section, such deposit shall be made, and Deposited Securities shall be delivered, under depositary arrangements which provide for issuance of Deposited Securities subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.
If the Depositary determines in its reasonable discretion that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.
The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration; provided, however, that the Company will have no obligation to cause its counsel to issue such opinion at the request of such Owner.
The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.
SECTION 4.05 Conversion of Foreign Currency.
Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable without excessively burdensome or otherwise unreasonable efforts, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.
SECTION 4.06 Fixing of Record Date.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date, which date shall be the same date, to the extent practicable, as the record date for the Deposited Securities or if different, as close thereto as practicable (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee or charge assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Shares. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively and to give voting instructions and to act in respect of any other such matter.
SECTION 4.07 Voting of Deposited Securities.
Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of People's Republic of China and Cayman Islands law and of the articles of association or similar document of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given, including an express indication that such instructions may be given or deemed given in accordance with the last sentence of this paragraph if no instruction is received, to the Depositary to give a discretionary proxy to a person designated by the Company. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Shares or other Deposited Securities represented by the American Depositary Shares in accordance with the instructions set forth in such request. The
Depositary shall not vote or attempt to exercise the right to vote that attaches to the Shares or other Deposited Securities, other than in accordance with such instructions or deemed instructions. If no instructions are received by the Depositary from any Owner with respect to any of the Deposited Securities represented by the American Depositary Shares evidenced by such Owner's Receipts on or before the date established by the Depositary for such purpose, the Depositary shall deem such Owner to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, that no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing) that (x) the Company does not wish such proxy given, (y) substantial opposition exists or (z) such matter materially and adversely affects the rights of holders of Shares.
There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction cutoff date to ensure that the Depositary will vote the Shares or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.
In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under this Section 4.07, the Company shall give the Depositary notice of any such meeting and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.
SECTION 4.08 Changes Affecting Deposited Securities.
Upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.
SECTION 4.09 Reports.
The Depositary shall make available for inspection by Owners at its Corporate Trust Office, as promptly as practicable after receipt, any reports and communications, including any proxy solicitation material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company. The Depositary shall also, upon written request by the Company, send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.
SECTION 4.10 Lists of Owners.
Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names American Depositary Shares are registered on the books of the Depositary.
SECTION 4.11 Withholding.
The Company or its agent will remit to the appropriate governmental agencies in the Cayman Islands and the People's Republic of China all amounts withheld and owing to such agencies. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners of Receipts.
In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.
ARTICLE 5.
THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY
SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.
Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain in the Borough of Manhattan, The City of New York, facilities for the execution and delivery, registration, registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books, at its Corporate Trust Office, for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners and the Company, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a
business or object other than the business of the Company or a matter related to this Deposit Agreement or the American Depositary Shares.
The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder or at the reasonable written request of the Company.
If any American Depositary Shares are listed on one or more
stock exchanges in the United States, the Depositary shall act as Registrar or,
with notice given as promptly as practicable to the Company, appoint a Registrar
or one or more co-registrars for registry of such American Depositary Shares in
accordance with any requirements of such exchange or exchanges. The Depositary
shall require each Registrar and co registrar that it appoints under this
Section 5.01 to give notice in writing to the Depositary accepting such
appointment and agreeing to abide by the applicable terms of this Deposit
Agreement.
SECTION 5.02 Prevention or Delay in Performance by the Depositary or the
Company.
Neither the Depositary nor the Company nor any of their
respective directors, employees, agents or affiliates shall incur any liability
to any Owner or Holder (i) if by reason of any provision of any present or
future law or regulation of the United States, the People's Republic of China or
any other country, or of any governmental or regulatory authority or stock
exchange, or by reason of any provision, present or future, of the articles of
association or similar document of the Company, or by reason of any provision of
any securities issued or distributed by the Company, or any offering or
distribution thereof, or by reason of any act of God or war or terrorism or
other circumstances beyond its control, the Depositary or the Company shall be
prevented, delayed or forbidden from, or be subject to any civil or criminal
penalty on account of, doing or performing any act or thing which by the terms
of this Deposit Agreement or the Deposited Securities it is provided shall be
done or performed, (ii) by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing which by the terms of this
Deposit Agreement it is provided shall or may be done or performed, (iii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement, (iv) for the inability of any Owner or holder to
benefit from any distribution, offering, right or other benefit which is made
available to holders of Deposited Securities but is not, under the terms of this
Deposit Agreement, made available to Owners or holders, or (v) for any special,
consequential or punitive damages for any breach of the terms of this Deposit
Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02,
or 4.03, or an offering or distribution pursuant to Section 4.04, or for any
other reason, such distribution or offering may not be made available to Owners,
and the Depositary may not dispose of such distribution or offering on behalf of
such Owners and make the net proceeds available to such Owners, then the
Depositary shall not make such distribution or offering, and shall allow any
rights, if applicable, to lapse.
SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.
The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.
The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares on behalf of any Owner or Holder or any other person.
Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information.
Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon any documents it believes in good faith to be genuine and to have been signed or presented by the proper party.
The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.
The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise.
The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.
No disclaimer of liability under the Securities Act of 1933 is intended by any provision of this Deposit Agreement.
SECTION 5.04 Resignation and Removal of the Depositary.
The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by
120 days prior written notice of such removal, to become effective upon the
later of (i) the 120th day after delivery of the notice to the Depositary and
(ii) the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its reasonable efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.
Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.
SECTION 5.05 The Custodians.
The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. Any Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. If upon such resignation there shall be no Custodian acting hereunder, the Depositary shall, promptly after receiving such notice, appoint a substitute custodian or custodians, each of which shall thereafter be a Custodian hereunder. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute or additional custodian or custodians, each of which shall thereafter be one of the Custodians hereunder. Upon demand of the Depositary any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian or such substitute or additional custodian or custodians. Each such substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.
Upon the appointment of any successor depositary hereunder, each Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent
hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority as agent hereunder of such successor depositary.
SECTION 5.06 Notices and Reports.
On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in the form given or to be given to holders of Shares or other Deposited Securities.
The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company to holders of its Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company's expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.
SECTION 5.07 Distribution of Additional Shares, Rights, etc.
If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Shares, (2) rights to subscribe for Shares, (3) securities convertible into Shares, or (4) rights to subscribe for such securities (each a "Distribution"), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act of 1933, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act of 1933 in effect that will cover that Distribution.
The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Shares under the Securities Act of 1933 or the Company delivers to the Depositary an opinion of United States counsel, satisfactory to the Depositary, to the effect that, upon deposit, those Shares will be eligible for public resale in the United States without further registration under the Securities Act of 1933 .
SECTION 5.08 Indemnification.
The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any fees and expenses reasonably incurred in seeking, enforcing or collecting such indemnity and the fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof in the United States or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.
The indemnities contained in the preceding paragraph shall not
extend to any liability or expense which arises solely and exclusively out of a
Pre-Release (as defined in Section 2.09) of American Depositary Shares in
accordance with Section 2.09 and which would not otherwise have arisen had such
American Depositary Shares not been the subject of a Pre-Release pursuant to
Section 2.09; provided, however, that the indemnities provided in the preceding
paragraph shall apply to any such liability or expense (i) to the extent that
such liability or expense would have arisen had American Depositary Shares not
been the subject of a Pre-Release, or (ii) which may arise out of any
misstatement or alleged misstatement or omission or alleged omission in any
registration statement, proxy statement, prospectus (or placement memorandum),
or preliminary prospectus (or preliminary placement memorandum) relating to the
offer or sale of American Depositary Shares, except to the extent any such
liability or expense arises out of (i) information relating to the Depositary or
any Custodian (other than the Company), as applicable, furnished in writing and
not materially changed or altered by the Company expressly for use in any of the
foregoing documents, or, (ii) if such information is provided, the failure to
state a material fact necessary to make the information provided not misleading.
The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to its or their negligence or bad faith.
If an action, proceeding (including, but not limited to, any governmental investigation), claim or dispute (collectively, a "Proceeding") in respect of which indemnity may be sought by either party is brought or asserted against the other party, the party seeking indemnification (the "Indemnitee") shall promptly (and in no event more than ten (10) days after receipt of notice of such Proceeding) notify the party obligated to provide such indemnification (the "Indemnitor") of such Proceeding. The failure of the Indemnitee to so notify the Indemnitor shall not impair the Indemnitee's ability to seek indemnification from the Indemnitor (but only for costs, expenses and liabilities incurred after such notice) unless such failure adversely affects the Indemnitor's ability to adequately oppose or defend such Proceeding. Upon receipt of such notice from the Indemnitee, the Indemnitor shall be entitled to participate in such Proceeding and, to the extent that it shall so desire and provided no conflict of interest exists as specified in
subparagraph (b) below or there are no other defenses available to Indemnitee as
specified in subparagraph (d) below, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnitee (in which case all attorney's fees and
expenses shall be borne by the Indemnitor and the Indemnitor shall in good faith
defend the Indemnitee). The Indemnitee shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be borne by the Indemnitee unless
(a) the Indemnitor agrees in writing to pay such fees and expenses, (b) the
Indemnitee shall have reasonably and in good faith concluded that there is a
conflict of interest between the Indemnitor and the Indemnitee in the conduct of
the defense of such action, (c) the Indemnitor fails, within ten (10) days prior
to the date the first response or appearance is required to be made in such
Proceeding, to assume the defense of such Proceeding with counsel reasonably
satisfactory to the Indemnitee or (d) there are legal defenses available to
Indemnitee that are different from or are in addition to those available to the
Indemnitor. No compromise or settlement of such Proceeding may be effected by
either party without the other party's consent unless (i) there is no finding or
admission of any violation of law and no effect on any other claims that may be
made against such other party and (ii) the sole relief provided is monetary
damages that are paid in full by the party seeking the settlement. Neither party
shall have any liability with respect to any compromise or settlement effected
without its consent, which shall not be unreasonably withheld. The Indemnitor
shall have no obligation to indemnify and hold harmless the Indemnitee from any
loss, expense or liability incurred by the Indemnitee as a result of a default
judgment entered against the Indemnitee unless such judgment was entered after
the Indemnitor agreed, in writing, to assume the defense of such Proceeding.
SECTION 5.09 Charges of Depositary.
The Company agrees to pay the fees, reasonably expenses and out-of-pocket charges of the Depositary and those of any Registrar in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.
The following charges shall be incurred by any party depositing or withdrawing Shares or by any party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary Shares pursuant to Section 4.03), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 and the surrender of American Depositary Shares pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this
Deposit Agreement, including, but not limited to Sections 4.01 through 4.04 hereof, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee charged under clause 6, a fee of $.02 or less per American Depositary Share (or portion thereof) per annum for depositary services, which will be payable as provided in clause 9 below, and (9) any other charges payable by the Depositary, any of the Depositary's agents, including the Custodian, or the agents of the Depositary's agents in connection with the servicing of Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be payable at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).
The Depositary, subject to Section 2.09 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.
SECTION 5.10 Retention of Depositary Documents.
The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company requests that such papers be retained for a longer period or turned over to the Company or to a successor depositary.
SECTION 5.11 Exclusivity.
The Company agrees not to appoint any other depositary for issuance of American or global depositary shares or receipts so long as The Bank of New York is acting as Depositary hereunder.
SECTION 5.12 List of Restricted Securities Owners.
From time to time, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update that list on a regular basis. The Company agrees to advise in writing each of the persons or entities so listed that such Restricted Securities are ineligible for deposit hereunder. The Depositary may rely on such a list or update but shall not be liable for any action or omission made in reliance thereon.
ARTICLE 6.
AMENDMENT AND TERMINATION
SECTION 6.01 Amendment.
The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or holders in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and holder, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.
SECTION 6.02 Termination.
The Company may at any time terminate this Deposit Agreement by instructing the Depositary to mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 60 days prior to the termination date included in such notice. The Depositary may likewise terminate this Deposit Agreement if at any time 30 days shall have expired after the Depositary delivered to the Company a written resignation notice and if a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04; in such case the Depositary shall mail a notice of termination to the Owners of all American Depositary Shares then outstanding at least 30 days prior to the termination date. On and after the date of termination, the Owner of American Depositary Shares will, upon (a) surrender of such American Depositary Shares, (b) payment of the fee of the Depositary for the surrender of American Depositary Shares referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by those American Depositary Shares. If any American Depositary Shares shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of American Depositary Shares, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, upon surrender of American Depositary Shares (after deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges).
At any time after the expiration of four months from the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it under this Deposit Agreement, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American Depositary Shares that have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting,
in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges). Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.
ARTICLE 7.
MISCELLANEOUS
SECTION 7.01 Counterparts.
This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Holder during business hours.
SECTION 7.02 No Third Party Beneficiaries.
This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.
SECTION 7.03 Severability.
In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04 Owners and Holders as Parties; Binding Effect.
The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of American Depositary Shares or any interest therein.
SECTION 7.05 Notices.
Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Agria Corporation, Room 706, 7/F, Huantai Building, No. 12A, South Street Zhongguancun, Haidian District, Beijing 100081, People's Republic of China, or any other place to which the Company may have transferred its principal office with notice to the Depositary.
Any and all notices to be given to the Depositary shall be
deemed to have been duly given if in English and personally delivered or sent by
mail or cable, telex or facsimile transmission confirmed by letter, addressed to
The Bank of New York, 101 Barclay Street, New York, N.Y. 10286, Attention:
American Depositary Receipt Administration, or any other
place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.
Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for American Depositary Shares of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.06 Submission to Jurisdiction; Appointment of Agent for Service of Process; Jury Trial Waiver.
The Company hereby (i) irrevocably designates and appoints Law
Debenture Corporate Services Inc., 400 Madison Avenue, 4th Floor, New York, N.Y.
10017, as the Company's authorized agent upon which process may be served in any
suit or proceeding arising out of or relating to the Shares or Deposited
Securities, the American Depositary Shares, the Receipts or this Agreement, (ii)
consents and submits to the jurisdiction of any state or federal court in the
State of New York in which any such suit or proceeding may be instituted, and
(iii) agrees that service of process upon said authorized agent shall be deemed
in every respect effective service of process upon the Company in any such suit
or proceeding. The Company agrees to deliver, upon the execution and delivery of
this Deposit Agreement, a written acceptance by such agent of its appointment as
such agent. The Company further agrees to take any and all action, including the
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment in full force and effect for so long
as any American Depositary Shares or Receipts remain outstanding or this
Agreement remains in force. In the event the Company fails to continue such
designation and appointment in full force and effect, the Company hereby waives
personal service of process upon it and consents that any such service of
process may be made by certified or registered mail, return receipt requested,
directed to the Company at its address last specified for notices hereunder, and
service so made shall be deemed completed five (5) days after the same shall
have been so mailed.
EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR
THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 7.07 Governing Law.
This Deposit Agreement and the Receipts shall be interpreted and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by the laws of the State of New York, except with respect to its authorization and execution by the Company, which shall be governed by the laws of the Cayman Islands.
IN WITNESS WHEREOF, AGRIA CORPORATION and THE BANK OF NEW YORK have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any interest therein.
AGRIA CORPORATION
By:[o]
Name:
Title:
THE BANK OF NEW YORK,
as Depositary
By:[o]
Name:
Title:
EXHIBIT A
AMERICAN DEPOSITARY SHARES
(Each American Depositary Share represents
Two (2) deposited Shares)
THE BANK OF NEW YORK
AMERICAN DEPOSITARY RECEIPT
FOR ORDINARY SHARES OF
THE PAR VALUE OF $0.0000001 EACH OF
AGRIA CORPORATION
(INCORPORATED UNDER THE LAWS OF THE CAYMAN ISLANDS)
The Bank of New York, as depositary (hereinafter called the "Depositary"), hereby certifies that___________ ________________________, or registered assigns IS THE OWNER OF _____________________________
AMERICAN DEPOSITARY SHARES
representing deposited ordinary shares (herein called "Shares") of AGRIA CORPORATION, incorporated under the laws of THE CAYMAN ISLANDS (herein called the "Company"). At the date hereof, each American Depositary Share represents two (2) ordinary Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at the Hong Kong office of The Hongkong and Shanghai Banking Corporation Limited (herein called the "Custodian"). The Depositary's Corporate Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office is located at 101 Barclay Street, New York, N.Y. 10286, and its principal executive office is located at One Wall Street, New York, N.Y. 10286.
THE DEPOSITARY'S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286
1. THE DEPOSIT AGREEMENT.
This American Depositary Receipt is one of an issue (herein called "Receipts"), all issued and to be issued upon the terms and conditions set forth in the deposit agreement, dated as of [o], 2007 (herein called the "Deposit Agreement"), by and among the Company, the Depositary, and all Owners and holders from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and holders and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Shares and held thereunder (such Shares, securities, property, and cash are herein called "Deposited Securities"). Copies of the Deposit Agreement are on file at the Depositary's Corporate Trust Office in New York City and at the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.
2. SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.
Upon surrender at the Corporate Trust Office of the Depositary of American Depositary Shares, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Shares is entitled to delivery, to him or as instructed, of the amount of Deposited Securities at the time represented by those American Depositary Shares. Delivery of such Deposited Securities may be made by the delivery of (a) certificates or account transfer for Shares in the name of the Owner hereof or as ordered by him or by certificates properly endorsed or accompanied by proper instruments or instructions of transfer to such Owner or as ordered by him and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt to such Owner or as ordered by him. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof. Notwithstanding any other provision of the Deposit Agreement or this Receipt, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities may be suspended only for (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares in connection with voting at a shareholders' meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American Depositary Shares or to the withdrawal of the Deposited Securities.
3. TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.
Transfers of American Depositary Shares may be registered on the books of the
Depositary upon (i) in the case of certificated American Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly stamped as may be required by the laws of the State of New York and of the United States of America and upon payment of funds for any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. The Depositary, upon surrender of a Receipt for the purpose of exchanging for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the Owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares. As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require the production of proof satisfactory to it as to the identity and genuineness of any signature or other information it deems necessary and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement.
The delivery of American Depositary Shares against deposit of Shares generally or against deposit of particular Shares may be suspended, or the transfer of American Depositary Shares in particular instances may be refused, or the registration of transfer of outstanding American Depositary Shares generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement any Shares which would be required to be registered under the provisions of the Securities Act of 1933 for public offer and sale in the United States, unless a registration statement is in effect as to such Shares for such offer and sale.
4. LIABILITY OF OWNER FOR TAXES.
If any tax or other governmental charge shall become payable with respect to any American Depositary Shares or any Deposited Securities represented by any American Depositary Shares, such tax or other governmental charge shall be payable by the Owner to the Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner any part or all of the Deposited Securities represented by those American Depositary Shares, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner shall remain liable for any deficiency.
5. WARRANTIES ON DEPOSIT OF SHARES.
Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, that such Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and free of any preemptive rights of the holders of outstanding Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent that the deposit of such Shares and the sale of American Depositary Shares representing such Shares by that person are not restricted under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and delivery of American Depositary Shares.
6. FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.
Any person presenting Shares for deposit or any Owner or holder may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of any American Depositary Shares or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. If requested in writing, the Depositary shall, as promptly as practicable, provide the Company, at the expense of the Company, with copies of any such proofs, certificates or other information it receives pursuant to this Article, unless prohibited by applicable law. No Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the Cayman Islands or in the People's Republic of China, which is then performing the function of the regulation of currency exchange.
7. CHARGES OF DEPOSITARY.
The Company agrees to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every
three months. The charges and expenses of the Custodian are for the sole account of the Depositary.
The following charges shall be incurred by any party
depositing or withdrawing Shares or by any party surrendering American
Depositary Shares or to whom American Depositary Shares are issued (including,
without limitation, issuance pursuant to a stock dividend or stock split
declared by the Company or an exchange of stock regarding the American
Depositary Shares or Deposited Securities or a delivery of American Depositary
Shares pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as
applicable: (1) taxes and other governmental charges, (2) such registration fees
as may from time to time be in effect for the registration of transfers of
Shares generally on the Share register of the Company or Foreign Registrar and
applicable to transfers of Shares to or from the name of the Depositary or its
nominee or the Custodian or its nominee on the making of deposits or withdrawals
under the terms of the Deposit Agreement, (3) such cable, telex and facsimile
transmission expenses as are expressly provided in the Deposit Agreement, (4)
such expenses as are incurred by the Depositary in the conversion of foreign
currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00
or less per 100 American Depositary Shares (or portion thereof) for the delivery
of American Depositary Shares pursuant to Section 2.03, 4.03 or 4.04 of the
Deposit Agreement and the surrender of American Depositary Shares pursuant to
Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per
American Depositary Share (or portion thereof) for any cash distribution made
pursuant to the Deposit Agreement, including, but not limited to Sections 4.01
through 4.04 of the Deposit Agreement, (7) a fee for the distribution of
securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in
an amount equal to the fee for the execution and delivery of American Depositary
Shares referred to above which would have been charged as a result of the
deposit of such securities (for purposes of this clause 7 treating all such
securities as if they were Shares) but which securities are instead distributed
by the Depositary to Owners, (8) in addition to any fee charged under clause 6,
a fee of $.02 or less per American Depositary Share (or portion thereof) per
annum for depositary services, which will be payable as provided in clause 9
below, and (9) any other charges payable by the Depositary, any of the
Depositary's agents, including the Custodian, or the agents of the Depositary's
agents in connection with the servicing of Shares or other Deposited Securities
(which charge shall be assessed against Owners as of the date or dates set by
the Depositary in accordance with Section 4.06 of the Deposit Agreement and
shall be payable at the sole discretion of the Depositary by billing such Owners
for such charge or by deducting such charge from one or more cash dividends or
other cash distributions).
The Depositary, subject to Article 8 hereof, may own and deal in any class of securities of the Company and its affiliates and in American Depositary Shares.
8. PRE-RELEASE OF RECEIPTS.
Notwithstanding Section 2.03 of the Deposit Agreement, the Depositary may deliver American Depositary Shares prior to the receipt of Shares pursuant to Section 2.02 of the Deposit Agreement (a "Pre-Release"). The Depositary may, pursuant to Section 2.05 of the Deposit Agreement, deliver Shares upon the surrender of American Depositary Shares that have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such American Depositary Shares have been Pre-Released.
The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom American Depositary Shares or Shares are to be delivered, that such person, or its customer, owns the Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times fully collateralized with cash or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of Shares represented by American Depositary Shares which are outstanding at any time as a result of Pre-Release will not normally exceed thirty percent (30%) of the Shares deposited under the Deposit Agreement; provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with the foregoing.
9. TITLE TO RECEIPTS.
It is a condition of this Receipt and every successive Owner and Holder of this Receipt by accepting or holding the same consents and agrees that when properly endorsed or accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under the laws of New York. American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of New York. The Depositary, notwithstanding any notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or be subject to any liability under the Deposit Agreement to any Holder of a Receipt unless such Holder is the Owner thereof.
10. VALIDITY OF RECEIPT.
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual signature of a duly authorized signatory of the Depositary; provided, however that such signature may be a facsimile if a Registrar for the Receipts shall have been appointed and such Receipts are countersigned by the manual signature of a duly authorized officer of the Registrar.
11. REPORTS; INSPECTION OF TRANSFER BOOKS.
The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and, accordingly, files certain reports with the Securities and Exchange Commission. Such materials will be available for inspection and copying at the public reference facilities maintained by the Commission located at Room 1580, 100 F Street, N.E., Washington, D.C. 20549.
The Depositary will make available for inspection by Owners at its Corporate
Trust Office, as promptly as practicable after receipt, any reports, notices and other communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also, upon written request by the Company, send to Owners copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.
The Depositary will keep books, at its Corporate Trust Office, for the registration of American Depositary Shares and transfers of American Depositary Shares which at all reasonable times shall be open for inspection by the Owners and the Company, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the American Depositary Shares.
12. DIVIDENDS AND DISTRIBUTIONS.
Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States, and subject to the Deposit Agreement, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes or other governmental charges, the amount distributed to the Owners of the American Depositary Shares representing such Deposited Securities shall be reduced accordingly.
Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Sections 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may refuse to effect any distribution of securities under this paragraph unless it has received an opinion of
United States counsel for the Company that is satisfactory to the Depositary that the distribution does not require registration under the Securities Act. The Depositary may sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this Article that is sufficient to pay its fees and expenses in respect of that distribution.
If any distribution consists of a dividend in, or free distribution of, Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary Shares representing the amount of Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Shares and the issuance of American Depositary Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof and Section 5.09 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of Shares received sufficient to pay its fees and expenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares in any such case, the Depositary will sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01of the Deposit Agreement. If additional American Depositary Shares are not so delivered, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.
The Company or its agent will remit to the appropriate governmental agencies in the Cayman Islands and the People's Republic of China all amounts withheld and owing to such agencies. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies, and the Depositary or the Company or its agent may file any such reports necessary to obtain benefits under the applicable tax treaties for the Owners. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.
13. RIGHTS.
In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary determines in its reasonable discretion that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to
whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems appropriate.
In circumstances in which rights would otherwise not be distributed, if an Owner requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner under the Deposit Agreement, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.
If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Shares, and the Company shall cause the Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, deliver American Depositary Shares to such Owner. In the case of a distribution pursuant to the second paragraph of this Article 13, such deposit shall be made, and Deposited Securities shall be delivered, under depositary arrangements which provide for issuance of Deposited Securities subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under applicable United States laws.
If the Depositary determines in its reasonable discretion that it is not lawful and feasible to make such rights available to all or certain Owners, it may sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any American Depositary Shares or otherwise.
The Depositary will not offer rights to Owners unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act of 1933 with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner requests the
distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act of 1933, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration; provided, however, that the Company shall have no obligation to cause its counsel to issue such opinion at the request of such Owner.
The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.
14. CONVERSION OF FOREIGN CURRENCY.
Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable without excessively burdensome or otherwise unreasonable efforts, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.
15. RECORD DATES.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date, which date shall be the same date, to the extent practicable, as the record date for the Deposited Securities or if different, as close thereto as practicable (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fee or charge assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Shares, subject to the provisions of the Deposit Agreement.
16. VOTING OF DEPOSITED SECURITIES.
Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter, mail to the Owners of Receipts a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in such notice of meeting received by the Depositary from the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of the People's Republic of China and Cayman Islands law and of the articles of association or similar document of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares or other Deposited Securities represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given including an express indication that such instruction may be given or deemed given in accordance with the last sentence of this paragraph if no instruction is received, to the Depositary to give a discretionary proxy to a person designated by the Company. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable to vote or cause to be voted the amount of Shares or other Deposited Securities represented by such American Depositary Shares in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Shares or other Deposited Securities, other than in accordance with such instructions or deemed instructions. If no instructions are received by the Depositary from any Owner with respect to any of the Deposited Securities represented by the American Depositary Shares evidenced by such Owner's Receipts on or before the date established by the Depositary for such purpose, the Depositary shall deem such Owner to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities; provided, that no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing) that (x) the Company does not wish such proxy given, (y) substantial opposition exists or (z) such matter materially and adversely affects the rights of holders of Shares.
There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the instruction cutoff date to ensure that the Depositary will vote the Shares or Deposited Securities in accordance with the provisions set forth in the preceding paragraph.
In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company will request the Depositary to act under this Article, the Company shall give the Depositary notice of any such meeting and details concerning the matters to be voted upon not less than 45 days prior to the meeting date.
17. CHANGES AFFECTING DEPOSITED SECURITIES.
Upon any change in nominal value, change in par value, split-up, consolidation,
or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, or upon the redemption or cancellation by the Company of the Deposited Securities, any securities, cash or property which shall be received by the Depositary or a Custodian in exchange for, in conversion of, in lieu of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.
18. LIABILITY OF THE COMPANY AND DEPOSITARY.
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Holder, (i) if by reason of any provision of any present or future law or regulation of the United States, the People's Republic of China or any other country, or of any governmental or regulatory authority, or by reason of any provision, present or future, of the articles of association or similar document of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or the Deposited Securities it is provided shall be done or performed, (ii) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (iii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iv) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or holders, or (v) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner or Holder or any other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for
deposit, any Owner or holder, or any other person believed by it in good faith to be competent to give such advice or information. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon any documents it believes in good faith to be genuine and to have been signed or presented by the proper party. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of Deposited Securities or otherwise. The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to any fees and expenses reasonably incurred in seeking, enforcing or collecting such indemnity and the fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale thereof in the United States or (b) acts performed or omitted, pursuant to the provisions of or in connection with the Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates. No disclaimer of liability under the Securities Act of 1933 is intended by any provision of the Deposit Agreement.
19. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 120 days prior written notice of such removal, to become effective upon the later of (i) the 120th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute or additional custodian or custodians.
20. AMENDMENT.
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or holders in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any
substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary Shares until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding American Depositary Shares. Every Owner and holder of American Depositary Shares, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such American Depositary Shares or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.
21. TERMINATION OF DEPOSIT AGREEMENT.
The Company may terminate the Deposit Agreement by instructing
the Depositary to mail notice of termination to the Owners of all American
Depositary Shares then outstanding at least 60 days prior to the termination
date included in such notice. The Depositary may likewise terminate the Deposit
Agreement, if at any time 30 days shall have expired after the Depositary
delivered to the Company a written resignation notice and if a successor
depositary shall not have been appointed and accepted its appointment as
provided in the Deposit Agreement; in such case the Depositary shall mail a
notice of termination to the Owners of all American Depositary Shares then
outstanding at least 30 days prior to the termination date. On and after the
date of termination, the Owner of American Depositary Shares will, upon (a)
surrender of such American Depositary Shares, (b) payment of the fee of the
Depositary for the surrender of American Depositary Shares referred to in
Section 2.05, and (c) payment of any applicable taxes or governmental charges,
be entitled to delivery, to him or upon his order, of the amount of Deposited
Securities represented by those American Depositary Shares. If any American
Depositary Shares shall remain outstanding after the date of termination, the
Depositary thereafter shall discontinue the registration of transfers of
American Depositary Shares, shall suspend the distribution of dividends to the
Owners thereof, and shall not give any further notices or perform any further
acts under the Deposit Agreement, except that the Depositary shall continue to
collect dividends and other distributions pertaining to Deposited Securities,
shall sell rights and other property as provided in the Deposit Agreement, and
shall continue to deliver Deposited Securities, together with any dividends or
other distributions received with respect thereto and the net proceeds of the
sale of any rights or other property, upon surrender of American Depositary
Shares (after deducting, in each case, the fee of the Depositary for the
surrender of American Depositary Shares, any expenses for the account of the
Owner of such American Depositary Shares in accordance with the terms and
conditions of the Deposit Agreement, and any applicable taxes or governmental
charges). At any time after the expiration of four months from the date of
termination, the Depositary may sell the Deposited Securities then held under
the Deposit Agreement and may thereafter hold uninvested the net proceeds of any
such sale, together with any other cash then held by it thereunder, unsegregated
and without liability for interest, for the pro rata benefit of the Owners of
American Depositary Shares that have not theretofore been surrendered, such
Owners thereupon becoming general creditors of the Depositary with respect to
such net proceeds. After making such sale, the Depositary shall be discharged
from all obligations under the Deposit Agreement, except to account for such net
proceeds and other cash (after deducting, in each case, the fee of the
Depositary for the surrender of American Depositary Shares, any expenses for the
account of the Owner of such American Depositary Shares in accordance with the
terms and conditions of the
Deposit Agreement, and any applicable taxes or governmental charges). Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.
22. DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM
(a) Notwithstanding the provisions of Section 2.04 of the Deposit Agreement, the parties acknowledge that the Direct Registration System ("DRS") and Profile Modification System ("Profile") shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.
(b) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in subsection (a) has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary's reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.
23. SUBMISSION TO JURISDICTION; JURY TRIAL WAIVER
In the Deposit Agreement, the Company has (i) appointed Law Debenture Corporate Services Inc., 400 Madison Avenue, 4th Avenue, 4th Floor, New York, N.Y. 10017, as the Company's authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of the Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment
in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or the Deposit Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.
EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the captions "Our Summary Consolidated Financial Data", "Selected Consolidated Financial Data" and "Experts" and to the use of our report dated July 15, 2007, in Amendment No.1 to the Registration Statement on Form F-1 and related Prospectus of Agria Corporation dated October 24, 2007.
/s/ Ernst & Young Hua Ming Shenzhen, People's Republic of China October 24, 2007 |
.
.
.
Exhibit 23.2
Our ref AEO\630408\2290342v1
Your ref
Agria Corporation Direct: +852 2971 3007 Room 706, 7/F, Huantai Building, No. 12A Mobile: +852 9020 8007 South Street Zhongguancun E-mail: richard.thorp@maplesandcalder.com Haidian District, Beijing 100081 People's Republic of China |
24 October 2007
Dear Sirs
AGRIA CORPORATION
We hereby consent to the reference to our name under the headings "Enforceability of Civil Liabilities", "Taxation" and "Legal Matters" and elsewhere in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ MAPLES and CALDER MAPLES AND CALDER |
Exhibit 23.3 41st Floor, One Exchange Square 8 Connaught Place, Central Hong Kong Tel: +852.2522.7886 Fax: +852.2522.7006 www.lw.com (chinese characters) (LATHAM & WATKINS LLP LOGO) FIRM / AFFILIATE OFFICES INTERNATIONAL LAW FIRM (chinese characters) Barcelona New Jersey Brussels New York October 24, 2007 Chicago Northern Virginia Frankfurt Orange County Hamburg Paris Hong Kong San Diego London San Francisco Los Angeles Shanghai Madrid Silicon Valley Milan Singapore Moscow Tokyo Munich Washington, D.C. Agria Corporation Room 706, 7/F, Huantai Building, No. 12A South Street Zhongguancun Haidian District, Beijing 100081 People's Republic of China |
Ladies and Gentlemen:
We hereby consent to the use of our name under the captions "Taxation" and "Legal Matters" in the prospectus included in the registration statement on Form F-1, originally filed by Agria Corporation on October 18, 2007, with the Securities and Exchange Commission under the Securities Act of 1933, as amended. In giving such consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.
Very truly yours,
/s/ Latham & Watkins LLP |
Exhibit 23.4
[Letterhead of C&F]
October 24, 2007
Agria Corporation
M&C, Corporate Services Limited,
PO Box 309GT, Ugland House,
South Church Street, George Town, Grand
Cayman, Cayman Islands
Ladies and Gentlemen:
We hereby consent to the use of our name under the captions "Risk Factors," "Enforceability of Civil Liabilities," "Regulation," and "Legal Matters" in the prospectus included in the registration statement on Form F-1, originally filed by Agria Corporation on October 24, 2007, with the Securities and Exchange Commission under the Securities Act of 1933, as amended. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.
Sincerely yours,
/s/ Commerce & Finance Law Offices Commerce & Finance Law Offices |