10:03     CHINA AGROTECH<01073> - Announcement (3)                            

    equipment, plant protection technical services,                           
    agricultural technical training, property rental                          
    management and other permitted agricultural related                       
    services.                                                                 
                                                                              
    Operation of the JV Company                                               
                                                                              
    Pursuant to the Agreement, the board of directors of                      
    the JV Company will include 2 members appointed by                        
    Hunan Xiangnong, 2 members appointed by Fujian                            
    Agrotech and 1 member appointed by Xiamen Gunben with                     
    the senior management appointed by the JV Parties.                        
    Hunan Xiangnong will provide sales personnel who are                      
    subject to the selection and appointment by the JV                        
    Company. Other sales and management personnel will                        
    be hired externally.                                                      
                                                                              
    Other terms set out in the Agreement include the                          
    following.                                                                
                                                                              
    *       For the purpose of expanding its operation, the                   
    JV Parties are obligated to provide short term loans                      
    or guarantees to finance the operation of the JV                          
    Company according to their respective shareholding                        
    proportion in the JV Company when necessary. The                          
    Directors currently do no foresee the immediate need                      
    for the provision of such short term loans or                             
    guarantees following the establishment of the JV                          
    Company.                                                                  
                                                                              
    *       Hunan Xiangnong shall transfer its existing                       
    business in agricultural resources to the JV Company                      
    and shall not be engaged in a business that is similar                    
    to that of the JV Company. The transfer of Hunan                          
    Xiangnong's business in agricultural resources to the                     
    JV Company does not form part of its assets                               
    contribution.                                                             
                                                                              
    *       The JV Company shall be responsible for Hunan                     
    Xiangnong Trading's bank loan of approximately                            
    RMB10,500,000 (approximately HK$9,906,000)                                
    mentioned above. It will be paid by the JV Company                        
    out of its own resources and will not require further                     
    contribution from the JV Parties.                                         
                                                                              
    *       Each of the JV Parties shall appoint 1 member to                  
    the set up committee which shall be responsible for                       
    the establishment of the JV Company. Costs incurred                       
    during the establishment of the JV Company shall be                       
    borne by the JV Parties according to their respective                     
    capital contribution to the JV Company.                                   
                                                                              
    For matters not covered in the Agreement, the JV                          
    Parties shall carry out further negotiations. It is                       
    the understanding between the JV Parties that profit                      
    and loss of the JV Company will be shared between the                     
    JV Parties according to their respective interest in                      
    the JV Company.                                                           
                                                                              
    REASONS FOR ENTERING INTO THE AGREEMENT                                   
                                                                              
    The Group is principally engaged in (i) the                               
    manufacturing and selling of plant growth regulatory                      
    products, pesticides and fertilizers, (ii) the                            
    trading of pesticides, fertilizers and other                              
    agricultural resources products and (iii) the                             
    provision of plant protection technical services in                       
    the PRC. Accordingly, the JV Company's business is                        
    in line with the Group's business. It is the                              
    Directors' plan to further expand the Group's                             
    agricultural resources trading network in the PRC.                        
    In view that Hunan Xiangnong is a provincial level                        
    (*) enterprise engaged in the business of trading                         
    of agricultural resources, the Directors believe the                      
    establishment of the JV Company with Hunan