Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B)Announcement No. 2019-45
ADAMA Ltd.
Special Report on the Deposit and Actual Usage of the Raised Funds
in the First Half-Year of 2019
The Company and all members of its Board of Directors confirm that all the information
disclosed herein is true, accurate, and complete with no false or misleading statement or
material omission.
The Special Report hereunder on the Deposit and Actual Use of the Funds Raised from
Non-Public Offerings in the first half of 2019 was prepared in accordance with
‘Regulatory Guidelines for Listed Companies No.2-Regulatory Requirements for the
Management and Use of Funds Raised by Listed Companies’ of China Securities
Regulatory Commission (CSRC Notice [2012] No.44), ‘Guidelines for the Standard
Operation of the Companies Listed in Shenzhen Stock Exchange’ (2015 Amendment)
issued by Shenzhen Stock Exchange.
I. General Information About the Raised Funds
1. Amount and date of Receiving the Raised Funds
After receiving the approval of China Securities Regulatory Commission for the
issuance of shares to China National Agrochemical Co., Ltd. to acquire assets and raise
supporting funds (CSRC Permits [2017] No.1096), the Company issued 104,697,982
ordinary A shares in December 2017, at the issue price of RMB14.9 per share, raising a
total amount of RMB1,559,999,931.80. After deducting the underwriting fees of
RMB28, 079,998.78, the net amount received by the Company was RMB1,
531,919,933.02. The net amount was received on 27 December 2017 and was verified
by Deloitte Touche Tohmatsu Certified Public Accountant LLP which issued a capital
verification report (De Shi Bao (Yan) Zi (17) No.00540).
2. The Used Amount of the Raised Funds in the Previous Year
As at 31 December 2018, the Company had used RMB 317,292,647.40 of the raised
funds in that year, and the balance that had not yet been used was
RMB1,263,521,479.15 (including interest income after deducting bank charges
RMB20,814,194.75).
3. The Used Amount of the Raised Funds in the First Half-Year of 2019 and the Current
Balance
In the first half of 2019, the Company didn’t use the raised funds. As at June 30, 2019,
the balance of the raised funds was RMB12,365,970.17 including net interest and tax
refund (after deducting the relevant bank charges) of RMB 1,275,887,449.32.
II. Deposit and Management of the Raised Funds
In order to standardize the management and the usage of the raised funds, and to protect
the rights of investors, based on the actual requirements, the Company prepared the
Raised Funds Management Policy in accordance with the laws, regulations, and
regulatory documents such as Management Measures for Initial Public Offering of
Shares and Listing, Notice on Further Standardize the Use of Raised Funds for Listing
Companies, and Listing Rules of Shenzhen Stock Exchange etc. The Raised Funds
Management Policy specifies the deposit, usage, change of the designated projects,
management and supervision of the raised funds.
The Company has signed the Trilateral Supervision Agreement for Special Account
Deposit with Guotai Jun’an and Jinzhou Sanwan Branch of China Construction Bank
Co., Ltd. on January 22, 2018, and the Four-party Supervision Agreement for New Fund-
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raising Account with Guotai Jun’an Securities Co., Ltd, Shanghai Branch of HSBC Bank
(China), ADAMA AGAN LTD, and ADAMA MAKHTESHIM LTD on June 25th,2018.
During the reporting period, the parties strictly performed their obligations under the
above supervision agreements.
The details of the opening of the special accounts and deposit of the raised funds
are as follows:
Unit: Yuan
Bank Account No. Balance of the account as at June
30, 2019
Jingzhou Sanwan 42050162610109000999 1,275,887,449.32
Branch of China
Construction Bank
Shanghai Branch of 715-039582-001 0
HSBC
Shanghai Branch of 715-039574-001 0
HSBC
III. Actual Usage of the Raised Funds in the First Half of 2019
For details of the actual use of the raised funds in the first half of 2019, please see the
appendix I Comparison Table for the Use of Raised Funds.
IV. The Usage of the Raised Funds in the Newly Changed Designated Projects
On April 10, 2019, the Annual Shareholders Meeting approved a proposal on the change
of certain designated projects included in the Project of Share Issuance for Assets
Purchase and Supporting Finance. The Company will no longer use the raised funds on
the project of the construction of Huai’an pesticide formulation center (RMB 249.8
million) and the project of fixed-assets investment-product A 600t/a (RMB 150.28
million). Instead, the Company will use the above amount (aggregated number RMB
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400.08million) to pay the consideration of the equity transfer of Jiangsu Anpon
Electrochemical Co., Ltd. The Company is dealing with the payment process.
V. Problems in the Usage and Disclosure of the Raised Funds
The Company has timely, truly, accurately and completely disclosed relevant
information on the raised funds. The management of the raised funds does not violate
the regulations of China Securities Regulatory Commission or Shenzhen Stock
Exchange.
Board of Directors of ADAMA Ltd.
August 22, 2019
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Appendix 1: Comparison Table for the Use of Raised Funds
Comparison Table for the Use of Raised Funds
Unit: RMB ’0000
Total investment of raised funds for the
Total amount of raised funds 155,999.99
reporting period 0
Total amount of raised funds with change of purpose during the
40,008
reporting period
Accumulated investment amount of raised
Accumulated amount of raised funds with change of purpose 40,008
funds
Percentage of accumulated amount of raised funds with change 31,729
25.65%
of purpose
Accumulated Investment
Date of Whether the
Whether the investment progress as at
Committed Total Investment projects Realized feasibility of the
project has been Total committed amount as at the the end of Whether the
fund-raising investment amount for the reaching benefits of the project has
changed, investment end of the period (%) expected
investment amount after reporting intended reporting changed
including part amount reporting period benefits are
projects adjustment (1) period useable period significantly
change (if any) (2) (3)=(2)/(1) achieved
condition
Huai’an
pesticide
preparation
Yes 24,980 24,980 0 0 - N/A N/A N/A Yes
center project
Product It will be clear
development after the
and registration
No 93,507 93,507 0 13,103 14% 2019
completion of
N/A No
project the project
It will be clear
ADAMA fixed
after the
asset investment Yes 66,204 66,204 2019 N/A Yes
0 5,913 9% completion of
project
the project
Payment for
transaction cost, No 13,600 13,600 0 12,713.04 93.48% —— —— N/A No
taxes and fees
Subtotal of non-
public offering 198,291 198,291
—— 0 31,729.04 16% —— —— —— ——
investment (Note ) (Note )
project
Investment Areas of the Over Raised Funds N/A
Aggregated 198,291 198,291
—— 0 31,729.04 16% —— —— —— ——
amount
Situations failing to meet the planned schedule or achieve expected benefits and the reasons
N/A
(according to the specific investment project)
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1. Project of the Construction of Huai’an Pesticide Formulation Center
Since Adama Pesticide (Jiangsu) Co., Ltd., a subsidiary company of the third-tier
subsidiary of Solutions, is the entity to implement the construction project of Huai’an
Pesticide Formulation Center, the Company needs to increase the capital of Solutions
first, and then increase the capital of the subsidiaries by Solutions. The time and process
required for the relevant approval process, such as funds entry and exist, is complicated.
In order to avoid delays of the project, the Company invested its own capital into the
project.
Explanation of projects whose feasibility changed significantly
2. Fixed-Assets Investment-Product A 600t/a
The project also needs to be carried out through the Company's capital increase for its
subsidiaries, involving the relevant approval process for funds exit, which takes a long
time. Product A is an innovative product. The market needs to accept innovative products
for a certain period. Additionally, due to the extreme weather in the European market, the
project has been delayed. Therefore, the Company replaced this original designated
project.
Amounts, usage and progress of the excess-raised funds N/A
Changes of location of investment programs N/A
Changes of implementation of the investment programs
The 5th meeting of the 8th session of the Board of Directors of the Company on June 25, 2018 approved the
Proposal on Utilization of Part of the Funds Raised in December 2017 for Replacing the Capital Previously
Internal funds previously invested and replacement from the funds raised Invested in the Designated Projects Included in the 2017 Major Assets Restructuring to allow the Company
to utilize RMB276,530,000 of the Raised Funds to replace capital previously invested in the Designated
Projects. The Company has completed the replacement by June 30, 2018.
Use of idle funds to temporarily supplement working funds N/A
Balance amount of raised funds after the completion of the designated funds and the reasons N/A
The unused funds are deposited in the special account and is going to be continuously used on the designated
Purpose and hereabouts of unused funds
projects.
Other issues in the usage and disclosure of the raised funds N/A
Note : The Company intends to raise funds of no more than 198,291 RMB’0000 in the supporting finance program, while the actual funds raised was 155,999,99 RMB’0000 on December 27,
2017.
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Appendix 2: Details of the Raised Funds that Used on the New Committed Project
Details of the Raised Funds that Used on the New Committed Project
Unit: RMB ’0000
Accumulated Date of Whether
Total Investment Whether the
Investment investment projects Realized the
Original committed progress as at feasibility of
New Committed amount for amount as at the reaching benefits of expected
Committed investment the end of the project has
Project the current end of the intended the current benefits
Projects amount period (%) changed
period current period useable period are
(1) (3) = (2)/ (1) significantly
(2) condition achieved
Huai’an
pesticide
Consideration of
formulation
the acquisition of 40,008 - - - 2019 N/A N/A No
center project
Anpon
ADAMA fixed
asset investment
project
Total —— 40,008 - - - - - - -
1.Project of the Construction of Huai’an Pesticide Formulation Center
Since Adama Pesticide (Jiangsu) Co., Ltd., a subsidiary company of the third-tier subsidiary of Solutions, is the entity to
implement the construction project of Huai’an Pesticide Formulation Center, the Company needs to increase the capital of
Solutions first, and then increase the capital of the subsidiaries by Solutions. The time and process required for the relevant
approval process, such as funds entry and exist, is complicated. In order to avoid delays of the project, the Company invested its
The reason for changes, decision-
own capital into the project.
making procedures, and disclosure
of information
2. Fixed Assets Investment-Product A 600t/a
The project also needs to be carried out through the Company's capital increase for its subsidiaries, involving the relevant
approval process for funds exit, which takes a long time. Product A is an innovative product. The market needs to accept
innovative products for a certain period. Additionally, due to the extreme weather in the European market, the project has been
delayed. Therefore, the Company replaced this original designated project.
Situations failing to meet the planned
schedule or achieve expected N/A
benefits and the reasons
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Explanation of the new committed
project whose feasibility changed N/A
significantly
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