Stock Code: 000553(200553)      Stock abbreviation: ADAMA A (B)     Announcement No. 2020-64




   Announcement on Assets Impairment of ADAMA Ltd. in the nine-
                     month period of 0202

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.

In accordance with the Accounting Standards for Business Enterprises, ADAMA Ltd.
(hereinafter referred to as the “Company”), recorded a total of RMB 116 million
(approximately $17 million) in the nine-month period of 2020 in provisions for asset
impairments - mainly related to one-time impairments of non-core assets that are non-
material to the main ongoing operations of the Company, as provided herein.
Overview and Financial Impact of Provision for the Assets Impairment
In the nine-month period of 2020, the Company recorded asset impairment provisions
based on principles of prudent accounting and according to the "Accounting Standards
for Business Enterprises" and the Company’s own relevant accounting policies.
These provisions are expected to lead to a one-time charge to the total profits of the
Company of RMB 116 million (approximately $17 million).
Further details of the impairments are as follows:
                                                 Unit: ‘000 RMB
Item                                                     Amount
Inventory impairment                                       66,370
Long-term and other investment impairment                  41,158
Provision for bad-debts                                     8,871
Total Asset impairments                                   116,399

Basis and Explanation for the Inventory Impairment
Inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of
inventories is made. Net realizable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion, the estimated costs
necessary to make the sale and relevant taxes.
In addition to an amount of 43.9 million RMB (6.2 million USD) in inventory impairment
done in the ordinary course of the Company’s business (compared to 36.5 million RMB
(5.3 million USD) in the same period in 2019), the Company has now recorded an
approximately 22.5 million RMB (3.3 million USD) one-time impairment on inventories in
Q3 related to a non-core aroma diffusion business that the Company invested in several
years ago and based on the current and future market prospects of this business, the
Company believes that the value of the relevant inventory has declined and therefore
should now be impaired.


Basis and Explanation for the long-term investment impairment
The Company assesses at each balance sheet date whether there is any indication of a
long-term equity investment that may be impaired, and if such indication exists, the
Company calculates the recoverable amount of the investment. When the recoverable
amounts of an investment is less than its carrying amount, an impairment loss is
recognized to reduce the carrying amount to the recoverable amount.
The Company invested in a seed start-up company in 2013. Based on the investee’s
current development prospects, there is an indication that the value of the long-term
equity investment has declined. Therefore, the Company has recorded an
approximately 41.2 RMB million (5.8 million USD) impairment provision in this regard in
Q3.


Basis for the bad debts provision
The Company recognizes an impairment provision, which reflects its assessment
regarding the credit risk of Account Receivables, Other Receivables and Investments on
a lifetime expected credit loss basis. The examination for expected credit losses is
performed using a model including aging analysis and historical loss experiences, and
adjusted by the observable factors reflecting current and expected future economic
conditions.


Explanation of the Asset Impairments
The aforementioned provisions resulted from non-cash charges due mainly to one-time
impairments of peripheral, non-material assets in the seed technology and aroma
diffusion, business not connected to the main Crop Protection business of the Company.
Based on the current status of these assets, these non-cash, mostly one-time
impairments serve to correctly present the balance sheet of the Company, while
meeting requirements of accounting standards and related policies.

                                                                By order of the Board of
                                                                          ADAMA LTD.
                                                                      October 30, 2020