Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2021-6
ADAMA Ltd.
Announcement on Expected Related-Party Transactions in the Ordinary
Course of Business in 2021
The Company and all members of its board of directors hereby confirm that all information
disclosed herein is true, accurate and complete with no false or misleading statement or
material omission.
I. Basic Information on Related Party Transactions in the ordinary course of business
(1) Overview of related-party transactions in the ordinary course of business
The Company expects that the aggregated amount of related party transactions between it
and/or its subsidiaries (together the "Group Companies") and the subsidiaries of China
National Chemical Co., Ltd (“ChemChina”, the actual controller of the Company) in 2021
is RMB 3,539.1 million. It consists of (1) the Group Companies will purchase raw
materials/products, receive certain services from subsidiaries controlled by ChemChina, in
a total amount that will not exceed RMB 2,058.04 million; and (2) the Group Companies
will sell products and provide services, in a total amount that will not exceed
RMB1,481.06 million, to subsidiaries controlled by ChemChina. Such transactions
hereinafter referred as the "related-party transactions".
Related-party transactions of the above type performed by the Company in 2020 in the
ordinary course of business amounted to RMB 2,162.14 million.
These estimations were performed based on the current available data and may change,
inter alia, as a result of changes to the Group Companies’ business and/or due to market
conditions as well as due to the strategic restructuring of ChemChina and Sinochem Group
Co., Ltd, the alignment and cooperation between the companies of Syngenta Group Co.,
Ltd.(“Syngenta Group”), comprising the Company, Syngenta AG and Sinochem’s
agriculture-related activities, which will further bolster the alignment between the
companies and capitalize on the value creation and synergy opportunities identified.
The related-party transactions matter has been reviewed and approved at the 31st Meeting
of the 8th Session of the Board of Directors of the Company. Among the five directors of
the Company, there were three affirmative votes, zero negative votes and zero abstentions,
while the two related-party directors (Mr. Erik Fyrwald and Mr. Chen Lichtenstein)
refrained from voting.
The related-party transactions matter shall be further approved by the Shareholders
Meeting. Syngenta Group and Jingzhou Sanonda Holdings Co., Ltd. will refrain from
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voting.
(2) The types and amounts of expected related-party transactions in the ordinary course
of business
RMB’0000
Amount
Contract already
The pricing Amount
Type of Content of amount or occurred
Related principle of occurred in
related-party related-party estimated in 2021 as
party related-party the previous
transaction transaction amount not of the
transaction year
to exceed disclosure
date
Syngenta
A.G. and Purchase of raw
Market price 132,936 29,124 96,023
its materials/products
subsidiaries
Bluestar
(Beijing)
Purchase of raw
Chemical Market price 940 0 939
materials/products
Machinery
Co., Ltd.
Jiangsu
Huaihe Purchase of raw
Market price 19,000 3,962 19,800
Chemicals materials/products
Co., Ltd.
Purchase of raw
Sinofert Market price 220 34 147
materials/products
Purchasing
raw materials
and products
from related
parties
Jiangsu
Yangnong Purchase of raw
Market price 52,010 7,108 21,974
Chemical materials/products
Co., Ltd.
Jiangsu
Youshi Purchase of raw
Market price 120 0 156
Chemical materials/products
Co., Ltd.
Jiangsu
Ruixiang Purchase of raw
Market price 160 13 161
Chemical materials/products
Co., Ltd.
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Jiangsu
Youjia Plant Purchase of raw
Market price 160 100 141
Protection materials/products
Co., Ltd.
Hangzhou
(Torch)
Xidou Door Purchase of raw
Market price 10 1 4
Film materials/products
Industry
Co., Ltd.
Sub-total - - 205,556 40,342 139,345
Syngenta
AG and its Selling products Market price 92,586 12,194 67,427
subsidiaries
Jiangsu
Huaihe
Selling products Market price 21,000 4,025 23,190
Chemicals
Co., Ltd.
Sinofert Selling products Market price 8, 030 1,234 2,946
Sino MAP Selling products Market price 500 115 281
Jiangsu
Yangnong
Selling products Market price 300 65 264
Chemical
Co., Ltd.
Selling raw Jiangsu
materials and Youshi
products to Selling products Market price 25,000 2,647 12,927
Chemical
related parties Co., Ltd.
Zhonglan
International
Selling products Market price 360 26 368
Chemical
Co., Ltd.
Jiangsu
Youjia Plant
Selling products Market price 280 59 45
Protection
Co., Ltd.
Sinochem
Chongqing
Fuling Selling products Market price 50 0 47
Chemical
Co., Ltd.
Sub-total - - 148,106 20,365 107,495
China
Receiving National
Value-added OA
services from Chemical Market price 128 0 246
services
related parties Information
Center
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Zhonglan
Lianhai
Design Design services Market price 120 0 689
Institute
Co., Ltd.
Sub-total - - 248 0 935
(3) Actual related-party transactions in the ordinary course of business performe d in the
previous year
RMB’0000
Type of Difference
Actually
related-par Content of related Estimated proportion
Related party occurred
ty transaction amount
amount （%）
transaction
Syngenta AG and its Purchase of raw
96,023 151,940 -36.80%
subsidiaries materials/products
Bluestar (Beijing) Chemical Purchase of raw
939 920 2.07%
Machinery Co., Ltd. materials/products
Jiangsu Huaihe Chemicals Purchase of raw
Purchasing 19,800 22,770 -13.04%
Co., Ltd. materials/products
raw
materials Zhonglan International Purchase of raw
2,698 3,102.7 -13.04%
and Chemical Co., Ltd. materials/products
products
Purchase of raw
from related Sinofert 147 - -
materials/products
parties
Hangzhou (Torch) Xidou
Purchase of raw
Door Film Industry Co., 4 - -
materials/products
Ltd.
Bluestar Engineering Co., Purchase of raw
123 - -
Ltd. materials/products
Sub-total - 119,734 178,732.7 -33%
Syngenta AG and its
Selling products 67,427 86,675.9 -22.21%
subsidiaries
Jiangsu Huaihe Chemicals
Selling products 23,190 26,668.5 -13.04%
Co., Ltd.
Selling Sinofert Selling products 2,946 941.85 212.79%
products Sinochem Agriculture Selling products 1,219 311.65 291.14%
and goods Sino MAP Selling products 281 272.55 3.1%
to related Zhonglan International
Selling products 368 2,300 -84%
parties Chemical Co., Ltd.
Sinochem (Hainan) Crop
Selling products 67 - -
Technology Co., Ltd.
Sinochem Chongqing
Selling products 47 - -
Fuling Chemical Co., Ltd.
Sub-total - 95,545 117,170.45 -18.45%
China National Chemical Value-added OA
Receiving 246 261 -5.75%
Information Center services
services
Shanghai Branch of
from related Design services
Zhonglan Lianhai Design 689 663 3.92%
party
Institute Co., Ltd.
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Sub-total - 935 924 1.19%
Aggregated 216,214 296,827.15 -27%
The actual total amount of related
transactions in the ordinary business
course in 2020 does not exceed the total
An explanation by the board of directors for the major difference amount expected, but it is not more
between the actual occurred amount of daily related transactions
and the estimated amount than 80% of the total amount. The main
reason is due to the COVID-19
pandemic related impacts, the changing
market conditions and the actual needs
of the Company.
The gap between the actual amount and
the estimations of the related party
transactions in the course of routine
business in 2020 is a reasonable and
proper result of the COVID-19
pandemic related impacts, the changing
An explanation by the independent directors for the major market conditions and the actual needs
difference between the actual occurred amount of daily related
transactions and the expected amount
of the Company. Such gap will neither
trigger any major impact on production
and operation, nor harm the interests of
the Company and its minority
shareholders, as well as will not
compromise the independency of the
Company.
Notes:
1. Please refer to the announcements on May 12, 2020 for the 2020 expected related-party
transactions of the Company (Announcement number 2020-30).
II. Introduction to Related Parties and Their Relationships with the Company
1. Bluestar (Beijing) Chemical Machinery Co., Ltd. (legal representative: Qiao Xiaofeng;
registered address: No. 5, Xingye Street, Beijing Economic and Development Zone) has
registered capital of RMB200 million and mainly undertakes the businesses related to
production of chemical machinery and equipment, production of type III pressure vessels,
design, maintenance and installation of chemical machinery and equipment, technical
consultation, technical services, technical training. The main financial data as of the date
December 31, 2020 are: operating revenue of RMB 457,773,760.76, net profit of RMB
12,051,837.90, total assets of RMB 1,119,173,782.42, net assets of RMB 558,979,214.03.
Relationship with the Company: It is a legal person controlled by ChemC hina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Bluestar
(Beijing) Chemical Machinery Co., Ltd. operates normally and is in good operational and
financial conditions and thus has a good contract performance capability. After searching on
the website of disclosure of enforcement information of China, it is not a dishonest party
subject to enforcement.
2. Jiangsu Huaihe Chemical Co., Ltd. (legal representative: Xia Wenbiao; registered address:
Yutai County, Jiangsu Province) has registered capital of RMB 24.7 million and mainly
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undertakes the businesses related to manufacturing and sale of chemical products. The main
financial data as of December 31, 2020 are: operating revenue of RMB 746,957,721.56, net
profit of RMB 30,810,888.84, total assets of RMB 630,130,326.05, net assets of RMB
183,685,932.12.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of performance capability: To the best knowledge of the Company, Jiangsu Huaihe
Chemical Co., Ltd. produces and operates normally and is in good operational and financial
conditions and thus has a good performance capability. After searching on the website of
disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
3. Sinofert Holdings Limited (Executive Director & CEO: Qin Hengde; registered office:
Clarendon House 2 Church Street Hamilton HM11 Bermuda) is a company listed on the Main
Board of the Stock Exchange of Hong Kong (stock code:00297), which has registered capital
of HKD 7,024,456 million and mainly undertakes the production, import and export,
distribution and retail of fertilizer raw materials and finished products, provision of
technological research and development and services relating to the fertilizer business and
products, exploration and exploitation of phosphate mine, and production of
monocalcium/dicalcium phosphate (MCP/DCP). The main financial data as of December 31,
2020 are: operating revenue of RMB 21,483,720,760.28, net profit of RMB 655,204,485.99,
total assets of RMB 17,109,030,096.48, net assets of RMB 8,211,979,640.39.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Sinofert
Holdings Limited produces and operates normally and is in good operational and financial
conditions and thus has a good contract performance capability. After searching on the website
of disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
4. Jiangsu Yangnong Chemical Co., Ltd. (legal representative: Qin Hengde; registered address:
No. 39, Wenfeng Road, Yangzhou) has registered capital of RMB 309.8989 million and mainly
undertakes the manufacture of agrochemicals and fine chemicals. The main financial data as of
September 30, 2020 are: operating revenue of RMB 7,956.36 million, net profit of
RMB1,024.21 million, total assets of RMB 11,203.15 million, net assets of RMB 5,774.72
million. Jiangsu Youshi, Jiangsu Ruixiang and Jiangsu Youjia mentioned in this announcement
as expected related parties are subsidiaries of Jiangsu Yangnong Chemical Co., Ltd.
Relationship with the Company: It is a legal person whose shares are indirectly held by
ChemChina, the actual control holder of the Company. According to the Article 10.1.3(5) of
the Rules of Shenzhen Stock Exchange for the Listing of Stocks, it is a related party of the
Company.
Analysis of contract performance capability: To the best knowledge of the Company, Jiangsu
Yangnong Chemical Co., Ltd. produces and operates normally and is in good operational and
financial conditions and thus has a good contract performance capability. After searching on
the website of disclosure of enforcement information of China, it is not a dishonest party
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subject to enforcement.
5. Hangzhou (Torch) Xidou Door Film Industry Co., Ltd. (legal representative: Wang Shougen;
registered address: Building 2, No. 602 Shunfeng Road, Qianjiang Economic Development
Zone, Hangzhou) has registered capital of RMB 58.24 million and mainly undertakes the
manufacturing of water treatment equipment, technical development, technical service and
transfer of membrane separation technology, separation membrane and water treatment
engineering technology products, and sales of separation membrane and water treatment
engineering technology products. The main financial data as of December 31, 2020 are:
operating revenue of RMB 83,204,194.62, net profit of RMB 79,817.25, total assets of RMB
69,251,119.63, net assets of RMB 51,323,448.2.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company,
Hangzhou (Torch) Xidou Door Film Industry Co., Ltd. produces and operates normally and is
in good operational and financial conditions and thus has a good contract performance
capability. After searching on the website of disclosure of enforcement information of China, it
is not a dishonest party subject to enforcement.
6. Bluestar Engineering Co., Ltd. (legal representative: Bai Jianli; registered address: 4/F,
Building 1, No.5 Anxiang Road, Zone B, Tianzhu Airport Industrial Zone, Shunyi District,
Beijing) has registered capital of RMB 110 million and mainly undertakes engineering services
in the fields of chemical industry, rubber tires, environmental pollution prevention and energy
conservation, providing engineering general contracting service, engineering design,
engineering consultation, etc. The main financial data as of December 31, 2020 are: operating
revenue of RMB 607,159,384.8, net profit of RMB 24,507,339.53, total assets of RMB
520,461,565.87, net assets of RMB 158,150,152.91.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Bluestar
Engineering Co., Ltd. produces and operates normally and is in good operational and financial
conditions and thus has a good contract performance capability. After searching on the website
of disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
7. Syngenta AG (legal representative: n/a; registered address: Schwarzwaldallee 215 4058 Basel)
has the registered capital of RMB 41.33 million and mainly undertakes the businesses related to
crop protection, seeds. The main financial data as of the date December 31, 2020 are: operating
revenue of RMB 98,588.87 million yuan, total assets of RMB 164,969.05 million yuan, net
assets of RMB 29,296.80 million yuan, net income of RMB 9,812.65 million yuan.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: Syngenta AG and its subsidiaries produce and
operate normally and are in good operational and financial conditions and thus have a good
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contract performance capability. After searching on the website of disclosure of enforcement
information of China, it is not a dishonest party subject to enforcement.
8. Sinochem Agriculture Holdings (legal representative: Ying Minjie; registered address: Room
818, No. 28 Fuxingmennei street, Xicheng district, Beijing) has registered capital of RMB
1,000 million and mainly undertakes sales of agricultural production materials; grain purchases;
services for agriculture; technology development and technology consultation on soil
improvement and restoration, etc. The main financial data as of December 31, 2020 are:
operating revenue of RMB 5,094,280,996.17, net profit of RMB -243,010,713.62, total assets
of RMB 8,085,801,965.85, net assets of RMB 82,190,310.56.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Sinochem
Agriculture Holdings produces and operates normally and is in good operational and financial
conditions and thus has a good contract performance capability. After searching on the website
of disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
9. Zhonglan International Chemical Co., Ltd. (legal representative: Yang Hongbin; registered
address: No. 1205-1206, 12/F, No.62 North 4th Ring West Road, Haidian District, Beijing) has
registered capital of RMB 100 million and mainly undertakes the wholesale chemical products,
technology import and export, technology and information consulting services. The main
financial data as of December 31, 2020 are: operating revenue of RMB 3,193,948,863.72, net
profit of RMB 13,430,091.05, total assets of RMB 737,377,591.65, net assets of RMB
14,450,287.23.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Co mpany.
Analysis of contract performance capability: To the best knowledge of the Company, Zhonglan
International Chemical Co., Ltd. produces and operates normally and is in good operational
conditions and thus has a good contract performance capability. After searching on the website
of disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
10. Sinochem Chongqing Fuling Chemical Co., Ltd. (legal representative: Wang Ligang; registered
address: No.2 Liming Road, Fuling, Chongqing) has registered capital of RMB 1,058 million
and mainly undertakes the businesses related to phosphate and compound fertilizer with high
concentration. The main financial data as of December 31, 2020 are: operating revenue of
RMB 223,567,834.58, net profit of RMB 19,022,049.87, total assets of RMB 2,251,556,472.13,
net assets of RMB 447,345,312.68.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Sinochem
Chongqing Fuling Chemical Co., Ltd. produces and operates normally and is in good
operational and financial conditions and thus has a good contract performance capability. After
8
searching on the website of disclosure of enforcement information of China, it is not a
dishonest party subject to enforcement.
11. China National Chemical Information Center (legal representative: Jie Yubin; registered
address: No. 53 Anwai Xiaoguan Street, Chaoyang District, Beijing) has registered capital of
RMB150 million and mainly undertakes the businesses related to chemical information
analysis and consultation, software development and network technologies and services. The
main financial data as of the date December 31, 2020 are: operating revenue of RMB
208,653,494.32, net profit of RMB 27,165,950.88, total assets of RMB 851,646,043.31, net
assets of RMB 756,207,185.71.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, China
National Chemical Information Center operates normally and is in good operational and
financial conditions and thus has a good contract performance capability. After searching on
the website of disclosure of enforcement information of China, it is not a dishonest party
subject to enforcement.
12. Zhonglan Lianhai Design Institute Co., Ltd. (Legal Representative: Li Shourong; registered
address: No.51, Chaoyang West Road, Haizhou District, Lianyungang) has registered capital of
RMB128 million and mainly undertakes the businesses related to project consultation and
evaluation, design and project management, engineering construction (excluding blasting),
general contracting, technical services. The main financial data as of December 31, 2020 are:
operating revenue of RMB 369,984,482.11, net profit of RMB 28,471,872.31, total assets of
RMB 977,329,268.36, net assets of RMB 654,222,122.51.
Relationship with the Company: It is a legal person controlled by ChemChina, the actual
control holder of the Company. According to the Article 10.1.3(2) of the Rules of Shenzhen
Stock Exchange for the Listing of Stocks, it is a related party of the Company.
Analysis of contract performance capability: To the best knowledge of the Company, Zhonglan
Lianhai Design Institute Co., Ltd. operates normally and is in good operational and financial
conditions and thus has a good contract performance capability. After searching on the website
of disclosure of enforcement information of China, it is not a dishonest party subject to
enforcement.
III. Main Content of Related-Party Transactions
1. Main content
(1) All related-party transactions between the Group Companies and the relevant
related parties should be carried out based on market terms and according to the
principles of voluntariness, equality, mutual benefit, justice and fairness and
without prejudice to the interests of the Company.
(2) If there is any available state fixed price, then the state fixed price shall prevail; if
the state fixed price is inapplicable or not applicable any more, then the market
price shall prevail; if the market price is inapplicable or not applicable any more,
then both parties shall determine the exact and fair pricing standards they believe
to be based on relevant data.
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2. Signing of transaction agreement
The Group Companies will conclude contracts with the relevant related parties
according to their production and operation requirements and their ordinary course
business practices.
IV. Purpose of Related-Party Transaction and its Impact on the Company
These related-party transactions are necessary for the daily business operation of the Group
Companies. They mainly aim to capitalize on the Group Companies’ unique positioning
and profile, including as part of the Syngenta Group, achieve cost savings, increase the
Company’s sales and market share and to drive its profitable growth. Based on the
understanding of the related-parties’ business performance, credit status and performance
capability, the Group Companies have selected them to conduct transactions in the
ordinary course of business. The related-party transaction activities follow the principle of
fairness and justice, they will not adversely affect the Company and its non-related party
shareholders. The Board of Directors of the Company holds that the related-party
transactions benefit the continuity and stability of the Company’s business operations and
has a positive impact on the normal operations of the Company. Those transactions will not
impact the independence of the Company.
V. Independent Directors’ Opinions
The Company’s independent directors have given separate opinions on the related party
transactions matter: The Group's related-party transactions performed in the ordinary
course of business are mainly to purchase or sell goods, materials and services from/to the
related parties based on the principles of justice and fairness and the pricing standards
consistent with those of non-related parties, in order to capitalize on the Group’s unique
positioning and profile including as part of the Syngenta Group, achieve cost savings,
increase the Company’s sales and market share and to drive its profitable growth. All such
transactions shall conform to relevant national laws and regulations, as applicable, and
market-oriented principles, and shall not influence the independence of the Company or
damage the interests of the Group Companies and their other shareholders. The
decision-making procedures for these related party transactions conform to the Company
Law of the People’s Republic of China, the Rules of Shenzhen Stock Exchange for the
Listing of Stocks, the Articles of Association and other laws and regulations. We agree on
this proposal and submit it to the General Meeting of Shareholders for deliberation.
VI. Documents for Future Reference
1. The resolution made at the 31st Meeting of the 8th Session of the Board of Directors of
the Company;
2. Independent directors’ prior written approval;
3. Independent directors’ opinions.
The Board of Directors of ADAMA Ltd.
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March 31, 2021
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