Stock Code: 000553(200553)      Stock abbreviation: ADAMA A (B)   Announcement No. 2021-8




   Announcement on Assets Impairment of ADAMA Ltd. during 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 190 million
(approximately $28 million) for the full year of 2020 in provisions for asset and credit
impairments. These provisions are mainly related to the Company’s multi-year Upgrade
& Relocation program in China and the 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
During 2020, the Company recorded provisions for asset and credit impairments based
on principles of prudent accounting and according to the "Accounting Standards for
Business Enterprises" and the Company’s own applicable accounting policies.
These provisions are expected to lead to a one-time charge to the total profits of the
Company of RMB 190 million (approximately $28 million).
Further details of the impairments are as follows:
                                                                            Unit: ‘000 RMB
Item                                                                                 Amount
Fixed assets                                                                          39,594
Construction in progress                                                              17,265
Inventories                                                                           66,351
Long-term equity and other investment impairment                                      40,944
Credit losses                                                                         25,949
Total Asset impairments                                                              190,103



Basis and Explanation for Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there are any indications
that the fixed assets may be impaired. If there is any indication that such assets may be
impaired, recoverable amounts are estimated for such assets (recoverable amount is
the higher between the assets’ fair value less costs to sell and the present value of the
future cash flow estimated to be derived from the asset). If the recoverable amount is
below the assets’ net cost recorded in the balance sheet, a provision for impairment is
made.
The Company is in the process of its multi-year Upgrade & Relocation program in China.
As part of this program, production assets located in the old production sites in Jingzhou
and Huai’An are being relocated to the new sites, both in 2020 and in the coming years.
Since some of the older production assets may not be able to be relocated, some of
these assets which are no longer operational are being written off (or impaired).


Basis and Explanation for Impairment of Construction in Progress
The Company assesses at each balance sheet date whether there are any indications
that any construction in progress may be impaired. If there is any indication that such
assets may be impaired, recoverable amounts are estimated for such assets
(recoverable amount is the higher between the assets’ fair value less costs to sell and
the present value of the future cash flow estimated to be derived from the asset). If the
recoverable amount is below the assets’ net cost recorded in the balance sheet, a
provision for impairment is being made.
In recent years, the Company has been planning and designing a number of capital
investment projects in China, related to both its multi-year Upgrade & Relocation
program as well as to other initiatives. Due to certain regulatory developments in global
markets, as well as evolving priorities and plans of the Company, a small number of the
projects still at the preliminary design stage of their progress have been changed,
requiring the impairment of certain of the investments made to date.


Basis and Explanation for Impairment of Inventories
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, the Company has recorded an
approximately 22.5 million RMB (3.3 million USD) one-time impairment on inventories in
Q3 as previously announced, 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 Equity 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
amount of an investment is less than its carrying amount, an impairment loss is
recognized to reduce the carrying amount to the recoverable amount.
The impairment amount is mainly in respect of an investment made by the Company in
2013 in a seed start-up company. Based on the investee’s current development
prospects, there is an indication that the value of the long-term equity investment has
declined. Therefore, as previously announced in Q3 2020, the Company recorded an
approximately 40 RMB million (6 million USD) impairment provision in this regard.


Basis and Explanation for Credit Impairment Losses
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 experience, and is
adjusted taking into account 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
as well as to the Company’s multi-year upgrade & relocation program in China.
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.
                                                                       March 31, 2021