ADAMA Ltd.
Independent Opinions on the Relevant Issues of the
31st Meeting of the 8th Session of the Board of
Directors
In accordance with the Company Law of the People’s Republic of China, Guidance on
Establishing the Independent Director System in Listed Companies, and other laws,
regulations and normative documents, as well as the Articles of Association and
Independent Director System, we, as the independent directors of ADAMA Ltd.
(hereinafter referred to as “Company”), give our independent opinions on the relevant
proposals of the 31st Meeting of the 8th Session of the Board of Directors from the
standpoint of independent judgment:
1. Independent Opinions on the Utilization of the Company’s Capital for
Non-Operating Purposes by the Controlling Shareholder and the Related
Parties of the Company and External Guarantee Provided by the Company
in 2020
(1) Utilization of the Company’s Capital for Non-Operating Purposes by the
Controlling Shareholder and the Related Parties of the Company
In 2020, the Controlling shareholder and related parties of the Company didn’t
utilize the Company’s capital for non-operating purpose. The statement issued by
Deloitte Touche Tohmatsu accurately reflected the above status.
Capitals transferred between the Company and its controlling shareholder and
related parties in 2020 were the demands of normal business with fair price. The
transactions followed the legal procedure and didn’t harm the interests of the
Company and its shareholders.
(2) External Guarantee
The Company strictly controlled the guarantees provided to others according to
the relevant laws and regulations as well as the Articles of Association of the
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Company. As of the date December 31, 2020, no guarantees were provided by the
Company and/or its subsidiaries for the favor of entities not consolidated in the
Company's financial statements. The balance of external guarantees was
RMB4,193.83 million, accounting for 19.64% of the latest audited net assets of
the Company.
We are of the opinion that, in 2020, all of the Company’s external guarantees
were legally provided and disclosed. The external guarantees provided by the
Company didn’t harm the interests of the Company and its shareholders,
especially the minority shareholders.
2. Independent Opinions on the Engage ment with Deloitte Touche Tohmatsu
(special general partnership) for the Audit of 2021 Financial Statements and
Internal Control of the Company
With the review of the relevant qualifications of Deloitte Touche Tohmatsu, we
are of the opinion that Deloitte Touche Tohmatsu is qualified to independently
provide audit services for a listed company and satisfy the work requirements of
the Company.
We have pre-approved the proposal on the Engagement with an Audit Firm for the
Audit of the Financial Statements and Internal Control of the Company before the
meeting of the BOD. The deliberation procedures for engaging Deloitte Touche
Tohmatsu is in line with the laws and regulations as well as the Articles of
Association of the Company, and does not harm the interests of the Company and
its shareholders. We approve to engage Deloitte Touche Tohmatsu for the Audit of
2021 Financial Statements and Internal Control of the Company.
3. Independent Opinion on the Pre-Plan of the 2020 Divide nd Distribution
On the basis of 2,329,811,766 shares entitled to dividend distribution on the
record day when the profit distribution plan is implemented (excluding the
repurchased shares held by the Company which are not entitled to dividend and
which, subject to the approval of the Company’s Board of Directors and
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shareholders, shall be cancelled), the Company plans to declare a cash dividend of
RMB 0.16 (before tax) for every 10 shares to the all shareholders, resulting in a
total cash dividend of RMB 37,276,988.26 (before tax). No share will be
distributed as share dividend, and no reserve shall be transferred to equity capital.
The Pre-Plan of the 2020 Dividend Distribution is based on the Company’s actual
situation and business requirement, and is in line with Company Law of the
People’s Republic of China, Chinese Enterprise Accounting Standards and other
related regulations. We agree the Pre-Plan of the 2020 Dividend Distribution.
4. Independent Opinion on the Expected Related Party Transactions in the
Ordinary Course of Business in 2021
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 market conditions
and the actual needs 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.
The transactions between related parties that have occurred in 2020 are all needed
by the normal and daily operation of the Company. All the transactions were
conducted in line with market practice and the laws and regulations; They have
served the Company's long-term interests and met requirement of development
strategies.
We have pre-approved the proposal on the Expected Related Party Transactions in
the Ordinary Course of Business in 2021 before the meeting of the BOD. We are
of the opinion that the related party transactions are the normal matters in the
Company’s operation. We agree to submit this proposal to the BOD meeting.
The related directors withdrew from the vote. This proposal has been passed by
the non-related directors. The decision-making procedures for these related party
transactions conform to the Company Law of the People’s Republic of China, the
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Rules of Shenzhen Stock Exchange for the Listing of Stocks, the Articles of
Association and other laws and regulations.
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 assist in
capitalizing the Group’s unique positioning and profile, achieve cost savings,
increase sales, market share and drive its profitable growth. All such transactions
shall conform to relevant national laws and regulations, as applicable, and the
market-oriented principles, and shall not influence the independence of the
Company or damage the interests of the Company and its 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.
5. Independent Opinion on the Status of the Deposit and Actual Usage of the
Raised Funds in 2020
In accordance with the Regulatory Guidelines for Listed Companies
No.2—Regulatory Requirements for Management and Use of Raised Funds of
Listed Companies (Announcement of CSRC [2012] No.44, as well as the
Guidelines of Shenzhen Stock Exchange for the Standard Operation of Listed
Companies issued by Shenzhen Stock Exchange, the Board of Director prepared a
Special Report on the Deposit and Actual Usage of the Raised Funds in
2020(hereinafter referred to as the “Report”).
After review of the Report, we are of the opinion that the Report truly reflects the
deposit, usage and management status of the raised funds. The related information
on the deposit and usage of the raised funds disclosed by the Company is timely,
authentic, accurate and complete. The deposit, usage and management of the
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raised funds are in line with relevant laws, regulations, and the Rules on the Usage
and Management of Raised Funds of the Company, and do not harm the interests
of shareholders.
6. Independent Opinion on the Self-Assessment Report on the 2020 Internal
Control of the Company
According to the requirements of the Basic Standards for Enterprise Internal
Control issued jointly by the Ministry of Finance and the Securities Regulatory
Commission and the Guidelines of Shenzhen Stock Exchange for the Standard
Operation of Listed Companies issued by the Shenzhen Stock Exchange, and in
light of the actual situation of the Company, the Board of Directors of the
Company reviewed and evaluated the effectiveness of the Company's internal
control, and issued the Self-Assessment Report on the 2020 Internal Control. We
are of the opinion that:
In 2020, the Company formulated and improved the internal control system
according to the actual operation situation, and its formulation procedures and
contents meet the requirements of relevant laws and regulations. The Company
has basically established and perfected the internal control system, which can play
an effective role in controlling business risks and protect the interests of all
shareholders. The Self-Assessment Report on the 2020 Internal Control conforms
to the actual situation of internal control of the Company.
7. Independent Opinion on the Deposit of Funds (related-party transaction)
with Che mChina Finance Co., Ltd.
According to the Guidelines of Shenzhen Stock Exchange for the Standard
Operation of Listed Companies and Guidelines of Shenzhen Stock Exchange on
Information Disclosure of Listed Companies No.5 - Transactions and
Related-party Transactions, based on the Special Report issued by Deloitte, we
are of the opinion that the deposit of funds and loans in ChemChina Finance Co.,
Ltd. is fair and does not harm the interests of the Company and non-related
shareholders.
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8. Independent Opinion on the 2020 Risk Appraisal Report of Che mChina
Finance Co., Ltd.
For securing the safety of the funds of the Company deposited in ChemChina
Finance Co., Ltd., the Company evaluated the business, qualifications, and the
status of the risk of ChemChina Finance Co., Ltd., and issued a Risk Appraisal
Report. We are of the opinion that:
(1) ChemChina Finance Co., Ltd. holds valid Finance License, Business License.
China Banking Regulatory Commission strictly supervises the business scope,
business procedures, internal risk control system of ChemChina Finance Co., Ltd.
(2) We did not find that ChemChina Finance Co., Ltd. has any significant defect
in its risk management. Currently, the risk of the Company’s related-party deposit
in ChemChina Finance Co., Ltd. is controllable.
9. Independent Opinion on the Investment in Derivative Financial Instruments
and Related Risk Controls
The derivative investments carried by the Company are for hedging and avoiding
the risk of market fluctuations. The investments respond to the Company’s routine
business demands and are in accordance with the relevant laws and regulations.
Additionally, the Company has adopted Currency Risk Hedging Policy to
strengthen the risk management and control which benefit the Company’s ability
to decrease the market risk. The derivative investments do not harm the interest of
the Company and its shareholders.
10. Independent Opinion on the Remuneration of Senior Executives
After deliberation, we hold the opinion that the remuneration of Senior
Executives is made on the basis of the duty and actual performance of relevant
personnel. The decision-making procedures follow the relevant laws, regulations
and the Articles of Association of the Company, and are in line with the
requirements of Company's development. It will not harm the interests of the
Company and shareholders. Therefore, we approve the Proposal on the
Remuneration of the Senior Executives.
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(The signature page of Independent Opinions on the Relevant Issues of the 31st
Meeting of the 8th Session of the Board of Directors)
Independent Director Signature:
__________________ ___________________
Ge Ming Xi Zhen
March 29, 2021
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