Stock Code: 000553(200553)      Stock abbreviation: ADAMA A (B)   Announcement No. 2023-3



                                     ADAMA Ltd.
                        Asset Impairment Announcement

 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”), is expected to record a total of RMB 417
million (approximately $62 million) for the year of 2022 in provisions for asset and credit
impairments. These provisions are mainly related to a credit loss provision for trade and
other receivables in Ukraine, impairment of inventories made during the ordinary course
of the Company’s business and one-time impairment of some assets that are no longer
operational, as provided herein.
Overview and Financial Impact of Provision for the Assets Impairment
During the year, the Company is expected to record 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, charged to the total profits of the Company during the year, are
expected to amount to RMB 417 million (approximately $62 million).
Further details of the impairments are as follows:
                                                                           Unit: ‘000 RMB
 Item                                                                              Amount
 Credit losses                                                                      91,668
 Inventories                                                                       156,392
 Fixed assets and Construction in progress                                         158,592
 Intangible assets                                                                  10,467
 Total Asset impairments                                                           417,119


Basis and Explanation for Credit Impairment Losses
The Company recognizes an impairment provision, which reflects its assessment
regarding the credit risk of accounts and other receivables 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.
The credit impairment losses recognized during the year was mainly related to the
accounts and other receivables in Ukraine. As the Announcement on Assets Impairment
published by the Company on April 28, 2022 (Announcement No. 2022-20) stated, in
order to cover the estimated risk due to the events in Ukraine, the Company has made a
such impairment.


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.
During 2022, an amount of RMB 156 million (approximately $23.2 million) in inventory
impairment is expected to be provided in the ordinary course of the Company’s business
mainly due to inventory expiration and decline in the market price of certain products.


Basis and Explanation for Impairment of Fixed Assets and Construction in Progress
The Company assesses at each balance sheet date whether there are any indications
that the fixed assets and 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 made.
Due to changes in the markets and regulatory developments, as well as upgrade in
technology and evolving priorities of the Company, non-recurring impairment is expected
to be made to assets that are no longer operational.


Basis and Explanation for Impairment of Intangible Assets
The Company assesses at each balance sheet date whether there is any indication that
the intangible assets with a finite useful life may be impaired, and if such indication exists,
the Company calculates the recoverable amount of the asset. When the recoverable
amount of an asset is less than its carrying amount, an impairment loss is expected to be
recognized to reduce the carrying amount to the recoverable amount.


Explanation on the Reasonableness of Asset Impairments
The aforementioned provisions resulted from non-cash charges due mainly to the credit
loss provision related to trade receivables in Ukraine, impairments of inventories accrued
during the ordinary course of the Company’s business and one-time impairment of certain
assets that are no longer operational.
Based on the current status of these assets, these non-cash and some of which non-
recurring impairments serve to correctly present the balance sheet of the Company, truly
and fairly reflects the company's financial situation, asset value and operating results,
while meeting requirements of accounting standards and related policies.


Other Explanations
The expected provision for asset impairment is the result of the preliminary calculation of
the financial department of the Company, without the audit of the accounting firm. Please
refer to the audited 2022 Annual Report of the Company for final financial data. Investors
are kindly remined to pay attention to investment risks.


It’s hereby announced.


                                                                       Board of Directors
                                                                           ADAMA LTD.
                                                                       January 31, 2023