ADAMA Ltd.
Independent Opinions on the Relevant Issues of the
19th Meeting of the 9th Session of the Board of
Directors
In accordance with the Company Law of the People’s Republic of China, Rules for
Independent Directors of 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 19th
Meeting of the 9th 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 2022
(1) Utilization of the Company’s Capital for Non-Operating Purposes by the
Controlling Shareholder and the Related Parties of the Company
In 2022, 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 2022 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, 2022, 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 RMB
6,932,533,900, accounting for 29.98% of the latest audited net assets of the
Company.
We are of the opinion that, the external guarantees provided by the Company
followed the due procedure and 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 2023 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
2023 Financial Statements and Internal Control of the Company.
3. Independent Opinion on the Pre-Plan of the 2022 Dividend Distribution
On the basis of 2,329,811,766 total outstanding shares of the Company as at
February 28, 2023, the Company is to distribute RMB 0.27 (including tax) per 10
shares as cash dividend to all shareholders, resulting in a total cash dividend of
RMB 62,904,917.68 (including tax). No shares shall be distributed as dividend
and no reserve shall be transferred to equity capital.
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The Pre-Plan of the 2022 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 2022 Dividend Distribution.
4. Independent Opinion on the Expected Related Party Transactions in the
Ordinary Course of Business in 2023
We have pre-approved the proposal on the Expected Related Party Transactions in
the Ordinary Course of Business in 2023 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
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.
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5. Independent Opinion on the Self-Assessment Report on the 2022 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 on Self-discipline
Supervision of Listed Companies No.1 - Standardized Operation of Main Board
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 2022 Internal Control. We are of the opinion that:
The Company has basically established the internal control system. In 2022, the
Company improved the internal control system according to the actual operation
status, so as to meet the requirements of relevant laws and regulations. The
Company doesn’t have material deficiency in the internal control mechanism and
internal control policy. The Self-Assessment Report on the 2022 Internal Control
conforms to the actual situation of internal control of the Company.
6. Independent Opinion on the Deposit of Funds (related-party transaction)
with Finance Company
According to the Guidelines of Shenzhen Stock Exchange on Self-discipline
Supervision of Listed Companies No.1 - Standardized Operation of Main Board
Listed Companies and Guidelines of Shenzhen Stock Exchange on Self-discipline
Supervision of Listed Companies No.7 - 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. and
Sinochem Finance Co., Ltd. are fair and do not harm the interests of the Company
and non-related shareholders.
7. Independent Opinion on the 2022 Risk Appraisal Report of Sinoche m
Finance Co., Ltd.
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For securing the safety of the funds of the Company deposited in the finance
company, the Company evaluated the business, qualifications, and the status of the
risk of Sinochem Finance Co., Ltd., and issued a Risk Appraisal Report. We are of
the opinion that:
(1) Sinochem 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 Sinochem Finance Co., Ltd..
(2) We did not find that Sinochem Finance Co., Ltd. has any significant defect in
its risk management. Currently, the risk of the Company’s related-party deposit in
Sinochem Finance Co., Ltd. is controllable.
8. 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.
9. 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 19th
Meeting of the 9th Session of the Board of Directors)
Independent Director Signature:
__________________ ___________________
Ge Ming Xi Zhen
March 19, 2023
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