Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No.2023-11
ADAMA Ltd.
Announcement on the Engagement of an
Accounting Firm
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. Explanation on the Proposed Appointment of the Company’s Auditor
ADAMA Ltd. (hereinafter referred to as: the “Company”) intends to renew the
appointment of Deloitte Touche Tohmatsu Certified Public Accountants LLP
(hereinafter referred to as: “Deloitte Huayong” or the “Auditor”) as the Company’s
Auditor for its 2023 financial statements and the annual internal control.
As an accounting firm with qualifications in securities and futures related businesses,
Deloitte Huayong is professionally competent and has warranted and represented that
while rendering the Company auditing services, Deloitte Huayong is, and shall remain
at all time during the financial year sufficiently independent, according to all rules and
regulations. While protecting investors, the Auditor has been committed to its duties
and provided audit services to the Company. By following the code of practice of
independence, objectiveness and fairness, it has accomplished the relevant work
entrusted by the Company. Therefore, the Company decides to renew the engagement
of the Auditor, among others, to ensure the auditing consistency. In 2022, Deloitte
Huayong charged 3.2 million RMB yuan for auditing services of the financial
statements and internal control of the Company. The Company’s Auditor’s budget for
2023 will be submitted to the shareholders’ meeting, in order to authorize the board of
directors to decide, based on the consultation with the firm.
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II. Introduction of the Proposed Auditor
Deloitte Huayong presented the following information to the Company.
1.Institution Information
1.1Basic Information
Deloitte Huayong was established in February 1993 and known as Hujiang Deloitte
Accounting Limited. It was renamed Deloitte Huayong in September 2012 and was
approved by the Ministry of Finance and other authorities to convert its business
property into a limited liability partnership. It is registered on the 30th Floor, No. 222
East Yan’an Road, Huangpu District, Shanghai.
Deloitte Huayong has the required approval issued by the Ministry of Finance to render
auditing services. It is also permitted by both the Ministry of Finance and the CSRC to
engage in the auditing of H-share enterprises. Deloitte Huayong has put on record for
the securities and futures related businesses in accordance with the relevant documents
such as the "Administrative Measures for the Recordation of Securities Service
Business by Accounting Firms" issued by the Ministry of Finance and the CSRC. As
such, the Auditor has accumulated extensive experience in securities services for the
past two decades.
The chief partner of Deloitte Huayong is Mr. Fu Jian Chao. As of the end of 2022,
Deloitte Huayong had 225 partners, 6,667 employees and 1,149 CPAs , of which more
than 250 CPAs have signed audit report on securities services business.
Deloitte Huayong had a revenue of 4.2 billion RMB yuan for 2021, of which 3.3 billion
RMB yuan were generated by auditing and 700 million RMB yuan by securities
business. Deloitte Huayong provides audit services on the 2021 annual reports for 61
listed companies, with a total audit service fee of 280 million RMB yuan. The main
industries of the listed companies that the Deloitte Huayong provides services are
manufacturing, finance, real estate, telecommunication, software and information
technology, transportation, storage and postal industries. Among the listed companies
Deloitte Huayong provides audit services, there are 23 listed companies in the same
industry as the Company.
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1.2 Investor Protection
The cumulative compensation limit of occupational insurance purchased by Deloitte
Huayong exceeds 200 million RMB, which is in compliance with relevant regulations.
In the past three years, Deloitte Huayong has not been assumed civil liability in relevant
civil lawsuits due to practice behaviors.
1.3 Integrity Record
As presented to the Company by the Auditor, neither Deloitte Huayong nor any of its
employees, has been subject to any criminal penalty for their professional conduct, as
well as self-discipline regulatory measure or disciplinary punishment by self-regulatory
organizations such as stock exchanges and industry associations in the past three years.
Deloitte Huayong has received administrative penalty once and administrative
regulatory measures twice. Fourteen employees were given administrative penalties
once each and four employees were given administrative regulatory measures once each.
A former employee who had resigned in 2021 was given administrative penalty by the
local securities regulatory bureau in 2022 for his personal behavior, which did not
involve the practicing quality of the audit engagement.
2. Engagement Information
2.1 Basic Information
Mr. Ji Yuting, the signing certified public accountant, joined Deloitte Huayong in 2020.
Mr. Ji has been focusing on auditing and providing services for the capital market for
quite a long time. He is currently a practicing member of the Chinese Institute of
Certified Public Accountants. With his experience in security-related services for more
than 15 years and professional competence, Mr. Ji has provided auditing services for
many listed companies and served as the certified public accountant with the signing
right.
Ms. Fan Siwen, a quality control reviewer, joined Deloitte Huayong in 2000 and has
been devoted to auditing and professional services related to the capital market for a
long time. She is currently a practicing member of the Chinese Institute of Certified
Public Accountants. With her extensive experience for more than 22 years and
professional competence, Ms. Fan has provided auditing services for many listed
companies and functioned as the project partner and certified public accountant with
the signing right.
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Ms. Zhao Jingyuan, the signing certified public accountant, joined Deloitte Huayong in
2015. Ms. Zhao has been focusing on auditing and providing services for the capital
market and she is currently a practicing member of the Chinese Institute of Certified
Public Accountants. Ms. Zhao is professionally competent with more than 7 years’
experience in security-related services and has provided auditing services to many listed
companies.
2.2 Integrity Record
As presented to the Company by the Auditor, Deloitte Huayong and the recommended
signing CPAs have not been subject to criminal penalties, administrative penalties,
administrative supervision measures or any punishment due to the violation of self-
discipline requirements published by the authorities .
2.3 Independence
Deloitte Huayong and abovementioned engagement partner, signing certified public
accountants, and engagement quality control reviewer have no circumstances that may
affect independence.
2.4 Audit Service Fee
The audit service fee is determined based on the time cost of the partners and other
employees of Deloitte Huayong consumed in this audit engagement, which taking into
account the responsibilities and risks of professional services and other factors as well.
In 2022, Deloitte Huayong charged 3.2 million RMB yuan for auditing services of the
financial statements and internal control of the Company. The Company’s Auditor’s
budget for 2023 will be submitted to the shareholders’ meeting, in order to authorize
the board of directors to decide, based on the consultation with the firm.
III. Procedures to be performed by the reappointment of the Auditor
1. The Company’s Audit Committee has relied Deloitte Huayong’s warranties
regarding, among others, its professional qualifications, business capabilities,
independence and investor protection capabilities. After receiving said warrants and
representations , the Audit Committee has agreed that Deloitte Huayong has the
qualifications required to serve the Company, and that it can effectively perform its
duties as an audit institution. The Audit Committee has agreed to propose to the Board
of Directors to reengage Deloitte Huayong as Company’s Auditor for the 2023 financial
statements and internal control.
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2. The pre-approval opinion of the Company’s independent directors is as follows: In
view of Deloitte Huayong’s warrants and representations regarding qualifications of
securities and futures related businesses, it has the ability to independently audit the
Company’s financial position and financial results. To ensure the auditing consistency,
we pre-approve the reengagement of Deloitte Huayong as the Company’s Auditor for
the 2023 financial statements and internal control and agree to submit the proposal to
the Company’s Board of Directors for review.
After providing the above pre-approval opinion, the independent directors further
provided the below opinion: The reengagement of the annual auditing accounting firm
is conducive to ensuring the quality of the Company’s auditing work and protecting the
interests of the Company and shareholders, especially the interests of minority
shareholders. The firm to be engaged is independent, professional and has the ability to
protect the investors’ interests. The decision-making procedures for the reengagement
of Deloitte Huayong is in compliance with relevant laws and regulations. The
independent directors agree to submit the proposal to the Shareholders for approval.
3. The 19th Meeting of the 9th Session of the Board of Directors of the Company on
March 19, 2023 approved the Engagement with the Company’s Auditor for the Audit
of the Financial Statements and Internal Control of the Company. This proposal was
passed with 5 affirmative votes, 0 negative votes and 0 abstentions. The Board of
Directors of the Company agreed to reengage Deloitte Huayong as the auditing agency
for the Company’s 2023 financial statements and internal control.
4. The reengagement of Deloitte Huayong shall be submitted to the shareholders for
deliberation, and will take effect from the date of approval by the shareholders' meeting
of the Company.
IV. Documents available for reference
1. Resolutions of the 19th Meeting of the 9th Session of the Board of Directors;
2. Resolutions of the 2nd Meeting of the Audit Committee in 2023；
3. Pre-approval and independent opinions of independent directors;
4. Copy of business license of the accounting firm to be engage; and the background
and contact information of the person in charge and the contact person for the
supervision business; and the certificate of identity, professional certificate and the
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contact information of the certified public accountant who intends to be responsible
for the specific audit business;
5. Other documents required by Shenzhen Stock Exchange.
It is hereby announced.
Board of Directors of ADAMA Ltd.
March 21, 2023
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