Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2024-34
ADAMA Ltd.
Announcement on the Purchase of Liability
Insurance for Directors, Supervisors and Senior
Executives and the Related-party Transaction
The Company and all members of the Company’s Board of Directors confirm that all
information disclosed herein is true, accurate and complete, with no false or misleading statement
or material omission.
I. Overview of the Related Party Transaction
On June 12, 2024, the 3rd meeting of the 10th session of the Board of Directors of
ADAMA Ltd. (hereinafter referred to as the “Company”) considered the Proposal on
the Purchase of Liability Insurance for Directors, Supervisors and Senior Executives
and the Related-party Transaction. In order to further benefit from the Syngenta
Group synergies and obtain preferable insurance terms, the Company is contemplating
purchasing a Directors and Officers liability insurance policy by way of adding the
Company to the Directors and Officers liability insurance policy of Syngenta Group
Co., Ltd. (hereinafter referred to as “SG”), which shall provide shared coverage (the
“Transaction”). Since SG is the controlling shareholder of the Company, this
Transaction therefore constituted a related-party transaction.
In accordance with the provisions of the Articles of Association and relevant laws and
regulations, all the Directors abstained from voting on this proposal, and thi s
transaction will be submitted directly to the general meeting of shareholders for
consideration and approval, during which SG, the related party, will abstain from
voting. This Transaction has been reviewed by the Specialized Meeting of
Independent Directors of the Company and approved by all independent directors.
The Transaction does not constitute a Material Assets Restructuring as stipulated by
the Administrative Measures on Significant Asset Restructuring of Listed Companies.
II. Overview of the Related Party
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Established in 2019, SG is registered at Unit 08 of the 30th Floor, No. 88 of Shiji
Avenue, Shanghai Pilot Free-Trade Zone of China with Mr. LI Fanrong as its legal
representative. It has a registered capital of RMB 11,144,544,602 and operates in
R&D, production and sales of crop protection, seeds and crop nutrition products as
well as modern agricultural services.
The shareholders and shareholding proportion of SG are as follows. China National
Agrochemical Co., Ltd holds 99.1% and Maidao Agrochemical Co., Ltd., 0.9%. The
State-owned Assets Supervision and Administration Commission of the State Council
(SASAC) is the actual controller of SG.
As of December 31st, 2022, the revenue of SG was RMB 224.84489 billion, net
income 11.40569 billion, total assets 573.10198 billion and net assets 269.39203
billion.
Related-party relationship: as the controlling shareholder of the Company, SG is a
related party in accordance with Item 1, Paragraph 2 of Article 6.3.3 of the Listing
Rules of Shenzhen Stock Exchange.
Analysis of contract performance capability: To the best of the Company’s knowledge,
SG has sound performance capability based on its normal production and operational
status. After searching on “the Website of Disclosure of Enforcement Information of
China”, it is not a debtor subject to judicial enforcement.
III. Basic Information on the Target of the Related-party Transaction
In order to ensure the directors, supervisors and senior executives to exercise their
management and supervisory duties independently and effectively, and to further
benefit from the SG synergies as well as preferable insurance terms, the Company is
contemplating purchasing a Directors and Officers liability insurance policy by way
of adding the Company to the Directors and Officers liability insurance policy of SG,
which shall provide shared coverage. For details, please refer to Section V of this
announcement “Main Contents of the Liability Insurance”.
The Board of Directors of the Company would like to request the Shareholders'
General Meeting to authorize the management team to handle the purchase of the
liability insurance for directors, supervisors and senior executives (including but not
limited to the identification of the relevant insured persons; confirmation of the
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insurance amount, premium and its adjustment and other insurance terms; signing of
the relevant legal documents and handling of other matters in relation to the
application for the insurance, etc.), as well as to handle the renewal or reappointment
of the liability insurance upon or before the expiry of the existing contract.
IV. Pricing Basis of the Related-Party Transaction
The Transaction is made on the principles of voluntariness, equality, mutual benefit,
justice and fairness. The terms of the Transaction were negotiated fairly on the basis
of market practice.
V. Main Contents of the Liability Insurance
1. The Proposer: ADAMA Ltd.
2. The Insurer: Zurich General Insurance (China) Company Limited
3. The Insured: Directors of the Board, Supervisors and Senior Executives of the
Company and its PRC subsidiaries
4. Limit of Liability: The insurance coverage is USD 75,000,000.
5. Premium Expenses: USD 115,680
6. Insurance Period: From July 1, 2024 to June 30, 2025
VI. Purpose of the Transaction and Its Impact on the Company
As a related-party transaction for the purchase of liability insurance for the directors,
supervisors and senior executives, this transaction is conducive to capitalizing on the SG
synergies and its preferable terms, safeguarding the rights and interests of the Company
and its investors and improving the Company’s risk management system. Furthermore, it
promotes the full exercise of the rights and performance of the duties of the directors,
supervisors and senior executives. It will not harm the interests of the Company and all
shareholders, nor will it affect its independence.
VII. Status of the Different Kind of Related-party Transactions between the Company
and SinoChem Holdings
The related-party transactions between the Company and subsidiaries of Sinochem
Holdings are as follows.
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1. The occurred related-party transactions with subsidiaries of SinoChem Holdings in
2023 in the ordinary course of business is RMB 3,246.42million. The estimated
related-party transaction amount in 2024 in the ordinary course of business approved
by the 2023 annual shareholders’ meeting is RMB 4,143.71 million.
2. Deposits of the Company and its subsidiaries in the Sinochem Finance Co., Ltd.: As
of the date of this announcement, the balance of deposits remains RMB 372 million
and USD 2 million, which have been approved by the 1st interim shareholders
meeting of the Company in 2022.
3. The 33rd meeting of the 9th session of the Board of Directors approved the Proposal
on Credit Facility from the Related Party according to which Syngenta Group (NL)
B.V., a subsidiary of the Company's controlling shareholder SG, shall enter into
an additional Facility Agreement and provide an amount of USD 200 million credit
facility in favor of Adama Fahrenheit B.V. , an indirectly wholly-owned subsidiary
of the Company, and the transaction has been approved by the 2024 1st Interim
Shareholders Meeting .
VIII. Independent Directors’ Prior Approval
The Company’s Specialized Meeting of Independent Directors approved the
Transaction and the independent directors have given approval opinions on the
Transaction:
The transaction can safeguard the rights and interests of the Company and the directors,
supervisors and senior executives, promote the full exercise of rights and fulfilment of
duties by relevant persons in charge, and improve the healthy development of the
Company.
Following the requirements of relevant applicable laws and regulations, this related-party
transaction is carried out in accordance with the market-oriented principle, which will not
affect the independence of the listed company and will not be detrimental to the interests
of the Company and other shareholders.
Its decision-making procedures conform to the Company Law, the Rules of Shenzhen Stock
Exchange for the Listing of Stocks, the Articles of Association of the Company and other
laws and regulations.
Therefore, the independent directors agreed to submit the Transaction to the Company’s
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shareholders’ meeting for approval.
IX. Documents for Future Reference
1. The resolutions of the 3rd Meeting of the 10th Session of the Board of Directors of the
Company;
2. The resolutions of the Specialized Meeting of Independent Directors.
It is hereby announced.
The Board of Directors of ADAMA Ltd.
June 13, 2024
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