Chapter I General ProvisionsArticle 1 The Measures are formulated to intensify the management of the liabilities ofADAMA Ltd. (hereinafter referred to as "the Company"), prevent debt risks, strengthenboth asset-liability and interest-bearing liability control, and maintain a reasonableasset-liability ratio.Article 2 The Measures should apply to the Company and its subsidiaries within thescope of consolidated statements.Article 3 Double control of asset-liability and interest-bearing liability should beimplemented for liability management. Asset-liability control refers to the indicatorsbased on asset-liability ratio, which refers to the proportion of the total liabilities of anenterprise to its total assets. Interest-bearing liability control refers to the indicatorsbased on year-end budget value and the upper limit value of the annual budget.
Chapter II Management Organizations and ResponsibilitiesArticle 4 As the main management department of assets and liabilities, the FinanceDepartment of the Company is specifically responsible for the budget, financing anduse of interest-bearing liabilities and analyses of the asset-liability structure as well asdebt risk management.Article 5 The Securities and Legal Affairs Department of the Company should beresponsible for contract review and handling of relevant legal issues.Article 6 All relevant departments of the Company have the responsibility to cooperatein asset and liability management and implement relevant requirements according totheir responsibilities.
Chapter III Liability ManagementArticle 7 Management of funds should be strengthened, especially with respect to the
management and supervision over the use of funds, so as to ensure fund security andimprove efficiency.Article 8 Liability management should be strengthened and an annual liability budgettarget should be incorporated into the budget to be deliberated by the Board of Directors.Establish a liability management system that meets the needs for liquidity and matchesbusiness development, rationally control the scale of liabilities and financing costs, andmaximize benefits. Strengthen asset-liability management and liability planning, makerational plans and arrangements for the proportion of long-term and short-termfinancing, the scale of debts, and the due time, advance diversified financing sources,and maintain a solid asset-liability structure.Article 9 Strengthen financing management and control the scale of interest-bearingliabilities. The total interest-bearing liabilities at the end of a year and the upper limitof liabilities within a year should not exceed the budget deliberated by the Board ofDirectors. Particular matter above the budget should be submitted to the Board ofDirectors for consideration.Article 10 The Company should strengthen accounting and preparation of financialreports, and focus on the change of liability-related indicators including asset-liabilityratio, working capital ratio, acid-test ratio, and net cash flow from operating activities.
Chapter IV Risk ControlArticle 11 The Finance Department of the Company should regularly analyze asset anddebt structure, pay special attention to monitoring indicators including asset-liabilityratio, working capital ratio, acid-test ratio, and net cash flow from operating activities,and include subsidiaries with an asset-liability ratio of or over 70% at year end into riskcontrol.Article 12 The Company should establish a dynamic mechanism to monitor debt risk,raise funds reasonably, repay due debts in a timely manner and prevent debt defaults.Special attention should be paid to the following risks: 1. implicit debt risks; 2. off-balance sheet debt risks; 3. contingent debt risks; 4. capital chain rupture risks. Any ofthe aforementioned risks related to debt and cash flow of the Company should bereported in a timely manner as required.
Article 13 If the Company is included in the scope of liability risk control by SinoChemHoldings Corporation Ltd., the Company should timely develop a liability risk controlplan and submit it to SinoChem for filing.
Chapter V Supplementary ProvisionsArticle 14 The right to interpret the Measures should reside in the Financial Departmentof the Company.Article 15 The Measures should come into effect as of the date of approval by the Boardof Directors.
ADAMA Ltd.