ADAMA Ltd.External Guarantee Management Measures
Chapter I General ProvisionsArticle 1 With the purpose to protect legitimate interests of investors, regulate externalguarantee of ADAMA Ltd. (hereinafter referred to as "the Company"), effectivelyprotect the Company from external guarantee risks and ensure safety of the Company'sassets, the Measures are hereby formulated based on actual situations of the Companyand according to the Civil Code of the People's Republic of China, Company Law ofthe People's Republic of China, Securities Law of the People's Republic of China, StockListing Rules of Shenzhen Stock Exchange (hereinafter referred to as "the Stock ListingRules"), No. 1 Self-regulation Supervision Guideline of Shenzhen Stock Exchange forListed Companies - Standardized Operation of Main Board Listed Companies and theArticles of Association of the Company.Article 2 The external guarantee mentioned herein refers to the guarantee provided bythe Company for others, including the guarantee provided by the Company for itscontrolled subsidiaries.Article 3 The Company should implement unified management for external guaranteeand should not provide any external guarantee without the approval of the Board ofDirectors or the General Meeting of Shareholders.Article 4 External guarantee of subsidiaries within the scope of the Company'sconsolidated statements should be deemed as the Company's behavior, and theirexternal guarantee should be implemented according to the Measures.Where a controlled subsidiary of the Company provides guarantee for a legal person orother organization within the scope of the Company's consolidated statements, theCompany should timely disclose the guarantee after the controlled subsidiary performsthe deliberation procedure, except for the guarantee matters that should be submitted tothe General Meeting of Stockholders of the Company for deliberation according to theStock Listing Rules.Where a controlled subsidiary of the Company provides guarantee for a subject (person
or entity) other than those specified in the preceding paragraph, the guarantee shouldbe deemed as provided by the Company and should comply with relevant provisions ofthe Measures.
Chapter II General Provisions on External GuaranteeArticle 5 The Company shall not provide guarantee for any non-legal-person entity orindividual.Article 6 The Company should establish an effective internal control system, strictlycontrol debt risks arising from external guarantee, and perform the deliberationprocedure and information disclosure obligation for external guarantee according to thelaws.Article 7 The Company should investigate the operation and credibility of theguaranteed party. The Board of Directors should carefully deliberate and analyze thefinancial status, operation status, industry prospect and credit standing of the guaranteedparty and make decisions prudently according to the laws. The Company may, whennecessary, employ an external professional institution to evaluate the guarantee risks,whose evaluation could serve as the basis for review by the Board of Directors or theGeneral Meeting of Shareholders.Article 8 When deliberating the guarantee proposal of a controlled subsidiary and heldcompany of the Company, the Board of Directors should pay attention to whether othershareholders of the controlled subsidiary and held company provide equivalentguarantee or counter guarantee in proportion to the equity ratio and whether theguarantee is fair and equivalent. The Company shall not provide guarantee exceedingits equity ratio.Article 9 The Company shall not provide guarantee to an enterprise outside ofSinoChem Holdings Corporation Ltd.. Where the Company provides guarantee for thecontrolling shareholder, actual controller and its related parties, they should providecounter guarantee. The Company should not provide guarantee for any shareholder oractual controller who is insolvent, or provide guarantee for any shareholder or actualcontroller without justified reasons.
Chapter III Procedure and Approval Authority of External GuaranteeArticle 10 The competent department of the Company's external guarantee is theFinance Department. The guaranteed party should submit relevant material to theFinance Department who should review and then submit it to the Secretary of the Boardfor requesting the Board of Directors or the General Meeting of Shareholders todeliberate according to regulations.Article 11 The material submitted by the guaranteed party to the Finance Departmentshould include:
(I) Basic information of the guaranteed party;(II) Description of the guaranteed debt (principal and interest);(III) Type and term of the guarantee;(IV) Main terms of the guarantee agreement;(V) Description of the guaranteed party's repayment plan and repayment source of theguaranteed debt(VI) Counter guarantee scheme (if applicable).Article 12 The guaranteed party should submit application with documents related tothe guarantee, including:
(I) Basic information of the enterprise;(II) The latest audited financial statements of the guaranteed party;(III) Copy of the contract for the guaranteed principal debt;(IV) Format guarantee contract provided by the creditor;(V) Conditions for the applicant to provide counter guarantee and relevant materials (ifapplicable);(VI) Other information deemed necessary by the Finance Department.Article 13 The following external guarantees to be provided by the Company should bedeliberated and approved by the General Meeting of Shareholders:
(I) Any guarantee after the total amount of external guarantees provided by the
Company and its controlled subsidiaries exceeds 50% of the latest audited net assets;(II) Any guarantee after the total amount of external guarantees provided by theCompany and its controlled subsidiaries exceeds 30% of the latest audited total assets;(III) Accumulated guarantees provided by the Company in the last 12 months exceed30% of the latest audited total assets;(IV) Guarantee provided for any guarantee object with an asset-liability ratio exceeding70% according to its latest financial statement;(V) Single guarantee with an amount exceeding 10% of the latest audited net assets;(VI) Guarantee provided for any shareholder, actual controller and its related party.The guarantee mentioned in the preceding Paragraph (III) subject to deliberation of theGeneral Meeting of Shareholders should be approved by at least two-thirds of the votesheld by the shareholders present at the meeting.Article 14 External guarantees other than those specified in Article 13 should beapproved by the Board of Directors. External guarantees that are subject to approval ofthe Board of Directors should be approved by more than 1/2 of all the directors and bymore than 2/3 of the directors present at the Board meeting with the correspondingresolution made.When the Company provides guarantees to related parties, it should be reviewed andapproved by more than 1/2 of all non-related directors and by more than 2/3 of the non-related directors attending the Board meeting with the corresponding resolution madeand submitted to the General Meeting of Shareholders for review.Article 15 The Company should sign a written guarantee contract for external guarantee.The Finance Department of Company, together with the Securities and Legal AffairsDepartment of the Company, should review the guarantee contract before it isconcluded.Article 16 For the external guarantees approved by the Board of Directors or theGeneral Meeting of Shareholders, the President and CEO of the Company or otherlegally authorized person should sign the guarantee contract on behalf of the Companyaccording to the resolution of the Board of Directors or the General Meeting ofShareholders.
Chapter IV Management of External GuaranteeArticle 17 The Finance Department should follow the financial status and solvency ofthe guaranteed party, and report to the Board of Directors in a timely manner if it findsthat the guaranteed party's operation status seriously deteriorates or if there are materialmatters such as dissolution or separation. The Board of Directors should take timelyand effective measures to minimize the loss.Article 18 Upon the maturity of the debt guaranteed, the Company should urge theguaranteed party to perform the debt repayment obligation within the due time. Wherethe guaranteed party fails to perform its obligation on time, the Company should timelytake necessary remedial measures.Article 19 The Board of Directors should perform regular inspections to review theCompany's guarantee practices. The Company should disclose any incompliantguarantee it discovers in a timely manner and take reasonable and effective measuresto eliminate or correct the incompliant guarantee.Article 20 The Finance Department should properly manage guarantee contracts andrelevant material, timely review them, regularly check with relevant institutions suchas the bank to ensure the completeness, accuracy and effectiveness of the archivedmaterials, and pay attention to the due time and duration of the guarantee.
Chapter V Information Disclosure of External GuaranteeArticle 21 The Company should perform the information disclosure obligation ofexternal guarantee according to relevant rules of the China Securities RegulatoryCommission, Shenzhen Stock Exchange and the Articles of Association of theCompany.Article 22 Any department and personnel involved in the Company’s external guaranteehas the responsibility to timely report the external guarantee to the Securities and LegalAffairs Department and provide documents required for information disclosure.Article 23 The external guarantee provided by the Company should be timely disclosedin any of the following circumstances:
(I) The guaranteed party fails to perform the repayment obligation within fifteen trading
days after the debt is due;(II) The guaranteed party is in bankruptcy, liquidation or other circumstances thatseriously affect its repayment ability.
Chapter VI AccountabilityArticle 24 Where any director, senior executive or other employees of the Companysigns a guarantee contract in violation of the Measures or beyond his/her authority, orwhere any director, senior executive or other employees of the Company is negligentin performing its duties and cause losses to the Company, the Board of Directors willdecide on giving corresponding punishment to the responsible person according to theeconomic losses suffered by the Company, relevant risks and severity of thenoncompliance matter.
Chapter VII Supplementary ProvisionsArticle 25 Unless otherwise specified, terms used in the Measures should have the samemeaning as those in the Articles of Association of the Company.Article 26 The Measures should be interpreted by the Board of Directors.Article 27 In case of any inconsistency between the Measures and national laws andregulations, relevant rules of China Securities Regulatory Commission and ShenzhenStock Exchange and the Articles of Association of the Company, the latter shouldprevail.Article 28 The Measures should take effect from the date of approval by the Board ofDirectors.
ADAMA Ltd.