ADAMA Ltd.Announcement on Asset Impairments Made by a Controlled
Subsidiary for the Fourth Quarter of 2023
The Company and all members of its Board of Directors confirm that all the informationdisclosed herein is true, accurate, and complete with no false or misleading statementor material omission.
In accordance with the Accounting Standards for Business Enterprises, one of thecontrolled subsidiaries of ADAMA Ltd. (hereinafter referred to as the “Company”), isexpected to record a total of RMB 230 million (approximately $32 million) for Q4 2023 inprovisions for fixed assets and construction in progress impairments. These provisionsare mainly related to one-time impairment of some idle assets as provided herein.
Overview and Financial Impact of Provision for the Asset ImpairmentsDuring Q4 2023, one of the controlled subsidiaries of the Company recorded provisionsfor fixed assets and construction in progress impairments based on principles of prudentaccounting and according to the "Accounting Standards for Business Enterprises" andthe Company’s own applicable accounting policies.These provisions, charged to the total profits of the Company during the year, areexpected to be amounted to RMB 230 million (approximately $32 million).Basis and Explanation for Impairment of Fixed Assets and Construction in ProgressThe Company and its subsidiaries, assess at each balance sheet date whether there areany indications that the fixed assets and construction in progress may be impaired. Ifthere is any indication that such assets may be impaired, recoverable amounts areestimated for such assets (recoverable amount is the higher between the assets’ fairvalue less costs to sell and the present value of the future cash flow estimated to bederived from the asset). If the recoverable amount is below the assets’ net cost recordedin the balance sheet, a provision for impairment is made.Due to changes in the markets and upgrade in technology, impairment is expected to bemade to some idle assets by one of the controlled subsidiaries of the Company.
Explanation on the Reasonableness of Asset ImpairmentsThe aforementioned provisions resulted from non-cash charges due mainly to one-timeimpairment of certain idle assets.
Based on the current status of these assets, these non-cash impairments serve tocorrectly present the balance sheet of the Company, truly and fairly reflects the company'sfinancial situation, asset value and operating results, while meeting requirements ofaccounting standards and related policies.
Other ExplanationsThe expected provision for asset impairment is the result of the preliminary calculation ofthe financial department of the Company, without the audit of the accounting firm. Pleaserefer to the audited 2023 Annual Report of the Company for final financial data. Investorsare kindly reminded to pay attention to investment risks.
It’s hereby announced.
Board of DirectorsADAMA LTD.January 6, 2024