ADAMA Ltd.Announcement on the Engagement of an
Accounting Firm
I. Explanation on the Proposed Appointment of the Company’s AuditorADAMA Ltd. (hereinafter referred to as: the “Company”) intends to renew theappointment of Deloitte Touche Tohmatsu Certified Public Accountants LLP(hereinafter referred to as: “Deloitte Huayong” or the “Auditor”) as the Company’sAuditor for its 2024 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 thatwhile rendering the Company auditing services, Deloitte Huayong is, and shall remainat all time during the financial year sufficiently independent, according to all rules andregulations. While protecting investors, the Auditor has been committed to its dutiesand provided audit services to the Company. By following the code of practice ofindependence, objectiveness and fairness, it has accomplished the relevant workentrusted by the Company. Therefore, the Company decides to renew the engagementof the Auditor, among others, to ensure the auditing consistency. In 2023, DeloitteHuayong charged 3.15 million RMB for auditing services of the financial statementsand internal control of the Company. The Company’s Auditor’s budget for 2024 willbe submitted to the shareholders’ meeting, in order to authorize the board of directorsto decide, based on the consultation with the firm.
Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No.2024-6The Company and all members of its board of directors hereby confirm that allinformation disclosed herein is true, accurate and complete with no false ormisleading statement or material omission.
II. Introduction of the Proposed AuditorDeloitte 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 DeloitteAccounting Limited. It was renamed Deloitte Huayong in September 2012 and wasapproved by the Ministry of Finance and other authorities to convert its businessproperty into a limited liability partnership. It is registered on the 30th Floor, No. 222East Yan’an Road, Huangpu District, Shanghai.Deloitte Huayong has the required approval issued by the Ministry of Finance to renderauditing services. It is also permitted by both the Ministry of Finance and the CSRC toengage in the auditing of H-share enterprises. Deloitte Huayong has put on record forthe securities and futures related businesses in accordance with the relevant documentssuch as the "Administrative Measures for the Recordation of Securities ServiceBusiness by Accounting Firms" issued by the Ministry of Finance and the CSRC. Assuch, the Auditor has accumulated extensive experience in securities services for thepast two decades.The chief partner of Deloitte Huayong is Mr. Fu Jian Chao. As of the end of 2023,Deloitte Huayong had 213 partners, 5,774 employees and 1,182 CPAs , of which morethan 270 CPAs have signed audit report on securities services business.Deloitte Huayong had a revenue of 4.2 billion RMB yuan for 2022, of which 3.2 billionRMB were generated by auditing and 800 million RMB by securities business. DeloitteHuayong provides audit services on the 2022 annual reports for 60 listed companies,with a total audit service fee of 275 million RMB. The main industries of the listedcompanies that the Deloitte Huayong provides services are manufacturing, finance, realestate, transportation, storage and postal, telecommunication, software and informationtechnology industries. Among the listed companies Deloitte Huayong provides auditservices, there are 24 listed companies in the same industry as the Company.
1.2 Investor Protection
The cumulative compensation limit of occupational insurance purchased by DeloitteHuayong 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 relevantcivil lawsuits due to practice behaviors.
1.3 Integrity Record
As presented to the Company by the Auditor, neither Deloitte Huayong nor any of itsemployees, has been subject to any criminal penalty for their professional conduct, aswell as self-regulatory measure or disciplinary punishment by self-regulatoryorganizations such as stock exchanges and industry associations in the past three years.Deloitte Huayong has received administrative penalty once and administrativeregulatory measures twice. Fourteen employees were given administrative penaltiesonce each, four employees were given administrative regulatory measures once eachand three employees were given self-regulatory measures once each. A formeremployee who had resigned in 2021 was given administrative penalty by the localsecurities regulatory bureau in 2022 for his personal behavior, which did not involvethe practicing quality of the audit engagement. According to relevant laws andregulations, the above matters do not affect our continued undertaking or execution ofsecurities service business.
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 forquite a long time. He is currently a practicing member of the Chinese Institute ofCertified Public Accountants. With his experience in security-related services for morethan 16 years and professional competence, Mr. Ji has provided auditing services formany listed companies and served as the certified public accountant with the signingright.Mr. Gu Yuping , a quality control reviewer, joined Deloitte Huayong in 2002 and hasbeen devoted to auditing and professional services related to the capital market. He iscurrently a practicing member of the Chinese Institute of Certified Public Accountants.With his extensive experience for more than 15 years and professional competence, Mr.Gu has provided auditing services for many listed companies and functioned as theproject partner and certified public accountant with the signing right.Ms. Zhao Jingyuan, the signing certified public accountant, joined Deloitte Huayong in2015. 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 CertifiedPublic Accountants. Ms. Zhao is professionally competent with more than 8 years’experience in security-related services and has provided auditing services to many listedcompanies.
2.2 Integrity Record
As presented to the Company by the Auditor, the abovementioned personnel fromDeloitte Huayong have not been subject to criminal penalties, administrative penalties,self-regulatory measures or any punishment due to the violation of self-disciplinerequirements published by the authorities .
2.3 Independence
Deloitte Huayong and abovementioned engagement partner, signing certified publicaccountants, and engagement quality control reviewer have no circumstances that mayaffect independence.
2.4 Audit Service Fee
The audit service fee is determined based on the time cost of the partners and otheremployees of Deloitte Huayong consumed in this audit engagement, which taking intoaccount the responsibilities and risks of professional services and other factors as well.In 2023, Deloitte Huayong charged 3.15 million RMB for auditing services of thefinancial statements and internal control of the Company. The Company’s Auditor’sbudget for 2024 will be submitted to the shareholders’ meeting, in order to authorizethe 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 warrantiesregarding, among others, its professional qualifications, business capabilities,independence and investor protection capabilities. After receiving said warrants andrepresentations , the Audit Committee has agreed that Deloitte Huayong has thequalifications required to serve the Company, and that it can effectively perform itsduties as an audit institution. The Audit Committee has agreed to reengage DeloitteHuayong as Company’s Auditor for the 2024 financial statements and internal controland submit this proposal to the Board of Directors of the Company.
2. The 30
th
Meeting of the 9
thSession of the Board of Directors of the Company onMarch 25, 2024 approved the Engagement with the Company’s Auditor for the Auditof the Financial Statements and Internal Control of the Company. This proposal waspassed with 5 affirmative votes, 0 negative votes and 0 abstentions. The Board ofDirectors of the Company agreed to reengage Deloitte Huayong as the auditing agencyfor the Company’s 2024 financial statements and internal control.
3. The reengagement of Deloitte Huayong shall be submitted to the shareholders fordeliberation, and will take effect from the date of approval by the shareholders' meetingof the Company.IV. Documents available for reference
1. Resolutions of the 30
th
Meeting of the 9
thSession of the Board of Directors;
2. Resolutions of the 1
st
Meeting of the Audit Committee in 2024；
3. 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 thesupervision business; and the certificate of identity, professional certificate and thecontact information of the certified public accountant who intends to be responsiblefor the specific audit business;
4. Other documents required by Shenzhen Stock Exchange.
It is hereby announced.
Board of Directors of ADAMA Ltd.
March 27, 2024