Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2024-34
ADAMA Ltd.Announcement on the Purchase of LiabilityInsurance for Directors, Supervisors and SeniorExecutives and the Related-party Transaction
I. Overview of the Related Party Transaction
On June 12, 2024, the 3
rd
meeting of the 10
thsession of the Board of Directors ofADAMA Ltd. (hereinafter referred to as the “Company”) considered the Proposal onthe Purchase of Liability Insurance for Directors, Supervisors and Senior Executivesand the Related-party Transaction. In order to further benefit from the SyngentaGroup synergies and obtain preferable insurance terms, the Company is contemplatingpurchasing a Directors and Officers liability insurance policy by way of adding theCompany to the Directors and Officers liability insurance policy of Syngenta GroupCo., Ltd. (hereinafter referred to as “SG”), which shall provide shared coverage (the“Transaction”). Since SG is the controlling shareholder of the Company, thisTransaction therefore constituted a related-party transaction.In accordance with the provisions of the Articles of Association and relevant laws andregulations, all the Directors abstained from voting on this proposal, and thistransaction will be submitted directly to the general meeting of shareholders forconsideration and approval, during which SG, the related party, will abstain fromvoting. This Transaction has been reviewed by the Specialized Meeting ofIndependent Directors of the Company and approved by all independent directors.The Transaction does not constitute a Material Assets Restructuring as stipulated bythe Administrative Measures on Significant Asset Restructuring of Listed Companies.II. Overview of the Related Party
Established in 2019, SG is registered at Unit 08 of the 30th Floor, No. 88 of ShijiAvenue, Shanghai Pilot Free-Trade Zone of China with Mr. LI Fanrong as its legalrepresentative. It has a registered capital of RMB 11,144,544,602 and operates inR&D, production and sales of crop protection, seeds and crop nutrition products aswell as modern agricultural services.The shareholders and shareholding proportion of SG are as follows. China NationalAgrochemical Co., Ltd holds 99.1% and Maidao Agrochemical Co., Ltd., 0.9%. TheState-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, netincome 11.40569 billion, total assets 573.10198 billion and net assets 269.39203billion.Related-party relationship: as the controlling shareholder of the Company, SG is arelated party in accordance with Item 1, Paragraph 2 of Article 6.3.3 of the ListingRules 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 operationalstatus. After searching on “the Website of Disclosure of Enforcement Information ofChina”, 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 theirmanagement and supervisory duties independently and effectively, and to furtherbenefit from the SG synergies as well as preferable insurance terms, the Company iscontemplating purchasing a Directors and Officers liability insurance policy by wayof 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 thisannouncement “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 theliability insurance for directors, supervisors and senior executives (including but notlimited to the identification of the relevant insured persons; confirmation of the
insurance amount, premium and its adjustment and other insurance terms; signing ofthe relevant legal documents and handling of other matters in relation to theapplication for the insurance, etc.), as well as to handle the renewal or reappointmentof 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 basisof 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 theCompany 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 SGsynergies and its preferable terms, safeguarding the rights and interests of the Companyand its investors and improving the Company’s risk management system. Furthermore, itpromotes 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 allshareholders, nor will it affect its independence.VII. Status of the Different Kind of Related-party Transactions between the Company
and SinoChem HoldingsThe related-party transactions between the Company and subsidiaries of SinochemHoldings are as follows.
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 estimatedrelated-party transaction amount in 2024 in the ordinary course of business approvedby 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.: Asof the date of this announcement, the balance of deposits remains RMB 372 millionand USD 2 million, which have been approved by the 1st interim shareholdersmeeting of the Company in 2022.
3. The 33rd meeting of the 9th session of the Board of Directors approved the Proposalon 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 intoan additional Facility Agreement and provide an amount of USD 200 million creditfacility in favor of Adama Fahrenheit B.V. , an indirectly wholly-owned subsidiaryof the Company, and the transaction has been approved by the 2024 1st InterimShareholders Meeting .VIII. Independent Directors’ Prior Approval
The Company’s Specialized Meeting of Independent Directors approved theTransaction and the independent directors have given approval opinions on theTransaction:
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 ofduties by relevant persons in charge, and improve the healthy development of theCompany.Following the requirements of relevant applicable laws and regulations, this related-partytransaction is carried out in accordance with the market-oriented principle, which will notaffect the independence of the listed company and will not be detrimental to the interestsof the Company and other shareholders.Its decision-making procedures conform to the Company Law, the Rules of Shenzhen StockExchange for the Listing of Stocks, the Articles of Association of the Company and otherlaws and regulations.Therefore, the independent directors agreed to submit the Transaction to the Company’s
shareholders’ meeting for approval.IX. Documents for Future Reference
1.
The resolutions of the 3rd Meeting of the 10
thSession of the Board of Directors of theCompany;
2.
The resolutions of the Specialized Meeting of Independent Directors.
It is hereby announced.
The Board of Directors of ADAMA Ltd.
June 13, 2024