ADAMA Ltd.Contingency Plan for Deposits atSinochem Finance Co., Ltd.
Chapter 1 General Provisions
Article 1 To prevent, control and mitigate risks of deposits of ADAMA Ltd. (hereinafterreferred to as “the Company”) at Sinochem Finance Co., Ltd. (hereinafter referred to as“Sinochem Finance”), safeguard security and ensure the liquidity and profitability offunds, this contingency plan is hereby formulated.
Chapter 2 Organizational Structure and Responsibilities
Article 2 The Company shall establish a leading team for deposit risk prevention andcontrol (hereinafter referred to as “the Leading Team”). The President and ChiefExecutive Officer shall lead the Leading Team and perform as the primary personresponsible for risk prevention and control. The Chief Financial Officer shall be deputyhead of the Leading Team. Other members include relevant employees of the financialdepartment and legal department. The Leading Team is responsible for organizing riskprevention and control of deposits. All units and individuals should not conceal, delay,lie or incite others to conceal, delay or lie about deposit risks.
Article 3 As the specialized contingency body, the Leading Team should immediatelyinitiate the contingency plan and carry out its work in accordance with the prescribedprocedures whenever a risk occurs at Sinochem Finance.
Article 4 The following principles should be followed in handling emergencies:
(1) The leadership should be unified and the responsibility should be graded. TheLeading Team shall take the lead and be responsible to the Board of Directors,responsible for the specific work of risk prevention and mitigation.
(2) Various relevant departments should perform their duties, coordinate and cooperatewith each other. Relevant departments should plan proactively and implement variousmeasures to prevent, mitigate and resolve risks through coordination.
(3) Information should be collected while focusing on prevention. The Companyshould supervise Sinochem Finance to provide relevant information in a timely manner,follow its operation and understand more about its ongoing business from the group,other subsidiaries of the group or regulatory authorities so as to ensure a regular andeffective mechanism to monitor information and prevent risks.
(4) Early warning and timely mitigation are imperative. Relevant departments shouldstrengthen the mechanism for risk monitoring and early detection and reporting and
take decisive measures to control and prevent the spread and escalation of any risk soas to minimize the impact on deposits.
Chapter 3 Information Reporting and Disclosure
Article 5 A deposit risk reporting system should be established to brief the Board ofDirectors on a regular or interim basis.Sinochem Finance's periodic financial reports including balance sheet, profit and lossstatement, cash flow statement, etc. should be obtained and reviewed on a regular basis.During the term of the deposit, the annual report of Sinochem Finance audited by anaccounting firm with qualifications for executing securities and futures should beobtained and reviewed to evaluate its financial and business risks. The Leading Teamshall issue a deposit risk assessment report based on the analysis of the information,which should be submitted to the Board of Directors for deliberation and approval. Thedeposited amount at Sinochem Finance at a specific time should be reported to theBoard of Directors on a regular basis. Its assets, liabilities, position status, unusualchanges in deposits and measures taken and proposed to be adopted should be updatedin the form of interim reports.
Article 6 Transactions between the Company and Sinochem Finance should strictlycomply with relevant laws and regulations on related party transactions, follow therequired decision-making procedures and fulfill the obligation of informationdisclosure.
Chapter 4 Emergency Procedures and Measures
Article 7 If any of the following circumstances occurs in Sinochem Finance, theemergency mechanism shall immediately be initiated:
(1) The balance sheet indicators of the Sinochem Finance do not meet requirements ofArticle 34 of the Administrative Measures for Finance Companies of Group Enterprises;
(2) A bank run occurs in the Sinochem Finance; debts cannot be paid on due date; alarge amount of loan is overdue; or it has to pay in advance a large amount for aguarantee; serious computer failure occurs; Sinochem Finance is robbed or frauded orany of its director of the board or senior management is involved in serious violation ofregulations or criminal cases and etc.,;
(3) Major institutional changes, equity transactions or business risks that may affectthe normal operation of Sinochem Finance;
(4) The balance of the Company's deposits at Sinochem Finance accounts for morethan 30% of the latter’s total deposit balance;
(5) The shareholders have overdue debt over one year to Sinochem Finance;
(6) The loan balance issued by the Sinochem Finance to a single shareholder exceeds50% of its registered capital or the shareholder's contribution to it;
(7) Sinochem Finance receives administrative penalties from China BankingRegulatory Commission and other regulatory authorities for violations of laws and
regulations;
(8) Sinochem Finance is required by China Banking Regulatory Commission to carryout rectification;
(9) Other matters that may pose a safety hazard to the Company's deposit funds.
Article 8 After a deposit risk occurs, relevant staff should immediately report to theLeading Team. The Leading Team should keep updated of the progress, collectinformation, draft a written analysis and report it to the Board of Directors.
Article 9 The Leading Team shall initiate emergency procedures. It should assignpersonnel to urge Sinochem Finance to provide detailed explanations whileunderstanding the situation through multiple channels. If necessary, the Leading Teamshould send personnel to investigate on-site and analyze the risk. Meanwhile, accordingto causes and conditions, it should implement various risk-resolving measures, clarifydifferent duties and formulate an emergency plan. The plan shall be revised andsupplemented in a timely manner according to the changes of deposit risks and theproblems found during implementation. The emergency plan should include thefollowing contents:
1. Roles and responsibilities of various departments and subsidiaries as well asmeasures to be taken, tasks to be completed and goals to be achieved;
2. Implementation of various risk mitigation measures;
3. Supervision and guidance of the implementation.
Article 10 In response to risks that arise, the Company shall hold a joint meeting withSinochem Finance. The Leading Team of the Company and the relevant responsibleperson of Sinochem Finance should attend the meeting and seek solutions. If necessary,documents can be drafted jointly and submitted to Sinochem Holdings Corporation Ltd.for deliberation.
Article 11 If necessary, the Company shall require Sinochem Finance to suspend or stopissuing new loans and start to collect funds back, to sell immediately treasury bonds orother bonds, to collect loans to peer institutions regardless of whether they are due ornot and to seek to transfer unexpired loans to other financial institutions to recover theprincipal and interest in time if there is any appropriate opportunity.
Article 12 All relevant departments and subsidiaries shall follow the unifiedmanagement of the Leading Team in accordance with the responsibilities andrequirements stipulated in the emergency plan. Each department should fulfill its ownduty and bear its own responsibility. And they should also implement various measuresto actively support the work.
Chapter 5 Subsequent Treatment
Article 13 After any sudden deposit risk is resolved, the Leading Team shall strengthen
the supervision of Sinochem Finance, require it to enhance funding strength, improveits ability to resist risks, reassess the deposit risks and adjust the deposit ratio ifnecessary.
Article 14 The Leading Team should work with Sinochem Finance to carefully analyzeand summarize causes and consequences of the emergency incidence of deposit risks.Experience and lessons should be learnt to enhance prevention and mitigationafterwards.
Chapter 6 Supplementary Provisions
Article 15 The Board of Directors of the Company holds the right to interpret thisPlan.
Article 16 This Plan shall be implemented from the date of approval by the Board ofDirectors.
Board of Directors of ADAMA Ltd.
November 6, 2024