ADAMA Ltd.Independent Opinions on the Relevant Issues of the
th Meeting of the 9
thSession of the Board ofDirectorsIn accordance with the Company Law of the People’s Republic of China, Rules forIndependent Directors of Listed Companies, and other laws, regulations andnormative documents, as well as the Articles of Association and Independent DirectorSystem, we, as the independent directors of ADAMA Ltd. (hereinafter referred to as“Company”), give our independent opinions on the relevant proposals of the 19
th
Meeting of the 9
thSession of the Board of Directors from the standpoint ofindependent judgment:
1. Independent Opinions on the Utilization of the Company’s Capital forNon-Operating Purposes by the Controlling Shareholder and the RelatedParties of the Company and External Guarantee Provided by the Companyin 2022
(1) Utilization of the Company’s Capital for Non-Operating Purposes by theControlling Shareholder and the Related Parties of the CompanyIn 2022, the Controlling shareholder and related parties of the Company didn’tutilize the Company’s capital for non-operating purpose. The statement issued byDeloitte Touche Tohmatsu accurately reflected the above status.Capitals transferred between the Company and its controlling shareholder andrelated parties in 2022 were the demands of normal business with fair price. Thetransactions followed the legal procedure and didn’t harm the interests of theCompany and its shareholders.
(2) External Guarantee
The Company strictly controlled the guarantees provided to others according tothe relevant laws and regulations as well as the Articles of Association of the
Company. As of the date December 31, 2022, no guarantees were provided by theCompany and/or its subsidiaries for the favor of entities not consolidated in theCompany's financial statements. The balance of external guarantees was RMB6,932,533,900, accounting for 29.98% of the latest audited net assets of theCompany.We are of the opinion that, the external guarantees provided by the Companyfollowed the due procedure and didn’t harm the interests of the Company and itsshareholders, especially the minority shareholders.
2. Independent Opinions on the Engagement with Deloitte Touche Tohmatsu(special general partnership) for the Audit of 2023 Financial Statements andInternal Control of the CompanyWith the review of the relevant qualifications of Deloitte Touche Tohmatsu, weare of the opinion that Deloitte Touche Tohmatsu is qualified to independentlyprovide audit services for a listed company and satisfy the work requirements ofthe Company.We have pre-approved the proposal on the Engagement with an Audit Firm for theAudit of the Financial Statements and Internal Control of the Company before themeeting of the BOD. The deliberation procedures for engaging Deloitte ToucheTohmatsu is in line with the laws and regulations as well as the Articles ofAssociation of the Company, and does not harm the interests of the Company andits shareholders. We approve to engage Deloitte Touche Tohmatsu for the Audit of2023 Financial Statements and Internal Control of the Company.
3. Independent Opinion on the Pre-Plan of the 2022 Dividend DistributionOn the basis of 2,329,811,766 total outstanding shares of the Company as atFebruary 28, 2023, the Company is to distribute RMB 0.27 (including tax) per 10shares as cash dividend to all shareholders, resulting in a total cash dividend ofRMB 62,904,917.68 (including tax). No shares shall be distributed as dividendand no reserve shall be transferred to equity capital.
The Pre-Plan of the 2022 Dividend Distribution is based on the Company’s actualsituation and business requirement, and is in line with Company Law of thePeople’s Republic of China, Chinese Enterprise Accounting Standards and otherrelated regulations. We agree the Pre-Plan of the 2022 Dividend Distribution.
4. Independent Opinion on the Expected Related Party Transactions in theOrdinary Course of Business in 2023We have pre-approved the proposal on the Expected Related Party Transactions inthe Ordinary Course of Business in 2023 before the meeting of the BOD. We areof the opinion that the related party transactions are the normal matters in theCompany’s operation. We agree to submit this proposal to the BOD meeting.The related directors withdrew from the vote. This proposal has been passed bythe non-related directors. The decision-making procedures for these related partytransactions conform to the Company Law of the People’s Republic of China, theRules of Shenzhen Stock Exchange for the Listing of Stocks, the Articles ofAssociation and other laws and regulations.The Group's related-party transactions performed in the ordinary course ofbusiness are mainly to purchase or sell goods, materials and services from/to therelated parties based on the principles of justice and fairness and the pricingstandards consistent with those of non-related parties, in order to assist incapitalizing the Group’s unique positioning and profile, achieve cost savings,increase sales, market share and drive its profitable growth. All such transactionsshall conform to relevant national laws and regulations, as applicable, and themarket-oriented principles, and shall not influence the independence of theCompany or damage the interests of the Company and its other shareholders. Thedecision-making procedures for these related party transactions conform to theCompany Law of the People’s Republic of China, the Rules of Shenzhen StockExchange for the Listing of Stocks, the Articles of Association and other laws andregulations. We agree on this proposal and submit it to the General Meeting ofShareholders for deliberation.
5. Independent Opinion on the Self-Assessment Report on the 2022 InternalControl of the CompanyAccording to the requirements of the Basic Standards for Enterprise InternalControl issued jointly by the Ministry of Finance and the Securities RegulatoryCommission and the Guidelines of Shenzhen Stock Exchange on Self-disciplineSupervision of Listed Companies No.1 - Standardized Operation of Main BoardListed Companies issued by the Shenzhen Stock Exchange, and in light of theactual situation of the Company, the Board of Directors of the Company reviewedand evaluated the effectiveness of the Company's internal control, and issued theSelf-Assessment Report on the 2022 Internal Control. We are of the opinion that:
The Company has basically established the internal control system. In 2022, theCompany improved the internal control system according to the actual operationstatus, so as to meet the requirements of relevant laws and regulations. TheCompany doesn’t have material deficiency in the internal control mechanism andinternal control policy. The Self-Assessment Report on the 2022 Internal Controlconforms to the actual situation of internal control of the Company.
6. Independent Opinion on the Deposit of Funds (related-party transaction)with Finance CompanyAccording to the Guidelines of Shenzhen Stock Exchange on Self-disciplineSupervision of Listed Companies No.1 - Standardized Operation of Main BoardListed Companies and Guidelines of Shenzhen Stock Exchange on Self-disciplineSupervision of Listed Companies No.7 - Transactions and Related-partyTransactions, based on the Special Report issued by Deloitte, we are of theopinion that the deposit of funds and loans in ChemChina Finance Co., Ltd. andSinochem Finance Co., Ltd. are fair and do not harm the interests of the Companyand non-related shareholders.
7. Independent Opinion on the 2022 Risk Appraisal Report of SinochemFinance Co., Ltd.
For securing the safety of the funds of the Company deposited in the financecompany, the Company evaluated the business, qualifications, and the status of therisk of Sinochem Finance Co., Ltd., and issued a Risk Appraisal Report. We are ofthe opinion that:
(1) Sinochem Finance Co., Ltd. holds valid Finance License, Business License.China Banking Regulatory Commission strictly supervises the business scope,business procedures, internal risk control system of Sinochem Finance Co., Ltd..
(2) We did not find that Sinochem Finance Co., Ltd. has any significant defect inits risk management. Currently, the risk of the Company’s related-party deposit inSinochem Finance Co., Ltd. is controllable.
8. Independent Opinion on the Investment in Derivative Financial Instruments
and Related Risk ControlsThe derivative investments carried by the Company are for hedging and avoidingthe risk of market fluctuations. The investments respond to the Company’s routinebusiness demands and are in accordance with the relevant laws and regulations.Additionally, the Company has adopted Currency Risk Hedging Policy tostrengthen the risk management and control which benefit the Company’s abilityto decrease the market risk. The derivative investments do not harm the interest ofthe Company and its shareholders.
9. Independent Opinion on the Remuneration of Senior Executives
After deliberation, we hold the opinion that the remuneration of SeniorExecutives is made on the basis of the duty and actual performance of relevantpersonnel. The decision-making procedures follow the relevant laws, regulationsand the Articles of Association of the Company, and are in line with therequirements of Company's development. It will not harm the interests of theCompany and shareholders. Therefore, we approve the Proposal on theRemuneration of the Senior Executives.
(The signature page of Independent Opinions on the Relevant Issues of the 19
th
Meeting of the 9
thSession of the Board of Directors)
Independent Director Signature:
__________________ ___________________
Ge Ming Xi Zhen
March 19, 2023