Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B)Announcement No. 2019-45
ADAMA Ltd.
Special Report on the Deposit and Actual Usage of the Raised Funds
in the First Half-Year of 2019
The Company and all members of its Board of Directors confirm that all the information disclosed herein is true, accurate, and complete with no false or misleading statement or material omission.
The Special Report hereunder on the Deposit and Actual Use of the Funds Raised from Non-Public Offerings in the first half of 2019 was prepared in accordance with‘Regulatory Guidelines for Listed Companies No.2-Regulatory Requirements for the Management and Use of Funds Raised by ListedCompanies’ of China Securities Regulatory Commission (CSRC Notice[2012] No.44),‘Guidelines for the Standard Operation of the Companies Listed in Shenzhen StockExchange’ (2015 Amendment) issued by Shenzhen Stock Exchange.
I. General Information About the Raised Funds
1. Amount and date of Receiving the Raised Funds
After receiving the approval of China Securities Regulatory Commission for the issuance of shares to China National Agrochemical Co., Ltd. to acquire assets and raise supporting funds (CSRC Permits[2017] No.1096), the Company issued 104,697,982 ordinary A shares in December 2017, at the issue price of RMB14.9 per share, raising a total amount of RMB1,559,999,931.80. After deducting the underwriting fees of RMB28, 079,998.78, the net amount received by the Company was RMB1, 531,919,933.02. The net amount was received on 27 December 2017 and was verified
by Deloitte Touche Tohmatsu Certified Public Accountant LLP which issued a capital verification report (De Shi Bao (Yan) Zi (17) No.00540).
2. The Used Amount of the Raised Funds in the Previous Year
As at 31 December 2018, the Company had used RMB 317,292,647.40 of the raised funds in that year, and the balance that had not yet been used was RMB1,263,521,479.15 (including interest income after deducting bank charges RMB20,814,194.75).
3. The Used Amount of the Raised Funds in the First Half-Year of 2019 and the Current Balance
In the first half of 2019, the Companydidn’t use the raised funds. As at June 30, 2019, the balance of the raised funds was RMB12,365,970.17 including net interest and tax refund (after deducting the relevant bank charges) of RMB 1,275,887,449.32.
II. Deposit and Management of the Raised Funds
In order to standardize the management and the usage of the raised funds, and to protect the rights of investors, based on the actual requirements, the Company prepared the Raised Funds Management Policy in accordance with the laws, regulations, and regulatory documents such as Management Measures for Initial Public Offering of Shares and Listing, Notice on Further Standardize the Use of Raised Funds for Listing Companies, and Listing Rules of Shenzhen Stock Exchange etc. The Raised Funds Management Policy specifies the deposit, usage, change of the designated projects, management and supervision of the raised funds.
The Company has signed the Trilateral Supervision Agreement for Special Account Deposit with GuotaiJun’an and Jinzhou Sanwan Branch of China Construction Bank Co., Ltd. on January 22, 2018, and the Four-party Supervision Agreement for New Fund-
raising Account with GuotaiJun’an Securities Co., Ltd, Shanghai Branch of HSBC Bank (China), ADAMA AGAN LTD, and ADAMA MAKHTESHIM LTD on June
25th,2018. During the reporting period, the parties strictly performed their obligations under the above supervision agreements.
The details of the opening of the special accounts and deposit of the raised funds
are as follows:
Unit: Yuan
||||
|-|-|-|
|Bank|Account No.|Balance of the account as at June30, 2019|
|Jingzhou SanwanBranch of ChinaConstruction Bank|42050162610109000999|1,275,887,449.32|
|Shanghai Branch ofHSBC|715-039582-001|0|
|Shanghai Branch ofHSBC|715-039574-001|0|

III. Actual Usage of the Raised Funds in the First Half of 2019
For details of the actual use of the raised funds in the first half of 2019, please see the
appendix I Comparison Table for the Use of Raised Funds.
IV. The Usage of the Raised Funds in the Newly Changed Designated Projects
On April 10, 2019, the Annual Shareholders Meeting approved a proposal on the change of certain designated projects included in the Project of Share Issuance for Assets Purchase and Supporting Finance. The Company will no longer use the raised funds on the project of the construction ofHuai’an pesticide formulation center (RMB 249.8
million) and the project of fixed-assets investment-product A 600t/a (RMB 150.28
million). Instead, the Company will use the above amount (aggregated number RMB
400.08million) to pay the consideration of the equity transfer of Jiangsu Anpon Electrochemical Co., Ltd. The Company is dealing with the payment process.
V. Problems in the Usage and Disclosure of the Raised Funds
The Company has timely, truly, accurately and completely disclosed relevant information on the raised funds. The management of the raised funds does not violate the regulations of China Securities Regulatory Commission or Shenzhen Stock Exchange.
Board of Directors of ADAMA Ltd. August 22, 2019
Appendix 1: Comparison Table for the Use of Raised Funds
Comparison Table for the Use of Raised Funds
Unit: RMB’0000
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|Total amount of raised funds||||155,999.99|||Total investment of raised funds for thereporting period|||0|||
|Total amount of raised funds with change of purpose during thereporting period||||40,008|||Accumulated investment amount of raisedfunds|||31,729|||
|Accumulated amount of raised funds with change of purpose||||40,008|||||||||
|Percentage of accumulated amount of raised funds with changeof purpose||||25.65%|||||||||
|Committedfund-raisinginvestmentprojects|Whether theproject has beenchanged,including partchange (if any)|Total committedinvestmentamount|Totalinvestmentamount afteradjustment (1)||Investmentamount for thereportingperiod|Accumulatedinvestmentamount as at theend of thereporting period(2)||Investmentprogress as atthe end ofperiod (%)(3)=(2)/(1)|Date ofprojectsreachingintendeduseablecondition|Realizedbenefits of thereportingperiod|Whether theexpectedbenefits areachieved|Whether thefeasibility of theproject haschangedsignificantly|
|Huai’anpesticidepreparationcenter project|Yes|24,980|24,980||0|0||-|N/A|N/A|N/A|Yes|
|Productdevelopmentand registrationproject|No|93,507|93,507||0|13,103||14%|2019|It will be clearafter thecompletion ofthe project|N/A|No|
|ADAMA fixedasset investmentproject|Yes|66,204|66,204||0|5,913||9%|2019|It will be clearafter thecompletion ofthe project|N/A|Yes|
|Payment fortransaction cost,taxes and fees|No|13,600|13,600||0|12,713.04||93.48%|——|——|N/A|No|
|Subtotal of non-public offeringinvestmentproject|——|198,291(Note )|198,291(Note )||0|31,729.04||16%|——|——|——|——|
|Investment Areas of the Over Raised Funds||||||N/A|||||||
|Aggregatedamount|——|198,291|198,291||0|31,729.04||16%|——|——|——|——|
|Situations failing to meet the planned schedule or achieve expected benefits and the reasons(according to the specific investment project)||||||N/A|||||||

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|Explanation of projects whose feasibility changed significantly|1. Project of the Construction of Huai’an Pesticide Formulation CenterSince Adama Pesticide (Jiangsu) Co., Ltd., a subsidiary company of the third-tiersubsidiary of Solutions, is the entity to implement the construction project of Huai’anPesticide Formulation Center, the Company needs to increase the capital of Solutionsfirst, and then increase the capital of the subsidiaries by Solutions. The time and processrequired for the relevant approval process, such as funds entry and exist, is complicated.In order to avoid delays of the project, the Company invested its own capital into theproject.2. Fixed-Assets Investment-Product A 600t/aThe project also needs to be carried out through the Company's capital increase for itssubsidiaries, involving the relevant approval process for funds exit, which takes a longtime. Product A is an innovative product. The market needs to accept innovative productsfor a certain period. Additionally, due to the extreme weather in the European market, theproject has been delayed. Therefore, the Company replaced this original designatedproject.|
|Amounts, usage and progress of the excess-raised funds|N/A|
|Changes of location of investment programs|N/A|
|Changes of implementation of the investment programs||
|Internal funds previously invested and replacement from the funds raised|The 5th meeting of the 8th session of the Board of Directors of the Company on June 25, 2018 approved theProposal on Utilization of Part of the Funds Raised in December 2017 for Replacing the Capital PreviouslyInvested in the Designated Projects Included in the 2017 Major Assets Restructuring to allow the Companyto utilize RMB276,530,000 of the Raised Funds to replace capital previously invested in the DesignatedProjects. The Company has completed the replacement by June 30, 2018.|
|Use of idle funds to temporarily supplement working funds|N/A|
|Balance amount of raised funds after the completion of the designated funds and the reasons|N/A|
|Purpose and hereabouts of unused funds|The unused funds are deposited in the special account and is going to be continuously used on the designatedprojects.|
|Other issues in the usage and disclosure of the raised funds|N/A|

Note : The Company intends to raise funds of no more than 198,291RMB’0000 in the supporting finance program, while the actual funds raised was 155,999,99RMB’0000 on December 27, 2017.
Appendix 2: Details of the Raised Funds that Used on the New Committed Project
Details of the Raised Funds that Used on the New Committed Project
Unit: RMB’0000
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|-|-|-|-|-|-|-|-|-|-|
|New CommittedProject|OriginalCommittedProjects|Totalcommittedinvestmentamount(1)|Investmentamount forthe currentperiod|Accumulatedinvestmentamount as at theend of thecurrent period(2)|Investmentprogress as atthe end ofperiod (%)(3) = (2)/ (1)|Date ofprojectsreachingintendeduseablecondition|Realizedbenefits ofthe currentperiod|Whethertheexpectedbenefitsareachieved|Whether thefeasibility ofthe project haschangedsignificantly|
|Consideration ofthe acquisition ofAnpon|Huai’anpesticideformulationcenter project|40,008|-|-|-|2019|N/A|N/A|No|
||ADAMA fixedasset investmentproject|||||||||
|Total|——|40,008|-|-|-|-|-|-|-|
|The reason for changes, decision-making procedures, and disclosureof information||1.Project of the Construction of Huai’an Pesticide Formulation CenterSince Adama Pesticide (Jiangsu) Co., Ltd., a subsidiary company of the third-tier subsidiary of Solutions, is the entity toimplement the construction project of Huai’an Pesticide Formulation Center, the Company needs to increase the capital ofSolutions first, and then increase the capital of the subsidiaries by Solutions. The time and process required for the relevantapproval process, such as funds entry and exist, is complicated. In order to avoid delays of the project, the Company invested itsown capital into the project.2. Fixed Assets Investment-Product A 600t/aThe project also needs to be carried out through the Company's capital increase for its subsidiaries, involving the relevantapproval process for funds exit, which takes a long time. Product A is an innovative product. The market needs to acceptinnovative products for a certain period. Additionally, due to the extreme weather in the European market, the project has beendelayed. Therefore, the Company replaced this original designated project.||||||||
|Situations failing to meet the plannedschedule or achieve expectedbenefits and the reasons||N/A||||||||

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|Explanation of the new committedproject whose feasibility changedsignificantly|N/A|