Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No. 2020-36
ADAMALtd.
Announcement on the Completion of Buyback and
Cancellation of the Compensation Shares
The Company and all members of its board of directors hereby confirm that all
information disclosed herein is true, accurate and complete with no false or
misleading statement or material omission.
Special Notice:
1. The buyback and cancellation of the Compensation Shares (as defined hereunder)
involved a single shareholder. The total number of shares repurchased and cancelled was
102,432,280, accounting for 4.19% of the Company’s total share capital prior to the
shares’buyback and cancellation.
2. The Compensation Shares were repurchased and cancelled by the Company at a
total price of RMB 1. The Company has completed the cancellation procedures at the
China Securities Depository and Clearing Corporation Limited Shenzhen Branch on July
13, 2020.
I. Corporate Procedures for the Compensation
The 25th Meeting of the 8th Session of the Board of Directors of ADAMA Ltd.
(hereinafter referred to as the “Company”) held on April 27, 2020 deliberated and
adopted the Proposal on the Overall Achievement of the Committed Performance
included in the Major Assets Restructuring Project and the Planned Compensation to the
Company by the Obligors, the Proposal on the Share Buyback and Cancellation and the
Decrease of the Registered Capital of the Company, and the Proposal on Revisions to the
Articles of Association of the Company and relevant Rules of Procedures. The 2019
Annual General Meeting held on May 20, 2020 reviewed and approved the aforesaid
three proposals. For details, please refer to Announcement on the Resolutions of the 25th
Meeting of the 8th Session of the Board of Directors (Announcement No.2020-21),
Announcement on the Overall Achievement of the Committed Performance Included in
the Major Assets Restructuring and the Planned Compensations to the Company by the
Obligors (Announcement No.2020-25) and Announcement on the Resolutions of the
2019Annual General Meeting (Announcement No.2020-31).
II. The Completion of Buyback and Cancellation of the Compensation Shares
1. Share Compensation Plan
1.1 Compensation for Performance Commitment
Within the context of the acquisition of ADAMA Agricultural Solutions Ltd.
(hereinafter referred to as “Solutions”) by the Company, the Company entered into a
Performance Compensation Agreement and two supplementary agreements (hereinafter
together “the Performance Compensation Agreement” ) with China National
Agrochemical Co., Ltd. (hereinafter referred to as “CNAC”) , then the 100% owner of
Solutions. CNAC made a commitment that Solutions’ adjusted aggregated net profit for
the 2017-2019 period attributed to the Company shall not be lower than USD 543.4137
million (USD 147.675 million, 173.3219 million and 222.4168 million in 2017, 2018 and
2019, respectively).
According to the audit report on the difference between the actual and committed net
profit of Solutions issued by Deloitte (special general partnership) (De Shi Bao (He) Zi
(18) No.E00079, (19) No.E00044, (20) No.E00020), the aggregated adjusted actual net
profit of Solutions for the 2017-2019 period was USD 512.6756 million, implying a
shortfall of USD 30.7381 million, a 94.34%t completion rate of the committed
performance.
According to the Performance CompensationAgreement，the number of shares to be
compensated by the obligor shall be calculated as follows:
（1）Total cumulative compensation amount at the end of the current period = (the
cumulative committed net profit amount as of the end of the current period USD
543.4137 million – the cumulative actual net profit amount as of the end of the current
period USD 512.6756 million) ÷the total committed net profit during the compensation
period USD 543.4137 million × RMB 18,471,006,998.16 (the consideration of the target
asset of the transaction).
（2）the number of shares to be compensated for the current year = the total amount
of accumulated compensation at the end of the current period RMB 1,044,809,249.77 ÷
10.20 yuan per share (the price of per share issued by the Company to CNAC for
acquiring its share equity in Solutions) – the cumulative number of shares already
compensated (0 shares).
According to the above formula, the number of shares to be returned to the
Company as compensation is 102,432,280 (“Compensation Shares”). The cumulative
cash dividend distributed during the profit compensation period generated from the
Compensation Shares shall be returned to the Company.
1.2Asset Impairment Compensation
According to the Audit Report on the Impairment Test of the Target Asset at the
Expiry of the Major Asset Restructuring Compensation Period (De Shi Bao (He) Zi (20)
No. E00021) issued by Deloitte (Special General Partnership), there is n
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