Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2024-28
ADAMA Ltd.
Announcement on the Arbitration Matters about Fulfillment of
Performance Commitments Related to a Controlled Subsidiary
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 recording,
misleading statement or material omission.
Key Points:
1. Progress of the arbitration case
Shanghai International Economic and Trade Arbitration Commission (Shanghai
International Arbitration Centre) has accepted but not yet heard the case.
2. The standing of the listed company in the case: theApplicant
3. Value involved in the case
The Applicant requested the payment of price adjustment of RMB 64,535,827 yuan,
compensation for corresponding losses and all costs incurred for initiating the
arbitration, including fees for the attorney and the arbitration.
4. Impact on the profit and losses of the listed company
Since the arbitration has not yet been heard, the conclusion and its impact on the
Company's profits and losses cannot be reliably measured yet.
I. Basic information on Acceptance of theArbitration Matter
ADAMA Ltd. (hereinafter referred to as “the Company”, “ADAMA” or the
“Applicant” ) received on May 8th, 2024 the “Notice of Acceptance of Arbitration Case
in respect of Disputes relating to the Equity Purchase Agreement (6.11.2019), the
Supplementary Agreement to the Equity Purchase Agreement (26.2.2020) and the
Supplementary Agreement to the Equity Purchase Agreement (II) (28.10.2020)”[Shang
Guo Zhong (2024) No. 1292] issued by Shanghai International Arbitration Centre
(hereinafter referred to as the “Arbitration Commission”). The arbitration application
filed by the Company as the Applicant to the Arbitration Commission against Jiangsu
Huifeng Bio-agriculture Co., Ltd. (hereinafter referred to as the “Respondent” or
“Jiangsu Huifeng”) as the claimant has been accepted.
Basic information about the arbitration institution and the parties to the arbitration is
presented as follows.
(I) Arbitration Institution
Name of the Arbitration Institution: Shanghai International Economic and Trade
Arbitration Commission (Shanghai International Arbitration Centre)
(II) Parties to theArbitration
1.Applicant:ADAMA Ltd.
2. Respondent: Jiangsu Huifeng
Legal representative: Zhong Hangen
RegisteredAddress: South ofWanggangzha, DafengDistrict,YanchengCity, Jiangsu
Province, China
II. Background Information of theArbitration
(I) Facts and Causes of the Dispute
On25March,2024,the“ProposalonRealization ofPerformanceCommitments related
to a Controlled Subsidiary” was considered and approved by the 30th Meeting of the
9th Session of the Board of Directors of the Company. Pursuant to the Supplementary
Agreement signed between the Company and Jiangsu Huifeng, Jiangsu Huifeng
undertakes that the average annual gross profit of ADAMA Huifeng (Shanghai)
generated by the business of Nongyi E-commerce (Beijing) Co., Ltd. (“Nongyi”), a
minority-owned company of Jiangsu Huifeng and Nongyi’s subsidiaries (hereinafter
referred to as the “Nongyi Business”) for the year of 2021, 2022 and 2023 (“Gross
Profit by Nongyi Business") should be at least RMB 8.6 million (“Nongyi Business
Benchmark”). IftheGrossProfitbyNongyi BusinessfailstoreachtheNongyi Business
Benchmark, Jiangsu Huifeng should pay the price to the Company in accordance with
the following formula: the payable value by Jiangsu Huifeng (“Price Adjustment
Payment”) = (Nongyi Business Benchmark – Gross Profit by Nongyi Business) x 13.
In addition, Jiangsu Huifeng should be liable for all the taxes and expenses which the
Company will bear due to the PriceAdjustment Payment. The gross profit ofADAMA
Huifeng (Shanghai) arising from the Nongyi Business during the period from 2021 to
2023 totaled RMB 10,907,117 yuan, with an average annual gross profit of RMB
3,635,706 yuan, meaning Jiangsu Huifeng should pay the Price Adjustment Payment
of RMB 64,535,827 yuan to the Company.
For details of the aforesaid, please refer to the “Announcement of Resolutions of the
30th Meeting of the 9th Session of the Board of Directors” (Announcement No. 2024-
4), “Announcement on the Fulfillment of Performance Commitments Related to a
Controlled Subsidiary (Announcement No. 2024-9) ” and the Special Report on
Difference between Actual and Promised Gross Profits for Purchase of ADAMA
Huifeng (Shanghai) Agricultural Technology Co., Ltd. (De Shi Bao (He) Zi (24) No.
E00116) issued by Deloitte (Special Ordinary Partnership).
On February 21st, 2024, the Company issued the “Notification Letter Regarding the
PriceAdjustment Payment related to the Performance Commitment of Nongyi Business”
to Jiangsu Huifeng, requesting the entity to pay the PriceAdjustment Payment of RMB
64,535,827 yuan within five working days commencing from 18 February 2024. On
April 26th, 2024, the Company issued
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