Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2025-9
ADAMA Ltd.Announcement on the Proposed Change of Accounting Firm
Special Reminder:
1. Name of the proposed accounting firm to be engaged: KPMG Huazhen CertifiedPublic Accountants LLP (hereinafter referred to as "KPMG Huazhen");
2. Name of the former accounting firm: Deloitte Touche Tohmatsu Certified PublicAccountants LLP (hereinafter referred to as "Deloitte Huayong");
3. Reason for the proposed change of accounting firm: Deloitte Huayong has beenproviding audit services to the Company for 8 consecutive years. According to therelevant provisions of the " Measures for Selecting Accounting Firms for State ownedEnterprises and Listed Companies" (Caikuai [2023] No. 4), taking into account theactual situation of the Company and the demand for future audit services, it is proposedto engage KPMG Huazhen as the audit firm for the Company in 2025;
4. This change of accounting firm complies with the provisions of the "Measures forthe Selection and Appointment of Accounting Firms by State owned Enterprises andListed Companies" (Caikuai [2023] No. 4) issued by the Ministry of Finance, the Stateowned Assets Supervision and Administration Commission of the State Council, andthe China Securities Regulatory Commission;On March 12, 2025, Adama Ltd. (hereinafter referred to as the "Company" or "theCompany") held the 10th meeting of the 10th Board of Directors and approved the"Proposal on Change of Accounting Firm and Appointment of the Audit Firm for theAudit of Financial Statements and Internal Control for the Year 2025". The Companyintends to appoint KPMG Huazhen as the audit firm for the year 2025. This proposal
still needs to be submitted for review and approval at the Company's 2024 annualgeneral meeting of shareholders. The specific details are hereby announced as follows:
I. Basic information of the proposed accounting firm to be engaged
1. Basic information
KPMG Huazhen was established on 18 August 1992 in Beijing. On 5 July 2012, it wasapproved by the Ministry of Finance and other authorities to convert its businessproperty into a limited liability partnership. The business license was obtained on 10July 2012 and the partnership business officially stated on 1 August 2012.The headquarter office of KPMG Huazhen is located in Beijing, with registered addressat 8th floor, East Building 2, Oriental Plaza, No.1 East Chang'an Avenue, DongchengDistrict, Beijing.The chief partner of KPMG Huazhen is Mr. Zou Jun, who is of Chinese nationality andholds the qualification of a Chinese Certified Public Accountant.As of the end of 2024, KPMG Huazhen had 241 partners, and 1,309 CPAs amongwhom more than 300 CPAs have signed audit report for securities services business.The total audited revenue of KPMG Huazhen in 2023 exceeded RMB 4.1 billion, ofwhich revenue from the audit business exceeded RMB 3.9 billion (including revenuefrom domestic statutory securities service exceeding RMB 900 million, revenue fromother securities services of approximately RMB 1 billion, with the total revenue fromsecurities service exceeding RMB 1.9 billion).KPMG Huazhen provides audit services on the 2023 annual reports for 98 listedcompanies, with a total audit service fee of RMB 538 million. The main industries ofthe listed companies that KPMG Huazhen served are manufacturing, finance,telecommunication, software and information technology, electricity, heat, gas andwater production and supply, transportation, warehousing, storage and postal,wholesale and retail, mining, real estate, scientific research and technology services,agriculture, forestry, animal husbandry, fisheries, leasing and business services, waterconservancy, environmental and public facility management, as well asaccommodation and catering. Among the listed companies KPMG Huazhen served forthe 2023 annual audit, there are 53 listed companies in the same industry as theCompany.
2. Investor Protection
The cumulative compensation limit of occupational insurance purchased by KPMGHuazhen exceeds RMB 200 million, which is in compliance with relevant regulations.In the past three years, KPMG Huazhen has undertaken civil liabilities in civillitigations related to its professional behavior including in 2023, a bond related civillitigation case was concluded, and the final judgment was that KPMG Huazhen borecompensation liabilities at a rate of 2% -3% (approximately RMB 2.7 million), and thecase has been fully settled.
3. Integrity Record
As presented to the Company by the auditor, neither KPMG Huazhen nor any of itsemployees, has been subject to any criminal penalty for their professional conduct, aswell as self-regulatory measure or disciplinary punishment by self-regulatoryorganizations such as stock exchanges and industry associations in the past three years.KPMG Huazhen previously received administrative regulatory measures of warningletter once, involving four employees. According to relevant laws and regulations, theaforementioned administrative regulatory measures are not administrative penalties anddo not affect KPMG Huazhen's continued undertaking or execution of securities servicebusiness and other businesses.II. Engagement Information
1. Basic Information
The basic information of the engagement partner, signing certified public accountant,and engagement quality control reviewer for KPMG Huazhen to undertake the audit ofthe financial statements of the Company for the year 2025 is as follows:
The engagement partner, Wang Jia, obtained the qualification of Chinese CertifiedPublic Accountant in 2008. Started practicing at KPMG Huazhen in 2004, engaged inauditing of listed companies from 2004, and will provide audit services to the Companyfrom 2025 onwards. Wang Jia has not signed or reviewed audit reports of listedcompanies in the past three years.The signing certified public accountant of this project, Wang Shan, obtained thequalification of Chinese certified public accountant in 2018. Started practicing atKPMG Huazhen in 2008, engaged in auditing of listed companies since 2008, and will
provide audit services to the Company from 2025 onwards. Wang Shan has signed orreviewed 2 audit reports of listed companies in the past three years.The quality control reviewer for this engagement, Chen Yuhong, obtained thequalification of Chinese Certified Public Accountant in 1994. Started practicing atKPMG Huazhen in 1992, engaged in auditing of listed companies in 1994, and willprovide audit services to the Company from 2025 onwards. Chen Yuhong has signedor reviewed 4 audit reports of listed companies in the past three years.
2. Integrity Record
As presented to the Company by the auditor, the abovementioned personnel fromKPMG Huazhen have not been subject to criminal penalties, administrative penalties,self-regulatory measures or any punishment due to the violation of self-disciplinerequirements published by the authorities.
3. Independence
KPMG Huazhen and abovementioned engagement partner, signing certified publicaccountants, and engagement quality control reviewer have no circumstances that mayaffect independence.
4. Audit Service Fee
The audit service fee is determined based on the time cost of the partners and otheremployees of KPMG Huazhen consumed on this audit engagement, which taking intoaccount the responsibilities and risks of professional services and other factors as well.In 2025, the management of the Company will negotiate with KPMG Huazhen todetermine the audit service fees based on factors such as the audit scope and workloadof the auditors.III. Explanation on the Proposed Change of Accounting Firm
1. Information of the former accounting firm and the audit opinion of the previousyearDeloitte Huayong, the former accounting firm of the Company, has provided annualaudit services for the Company for 8 consecutive years and issued standard unqualifiedaudit opinions on the Company's 2024 financial report and the effectiveness of the
internal controls related to financial reporting for 2024. The Company did not dismissthe former accounting firm after engaging it to carry out some of the audit work.
2. Reason for proposed change of accounting firm
According to the relevant provisions of the "Measures for the Selection andAppointment of Accounting Firms by State owned Enterprises and Listed Companies"(Caikuai [2023] No. 4), considering that Deloitte Huayong has provided audit servicesto the Company for 8 consecutive years and taking into account the actual situation ofthe Company and the needs for future audit services, it is proposed to appoint KPMGHuazhen as the audit firm for the Company in 2025.
3. Communication between the listed company and the accounting firmsThe Company has communicated with the former and the succeeding accounting firmsregarding the proposed change of accounting firm. Both parties are aware of this matterand have no objections to this change. The former and the succeeding accounting firmswill actively communicate and cooperate in accordance with relevant regulations suchas the "Chinese Auditing Standards No. 1153- Communication between the Former andthe Succeeding Certified Public Accountants".IV. Approval process for the proposed change of accounting firm
1. Audit Committee's approval
On March 10, 2025, the Company held the first meeting of the Audit Committee of theBoard of Directors in 2025, and approved the "Proposal on Change of Accounting Firmand Appointment of the Audit Firm for the Audit of Financial Statements and InternalControl for the Year 2025". The Audit Committee of the Board of Directors has fullyunderstood and reviewed the professional competence, investor protection ability,integrity, and independence of KPMG Huazhen, and believes that it can meet therequirements of providing audit services to the Company. The reasons for changingaccounting firm are legitimate and sufficient. It is agreed to submit the proposal to theBoard of Directors for review and approval.
2. Board of Directors’ approval
On March 12, 2025, the Company held the 10th meeting of the 10th Session of Boardof Directors to review and approve the "Proposal on Change of Accounting Firm and
Appointment of the Audit Firm for the Audit of Financial Statements and InternalControl for the Year 2025". The Board of Directors approved the proposal with 6 votesin favor, 0 votes against, and 0 abstentions, agreeing to appoint KPMG Huazhen as theCompany's audit firm for 2025.
3. Supervisory Board’s approval
On March 12, 2025, the Company held the 4th meeting of the 10th Board of Supervisorsto review and approve the "Proposal on Change of Accounting Firm and Appointmentof the Audit Firm for the Audit of Financial Statements and Internal Control for theYear 2025". The Board of Supervisors approved the proposal with 3 votes in favor, 0votes against, and 0 abstentions, and agreed to appoint KPMG Huazhen as theCompany's audit firm for 2025.
4. Effective Date
The change of accounting firm still needs to be submitted to the Company's generalmeeting of shareholders for review and approval, and will take effect from the date ofapproval by the Company's general meeting of shareholders.V. Documents for Future Reference
1. The resolutions of the Audit Committee
2. The resolutions of the 10th Meeting of the 10th Session of the Board of Directors ofthe Company
3. The resolutions of the 4th Meeting of the 10th Board of Supervisors of the Company
4. The basic information of the engaged accounting firm
It’s hereby announced.
Board of Directors of ADAMA Ltd.
March 14, 2025