StockCode:000553(200553)  StockAbbreviation:ADAMAA(B)  AnnouncementNo.2019-16
                            ADAMALtd.

  AnnouncementontheAcquisitionof100%oftheEquityInterestsinJiangsu
      AnponElectrochemicalCo.,Ltd.,inaRelated-PartyTransaction

TheCompanyandallmembersoftheCompany’sBoardofDirectorsconfirmthatallinformationdisclosedhereinistrue,accurateandcomplete,withnofalseormisleadingstatementormaterialomission.
I.Overviewofrelated-partytransaction
ADAMALtd.(“Company”)intendstoacquire100%equityinterests(“TargetEquities”)inJiangsuAnponElectrochemicalCo.,Ltd.(“Anpon”)fromCNACInternationalCompanyLimited(“Seller”or“CNACInternational”).On[March19,2019],theCompanysignedtheEquityInterestTransferAgreementwiththeSellerandChinaNationalAgrochemicalCorporation(“SellerParent”or“CNAC”).
TheSellerParentisthecontrollingshareholderoftheCompany.TheSellerisawhollyownedsubsidiaryoftheSellerParent.ThereforebothpartiesaredeemedasrelatedpartiesoftheCompany,andthisTransactioniSARelated-partytransaction.
AccordingtotheListingRulesofShenzhenStockExchangeandtheArticlesofAssociationoftheCompany,thisTransactionshallbeapprovedbytheBoardofDirectorsoftheCompanyanddoesnotrequireshareholder’sapproval.The12thMeetingofthe8thsessionoftheBoardofDirectorsoftheCompanyhasapprovedthistransaction.AmongthefivedirectorsoftheCompany,thetworelated-partydirectors(Mr.YangXingqiangandMr.AnLiru)refrainedfromvoting,whilefromtheremainingthreedirectors,therewerethreeaffirmativevotes,zeronegativevotesandzeroabstentions.
TheIndependentDirectorshaveissuedtheirpriorwrittenconsentandindependentopinionsonthisTransaction.
ThisTransactiondoesnotconstituteaMaterialAssetsrestructuringasstipulatedby
ThisTransactionisnotsubjecttotheapprovalofshareholders’meeting.ChinaNationalChemicalCorporationLtd.,asthesupervisingauthorityofthestate-ownedassets,itsworkingmeetingofthegeneralmanagerhasapprovedthisTransaction.Ithasalsocompletedthefillingprocedureoftheassetsappraisal.
TheCompanywilltimelydisclosetherelevantinformationaccordingtotheprogressofthisTransaction.
II.Basicinformationoftherelatedparties
(I)CNACInternationalCompanyLimited
1.Basicinformation
(1)Companyname:CNACInternationalCompanyLimited
(2)Natureofenterprise:Privatelimitedcompany
(3)Registeredaddress:17/F,SHINGLEECOMMERCIALBUILDING,6-12WINGKUTSTREET,CENTRAL,HK
(4)Mainoffice:17/F,SHINGLEECOMMERCIALBUILDING,6-12WINGKUTSTREET,CENTRAL,HK
(5)Director:ChenHongbo
(6)Registeredcapital:RMB7,178,289,345.11
(7)BusinessregistrationcertificateNo.:53630355-000-01-18-9
(8)Mainbusiness:holdingandinvestment
(9)Controllingshareholder:CNAC
2.Keyfinancialfiguresofthelatestfinancialyear(Unaudited):
(1)Revenue:RMB0
(2)Netprofit:RMB-1,576.95million
(3)Netasset:RMB3,727.74million

Parent,thecontrollingshareholderoftheCompany.TheSellerandtheCompanyareundercommoncontroloftheSellerParent,andthereforetheSelleriSARelatedpartyoftheCompany.
4.Creditstatus:AftersearchingonthewebsiteofdisclosureofenforcementinformationofChina,theSellerisnotadis-honestpartysubjecttoenforcement.
(II)ChinaNationalAgrochemicalCorporation
1.Basicinformation
(1)Companyname:ChinaNationalAgrochemicalCorporation
(2)Natureofenterprise:Limitedliabilitycompany(soleproprietorshipbylegalperson)
(3)Registeredaddress:No.62,BeisihuanWestRoad,HaidianDistrict,Beijing
(4)Mainoffice:No.62,BeisihuanWestRoad,HaidianDistrict,Beijing
(5)Legalrepresentative:ChenHongbo
(6)Registeredcapital:RMB3,338,219,564.48
(7)Unifiedsocialcreditcode:91110000100011399Y
(8)Businessscope:Agrochemicalandchemicalproductsandchemicalraw
materials  (excluding  hazardous  chemicals);  procurements  and  sales  of
electromechanicalequipment,electricalequipment,automaticcontrolsystem,instrument,constructionmaterials,industrialsalt,naturalrubberandproducts,computersoftwareandhardware,officeautomationequipmentandtextilerawmaterials;salesoffertilizer;cargowarehousing;importandexportbusiness;technicalconsultant,service,developmentandtesting;productionofgeneticallymodifiedcropseeds(excludingthesixcentralareasofBeijingcity);salesofcropseeds,grassseedsandediblefungusstrains.(Thecompanyshalllawfullyandindependentlyselectitsbusinessprojectsandconductbusinessactivities;thebusinessactivitieswhichrequireapprovalsshallbeconductedafterobtainingsuchapprovalsfromrelevantauthoritiesinaccordancewiththeapprovedscopes;andthecompanyisprohibitedtoinvolvein
(9)Controllingshareholder:ChinaNationalChemicalCorporation
2.Keyfinancialfiguresofthelatestfinancialyear(Unaudited):
(1)Revenue:RMB  31,650.09million
(2)Netprofit:RMB500.60million
(3)Netasset:RMB25,569.92million
3.Related-partyrelationship:CNACisthecontrollingshareholderoftheCompany,whichisdeemedaSARelatedpartyoftheCompany.
4.Creditstatus:AftersearchingonthewebsiteofdisclosureofenforcementinformationofChina,CNACisnotadis-honestpartysubjecttoenforcement.
III.Basicinformationofthetargetoftherelated-partytransaction
(I)Overviewofthetargetassets
1.Targetassets:100%equityinterestsinAnponownedbytheSeller
2.Assetcategory:equityinvestment
3.Encumbrance:Nomortgage,pledgeoranyotherthird-partyclaimonthetransferredequities.Andthetransferredequityisnotinvolvedinanymajordisputes,lawsuits,arbitrations,freezeorotherjudicialmeasures.
4.Assetvalue:Basedontheassetsappraisalreport(ZhongFaPingBaoZi[2018]No.115)(“AppraisalReport”)issuedbyDeveChinaInternationalAppraisals(“DeveChina”)(whoisqualifiedtoconductbusinessinrelationtosecuritiesandfutures)forthisTransaction(thebenchmarkdateofwhichisDecember31,2017),theappraisalvaluationisalignedwiththeappraisalresultofasset-basedapproach.ThebookvalueofAnpon’snetassetisRMB384,645,000andtheappraisalvalueofAnpon’snetassetisRMB820,036,300.
Thebenchmarkdateoftheabove-mentionedAppraisalReportisDecember31,2017,whichhasalreadybeenexpired.IntheinterestsoftheCompanyandallits
interestsownedbyAnpon’sshareholders,andDeveChinaissuedanassetsappraisalreport(ZhongFaPingBaoZi[2019]No.013)(“UpdatedAppraisalReport”)(thebenchmarkdateofwhichisDecember31,2018).
ThebenchmarkdateoftheUpdatedAppraisalReportisDecember31,2018,Boththeasset-basedapproachandincomeapproachwereusedinthevaluationintheUpdatedAppraisalReport.Theappraisalvaluationisalignedwiththeappraisalresultoftheasset-basedapproach.BasedontheUpdatedAppraisalReport,asofDecember31,2018,Anpon’sbookvalueofnetassetisRMB447,647,400;theappraisedvalueofthenetassetisRMB879,938,100.Comparedwiththebookvalue,theappraisalvalueofnetassetincreasesbyRMB432,290,700,anincreaseof96.57%.
Basedontheappraisalvaluation(thebenchmarkdateofwhichisDecember31,2018),theappraisalvaluationofAnpondoesnothaveanyadverseeffectontheinterestsoftheCompanyanditsshareholders.Therefore,thepurchasepriceofthisTransactionwhichwasdeterminedtoalignwiththeappraisalvaluation(thebenchmarkdateofwhichisDecember31,2017)willnotharmtheinterestsoftheCompanyanditsshareholders,especiallytheminorityshareholders.ThepurchasepriceofthisTransactionisdeterminedasRMB820,000,000.
5.Maincorporatehistory
(1)Reorganizationandestablishment
Anpon(thepredecessorofwhichisQingjiangPesticidePlant)wasreorganizedandestablishedonNovember25,1998.Whenitwasestablished,thecompanynameofAnponwasJiangsuQingnongElectrochemicalCo.,Ltd.,theenterprisetypewaslimitedliabilitycompanyandtheregisteredcapitalwasRMB134,590,000.
(2)Capitaldecrease
InMay2003,Anpon’sregisteredcapitalwasreducedfromRMB134,590,000toRMB51,380,000afterobtainingawrittenresolutionofAnpon’sshareholders’meeting.ThereducedregisteredcapitalwasverifiedbyacapitalverificationreportissuedbyHuai’anXinruiAccountingFirm.
(3)Equitytransfer

correspondedtotheregisteredcapitalofRMB41,580,000)fromrelevantshareholdersafterobtainingawrittenresolutionofAnpon’sshareholders’meeting.
(4)Capitaldecrease
InMay2013,Anpon’sregisteredcapitalwasreducedfromRMB51,380,000toRMB41,580,000afterobtainingawrittenresolutionofAnpon’sshareholders’meeting.Thereducedregisteredcapital(i.e.19.0740%equityinterestsinAnpon,whichcorrespondedtotheregisteredcapitalofRMB9,800,000)wasownedbyAnpon’semployeeshareholdingassociation.Afterthiscapitaldecrease,AnponbecameawhollyownedsubsidiaryofCNAC.TheregisteredcapitalafterthiscapitaldecreasewasverifiedbyacapitalverificationreportissuedbyHuai’anXinruiAccountingFirm
(5)Capitalincrease
InApril2014,inaccordancewithCNAC’sshareholderresolution,Anpon’sregisteredcapitalwasincreasedfromRMB41,580,000to51,380,000,whichwasconductedbywayofconvertingcapitalreserveintopaid-upcapital.
(6)Equitytransfer
InApril2014,inaccordancewithCNAC’sshareholderresolution,CNACtransferred100%equityinterestsinAnponwhichwasownedbyCNACtotheSeller.Afterthisequitytransfer,Anponbecamealimitedliabilitycompany(whollyownedbyalegalpersonlocatedinTaiwanregion,HKandMacao).
(7)MergerofJiangsuMaidaoAgrochemicalCo.,Ltd.
InSeptember2015,theSellerconductedamergerofJiangsuMaidaoAgrochemicalCo.,Ltd.(“Maidao”)withAnpon.Anponcontinuedto  existafterthismergerandMaidaowasdissolved.Afterthismerger,Anpon’sregisteredcapitalisRMB251,380,000.
6.BasicinformationofAnpon
(1)Shareholdingstructure:TheSellerholdsandowns100%oftheequityinterests
(2)Businessscope:Producingchemicalmaterialsandchemicalproducts(ifbusinessactivitiesinvolvehazardouschemicals,precursorchemicalsorcontrolledchemicalswhichrequirelicenses,suchactivitieSARelimitedtothepermittedscopeasindicatedinrelevantlicensessuchasSafetyProductionLicense);producingchemicalproducts(formulations);wholesaleofhazardouschemicals(limitedtothescopeasindicatedinBusinessLicenseofHazardousChemicals);exploitingundergroundrocksalt;exportingself-producedpesticidesandchemicalproducts;inspectingweldedgascylinder;producingsteamandgeneratingelectricitywithwasteheat;producingandsellingpackagedgoods;printinglabelsofcarton;exportbusinessofself-producedproductsandtechnology;importbusinessofrawmaterials,machineryequipment,componentsandtechnologywhichareneededforproductionandresearch;supplyingself-producedhotwater(excludingdrinkingwater);pesticidebusiness(excludingprocessingandrepackingofpesticidesandpesticidesforsanitaryuse);(projectswhichrequireregulatoryapprovalsshallbeoperatedafterobtainingsuchapprovalsfromrelevantauthorities).
(3)Registeredcapital:RMB251,380,000
(4)Dateofestablishment:November25,1998
(5)Registeredaddress:No.30,HuagongRoad,Huai’an
(6)Keyfinancialfiguresofthelastyear(RMB):

    Keyfinancialfigures            AsofDecember31,2018/FY2018(Audited)

    Totalassets                                              1,395,561,859.48

    Totalliabilities                                              911,435,602.52

    Totalreceivables                                            183,349,526.73

    Totalamountofcontingency

    (including  lawsuits  and                                            0

    arbitrations)

    Netassets                                                  484,126,256.96

    Revenues                                                1,507,474,169.85

    Profits                                                      66,650,788.52

    Net  profits  attributable  to

                                                              48,014,469.95

    shareholders


    Net  profits  attributable  to

    shareholdersafterdeducting

                                                              43,865,570.00

    thenon-recurringgainsand

    losses

    Netcashflowsgeneratedfrom

                                                              297,287,837.58

    operatingactivities
(7)Creditstatus:AftersearchingonthewebsiteofdisclosureofenforcementinformationofChina,Anponisnotadis-honestpartysubjecttoenforcement.
(8)Auditstatus:RuihuaCertifiedPublicAccountantswhoisqualifiedtoconductbusinessinrelationtosecuritiesandfutureshasconductedauditonAnpon’sfinancialstatementsofFY2017and2018andissuedanauditreport(RuihuaShenZi[2018]No.02160124,RuihuaShenZi[2019]No.01580026).
(9)Appraisalstatus:DeveChinawhoisqualifiedtoconductbusinessinrelationtosecuritiesandfutureshasissuedanassetsappraisalreportforthisTransaction.ThebenchmarkdateofthisAppraisalReportisDecember31,2017.TheappraisalvaluationoftheTargetEquitiesisRMB820,036,300,whichisconcludedbytheappraisalresultofasset-basedapproach.Additionally,basedontheUpdatedAppraisalReport,asofDecember31,2018,theappraisedvalueofAnpon’snetassetisRMB879,938,100.
(10)WhetherAnponisprovidingguaranteeorfinancialsupportfortherelatedparties:
1）externalguarantee
Asofthedateofthisannouncement,AnponprovidesguaranteewithmaximumamountinfavorofJiangsuHuaiheChemicalsCo.,Ltd.,awhollyownedsubsidiaryoftheSeller,foraloanthedebtprincipalofwhichisnomorethanRMB50million.SuchguaranteewillbesettledpriortotheclosingdateofthisTransaction.
2)loan
Asofthedateofthisannouncement,CNACborrowedRMB8,529,126.62fromAnpon.SuchloanwillbesettledpriortotheclosingdateofthisTransaction.
Excepttheaboveguaranteeandloan,Anpondoesn’tprovideguaranteeorfinancial

        (11)TheArticlesofAssociationorotherdocumentsofAnpondonotcontain

        provisionsrestrictingtherightsofshareholdersotherthanlawsandregulations.

        IV.Pricingbasisoftherelated-partytransaction

        BasedontheAppraisalReportissuedbyDeveChina,thebenchmarkdateis

        December31,2017,andDeveChinahasadoptedtwoappraisalmethods:asset-based

        approachandincomeapproach.Theappraisalresultisbasedontheappraisal

        valuationofasset-basedapproach.Accordingtosuchappraisalvaluation,thebook

        valueofAnpon’snetassetisRMB384,645,000andtheappraisalvalueofAnpon’s

        netassetisRMB820,036,300.TheappraisalvalueofnetassetincreasesbyRMB

        435,391,300comparedtothebookvalue,anincreaseof113.19%.Basedonthe

        appraisalresult,theconsiderationofthisTransactionisdeterminedasRMB

        820,000,000.

        TheappraisalresultofAnpon’sassetsandliabilitiesisasfollow:

                                                        RMB(tenthousandyuan)

            Items              Bookvalue  Appraisalvalue  Amountofincreaseordecrease  Value-addedratio
                                    A          B                C=B-A            D=C/A×100
1  Currentassets                  69,736.79      70,803.56                    1,066.77            1.53
2  Non-currentassets              87,137.64    127,226.59                  40,088.95          46.01
3  Financialassetsavailableforsale          -              -                          -              -
4      Held-to-maturity                  -              -                          -              -
    investment

5      Long-termreceivables              -              -                          -              -
6      Long-termequity            1,000.00      15,910.71                  14,910.71        1,491.07
    investment

7      Realpropertyinvestment            -              -                          -              -
8      Fixedassets                75,788.40      91,768.34                  15,979.94          21.08
9      Constructionsinprogress      3,767.86      3,767.86                          -              -
10      Engineermaterials                  -              -                          -              -
11      Disposaloffixedassets              -              -                          -              -
12      Productivebiologicalassets          -              -                          -              -
13      Oilandgasassets                  -              -                          -              -
14      Intangibleassets            5,300.00      15,112.91                    9,812.91          185.15
15      Developmentexpenditure            -              -                          -              -
16      Goodwill                        -              -                          -              -
17      Long-termamortization        814.61        200.00                    -614.61          -75.45
    costs

18      Deferredincometaxassets      466.77        466.77                          -              -
19      Othernon-currentassets            -              -                          -              -
20  Totalassets                  156,874.43    198,030.15                  41,155.72          26.23
21  Currentliabilities              110,783.61    110,783.61                          -              -

23  Totalliabilities                118,409.93    116,026.52                  -2,383.41            -2.01
24  Netassets(ownershipinterests)    38,464.50      82,003.63                  43,539.13          113.19
        BasedontheAppraisalReport,theresultofasset-basedapproachisdifferentfrom

        thatofincomeapproach.ThedifferenceisRMB115,091,100andthedifferenceratio

        is14.03%.Theasset-basedapproachconsiderstheapproachofrepurchasingofassets

        andreflectsthereplacementvalueofcompany’scurrentassets.Theincomeapproach

        considersthecompany’sprofitabilityinthefutureandreflectsthecompany’soverall

        profitabilityofallassets.TheapproachesofthesetwomethodSARedifferentand

        thereforetheappraisalresultSARedifferent.Thefutureearningsforecastisbasedon

        thejudgementandestimationoffuturemacro-economicsandeconomicmarkets.Due

        totheuncertaintyofcurrenteconomicandmarketenvironment,therearemany

        uncertainfactorswhichwillaffectthecompany’sfutureincome.Itisdifficultto

        accuratelyforecastthefutureincome.Thereforetheappraisalresultisbasedonthe

        asset-basedapproach.

        Thebenchmarkdateoftheabove-mentionedAppraisalReportisDecember31,2017,

        whichhasalreadyexpired.IntheinterestsoftheCompanyandallitsshareholders,

        theCompanyengagedDeveChinatoappraisethevalueofallAnponequityinterests

        ownedbyAnpon’sshareholders,andDeveChinaissuedtheUpdatedAppraisalReport

        (thebenchmarkdateofwhichisDecember31,2018).

        ThebenchmarkdateoftheUpdatedAppraisalReportisDecember31,2018.Boththe

        asset-basedapproachandincomeapproachwereusedinthevaluationintheUpdated

        AppraisalReport.Theappraisalvaluationisalignedwiththeappraisalresultofthe

        asset-basedapproach.BasedontheUpdatedAppraisalReport,asofDecember31,

        2018,Anpon’sbookvalueofnetassetsisRMB447,647,400;theappraisedvalueof

        thenetassetsisRMB879,938,100.Comparedwiththebookvalue,theappraisal

        valueofnetassetincreasedbyRMB432,290,700,anincreaseof96.57%.

        V.Keytermsoftheagreementofrelated-partytransaction

        1.Consideration:RMB820,000,000

        2.Payment:Cashpayment

PaymentandtheConditionalPayment.TheClosingPaymentisRMB415,000,000andshallbepaidbytheCompanyonApril15,2019oratsuchotherplaceoratsuchothertimeoronsuchotherdateastheSellerandthePurchasermaymutuallyagreeuponinwriting..TheConditionalPaymentisRMB405,000,000andshallbepaidbytheCompanyonthetenth(10)BusinessDayfollowingthelaterof(x)deliverybythePurchaserofaRelocationCompletionNoticetotheSellerand(y)expirationofthefifth(5th)anniverSARyoftheClosingDate,whichissubjecttothebelowconditionsandterms:
(1)IftheNetRelocationCostsofAnponarelessthanRMB405,000,000,theamountoftheConditionalPaymentpayablebythePurchasertotheSellershallbereducedtothedifferencebetweentheNetRelocationCostsandRMB405,000,000andtherelevantinterestshallalsobepaidbythePurchaser.
(2)IftheNetRelocationCostsofAnponequalstoorexceedsRMB405,000,000,theobligationofthePurchasertopaytheConditionalPaymentshallbedeemedtohavebeendischargedinfullandthePurchasershallhavenoobligationtomakeanysuchpaymenttotheSeller.
(3)IfthereisnoNetRelocationCosts,thePurchasershallpaytotheSellerthefullConditionalPayment(RMB405,000,000)togetherwiththerelevantinterest.
4.Closingdate:TheclosingoftheTransactionshallnolaterthanMarch31,2019.
5.ThisAgreementshallcomeintoeffectuponthefollowingconditions:
(1)thisAgreementhasbeendulysignedbyallParties’legalrepresentativesorauthorizedrepresentativesandaffixedwithcompanychop;
(2)theCompany’sboardmeetingandshareholders’meeting(ifneeded)haveapprovedthisTransaction.
6.Attributionofeconomicbenefits:ThePartiesagreethat,(i)anyeconomicbenefits,profitsandinterestsgeneratedbyAnponanditssubsidiariesduringtheperiodstartingfromJanuary1,2018toDecember31,2018shallbeattributedtotheSeller;and(ii)anyeconomicbenefits,profitsandinterestsgeneratedbyAnponanditssubsidiariesduringtheperiodstartingfromJanuary1,2019totheClosingDate(“Transition
7.SourceofthePayment:TheCompanywillusetheraisedfundsRMB400.08millionfortheClosingPayment.Fordetails,pleaserefertotheAnnouncementontheChangeofCertainDesignatedProjectsdisclosedbytheCompanyonMarch21,2019.Fortherestpayment,theCompanyintendstouseitsowncapital.
VI.Purposeoftherelated-partytransactionandtheeffectsontheCompany
1.ThisTransactionwillhelpthecontrollingshareholderperformitscommitmentswithrespecttoavoidingandeliminatinghorizontalcompetition
TheacquisitionofAnponservestoeliminatehorizontalcompetitionbetweentheCompanyanditscontrollingshareholder.ThisistheperformanceofthecommitmentsmadebythecontrollingshareholderoftheCompanyintheMajorAssetsRestructuringReportin2017.Thecontrollingshareholdercommitted:“Thecompany’ssubsidiariesJiangsuAnponElectrochemicalCo.,Ltd.,JiangsuHuaiheChemicalCo.,Ltd.,JiangsuMaidaoAgrochemicalCo.,Ltd.,AnhuiPetrochemicalGroupCo.,Ltd.andJiamusiHeilongPesticideCo.,Ltd.anditssubsidiarieSARethesameorsimilartothoseofthemainbusinessoftheCompany.Inviewofthedomesticcompetitioninthesameindustry,thecompanypromisesthatinthenextfouryears,inaccordancewiththerequirementsofsecuritieslawsandregulationsandindustrypolicies,appropriatemethodsshallbeadoptedtograduallysolvethehorizontalcompetition."
In2017and2018,theamountofrelated-partytransactiononthepurchaseofrawmaterialsbetweentheCompanyandAnponisRMB136millionandRMB242million.Afterthecompletionoftheacquisition,suchtransactionsbetweentheCompanyandAnponwillnolongerberelated-partytransactionswhichservestosolvethehorizontalcompetitionandprotecttheinterestsoftheCompanyandpublicinvestors.
2.Anpon’smainbusinessissynergisticwiththatoftheCompany.
Anpon'smainbusinesshasahighdegreeofsynergywiththeCompany'smainbusiness.SignificantsynergieSARegeneratedbysellingAnpon'sAgChemproductsthroughAdama'sChinadomesticdistributionchannelsaswellasAdama'sbroadglobalnetwork.Inaddition,theCompanyhasalmostcompletedtheHuai'anPesticideFormulationCenterprojectwhichisexpectedtobefullyoperationalin2019.The
chainsynergy,realizetheintegrationofupstreamanddownstreambusinessoftheCompanyfromrawmaterialstoproducts,andfurtherpromotetherealizationoftheCompany’scorestrategywhichregardsChinaasasignificantglobalbusinesssupplybase.
ThisTransactionisinlinewiththeCompany'sbusinessdevelopmentstrategy,whichisconducivetotheCompany'sfurtherdevelopmentofthedomesticmarket,andfurtherenhancesitscorecompetitiveness.ThisTransactionisalsoinlinewiththeinterestsoftheCompanyandshareholders.
3.TheTransactionisamergerunderthesamecontrol.TheCompanywillconfirmtheinitialinvestmentcostaccordingtothebookvalueofnetassetsadjustedbytheaccountingpolicyoflistedcompanies.TheCompanywilladjustthecompany'scapitalreservebasedonthedifferencebetweenthebookvalueofnetassetsobtainedandtheconsiderationpaidTheCompany'scurrentprofitsandlosseswillnotbeaffected.
VII.Statusofallkindsofrelated-partytransactionsoccurredwithsuchrelatedpartiesfromthebeginningofFY2019
FromthebeginningofFY2019tothedateofthisannouncement,therelated-partytransactionsbetweentheCompanyandtherelatedpartieSARethetransactionsintheordinarybusinesscourse.TheshareholdersmeetingonMarch11,2019hasapprovedtheexpectedrelated-partytransactionsintheordinarycourseofbusinessin2019whichtotalamountshallnotexceed1,914.43million.
VIIIPotentialRisksandCounterMeasures
1、RisksoftheMarketandIndustryCompetition
Anpon'smainbusinessistheproductionandsalesofactiveingredientsandchemicalintermediates,andtheCompanyhasafullrangeofhighqualityandefficientherbicides,pesticidesandfungicides.TheacquisitionwillhelptheCompanyexpanditsproductsrangeandimprovethedistributionofagrochemicalproductsdomesticallyandabroad.However,inthefragmentedglobaloff-patentagrochemicalproductmarket,AnponandtheCompanyalsofacesfiercecompetitionandrisksrelatingto
promotethesharingofmarketandcustomerchannelsbetweentheCompanyandAnponaccordingtotheadvantagesofAnpon'sproducts,theproductsdifferentiation,andtheCompany'smanagementsoastoimproveandprotecttheoverallcompetitiveadvantageandprofitabilityofrelatedbusinessesandproducts.
2.RisksofRegistrationPolicy
Sincethetesting,productionandsalesofagrochemicalproductSAResubjecttostrictsupervision,includingtherequirementtoobtainandholdtheproductionlicensesrequiredforvariousproductsandtheregistrationcertificatesrequiredforthesale,andconsideringtheenvironmentalprotectionauthorityhastendedtoapplymorestringentsurveillanceinrecentyears,  thereforetheapplicableregulatoryrequirementsandregulatoryenvironmentmaychangefromtimetotimewhichmayresultintherisksthataffecttheproductionandsalesoftheproducts.TheCompanyhasbuiltacomprehensiveproductregistrationteamaroundtheworld,continuouslyassessingtheregulatorycomplianceofthecountriesinwhichtheproductSAResold,andcontinuallymodifyingtheapplicableregistrationcontenttoavoidproductsalesthatdonotcomplywithregulatoryrequirements.Thecompanywillcontinuetostrivetomeetenvironmentalregulatoryrequirementsbybuilding,operatingandtransformingitsproductionandenvironmentalprotectionfacilities.
3.RisksofBusinessIntegration
Afterthecompletionofthetransaction,theCompanywillhold100%oftheequityofAnpon.  WhetherthecompanycansuccessfullyintegrateAnponbusinessremainssubjecttocertainuncertainties.TheCompanywillreducetheserisksbymanagingthecombinedChinabusinessbasedonglobalmanagementandtheChineseteam,andconstantlyimprovingtheoperations,governanceandinternalcontrolofAnpon.
4.RisksofFinancialIntegration
AfterthecompletionofthisTransaction,theCompanyandAnponneedtoalignintheaspectsoffinancialsystem,investment,financingmethods,fundmanagement,profitmanagement,whichwillentailrisks.Inordertoreducesuchrisks,theCompanywillworkwithAnpontoactivelydefinethefinancialauthority,financialpositionsandfunctions,fundmanagementpolicyandinformationdisclosurepolicy,andprovidethe
asthescopeofthecoreissuesofAnpon.
5.RisksofAssetsAppraisal
SectionIIIofthisannouncementelaboratestheappraisalsituationofAnponassets.AlthoughtheAppraiser’sassumptionsonthevaluationofassetsfollowedtheprincipleofprudence,thereisstillariskthattheassetsvaluationmaybeunreasonablyhigherthanthenetassetsvalueofthebook.
IX.Priorconsentandindependentopinionsofindependentdirectors
1.TheIndependentDirectorshavegivenpriorconsenttothisTransaction:thisTransactionisallowedtobesubmittedtotheboardmeetingfordeliberationandapproval.
2.TheIndependentDirectorshaveissuedindependentopinionsonthisTransaction:related-partydirectorshaveabstainedfromvotingwhendeliberatingandapprovingthisTransactionandthevotingprocedureshavecompliedwithrelevantlawsandregulations.ThisTransactionisalignedwiththeCompany’sstrategiesofbusinessoperationanddevelopmentandisintheinterestsoftheCompanyanditsshareholders.ThisTransaction’sconsiderationisbasedontheappraisalresultprovidedintheAppraisalReport,whichisissuedbyaqualifiedappraiserandhasbeenfiledwithcompetentstate-ownedregulatoryauthority.TheconsiderationthereforeisfairanddoesnotdamagetheinterestsoftheCompanyanditsshareholders.
X.Independentfinancialadvisor’sopinions
Afterverification,theindependentfinancialadvisorissuedthefollowingopinions:ThisTransactionishelpfultoeliminatethecompetitionbetweenAnponandtheCompany.ThisTransactionconformstotheCompany'sbusinessdevelopmentstrategyandtheinterestsoftheCompanyanditsshareholders.Theconsiderationisbasedontheevaluationreportissuedbytheappraisalagencywiththequalificationofsecuritiesandfuturespractitioners,andfollowstheprincipleoffairnessandreasonableness.ItdoesnotharmtheinterestsoftheCompanyanditssmallandmedium-sizedshareholders,anddoesnotaffecttheindependenceoftheCompany.
ThisTransactionisapprovedbythe12thmeetingofthe8thBoardofDirectorsandthe
voting.Theindependentdirectorshaveexpressedtheirconsent.ThereviewproceduresconformtotherelevantprovisionsoftheCompanyLawandtheArticlesofAssociationoftheCompany.TheindependentfinancialadviserhasnoobjectiontothisTransaction.
XI.Filingdocuments
1.Resolutionofthe12thmeetingofthe8thsessionoftheBoardofDirectorsoftheCompany
2.ConsentoftheIndependentDirectors
2.PriorconsentoftheIndependentDirectors
4.EquityInterestTransferAgreement
5.AuditReport(RuihuaShenZi[2018]No.02160124,RuihuaShenZi[2019]No.01580026)
6.AppraisalReport(ZhongFaPingBaoZi[2018]No.115),UpdatedAppraisalReport(ZhongFaPingBaoZi[2019]No.013)
7.Guotai’sopinion
Itisherebyannounced.

                                      BoardofDirectorsoftheCompany
                                                      March21,2019