Stock Code: 000553(200553) Stock Abbreviation: ADAMA A (B) NO. 2025-43
ADAMA Ltd.
Announcement on Expected Derivatives Transactions for
Hedging
The Company and all members of the Company’s Board of Directors confirm that all information
disclosed herein is true, accurate, complete, with no false or misleading statement or material
omission.
Important Notes:
• In order to offset the impact of foreign exchange rate and CPI fluctuations on the Company’s
financial indicators, the Company expects to continue to conduct derivatives transactions for
hedging in 2026. The derivatives transactions of the Company are for the purpose of hedging
only and will match the size and term of the accounting exposure and economic exposure of the
Company.
• All the Company’s hedging transactions are through banks in certain countries where the
Company is present. The hedging tools include (inter alia) Forwards, Swaps, Loans and
Deposits, Options, Exotic Options, and Options Strategies (including sell and buys).
• The Company expects that the maximum outstanding contract value of derivatives transactions
on any single trading day in the twelve months since the approval by the Shareholders’
Meeting (validity duration) should not exceed USD 5 billion. The transaction limits shall be
valid and can be recycled within the validity duration.
• The 17th Meeting of the 10th session of the Board of Directors of the Company and the 5th
Meeting of the Audit Committee of the Board of Directors in 2025 considered and approved
the Proposal on the Expected Derivatives Transactions for Hedging. In accordance with the
provisions of the Articles of Association and relevant laws and regulations, the proposal is yet
to be submitted to the shareholder meeting for consideration.
• Hedging transactions have market, liquidity and performance risks, etc. Investors are reminded
to pay attention to investment risks.
On December 22nd, 2025, the 17th Meeting of the 10th session of the Board of Directors of ADAMA
Ltd. (hereinafter referred to as “the Company”) considered and approved the Proposal on Expected
Derivatives Transactions for Hedging, as follows,
I. Overview of the Transactions
The Company and its subsidiaries (hereinafter combined as “the Company”) conducts crop
protection business in dozens of countries globally, with direct presence in all Top-20 markets. In
many countries, the business is settled in local currencies while the relevant local subsidiaries are
nominated in USD. In addition, one of the Company’s major subsidiaries issued corporate bonds
denominated in Israeli Shekel and linked to Israeli CPI. Given the global nature of its operational
activities and the composition of its assets and liabilities, the Company, in the ordinary course of its
business, uses derivatives to hedge mainly two exposures related to foreign exchange rates and CPI,
• Accounting Exposure----the currency exposure arising from currency exchange rate fluctuation
effect on the value of monetary assets and liabilities in the balance sheet which are
denominated to currencies that are different from the reporting currency or indexed to the CPI
of the applicable subsidiaries nominated in USD.
• Economic Exposure----the business exposure to changes in profit or loss arising from future
income and expenses that is in different currencies than the reporting currency of the applicable
subsidiaries, and which were not recorded in the accounting system (such as due to signed
contract, binding offers, open orders, work plan, acquisitions and investments).
All the derivatives transactions of the Company are for the purpose of hedging only. They match
the size and terms of the accounting and economic exposure of the Company.
Based on 2026 Work Plan, the Company expects that the maximum outstanding contract value of
derivatives transactions on any single trading day in 2026 (in the twelve months since the approval
by the Shareholders’ Meeting) held by the Company shall not exceed USD 5 billion. The
transaction amount (including the proceeds of the aforesaid transactions used to trade again) at any
point during this period shall not exceed the above approved estimation.
The expected trading margin ratio for derivatives business shall not exceed 2.5% of the maximum
contract value (including the value of collateral provided for the transaction, the credit line of the
financial institution expected to be occupied, and the margin reserved for contingency measures).
Since the Company’s global business involves settlement of many local currencies and is thus
exposed to foreign exchange rates of various local currencies vs. USD, it conducts hedging
transactions through qualified well-known banks in certain countries where relevant.
The derivatives to be used in hedging transactions include,
• High effective tools – including (inter alia) Forwards, Swaps, Loans and deposits.
• Low effective tools – including (inter alia) Options, Exotic options, Options strategies
(includes sell and buys).
The authorization shall be valid in the twelve months since its approval by the Shareholders'
Meeting and can be recycled within the valid period.
The Company utilizes its own funds for hedging transactions and does not involve raised funds
through equity placement.
II. Deliberation Procedures
On December 22nd, 2025, the 17th Meeting of the 10th session of the Board of Directors of the
Company considered and approved the Proposal on Expected Derivatives Transactions for Hedging.
It had been approved by the 5th Meeting of the Audit Committee of the Board of Directors in 2025.
In accordance with the provisions of the Articles of Association and relevant laws and regulations,
this proposal is yet to be submitted to the Shareholders’ Meeting for consideration and approval.
The Board of Directors seeks the Shareholders’ Meeting to authorize the management of the
Company and their authorized persons to execute the matter of derivatives hedging transactions,
including signing relevant agreements and documents. The transactions do not constitute
related-party transactions and there is no need to go through procedures for related-party
transactions.
III. Risk Analysis and Control Measures
i. Risk Analysis
has been complicated and volatile with ongoing geopolitical conflicts escalating, may cause drastic
fluctuations in exchange rates and consumer price index and result in significant increase in the
Company's hedging costs and consequently, potential losses.
involve customer credit as is customary in each market. A portion of these credit lines is insured,
while the remainder are exposed to risk, particularly during economic slowdowns in the relevant
markets. Any overdue accounts receivable from customers, or failure of money collection within
the forecasted payback period may affect the Company's cash flow and result in the actual cash
flow incurred not being able to fully match the term or amount of the foreign exchange derivatives
business that has been operated.
and its relevant subsidiaries’ collection and payment in foreign currency as well as assets and
liabilities in local and foreign currencies. Such transactions do not take up the available funds, but
there is the risk of having to pay spreads to the banks due to losses on closing out and chopping
down positions for various reasons.
trading are banks with good credit and long-term business relationship, so the occurrence of such
risk is relatively low.
result in improper execution of contracts and bring losses to the Company.
ii. Risk Control Measures
control system for managing foreign exchange and index risk hedging, which clearly stipulates the
principles, approval authority, operating institutions and processes as well as risk control procedures
of the derivatives transactions, to ensure a comprehensive supervision over each link from
pre-emptive prevention, in-process monitoring to post-processing.
banks with compliant qualifications and good credibility, strictly follows the laws and regulations in
the relevant fields in each country to avoid possible legal risks and fully takes into account
settlement, liquidity and FX volatility related to the transactions.
and transactions in a timely manner through weekly, monthly and quarterly meetings; any
significant change in the market or significant floating losses, whenever it occurs, will be timely
reported to the Company's management team and to the Board of Directors as appropriate, so as to
activate a contingency mechanism to respond and handle the situation appropriately.
system) theoretical pricing and/or banks/brokers quotes, as the case may be.
and transactions.
transactions and is responsible for monitoring and checking the compliance of both the Company
and its subsidiaries in the decision-making, management and execution of relevant transactions.
IV. Relevant Accounting Treatment
The Company should account for and disclose the derivatives transactions according to Accounting
Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments, No. 24 – Accounting for Hedging, No. 37 – Presentation of Financial Instruments, and
No. 39 - Fair Value Measurement, and relevant regulations and their guidelines.
V. Documents for Reference
Board of Directors of ADAMA Ltd.
December 23, 2025
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