ADAMA Ltd.
ENGLISH TRANSLATION OF FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2026
ADAMA Ltd.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2026
CONTENTS PAGES
THE CONSOLIDATED AND COMPANY'S BALANCE SHEETS 1-3
THE CONSOLIDATED AND COMPANY'S INCOME STATEMENTS 4-5
THE CONSOLIDATED AND COMPANY'S CASH FLOW STATEMENTS 6-7
THE CONSOLIDATED AND COMPANY'S STATEMENTS
OF CHANGES IN SHAREHOLDERS' EQUITY 8 - 10
NOTES TO THE FINANCIAL STATEMENTS 11 – 116
ADAMA Ltd.
(Expressed in RMB '000)
Consolidated Balance Sheet
June 30 December 31
Notes 2026 2025
Current assets
Cash at bank and on hand V.1 2,906,052 3,450,300
Financial assets held for trading V.2 2,711 1,223
Derivative financial assets V.3 228,492 449,379
Bills receivable V.4 256,325 358,489
Accounts receivable V.5 7,781,302 7,124,736
Receivables financing V.6 78,314 30,767
Prepayments V.7 309,064 368,012
Other receivables V.8 776,266 1,076,164
Inventories V.9 11,280,787 11,607,842
Other current assets V.10 965,692 1,094,273
Total current assets 24,585,005 25,561,185
Non-current assets
Long-term receivables V.11 203,183 118,203
Long-term equity investments V.12 42,820 39,312
Other equity investments V.13 127,475 129,796
Investment properties 18,053 18,869
Fixed assets V.14 9,635,349 10,073,551
Construction in progress V.15 713,670 897,175
Right-of-use assets V.16 562,738 661,443
Intangible assets V.17 3,981,086 4,302,343
Goodwill V.18 4,814,486 4,964,450
Deferred tax assets V.19 1,526,168 1,294,176
Other non-current assets V.20 439,056 403,459
Total non-current assets 22,064,084 22,902,777
Total assets 46,649,089 48,463,962
-1-
ADAMA Ltd.
(Expressed in RMB '000)
Consolidated Balance Sheet (continued)
June 30 December 31
Notes 2026 2025
Current liabilities
Short-term loans V.21 5,763,384 6,673,792
Derivative financial liabilities V.22 249,837 189,581
Bills payable V.23 605,314 622,660
Accounts payable V.24 5,048,131 5,461,749
Contract liabilities V.25 1,515,640 1,789,490
Employee benefits payable V.26 734,607 936,724
Taxes payable V.27 571,720 539,168
Other payables V.28 1,523,019 1,418,093
Non-current liabilities due within one year V.29 3,794,710 3,825,203
Other current liabilities V.30 898,096 929,259
Total current liabilities 20,704,458 22,385,719
Non-current liabilities
Long-term loans V.31 1,152,479 1,507,514
Debentures payable V.32 5,138,114 4,894,076
Lease liabilities V.33 652,730 751,226
Long-term payables 153,307 164,735
Long-term employee benefits payable V.34 559,208 536,895
Provisions V.35 421,488 424,347
Deferred tax liabilities V.19 231,286 224,024
Other non-current liabilities V.36 - -
Total non-current liabilities 8,308,612 8,502,817
Total liabilities 29,013,070 30,888,536
Shareholders' equity
Share capital V.37 2,329,812 2,329,812
Capital reserve V.38 12,867,123 12,867,123
Other comprehensive income V.39 1,218,425 1,570,748
Special reserves 8,705 6,156
Surplus reserve V.40 298,610 298,610
Retained earnings V.41 913,344 502,977
Total equity attributed to the shareholders 17,636,019 17,575,426
of the company
Non-controlling interests - -
Total Equity 17,636,019 17,575,426
Total liabilities and equity 46,649,089 48,463,962
Gael Hili Efrat Nagar
Legal representative Chief Financial Officer
These financial statements were approved by the Board of Directors of the Company on August 17, 2026.
The notes form part of these financial statements.
-2-
ADAMA Ltd.
(Expressed in RMB '000)
Company's Balance Sheet
June 30 December 31
Notes 2026 2025
Current assets
Cash at bank and on hand XV.1 152,578 64,964
Bills receivable 74,268 112,369
Accounts receivable XV.2 2,005,930 1,636,608
Receivables financing XV.3 26,915 10,490
Prepayments 24,350 92,227
Other receivables XV.4 23,722 26,434
Inventories 169,629 210,072
Other current assets 53,046 14,923
Total current assets 2,530,438 2,168,087
Non-current assets
Long-term equity investments XV.5 17,430,716 17,430,716
Other equity investments 54,299 54,299
Investment properties 1,248 1,522
Fixed assets 1,181,097 1,252,804
Construction in progress 25,474 10,184
Right-of-use assets 790 1,354
Intangible assets 221,238 227,391
Deferred tax assets 34,870 46,359
Other non-current assets 242,671 230,156
Total non-current assets 19,192,403 19,254,785
Total assets 21,722,841 21,422,872
Current liabilities
Short-term loans 626,532 418,692
Bills payables 213,636 155,220
Accounts payables 258,330 280,455
Contract liabilities 10,458 21,420
Employee benefits payable 5,678 9,800
Taxes payable 2,677 3,171
Other payables 770,039 778,254
Non-current liabilities due within one year 19,631 13,930
Other current liabilities 116,585 116,585
Total current liabilities 2,023,566 1,797,527
Non-current liabilities
Long-term loans 631,000 642,000
Lease liabilities 162 443
Long-term employee benefits payable 61,320 63,175
Provisions 24,615 24,871
Total non-current liabilities 717,097 730,489
Total liabilities 2,740,663 2,528,016
Shareholders’ equity
Share capital V.37 2,329,812 2,329,812
Capital reserve 15,523,881 15,523,881
Other comprehensive income 24,916 24,916
Special reserves 9,396 6,847
Surplus reserve V.40 298,610 298,610
Retained earnings 795,563 710,790
Total shareholders’ equity 18,982,178 18,894,856
Total liabilities and shareholders’ equity 21,722,841 21,422,872
-3-
ADAMA Ltd.
(Expressed in RMB '000)
Consolidated Income Statement
Six months ended June 30
Notes 2026 2025
I. Operating income V.42 14,476,540 15,024,200
Less: Cost of sales V.42 10,523,330 11,030,173
Taxes and surcharges V.43 46,920 57,128
Selling and Distribution expenses V.44 2,038,063 1,975,668
General and administrative expenses V.45 602,039 734,867
Research and Development expenses V.46 211,350 216,793
Financial expenses V.47 1,023,706 1,024,340
Including: Interest expense 462,779 527,096
Interest income 76,612 101,281
Add: Investment income, net V.48 6,593 5,261
Including: Income from investment
in associates and joint ventures 6,593 5,261
Gain (loss) from changes in fair value V.49 213,451 (6,493)
Credit impairment losses V.50 (28,205) (93,679)
Asset impairment losses V.51 (152,029) (27,617)
Gain from disposal of assets V.52 306,349 5,054
II. Operating income (loss) 377,291 (132,243)
Add: Non-operating income 94,399 19,219
Less: Non-operating expenses 79,305 12,555
III. Total income (loss) 392,385 (125,579)
Less: Income tax expenses (income) V.53 (40,182) (45,227)
IV. Net income (loss) 432,567 (80,352)
(1). Classified by nature of operations
(1.1). Continuing operations 432,567 (80,352)
(2). Classified by ownership
(2.1). Shareholders of the Company 432,567 (80,352)
(2.2). Non-controlling interests - -
V. Other comprehensive income (loss), net of tax V. 39 (352,323) 71,116
Other comprehensive income (loss) (net of tax)
attributable to shareholders of the Company (352,323) 71,116
(1) Items that will not be reclassified to profit or loss: (2,167) 979
(1.1) Re-measurement of defined benefit plan liability (2,167) 979
(1.2) Fair Value changes in other equity investment - -
(2) Items that were or will be reclassified to profit or loss (350,156) 70,137
(2.1) Effective portion of gains or loss of cash flow hedge 45,686 (48,355)
(2.2) Translation differences of foreign financial statements (395,842) 118,492
VI. Total comprehensive income (loss) for the period attributable to 80,244 (9,236)
Shareholders of the Company
Total comprehensive (loss) for the period 80,244 (9,236)
attributable to shareholders of the Company
Total comprehensive income for the period - -
attributable to Non-controlling interests
VII. Earnings per share XIV.3
(1) Basic earnings (loss) per share (Yuan/share) 0.19 (0.03)
(2) Diluted earnings per share (Yuan/share) N/A N/A
-4-
ADAMA Ltd.
(Expressed in RMB '000)
Company's Income Statement
Six months ended June 30
Notes 2026 2025
I. Operating income XV.6 1,179,597 1,094,572
Less: Operating costs XV.6 963,743 879,975
Taxes and surcharges 4,595 7,663
Selling and Distribution expenses 5,009 2,185
General and administrative expenses 60,247 105,840
Research and Development expenses 10,956 664
Financial expenses 58,952 13,170
Including: Interest expense 13,058 14,052
Interest income 1,939 1,019
Add: Investment income, net 20,301 32,445
Gain from changes in fair value (“-” means loss) - 30,714
Credit impairment losses (90) (1,084)
Asset Impairment losses (2,099) (3,362)
Gain from disposal of assets - 3,607
II. Operating Profit 94,207 147,395
Add: Non-operating income 2,083 4,225
Less: Non-operating expenses 28 20
III. Total profit 96,262 151,600
Less: Income tax expense 11,489 21,449
IV. Net profit 84,773 130,151
V. Other comprehensive income, net of tax - -
(1) Items that will not be reclassified to profit or loss - -
(1.1) Re-measurement of defined benefit plan liability - -
(1.2) FV changes in other equity investment - -
VI. Total comprehensive income for the period 84,773 130,151
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ADAMA Ltd.
(Expressed in RMB '000)
Consolidated Cash Flow Statement
Six months ended June 30
Notes 2026 2025
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 13,018,653 14,968,968
Refund of taxes and surcharges 69,659 90,510
Cash received relating to other operating activities V.56(1) 234,064 75,142
Sub-total of cash inflows from operating activities 13,322,376 15,134,620
Cash paid for goods and services 8,920,011 9,451,146
Cash paid to and on behalf of employees 2,212,852 1,999,080
Payments of taxes and surcharges 270,755 289,600
Cash paid relating to other operating activities V.56(2) 1,248,849 1,656,216
Sub-total of cash outflows from operating activities 12,652,467 13,396,042
Net cash flows provided by operating activities V.57(1)a 669,909 1,738,578
II. Cash flows from investing activities:
Cash received from disposal of investments 150,917 41,370
Cash received from returns of investments 2,325 -
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 464,112 17,493
Sub-total of cash inflows from investing activities 617,354 58,863
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 479,402 589,861
Net cash paid to acquire subsidiaries or other business units - 56,272
Cash paid relating to other investing activities V.56(3) 631 47,825
Sub-total of cash outflows from investing activities 480,033 693,958
Net cash flows provided by (used in) investing activities 137,321 (635,095)
III. Cash flows from financing activities:
Cash received from borrowings 959,512 1,625,222
Cash received from other financing activities V.56(4) 778,828 1,082,504
Sub-total of cash inflows from financing activities 1,738,340 2,707,726
Cash repayments of borrowings 2,311,558 3,107,377
Cash payment for dividends, profit distributions and interest 475,346 527,153
Including: Dividends paid to non-controlling interest 22,200 74,170
Cash paid relating to other financing activities V.56(5) 202,602 440,257
Sub-total of cash outflows from financing activities 2,989,506 4,074,787
Net cash flow used in financing activities (1,251,166) (1,367,061)
IV. Effects of foreign exchange rate changes on cash and cash equivalent
equivalent (90,358) (4,700)
V. Net decrease in cash and cash equivalents V.57(1)b (534,294) (268,278)
Add: Cash and cash equivalents at the beginning of the year 3,353,326 3,583,963
I. VI. Cash and cash equivalents at the end of the period V.57(2) 2,819,032 3,315,685
-6-
ADAMA Ltd.
(Expressed in RMB '000)
Company's Cash Flow Statement
Six months ended June 30
Notes 2026 2025
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 481,456 650,459
Refund of taxes and surcharges 9,757 32,238
Cash received relating to other operating activities XV.7(1) 5,034 15,324
Sub-total of cash inflows from operating activities 496,247 698,021
Cash paid for goods and services 236,511 413,963
Cash paid to and on behalf of employees 61,073 64,712
Payments of taxes and surcharges 11,480 9,317
Cash paid relating to other operating activities XV.7(2) 112,893 23,927
Sub-total of cash outflows from operating activities 421,957 511,919
Net cash flows provided by operating activities XV.8 74,290 186,102
II. Cash flows from investing activities:
Cash received from returns of investments 22,626 32,445
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets - 11,210
Cash received relating to other investing activities XV.7.(3) 757 803
Sub-total of cash inflows from investing activities 23,383 44,458
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 21,109 9,369
Cash paid for other investing activities XV.7.(4) 20,000 -
Sub-total of cash outflows from investing activities 41,109 9,369
Net cash flows provided by (used in) investing activities (17,726) 35,089
III. Cash flows from financing activities:
Cash received from borrowings 201,000 300,000
Cash received relating to other financing activities XV.7.(5) 4,500 1,858
Sub-total of cash inflows from financing activities 205,500 301,858
Cash repayments of borrowings 155,000 473,046
Cash payment for dividends, profit distributions or interest 13,073 14,395
Cash paid relating to other financing activities XV.7.(6) 12,172 14,246
Sub-total of cash outflows from financing activities 180,245 501,687
Net cash flow provided (used in) financing activities 25,255 (199,829)
IV. Effects of foreign exchange rate changes on cash and cash equivalents (1,877) 4,965
V. Net increase in cash and cash equivalents 79,942 26,327
Add: Cash and cash equivalents at the beginning of the year XV.8(2) 58,950 39,173
VI. Cash and cash equivalents at the end of the period XV.8(2) 138,892 65,500
-7-
ADAMA Ltd.
(Expressed in RMB '000)
Consolidated Statement of Changes in Shareholders’ Equity
For the Six months ended June 30, 2026
Other
Share Capital comprehensive Special Surplus Retained Non-controlling
capital reserve income reserves reserve earnings Total interests Total equity
I. Balance at December 31, 2025 2,329,812 12,867,123 1,570,748 6,156 298,610 502,977 17,575,426 - 17,575,426
II. Changes in equity for the period - - (352,323) 2,549 - 410,367 60,593 - 60,593
interest
III. Balance at June 30, 2026 2,329,812 12,867,123 1,218,425 8,705 298,610 913,344 17,636,019 - 17,636,019
-8-
ADAMA Ltd.
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the Six months ended
June 30, 2025
Other
Share Capital comprehensive Special Surplus Retained Non-controlling
capital reserve income reserves reserve earnings Total interests Total equity
I. Balance at December 31, 2024 2,329,812 12,950,464 1,721,028 10,798 298,610 1,680,382 18,991,094 - 18,991,094
II. Changes in equity for the period - - 71,116 (2,644) - (154,522) (86,050) - (86,050)
interest
III. Balance at June 30, 2025 2,329,812 12,950,464 1,792,144 8,154 298,610 1,525,860 18,905,044 - 18,905,044
-9-
ADAMA Ltd.
(Expressed in RMB '000)
Company's Statement of Changes in Shareholders’ Equity
For the Six months ended June 30, 2026
Other
Share Capital comprehensive Special Surplus Retained
capital reserve income reserves reserve earnings Total
I. Balance at December 31, 2025 2,329,812 15,523,881 24,916 6,847 298,610 710,790 18,894,856
II. Changes in equity for the period - - - 2,549 - 84,773 87,322
Ⅲ. Balance at June 30, 2026 2,329,812 15,523,881 24,916 9,396 298,610 795,563 18,982,178
For the Six months ended June 30, 2025
Other
Share Capital comprehensive Special Surplus Retained
capital reserve income reserves reserve earnings Total
I. Balance at December 31, 2024 2,329,812 15,523,881 23,894 11,489 298,610 779,972 18,967,658
II. Changes in equity for the period - - - (2,644) - 130,151 127,507
Ⅲ. Balance at June 30, 2025 2,329,812 15,523,881 23,894 8,845 298,610 910,123 19,095,165
- 10 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
I BASIC CORPORATE INFORMATION
ADAMA Ltd. (hereinafter the “Company” or the “Group”) is a company limited by shares established in
China with its head office located in Hubei Jingzhou.
In June 2020, the controlling shareholder of the Company changed from China National Agrochemical Co,.
Ltd. (hereinafter – “CNAC") to Syngenta Group Co., Ltd. (hereinafter “Syngenta Group”). As of August
and Sinochem Holdings Corporation Ltd. (hereinafter - “Sinochem Holdings”), Syngenta Group, and
subsequently the Company, are ultimately controlled by Sinochem Holdings - parent of both ChemChina
and Sinochem Group Co., Ltd. (hereinafter “Sinochem Holdings”), subordinated to SASAC.
The principal activities of the Company and its subsidiaries (together referred to as the “Group”) are
engaged in development, manufacturing and marketing of agrochemicals, intermediate materials for other
industries, food additives and synthetic aromatic products, mainly for export. For information about the
largest subsidiaries of the Company, refer to Note VII.
The Company’s consolidated financial statements had been approved by the Board of Directors of the
Company on August 17, 2026.
Details of the scope of consolidated financial statements are set out in Note VII "Interest in other entities",
whereas the changes of the scope of consolidation are set out in Note VI "Changes in consolidation scope".
II BASIS OF PREPARATION
The Group has adopted the Accounting Standards for Business Enterprises issued by the Ministry of
Finance (the "MoF"). In addition, the Group has disclosed relevant financial information in these financial
statements in accordance with Information Disclosure and Presentation Rules for Companies Offering
Securities to the Public No. 15－General Provisions on Financial Reporting (revised by China Securities
Regulatory Commission (hereinafter "CSRC”) in 2023).
The Group has adopted the accrual basis of accounting.
In the historical cost measurement, assets obtained shall be measured at the amount of cash or cash
equivalents or fair value of the consideration paid. Liabilities shall be measured at the actual amount of
cash or assets received, or the contractual amount in a present obligation, or the prospective amount of
cash or cash equivalents paid to discharge the liabilities.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing market participants in an arm’s length transaction at the measurement date. Fair
value measured and disclosed in the financial statements are determined on this basis whether it is
observable or estimated by valuation techniques.
- 11 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
II BASIS OF PREPARATION - (cont’d)
The following table provides an analysis, grouped into Levels 1 to 3 based on the degree to which the fair
value input is observable and significant to the fair value measurement as a whole:
Level 1 - based on quoted prices (unadjusted) in active markets;
Level 2 - based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable (other than quoted prices included within Level 1), either directly or
indirectly;
Level 3 - based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
The financial statements have been prepared on the going concern basis.
The Group has performed going concern assessment for the following 12 months from June 30, 2026 and
have not identified any significant doubtful matter or event on the going concern, as such the financial
statement have been prepared on the going concern basis.
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
These financial statements are in compliance with the Accounting Standards for Business Enterprises to
truly and completely reflect the Company's consolidated financial position as at June 30, 2026 and the
Company's consolidated operating results, changes in shareholders' equity and cash flows for the six
months then ended.
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
The company takes the period from the acquisition of assets for processing to their realisation in cash or
cash equivalents as a normal operating cycle. The operating cycle for the company is 12 months.
The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional
currency. Functional currencies of overseas subsidiaries are determined on the basis of the principal
economic environment in which the overseas subsidiaries operate. The functional currency of the overseas
subsidiaries is mainly the United States Dollar (hereinafter "USD"). The presentation currency of these
financial statements is Renminbi.
- 12 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Item Benchmark for Material Item
Individual construction in progress project with a budget higher than RMB
Material construction in progress projects
Material receivables assessed individually for
Individual impairment higher than RMB 150 million
impairment
A business combination not involving enterprises under common control is a business combination in
which all of the combining enterprises are not ultimately controlled by the same party or parties before and
after the combination.
The costs of business combination are the fair value of the assets paid, liabilities incurred or assumed and
equity instruments issued by the acquirer for the purpose of achieving the control rights over the acquiree.
The intermediary costs such as audit, legal services and assessment consulting costs and other related
management costs that are directly attributable to the combination by the acquirer are charged to profit or
loss in the period in which they are incurred. Direct capital issuance costs incurred in respect of equity
instruments or liabilities issued pursuant to the business combination should be charged to the respect
equity instruments or liabilities upon initial recognition of the underlying equity instruments or liabilities.
The acquiree’s identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a business
combination, that meet the recognition criteria shall be measured at fair value at the acquisition date.
The consideration transferred includes the fair value of any contingent consideration. (such as earnout
arrangements with the former shareholders). After the acquisition date, the Group recognizes changes in
the fair value of contingent consideration classified as a financial liability at fair value through profit or
loss.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable
net assets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on
initial recognition. Where the cost of combination is less than the acquirer’s interest in the fair value of the
acquiree’s identifiable net assets, the remaining difference is recognized immediately in profit or loss for
the current year.
The goodwill raised because of the business combination should be separately disclosed in the
consolidated financial statement and measured by the initial amount less any accumulative impairment
provision.
In a business combination achieved in stages, the Group remeasure its previously held equity interest in the
acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss.
- 13 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The scope of consolidation in consolidated financial statements is determined on the basis of control.
Control is achieved when the Company has power over the investee; is exposed, or has rights, to variable
returns from its involvement with the investee; and has the ability to use its power to affect its returns.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of disposal
(the date when control is lost) are included in consolidated income statement and consolidated statement of
cash flows.
For a subsidiary acquired through a business combination not involving enterprises under common control,
the operating results and cash flows from the acquisition date (the date when control is obtained) are
included in consolidated income statement and consolidated statement of cash flows.
The significant accounting policies and accounting years adopted by the subsidiaries are determined based
on the uniform accounting policies and accounting years set out by the Company.
All significant intra-group balances, transactions and unrealized profits are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as non-controlling
interests and presented as "non-controlling interests" in the shareholders’ equity in consolidated balance
sheet. The portion of net profits or losses of subsidiaries for the period attributable to non-controlling
interests is presented as "non-controlling interests" in consolidated income statement below the "net profit"
line item. Total comprehensive income attributable to non-controlling shareholders is presented separately
in the consolidated income statement below the total comprehensive income line item.
When the amount of loss for the period attributable to the non-controlling shareholders of a subsidiary
exceeds the non-controlling shareholders' portion of the opening balance of owners' equity of the
subsidiary, the excess amount is still allocated against non-controlling interests.
Acquisition of non-controlling interests or disposal of equity interest in a subsidiary that does not result in
the loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts of the
Company's interests and non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiary. The difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is adjusted to capital reserve under owners'
equity. If the capital reserve is not sufficient to absorb the difference, the excess is adjusted against
retained earnings. Other comprehensive income attributed to the non-controlling interest is reattributed to
the shareholders of the company.
A put option issued by the Group to holders of non-controlling interests that is settled in cash or other
financial instrument is recognized as a liability at the present value of the exercise price (according to the
"anticipated acquisition method"). The Group’s share of a subsidiary’s profits includes the share of the
holders of the non-controlling interests to which the Group issued a put option.
- 14 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
In cases which the Group has a Call option in addition to the Put option above, due to the anticipated
acquisition method implementation no value is given to the Call option in the consolidated financial
statements.
When the Group loses control over a subsidiary due to disposal of certain equity interest or other reasons,
any retained interest is re-measured at its fair value at the date when control is lost. The difference between
(i) the aggregate of the consideration received on disposal and the fair value of any retained interest and (ii)
the share of the former subsidiary's net assets cumulatively calculated from the acquisition date according
to the original proportion of ownership interest is recognized as investment income in the period in which
control is lost. Other comprehensive income associated with the disposed subsidiary is reclassified to
investment income in the period in which control is lost.
There are two types of joint arrangements – joint operations and joint ventures. The type of joint
arrangements is determined based on the rights and obligations of joint operator to the joint arrangements
by considering the factors, such as the structure, the legal form of the arrangements, and the contractual
terms, etc. A joint operation is a joint arrangement whereby the joint operators have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement
whereby the joint ventures have rights to the net assets of the arrangement.
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are
the Group's short-term, highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
On initial recognition, foreign currency transactions are translated into functional currency using the spot
exchange rate prevailing at the date of transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currency using the
spot exchange rates at the balance sheet date. Exchange differences arising from the differences between
the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the
previous balance sheet date are recognized in profit or loss for the period, except that (i) exchange
differences related to a specific-purpose borrowing denominated in foreign currency that qualify for
capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period. (ii)
exchange differences related to hedging instruments for the purpose of hedging against foreign currency
risks are accounted for using hedge accounting.
- 15 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
When preparing financial statements involving foreign operations, if there is any foreign currency
monetary items, which in substance forms part of the net investment in the foreign operations, exchange
differences arising from the changes of foreign currency are recorded as other comprehensive income, and
will be reclassified to profit or loss upon disposal of the foreign operations.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions and the amounts in
functional currency remain unchanged.
For the purpose of preparing consolidated financial statements, financial statements of a foreign operation
are translated from the foreign currency into RMB using the following method: assets and liabilities on the
balance sheet are translated at spot exchange rate prevailing at the balance sheet date; shareholders' equity
items, except for retained earnings, are translated at the spot exchange rates at the dates on which such
items arose; all items in the income statement as well as items reflecting the distribution of profits are
translated at average rate or at spot exchange rates on the dates of the transactions; the retained earnings
opening balance is previous year's translated retained earnings closing balance; the closing balance of
retained earnings is calculated and presented on the basis of each translated income statement and profit
distribution item. The difference between the translated assets and the aggregate of liabilities and
shareholders' equity items is recorded as other comprehensive income. Cash Flows arising from transaction
in foreign currency and the cash flows of a foreign subsidiary are translated at the spot exchange rate on
the date of the cash flow, the effect of exchange rate changes on the cash and cash equivalents is regarded
as a reconciling item and present separately in the statement “effect of foreign exchange rate changes on
the cash and cash equivalents".
The opening balances and the comparative figures of prior year are presented at the translated amounts in
the prior year's financial statements.
On disposal of the Group's entire equity interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain equity interest in it or other reasons, the Group transfers the
accumulated translation differences, which are attributable to the owners' equity of the Company and
presented under other comprehensive income to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign
operation, the proportionate share of accumulated translation differences are re-attributed to non-
controlling interests and are not recognized in profit and loss. For partial disposals of equity interest in
foreign operations, which are associates or joint ventures, the proportionate share of the accumulated
translation differences are reclassified to profit or loss.
- 16 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual
provisions of the instrument. At initial recognition, the Group measures a financial asset or financial
liability at its fair value plus or minus (which is not measured at fair value through profit or loss)
transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial
liability. Initial recognition in trade receivables which do not contain a significant financing component,
shall be made according to their transaction price.
After initial recognition, an entity shall measure a financial asset at: (a) amortised cost; (b) fair value
through other comprehensive income (“FVTOCI”); or (c) fair value through profit or loss (“FVTPL”).
A financial asset is measured at amortised cost if both of the following conditions are met: (a) the financial
asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
Such financial assets are subsequently measured at amortised cost, using effective interest method. Gains
or losses upon impairment and derecognition are recognized in profit or loss.
Effective interest rate represents the rate that discounts the future cash flow over the expected subsisting
period or shorter period, if appropriate, of the financial asset or financial liability to the current carrying
value of such financial asset or financial liability.
When calculating the effective interest rate, the Group will consider the anticipated future cash flow (not
considering the future credit loss) on the basis of all contract clauses of financial assets or financial
liabilities, as well as consider all kinds of charges which are an integral part of the effective interest rate,
including transaction fees and discount or premium paid or received between both parties of financial asset
or financial liability contract.
- 17 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
A financial asset is measured at fair value through other comprehensive income if both of the following
conditions are met: (a) the financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets and (b) the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
A gain or loss on a financial asset measured at fair value through other comprehensive income is
recognized in other comprehensive income, except for impairment gains or losses, foreign exchange gains
and losses and interest calculated using the effective interest method, until the financial asset is
derecognized or reclassified. When the financial asset is derecognized the cumulative gain or loss
previously recognized in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment.
Financial assets at FVTPL are either those that are classified as financial assets at FVTPL or designated as
financial assets at FVTPL.
A financial asset is measured at FVTPL unless it is measured at amortised cost or at FVTOCI.
The Group may, at initial recognition, irrevocably designate a financial asset as measured at FVTPL if
doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes
referred to as an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or
recognizing the gains and losses on them on different bases.
A gain or loss on a financial asset that is measured at FVTPL is recognized in profit or loss unless it is part
of a hedging relationship. Dividends are recognized in profit or loss.
At initial recognition, the Group makes an irrevocable election to designate to FVTOCI an investment in
an equity instrument that is not held for trading.
When a non-trading equity instrument investment is designated as a financial asset that is measured at fair
value through other comprehensive income, the changes in the fair value of the financial asset are
recognised in other comprehensive income. Upon realization the accumulated gains or losses from other
comprehensive income are transferred from other comprehensive income and included in retained earnings.
During the period in which the Group holds these non-trading investment instruments, the right to receive
dividends in the Group has been established, and the economic benefits related to dividends are likely to
flow into the Group, and when the amount of dividends can be reliably measured, the dividend income is
recognized in the current profit and loss.
- 18 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group recognizes a loss allowance for expected credit losses on financial assets that are classified to
amortised cost and FVTOCI.
The Group always measures the loss allowance at an amount equal to lifetime expected credit losses for
trade receivables and notes receivables.
For financial assets other than trade receivables, the Group initially measure the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. At each balance sheet date, if
the credit risk on that financial instrument has increased significantly since initial recognition, the Group
measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses. The Group recognizes in profit or loss, as an impairment gain or loss, the amount of expected credit
losses (or reversal) that is required to adjust the loss allowance to the amount that is required to be
recognized.
At each balance sheet date, the Group assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition.
The Group mainly considers the following list of information in assessing changes in credit risk:
(a) significant changes in internal price indicators of credit risk as a result of a change in credit risk
since inception.
(b) significant changes in external market indicators of credit risk for a particular financial instrument
or similar financial instruments with the same expected life.
(c) a significant change in the debtors’ ability to meet its debt obligations.
(d) an actual or expected significant change in the operating results of the debtor.
(e) significant increases in credit risk on other financial instruments of the same debtor.
(f) an actual or expected significant adverse change in the regulatory, economic, or technological
environment of the debtor.
(g) significant changes in the value of the collateral supporting the obligation or in the quality of third-
party guarantees or credit enhancements, which are expected to reduce the debtor’s economic
incentive to make scheduled contractual payments or to otherwise have an effect on the probability
of a default occurring.
(h) significant changes that are expected to reduce the receivable’s economic incentive to make
scheduled contractual payments.
(i) significant changes in the expected performance and behaviour of the debtor.
The Group assumes that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low credit risk at the reporting date.
- 19 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-
impaired include observable data about the following events:
(a) significant financial difficulty of the issuer or the receivable;
(b) a breach of contract, such as a default or past due event;
(c) the lender(s) of the receivable, for economic or contractual reasons relating to the receivable’s
financial difficulty, having granted to the receivable a concession(s) that the lender(s) would not
otherwise consider;
(d) it is becoming probable that the receivable will enter bankruptcy or other financial reorganization;
Expected credit losses of financial instruments are determined as the present value of the difference
between: (a) the contractual cash flows that are due to an entity under the contract; and (b) the cash flows
that the entity expects to receive.
For a financial asset that is credit-impaired at the reporting date, an entity shall measure the expected
credit losses as the difference between the asset’s gross carrying amount and the present value of
estimated future cash flows discounted at the financial asset’s original effective interest rate. Any
adjustment is recognized in profit or loss as an impairment gain or loss.
The Group measures expected credit losses of a financial instrument in a way that reflects:
(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the
reporting date about past events, current conditions and forecasts of future economic conditions.
- 20 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group directly reduces the gross carrying amount of a financial asset when the entity has no
reasonable expectations of recovering a financial asset in its entirety or a portion thereof. A write-off
constitutes a derecognition event.
The Group derecognizes a financial asset if one of the following conditions is satisfied: (i) the contractual
rights to the cash flows from the financial asset expire; or (ii) the financial asset has been transferred and
substantially all the risks and rewards of ownership of the financial asset transferred to the transferee; or
(iii) although the financial asset has been transferred, the Group neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset but has not retained control of the financial
asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial
asset, and it retains control of the financial asset, it recognizes the financial asset to the extent of its
continuing involvement in the transferred financial asset and recognizes an associated liability. The extent
of the Group’s continuing involvement in the transferred asset is the extent to which it is exposed to
changes in the value of the transferred asset.
When the company is derecognizing a financial asset in its entirety, the difference between (i) the carrying
amount of the financial asset transferred; and (ii) the sum of the consideration received from the transfer is
recognized in profit or loss.
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
All financial liabilities are subsequently measured at FVTPL or other financial liabilities.
Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is
designated as at FVTPL. The financial liability other than derivative financial liabilities are stated as
liabilities held for trading.
Other financial liabilities are subsequently measured at amortized cost by using effective interest method.
Gain or loss arising from derecognition or amortization is recognized in current profit or loss.
- 21 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full
or in part. An agreement entered into force between the Group (debtor) and a creditor to replace the
original financial liabilities with new financial liabilities with substantially different terms, derecognize the
original financial liabilities as well as recognize the new financial liabilities. When financial liabilities is
derecognized in full or in part, the difference between the carrying amount of the financial liabilities
derecognized and the consideration paid (including transferred non-cash assets or new financial liability) is
recognized in profit or loss for the current period.
Derivative financial instruments include forward exchange contracts, currency swaps and foreign exchange
options, etc. Derivatives are initially measured at fair value at the date when the derivative contracts are
entered into and are subsequently re-measured at fair value. The resulting gain or loss is recognized in
profit or loss unless the derivative is designated and highly effective as a hedging instrument, in which case
the timing of the recognition in profit or loss depends on the nature of the hedge relationship (Note III
Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be
offset, except for circumstances where the Group has a legal right that is currently enforceable to offset the
recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize
the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability
shall be offset and the net amount is presented in the balance sheet.
The consideration received from the issuance of equity instruments net of transaction costs is recognized in
shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-
issued equity instruments are deducted from shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All
expenditures relating to the repurchase are recorded in the cost of the treasury shares, with the transaction
entering into the share capital. Treasury shares are excluded from profit distributions and are stated as a
deduction under shareholders’ equity in the balance sheet.
- 22 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Accounts receivables are assessed for impairment on a collective group and/or on an individual basis as
follows:
Expected credit losses in respect of accounts receivables is measured at an amount equal to lifetime
expected credit losses. The assessment is made collectively for account receivables, where receivables
share similar credit risk characteristics based on geographical location, using the expected credit losses
model including inter-alia aging analysis, historical loss experiences adjusted by the observable factors
reflecting current and expected future economic conditions. The ratio of the account receivables collective
provision for expected credit losses in which credit losses has not occurred is between 0%-2.81%.
When credit risk on accounts receivable has increased significantly since initial recognition, the group
records specific provision or collective provision, which is determined for groups of similar assets in
countries in which there are large number of customers with immaterial balances.
In assessing whether the credit risk on accounts receivables has increased significantly since initial
recognition, the Group compares the risk of a default occurring on the accounts receivables at the reporting
date with the risk of a default occurring on the accounts receivables at the date of initial recognition and
considers both quantitative and qualitative information that is reasonable and supportable, including
observable data that comes to the attention of the Group about loss events such as a significant decline in
the solvency of an individual debtor or the portfolio of debtors, and significant changes in the financial
condition that have an adverse effect on the debtor.
All receivbales financing are bank acceptance notes due within 1 year. From the past experience, the
possibility of significant losses due to banks default is low, the Group believes that there is no significant
credit risk in the bank acceptances notes held.
The Group determines expected credit losses for other receivables on an individual basis.
The Group's inventories mainly include raw materials, work in progress, semi-finished goods, finished
goods and reusable materials. Reusable materials include low-value consumables, packaging materials and
other materials, which can be used repeatedly but do not meet the definition of fixed assets.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of
conversion and other expenditures incurred in bringing the inventories to their present location and
condition including direct labor costs and an appropriate allocation of production overheads.
- 23 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The actual cost of inventories upon delivery is calculated using the weighted average method.
inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion, the estimated costs necessary to make the sale and relevant taxes. In determining the
realizable value of inventory, it is based on solid evidence obtained, while also considering the purpose of
holding the inventory and the impact of events after the balance sheet date.
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value of inventories is
higher than their carrying amount, the original provision for decline in value is reversed and the reversal is
included in profit or loss for the period.
Long-term equity investments include investments in subsidiaries, joint ventures and associates.
Control is achieved when the Company has power over the investee; is exposed, or has rights, to variable
returns from its involvement with the investee; and has the ability to use its power to affect its returns.
Joint control is the contractually agreed sharing of control over an economic activity, and exists only when
the strategic financial and operating policy decisions relating to the activity require the unanimous consent
of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over
an investee, the effect of potential voting rights of the investee (for example, warrants and convertible
debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
- 24 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Subsidiaries are the companies that are controlled by the Company. Associates are the companies over
which the Group has significant influence. Joint ventures are joint arrangements over which the Group has
joint control along with other investors and has rights to the net assets of the joint arrangement.
The Company accounts for the investment in subsidiaries at historical cost in the Company's financial
statements. Investments in associates and joint ventures are accounted for under equity method.
For a long-term equity investment acquired through a business combination involving enterprises under
common control, the investment cost of the long-term equity investment is the share of the carrying
amount of the shareholders' equity of the acquiree attributable to the ultimate controlling party at the date
of combination. The difference between initial investment cost and cash paid, non-cash assets transferred
and book value of liabilities assumed, is adjusted in capital reserve. If the balance of capital reserve is not
sufficient to absorb the difference, any excess is adjusted to retained earnings.
For a long-term equity investment acquired through business combination not involving enterprises under
common control, the investment cost of the long-term equity investment is the cost of acquisition. For a
business combination not involving enterprises under common control achieved in stages that involves
multiple exchange transactions, the initial investment cost is carried at the aggregate of the carrying
amount of the acquirer’s previously held equity interest in the acquiree and the new investment cost
incurred on the acquisition date.
Regarding the long-term equity investment acquired otherwise than through a business combination, if the
long-term equity investment is acquired by cash, the historical cost is determined based on the amount of
cash paid and payable; if the long-term equity investment is acquired through the issuance of equity
instruments, the historical cost is determined based on the fair value of the equity instruments issued.
If the long-term equity investment is accounted for at cost, it should be measured at historical cost less
accumulated impairment losses. Dividend declared by the investee should be accounted for as investment
income.
Under the equity method, where the long-term equity investment initial investment cost exceeds the
Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, no
adjustment is made to the initial investment cost. Where the initial investment cost is less than the Group’s
share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is
recognized in profit or loss for the period, and the cost of the long-term equity investment is adjusted
accordingly.
- 25 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive
income of the investee for the period as investment income or loss and other comprehensive income for the
period. The Group recognizes its share of the investee’s net profit or loss based on the fair value of the
investee’s individual separately identifiable assets, etc. at the acquisition date after making appropriate
adjustments to be confirmed with the Group's accounting policies and accounting period. The Group
discontinues recognizing its share of net losses of the investee after the carrying amount of the long-term
equity investment together with any long-term interests that in substance form part of its net investment in
the investee is reduced to zero. If the Group has incurred obligations to assume additional losses of the
investee, a provision is recognized according to the expected obligation, and recorded as investment loss
for the period.
If the recoverable amounts of the investments to subsidiaries, joint ventures and associates are less than
their carrying amounts, an impairment loss should be recognized to reduce the carrying amounts to the
recoverable amounts (Note III 23).
On disposal of a long term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period.
Investment property refers to real estate held to earn rentals or for capital appreciation, or both, including
leased land use rights, land use rights held and provided for transferring after appreciation and leased
constructions, etc.
Investment property is initially measured at cost. Subsequent expenditures related to an investment
property shall be included in cost of investment property only when the economic benefits associated with
the asset will likely flow to the Group and its cost can be measured reliably. All other subsequent
expenditures on investment property shall be included in profit or loss for the current period when incurred.
The Group adopts cost method for subsequent measurement of investment property, which is depreciated
or amortized using the same policy as that for buildings and land use rights.
When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal
of the property net of the carrying amount and related taxes and surcharges is recognized in profit or loss
for the current period.
- 26 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Fixed assets include land owned by the Group and buildings, machinery and equipment, motor vehicles,
office equipment and others.
Fixed assets are tangible assets that are held for use in the production or supply of goods or for
administrative purposes, and have useful lives of more than one accounting year. A fixed asset is
recognized only when it is probable that economic benefits associated with the asset will flow to the Group
and the cost of the asset can be reliably measured. Purchased or constructed fixed assets are initially
measured at cost when acquired.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is
probable that economic benefits associated with the asset will flow to the Group and the subsequent
expenditures can be measured reliably. Other subsequent expenditures are recognized in profit or loss in
the period in which they are incurred.
Fixed asset is depreciated based on the cost of fixed asset recognized less expected net residual value over
its useful life using the straight-line method since the month subsequent to the one in which it is ready for
intended use. Depreciation is calculated based on the carrying amount of the fixed asset after impairment
over the estimated remaining useful life of the asset.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year-end, and account for any change as a change in an
accounting estimate.
The estimated useful life, estimated net residual value and annual depreciation rate of each category of
fixed assets are as follows:
Residual Annual
Useful life value depreciation rate
Category Depreciation (years) (%) (%)
Buildings the straight-line method 15-50 0-4 1.9-6.7
Machinery and equipment the straight-line method 3-22 0-4 4.4-33.3
Office and other equipment the straight-line method 3-17 0-4 5.6-33.3
Motor vehicles the straight-line method 5-9 0-2 10.9-20.0
Overseas Land owned by the Group is not depreciated.
- 27 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or
disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the
amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognized
in profit or loss for the period.
The difference between recoverable amounts of the fixed assets under the carrying amount is referred to as
impairment loss (Note III 23).
Construction in progress is measured at its actual costs. The actual costs include various construction,
installation costs, borrowing costs capitalized and other expenditures incurred until such time as the
relevant assets are completed and ready for its intended use. When the asset concerned is ready for its
intended use, the cost of the asset is transferred to fixed assets and depreciated starting from the following
month.
The difference between recoverable amounts of the construction in progress under the carrying amount is
referred to as impairment loss (Note III 23).
Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are
capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended
use or sale have commenced. Capitalization of borrowing costs ceases when the qualifying asset being
acquired, constructed or produced becomes ready for its intended use or sale. Borrowing costs incurred
subsequently should be charged to profit or loss. Capitalization of borrowing costs is suspended during
periods in which the acquisition, construction or production of a qualifying asset is suspended abnormally
and when the suspension is for a continuous period of more than 3 months. Capitalization is suspended
until the acquisition, construction or production of the asset is resumed.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is
the actual interest expenses incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the temporary
investment of those funds.
Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest
to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess
of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose
borrowings.
During the capitalization period, exchange differences on foreign currency specific-purpose borrowing are
fully capitalized whereas exchange differences on foreign currency general-purpose borrowing, charged to
profit or loss.
- 28 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group’s intangible assets include product registration assets, intangible assets upon purchase of
products, marketing rights and rights to use tradenames and trademarks, land use rights, software and
customer relations. Intangible assets are stated at cost less accumulated amortization and impairment losses.
When an intangible asset with a finite useful life is available for use, its original cost less any accumulated
impairment losses is amortized over its estimated useful life using the straight-line method. An intangible
asset with an indefinite useful life is not amortized.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method
at the end of the year, and makes adjustments when necessary.
The respective amortization periods for such intangible assets are as follows:
Item Amortization period (years)
Land use rights 49-50 years
Product registration 8-11 years
Intangible assets on purchase of products 7-20 years
Marketing rights, tradename and trademarks 4-10, 30 years
Exclusivity agreement 21 years
Software 3-5 years and 12 years for ERP
Customer relations 5-10, 13 years
The difference between recoverable amounts of the intangible assets under the carrying amount is referred
to as impairment loss (see Note III 23).
- 29 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Internal research and development project expenditures were classified into research expenditures and
development expenditures depending on its nature and the greater uncertainty whether the research
activities becoming to intangible assets.
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is
recognized as intangible asset:
- It is technically feasible to complete the intangible asset so that it will be available for use or sale;
- The Group has the intention to complete the intangible asset and use or sell it;
- The Group can demonstrate the ways in which the intangible asset will generate economic benefits;
- The availability of adequate technical, financial and other resources to complete the development and the
ability to use or sell the intangible asset;
- The expenditure attributable to the intangible asset during its development phase can be reliably
measured.
Expenditures that do not meet all of the above conditions at the same time are recognized in profit or loss
when incurred. If the expenditures cannot be distinguished between the research phase and development
phase, the Group recognizes all of them in profit or loss for the period. Expenditures that have previously
been recognized in the profit or loss would not be recognized as an asset in subsequent years. Those
expenditures capitalized during the development stage are recognized as development costs incurred and
will be transferred to intangible asset when the underlying project is ready for an intended use.
The research and development expenditure includes salaries and welfare expenses of personnel directly
engaged in research and development activities, depreciation expenses of instruments and equipment used
in research and development activities, expenses for field trial and professional services, materials
consumed and lease and maintenance expenses related to research and development activities.
- 30 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the
fair value of the identifiable net assets of the acquiree under a business combination not involving
enterprises under common control.
Goodwill is not amortized and is stated in the balance sheet at cost less accumulated impairment losses
(see Note III 23). On disposal of an asset group or a set of asset groups, any attributable goodwill is written
off and included in the calculation of the profit or loss on disposal.
The Company assesses at each balance sheet date whether there is any indication that the fixed assets,
construction in progress, right of use assets, intangible assets with finite useful lives, investment properties
measured at historical cost, investments in subsidiaries, joint ventures and associates may be impaired. If
there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets.
The recoverable amount of an asset is the higher of its fair value less costs to sell and the present value of
the future cash flow estimated to be derived from the asset. The Group estimates the recoverable amount
on an individual basis. If it is not possible to estimate the recoverable amount of the individual asset, the
Group determines the recoverable amount of the asset group to which the asset belongs. Identification of
an asset group is based on whether major cash inflows generated by the asset group are largely
independent of the cash inflows from other assets or asset groups.
Goodwill arising from a business combination is tested for impairment at least at each year end,
irrespective of whether there is any indication that the asset may be impaired. For the purpose of
impairment testing, the carrying amount of goodwill acquired in a business combination is allocated from
the acquisition date on a reasonable basis to each of the related asset groups; if it is impossible to allocate
to the related asset groups, it is allocated to each of the related set of asset groups. Each of the related asset
groups or set of asset groups is an asset group or set of asset group that is able to benefit from the synergies
of the business combination and shall not be larger than a reportable segment determined by the Group. If
the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the
amount of the impairment loss first reduced by the carrying amount of the goodwill allocated to the asset
group or set of asset groups, and then the carrying amount of other assets (other than the goodwill) within
the asset group or set of asset groups, pro rata based on the carrying amount of each asset.
Once the impairment loss of such assets is recognized, it will not be reversed in any subsequent period.
Contract liabilities refer to the Group’s obligation to transfer goods or services to a customer for which the
Group has received consideration from the customer.
- 31 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Employee wages or salaries, bonuses, social security contributions, measured on a non-discounted basis,
and the expense is recorded when the related service is provided. A provision for short-term employee
benefits in respect of cash bonuses is recognized in the amount expected to be paid where the Group has a
current legal or constructive obligation to pay the said amount for services provided by the employee in the
past and the amount can be estimated reliably.
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
A defined contribution plan is a post- employment benefit plan under which the Group pays contributions
to a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution plans are recognized as an expense in profit or loss in the periods
during which related services are rendered by employees.
Defined benefit plans of the Group are post-employment benefit plans other than defined contribution
plans. In accordance with the projected unit credit method, the Group measures the obligations under
defined benefit plans using unbiased and mutually compatible actuarial assumptions to estimate related
demographic variables and financial variables, and discount obligations under the defined benefit plans to
determine the present value of the defined benefit liability. The discount rate used is the yield on the
reporting date on highly-rated corporate debentures denominated in the same currency, that have maturity
dates approximating the terms of the Group’s obligation.
The Group attributes benefit obligations under a defined benefit plan to periods of service provided by
respective employees. Service cost and interest expense on the defined benefit liability are charged to
profit or loss and remeasurements of the defined benefit liability are recognized in other comprehensive
income.
When the Group terminates the employment with employees or provides compensation under an offer to
encourage employees to accept voluntary redundancy, a provision is recognized with a corresponding
expense in profit or loss at the earlier of when the Group can no longer withdraw the offer of the
termination benefit and when it recognises any related restructuring costs.
If the benefits are payable more than 12 months after the end of the reporting period, they are discounted to
their present value. The discount rate used is the yield on the reporting date on highly-rated corporate
debentures denominated in the same currency, that have maturity dates approximating the terms of the
Group’s obligation.
- 32 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group’s net obligation for long-term employee benefits, which are not attributable to
post- employment benefit plans, is for the amount of the future benefit to which employees are entitled for
services that were provided during the current and prior periods.
The amount of these benefits is discounted to its present value and the fair value of the assets related to
these obligations is deducted therefrom. The discount rate used is the yield on the reporting date on highly-
rated corporate debentures denominated in the same currency, that have maturity dates approximating the
terms of the Group’s obligation.
Share-based payment refers to the transaction in order to acquire the service offered by the employees or
other parties that grants equity instruments or liabilities on the basis of the equity instruments. Share-based
payment classified into equity-settled share-based payment and cash-settled share-based payment.
The cash-settled share-based payment should be measured according to the fair value of the liabilities
recognized based on the shares or other equity instrument undertaken by the Company. For cash-settled
share-based payment made in return for the rendering of employee services that cannot be exercised until
the services are fully provided during the vesting period or specified performance targets are met, on each
balance sheet date within the vesting period, the services acquired in the current period shall, based on the
best estimate of the number of exercisable instruments, be recognized in relevant expenses and the
corresponding liabilities at the fair value of the liability incurred by the Company.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the
Company should re-measure the fair value of the liabilities and the changes should be included in the
current period profit and loss.
Provisions are recognized when the Group has a present obligation related to a contingency, it is probable
that an outflow of economic benefits will be required to settle the obligation, and the amount of the
obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the settlement date, taking into account factors pertaining to a contingency such as the risks,
uncertainties and time value of money. Where the effect of the time value of money is material, the amount
of the provision is determined by discounting the related future cash outflows. The increase in the
provision due to passage of time is recognized as interest expense.
If all or part of the provision settlements is reimbursed by third parties, when the realization of income is
virtually certain, then the related asset should be recognized. However, the amount of related asset
recognized should not be exceeding the respective provision amount.
- 33 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
At the balance sheet date, the amount of provision should be re-assessed to reflect the best estimation then.
- 34 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Revenue of the Group is mainly from sale of goods.
The Group recognizes revenue when transferring goods to a customer, at the amount of the transaction
price. The timing of transferring the control of goods changes according to the specific terms of the sale
contract. Regarding sales of products, transfer of the control of goods generally occurs when the products
arrive at the customer’s warehouse, while for certain overseas shipments the transfer occurs when the
products are loaded on the shipper’s transport vehicles.
Transaction price is the amount of consideration to which an entity expects to be entitled in exchange for
transferring goods to a customer, excluding amounts collected on behalf of third parties.
Variable consideration
Variable consideration includes sales with a right of return (see below), refunds, discounts, volume rebates
etc. The amounts of variable consideration are estimated using the Group’s past experience in the relevant
markets. The Group includes in the transaction price the amounts of variable consideration only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized
will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Significant financing component
For a contract with a significant financing component, the Group recognize revenue at an amount that
reflects the price that a customer would have paid for the goods if the customer had paid cash for those
goods at receipt. The difference between the amount of consideration and the cash selling price of the
goods, is amortized in the contract period using effective interest rate. The Group does not adjust the
amount of consideration for the effects of a significant financing component if the Group expects, at
contract inception, that the period between when the entity transfers a good to a customer and when the
customer pays for that good will be one year or less.
Sale with a right of return
For sale with a right of return, the Group recognizes revenue at the amount of consideration to which the
Group expects to be entitled (ie excluding the products expected to be returned). For any amounts received
(or receivable) for which an entity does not expect to be entitled, the entity shall not recognize revenue
when it transfers products to customers but shall recognize those amounts received (or receivable) as a
refund liability. An asset recognized for the Group’s right to recover products from a customer on settling a
refund liability shall initially be measured by reference to the former carrying amount of the product less
any expected costs to recover those products.
Advance receipts for the sale of goods
When the Group receives advance payments from customers for the sale of goods, it first recognizes such
payments as liabilities and then transfers them to revenue when the relevant performance obligations are
fulfilled.
- 35 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Government grants are transfer of monetary assets and non-monetary assets from the government to the
Group at no consideration, including tax returns, financial subsidies and so on. A government grant is
recognized only when the Group can comply with the conditions attached to the grant and the Group will
receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received
or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If
the fair value cannot be reliably determined, it is measured at a nominal amount.
Government grants are either related to assets or income.
(1) The basis of judgment and accounting method of the government grants related to assets
Government grants obtained for acquiring long-term assets are government grants related to assets. A
government grant related to an asset is offset with the cost of the relevant asset.
(2) The basis of judgment and accounting method of the government grants related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses to
be incurred in subsequent periods, the grant is recognized as deferred income, and recognized in profit or
loss over the periods in which the related costs are recognized. If the grant is a compensation for related
expenses or losses already incurred, the grant is recognized immediately in profit or loss for the period.
Government grants related to the Group’s normal course of business are offset with related costs and
expenses. Government grants related that are irrelevant with the Groups’s normal course of business are
included in non-operating gains.
The income tax expenses include current income tax and deferred income tax.
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
Temporary differences are differences between the carrying amounts of certain assets or liabilities and
their tax base.
All taxable temporary differences are recognized as related deferred tax liabilities. Deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which the
deductible losses and tax credits can be utilized.
- 36 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the
extent that it is probable that future taxable profits will be available against which the deductible losses and
tax credits can be utilized. However, for deductible temporary differences associated with the initial
recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a
business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at
the time of transaction, no deferred tax asset or liability is recognized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax
laws, that are expected to apply in the period in which the asset is realized or the liability is settled.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in
subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the
timing of the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The Group may be required to pay additional tax in case of distribution of dividends by the Group
companies. This additional tax was not included in the financial statements, since the policy of the Group
is not to distribute in the foreseeable future a dividend which creates a significant additional tax liability.
Except for those current income tax and deferred tax charged to comprehensive income or shareholders’
equity in respect of transactions or events which have been directly recognized in other comprehensive
income or shareholders’ equity, and deferred tax recognized on business combinations, all other current
income tax and deferred tax items are charged to profit or loss in the current period.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no
longer probable that sufficient taxable profits will be available in the future to allow the benefit of deferred
tax assets to be utilized. Such reduction is reversed when it becomes probable that sufficient taxable profits
will be available.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and tax assets and
tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities which intend to realize the assets and liabilities simultaneously, current tax
assets and liabilities are offset and presented on a net basis.
When the Group has a legal right to settle deferred tax assets and liabilities on a net basis which relates to
income taxes levied by the same taxation authority, on either the same taxable entity or different taxable
entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets
and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and
presented on a net basis.
- 37 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Lease is a contract, that conveys the right to use an asset for a period of time in exchange for consideration.
On the inception date of the lease, the Group determines whether the arrangement is a lease or contains a
lease, while assessing if it conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. In its assessment of whether an arrangement conveys the right to control the
use of an identified asset, the Group assesses whether it has the following two rights throughout the lease
term:
(a) The right to obtain substantially all the economic benefits from use of the identified asset; and
(b) The right to direct the identified asset’s use.
An arrangement does not contain a lease if an asset is leased for a period of less than 12 months, or to lease of
asset with low economic value.
Upon initial recognition, the Group recognizes a liability at the present value of future lease payments
(exclude certain variable lease payments, as detailed in Note III 31.4), and concurrently the Group
recognizes a right-of-use asset at the same amount, adjusted for any prepaid lease payments paid at the
lease date or before, plus initial direct costs incurred in respect of the lease.
When the interest rate implicit in the lease is not readily determinable, the incremental borrowing rate of
the lessee is used.
The Group presents right-of-use assets separately from other assets in the balance sheet.
The lease term is the non-cancellable period of the lease plus periods covered by an extension or
termination option, if it is reasonably certain that the lessee will exercise or not exercise the option,
respectively.
If there is a change in the lease term, or in the assessment of an option to purchase the underlying asset, the
Group remeasures the lease liability, on the basis of the revised lease term and the revised discount rate and
adjust the right-of-use assets accordingly.
Variable lease payments that depend on an index or a rate, are initially measured using the index or rate
existing at the commencement of the lease. When the cash flows of future lease payments change as the
result of a change in an index or a rate, the balance of the liability is adjusted with a correspondence
change in the right-of-use asset.
Other variable lease payments that are not included in the measurement of the lease liability are recognized
in profit or loss in the period in which the condition that triggers payment occurs.
- 38 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
After lease commencement, a right-of-use asset is measured on a cost basis less accumulated depreciation
and accumulated impairment losses and is adjusted for re-measurements of the lease liability. The asset is
depreciated on a straight-line basis over the useful life or contractual lease period, whichever earlier.
The Group applies ASBE8 Impairment of Assets, to determine whether the right-of-use asset is impaired
and to account for any impairment loss identified.
A lease liability is measured after the lease commencement date at amortized cost using the effective
interest method.
The Group uses derivative financial instruments to hedge its risks related to foreign currency and inflation
risks and derivatives that are not used for hedging.
Hedge accounting
The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing
basis, whether the hedge is expected to be effective in offsetting the changes in the fair value of cash flows
that can be attributed to the hedged risk during the period for which the hedge is designated.
An effective hedge exists when all of the below conditions are met:
• There is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic
relationship;
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the
hedged item that the entity actually hedges and the quantity of the hedging instrument that the
entity actually uses to hedge that quantity of hedged item.
On the commencement date of the accounting hedge, the Group formally documents the relationship
between the hedging instrument and hedged item, including the Group’s risk management objectives and
strategy in executing the hedge transaction, together with the methods that will be used by the Group to
assess the effectiveness of the hedging relationship.
With respect to a cash- flow hedge, a forecasted transaction that constitutes a hedged item must be highly
probable and must give rise to exposure to changes in cash flows that could ultimately affect profit or loss.
- 39 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Cash-flow hedges
Subsequent to the initial recognition, changes in the fair value of derivatives used to hedge cash flows are
recognized through other comprehensive income directly in a hedging reserve, with respect to the part of
the hedge that is effective. Regarding the portion of the hedge that is not effective, the changes in fair value
are recognized in profit and loss. The amount accumulated in the hedging reserve is reclassified to profit
and loss in the period in which the hedged cash flows impact profit or loss and is presented in the same line
item in the statement of income as the hedged item.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated
or exercised, the hedge accounting is discontinued. The cumulative gain or loss previously recognized in a
hedging reserve through other comprehensive income remains in the reserve until the forecasted
transaction occurs or is no longer expected to occur. If the forecasted transaction is no longer expected to
occur, the cumulative gain or loss in respect of the hedging instrument in the hedging reserve is reclassified
to profit or loss.
Economic hedge
Hedge accounting is not applied with respect to derivative instruments used to economically hedge
financial assets and liabilities denominated in foreign currency or CPI linked. Changes in the fair value of
such derivatives are recognized in profit or loss as gain (loss) from changes in fair value.
Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account
receivables.
Reportable segments are identified based on operating segments which are determined based on the
structure of the Group’s internal organization, management requirements and internal reporting system.
Two or more operating segments may be aggregated into a single operating segment if the segments have
similar economic characteristics and are same or similar in respect of the nature of each product and
service, the nature of production processes, the type or class of customers for the products and services, the
methods used to distribute the products or provide the services, and the nature of the regulatory
environment.
Inter-segment revenues are measured on the basis of actual transaction price for such transactions for
segment reporting. Segment accounting policies are consistent with those for the consolidated financial
statements.
- 40 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
Dividends which are approved after the balance sheet date are not recognized as a liability at the balance
sheet date but are disclosed in the notes separately.
There are no significant changes in accounting policies in the reporting period.
There are no significant changes in accounting estimates in the reporting period.
The preparation of the financial statements requires management to make estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates as well as underlying assumptions and
uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
Notes V.34, Note VIII, Note IX and Note XIII contain information about the assumptions and their risk
factors relating to post-employment benefits – defined benefit plans, fair value of financial instruments and
share-based payments. Other key sources of estimation uncertainty are as follows:
As described in Note III.12, trade receivables are reviewed at each balance sheet date to determine whether
credit risk on a receivable has increased significantly since initial recognition, lifetime expected losses is
accrued for impairment provision. Evidence of impairment includes observable data that comes to the
attention of the Group about loss events such as a significant decline in the solvency of an individual
debtor or the portfolio of debtors, and significant changes in the financial condition that have an adverse
effect on the debtor. If there is objective evidence of a recovery in the value of receivables which can be
related objectively to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed.
- 41 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
As described in Note III.15, the net realisable value of inventories is under management’s regular review,
and as a result, provision for impairment of inventories is recognized for the excess of inventories’
carrying amounts over their net realisable value. When making estimates of net realisable value, the Group
takes into consideration the use of inventories held on hand and other information available to form the
underlying assumptions, including the inventories’ market prices and the Group’s historical operating costs.
The actual selling price, the costs of completion and the costs necessary to make the sale and relevant taxes
may vary based on the changes in market conditions and product saleability, manufacturing technology
and the actual use of the inventories, resulting in the changes in provision for impairment of inventories.
The net profit or loss may then be affected in the period when the impairment of inventories is adjusted.
As described in Note III.23, if impairment indication exists, assets other than inventories and financial
assets are assessed at balance sheet date to determine whether the carrying amount exceeds the recoverable
amount of the assets. If any such case exists, an impairment loss is recognized.
If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of
the asset group to which the asset belongs will be estimated. Impairment exists if the carrying amount of an
asset or asset group is higher than recoverable amount, the higher of its fair value less costs of disposal and
the present value of the future cash flows expected to be derived from the asset or asset group. In assessing
the present value of estimated future cash flows, significant judgements are exercised over the asset’s
production, selling price, related operating expenses and discount rate to calculate the present value. All
the parameters used for estimation of the recoverable amount are based on reasonable and supportable
assumptions.
As described in Note III.18 and III.21, assets such as fixed assets and intangible assets are depreciated and
amortised over their useful lives after taking into account residual value. The estimated useful lives of the
assets are regularly reviewed to determine the depreciation and amortisation costs charged in each
reporting period. The useful lives of the assets are determined based on historical experience of similar
assets and the estimated technical changes. If there have been significant changes in the factors used to
determine the depreciation or amortisation, the rate of depreciation or amortisation is revised prospectively.
- 42 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Company and Group companies are assessed for income tax purposes in a large number of
jurisdictions and, therefore, Company management is required to use considerable judgment in
determining the total provision for taxes and attribution of income.
When assessing whether there will be sufficient future taxable profits available against which the
deductible temporary differences can be utilised, the Group recognizes deferred tax assets to the extent that
it is probable that future taxable profits will be available against which the deductible temporary
differences can be utilised, using tax rates that would apply in the period when the asset would be utilised.
In determining the amount of deferred tax assets, the Group makes reasonable judgements and estimates
about the timing and amount of taxable profits to be utilised in the following periods, and of the tax rates
applicable in the future according to the existing tax policies and other relevant regulations. If the actual
timing and amount of future taxable profits or the actual applicable tax rates differ from the estimates made
by management, the differences affect the amount of tax expenses.
When assessing the possible outcomes of legal claims filed against the Company and its investee
companies, the company positions are based on the opinions of their legal advisors. These assessments by
the legal advisors are based on their professional judgment, considering the stage of the proceedings and
the legal experience accumulated regarding the various matters. Since the results of the claims will be
determined by the courts, the outcomes could be different from the assessments.
In addition to the said claims, the Group is exposed to unasserted claims, inter alia, where there is doubt as
to interpretation of the agreement and/or legal provision and/or the manner of their implementation. This
exposure is brought to the Company’s attention in several ways, among others, by means of contacts made
to Company personnel. In assessing the risk deriving from the unasserted claims, the Company relies on
internal assessments by the parties dealing with these matters and by management, who weigh assessment
of the prospects of a claim being filed, and the chances of its success, if filed. The assessment is based on
experience gained with respect to the filing of claims and the analysis of the details of each claim. By their
nature, in view of the preliminary stage of the clarification of the legal claim, the actual outcome could be
different from the assessment made before the claim was filed.
The Group’s liabilities for long-term post-employment and other benefits are calculated according to the
estimated future amount of the benefit to which the employee will be entitled in consideration for his
services during the current period and prior periods. The benefit is stated at present value net of the fair
value of the plan’s assets, based on actuarial assumptions. Changes in the actuarial assumptions could lead
to material changes in the book value of the liabilities and in the operating results.
- 43 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
The Group enters into transactions in derivative financial instruments for the purpose of hedging risks
related to foreign currency and inflationary risks. The derivatives are recorded at their fair value. The fair
value of derivative financial instruments is based on quotes from financial institutions. The reasonableness
of the quotes is examined by discounting the future cash flows, based on the terms and length of the period
to maturity of each contract, while using market interest rates of a similar instrument as of the
measurement date. Changes in the assumptions and the calculation model could lead to material changes in
the fair value of the assets and liabilities and in the results.
- 44 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation
The income tax rate in China is 25% (2025: 25%). The subsidiaries outside of China are assessed based on
the tax laws in the country of their residence.
Set forth below are the tax rates outside China relevant to the largest subsidiaries of the Group in respect of
assets and operating income:
Name of subsidiary Location 2026
ADAMA agriculture solutions Ltd. Israel 23.0%
ADAMA Makhteshim Ltd. Israel 7.5%
ADAMA Agan Ltd. Israel 16.0%
ADAMA Brasil S/A Brazil 34.0%
Makhteshim Agan of North America Inc. U.S. 24.3%
ADAMA India Private Ltd India 25.2%
ADAMA Deutschland GmbH Germany 32.5%
Control Solutions Inc. U.S. 26.0%
Adama Australia Pty Ltd Australia 30.0%
ADAMA Northern Europe B.V. Netherlands 25.8%
ADAMA Italia SRL Italy 27.9%
Alligare LLC U.S. 26.1%
The VAT rate of the Group's subsidiaries is in the range between 2.6% to 27%.
(1) Benefits from High-Tech Certificate
The Company, was jointly approved as new and high-tech enterprise, by the Hubei Provincial Department
of Science and Technology, Department of Finance of Hubei Province and Hubei Provincial Office of the
State Administration of Taxation. The applicable income tax rate for 2026 and 2025 is 15%.
Adama Anpon (Jiangsu) Ltd. (Formally know as Jiangsu Anpon Electrochemical Co. Ltd, hereinafter -
“Anpon"), a subsidiary of the Company, was jointly approved as new and high-tech enterprise, by the
Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province
and Jiangsu Provincial Office of the State Administration of Taxation. The applicable income tax rate for
(2) Amendment to the Law for the Encouragement of Capital Investments, 1959
Since 2013 the Israeli enterprises are taxed under the "Preferred Enterprise" regime. The benefits include a
grants track for enterprises located in Area A. Tax rates on preferred income as from 2017 tax year are as
follows: 7.5% for Development Area A and 16% for the rest of the country. The amendment further
determined that no tax shall apply to dividend distributed out of preferred income to Israel resident
company shareholder.
- 45 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
(3) Amendment to the Law for the Encouragement of Capital Investments, 1959 - (cont’d)
As of January 1, 2017 the law includes new tax benefit tracks for a “preferred technological enterprise”
and a “special preferred technological enterprise” which award reduced tax rates to a technological
industrial enterprise for the purpose of encouraging activity relating to the development of qualifying
intangible assets.
The benefits will be awarded to a “preferred company” that has a “preferred technological enterprise” or a
“special preferred technological enterprise” with respect to taxable “preferred technological income” per
its definition in the Encouragement Law. Regulations that provide a nexus formula for allocating eligible
profits govern these regimes.
Income of a Preferred Technological Enterprise a Special Preferred Technological Enterprise will be
subject to a reduced corporate tax rate of 6% regardless of the development area in which the enterprise is
located.
- 46 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements
June 30 December 31
Cash on hand 1,091 1,107
Deposits in banks 2,817,941 3,352,219
Other cash and bank balances 87,020 96,974
Including cash and bank balances placed outside China 1,905,710 2,279,489
As at June 30, 2026 restricted cash and bank balances was 87,020 thousand RMB (as at December 31, 2025
June 30 December 31
Bank deposits 2,711 1,223
June 30 December 31
Economic hedge 164,551 401,091
Accounting hedge derivatives 63,941 48,288
June 30 December 31
Post-dated checks receivable 256,325 358,489
- 47 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
a. By category
June 30, 2026
Provision for expected
Book value credit losses
Percentage Carrying
Amount (%) Amount Percentage (%) amount
Account receivables assessed 676,529 8 353,127 52 323,402
individually for impairment
Account receivables assessed 7,573,420 92 115,520 2 7,457,900
collectively for impairment
December 31, 2025
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed 617,676 8 350,083 57 267,593
individually for impairment
Account receivables assessed 6,968,418 92 111,275 2 6,857,143
collectively for impairment
b. Aging analysis
June 30, 2026
Within 1 year (inclusive) 7,684,583
Over 1 year but within 2 years 307,110
Over 2 years but within 3 years 51,960
Over 3 years but within 4 years 19,636
Over 4 years but within 5 years 25,446
Over 5 years 161,214
- 48 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
Main groups of account receivables assessed collectively for impairment based on geographical
location:
Geographical location A:
Account receivables in geographical location A are grouped based on similar credit risk:
June 30, 2026
Provision for expected
Book value credit loss Percentage (%)
Credit group A 1,340,303 5,097 0.4
Credit group B 481,517 7,434 1.5
Credit group C 367,692 10,329 2.8
Credit group D 66,135 250 0.4
Geographical location B:
Account receivables in geographical location B are grouped based on aging analysis:
June 30, 2026
Provision for expected
Book value credit loss Percentage (%)
Accounts receivable that are not overdue 529,483 7,486 1.4
Debts overdue less than 90 days 39,072 1,141 2.9
Debts overdue less than 180 days but 18,372 1,862 10.1
more than 90 days.
Debts overdue less than 360 days but 15,055 3,909 26.0
more than 180 days.
Debts overdue above 360 days 14,580 11,210 76.9
Legal Debtors 54,638 54,638 100.0
Other geographical locations:
June 30, 2026
Provision for expected
Book value credit loss Percentage (%)
Other account receivables assessed 4,646,573 12,164 0.3
collectively for impairment
- 49 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
c. Addition, written-back and written-off of provision for expected credit losses during the period
Lifetime
expected credit Lifetime expected
loss (credit losses credit loss (credit
has not occurred) losses has occurred) Total
January 1, 2026 42,428 418,930 461,358
Addition (write back) during the period, net (641) 29,081 28,440
Write-off during the period - (7,435) (7,435)
Classification between long term and short - (16,808) (16,808)
term, net
Exchange rate effect (1,149) 4,241 3,092
Balance as of June 30, 2026 40,638 428,009 468,647
d. Five largest accounts receivable at June 30, 2026:
Allowance of expected
Proportion of Accounts credit losses (credit losses
Name Closing balance receivable (%) has occurred)
Customer 1 238,106 3 -
Customer 2 96,081 1 (89,727)
Customer 3 88,426 1 -
Customer 4 69,968 1 -
Customer 5 66,481 1 -
Total 559,062 7 (89,727)
e. Derecognition of accounts receivable due to transfer of financial assets
Certain subsidiaries of the group entered into a securitization transaction with Rabobank International for
sale of trade receivables (hereinafter – “the Securitization Program” and/or “the Securitization
Transaction”).
Pursuant to the Securitization Program, the companies will sell their trade receivables debts, in various
different currencies, to a foreign company that was set up for this purpose and that is not owned by the
Adama Ltd. (hereinafter – “the Acquiring Company”). Acquisition of the trade receivables by the
Acquiring Company is financed by Cooperative Rabobank U.A..
The trade receivables included as part of the Securitization Transaction are trade receivables that meet the
criteria provided in the agreement.
Every year the credit facility is re-approved in accordance with the Securitization Program. As at 30 June
- 50 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
The maximum scope of the securitization is adjusted for the seasonal changes in the scope of the
Company’s activities, as follows: during January - 350m$ (as of June-2026 2,384 million RMB ), during
the months of February through July – 400m$ (as of June-2026 2,724 million RMB ), during the months of
August through September – 300m$ (as of June-2026 2,043 million RMB), during the months of October
through November- 275m$ (as of June-2026 1,873 million RMB) and during the month of December –
facility of 50$ million (as of June-2026 - 341 million RMB) which will be applicable each period. The
proceeds received from those customers whose debts were sold are used for acquisition of new trade
receivables.
The price at which the trade receivables debts are sold is the amount of the debt sold less a discount
calculated based on, among other things, the expected length of the period between the date of sale of the
trade receivable and its anticipated repayment date. In the month following acquisition of the debt, the
Acquiring Company pays in cash most of the debt while the remainder is recorded as a subordinated note
and as continuing involvement that is paid after collection of the debt sold. If the customer does not pay its
debt on the anticipated repayment date, the Company bears interest up to the earlier of the date on which
the debt is actually repaid or the date on which debt collection is transferred to the insurance company (the
actual costs are not significant and are not expected to be significant).
The Acquiring Company bears 95% of the credit risk in respect of the customers whose debts were sold
and will not have a right of recourse to the Company in respect of the amounts paid in cash, except
regarding debts with respect to which a commercial dispute arises between the companies and their
customers, that is, a dispute the source of which is a claim of non-fulfillment of an obligation of the seller
in the supply agreement covering the product, such as: a failure to supply the correct product, a defect in
the product, delinquency in the supply date, and the like.
The Acquiring Company appointed a policy manager who will manage for it the credit risk involved with
the trade receivables sold, including an undertaking with an insurance company.
Pursuant to the Receivables Servicing Agreement, the Group subsidiaries handle collection of the trade
receivables as part of the Securitization Transaction for the benefit of the Acquiring Company.
As part of the agreement, Solutions is committed to comply with certain financial covenants, mainly the
ratio of the liabilities to equity and profit ratios. As of June 30 2026, Solutions was in compliance with the
financial covenants.
The accounting treatment of sale of the trade receivables included as part of the Securitization Program is:
The Company is not controlling the Acquiring Company, therefore the Acquiring Company is not
consolidated in the financial statements.
The Company continues to recognize the trade receivables included in the Securitization Program based on
the extent of its continuing involvement therein.
A subordinated note is recorded in respect of the portion of trade receivables included in the Securitization
Program with respect to outstanding cash proceeds, however the Company has transferred the credit risk.
The continuing involvement and subordinated note recorded in the balance sheet as part of the “other
receivables” line item.
- 51 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
The loss from sale of the trade receivables is recorded at the time of sale in the statement of income in the
“financing expenses”.
f. A subsidiary in Brazil (hereinafter - “the subsidiary”) entered into the following securitization
agreements:
Since 2016, a securitization transaction with Rabobank Brazil for sale of customer receivables (hereinafter
"FIDC-Donegal agreement"). Under the FIDC-Donegal agreement, the subsidiary will sell its receivables
to a securitization structure (hereinafter - “the entity”) that was formed for this purpose where the
subsidiary has subordinate rights of 5% of the entity's capital.
As at June 17, 2024 the FIDC-Donegal agreement was approved up to September 30, 2027. The maximum
securitization scope as of June, 2026 is BRL 350 million (460 million RMB).
On the date of the sale of the customer receivables, the entity pays the full amount which is the debt
amount sold net of discount calculated, among others, over the expected length of the period between the
date of sale of the customer receivable and its anticipated repayment date.
The entity bears 95% of the credit risk in respect of the customers whose debts were sold such that the
entity has the right of recourse to 5% of the unpaid amount. The subsidiary has a pledged deposit with
regards to the entity’s right of recourse.
The subsidiary continues to recognize the trade receivables sold to the entity based on the extent of its
continuing involvement therein (5% right of recourse) and also recognizes an associated liability in the
same amount.
In "FIDC-Donegal agreement" the subsidiary handles the collection of receivables included in the
securitization for the entity.
In the agreement above, the subsidiary does not control the entities and therefore the entities are not
consolidated in the Group's financial statements.
The loss from the sale of the trade receivables is recorded at the time of sale in the statement of income in
the “financing expenses” category.
- 52 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
f. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
June 30 December 31
Accounts receivables derecognized 3,812,231 3,275,491
Continuing involvement 168,951 148,167
Subordinated note in respect of trade receivables 521,388 777,505
Liability in respect of trade receivables 58,376 29,191
Six months ended June 30
Loss in respect of sale of trade receivables 87,785 87,344
June 30 December 31
Bank acceptance draft 78,314 30,767
As at June 30, 2026, bank acceptance endorsed but not yet due amounts to 297,560 thousands RMB.
(1) The aging analysis of prepayments is as follows:
June 30 December 31
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 289,497 94 358,321 98
Over 1 year but within 2 years (inclusive) 18,451 6 8,726 2
Over 2 years but within 3 years (inclusive) 753 - 774 -
Over 3 years 363 - 191 -
(2) Total of five largest prepayments by debtor at the end of the period:
Percentage of prepayments
Amount (%)
June 30, 2026 75,240 24
- 53 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
(1) Other receivables by nature
June 30 December 31
Dividend receivable 4,340 2,325
Others 771,926 1,073,839
a. Others breakdown by categories
June 30 December 31
Subordinated note in respect of trade receivables 521,388 777,505
Trade receivables as part of securitization transactions
not yet eliminated 168,951 148,167
Other 94,010 162,387
Sub total 784,349 1,088,059
Provision for expected credit losses - other receivables (12,423) (14,220)
b. Other receivables by aging
June 30
Within 1 year (inclusive) 764,254
Over 1 year but within 2 years 4,488
Over 2 years but within 3 years 1,498
Over 3 years but within 4 years 48
Over 4 years but within 5 years 6,151
Over 5 years 7,910
(2) Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Six months ended
June 30, 2026
Balance as of January 1 2026, 14,220
Addition (written back) during the period (235)
Write-off during the period (1,508)
Exchange rate effect (54)
Balance as of June 30, 2026 12,423
- 54 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
(3) Five largest other receivables at June 30, 2026:
Allowance of
Proportion of other expected credit
Name Closing balance receivables (%) losses
Party 1 521,388 66 -
Party 2 17,885 2 -
Party 3 5,572 1 5,572
Party 4 1,595 - 1,595
Party 5 1,280 - 1,280
Total 547,720 70 8,447
(1) Inventories by category:
June 30, 2026
Provision for
Book value impairment Carrying amount
Raw materials 3,126,338 25,769 3,100,569
Work in progress 1,334,872 851 1,334,021
Finished goods 6,627,347 277,792 6,349,555
Others 513,244 16,602 496,642
December 31, 2025
Provision for
Book value impairment Carrying amount
Raw materials 2,903,909 32,098 2,871,811
Work in progress 1,806,286 820 1,805,466
Finished goods 6,729,824 277,285 6,452,539
Others 495,793 17,767 478,026
- 55 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
(2) Provision for impairment of inventories:
For the Six months ended June 30, 2026
January 1, Reversal or
Raw material 32,098 5,975 (11,177) (1,127) 25,769
Work in progress 820 341 (310) - 851
Finished goods 277,285 100,458 (92,767) (7,184) 277,792
Others 17,767 2,920 (3,865) (220) 16,602
June 30 December 31
Deductible VAT 570,110 528,604
Current tax assets 308,233 311,227
Short term investments - 155,154
Others 87,349 99,288
June 30 December 31
Long term account receivables from sale of goods 281,583 180,324
Provision for expected credit losses (78,400) (62,121)
Provision for
long term
receivables
Balance as of January 1, 2026 62,121
Classification between long term and short term, net 16,808
Addition (write back) during the period, net -
Exchange rate effect (529)
Balance as of June 30, 2026 78,400
- 56 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
(1) Long-term equity investments by category:
June 30 December 31
Joint venture 1,956 2,129
Associate 40,864 37,183
(2) Movements of long-term equity investments for the period are as follows:
Other Declared
January 1, Investment Comprehensive distribution of Balance at the
Joint
venture
Investee A 2,129 )110( (63) - 1,956
Sub-total 2,129 )110( (63) - 1,956
Associate
Investee B 37,183 6,703 1,134 (4,156) 40,864
Sub-total 37,183 6,703 1,134 (4,156) 40,864
Sub-total 39,312 6,593 1,071 (4,156) 42,820
December 31, Dividend recognized
June 30, 2026 2025 during 2026
Investment A 54,299 54,299 -
Investment B 73,176 75,497 -
Other equity investments are non-core businesses that are intended to be held in the foreseeable future.
- 57 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
Land & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2026 4,692,472 19,736,914 172,406 487,236 25,089,028
Purchases 13,181 37,195 19,933 14,354 84,663
Transfer from construction in progress 13,717 354,388 - 553 368,658
Disposals (180,005) (543,528) (22,666) (3,601) (749,800)
Currency translation adjustment (72,705) (470,143) (3,626) (14,863) (561,337)
Balance as at June 30, 2026 4,466,660 19,114,826 166,047 483,679 24,231,212
Accumulated depreciation
Balance as at January 1, 2026 (2,019,460) (11,380,299) (78,043) (383,424) (13,861,226)
Charge for the period (69,463) (417,366) (13,087) (18,605) (518,521)
Disposals 108,227 483,505 15,934 3,305 610,971
Currency translation adjustment 40,612 275,804 1,128 13,292 330,836
Balance as at June 30, 2026 (1,940,084) (11,038,356) (74,068) (385,432) (13,437,940)
Provision for impairment
Balance as at January 1, 2026 (380,580) (772,042) (681) (948) (1,154,251)
Charge for the period - (74,229) - - (74,229)
Transfer from construction in progress - (298) - - (298)
Disposals 20,353 31,789 75 18 52,235
Currency translation adjustment 7,090 11,524 - 6 18,620
Balance as at June 30, 2026 (353,137) (803,256) (606) (924) (1,157,923)
Carrying amounts
As at June 30, 2026 2,173,439 7,273,214 91,373 97,323 9,635,349
As at January 1, 2026 2,292,432 7,584,573 93,682 102,864 10,073,551
The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.
- 58 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(1) Construction in progress
June 30 December 31
Provision for Provision for
Book value impairment Carrying amount Book value impairment Carrying amount
(2) Details and Movements of major construction projects in progress during period ended June 30, 2026
Actual
Including: Currency Transfer cost to Project
January Interest translation to fixed June 30, budget progress
Budget 1, 2026 Additions capitalized differences assets Impairment 2026 (%) (%) Source of funds
Project A 874,889 66,308 3,196 - - (2,032) - 67,472 94% 94% Bank loan and internal finance
Project B 912,661 162,376 7,034 - (5,121) - - 164,289 86% 86% Bank loan and internal finance
* As of June 30, 2026 Project A include impairment of RMB 17 million.
- 59 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Land & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2026 852,943 41,927 282,628 4,224 1,181,722
Additions 16,154 733 55,634 (13) 72,508
Decrease (76,984) (3,845) (51,596) (739) (133,164)
Currency translation adjustment (13,094) (1,273) (9,271) (154) (23,792)
Balance as at June 30, 2026 779,019 37,542 277,395 3,318 1,097,274
Accumulated depreciation
Balance as at January 1, 2026 (356,593) (23,003) (137,632) (3,051) (520,279)
Charge for the period (44,226) (1,366) (41,194) (442) (87,228)
Decrease 5,928 3,845 47,004 2,012 58,789
Currency translation adjustment 8,757 693 4,648 84 14,182
Balance as at June 30, 2026 (386,134) (19,831) (127,174) (1,397) (534,536)
Provision for impairment
Balance as at January 1, 2026 - - - - -
Balance as at June 30, 2026 - - - - -
Carrying amounts
As at June 30, 2026 392,885 17,711 150,221 1,921 562,738
As at January 1, 2026 496,350 18,924 144,996 1,173 661,443
- 60 -
ADAMA LTD.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Marketing
Intangible assets rights,
Product on Purchase of tradename and Customers
registration Products Software trademarks relations Land use rights (1) Others(2) Total
Costs
Balance as at January 1, 2026 13,291,894 4,183,197 1,568,175 783,128 638,122 506,245 605,009 21,575,770
Purchases 121,513 - 57,790 - - - 6,928 186,231
Disposals (452,428) - (6,308) (9,748) - - (8,996) (477,480)
Currency translation adjustment (404,322) (129,684) (43,928) (24,377) (16,573) (1,212) (12,679) (632,775)
Balance as at June 30, 2026 12,556,657 4,053,513 1,575,729 749,003 621,549 505,033 590,262 20,651,746
Accumulated amortization
Balance as at January 1, 2026 (11,006,559) (3,571,987) (992,254) (550,475) (446,031) (130,437) (234,807) (16,932,550)
Charge for the period (241,116) (53,168) (57,910) (9,875) (20,608) (4,968) (10,631) (398,276)
Disposals 451,762 - 6,281 9,748 - - 8,996 476,787
Currency translation adjustment 341,594 111,392 27,711 17,272 12,806 (248) 5,200 515,727
Balance as at June 30, 2026 (10,454,319) (3,513,763) (1,016,172) (533,330) (453,833) (135,653) (231,242) (16,338,312)
Provision for impairment
Balance as at January 1, 2026 (170,389) (159,597) (9,273) - - - (1,618) (340,877)
Charge for the period - - - - - - - -
Disposals 348 - - - - - - 348
Currency translation adjustment 2,964 4,948 269 - - - - 8,181
Balance as at June 30, 2026 (167,077) (154,649) (9,004) - - - (1,618) (332,348)
Carrying amount
As at June 30, 2026 1,935,261 385,101 550,553 215,673 167,716 369,380 357,402 3,981,086
As at January 1, 2026 2,114,946 451,613 566,648 232,653 192,091 375,808 368,584 4,302,343
(1) Include land parcel in Israel that has not yet been registered in the name of the Group subsidiaries at the Land Registry Office, mostly due to registration procedures or technical problems.
(2) Mainly exclusivity agreements.
- 61 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Changes in goodwill
The Group allocates goodwill to two cash generating units ("CGU"), Crop Protection (Agro) and a non-core
activity included in the Intermediates and ingredients segment. At the end of the year, or more frequently
whether indicators for impairment exists, the Group estimates the recoverable amount of each CGU for which
goodwill has been allocated to using the DCF model. As of June 30, 2026 no indicators of impairment existed.
The 2025 DCF model was based on:
? The actual results of 2025, 2026 workplan and the forecast results for the next 4 years. The key
assumptions contains projected revenue growth rate and gross margin.
? The discount rate (8.6% WACC) based on the company's cost of equity and cost of debt, taking into
account the comprehensive risk factors.
? The annual growth rate (1.5%) based on the management projections and market expectations.
As of December 31, 2025 the value in use of the cash generating units to which goodwill has been allocated to
exceeds its carrying amount.
Change Currency
January 1, during the translation Balance at
Book value 4,964,450 - (149,964) 4,814,486
Impairment provision - - - -
Carrying amount 4,964,450 - (149,964) 4,814,486
(1) Deferred tax assets without taking into consideration of the offsetting of balances within the same
tax jurisdiction
June 30 December 31
Deductible Deductible
temporary Deferred tax temporary Deferred tax
differences assets differences assets
Deferred tax assets
Deferred tax assets in respect of carry
forward losses 2,727,787 503,850 3,217,169 484,298
Deferred tax assets in respect of
inventories 2,760,879 750,488 2,199,271 585,021
Deferred tax assets in respect of
employee benefits 900,396 135,489 874,432 142,094
Other deferred tax asset 2,601,400 634,354 2,508,133 644,334
- 62 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(2) Deferred tax liabilities without taking into consideration of the offsetting of balances within the
same tax jurisdiction
June 30 December 31
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Deferred tax liabilities
Deferred tax liabilities in respect of
fixed assets, intangible assets and
right-of-use assets 3,937,397 729,299 4,258,988 785,595
(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting
June 30 December 31
The offset The offset
amount of Deferred tax amount of Deferred tax
deferred tax assets or deferred tax assets or
assets and liabilities assets and liabilities after
liabilities after offset liabilities offset
Presented as:
Deferred tax assets 498,013 1,526,168 561,571 1,294,176
Deferred tax liabilities 498,013 231,286 561,571 224,024
(4) Details of unrecognized deferred tax assets
June 30 December 31
Deductible temporary differences 756,471 830,630
Deductible losses carry forward 4,857,241 5,547,431
(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets
June 30 December 31
After 2030 4,203,312 4,839,207
- 63 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(6) Unrecognized deferred tax liabilities
When calculating the deferred taxes, taxes that would have applied in the event of realizing investments
in subsidiaries were not taken into account, since it is the Company’s intention to hold these investments
and not realize them.
June 30 December 31
Judicial deposits 171,328 152,033
Advances in respect of non-current assets 34,418 38,745
Assets related to securitization 29,171 27,799
Others 204,139 184,882
Short-term loans by category:
June 30 December 31
Unsecured loans 5,763,384 6,673,792
- 64 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
June 30 December 31
Economic hedge 246,105 152,525
Accounting hedge derivatives 3,732 37,056
June 30 December 31
Post-dated checks payables 127,309 221,808
Note payables draft 478,005 400,852
As at June 30, 2026, none of the bills payable are overdue.
June 30 December 31
Within 1 year (including 1 year) 4,974,877 5,379,999
Over 3 years 30,950 34,349
There are no significant accounts payables aging over one year.
As at June 30, 2026, the amount of the accounts payable included under the supplier financing
arrangements was 892,228 thousand RMB (as at December 31,2025: 1,040,262). Accounts payables
under financing arrangements have payment due dates ranging from 90 to 180 days from the invoice
date. Comparable accounts payable that are not part of supplier financing arrangements have similar
payment terms.
Under supplier finance arrangements, participating suppliers may elect, to receive early payment
from the financial institutions for invoices owed and the company makes a payment to the financial
institutions on the original invoice due date, regardless of whether the supplier has elected to receive
early payment or not.
- 65 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
The company may provide guarantees to the financial institutions (as may be provided to suppliers
directly as well) but incurs no interest or other charges payable to the financial institutions on the
payments made.
The balance of the accounts payable is not derecognized from the balance sheet because the original
liability is not substantially modified on entering the arrangements as it continues to carry the
characteristic of accounts payable and represent liabilities to pay for goods and services.
The settlements to the financial institutions are included within operating cash flows because they
continue to be part of the normal operating cycle.
Supplier financing arrangements have no impact on the company's liquidity risk.
June 30 December 31
Discount for customers 1,394,296 813,747
Advances from customers 121,344 975,743
June 30 December 31
Short-term employee benefits 446,626 643,371
Post-employment benefits 25,038 46,389
Share based payment (See note XIII) - 110
Other benefits within one year 215,342 197,286
Current maturities 47,601 49,568
- 66 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
June 30 December 31
Corporate income tax 348,041 322,939
VAT 196,985 187,569
Others 26,694 28,660
June 30 December 31
Dividends payables 750 750
Other payables 1,522,269 1,417,343
(1) Other payables
June 30 December 31
Accrued expenses 789,954 762,284
Hold-back payment due to acquistions 100,000 100,000
Liability in respect of securitization transactions 58,376 29,191
Payables in respect of intangible assets 18,097 43,944
Financial institutions 9,753 886
Others 546,089 481,038
Non-current liabilities due within one year by category are as follows:
June 30 December 31
Long term loans from related party due within one year 2,350,850 2,359,991
Long-term loans due within one year 760,991 819,790
Debentures payable due within one year 513,807 489,394
Lease liabilities due within one year 169,062 156,028
- 67 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
June 30 December 31
Put options to holders of non-controlling interests 549,492 544,725
Provision in respect of returns 311,873 344,273
Provision in respect of claims 36,343 39,846
Others 388 415
Long-term loans by category
June 30 December 31
Long term loans
Unsecured loans 1,913,470 2.25%-6.45% 2,327,304 1.65%-6.45%
Less:
Long term loans from banks due within 1 year (760,991) (819,790)
Long term loans, net 1,152,479 1,507,514
* For more detailes regarding the guaranteed loans – see note X. related parties and related parties
transactions.
For the maturity analysis, see note VIII.C - Liquidity risk.
June 30 December 31
Debentures Series B 5,651,921 5,383,470
Current maturities (513,807) (489,394)
June 30
First year (current maturities) 513,807
Second year 513,807
Third year 513,807
Fourth year 513,807
Fifth year and thereafter 3,636,693
- 68 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Movements of debentures payable:
For the Six months ended June 30, 2026:
Original Original Balance at Amortization CPI and Repayment Currency Balance at
Maturity Face value Face value Issuance Maturity Issuance January 1, of discounts exchange during the translation June 30,
period in RMB NIS date period amount 2026 or premium rate effect period adjustment 2026
Debentures November
Series B 2,673,640 1,650,000 4.12.2006 2020-2036 3,043,742 2,237,456 48 186,753 - (74,852) 2,349,405
Debentures November
Series B 843,846 513,527 16.1.2012 2020-2036 842,579 692,337 4,129 58,056 - (23,195) 731,327
Debentures November
Series B 995,516 600,000 7.1.2013 2020-2036 1,120,339 848,376 1,778 70,908 - (28,392) 892,670
Debentures November
Series B 832,778 533,330 1.2.2015 2020-2036 1,047,439 786,741 (1,096) 65,766 - (26,305) 825,106
Debentures November
Series B 418,172 266,665 1-6.2015 2020-2036 556,941 421,173 (2,868) 35,152 - (14,038) 439,419
Debentures November
Series B 497,989 246,499 5.5.2020 2020-2036 692,893 397,387 (3,412) 33,251 - (13,232) 413,994
Series B debentures, in amount of NIS 3,810 million par value (2,958 million par value, net of self-purchased), linked to the CPI and bear interest at the base annual rate of
On May 26, 2025, ADAMA Solutions Board of Directors approved a buyback plan for the Company's debentures (Series B) in the amount of up to USD 300 million (RMB
- 69 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
June 30 December 31
Lease liabilities 821,792 1.9%-14.1% 907,254 1.0%-14.1%
Less: Lease liabilities due within one year (169,062) (156,028)
Long term lease liabilities, net 652,730 751,226
Post-employment benefit plans – defined benefit plan and early retirement
June 30 December 31
Total present value of obligation 497,317 490,562
Less: fair value of plan's assets (64,649) (63,751)
Net liability related to Post-employment benefits 432,668 426,811
Termination benefits 71,004 67,828
Total recognized liability for defined benefit plan, net (1) 503,672 494,639
Other long-term employee benefits 103,137 91,824
Total long-term employee benefits, net 606,809 586,463
Including: Long-term employee benefits payable due within one year 47,601 49,568
(1) Movement in the net liability and assets in respect of defined benefit plans, early retirement and
their components
Defined benefit
obligation and early Fair value of plan's
retirement assets Total
Balance as at January 1, 558,390 531,452 63,751 54,186 494,639 477,266
Expense/income recognized
in profit and loss:
Current service cost 7,423 8,400 - - 7,423 8,400
Past service cost 1,855 (309) 579 - 1,276 (309)
Interest costs 10,251 10,360 1,400 1,315 8,851 9,045
Losses on curtailments and settlements 13,260 3,374 - - 13,260 3,374
Changes in exchange rates 28,029 32,895 4,268 4,260 23,761 28,635
Actuarial gain (losses) due to early retirement (301) 1,033 - - (301) 1,033
Included in other comprehensive income:
Actuarial gain (losses) as a result of changes in
actuarial assumptions 2,787 (1,555) 1,317 (302) 1,470 (1,252)
Foreign currency translation differences in respect of
foreign operations (20,274) (2,324) (2,142) (285) (18,132) (2,040)
Additional movements:
Benefits paid (33,099) (34,220) (5,227) (3,161) (27,872) (31,059)
Contributions paid by the Group - - 703 690 (703) (690)
Balance as at June 30, 568,321 549,106 64,649 56,703 503,672 492,403
- 70 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Post-employment benefit plans – defined benefit plan and early retirement - (cont'd)
(2) Actuarial assumptions and sensitivity analysis
The principal actuarial assumptions at the reporting date for defined benefit plan
June 30 December 31
Discount rate (%)* 1.8%-2.7% 1.8%-3.3%
* According to the demographic and the benefit components.
The assumptions regarding the future mortality rate are based on published statistical data and acceptable
mortality rates.
Possible reasonable changes as of the date of the report in the discount rate, assuming the other
assumptions remain unchanged, would have affected the defined benefit obligation as follows:
As of June 30, 2026
Increase of 1% Decrease of 1%
Change in defined benefit obligation (36,231) 47,336
June 30 December 31
Liabilities in respect of contingencies* 231,874 210,045
Provision in respect of site restoration 188,592 211,997
Other 1,022 2,305
* Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of
resources had been reliably estimated.
- 71 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
June 30 December 31
Long term loans from related party 2,350,850 2,359,991
Current maturities (2,350,850) (2,359,991)
- -
Balance at Issuance of new Balance at
January 1, 2026 shares Buyback of shares June 30, 2026
Share capital 2,329,812 - - 2,329,812
Balance at Additions during Reductions during Balance at
January 1, 2026 the period the period June 30, 2026
Share premiums 12,606,562 - - 12,606,562
Other capital reserve 260,561 - - 260,561
- 72 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Attributable to shareholders of the company
Less:
Balance at transfer Less:
January 1, Before tax to profit Income tax Net-of-tax Balance at June
Items that will not be
reclassified to profit or loss 114,141 (1,470) - 697 (2,167) 111,974
Re-measurement of changes
in liabilities under defined
benefit plans 85,466 (1,470) - 697 (2,167) 83,299
Changes in fair value of
other equity investment 28,675 - - - - 28,675
Items that may be
reclassified to profit or loss 1,456,607 (305,939) 40,827 3,390 (350,156) 1,106,451
Effective portion of gain or
loss of cash flow hedge 8,880 89,903 40,827 3,390 45,686 54,566
Translation difference of
foreign financial statements 1,447,727 (395,842) - - (395,842) 1,051,885
Additions Reductions
Balance at during the during the Balance at
January 1, 2026 period period June 30, 2026
Statutory surplus reserve 294,796 - - 294,796
Discretional surplus reserve 3,814 - - 3,814
Retained earnings as at January 1 502,977 1,680,382
Net income (loss) for the period attributable to shareholders of the
Company 432,567 (80,352)
Dividends to non-controlling Interest (22,200) (74,170)
Retained earnings as at June 30 913,344 1,525,860
- 73 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Six months ended June 30 Six months ended June 30
Income Cost of sales Income Cost of sales
Principal activities 14,442,307 10,511,602 14,991,514 11,019,714
Other businesses 34,233 11,728 32,686 10,459
Six months ended June 30
Tax on turnover 11,648 10,953
Others 35,272 46,175
Six months ended June 30
Salaries and related expense 962,780 912,703
Depreciation and amortization 410,537 465,967
Advertising and sales promotion 165,134 132,972
Warehouse expenses 103,994 85,581
Travel expenses 69,539 67,740
Registration 67,653 70,147
Professional services 57,746 51,287
Insurance 45,360 39,707
Others 155,320 149,564
- 74 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Six months ended June 30
Salaries and related expenses 311,785 238,606
IT systems 75,682 76,570
Professional services 67,609 225,996
Depreciation and amortization 64,956 71,596
Cost contribution arrangement 22,226 36,281
Office rent, maintenance and expenses 18,710 17,901
Other 41,071 67,917
Six months ended June 30
Salaries and related expenses 119,301 110,779
Depreciation and amortization 33,275 32,164
Materials 16,100 19,589
Office rent, maintenance and expenses 8,351 8,101
Field trial 7,834 13,186
Professional services 7,076 8,839
Other 19,413 24,135
Six months ended June 30
Interest expenses on debentures and loans and other charges 454,511 522,664
Exchange rate differences, net 421,845 230,008
CPI expenses in respect of debentures 65,049 117,480
Interest income from customers, banks and others (76,612) (101,281)
Loss in respect of sale of trade receivables 87,785 87,344
Revaluation of put option, net 10,677 43,890
Interest expense on lease liabilities 28,689 24,084
Interest expense in respect of post-employment benefits and early
retirement, net 10,417 8,992
Others 21,345 91,159
- 75 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Six months ended June 30
Income from long-term equity investments accounted for using
the equity method 6,593 5,261
Six months ended June 30
Gain (loss) from changes in fair value of derivative financial
Instruments 213,451 (36,189)
Others - 29,696
Six months ended June 30
Bills receivable and accounts receivable (28,440) (93,532)
Other receivables 235 (147)
(28,205) (93,679)
Six months ended June 30
Fixed assets (74,229) -
Inventories (76,256) (26,081)
Construction in progress (1,544) (101)
Intangible asset - (1,435)
(152,029) (27,617)
- 76 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Six months ended June 30 Included in
non-recurring
Gain from disposal of fixed assets 304,273 5,160 304,273
Gain (loss) from disposal of intangible assets 2,076 (106) 2,076
Six months ended June 30
Current year 231,081 192,126
Deferred tax expenses (income) (268,411) (245,081)
Adjustments for previous years, net (2,852) 7,728
(40,182) (45,227)
(1) Reconciliation between income tax expense and accounting profit is as follows:
Six months ended June 30
Loss before taxes 392,385 (125,579)
Statutory tax in china 25% 25%
Tax calculated according to statutory tax in china 98,096 (31,395)
Tax benefits from Approved Enterprises (17,203) (19,282)
Difference between measurement basis of income for financial
statement and for tax purposes (18,164) (82,453)
Taxable income (loss) and temporary differences at other tax rate (142,908) (197,928)
Taxes in respect of prior years (2,852) 7,728
Utilization of tax losses prior years for which deferred taxes were
not created (103,537) (14,177)
Temporary differences and losses in the report year for which
deferred taxes were not created 130,936 180,931
Non-deductible expenses, non-taxable income and other difference,
net 49,617 48,007
Neutralization of tax calculated in respect of the Company’s share
in results of equity accounted investees (2,392) (1,744)
Effect of change in tax rate in respect of deferred taxes (32,028) 12,056
Creation and reversal of deferred taxes for tax losses and temporary
differences from previous years, net 253 53,030
Income tax expenses (incomes) (40,182) (45,227)
Details of the Other comprehensive income are set out in Note V.39
- 77 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
Amount recognized in the profit
and loss statements during the Six
months ended June 30
Category Presentation accounts 2026 2025
Government grants related to income Non-Operating income 3,940 5,111
Government grants related to assets Fixed assets, Intangible assets 5,352 5,334
(1) Cash received relating to other operating activities
Six months ended June 30
Financial institutions 70,735 -
Interest income 24,555 39,574
Government subsidies 2,970 12,854
Others 135,804 22,714
(2) Cash paid relating to other operating activities
Six months ended June 30
Derivatives transactions 100,589 402,853
Professional services 186,982 256,694
Advertising and sales promotion 173,576 141,629
IT and Communication 132,238 106,662
Commissions and Warehouse 108,548 99,741
Registration and Field trials 81,734 76,972
Financial institutions 20,214 71,112
Travel 52,967 45,237
Insurance 35,064 35,887
Other 356,937 419,429
(3) Cash paid relating to other investing activities
Six months ended June 30
Increase in short and long term investments 631 47,825
- 78 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(4) Cash received from other financing activities
Six months ended June 30
Proceeds in respect of hedging transactions on debentures 683,858 246,992
Deposit for issuing bills payables 94,970 46,148
Borrowing from related party * - 789,364
* For more detailes regarding the borrowing from related party – see note X. related parties and related
parties transactions.
(5) Cash paid relating to other financing activities
Six months ended June 30
Repayment of lease liability 117,586 93,276
Deposit for issuing bills payable 85,016 181,047
Payment in respect of hedging transactions on debentures - 165,934
(1) Supplementary information on Cash Flow Statement
a. Reconciliation of net profit to cash flows from operating activities:
Six months ended June 30
Net income (loss) 432,567 (80,352)
Add: Impairment provisions for assets 152,029 27,617
Credit impairment losses 28,205 93,679
Depreciation of fixed assets and investment property 519,339 520,896
Depreciation of right-of-use asset 87,228 94,218
Amortization of intangible asset 398,276 447,594
Gains on disposal of fixed assets, intangible assets, and other long-
term assets, net (306,349) (5,054)
Losses (gain) from changes in fair value (213,451) 6,493
Financial expenses 1,040,649 1,214,335
Investment income, net (6,593) (5,261)
Increase in deferred tax assets, net (280,584) (226,093)
Increase (decrease) in deferred tax liabilities, net 12,173 (18,988)
Increase in inventories, net (32,067) (365,063)
Increase in operating receivables, net (2,375,183) (1,431,729)
Increase in operating payables, net 1,213,670 1,466,286
Net cash flow provided by operating activities 669,909 1,738,578
- 79 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(1) Supplementary information on Cash Flow Statement - - (cont'd)
b. Net Decrease in cash and cash equivalents
Six months ended June 30
Closing balance of cash and cash equivalents 2,819,032 3,315,685
Less: Opening balance of cash and cash equivalents 3,353,326 3,583,963
Decrease in cash and cash equivalents (534,294) (268,278)
(2) Details of cash and cash equivalents
June 30 December 31
Cash on hand 1,091 1,107
Bank deposits available on demand without restrictions 2,817,941 3,352,219
June 30
Cash 87,020 Pledged
Other non-current assets 171,328 Guarantees
- 80 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(1) Foreign currencies denominated items - (cont'd)
As at June 30, 2026
RMB at the
Exchange end of the
Foreign currency at the end of the period rate period
Cash and bank balances
EUR 41,519 7.76 322,312
USD 20,261 6.81 137,999
BRL 90,379 1.32 118,939
ILS 51,444 2.29 117,653
ZAR 117,935 0.42 48,943
RUB 388,144 0.09 34,157
GBP 3,693 9.01 33,271
Other 193,170
Total 1,006,444
Bills and Accounts receivable
BRL 783,036 1.316 1,030,476
EUR 49,157 7.763 381,606
RON 214,723 1.48 317,790
HUF 8,977,385 0.022 197,502
ILS 69,910 2.287 159,884
CAD 19,754 4.784 94,501
CZK 294,910 0.320 94,358
GBP 10,464 9.009 94,270
Other 369,255
Total 2,739,642
Other receivables
EUR 73,131 7.763 567,716
CAD 20,660 4.784 98,836
PLN 34,753 1.806 62,764
BRL 26,121 1.316 34,375
Other 64,197
Total 827,888
Other current assets
ILS 70,584 2.287 161,425
EUR 11,642 7.763 90,374
BRL 61,417 1.316 80,825
UAH 238,830 0.152 36,302
CAD 2,679 4.784 12,818
Other 40,334
Total 422,078
- 81 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(2) Foreign currencies denominated items - (cont'd)
As at June 30, 2026
RMB at the
Exchange end of the
Foreign currency at the end of the period rate period
Other current assets
Long-term receivables
BRL 154,394 1.316 203,183
Total 203,183
Long-term investments, loans
and other
BRL 228,647 1.316 300,899
Other 7,396
Total 308,295
Short-term loans
UAH 703,345 0.152 106,909
ARS 679,728 0.005 3,399
Total 110,308
Bills and Accounts payable
ILS 344,244 2.287 787,286
EUR 51,079 7.763 396,524
BRL 146,476 1.316 192,762
USD 7,570 6.811 51,557
Other 62,888
Total 1,491,017
Other payables
ILS 94,432 2.287 215,966
BRL 120,102 1.316 158,054
UAH 173,768 0.152 26,413
ILS CPI 10,793 2.287 24,683
ZAR 31,281 0.415 12,982
CNH 11,880 1.005 11,940
Other 35,976
Total 486,014
- 82 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(3) Foreign currencies denominated items - (cont'd)
As at June 30, 2026
Foreign currency
at the end of the RMB at the end of
period Exchange rate the period
Contract liabilities
EUR 57,223 7.763 444,221
CAD 56,142 4.784 268,581
BRL 46,616 1.316 61,346
THB 98,675 0.205 20,228
TRY 72,821 0.146 10,632
Other 67,346
Total 872,354
Non-current liabilities due within one year
CNH 2,000,000 1.005 2,010,305
ILS CPI 257,974 2.287 589,986
EUR 1,650 7.763 12,811
Other 27,966
Total 2,641,068
Other current liabilities
EUR 6,950 7.763 53,956
RON 17,253 1.48 25,534
Other 82
Total 79,572
Debentures payable
ILS CPI 2,246,662 2.287 5,138,114
Total 5,138,114
Provision and Long-term payables
BRL 165,169 1.316 217,363
ILS 56,575 2.287 129,387
Total 346,750
Lease liabilities
ILS CPI 33,200 2.287 75,928
EUR 4,940 7.763 38,352
ILS 11,529 2.287 26,366
Other 33,292
Total 173,938
- 83 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
(4) Major foreign operations
Registration &
Principal place of Functional
Name of the Subsidiary business Business nature currency
ADAMA France S.A.S France Distribution USD
ADAMA Brasil S/A Brazil Manufacturing; Distribution; USD
Registration
ADAMA Deutschland GmbH Germany Distribution; Registration USD
ADAMA India Private Ltd. India Manufacturing INR
Distribution; Registration
Makhteshim Agan of North United States Manufacturing; Distribution; USD
America Inc. Registration
Control Solutions Inc. United States Manufacturing; Distribution; USD
Registration
ADAMA Agan Ltd. Israel Manufacturing; Distribution; USD
Registration
ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution; USD
Registration
ADAMA Australia Pty Australia Distribution AUD
Limited
ADAMA Italia SRL Italy Distribution USD
ADAMA Northern Netherlands Distribution USD
Europe B.V.
Alligare LLC United States Manufacturing; Distribution; USD
Registration
The functional currency of the subsidiaries above is the main currency that represent the principal
economic environment.
VI. Change in consolidation Scope
There is no change of consolidation scope during the period.
- 84 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VII. Interest in Other Entities
Composition of the largest subsidiaries of the Group in respect of assets and operating income
Registration & Method of
Principal place of obtaining the
Name of the Subsidiary business Business nature Direct Indirect subsidiary
ADAMA France S.A.S France Distribution 100% Established
ADAMA Brasil S/A Brazil Manufacturing; Distribution; 100% Purchased
Registration
ADAMA Deutschland GmbH Germany Distribution; Registration; 100% Established
ADAMA India Private Ltd. India Manufacturing; 100% Established
Distribution; Registration
Makhteshim Agan of North America United States Manufacturing; Distribution; 100% Established
Inc. Registration
Control Solutions Inc. United States Manufacturing; Distribution; 100% Purchased
Registration
ADAMA Agan Ltd. Israel Manufacturing; Distribution; 100% Restructure
Registration
ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution; 100% Restructure
Registration
ADAMA Australia Pty Limited Australis Distribution 100% Purchased
ADAMA Italia SRL Italy Distribution 100% Established
ADAMA Northern Europe B.V. Netherlands Distribution 55% Purchased
Manufacturing; Distribution; Purchased
Alligare LLC United States 100%
Registration
Adama Anpon (Jiangsu) Ltd. China Manufacturing; Distribution 100% Purchased
Adama Huifeng (Jiangsu) Co. Ltd. China Manufacturing; Distribution 51% Purchased
June 30 December 31
Joint venture 1,956 2,129
Associate 40,864 37,183
December 31, 2025
June 30, 2026 and six and six months ended
months then ended June 30, 2025
Joint venture:
Total carrying amount 1,956 2,129
The Group's share of the following items:
Net profit (110) 137
Other comprehensive income (63) (9)
Total comprehensive income (173) 128
Associate:
Total carrying amount 40,864 37,183
The Group's share of the following items:
Net profit 6,703 5,124
Other comprehensive income 1,134 3,802
Total comprehensive income 7,837 8,926
- 85 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments
A. General
The Group has extensive international operations, and, therefore, it is exposed to credit risks, liquidity risks
and market risks (including currency risk, interest risk and other price risk). In order to reduce the exposure
to these risks, the Group uses financial derivatives instruments, including forward transactions and options
(hereinafter - “derivatives”).
Transactions in derivatives are undertaken with major financial institutions, and therefore, in the opinion of
Group Management the credit risk in respect thereof is low.
This note provides information on the Group’s exposure to each of the above risks, the Group’s objectives,
policies and processes regarding the measurement and management of the risk. Additional quantitative
disclosure is included throughout the consolidated financial statements.
The Board of Directors has overall responsibility for establishing and monitoring the framework of the
Group's risk management policy. The Finance Committee is responsible for establishing and monitoring the
Group's actual risk management policy. The Chief Financial Officer reports to the Finance Committee on a
regular basis regarding these risks.
The Group’s risk management policy, established to identify and analyze the risks facing the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. The policy and methods for
managing the risks are reviewed regularly, in order to reflect changes in market conditions and the Group's
activities. The Group, through training, and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all the employees understand their roles and
obligations.
B. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and derives mainly from trade receivables and other receivables as
well as from cash and deposits in financial institutions.
Accounts and other receivables
The Group’s revenues are derived from a large number of widely dispersed customers in many countries.
Customers include multi-national companies and manufacturing companies, as well as distributors,
agriculturists, agents and agrochemical manufacturers who purchase the products either as finished goods or
as intermediate products for their own requirements.
The Company entered into an agreement for the sale of trade receivables in a securitization transaction, for
details see note V.5.e. and f.
In September 2025, a two-years agreement with an international insurance company was renewed. The
amount of the insurance coverage was fixed at $150 million cumulative per year. The indemnification is
limited to 90% of the debt.
The Group’s exposure to credit risk is influenced mainly by the personal characterization of each customer,
and by the demographic characterization of the customer’s base, including the risk of insolvency of the
industry and geographic region in which the customer operates.
- 86 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
B. Credit risk - (cont’d)
The Company management has prescribed a credit policy, whereby the Company performs current ongoing
credit evaluations of existing and new customers, and every new customer is examined thoroughly regarding
the quality of his credit, before offering him the Group’s customary shipping and payment terms. The
examination made by the Group includes an outside credit rating, if any, and in many cases, receipt of
documents from an insurance company. A credit limit is prescribed for each customer, outstanding amount
of the accounts receivable balance. These limits are examined annually. Customers that do not meet the
Group’s criteria for credit quality may do business with the Group on the basis of a prepayment or against
furnishing of appropriate collateral.
Most of the Group’s customers have been doing business with it for many years. In monitoring customer
credit risk, the customers were grouped according to a characterization of their credit, based on geographical
location, industry, aging of receivables, maturity, and existence of past financial difficulties. Customers
defined as “high risk” are classified to the restricted customer list and are supervised by management. In
certain countries, mainly, Brazil, customers are required to provide property collaterals (such as agricultural
lands and equipment) against execution of the sales, the value of which is examined on a current ongoing
basis by the Company. In these countries, in a case of expected credit risk, the Company records a provision
for the amount of the debt less the value of the collaterals provided and acts to realize the collaterals.
The Group closely monitors the economic situation in Eastern Europe and in South America on an ongoing
basis.
The Group recognizes an impairment provision, which reflects its assessment regarding the credit risk of
account receivables, Other receivables and investments on a lifetime expected credit loss basis. See also
notes Ⅲ.11 – Financial instruments, Ⅲ.12 – Accounts receivables and Ⅲ.14 – Other receivables.
Cash and deposits in banks
The Company holds cash and deposits in banks with a high credit rating. These banks are also required to
comply with capital adequacy or maintain a level of security based on different situations.
Guarantees
The Company’s policy is to provide financial guarantees only to investee companies.
Aging of receivables and expected credit risk
Presented below is the aging of the past due trade receivables:
June 30, 2026
Past due by less than 90 days 631,086
Past due by more than 90 days 533,389
- 87 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
B. Credit risk - (cont’d)
The company measure the provision for credit losses on a collective group basis, where receivables share
similar credit risk characteristics based on geographical locations. The examination for expected credit
losses is performed using model including aging analysis and historical loss experiences, and adjusted by the
observable factors reflecting current and expected future economic conditions.
When credit risk on a receivable has increased significantly since initial recognition, the group records
specific provision or general provision which is determined for groups of similar assets in countries in which
there are large number of customers with immaterial balances.
The Group has credit risk exposures for accounts receivables amounted to RMB 7,431,703 thousand relate to
category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 818,246
thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has a
provision for other receivables amounted to RMB 12,423 thousand related to category of "Lifetime expected
credit losses (credit losses occurred)". The credit risk exposures for all remaining balance of financial assets
at amortised cost and financial assets at FVTOCI are related to "12-month expected credit losses".
C. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligation when
they come due. The Group's approach to managing its liquidity risk is to assure, to the extent possible, an
adequate degree of liquidity for meeting its obligations timely, under ordinary conditions and under pressure
conditions, without sustaining unwanted losses or hurting its reputation.
The cash- flow forecast is determined both at the level of the various entities as well as of the consolidated
level. The Company examines the current forecasts of its liquidity requirements in order to ascertain that
there is sufficient cash for the operating needs, including the amounts required in order to comply with the
financial liabilities, while taking strict care that at all times there will be unused credit frameworks so that
the Company will not exceed the credit frameworks granted to it and the financial covenants with which it is
required to comply with. These forecasts take into consideration matters such as the Company’s plans to use
debt for financing its activities, compliance with required financial covenants, compliance with certain
liquidity ratios and compliance with external requirements such as laws or regulation.
The surplus cash held by the Group subsidiaries, which is not required for financing the current ongoing
operations, is invested in short- term interest- bearing investment channels.
- 88 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
C. Liquidity risk - (cont’d)
(1) Presented below are the contractual maturities of the financial liabilities at undiscounted amounts,
including estimated interest payments:
As at June 30, 2026
Third- Fifth year Contractual Carrying
First year Second year Fourth year and above Cash flow amount
Non-derivative financial
liabilities
Short-term loans 5,774,429 - - - 5,774,429 5,763,384
Accounts payables 5,048,131 - - - 5,048,131 5,048,131
Bills payables 605,314 - - - 605,314 605,314
Other payables 1,523,019 - - - 1,523,019 1,523,019
Other current liabilities 549,492 - - - 549,492 549,492
Debentures payable 786,026 783,608 1,485,927 4,347,152 7,402,713 5,651,921
Long-term loans 806,005 588,729 607,307 - 2,002,041 1,913,470
Long-term payables 8,118 21,372 38,281 137,581 205,352 153,307
Lease Liabilities 226,496 188,066 193,334 869,046 1,476,942 821,792
Other non-current liabilities 2,361,330 - - - 2,361,330 2,350,850
Derivative financial liabilities
Foreign currency derivatives 237,588 - - - 237,588 237,588
CPI/shekel forward transactions 12,249 - - - 12,249 12,249
D. Market risks
Market risk is the risk that changes in market prices, such as foreign exchange rates, CPI, interest rates and
prices of capital instruments, will affect the Group’s revenues or the value of its holdings in its financial
instruments. The objective of market risk management is to manage and monitor the exposure to market
risks within acceptable parameters, while optimizing the return.
During the ordinary course of business, the Group purchases and sells derivatives and assumes financial
liabilities for the purpose of managing market risks.
(1) CPI and foreign currency risks
Currency risk
The Group is exposed to currency risk from its sales, purchases, expenses and loans denominated in
currencies that differ from the Group’s functional currency. The main exposure is in Euro, Brazilian real,
USD and in NIS. In addition, there are smaller exposures to various currencies such as the British pound,
Polish zloty, Australian dollar, Indian rupee, Argentine peso, Canadian dollar, South African Rand, Ukraine
Hryunia and Chinese Yuan Renminbi.
The Group uses foreign currency derivatives – forward transactions and currency options – in order to hedge
the cash flows risk, which derive from existing monetary assets and liabilities and anticipated sales and
purchases, which may be affected by exchange rate fluctuations.
- 89 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(1) CPI and foreign currency risks - (cont’d)
The Group hedged a part of the estimated currency exposure to anticipate sales and purchases for the
subsequent year. Likewise, the Group hedges most of its monetary assets and liabilities denominated in a
non- U.S. dollar currency. The Group uses foreign currency derivatives to hedge its currency risk with
maturity dates of less than one year from the reporting date.
Solutions debentures are linked to the NIS-CPI and, therefore, an increase in the NIS-CPI, as well as
changes in the NIS exchange rate, could cause significant impact with respect to the subsidiary functional
currency – the U.S. dollar. As of the approval date of the financial statements, the subsidiary had hedged
most of its exposure deriving from issuance of the debentures, in options and forward contracts.
(A) The Group’s exposure to NIS-CPI and foreign currency risk is as follows:
June 30, 2026
Total assets Total liabilities
In US Dollar 3,069,647 1,842,486
In Euro 1,466,936 752,152
In Brazilian real 1,768,697 412,162
CPI-linked NIS - 5,799,298
In New Israeli Shekel 439,237 1,059,033
Denominated in or linked to other foreign currency 2,813,192 3,371,619
(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:
June 30, 2026
Currency/ Currency/ Average USD RMB
linkage linkage expiration thousands thousands
receivable payable date Par value Par value Fair value
Forward foreign currency USD EUR 24/10/2026 209,984 1,430,181 13,925
Contracts and call options USD PLN 22/09/2026 8,043 54,777 (1,180)
USD BRL 05/08/2026 173,675 1,182,885 3,374
USD GBP 28/07/2026 21,047 143,351 3,288
USD ZAR 04/09/2026 32,145 218,936 (913)
ILS USD 15/08/2026 1,081,236 7,364,188 (33,470)
USD OTHER 1,034,366 7,044,962 5,341
CPI forward contracts CPI ILS 07/28/2026 537,280 3,659,360 (11,710)
- 90 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(1) CPI and foreign currency risks - (cont’d)
(C) Sensitivity analysis
The appreciation or depreciation of the Dollar against the following currencies as of December 31,
the amounts presented below. This analysis assumes that all the remaining variables, among others
interest rates, remains constant.
June 30, 2026
Decrease of 5% Increase of 5%
Equity Profit (loss) Equity Profit (loss)
New Israeli shekel 57,222 26,256 (15,586) 6,848
British pound 469 469 (469) (469)
Euro (6,988) 23,407 23,320 (23,407)
Brazilian real 10,040 10,040 (15,501) (15,501)
Polish zloty 5,040 5,040 (4,774) (4,774)
South African Rand (1,073) (1,073) 523 523
Chinese Yuan Renminbi 217,880 217,880 (196,112) (196,112)
CPI-linked NIS 130,795 130,795 (130,795) (130,795)
(2) Interest rate risks
The Group has exposure to changes in the variable interest rate. The Group has different assets and
liabilities in different countries which bear interest according to the economic environment in each
country. Most of the loans, other than the debentures, bear Dollar SOFR and Euro ESTER interest. As a
result, most of the variable interest exposure of those loans is to the SOFR interest.
The Company prepares a quarterly summary of exposure to a change in the SOFR interest rate. As at the
approval date of the financial statements, the Company had not hedged this exposure.
- 91 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(2) Interest rate risks - (cont’d)
(A) Type of interest
The interest rate profile of the Group’s interest-bearing financial instruments was as follows:
June 30, 2026
Fixed-rate instruments – unlinked to the CPI
Financial assets
Other non-current assets 6,634
Financial liabilities
Long-term loans (1) 1,813,470
Long-term payables 20,835
Other non-current liabilities (1) 340,545
(2,168,216)
Fixed-rate instruments – linked to the CPI
Financial liabilities
Debentures payable (1) 5,651,921
Variable-rate instruments
Financial assets
Cash at banks 491,863
Financial assets at fair value through profit or loss 2,711
Financial liabilities
Short-term loans and credit from banks 5,763,384
Long-term loans (1) 100,000
Long-term payables 119,596
Other non-current liabilities (1) 2,010,305
(7,498,711)
(1) Including current maturities.
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IX. Fair Value
The fair value of forward contracts on foreign currency is based on their listed market price, if available. In
the absence of market prices, the fair value is estimated based on the discounted difference between the stated
forward price in the contract and the current forward price for the residual period until redemption, using an
appropriate interest rate.
The fair value of foreign currency options is based on bank quotes. The reasonableness of the quotes is
evaluated through discounting future cash flow estimates, based on the conditions and duration to maturity of
each contract, using the market interest rates of a similar instrument at the measurement date and in
accordance with the Black & Scholes model.
The carrying amount of certain financial assets and liabilities, including cash at bank and on hand, bills and
accounts receivable, receivables financing, other receivables, short-term loans, bills and accounts payable and
other payable, are the same or proximate to their fair value.
The following table details the carrying amount in the books and the fair value of groups of non- current
financial instruments presented in the financial statements not in accordance with their fair values:
June 30, 2026
Carrying amount Fair value
Financial assets
Other non-current assets (a – Level 2) 30,520 23,987
Financial liabilities
Long-term loans and others (b – Level 2) 5,240,319 5,211,018
Debentures (c – Level 1) 5,651,921 6,248,795
a) The fair value of the other non-current assets is based on a discounted future cash flows, using the acceptable
interest rate for similar investment having similar characteristics (Level 2).
b) The fair value of the long-term loans and others is based on a discounted future cash flows, using the acceptable
interest rate for similar loans having similar characteristics (Level 2).
c) The fair value of the debentures is based on stock exchange quotes (Level 1).
?
The interest rates used to discount the estimate of anticipated cash flows are:
June 30, 2026
%
U.S. dollar interest 5.83 - 7.24
Chinese Yuan Renminbi 1.26 - 2.50
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IX. Fair Value - (cont’d)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The table below presents an analysis of
financial instruments measured at fair value. The various levels have been defined as follows:
? Level 1: quoted prices (unadjusted) in active market for identical instrument.
? Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
? Level 3: inputs that are not based on observable market data (unobservable inputs).
The Company’s forward contracts and options are carried at fair value and are evaluated by observable inputs
and therefore are concurrent with the definition of level 2.
June 30
Forward contracts and options used for hedging the cash flow (Level 2) 60,209
Forward contracts and options used for economic hedging (Level 2) (81,554)
Other equity investment (Level 2) 127,475
Receivables financing (Level 2) 78,314
Other non-current assets (Level 2) 29,171
Other (Level 2) 2,711
Financial Instrument Fair value
Fair value measured on the basis of discounting the difference between the
stated forward price in the contract and the current forward price for the
Forward contracts
residual period until redemption using an appropriate interest rates.
Foreign currency options The fair value is measured based on the Black&Scholes model.
No transfer between any levels of the fair value hierarchy in the reporting period.
No change in the valuation techniques in the reporting period.
- 94 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions
Company Registered Registered capital Shareholding Percentage
name place Business nature (Thousand RMB) percentage of voting rights
Production and
sales of
agrochemicals,
Syngenta Shanghai, fertilizers and GM
Group China seeds 11,182,127 78.47% 78.47%
The Company’s ultimate controlling shareholder is Sinochem Holdings .
For information about the subsidiaries of the Company, refer to Note VII.1.
For information about the joint ventures and associates of the Company, refer to Note V.12.
Other joint ventures and associates that have related party transactions with the Group during this period or
the previous periods are as follows:
Name of entity Relationship with the Company
Innovaroma SA Joint venture of the Group
- 95 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
Name of other related parties Related party relationship
Agro Jangada Ltda Common control
Anhui Chemical Research Institute Common control
Anhui Kelihua Chemistry Co., Ltd. Common control
Beijing Guangyuan Yinong Chemical Co., LTD Common control
Bluestar (Beijing) Chemical Machinery Co. Ltd. Common control
Bluestar Engineering Co. Ltd. Common control
Dipagro LTDA Common control
Elkem Silicones Brasil Ltd. Common control
Sinochem Hebei Fuding Chemical Technology Co., Ltd. Common control
Huaxia Hanhua Chemical Equipment Co., Ltd. Common control
Jiangsu Huaihe Chemical Co., Ltd. Common control
Jiangsu Ruiheng New Material Technology CO., LTD. Common control
Jiangsu Youjia Plant Protection Co., Ltd. Common control
Jiangsu Youshi Chemical Co., Ltd. Common control
YANGNONG SINGAPORE PTE. LTD. Common control
Jiangsu Yangnong Chemical Co., Ltd. Common control
Liaocheng Luxi Polyol New Material Technology Co. Ltd. Common control
Sino MAP Common control
Ningxia Ruitai Technology Co., Ltd. Common control
P.T. Syngenta Indonesia Common control
Produtécnica Nordeste Comércio de Insumos Agrícolas Ltda. Common control
Shandong Dacheng Agrochemical Company Limited Common control
Shenyang Sciencreat Chemicals Co. Ltd. Common control
Shenyang Chemical Research Institute Co., Ltd Common control
Shenyang Shenhua Institute Testing Technology Co., Ltd. Common control
Sinochem (Hainan) Agroecology Co. Common control
Sinochem (Linyi) Crop Nutrition Co. Ltd Common control
Sinochem International Crop Care (Overseas) Pte.Ltd. Common control
Sinochem Agro Co. Ltd. Common control
Sinochem Digital Intelligence Technology Co ., Ltd . Common control
Sinochem Fertilizer Company Limited and its branches Common control
Sinochem Finance Co. Ltd Common control
Sinochem Hebei Co. Ltd. Common control
Sinochem Modern Agriculture (Liaoning) Co. LTD Common control
Sinochem Modern Agriculture (Anhui) Co. LTD Common control
Sinochem Petrochemical Sales Co. Ltd. Common control
Sinochem India Company Private Limited Common control
Syngenta (Shanghai) Crop Protection Technology Company Limit Common control
- 96 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
Name of other related parties Related party relationship
Syngenta Nantong Crop Protection Co.,Ltd. Common control
Syngenta Agro (Argentina) S.A. Common control
Syngenta Agro GmbH Common control
Syngenta Agro SA de CV Common control
Syngenta Australia Pty Ltd Common control
Syngenta Canada Inc Common control
Syngenta Crop Protection A/S Common control
Syngenta Crop Protection AG Common control
Syngenta Crop Protection BV Common control
Syngenta Crop Protection Lda Common control
Syngenta Crop Protection LLC Common control
Syngenta Crop Protection Ltd. Common control
Syngenta Crop Protection NV Common control
Syngenta Czech s.r.o. Common control
Syngenta Espa?a S.A. Common control
Syngenta France SAS Common control
Syngenta Group Co. Ltd Common control
Syngenta Hellas AEBE Common control
Syngenta Italia SpA Common control
Syngenta Nantong Crop Protection Co Ltd Common control
Syngenta Protecao de Cultivos Ltda Common control
Syngenta SA. Common control
Taicang Zhonglan Environmental Protection Technology Common control
Service Co., Ltd.
China Bluestar Chengrand Research Institute Chemical Common control
Industry
Zhonglan Lianhai Design & Research Institute Co. Ltd. Common control
Jiangsu Huifeng Agrochemical Co. Ltd. Minority shareholder and its subsidiary
Nongyi Net (Yangling) e-commerce Co., Ltd. Minority shareholder and its subsidiary
Shanghai focus supply chain Co., Ltd Minority shareholder and its subsidiary
Huifeng Biology (Shanghai) Co., Ltd Minority shareholder and its subsidiary
- 97 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
(1) Transactions with related parties
Six months ended
June 30
Type of purchase Related Party Relationship 2026 2025
Summary of purchase of goods/services:
Purchase of goods/services received Common control under
Sinochem Holdings 539,227 651,803
Minority shareholder and 510 14,228
its subsidiary
Purchase of fixed assets and other assets Common control under 15,042 49
Sinochem Holdings
Lease expenses Minority shareholder and 924 924
its subsidiary
Summary of Sales of goods:
Sale of goods/ Service rendered Common control under 396,910 554,642
Sinochem Holdings
Joint venture 35,747 49,323
Minority shareholder and
its subsidiary 5,391 8,948
Lease income Minority shareholder and 544 544
its subsidiary
(2) Guarantees
The Group as the guarantee receiver
Amount of Inception date Maturity date Guaranty
Guarantee provider guaranteed loan of guaranty of guaranty completed (Y / N)
Parent company 263,000 21/04/2021 20/04/2028 Y
As at 30 June 2026, all guarantees provided by the parent company of the Group to the Group have been
fully discharged. No guarantee fees were incurred for the six months ended 30 June 2026 (six months
ended 30 June 2025: guarantee fees paid by the Group to its parent company amounted to RMB 197
thousand).
- 98 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
(3) Remuneration of key management personnel and directors
Periods ended June 30
Remuneration of key management personnel and directors 28,856 16,533
(4) Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Common control under 248,189 - 214,960 -
Sinochem Holdings
Joint venture 17,286 - 15,063 -
Minority shareholder and 3,735 - 5,201 -
its subsidiary
Prepayments Common control under 2,263 - 1,629 -
Sinochem Holdings
Payable Items
June 30 December 31
Items Related Party Relationship 2026 2025
Trade payables Common control under Sinochem 296,190 328,410
Holdings
Minority shareholder and its subsidiary 320 63
Other payables Common control under Sinochem 53,643 66,612
Holdings
Minority shareholder and its subsidiary 517 517
Contractual liability Common control under Sinochem 12,079 22,912
Holdings
Short-term loans * Common control under Sinochem 3,337,340 3,444,112
Holdings
Other non-current Common control under Sinochem 2,350,850 2,359,991
liabilities (including Holdings
current maturities). *
* Include liabilities are loans from a related party, the interest expenses for the Six months ended June 30,
- 99 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
(4) Receivables from and payables to related parties (including loans) (cont'd)
On October 27, 2021, the Board of Directors first approved (following the pre-approval of the Company’s
independent directors dated October 25, 2021) the Company, through one of its subsidiaries, entering into
committed credit facilities agreements in the aggregate amount of USD 100 million on market terms with
Syngenta Group, or any of its subsidiaries, including a long-term loan for 5 years of USD 50 million. As of
June 30, 2026, the balance of this loan amounted to approximately RMB 341 million.
On August 28, 2023, the Board of Directors approved (following the pre-approval of the Company’s
independent directors dated August 22, 2023) the Company, through one of its subsidiaries, entering into
an additional committed credit facility agreement in the amount of RMB 2,000 million with Syngenta
Group, or any of its subsidiaries. As of June 30, 2026, a total of RMB 2,000 million was utilized.
On March 26, 2026, the Board of Directors approved (following the pre-approval of the Company’s
independent directors dated March 24, 2026) the Proposal on Consolidation of Credit Facilities from the
Related Party, to consolidate the existing short- term annual revolving credit facilities of USD 350 million
and USD 400 million originally provided by Syngenta Group subsidiaries to the Group’s subsidiaries into
a single short- term annual revolving credit facility with an aggregate amount of USD 750 million. As of
June 30, 2026, the Group’s cumulative utilisation of this credit facility amounted to USD 490 million
(equivalent to approximately RMB 3,337 million).
(5) Other related party transactions
The closing balance of bank deposit in Sinochem Finance Corporation was 768,225 thousand RMB
(31.12.25: 912,869) Interest income of bank deposit for the current period was 8,391 thousand RMB
(amount for six months ended June , 2025 was 3,197 thousand RMB).
The closing balance of a loan received from Sinochem Finance Corporation was 249,641 thousand RMB
(31.12.25: 209,641) Interest expenses in the current period was 2,852 thousand RMB (amount for six
months ended June , 2025 was 398 thousand RMB).
- 100 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies
June 30 December 31
Investment in Fixed assets
On April 30, 2026, the 3rd meeting of the 10th session of the Board of Directors of the Company approved the
engagement on the purchase of joint liability insurance policy for Directors, Supervisors and Senior Executives
of the Company and its PRC subsidiaries, by way of adding the Company to the Directors and Officers liability
insurance policy of Syngenta Group, which shall provide shared coverage. On June 28, 2024，the Company’s
from July 1, 2024, to June 30, 2025.
Based on the Shareholders meeting approval and authorization, the Company's management renewed and
extended the Directors and Officers liability insurance policy, such that the current insurance period ends on
April 30, 2027.
Environmental protection
The manufacturing processes of the Company and the products it produces and market, entail environmental
risks that impact the environment. The Company invests substantial resources in order to comply with the
applicable environmental laws and attempts to prevent or minimize the environmental risks that could occur
as a result of its activities. To the best of the Company’s knowledge, at the balance sheet date, there are no
material environmental issues relating to the Company, there are no material administrative penalties or
investigations related to environment, health and safety imposed or initiated by regulatory authorities, and
none of the material permits and licenses regarding environmental issues required for the Company’s day to
day operations have been revoked.
Claims against subsidiaries
In the ordinary course of business, legal claims were filed against subsidiaries, including claims for patent
infringement. The Company, inter alia, like other companies operating in the crop protection market, is
exposed to class actions for large amounts, which it must defend against while incurring considerable costs,
even if these claims have no basis in the first place. In the opinion of the Company’s management, which is
based, inter alia, on the opinions of its legal advisors regarding the prospects of the proceedings, the financial
statements include adequate provisions where necessary to cover the exposure resulting from the claims.
On October 20, 2020, a claim and a motion for its approval as a class action (the “Motion”) was filed against
Monsanto Company and Bayer AG (the “Manufacturers”) as well as against ADAMA Agan Ltd., a wholly-
owned subsidiary of Solutions, with respect to an herbicide bearing the brand name Roundup, which is
produced by the Manufacturers and distributed in Israel in small quantities by Solutions’ subsidiary. The
applicants argued that the product allegedly poses a risk to users or those who have been exposed to it.
On August 7, 2025 , the court rendered a first-instance judgment dismissing the Motion. On November 9,
According to the Solutions' external counsels, given the preliminary stages of the appeal, it is too early to
assess the chances of the appeal, and the Motion, to be accepted.
As Solutions is an authorized distributor of the Manufactures, the Manufacturers undertook to fully indemnify,
defend and hold harmless ADAMA Agan Ltd., for any monetary compensation or any other remedy it will
have to make in connection with the Motion.
- 101 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies - (cont’d)
Claims against subsidiaries (cont’d)
Therefore, and based on the opinion of Solutions’ external counsels, as of the date of the financial statements
it is the Company's estimation that this proceeding is not expected to have any non-negligible effect on the
Company’s financial results.
In June 2021, a lawsuit was filed against a subsidiary of the Company, alleging two patents owned by a large
competitor of the Company, have been infringed by such subsidiary. Among the claims, the plaintiff seeks
preliminary and permanent injunctions to prevent the subsidiary from manufacturing, using or
commercializing a product that allegedly infringes the plaintiff’s patents, and seeks actual damages and profits
loss. The said preliminary injunctions were granted by the court in favor of the plaintiff. The subsidiary has
filed appeals against such preliminary injunctions, which were rejected. Prior to such claims, the subsidiary
filed lawsuits seeking declarations that the said patents are invalid and not infringed. These proceedings
remain pending. In May 2023, the same competitor filed an additional lawsuit alleging infringement of the
same two patents by a different product and sought a preliminary injunction. The injunction was rejected at
first instance, upheld on appeal, and finally dismissed by the superior court - a decision that is now final and
unappealable. All these lawsuits are pending as of the approval date of the financial statements. At this stage,
the claims filed by the plaintiff are not expected to have a material effect on the Company.
Various immaterial claims have been filed against Group companies in courts throughout the world, in
immaterial amounts, for causes of action primarily involving employee-employer relations and various civil
claims, for which the Company did not record a provision in the financial statements. The claims that in the
estimation of Company’s management, based on its legal advisors’ opinion, have lower chances of succeeding
than being rejected, amount to a negligible amount. Furthermore, claims were filed against the Company for
product liability damages, for which the Company has adequate insurance coverage, such that the Company’s
exposure in respect thereof is limited to the deductible amount or the amount thereof does not exceed the
deductible amount.
XII. Events subsequent to the balance sheet date
The Company is not aware of any events subsequent to the balance sheet date.
XIII. Share-based Payments
In September 2019, the remuneration committee and Solutions Board of Directors (and the General Meeting
with respect to the CEO and Vice President who also serves as a director) approved the cancellation of 2017
Plan against the allocation of 28,258,248 warrants in accordance with the long-term phantom compensation
plan (hereinafter - "The Alternative Warrants" and "The Alternative Plan"). The cancellation and allocation
date is September 26, 2019. During 2019, an additional 90,130 Alternative Phantom Warrants were granted.
- 102 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIII. Share-based Payments - (cont’d)
The alternative warrants will vest in four equal portions, where the first quarter is exercisable after one year,
the second quarter after two years, the third quarter after three years and the fourth quarter after four years
from October 1, 2019. The warrants will be exercisable, in whole or in part, in accordance with the terms of
the Alternative Plan, and subject to achieving financial targets as determined in the plan. The warrants will
be exercisable until October 1, 2026.
Upon exercise of each warrant, the offeree will be entitled to receive cash payment equal to the difference
between the base price as determined at the time of the grant and the closing price of one share of the parent
company on the Shenzhen Stock Exchange, as it will be on the exercise date up to the ceiling that was
determined under the plan.
The fair value of the total granted alternative warrants at the allocated date is equal to the fair value of the
total warrants canceled from the 2017 plan.
The cost of the benefit embodied in the warrants that were allocated as aforesaid, based on the fair value at
the cancellation and allocation date, amounted to a total of approximately 69 million RMB. The liability in
the financial statements at the end of the reporting period was recorded at the fair value estimated using the
binomial option pricing model and by the vesting period from the original grant date of the 2017 plan to the
end of the service period determined by the alternative plan, taking into account the extent of the service that
the employees provided until that date and the stock price at the reporting date.
Statement of share based payments in the period
Phantom warrants
Changes in the number of 2017 Plan:
Total number of Phantom warrants at the beginning of the period 3,689,544
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period -
Total number of Phantom warrants forfeited in current period (1,255,300)
Total number of Phantom warrants at the end of the period 2,434,244
The range of the exercise prices and the remainder of the contractual period RMB 9.37 – 9.43
for Phantom warrants outstanding at the end of period 0.25 year
The parameters used in implementing the model at the grant date are as follows:
Stock price (RMB) 9.23
Exercise increment (RMB) 9.43
Expected volatility 40.29%
Risk-free interest rate 3.14%
Economic value as of September 26, 2019 (in thousands RMB) 68,836
The methods for the determination of the fair value of liabilities arising from
cash-settled share-based payments related to the alternative plan The binomial pricing model
Accumulated amount of liabilities arising from cash-settled share-based
payments related to the alternative plan (in thousands RMB) -
Expenses (income) arising from cash-settled share-based payments in
current period related to the alternative plan (in thousands RMB) (102)
- 103 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items
The Company presents its segment reporting based on a format that is based on a breakdown by business
segments:
? Crop Protection (Agro)
This is the main area of the Company’s operations and includes the manufacture and marketing of
conventional agrochemical products.
? Intermediates and ingredients
This field of activity includes a large number of sub-fields, including: Lycopan (an oxidization retardant),
aromatic products, and other chemicals. It combines all the Company’s activities not included in the Crop
Protection products segment.
Segment results reported to the chief operating decision maker include items directly attributable to a
segment as well as items that can be allocated on a reasonable basis. Unallocated items comprise mainly
financing expenses, net, gains from changes in fair value, investment income and tax expenses.
All assets and liabilities that can be attributed to a specific segment were allocated accordingly. Attributed
assets include: accounts and bills receivables, receivables financing, inventory, fixed assets, right-of-use
assets, construction in progress, intangible assets, goodwill, non-current trade receivables and long-term
equity investments. Attributed liabilities include account payables, bill payablesand lease liabilities. All
other assets and liabilities which are not attributable to a specific segment are presented as unallocated assets
and liabilities.
- 104 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
Information regarding the results and assets and liabilities of each reportable segment is included below:
Crop Protection Intermediates and ingredients Elimination among segments Total
Six months ended Six months ended Six months ended Six months ended
June 30 June 30 June 30 June 30
Operating income from external
customers 13,497,197 13,656,589 979,343 1,367,611 - - 14,476,540 15,024,200
Inter-segment operating income - - 655 962 (655) (962) - -
Interest in the profit or loss of
associates and joint ventures - - 6,593 5,261 - - 6,593 5,261
Segment's results 1,117,325 776,250 85,315 129,004 - - 1,202,640 905,254
Financial expenses 1,023,706 1,024,340
Gain (loss) from changes in fair
value 213,451 (6,493)
Income (loss) before tax 392,385 (125,579)
Income tax expenses (40,182) (45,227)
Net (income) Loss 432,567 (80,352)
Crop Protection Intermediates and ingredients Unallocated assets and liabilities Total
June 30 December 31 June 30 December 31 June 30 December 31 June 30 December 31
Total assets 37,997,140 39,011,654 2,043,258 2,092,328 6,608,691 7,359,980 46,649,089 48,463,962
Total liabilities 7,360,638 7,904,219 208,693 240,167 21,443,739 22,744,150 29,013,070 30,888,536
- 105 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
Geographic information
The following tables sets out information about the geographical segments of the Group’s operating income
based on the location of customers (sales target) and the Group's non-current assets (including mainly fixed
assets, right-of-use assets, construction in progress, investment properties intangible assets and goodwill). In
the case of investment property, fixed assets, right of used assets and construction in progress, the
geographical location of the assets is based on its physical location. In case of intangible assets and goodwill,
the geographical location of the company which owns the assets.
Operating income from external
customers
Six months ended June 30
Europe, Africa and Middle Eas 5,041,810 4,811,339
North America 3,570,492 3,554,544
Latin America 2,431,950 2,609,695
Asia Pacific 3,432,288 4,048,622
Specified non-current assets
June 30 December 31
Europe, Africa and Middle East 12,548,065 13,319,926
North America 1,201,899 1,232,186
Latin America 1,760,934 1,905,677
Asia Pacific 4,372,305 4,606,298
No single customer's proportion of the total amount of sales is over 10%.
- 106 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
Amount for the Amount for the
current period prior period
Net loss from continuing operations attributable to ordinary
shareholders 432,567 (80,352)
Amount for the Amount for the
Shares current period prior period
Number of ordinary shares outstanding at the beginning of the
year 2,329,811,766 2,329,811,766
Add: weighted average number of ordinary shares issued during
the year - -
Less: weighted average number of ordinary shares repurchased
during the year - -
Weighted average number of ordinary shares outstanding at the
end of the year 2,329,811,766 2,329,811,766
Amount for Amount for
the current the prior
period period
Calculated based on net profit (loss) attributable to ordinary
shareholders
Basic losses per share 0.19 (0.03)
Diluted losses per share N/A N/A
Calculated based on net profit (loss) from continuing operations
attributable to ordinary shareholders:
Basic losses per share 0.19 (0.03)
Diluted losses per share N/A N/A
Calculated based on net profit (loss) from discontinued operations
attributable to ordinary shareholders:
Basic losses per share N/A N/A
Diluted losses per share N/A N/A
- 107 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements
June 30 December 31
Deposits in banks 138,892 58,950
Other cash and bank balances 13,686 6,014
As at June 30, 2026, restricted cash and bank balances was 13,686 thousand RMB (as at December 31, 2025:
a. By category
June 30, 2026
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 1 13,893 100 -
Account receivables assessed
collectively for impairment 2,006,832 99 902 - 2,005,930
December 31, 2025
Provision for expected credit
Book value losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 1 13,893 100 -
Account receivables assessed
collectively for impairment 1,637,510 99 902 - 1,636,608
b. Aging analysis
June 30, 2026
Within 1 year (inclusive) 1,254,429
Over 1 year but within 2 years 733,188
Over 2 years but within 3 years 19,215
Over 3 years but within 4 years -
Over 4 years but within 5 years -
Over 5 years 13,893
- 108 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
c. Addition, written-back and written-off of provision for expected credit losses during the period
Six months ended June 30, 2026
Balance as of January 1 14,795
Addition during the period, net -
Balance as of June 30.2026 14,795
d. Five largest accounts receivable at June 30, 2026:
Proportion of Allowance of
Accounts expected
Name Closing balance receivable (%) credit losses
Party 1* 1,877,059 93 -
Party 2 66,481 3 -
Party 3 19,965 1 902
Party 4 8,140 0.5 -
Party 5 8,000 0.5 -
* Include intergroup balance with ADAMA Solutions.
June 30 December 31
Bank acceptance draft 26,915 10,490
As at June 30, 2026, bank acceptance endorsed but not yet due amounts to 221,975 thousand RMB.
June 30 December 31
Dividends receivable - 2,325
Other receivables 23,722 24,109
- 109 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(1) Other receivables
a. Other receivables by categories
June 30 December 31
Other 29,188 29,485
Provision for expected credit losses (5,466) (5,376)
b. Other receivables by aging
June 30, 2026
Within 1 year (inclusive) 90
Over 1 year but within 2 years 12,111
Over 2 years but within 3 years -
Over 3 years but within 4 years 113
Over 4 years but within 5 years 91
Over 5 years 16,783
c. Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Six months ended June 30, 2026
Balance as of January 1, 2026 5,376
Addition during the period 90
Balance as of June 30, 2026 5,466
d. Five largest other receivables at June 30 2026:
Proportion of other
Name Closing balance receivables (%) Credit loss provision
Party 1* 23,722 81 -
Party 2 3,125 11 3,125
Party 3 548 2 548
Party 4 237 1 237
Party 5 221 1 221
* Include intergroup balance with Anpon
- 110 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
June 30, 2026 December 31, 2025
Impairment Impairment
Amount balance loss Book value Amount balance loss Book value
Invest in
subsidiaries 17,511,352 80,636 17,430,716 17,511,352 80,636 17,430,716
Investments in subsidiaries
Provision of Balance of
Opening impairment Closing Impairment
Invested unit balance Increase Decrease loss balance loss
ADAMA Agricultural Solutions Ltd. 15,890,213 - - - 15,890,213 -
Adama Anpon (Jiangsu) Ltd. 450,449 - - - 450,449 -
ADAMA Hiufeng (Jiangsu) Co. Ltd. 789,116 - - - 789,116 (59,024)
Hubei Sanonda Foreign Trade Co. 11,993 - - - 11,993 -
Ltd.
Adama Huifeng (shanghai) 288,945 - - - 288,945 (21,612)
Agricultural Technology Co., Ltd
Six months ended June 30, 2026 Six months ended June 30, 2025
Operating Operating
Revenue costs Revenue costs
Main operations 1,150,645 953,163 1,068,970 870,381
Other operations 28,952 10,580 25,602 9,594
- 111 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(1) Other cash received relevant to operating activities
Six months ended Six months ended
June 30, 2026 June 30, 2025
Interest income 1,181 216
Government subsidies 2,064 4,201
Other 1,789 10,907
(2) Other cash paid relevant to operating activities
Six months ended Six months ended
June 30, 2026 June 30, 2025
Professional services 103,854 11,037
Other 9,039 12,890
(3) Other cash received relevant to investing activities
Six months ended Six months ended
June 30,2026 June 30,2025
Other 757 803
(4) Other cash paid relevant to investing activities
Six months ended Six months ended
June 30,2026 June 30, 2025
Loans 20,000 -
(5) Other cash received relevant to financing activities
Six months ended Six months ended
June 30, 2026 June 30, 2025
Deposit for issuing bills payables 4,500 1,858
- 112 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
)6( Other cash paid relevant to financing activities
Six months ended Six months ended
June 30, 2026 June 30, 2025
Deposit for issuing bills payables 12,172 14,246
XV. Notes to major items in the Company's financial statements - (cont'd)
(1) Reconciliation of net profit to net cash flows generated from operating activities:
Six months ended June 30
Net profit 84,773 130,151
Add: Asset Impairment losses 2,099 3,362
Credit impairment losses 90 1,084
Depreciation of fixed assets and investment property 87,847 98,116
Depreciation of-right-of use assets 565 395
Amortization of intangible assets 6,153 6,067
Gain (losses) on disposal of fixed assets, intangible assets and other 28 (3,587)
long-term assets
Gains from changes in fair value - (30,714)
Financial expenses 60,000 13,298
Investment income (20,301) (32,445)
Decrease in deferred income tax assets 11,489 21,449
Decrease in inventory 39,881 43,633
Increase in accounts receivable from operating activities (317,594) (212,970)
Increase in payables from operating activities 119,260 148,263
Net cash flows generated from operating activities 74,290 186,102
(2) Net increase in cash and cash equivalents
Six months ended June 30
Closing balance of cash 138,892 65,500
Less: Opening balance of cash 58,950 39,173
Net increase in cash and cash equivalents 79,942 26,327
- 113 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(1) Information on parent Company
Registered
capital
Company Registered (Thousand Shareholding Percentage
name place Business nature RMB) percentage of voting rights
Production and sales
of agrochemicals,
Syngenta Shanghai, fertilizers and GM
Group China seeds 11,182,127 78.47% 78.47%
The ultimate controlling shareholder is Sinochem Holdings .
(2) Information on the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
(3) Transactions with related parties
a. Transactions of goods and services
Six months ended June 30
Summary of Purchase of goods/services Related Party Relationship
received:
Purchase of goods/services received Common control
under Sinochem
Holdings 19,205 37,764
Subsidiary 50,175 45,789
Purchase of fixed assets and other assets Common control
under Sinochem 15,042 -
Holdings
Subsidiary 1,327 -
Summary of Sales of goods:
Sale of goods Common control under
Sinochem Holdings 177 347
Subsidiary 721,560 645,933
- 114 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees
The Company as the guarantor
Amount of Inception Maturity Guaranty
guaranteed date of date of completed
loan guaranty guaranty (Y/ N)
Subsidiary 23,951 01.01.2026 31.12.2026 N
- 115 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees - (cont'd)
The Company as the guarantee receiver
Amount of Inception date Maturity date Guaranty
Guarantee provider guaranteed loan of guaranty of guaranty completed (Y / N)
Parent company 263,000 21.04.2021 20/04/2028 Y
Parent company 67,971 01.06.2021 31/05/2028 Y
As at 30 June 2026, all guarantees provided by the parent company of the Group to the Group have
been fully discharged. No guarantee fees were incurred for the six months ended 30 June 2026 (six
months ended 30 June 2025: guarantee fees paid by the Group to its parent company amounted to
RMB 197 thousand).
c. Intercompany borrowings/lending
Related Borrowing/ Commencement Termination Balance at
party Lending amount date date year end Interest rate
Lending
Subsidiary 50,000 2025.12 2028.11 50,000 2.4%
Subsidiary 20,000 2026.2 2028.11 20,000 2.4%
d. Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Subsidiary 1,882,791 - 1,563,401 -
Other non-current
assets Subsidiary 70,000 - 50,000 -
Other receivables Subsidiary 23,722 - 24,109 -
Prepayments Subsidiary 1,500 - - -
Prepayments Common control under
Sinochem Holding 2,146 - 83 -
- 116 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(3) Transactions with related parties - (cont'd)
d. Receivables from and payables to related parties (including loans) - (cont'd)
Payable Items
June 30 December 31
Items Related Party Relationship 2026 2025
Trade payables Common control under Sinochem
Holdings 195 4,665
Other payables Subsidiary 546,251 587,644
Common control under Sinochem
Holdings 471 471
e. Other related party transactions
As at June 30,2026 , the closing balance of bank deposit in SinoChem Finance Corporation was
year was 1,204 thousand RMB (amount for six months ended June , 2025 was 157 thousand RMB).
- 117 -
ADAMA Ltd. Semi-Annual Report 2026
Supplementary information
(Expressed in RMB '000)
Six months ended
June 30, 2026
Disposal of non-current assets 306,349
Government grants recognized through profit or loss 3,940
Custodian fees earned from entrusted operation 1,746
Recovery or reversal of expected credit losses which is assessed individually during
the years 27,827
Other profit or loss that meets the definition of non-recurring profit or loss 17,102
Other non-operating income or expenses other than the above 5,533
Tax effect (10,567)
The information of Return on net assets and EPS is in accordance with the Preparation Rules for
Information Disclosure by Companies Offering Securities to the Public No. 9 – Calculation and
Disclosure of Return on net assets and Earnings per share (2010 Amendment) issued by China
Securities Regulatory Commission.
Weighted average
rate of return on net Basic EPS Diluted EPS
Profit during the reporting period assets (RMB/share) (RMB/share)
Net loss attributable to ordinary
shareholders of the Company 2.46% 0.19 N/A
Net loss after deduction of extraordinary
gains/losses attributable to ordinary
shareholders of the Company 0.46% 0.03 N/A
- 118 -
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