ADAMA Ltd. Full Content of the First Quarter Report 2019 ADAMA LTD. FIRST QUARTER REPORT 2019 ADAMA Ltd. is one of the world's leading crop protection companies. We strive to Create Simplicity in Agriculture - offering farmers effective products and services that simplify their lives and help them grow. With one of the most comprehensive and diversified portfolios of differentiated, quality products, our 7,000 strong team reaches farmers in over 100 countries, providing them with solutions to control weeds, insects and disease, and improve their yields. Please see important additional information and further details included in the Annex. April 2019 1 ADAMA Ltd. Full Content of the First Quarter Report 2019 Section I Important Statements The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of ADAMA Ltd. (hereinafter referred to as “the Company”) confirm that the content of the report is true, accurate and complete and contains no false statement, misleading presentation or material omissions, and assume joint and several legal liability arising therefrom. All of the Company’s directors attended the board meeting for the review of this report. Chen Lichtenstein, the person leading the Company as well as its legal representative, and Aviram Lahav, the person leading the accounting function and Chief Financial Officer & Chief of the accounting organ, hereby confirm the ruefulness accuracy and completeness of the Financial Report enclosed in this report. This Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. 2 ADAMA Ltd. Full Content of the First Quarter Report 2019 Section II Basic Information of the Company I Highlights of accounting data and financial indicators Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year √ Yes □ No The reason for the retroactive adjustments or restatements: Business combination under common control. Unit: RMB’000 January-March 2018 +/- (%) January-March 2019 Before adjustment After adjustment After adjustment Operating revenue 6,787,751 6,499,510 6,757,166 0.45% Net profit attributable to shareholders of 366,756 2,032,027 2,032,870 (81.96%) the Company Net profit attributable to shareholders of the Company excluding non-recurring 285,087 466,066 466,066 (38.83%) profit and loss Net cash flows from operating activities (1,289,484) (215,819) (246,200) 423.75% Basic EPS (RMB/share) 0.150 0.831 0.831 (81.95%) Diluted EPS (RMB/share) N/A N/A N/A N/A Weighted average return on equity 1.61% 10.39% 10.14% (8.53%) December 31, 2018 +/- (%) March 31 2019 Before adjustment After adjustment After adjustment Total assets 45,503,823 42,812,505 44,157,758 3.05% Net assets attributable to shareholders of 22,243,351 22,280,126 22,759,274 (2.27%) the Company Please see key additional information and further details included in the Annex. Non-Recurring gain/loss √ Applicable □ Not applicable Unit: RMB’000 Item January-March 2019 Notes Gains/losses on the disposal of non-current assets (including the write-off of 40,479 asset impairment provisions accrued during the period) Government grants recognized in profit or loss (other than grants which are closely related to the Company's business and are either in fixed amounts or 5,238 determined under quantitative methods in accordance with the national standard) Net profit or loss of subsidiaries from the beginning of the period up to the business combination date recognized as a result of business combination of 38,027 enterprises under common control Reversal of provision for receivables and contract assets, that are subject to 11,917 specific provision Other non-operating income and expenses other than the above (6,208) Less: Income tax effects 7,784 Total 81,669 -- 3 ADAMA Ltd. Full Content of the First Quarter Report 2019 Explanation of why the Company classified an item as non-recurring gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public— Non-recurring Gain and Loss, or reclassified any non-recurring gain/loss item given as an example in the said explanatory announcement to recurrent gain/loss □ Applicable √ Not applicable In the reporting period, the Company had no such case that classified non-recurring profit (gain)/loss as defined and listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Nonrecurring Profit/loss as recurring profit (gain)/loss. II Total number of shareholders and shareholdings of top 10 shareholders at the period-end 1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right & shareholdings of top 10 shareholders at the period-end Unit: share 52,346 Total number of preference (the number of ordinary A share Total number of ordinary shareholders at the shareholders who had resumed their shareholders is 36,181; 0 end of the Reporting Period voting right at the end of the the number of B share Reporting Period (if any) shareholders is 16,165) Shareholdings of top 10 shareholders Nature of Shareholding Number of Number of restricted Pledged or frozen shares Name of shareholder shareholder percentage shares held shares held Status Number China National Agrochemical State-owned 74.02% 1,810,883,039 1,810,883,039 - - Co., Ltd. legal person Jingzhou Sanonda Holding Co., State-owned 4.89% 119,687,202 - - - Ltd. legal person China Cinda Asset Management State-owned 1.37% 33,557,046 - - - Co., Ltd. legal person China Structural Reform Fund State-owned 1.37% 33,557,046 - - - Co., Ltd. legal person Portfolio No.503 of National Others 0.53% 12,999,893 - - - Social Security Fund CCB Principal-ICBC-Avic Trust, Trust Plan of Pooled Funds of CCB Principal Private Others 0.53% 12,885,906 - - - Placement Investment, Tianqi (2016) No. 293 of Avic Trust Industrial Bank Co., Ltd, Mixed Securities Investment Fund, Others 0.33% 8,053,736 - - - Aegon-Industrial Trend Investment (LOF) Domestic Jiang Yun 0.27% 6,500,073 - - - individual GUOTAI JUNAN Foreign SECURITIES(HONGKONG) 0.20% 4,989,844 - - - legal person LIMITED Caitong Fund Fuchun Chuangyi Private Placement No.3 Asset Others 0.19% 4,697,986 - - - Management Plan Shareholdings of top 10 non-restricted shareholders Number of non-restricted shares Type of shares Name of shareholder held at the period-end Type Number Jingzhou Sanonda Holding Co., Ltd. 119,687,202 RMB ordinary share 119,687,202 China Cinda Asset Management Co., RMB ordinary share 33,557,046 33,557,046 Ltd. China Structural Reform Fund Co., RMB ordinary share 33,557,046 33,557,046 Ltd. Portfolio No.503 of National Social RMB ordinary share 12,999,893 12,999,893 Security Fund 4 ADAMA Ltd. Full Content of the First Quarter Report 2019 CCB Principal-ICBC-Avic Trust, RMB ordinary share Trust Plan of Pooled Funds of CCB Principal Private Placement 12,885,906 12,885,906 Investment, Tianqi (2016) No. 293 of Avic Trust Industrial Bank Co., Ltd, Mixed RMB ordinary share Securities Investment Fund, Aegon- 8,053,736 8,053,736 Industrial Trend Investment (LOF) Jiang Yun 6,500,073 RMB ordinary share 6,500,073 GUOTAI JUNAN Domestically listed foreign share SECURITIES(HONGKONG) 4,989,844 4,989,844 LIMITED Caitong Fund Fuchun Chuangyi RMB ordinary share Private Placement No.3 Asset 4,697,986 4,697,986 Management Plan State-owned Assets Administration RMB ordinary share 4,169,266 4,169,266 Bureau of Qichun County Jingzhou Sanonda Holdings Co., Ltd. and CNAC are related parties, and are acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. Related or act-in-concert parties Sanonda Holding is a wholly-controlled subsidiary of CNAC. It is unknown to the Company among the shareholders above whether the other shareholders are related parties or acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. Top 10 ordinary shareholders conducting securities margin trading No such issue. (if any) Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct any promissory buy-back transaction during the Reporting Period? □ Yes √ No No such cases in the Reporting Period. 2. Total number of preference shareholders and shareholdings of the top 10 of them □ Applicable √ Not applicable 5 ADAMA Ltd. Full Content of the First Quarter Report 2019 Section III Important Events I Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons for the changes √ Applicable □ Not applicable Unit: RMB’000 March 31, Assets and liabilities December 31, 2018 +/- (%) Main reason for change 2019 Increase in Subordinated note in respect of Other receivables 1,671,583 1,079,332 55% securitization transaction. Rights of use assets 534,410 - 100% Adoption of ASBE21 - Leases. Other non-current Mainly due to guarantees received from 312,686 217,282 44% assets customers. Mainly due to increase of short-term credits from banks to finance the increase in the needs of Short term loans 2,198,189 1,122,774 96% working capital and the increased investments in the period. Derivative financial 772,083 1,451,670 -47% Realization and revaluation of derivatives. liabilities Mainly due to increase of payables to CNAC for Other payables 1,786,678 1,197,579 49% the acquisition of Anpon and interest payable for debentures. Mainly due to reclassification of put options to Other current 317,242 578,184 -45% holders of non-controlling interests to long term liabilities liability. Mainly due to increase of long-term loans from banks in order to finance acquisitions and other Long-term loans 471,796 235,819 100% investments and due to the increase in the working capital in the period. Mainly due to reclassification of put options to Other non-current 387,275 222,625 74% holders of non-controlling interests from short liabilities term liability. Lease liability 401,911 - 100% Adoption of ASBE 21 - Leases. Other comprehensive Mainly due to translation effect of foreign 700,784 1,090,827 -36% income operations. January - January - March, Profit and losses +/- (%) Main reason for change March, 2019 2018 Mainly written-up amortization of transferred Selling and 1,268,966 1,092,897 16% assets from Syngenta and addition from Anpon Distribution expenses and Bonide. General and The increase is mainly idleness expenses of the administrative 317,514 266,991 19% Jingzhou old site of the Company. expenses Research and Mainly reflecting higher spending on strategic Development 96,353 80,091 20% research and development projects. expenses Impairment losses 8,777 20,942 -58% Decrease in inventory impairment. Gains from changes Mainly due to change in the fair value of 794,180 (315,265) 352% in fair value derivatives. Investment income (550,462) 137,676 -500% Mainly due to realization of derivatives Financing Expense 479,381 53,066 803% Mainly due to exchange rate differences Gain (Loss) from Significant higher amount in Q1 2018 gain from disposal of non- 40,479 1,997,866 -98% disposal of divestiture assets in Europe. current assets Non-operating 5,707 2,600 120% Increase in non-operating income income Non-operating 9,196 2,965 210% Increase in non-operating expenses expenses Significant higher amount in Q1 2018 mainly due Income tax expenses 48,355 542,804 -91% to increase of income before tax due to gain from 6 ADAMA Ltd. Full Content of the First Quarter Report 2019 disposal of divesture assets in Europe. Note: Given the global nature of its operational activities and the composition of its assets and liabilities, the Group uses foreign currency derivatives (forward transactions and currency options) to hedge the cash flow risk associated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations. Financial expenses mainly reflect interest payments on corporate bonds and loans as well as Foreign Exchange income/losses on the bonds and other monetary assets and liabilities, while net gains/losses from hedging of those positions are recorded in Gains/Losses from Changes in Fair Value, and further transferred to Investment Income upon realization. The aggregate of these three items for Q1 2019 amounts to 235.6 million RMB compared with 216.1 million RMB for Q1 2018. In addition to the reported financial results that the Company prepares in accordance with PRC GAAP, the Company’s management prepares non-GAAP, adjusted financial results, contained in the Business Update annexed to this Report, to present what the Company believes is a more useful view of the true economic performance of the business on an ongoing basis. These adjusted results exclude items that are of a one-time, or non-cash or non-operational nature that do not impact the ongoing performance of the business, and reflects the way the management and board of directors view the performance of the Company. The Company believes that excluding the effects of these items from its operating results allows an effective assessment and comparison of the underlying financial performance of its business from period to period and within the market. The main one-time or non-cash or non-operational items affecting the Company’s reported numbers are as follows: Amortization of legacy PPA of 2011 acquisition of Adama Agricultural Solutions Ltd. (“Solutions”) (non-cash): Under PRC GAAP, the Company has inherited the historical “legacy” amortization charge from the first combined reporting for Q3 2017 that ChemChina previously was incurring in respect of its acquisition of Solutions in 2011. This amortization is done in a linear manner on a quarterly basis, most of which will be completed and removed in the second half of 2020. Amortization of acquisition PPA (non-cash): Related to the amortization of non-cash intangible assets created as part of acquisitions, in addition to the full reflection of the purchase price paid in the Company’s net debt; has no impact on the ongoing performance of the companies acquired. Amortization of transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash): The proceeds from the Divestment of crop protection products in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina, net of taxes and transaction expenses, were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature and economic value. Since the products acquired from Syngenta are of the same nature and with the same net economic value as those divested, and since the Company excludes the one-time gain that it made on the divested products, the additional amortization charge incurred due to the written-up of the acquired assets is also excluded to present a consistent view of Divestment and Transfer transactions, which had no net impact on the underlying economic performance of the Company. II Progress on significant events, as well as the influence and solutions √ Applicable □ Not applicable On March 19, 2019, the Company entered into an agreement with China National Agrochemical Co., Ltd. (“CNAC”) and CNAC International Company Limited for the acquisition of Jiangsu Anpon Electrochemical Co., Ltd. (“Anpon”), a backward-integrated manufacturer of key active ingredients used in crop protection markets worldwide, most notably Ethephon, Pymetrozine and Buprofezin, as well as intermediates such as chlor-alkali, with advanced membrane production technology. The above transaction was closed on March 29, 2019. At the end of January 2019, preceding the Spring Festival, the Company voluntarily suspended operations at the old site in Jingzhou, which is in the process of being relocated to a nearby advanced site, due to recording of higher than permitted levels of wastewater compounds. The Company was subsequently instructed by the local government not to resume operations before rectification. The Company is deeply committed to environmentally sustainable production, has a strong track record worldwide of compliance with relevant regulations, and takes seriously any potential instance of exceeding of emissions thresholds. During the suspension of its production, the Company took specific measures to meet all rectification requirements of the relevant authorities. On March 29, 7 ADAMA Ltd. Full Content of the First Quarter Report 2019 2019, the local government issued a Notice on Agreeing to the Production Resumption of ADAMA Ltd. and allowed the resumption of production at the Company’s old site in Jingzhou. The Jingzhou old site is gradually resuming operation, following its connection via pipeline to the state-of-the-art wastewater treatment facility installed at the new and already operational site. As a consequence of the disruption, the Company lacked sufficient product to fulfill first quarter demand, and incurred approximately $11 million of additional idleness cost, reflected in operating expenses. The impact of the suspension is expected to continue to some extent into the second quarter, and subside alongside the increase in output at the old site. Significant Events Date of Index of the Disclosed Announcements Disclosure March 21, Announcement on the Acquisition of 100% of the Equity Interests in Jiangsu Anpon Anpon Acquisition 2019 Electrochemical Co., Ltd., in a Related-Party Transaction (Announcement No: 2019-16 ) disclosed at www.cninfo.com.cn. March 30, Announcement on the Progress of the Acquisition of 100% of the Equity Interests 2019 in Jiangsu Anpon Electrochemical Co., Ltd. (Announcement No: 2019-24) disclosed at www.cninfo.com.cn. Resumption of the February 13, Announcement on Receiving a Notice Prior to Administrative Punishment Production at the Old 2019 (Hearing) and Decision Notice of Production Suspension and Rectification Site in Jingzhou (Announcement No: 2019-9) disclosed at www.cninfo.com.cn. April 2, 2019 Announcement on the Resumption of Production at the Old Site in Jingzhou (Announcement No: 2019-25) disclosed at www.cninfo.com.cn. In January 2019, the Company, through a subsidiary of Solutions, acquired Bonide Products Inc., a US provider of pest-control solutions for the consumer Home & Garden use, allowing the Company to bring its advanced technologies and differentiated portfolio of pest- control directly to the consumers. Please see key additional information and further details included in the Annex. Progress of repurchasing the shares (share buy-back) □ Applicable √ Not applicable Progress of selling the buy-back shares through call auction □ Applicable √ Not applicable III None completion of Commitments that should have been completed in the reporting period by the Company, actual controller, shareholders, related parties, acquirer, and other committed parties. □ Applicable √ Not applicable IV Performance forecast for months 1-6 2019 Warning of possible loss or considerable YoY change in the accumulative net profit made during the year-beginning to the end of the next reporting period, as well as the reasons. □ Applicable √ Not applicable V Securities investment □ Applicable √ Not applicable No such cases in the Reporting Period. VI Investment in derivative financial instruments √ Applicable □ Not applicable 8 ADAMA Ltd. Full Content of the First Quarter Report 2019 Unit: RMB’000 Percentage of Amount Amount investment The party Related Investment Investment Gain/loss Relation Initial purchased sold during Impairment amount that party Starting Expiring amount at amount at during the with the Type investment during the the accrued divided by operates the transaction date date beginning of end of the reporting Company amount reporting reporting (if any) net asset at investment or not? the period period period period period end of the period Banks No No Option 3,362,968 17.9.2018 25.8.2019 3,362,968 2,363,459 -2,016,268 No 3,710,159 16.51% 94,112 Banks No No Forward 11,634,236 11.12.2018 12.7.2019 11,634,236 17,611,172 -15,747,202 No 13,498,206 60.07% 219,593 Total 14,997,204 -- -- 14,997,204 19,974,631 -17,763,470 17,208,365 76.58% 313,705 Source of fund for the investment Internal litigation-related situations (if N/A applicable) Date of disclosure of Board approval (if December 30, 2017 any) Date of disclosure of Shareholders’ N/A approval (if any) The aforesaid refers to short term hedging currency transactions made with banks. The Group’s transactions are not traded in the market. The Transactions are between the applicable company in the Group and the applicable bank until the expiration date of the transaction, therefore no market risk is involved. Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA agreements. As to operational risk, the Group is working with relevant software, which is its back office for all transactions. No legal risk is involved. Risk and control analysis for the The actions taken in order to further reduce risks are: reporting period (including but not The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by limited to market risk, liquidity risk, the subsidiaries' financial statements committee of the board, which specifies, inter alia, the hedging credit risk, operational risk, legal risk, policy, the persons that have the authorization to deal with hedging, the tools, ranges etc. The only etc.) subsidiary that has hedging positions in the Group in the period was Solutions and its subsidiaries. The relevant subsidiaries apply management designed procedures and controls, which among other things, monitor the working process and the controls of the hedging transactions and are quarterly reviewed and annually audited. The controllers of the relevant subsidiaries are involved in the process and are monitoring the hedging accounting treatment. Every 2-3 years the internal audit of the relevant subsidiaries’ department is auditing the entire procedure. The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks. Market price or fair value change of Segregation of duties as follows: investments during the reporting period. For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary Specific methodology and assumptions hedges currencies only; the relevant transactions are simple (Options and forwards) for short terms. For fair value should be disclosed in the analysis of methodology see section XI of this report, note IX. Fair Value. The exchange rates are provided by the accounting fair value of the investments department of the relevant subsidiary and all other parameters are provided by the experts. Explanation for any significant changes in accounting policies and principles, N/A compared with last reporting period The derivative investments carried by the Company are for hedging and narrowing down the risk of market Independent Directors’ opinion on the fluctuations. The investments respond to the Company’s routine business demands and are in accordance with the investment in derivative financial relevant laws and regulations. Additionally, the Company has adopted Currency Risk Hedging Policy to strengthen instruments and related risk controls the risk management and control which benefit the Company’s ability to protect against market risk. The derivative investments do not harm the interests of the Company and its shareholders. VII Visits paid to the Company for purposes of research, communication, interview, etc. during the Reporting Period √ Applicable □ Not applicable 9 ADAMA Ltd. Full Content of the First Quarter Report 2019 Date Activity Visitor Type Main Topics and Provided Materials Institutional & Introduction of the company, future development plan and January 10, 2019 Online Roadshow Retail recent M&A project Introduction of the company’s recent M&A project and future January 14, 2019 Roadshow Institutional development plan Investment Strategy Introduction of the company’s recent M&A project and future January 15, 2019 Meeting of Security Institutional development plan, Companies Investment Strategy Introduction of the company, core advantage, future January 16, 2019 Meeting of Security Institutional development plan and recent M&A project, answering the Companies questions from investors Introduction of the company, core advantage, future January 17, 2019 Roadshow Institutional development plan and recent M&A project, answering the questions from investors Introduction of the company, core advantage, future January 28-31, 2019 Roadshow Institutional development plan and recent M&A project, answering the questions from investors Introduction of the company, future development plan February 2, 2019 Roadshow Institutional and recent M&A project, as well as the trend of global agrochemical industry Introduction of the company’s recent M&A project and future February 13, 2019 Roadshow Institutional development plan,as well as the global market outlook in 2019 The impact of halting production of Sanonda old factories and February 13, 2019 Phone Call Retail time of resuming production March 19, 2019 Phone Call Retail Answer the question of how the company will deal with B share March 20, 2019 Call Conference Institutional Introduction of Q4 and full year result in 2018 March 20, 2019 Phone Call Retail Answer the question related to the 2018 Q4 and full year result March 26, 2019 Roadshow Institutional Introduction of Q4 and full year result in 2018 March 27, 2019 Roadshow Institutional Introduction of Q4 and full year result in 2018 VIII Illegal provision of guarantees for external parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s funds by the controlling shareholder or its related parties for non- operating purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 10 ADAMA Ltd. Full Content of the First Quarter Report 2019 Section IV Financial Statements I Financial statements 1. Consolidated balance sheet Prepared by ADAMA Ltd. 31 March 2019 Unit: RMB’000 December 31, 2018 Item March 31, 2019 (Restated) Current assets: Cash at bank and on hand 4,801,192 6,400,190 Financial assets held for trading 38,934 46,095 Derivative financial assets 589,909 517,726 Bills and accounts receivable 7,667,955 6,683,450 Including: Bills receivable 129,388 113,785 Accounts receivable 7,538,567 6,569,665 Prepayments 371,470 413,941 Other receivables 1,671,583 1,079,332 Including: Dividends receivable - 5,240 Inventories 9,979,162 9,433,876 Non-current assets due within one year 54 48 Other current assets 661,159 660,806 Total current assets 25,781,418 25,235,464 Non-current assets: Long-term accounts receivable 148,150 157,600 Long-term equity investments 111,103 108,350 Other equity investments 97,285 91,559 Investment properties 4,013 4,094 Fixed assets 7,174,200 7,280,584 Construction in progress 462,691 493,181 Right-of-use assets 534,410 - Intangible assets 5,879,971 5,741,962 Goodwill 4,197,052 4,085,945 Deferred tax assets 800,844 741,737 Other non-current assets 312,686 217,282 Total non-current assets 19,722,405 18,922,294 Total assets 45,503,823 44,157,758 11 ADAMA Ltd. Full Content of the First Quarter Report 2019 December 31, 2018 Item March 31, 2019 (Restated) Current liabilities: Short-term loans 2,198,189 1,122,774 Derivative financial liabilities 772,083 1,451,670 Bills and accounts payable 5,162,562 5,073,469 Contract liabilities 891,245 799,509 Employee benefits payable 999,382 944,175 Taxes payable 591,510 616,780 Other payables 1,786,678 1,197,579 Including: Interest payable 152,952 46,258 Dividends payable 57,062 750 Non-current liabilities due within one year 428,996 350,707 Other current liabilities 317,242 578,184 Total current liabilities 13,147,887 12,134,847 Non-current liabilities: Long-term loans 471,796 235,819 Debentures payable 7,723,041 7,649,098 Lease liabilities 401,911 - Long-term payables 25,049 25,106 Long-term employee benefits payable 588,371 606,234 Provisions 135,036 132,351 Deferred tax liabilities 380,106 392,404 Other non-current liabilities 387,275 222,625 Total non-current liabilities 10,112,585 9,263,637 Total liabilities 23,260,472 21,398,484 Shareholders' equity Share capital 2,446,554 2,446,554 Capital reserve 12,917,359 13,332,359 Other comprehensive income 700,784 1,090,827 Special reserves 16,042 13,536 Surplus reserve 240,162 240,162 Retained earnings 5,922,450 5,635,836 Total shareholders’ equity 22,243,351 22,759,274 Total liabilities and shareholders’ equity 45,503,823 44,157,758 Legal representative: Chen Lichtenstein; Chief of the accounting work: Aviram Lahav; Chief of the accounting organ: Aviram Lahav. 12 ADAMA Ltd. Full Content of the First Quarter Report 2019 2. Balance sheet of the Company Unit: RMB’000 Item March 31, 2019 December 31, 2018 Current Assets: Cash at bank and on hand 2,266,633 2,058,253 Bills and accounts receivable 402,350 712,116 Including: Bills receivable 39,076 19,917 Accounts receivable 363,274 692,199 Prepayments 61,627 10,500 Other receivables 31,288 31,748 Including: Dividends receivable - 1,808 Inventories 96,050 147,975 Other current assets 192 1,343 Total current assets 2,858,140 2,961,935 Non-current assets: Long-term equity investments 16,403,642 15,939,826 Other equity investments 86,059 80,119 Investment properties 4,013 4,094 Fixed assets 981,647 1,012,674 Construction in progress 194,530 188,020 Right-of-use assets 714 - Intangible assets 173,824 174,997 Deferred tax assets 50,041 48,103 Other non-current assets 74,334 54,060 Total non-current assets 17,968,804 17,501,893 Total assets 20,826,944 20,463,828 Current liabilities: Short-term loans 20,000 20,000 Bills and accounts payable 321,284 391,810 Contract liabilities 5,814 9,983 Employee benefits payable 16,351 25,758 Taxes payable 56,471 55,198 Other payables 585,750 187,762 Including: Dividends payable 250 250 Non-current liabilities due within one year 72,000 72,000 Total current liabilities 1,077,670 762,511 Non-current liabilities: Lease liabilities 824 - Long-term employee benefits payable 98,815 100,144 Provisions 16,660 16,454 Other non-current liabilities 171,770 171,770 Total non-current liabilities 288,069 288,368 Total liabilities 1,365,739 1,050,879 Shareholders’ equity Share capital 2,446,554 2,446,554 Capital reserve 15,463,245 15,414,429 Other comprehensive income 48,217 43,167 Special reserves 13,684 11,564 Surplus reserve 240,162 240,162 Retained earnings 1,249,343 1,257,073 Total shareholders’ equity 19,461,205 19,412,949 Total liabilities and shareholders’ equity 20,826,944 20,463,828 13 ADAMA Ltd. Full Content of the First Quarter Report 2019 3. Consolidated income statement Unit: RMB’000 January-March 2019 January-March 2018 Item (Restated) I. Operating income 6,787,751 6,757,166 Less: Cost of sales 4,449,236 4,445,300 Taxes and surcharges 24,541 34,579 Selling and Distribution expenses 1,268,966 1,092,897 General and administrative expenses 317,514 266,991 Research and Development expenses 96,353 80,091 Financial expenses 479,381 53,066 Including: Interest expense 163,299 152,842 Interest income 20,227 20,203 Asset impairment loss 8,777 20,942 Credit impairment loss 8,580 7,538 Add: Investment income, net (550,462) 137,676 Including: Income from investment associates and joint ventures 5,773 5,646 Gain (loss) from changes in fair value 794,180 (315,265) Gain from disposal of assets 40,479 1,997,866 II. Operating profit 418,600 2,576,039 Add: Non-operating income 5,707 2,600 Less: Non-operating expenses 9,196 2,965 III. Total profit 415,111 2,575,674 Less: Income tax expense 48,355 542,804 IV. Net profit 366,756 2,032,870 (1) Classified by nature of operations (1.1) Continuing operations 366,756 2,032,870 (2) Classified by ownership (2.1) Shareholders of the Company 366,756 2,032,870 V. Other comprehensive income, net of tax Other comprehensive income (net of tax) (390,043) (488,115) attributable to shareholders of the Company (1) Items that will not be reclassified to profit or loss: (1.1) Re-measurement of defined benefit plan liability (9,202) 2,205 (1.2) Fair value change in other equity investment 5,050 - (2) Items that were or will be reclassified to profit or loss (2.1) Effective portion of gains or loss of cash flow hedge (40,304) 81,077 (2.2) Translation differences of foreign financial statements (345,587) (571,397) VI. Total comprehensive income for the period attributable to (23,287) 1,544,755 Shareholders of the Company VII. Earnings per share (1) Basic earnings per share (Yuan/share) 0.150 0.831 (2) Diluted earnings per share (Yuan/share) N/A N/A For the business combination under common control in the reporting period, net profit attributable to the owners of the Company from the merged party before the closing date (January-March) was RMB’000 37,830, with the corresponding amount for the same period (January-March) of last year being RMB’000 4,073. Legal representative: Chen Lichtenstein; Chief of the accounting work: Aviram Lahav; Chief of the accounting organ: Aviram Lahav. 14 ADAMA Ltd. Full Content of the First Quarter Report 2019 4. Income statement of the Company Unit: RMB’000 Item January-March 2019 January-March 2018 I. Operating income 416,354 837,781 Less: Cost of sales 292,548 614,109 Taxes and surcharges 6,241 14,642 Selling and Distribution expenses 19,482 30,261 General and administrative expenses 96,492 34,816 Research and Development expenses 1,470 1,325 Financial expenses 8,886 6,092 Including: Interest expense 1,077 2,755 Interest income 6,901 6,199 Asset impairment loss 69 780 Credit impairment loss 577 2,177 Add: Investment income (loss), net - - Gain (loss) from changes in fair value - - II. Operating Profit (9,411) 133,579 Add: Non-operating income 710 238 Less: Non-operating expenses 1,857 4 III. Total profit (10,558) 133,813 Less: Income tax expense (2,828) 20,667 IV. Net profit (7,730) 113,146 Continuing operations (7,730) 113,146 V. Other comprehensive income, net of tax 5,050 - (1) Items that will not be reclassified to profit or loss 5,050 - (1.1) Fair value change in other equity investment 5,050 - (2) Items that may be reclassified to profit or loss - - VI. Total comprehensive income for the period (2,680) 113,146 5. Consolidated cash flow statement Unit: RMB’000 January-March 2019 January-March 2018 Item (Restated) I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 5,006,120 5,239,661 Refund of taxes and surcharges 30,497 5,475 Cash received relating to other operating activities 109,616 134,505 Sub-total of cash inflows from operating activities 5,146,233 5,379,641 Cash paid for goods and services 4,604,831 3,998,904 Cash paid to and on behalf of employees 829,857 840,323 Payments of taxes and surcharges 264,648 108,862 Cash paid relating to other operating activities 736,381 677,752 Sub-total of cash outflows from operating activities 6,435,717 5,625,841 Net cash flows used in operating activities (1,289,484) (246,200) II. Cash flows from investing activities: Cash received from disposal of investments 8,148 7,470 Cash received from returns of investments 3,372 - Net cash received from disposal of fixed assets, intangible assets and other long-term assets 30,843 2,411,752 Sub-total of cash inflows from investing activities 42,363 2,419,222 Cash paid to acquire fixed assets, intangible assets and other long-term assets 287,509 2,373,718 Net cash paid to acquire subsidiaries or other business units 824,583 - 15 ADAMA Ltd. Full Content of the First Quarter Report 2019 January-March 2019 January-March 2018 Item (Restated) Sub-total of cash outflows from investing activities 1,112,092 2,373,718 Net cash flows from (used in) investing activities (1,069,729) 45,504 III. Cash flows from financing activities: Cash received from borrowings 1,537,197 227,500 Sub-total of cash inflows from financing activities 1,537,197 227,500 Cash repayments of borrowings 258,676 2,106,526 Cash payment for dividends, profit distributions and interest 64,551 51,261 Including: Dividends paid to non-controlling interest 23,830 16,028 Cash paid relating to other financing activities 380,425 8,885 Sub-total of cash outflows from financing activities 703,652 2,166,672 Net cash from (used in) financing activities 833,545 (1,939,172) IV. Effects from foreign exchange rate changes on cash and cash equivalents (81,844) (210,948) V. Net decrease in cash and cash equivalents (1,607,512) (2,350,816) Add: Cash and cash equivalents at the beginning of the period 6,346,196 7,979,502 VI. Cash and cash equivalents at the end of the period 4,738,684 5,628,686 6. Cash flow statement of the Company Unit: RMB’000 Item January-March 2019 January-March 2018 I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 633,069 636,451 Refund of taxes and surcharges 15,759 - Cash received relating to other operating activities 7,737 6,835 Sub-total of cash inflows from operating activities 656,565 643,286 Cash paid for goods and services 290,452 267,037 Cash paid to and on behalf of employees 55,606 49,453 Payments of taxes and surcharges 20,779 15,462 Cash paid relating to other operating activities 51,452 27,075 Sub-total of cash outflows from operating activities 418,289 359,027 Net cash flows from operating activities 238,276 284,259 II. Cash flows from investing activities: Net cash received from disposal of fixed assets, intangible assets and other long-term assets - - Cash received relating to other investing activities 1,808 - Sub-total of cash inflows from investing activities 1,808 - Cash paid to acquire fixed assets, intangible assets and other long-term assets 25,850 12,582 Sub-total of cash outflows from investing activities 25,850 12,582 Net cash flows from investing activities (24,042) (12,582) III. Cash flows from financing activities: Cash received from borrowings - - Cash received relating to other financing activities - - Sub-total of cash inflows from financing activities - - Cash repayments of borrowings - 76,590 Cash payment for dividends, profit distributions or interest 1,077 2,680 Cash paid relating to other financing activities 8,610 7,555 Sub-total of cash outflows from financing activities 9,687 86,825 Net cash used in financing activities (9,687) (86,825) IV. Effects of foreign exchange rate changes on cash and cash equivalents (4,777) (13,876) V. Net increase in cash and cash equivalents 199,770 170,976 Add: Cash and cash equivalents at the beginning of the period 2,005,313 1,864,003 VI. Cash and cash equivalents at the end of the period 2,205,083 2,034,979 16 ADAMA Ltd. Full Content of the First Quarter Report 2019 II Adjustments of the financial statements 1. Opening balance adjustments due to adoption of new accounting standards for financial instruments, revenue and leases √ Applicable □ Not applicable Consolidated Balance Sheet Unit: RMB’000 Adjustments from Item December 31, 2018 adoption of new lease January 1, 2019 standard Current assets Cash at bank and on hand 6,400,190 - 6,400,190 Financial assets held for trading 46,095 - 46,095 Derivative financial assets 517,726 - 517,726 Bills and accounts receivable 6,683,450 - 6,683,450 Including: Bills receivable 113,785 - 113,785 Accounts receivable 6,569,665 - 6,569,665 Prepayments 413,941 - 413,941 Other receivables 1,079,332 - 1,079,332 Inventories 9,433,876 - 9,433,876 Non-current assets due within one year 48 - 48 Other current assets 660,806 - 660,806 Total current assets 25,235,464 - 25,235,464 Non-current assets - Long-term accounts receivable 157,600 - 157,600 Long-term equity investments 108,350 - 108,350 Other equity investments 91,559 - 91,559 Investment properties 4,094 - 4,094 Fixed assets 7,280,584 - 7,280,584 Construction in progress 493,181 - 493,181 Right-of-use assets N/A 506,862 506,862 Intangible assets 5,741,962 - 5,741,962 Goodwill 4,085,945 - 4,085,945 Deferred tax assets 741,737 - 741,737 Other non-current assets 217,282 - 217,282 Total non-current assets 18,922,294 506,862 19,429,156 Total assets 44,157,758 506,862 44,664,620 17 ADAMA Ltd. Full Content of the First Quarter Report 2019 December 31, 2018 Adjustments from January 1, 2019 adoption of new lease Item standard Current liabilities Short-term loans 1,122,774 - 1,122,774 Derivative financial liabilities 1,451,670 - 1,451,670 Bills and accounts payable 5,073,469 - 5,073,469 Advances from customers - - - Contract liabilities 799,509 - 799,509 Employee benefits payable 944,175 - 944,175 Taxes payable 616,780 - 616,780 Other payables 1,197,579 - 1,197,579 Including: Interest payable 46,258 - 46,258 Dividends payable 750 - 750 Non-current liabilities due within one year 350,707 120,584 471,291 Other current liabilities 578,184 - 578,184 Total current liabilities 12,134,847 120,584 12,255,431 Non-current liabilities - Long-term loans 235,819 - 235,819 Debentures payable 7,649,098 - 7,649,098 Lease liabilities N/A 386,278 386,278 Long-term payables 25,106 - 25,106 Long-term employee benefits payable 606,234 - 606,234 Provisions 132,351 - 132,351 Deferred tax liabilities 392,404 - 392,404 Other non-current liabilities 222,625 - 222,625 Total non-current liabilities 9,263,637 386,278 9,649,915 Total liabilities 21,398,484 506,862 21,905,346 Shareholders' equity Share capital 2,446,554 - 2,446,554 Capital reserve 13,332,359 - 13,332,359 Other comprehensive income 1,090,827 - 1,090,827 Special reserves 13,536 - 13,536 Surplus reserve 240,162 - 240,162 Retained earnings 5,635,836 - 5,635,836 Total shareholders’ equity 22,759,274 - 22,759,274 Total liabilities and shareholders’ equity 44,157,758 506,862 44,664,620 Notes to the adjustments: As from January 1, 2019, the Group initially applies revised Accounting Standards for Business Enterprises 21, Leases (hereinafter: “the new lease standard”). According to the new lease standard, the Group recognized right-of-use asset and lease liabilities as of January 1, 2019. 18 ADAMA Ltd. Full Content of the First Quarter Report 2019 Balance Sheet Unit: RMB’000 Adjustments from adoption Item December 31, 2018 January 1, 2019 of new lease standard Current assets Cash at bank and on hand 2,058,253 - 2,058,253 Bills and accounts receivable 712,116 - 712,116 Including: Bills receivable 19,917 - 19,917 Accounts receivable 692,199 - 692,199 Prepayments 10,500 - 10,500 Other receivables 31,748 - 31,748 Inventories 147,975 - 147,975 Other current assets 1,343 - 1,343 Total current assets 2,961,935 - 2,961,935 Non-current assets - Long-term equity investments 15,939,826 - 15,939,826 Other equity investments 80,119 - 80,119 Investment properties 4,094 - 4,094 Fixed assets 1,012,674 - 1,012,674 Construction in progress 188,020 - 188,020 Right-of-use assets N/A 818 818 Intangible assets 174,997 - 174,997 Deferred tax assets 48,103 - 48,103 Other non-current assets 54,060 - 54,060 Total non-current assets 17,501,893 818 17,502,711 Total assets 20,463,828 818 20,464,646 Current liabilities Short-term loans 20,000 - 20,000 Bills and accounts payable 391,810 - 391,810 Contract liabilities 9,983 - 9,983 Employee benefits payable 25,758 - 25,758 Taxes payable 55,198 - 55,198 Other payables 187,762 - 187,762 Including: Interest payable - Dividends payable 250 - 250 Non-current liabilities due within one year 72,000 - 72,000 Total current liabilities 762,511 - 762,511 Non-current liabilities - Lease liabilities N/A 818 818 Long-term employee benefits payable 100,144 - 100,144 Provisions 16,454 - 16,454 Other non-current liabilities 171,770 - 171,770 Total non-current liabilities 288,368 818 289,186 Total liabilities 1,050,879 818 1,051,697 Shareholders' equity Share capital 2,446,554 - 2,446,554 Capital reserve 15,414,429 - 15,414,429 Other comprehensive income 43,167 - 43,167 Special reserves 11,564 - 11,564 Surplus reserve 240,162 - 240,162 Retained earnings 1,257,073 - 1,257,073 Total shareholders’ equity 19,412,949 - 19,412,949 Total liabilities and shareholders’ equity 20,463,828 818 20,464,646 2. Retrospective adjustments due to adoption of new accounting standards for financial instruments and leases □ Applicable √ Not applicable 19 ADAMA Ltd. Full Content of the First Quarter Report 2019 III Auditor’s report Is this Report audited? □ Yes √ No This Report is unaudited. ADAMA Ltd. April 28, 2019 20