ADAMA Ltd. Full Content of the First Quarter Report 2021
ADAMA LTD.
FIRST QUARTER REPORT 2021
ADAMA Ltd. (hereinafter referred to as “the Company”) is a global leader in crop protection,
providing solutions to farmers across the world to combat weeds, insects and disease.
ADAMA has one of the widest and most diverse portfolios of active ingredients in the world,
state-of-the art R&D, manufacturing and formulation facilities, together with a culture that
empowers our people in markets around the world to listen to farmers and ideate from the
field. This uniquely positions ADAMA to offer a vast array of distinctive mixtures, formulations
and high-quality differentiated products, delivering solutions that meet local farmer and
customer needs in over 100 countries globally.
Please see important additional information and further details included in the Annex.
April 2021
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Section I - Important Notice
The Company’s Board of Directors, Board of Supervisors, directors, supervisors and
senior managers confirm that the content of the Report is true, accurate and complete
and contains no false statements, misleading presentations or material omissions,
and assume joint and several legal liability arising therefrom.
Ignacio Dominguez, the person leading the Company (President and Chief Executive
Officer) as well as its legal representative, and Aviram Lahav, the person leading the
accounting function (Chief Financial Officer & Deputy Chief Executive Officer), hereby
assert and confirm the truthfulness, accuracy and completeness of the Financial
Report.
All of the Company’s directors attended the board meeting for the review of 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.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Section II - Financial Highlights & Shareholder Changes
I. Main accounting and financial results
Whether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year due to
change in accounting policies or correction of accounting errors
□ Yes √ No
January - March 2021 January - March 2020 YoY +/- (%)
Operating revenues (RMB’000) 7,187,164 6,782,243 5.97%
Net profit attributable to shareholders of the Company
148,784 (16,707) 990.55%
(RMB’000)
Net profit attributable to shareholders of the Company
121,678 16,813 623.71%
excluding non-recurring profit and loss (RMB’000)
Net cash flow from operating activities (RMB’000) (837,773) (384,708) 117.77%
Basic EPS (RMB/share) 0.064 (0.007) 1,012.30%
Diluted EPS (RMB/share) NA NA NA
Weighted average return on net assets 0.69% -0.07% 0.76%
End of Reporting
End of last year +/- (%)
Period
Total assets (RMB’000) 48,431,370 46,801,034 3.48%
Net assets attributable to shareholders (RMB’000) 21,728,692 21,353,752 1.76%
Please see key additional information and further details included in the Annex.
Non-Recurring profit/loss
√ Applicable □ Not applicable
Unit: RMB’000
Item January-March 2021 Note
Gains/losses on the disposal of non-current assets (including the write-off of
6,774 -
asset impairment provisions accrued during the period)
Government grants recognized through profit or loss (excluding government
grants closely related to business of the Company and given at a fixed quota 15,086 -
or amount in accordance with government’s uniform standard)
Reversal of provision for receivables and contract assets, that are subject to
6,079 -
specific provision
Other non-operating income and expenses other than the above 4,375 -
Other profit or loss that meets the definition of non-recurring profit or loss - -
Less: Income tax effects 5,208 -
Total 27,106 -
Explanation of why the Company classified an item as non-recurring profit/loss according to the definition in the First
Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public. Non-recurring
Profit and Loss, and reclassified any non-recurring profit/loss item given as an example in the said explanatory
announcement to recurrent profit/loss
□ Applicable √ Not applicable
No such cases during the Reporting Period.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
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 and shareholdings of top 10 shareholders at the period-end
Unit: share
46,241
Total number of preference
(the number of ordinary A
Total number of ordinary shareholders at the shareholders who had resumed
share shareholders is 32,057; 0
end of the Reporting Period their voting right at the end of
the number of B share
the Reporting Period (if any)
shareholders is 14,184)
Shareholdings of top 10 shareholders
Number of Pledged or frozen
Nature of Shareholding Number of shares
Name of shareholder restricted shares
shareholder percentage shares held
held Status Number
State-owned
Syngenta Group Co., Ltd. 72.88% 1,708,450,759 -- -- --
legal person
Jingzhou Sanonda Holding State-owned
5.11% 119,687,202 -- -- --
Co., Ltd. legal person
China Cinda Asset State-owned
1.33% 31,115,916 -- -- --
Management Co., Ltd. legal person
Portfolio No.503 of National
Others 0.98% 23,000,052 -- -- --
Social Security Fund
Huarong Ruitong Equity
State-owned
Investment Management Co., 0.55% 12,885,906 -- -- --
legal person
Ltd.
Hong Kong Securities
Overseas
Clearing Company Ltd. 0.41% 9,527,106 -- -- --
legal person
(HKSCC)
Bosera Funds Xincheng No.2
Collective Asset Others 0.28% 6,500,000 -- -- --
Management Plan
Bosera Funds Xincheng No.3
Collective Asset Others 0.26% 6,000,000 -- -- --
Management Plan
China Universal-Strategic
Enhancement No.3 Collective Others 0.19% 4,400,000 -- -- --
Asset Management Plan
State-owned Assets
State-owned
Administration Bureau of 0.18% 4,169,266 -- -- --
legal person
Qichun County
Shareholdings of top 10 non-restricted shareholders
Number of non-restricted Type of shares
Name of shareholder
shares held at the period-end Type Number
Syngenta Group Co., Ltd. 1,708,450,759 RMB ordinary share 1,708,450,759
Jingzhou Sanonda Holding Co.,
119,687,202 RMB ordinary share 119,687,202
Ltd.
China Cinda Asset Management
31,115,916 RMB ordinary share 31,115,916
Co., Ltd.
Portfolio No.503 of National Social
23,000,052 RMB ordinary share 23,000,052
Security Fund
Huarong Ruitong Equity
12,885,906 RMB ordinary share 12,885,906
Investment Management Co., Ltd.
Hong Kong Securities Clearing
9,527,106 RMB ordinary share 9,527,106
Company Ltd. (HKSCC)
Bosera Funds Xincheng No.2
6,500,000 RMB ordinary share 6,500,000
Collective Asset Management Plan
Bosera Funds Xincheng No.3
6,000,000 RMB ordinary share 6,000,000
Collective Asset Management Plan
China Universal-Strategic
4,400,000 RMB ordinary share 4,400,000
Enhancement No.3 Collective
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Asset Management Plan
State-owned Assets
Administration Bureau of Qichun 4,169,266 RMB ordinary share 4,169,266
County
Jingzhou Sanonda Holdings Co., Ltd. and Syngenta Group are related parties, and
are acting-in-concert parties as prescribed in the Administrative Methods for
Related or act-in-concert parties Acquisition of Listed Companies. Both Jingzhou Sanonda Holdings Co., Ltd. and
among the shareholders above Syngenta Group are controlled by ChemChina. It is unknown to the Company
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
No such issue.
trading (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 such at the period-end
□ Applicable √ Not applicable
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Section III - Significant 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
In the first quarter of 2021, commodity crop prices continued to increase as global demand remained strong, fueled by
pandemic-related food security concerns, a recovery in biofuel demand and higher feed demand, especially from China.
Weather-related agricultural supply challenges also contributed to the high crop prices, which are expected to remain
elevated throughout the rest of the year. The positive crop price environment, along with associated expectations of higher
planted areas, are combining to drive global demand for crop protection products.
During the quarter, prices of intermediates and active ingredients sourced from China increased compared to the same
period last year, due in part to the recovery of oil prices alongside higher raw material costs and stronger demand.
As global economies start to reopen following pandemic-related shutdowns over the past year, global trade markets are
experiencing scarcity of transportation resources leading to higher freight costs, a situation that has been exacerbated by
the recent Suez Canal incident and other port congestions all over the globe.
The Company actively manages its procurement and supply chain activities in order to mitigate these higher procurement
and logistics costs, and endeavors to adjust its pricing wherever possible to compensate.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Q1 2021 Q1 2020 Q1 2021 Q1 2020
+/-% +/-%
(000’RMB) (000’RMB) (000’USD) (000’USD)
Operating income
7,187,164 6,782,243 5.97% 1,108,904 972,531 14.02%
(Revenues)
Cost of goods sold 5,127,390 4,757,413 7.78% 791,102 682,181 15.97%
*Total Operating
1,618,505 1,674,108 -3.32% 249,713 240,055 4.02%
Expenses
Financial Expenses 184,932 411,620 -55.07% 28,551 59,022 -51.63%
Gain (loss) from Changes -59,738 -118.45% -9,217 -119.85%
323,813 46,433
in Fair Value
Investment Income (loss) 8,627 -129,323 -106.67% 1,331 -18,544 -107.18%
Total Net Financial
Expenses and Investment 236,043 217,130 8.71% 36,437 31,133 17.04%
Income
Total profits 186,899 136,632 36.79% 28,825 19,601 47.06%
% of Sales 2.60% 2.02% 2.60% 2.02%
Income tax expenses 36,055 153,339 -76.49% 5,562 21,988 -74.70%
Net income attributable to
shareholders of the 148,784 -16,707 -990.55% 22,945 -2,387 -1,061.25%
Company
% of Sales 2.07% -0.25% 2.07% -0.25%
EBITDA 892,232 927,888 -3.84% 137,669 133,058 3.47%
% of Sales 12.41% 13.68% 12.41% 13.68%
* Total operating expenses includes Sales and Marketing, General and Administrative and Research and Development
expenses
Note: Since the functional currency of main overseas subsidiaries is the USD, and the Company’s management review of
the Company’s performance is based on the USD results, following explanations and analysis are based on USD-
denominated numbers.
Analysis of Financial Highlights
(1) Revenues
Revenues grew 14% (+6% in RMB terms) to hit a first quarter record-high of $1,109 million, driven by a robust 15%
increase in volumes. This strong volume-driven growth was somewhat mitigated by a softer pricing environment in
a number of key regions.
ADAMA delivered particularly strong performances in the Asia Pacific and India, Middle-East & Africa regions,
benefiting from strong demand and favorable seasonal conditions. The Company also grew strongly in North
America, driven by its Consumer and Professional business, as well as in Latin America. Sales in Europe were
somewhat lower due to a slow start to the season in the northern and eastern parts of the region.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Regional Sales Performance
Q1 2021 Q1 2020 Change
$m $m USD
Europe 344 357 -3.5%
North America 189 168 12.4%
Latin America 177 159 11.3%
Asia Pacific 241 158 52.7%
Of which China 124 68 81.6%
India, Middle East & Africa 158 131 20.4%
Total 1,109 973 14.0%
Europe: Sales were lower by 4.1% in the first quarter, in CER terms, compared with the corresponding period last year.
Growth in the southern part of the region, where favorable market conditions drove good demand, was outweighed by a
slow start to the season in the northern and eastern parts of the region, especially when compared to Q1 2020 which then
saw strong orders from distribution in anticipation of the COVID-related shutdowns that soon followed.
In US dollar terms, sales in Europe were lower by 3.5% in the quarter, compared to the corresponding period last year.
North America: Sales grew by 11.8% in the quarter, in CER terms, compared with the corresponding period last year.
Growth in the region was driven by a strong performance from the Company’s Consumer and Professional business,
benefiting from the reopening of the economy after COVID-19 related restrictions in 2020. This more than offset a
somewhat softer performance in the US crop protection business.
In US dollar terms, sales in North America grew by 12.4% in the quarter, compared to the corresponding period last year,
reflecting a moderate strengthening of the Canadian Dollar in the quarter.
Latin America: Sales grew by a robust 22.1% in the quarter, in CER terms, compared to the corresponding period last
year.
The Company continues its growth trajectory in Latin America, driven by solid volume growth and good performance from
recent product launches in the region.
In US dollar terms, sales in Latin America grew by 11.3% in the quarter, compared to the corresponding period last year,
as the robust business growth was partially offset by weaker currencies in the region, in particular the Brazilian Real.
Asia Pacific: Sales grew by 39.3% in the quarter, in CER terms, compared to the corresponding period last year.
The strong growth in the Asia-Pacific region was seen both in China and beyond. In China, ADAMA saw significant growth
in the quarter both from its branded, formulated portfolio, which was driven by higher cereal demand due to an increase in
field crop planted areas and an early start to the Q2 season, as well as from its sales of raw materials and intermediates.
Sales in the country were further bolstered by the inclusion of the Company’s recent acquisition of Jiangsu Huifeng’s
domestic commercial crop protection business.
In the rest of Asia-Pacific, the Company benefited from favorable seasonal conditions and delivered strong growth, despite
a slower recovery from COVID-19 challenges in Asia.
In US dollar terms, sales in Asia-Pacific grew by 52.7% in the quarter, compared to the corresponding period last year,
reflecting mainly the strengthening of the Chinese Renminbi and the Australian dollar against the US dollar.
India, Middle East and Africa: Sales grew by 23.0% in the quarter, in CER terms, compared to the corresponding period
last year, driven by strong volume growth alongside price increases amid continued positive weather conditions.
During the quarter, ADAMA launched a new pilot formulation R&D facility in India, complementing the Company’s leading
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ADAMA Ltd. Full Content of the First Quarter Report 2021
formulation development capabilities in its main R&D hubs in Israel, China and India. The new facility, equipped with state-
of-the-art technologies, will bridge the path from the R&D lab to commercial stage production, developing processes for
the scale-up of liquid and solid formulation.
In US dollar terms, sales in the India, Middle East & Africa region grew by 20.4% in the quarter, compared to the
corresponding period last year, reflecting mainly the weaker level of the Turkish Lira, partially offset by a stronger Israeli
Shekel.
(2) Cost of Goods Sold and Gross Profit
The Company achieved higher gross profit in the quarter compared to the corresponding period last year, driven by the
strong volume growth alongside positive seasonal changes in its product offering, more than offsetting the impacts of the
generally softer pricing and higher cost of goods sold. The higher cost of goods sold in the quarter was largely driven by
higher procurement and logistics costs incurred as the Company continued to fulfill demand for its products.
The Company recorded certain extraordinary charges within its reported cost of goods sold, totaling approximately $11
million in the first quarter (Q1 2020: $9 million) largely related to its Relocation & Upgrade program. These charges mainly
reflect excess procurement costs incurred as the Company continued to fulfill demand for its products in order to protect
its market position, through replacement sourcing at significantly higher costs from third-party suppliers.
(3) Operating Expenses
Operating expenses include Sales and Marketing, General and Administration and R&D.
Operating expenses in the first quarter were $250 million (22.5% of sales), compared to $240 million (24.7% of sales)
reported in the corresponding period last year.
The Company recorded certain non-operational, mostly non-cash, charges within its reported operating expenses, mainly
as follows:
(i) $8 million (RMB 51 million) in Q1 2021 (Q1 2020: $8 million (RMB 55 million)) in non-cash amortization
charges in respect of Transfer assets received and written-up related to the 2017 ChemChina-Syngenta
acquisition. 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, the Divestment and Transfer transactions had no net impact on the
underlying economic performance of the Company. These additional amortization charges will continue until
2032 but at a reducing rate, yet will still be at a meaningful level until 2028;
(ii) $6 million (RMB 41 million) in Q1 2021 (Q1 2020: $10 million (RMB 70 million) in idleness charges largely
related to suspensions at the facilities being relocated as well as to the temporary suspension of the Jingzhou
site in Q1 2020 (at the outbreak of COVID-19 in Hubei Province); and
(iii) $4 million (RMB 24 million) in Q1 2021 (Q1 2020: $3 million (RMB 18 million)) in charges related mainly to
the non-cash amortization of intangible assets created as part of the Purchase Price Allocation (PPA) on
acquisitions, with no impact on the ongoing performance of the companies acquired, as well as other M&A-
related costs.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
The higher aggregate amount of non-operational charges in Q1 2020 also included $11 million in non-cash amortization
charges related to the legacy PPA of the 2011 acquisition of Adama Agricultural Solutions Ltd., which have now largely
finished, and $9 million in respect of early retirement expenses.
Excluding the impact of the abovementioned non-operational charges, the higher operating expenses reflect primarily an
increase in sales and marketing teams in growing geographies to drive and support the strong sales growth, higher
transportation and logistics costs driven by both an increase in freight costs and the increased volumes being moved, as
well as the inclusion of recent acquisitions in Greece, Paraguay and China. Despite the higher operating expenses in
absolute terms, the Company continued to improve its expense-to-sales ratio.
(4) Financial Expenses
“Financial Expenses” mainly reflect interest payments on corporate bonds and bank loans as well as foreign exchange
gains/losses on the bonds and other monetary assets and liabilities before the Company carries out any hedging. The
impact of Financial Expenses (before hedging) is RMB 185 million (USD 29 million) for the first quarter of 2021 compared
with RMB 412 million (USD 59 million) for the corresponding period in 2020.
Given the global nature of its operational activities and the composition of its assets and liabilities, the Company, in the
ordinary course of its business, uses foreign currency derivatives (forwards and options) to hedge the cash flow risks
associated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations. Net gains/losses
from hedging of those positions, are recorded in “Gains/Losses from Changes in Fair Value”, and are then transferred
to “Investment Income” upon realization. The combined impact of Gains/Losses from Changes in Fair Value and
Investment Income related to derivatives transactions, is a net loss of RMB 53 million (USD 8 million) in the first quarter
of 2021 compared with net gain of RMB 185 million (USD 27 million) in the corresponding period in 2020.
The aggregate of Financial Expenses, Gains/Losses from Changes in Fair Value and Investment Income (hereinafter
as “Total Net Financial Expenses and Investment Income”), which more comprehensively reflects the financial
expenses of the Company in supporting its main business and protecting its monetary assets/liabilities, amounts to RMB
238 million (USD 37 million) in the first quarter of 2021 compared with RMB 227 million (USD 32 million) in the
corresponding period in 2020.
The higher financial expenses were mainly due to an increase in financing costs on the NIS-denominated, CPI-linked
bonds due to a higher CPI in Israel.
(5) Tax Expenses
The first quarter is generally characterized by a low effective tax rate compared to the effective tax rate of the Company
over the full year. This is mainly due to the generation of profits by subsidiary companies within ADAMA whose tax rates
are lower relative to the Company’s aggregate effective tax rate, as well as to the method of calculation of tax assets
related to unrealized profits. However, in Q1 2020, the Company recorded higher tax expenses largely due to the impact
of the significant weakening of currencies in that quarter against the US dollar, most notably that of the Brazilian Real,
driving higher non-cash tax expenses due to differences between the functional (US dollar) and tax (local) currencies
regarding the value of non-monetary assets.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
Changes in main assets and liabilities
Unit: RMB’000
Assets and liabilities March 31, 2021 December 31, 2020 % change Explanation for any major
change
Derivative financial Realization and revaluation of
937,140 1,560,788 -39.96%
assets* derivatives
Accounts receivable 9,772,073 8,766,869 11.47% Seasonality increase
Derivative financial Realization and revaluation of
656,789 1,463,614 -55.13%
liabilities derivatives
Seasonality increase mainly
Taxes payable 562,928 358,988 56.81%
due to VAT
Increase mainly due to tax
Deferred tax liability 386,547 331,942 16.45% basis revaluation of non-
monetary assets in Brazil
Increase mainly to support
Short term loans 2,844,948 1,205,498 136.00%
increase in working capital
*Both derivative financial assets and liabilities are hedging instruments, the sum-up of which reflects the net position.
II. Progress on significant events, as well as the impact and solutions
□ Applicable √ Not applicable
Status of share buyback
√ Applicable □ Not applicable
The Company held the 26th Meeting of the 8th Session of the Board of Directors on August 19, 2020 and the 3 rd Interim
Shareholders Meeting on September 7, 2020, approving the Repurchase Plan for Part of the Company’s Domestically
Listed Foreign Shares (B Share), and subsequently disclosed the repurchase report and a series of repurchase progress
announcements according to relevant regulations.
The repurchase period expired on December 6, 2020. From September 16, 2020 (the first actual occurrence date of the
share repurchase) to December 6, 2020, the Company repurchased 14,309,536 B-Shares by means of a centralized price
bidding transaction through a special securities repurchase account for B-Shares. This amount of B-shares accounts for
0.61% of the Company’s total share capital. The highest transaction price was 5.22 HKD/share, the lowest transaction
price was 4.27 HKD/share, and the total payment amount was HKD 69,747,209 (including transaction fees). Please refer
to the Announcement on the Expiry of the Repurchase Period and the Results of the B-Shares Repurchase (Announcement
No.2020-71) for details.
According to the Repurchase Plan, after the completion of the repurchase of shares, the Board of Directors shall propose
to shareholders to approve the cancellation of the repurchased shares, the decrease of the Company’s registered capital
and the corresponding amendments to the Articles of Association of the Company. The above matters have been reviewed
and approved by the 31st Meeting of the 8th Session of the Board of Directors of the Company, and have yet to be reviewed
and approved by the shareholders’ meeting, which is to be convened on May 21, 2021. After the shareholders’ meeting
will have reviewed and approved the share cancellation, the reduction of the registered capital and the corresponding
amendments to the Company’s Articles of Association, the Company will submit applications for the cancellation of the
repurchased shares and the reduction of the registered capital to the Shenzhen Stock Exchange and China Registration
and Clearing Corporation (Shenzhen Branch), respectively. After the share cancellation will be completed, the Company
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ADAMA Ltd. Full Content of the First Quarter Report 2021
will make corresponding amendments to the relevant provisions in the Articles of Association of the Company, and file the
industrial and commercial registration.
Whether the Company sold out shares which were bought back by means of centralized price bidding
□ 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
No such cases in the Reporting Period.
IV. Investment on financial assets
(1) Securities investment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
(2) Investment in derivative financial instruments
√ Applicable □ Not applicable
Unit: RMB’000
The party that Related party Initial Investment amount at Amount purchased Percentage of investment Gain/loss during
Relation with Expiring Amount sold during Impairment Investment amount
operates the transaction or Type investment Starting date beginning of the during the reporting amount divided by net asset at the reporting
the Company date the reporting period accrued (if any) at end of the period
investment not? amount period period end of the period period
Banks No No Option 1,994,238 28/01/2021 22/07/2021 1,994,238 6,713,258 -4,465,149 No 4,242,347 19.31% -42,533
Banks No No Forward 20,796,924 27/10/2020 19/05/2021 20,796,924 26,320,565 -30,833,920 No 16,283,569 74.14% -99,245
Total 22,791,162 -- -- 22,791,162 33,033,823 -35,299,069 20,525,916 93.45% -141,778
Source of fund for the investment Internal
litigation-related situations (if applicable) N/A
Date of disclosure of Board approval (if any) December 30, 2017
Date of disclosure of Shareholders’ approval (if any) N/A
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.
Risk and control analysis for the reporting period (including but No legal risk is involved.
not limited to market risk, liquidity risk, credit risk, operational The actions taken in order to further reduce risks are:
risk, legal risk, etc.) The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' financial statements committee of the board, which specifies, inter alia, the hedging
policy, the persons that have the authorization to deal with hedging, the tools, ranges etc. The only 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 investments during the
Segregation of duties as follows:
reporting period.
For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the relevant transactions are simple (Options and forwards) for short
Specific methodology and assumptions should be disclosed in
terms. For fair value methodology see section XII of the annual report, note IX. Fair Value. The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters
the analysis of fair value of the investments
are provided by the experts.
Explanation for any significant changes in accounting policies
N/A
and principles, compared with last reporting period
The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond to the Company’s routine business demands and are in
Independent Directors’ opinion on the investment in derivative
accordance with the relevant laws and regulations. Additionally, the Company has adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability
financial instruments and related risk controls
to protect against market risk. The derivative investments do not harm the interests of the Company and its shareholders.
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ADAMA Ltd. Full Content of the First Quarter Report 2021
V. Progress on the designated projects used the raised funds
√ Applicable □ Not applicable
After receiving the approval of China Securities Regulatory Commission for the issuance of shares to China National
Agrochemical Co., Ltd. acquire assets and raise supporting funds (CSRC Permits [2017] No.1096), the Company
issued 104,697,982 ordinary A shares in December 2017, at the price of RMB14.90 per share, raising a total amount
of RMB 1,559,999,931.80. After deducting the underwriting fees of RMB 28,079,998.78, the net amount actually
received was RMB 1,531,919,933.02. The net amount was received on 27 December 2017 and was verified by
Deloitte Touche Tohmatsu Certified Public Accountant LLP which issued a capital verification report (De Shi Bao
(Yan) Zi (17) No.00540).
As at 31 March 2021, the Company has utilized a cumulative amount of RMB 1,047,929,415.06 of the raised funds,
including RMB 993,372,647.40 used in previous years, and RMB 54,556,767.66 during this reporting period which
were used for the remainder purchase price of the 51% Equity Stake in Shanghai Dibai Plant Protection Co., Ltd
and the advanced payment of the partial purchase price of the 51% Equity Stake in ADAMA Huifeng (Jiangsu) Ltd.
(the former name Jiangsu Kelinong Agrochemical Co., Ltd.). The balance that has not yet been used was RMB
566,302,702.64, including RMB 51,141,555.30 of net interest income (after deduction of bank charges).
For details, please refer to the Announcement on the Use of the Raised Funds for the Acquisition of the 51% Equity
Stake in Jiangsu Kelinong Agrochemical Co., Ltd. as well as that of in Shanghai Dibai Plant Protection Co., Ltd.
(announcement no. 2020-61), Announcement on the Termination of the Use of Raised Funds for Certain Designated
Projects(announcement no. 2020-26), Announcement on the Change of Certain Designated Projects
(announcement no. 2019-17) separately published by the Company on October 29, 2020, April 28, 2020, and March
21, 2019.
VI. Performance forecast for January-June 2021
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-
beginning to the end of the next reporting period, as well as the reasons thereto:
□ Applicable √ Not applicable
VII. Significant contract in the routine business
□ Applicable √ Not applicable
VIII. Wealth management entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X. Inadequate use of Company’s capital by the controlling shareholder or by its related
parties for non-operating purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
14
ADAMA Ltd. Full Content of the First Quarter Report 2021
XI. Information regarding communication with investors
√ Applicable □ Not applicable
Reception Type of
Date Place Name of the visitor About Index
mode visitor
CICC, Industrial Securities,
Record of the
TF Securities, Haitong
Introduction on Communications
Securities, Dongxing
2020 Q4 and FY between the
Securities, BOC
performance. Company and the
Others International, Nanjing
March Not Corresponding Investors (No.
Phone call (Sell-side Securities, HSBC Qianhai
30, 2021 applicable presentation was 2021-01) was
analysts) Securities, Guolian
published on the published by the
Securities, SWHY Securities,
website of the Company on April
CITIC Securities, Everbright
Company. 1, 2021 at
Securities, North East
www.cninfo.com.cn.
Securities and Citi, etc.
Record of the
Introduction on the Communications
2020 Q4 and FY between the
Institutional performance. Company and the
March Not and Corresponding Investors (No.
Webcasting Not applicable
31, 2021 applicable individual presentation was 2021-02) was
investors published on the published by the
website of the Company on April
Company. 2, 2021 at
www.cninfo.com.cn.
15
ADAMA Ltd. Full Content of the First Quarter Report 2021
Section IV Financial Statements
I. Financial statements
1. Consolidated balance sheet
Prepared by ADAMA Ltd.
31 March 2021
Unit: RMB’000
March 31, December 31, March 31, December 31,
Item Item
2021 2020 2021 2020
Current assets: Current liabilities:
Cash at bank and on hand 3,914,945 3,863,886 Short-term loans 2,844,948 1,205,498
Financial assets held for
Derivative financial liabilities
trading 80,820 1,253 656,789 1,463,614
Derivative financial assets 937,140 1,560,788 Bills payable 186,718 369,791
Bills receivable 77,101 102,082 Accounts payable 4,944,450 4,557,006
Accounts receivable 9,772,073 8,766,869 Contract liabilities 1,146,678 1,092,253
Receivables financing 99,269 109,483 Employee benefits payable 1,166,818 1,208,834
Prepayments 423,597 406,008 Taxes payable 562,928 358,988
Other receivables 1,493,239 1,310,029 Other payables 1,178,348 1,075,721
Non-current liabilities due
Inventories
10,930,707 10,338,273 within one year 1,218,061 1,272,581
Other current assets 853,516 769,641 Other current liabilities 283,835 315,597
Total current assets 28,582,407 27,228,312 Total current liabilities 14,189,573 12,919,883
Non-current assets: Non-current liabilities:
Long-term receivables 93,010 95,329 Long-term loans 2,415,800 2,387,628
Long-term equity investments 13,353 14,081 Debentures payable 7,851,271 8,078,113
Other equity investments 152,672 152,200 Lease liabilities 411,974 379,190
Investment properties 4,246 4,364 Long-term accounts payable 104,031 27,327
Long-term employee benefits
Fixed assets
6,551,449 6,576,116 payables 656,931 645,755
Construction in progress 1,563,964 1,405,328 Provisions 160,664 163,251
Right-of-use assets 528,171 483,618 Deferred tax liabilities 386,547 331,942
Intangible assets 5,182,771 5,226,455 Other non-current liabilities 443,664 434,030
Goodwill 4,606,865 4,584,226 Total non-current liabilities 12,430,882 12,447,236
Deferred tax assets 873,515 773,673 Total liabilities 26,620,455 25,367,119
Other non-current assets 278,947 257,332 Shareholders’ equity:
Total non-current assets 19,848,963 19,572,722 Share capital 2,344,121 2,344,121
Total assets 48,431,370 46,801,034 Capital reserves 13,023,219 13,023,219
Less: Treasury shares 60,357 60,357
Other comprehensive
income 152,749 (72,055)
Special reserves 17,337 15,960
Surplus reserves 240,162 240,162
Retained earnings 6,011,461 5,862,702
Total equity attributed to the
shareholders of the company
21,728,692 21,353,752
Non-controlling interests 82,223 80,163
Total equity 21,810,915 21,433,915
Total liabilities and equity 48,431,370 46,801,034
Ignacio Dominguez Aviram Lahav Aviram Lahav
Legal representative Chief of the accounting work Chief of the accounting organ
16
ADAMA Ltd. Full Content of the First Quarter Report 2021
2. Balance sheet of the Company
Unit: RMB’000
March 31, December 31, March 31, December 31,
Item Item
2021 2020 2021 2020
Current assets: Current liabilities:
Cash at bank and on hand 1,027,091 1,034,812 Short-term loans 80,000 100,000
Accounts receivable 235,016 387,117 Bills payable - 19,600
Receivables financing 29,782 25,060 Accounts payable 191,627 324,047
Prepayments 18,237 5,973 Contract liabilities 5,631 17,480
Other receivables 27,006 27,138 Employee benefits payable 54,378 99,808
Inventories 103,360 141,235 Taxes payable 3,057 3,143
Other current assets 32,505 42,243 Other payables 200,366 240,939
Non-current liabilities due
Total current assets
1,472,997 1,663,578 within one year 39,302 39,302
Non-current assets: Total current liabilities 574,361 844,319
Long-term equity investments 16,663,212 16,663,212 Non-current liabilities:
Other equity investments 85,495 85,495 Long-term loans 1,083,430 941,430
Long-term employee benefits
Investment properties
4,246 4,364 payables 88,604 89,658
Fixed assets 757,379 784,218 Provisions 42,850 44,743
Construction in progress 1,030,036 992,863 Other non-current liabilities 143,770 143,770
Right-of-use assets 23 37 Total non-current liabilities 1,358,654 1,219,601
Intangible assets 258,330 220,963 Total liabilities 1,933,015 2,063,920
Deferred tax assets 66,264 66,036 Shareholders’ equity:
Other non-current assets 262,627 238,750 Share capital 2,344,121 2,344,121
Total non-current assets 19,127,612 19,055,938 Capital reserves 15,569,929 15,569,929
Total assets 20,600,609 20,719,516 Less: Treasury shares 60,357 60,357
Other comprehensive
income 47,390 47,390
Special reserves 18,029 16,651
Surplus reserves 240,162 240,162
Retained earnings 508,320 497,700
Total shareholders’ equity 18,667,594 18,655,596
Total liabilities and
shareholders’ equity 20,600,609 20,719,516
17
ADAMA Ltd. Full Content of the First Quarter Report 2021
3. Consolidated income statement
Unit: RMB’000
Item January-March, 2021 January-March, 2020
1. Total operating Income 7,187,164 6,782,243
Less: Cost of sales 5,127,390 4,757,413
Taxes and surcharges 34,501 18,943
Selling and Distribution expenses 1,241,310 1,256,871
General and Administrative expenses 266,713 325,229
Research and Development expenses 110,482 92,008
Financial expenses 184,932 411,620
Including: Interest expense 169,365 165,243
Interest income 12,775 10,530
Add: Investment income, net 8,627 (129,323)
Including: Income from investment in associates
and joint ventures 2,048 9,128
Gain (loss) from changes in fair value (59,738) 323,813
Credit impairment reversal (losses) 4,288 13,886
Asset Impairment reversal (losses) (9,449) (1,923)
Gain (loss) from disposal of assets 6,773 7,692
2. Operating profit 172,337 134,304
Add: Non-operating income 20,065 17,390
Less: Non-operating expense 5,503 15,062
3. Total profit 186,899 136,632
Less: income tax expense 36,055 153,339
4. Net profit 150,844 (16,707)
4.1 Classified by nature of operations
4.1.1 Continuing operations 150,844 (16,707)
4.2 Classified by ownership
4.2.1 Shareholders of the Company 148,784 (16,707)
4.2.2 Non-controlling interests 2,060 -
5. Other comprehensive income net of tax
Other comprehensive income net of tax attributable to shareholders
of the Company 224,804 144,207
5.1 Items that will not be reclassified into profit/loss (8,411) 34,218
5.1.1 Re-measurement of defined benefit plan liability (8,411) 34,218
5.2 Items that were or will be reclassified to profit or loss 233,215 109,989
5.2.1 Effective portion of gains or loss of cash flow hedge 198,665 45,885
5.2.2 Translation differences of foreign financial statements 34,550 64,104
Other comprehensive income net of tax attributable to Non-controlling
interests - -
6. Total comprehensive income for the period 375,648 127,500
Total comprehensive income attributable to shareholders
of the Company 373,588 127,500
Total comprehensive income attributable to Non-controlling interests 2,060 -
7. Earnings per share
7.1 Basic earnings per share (RMB/ share) 0.064 (0.007)
7.2 Diluted earnings per share (RMB/ share) N/A N/A
Ignacio Dominguez Aviram Lahav Aviram Lahav
Legal representative Chief of the accounting work Chief of the accounting organ
18
ADAMA Ltd. Full Content of the First Quarter Report 2021
4. Income statement of the Company
Unit: RMB’000
Item January-March, 2021 January-March, 2020
1. Operating income 359,193 170,951
Less: Cost of sales 273,581 149,890
Taxes and surcharges 1,741 1,695
Selling and Distribution expenses 11,641 2,938
General and Administrative expenses 66,155 98,878
Research and Development expenses 9,952 1,961
Financial expenses (income) 1,971 (3,725)
Including: Interest expense 4,099 1,415
Interest income 2,466 4,033
Add: Credit impairment loss 49 (1,266)
Asset Impairment loss (143) (1,587)
Gain from disposal of assets 7,411 -
2. Operating profit 1,469 (83,539)
Add: Non-operating income 9,412 4,100
Less: Non-operating expense 489 363
3. Total profit 10,392 (79,802)
Less: Income tax expense (228) (1,404)
4. Net profit 10,620 (78,398)
4.1 Continuing operations 10,620 (78,398)
5. Other comprehensive income net of tax - -
6. Total comprehensive income for the period 10,620 (78,398)
19
ADAMA Ltd. Full Content of the First Quarter Report 2021
5. Consolidated cash flow statement
Unit: RMB’000
Item January-March, 2021 January-March, 2020
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 5,246,605 5,144,846
Refund of taxes and surcharges 40,843 26,579
Cash received relating to other operating activities 297,970 167,605
Sub-total of cash inflows from operating activities 5,585,418 5,339,030
Cash paid for goods and services 4,681,382 4,028,009
Cash paid to and on behalf of employees 887,515 905,294
Payments of taxes and surcharges 75,172 75,043
Cash paid relating to other operating activities 779,122 715,392
Sub-total of cash outflows from operating activities 6,423,191 5,723,738
Net cash flows from operating activities (837,773) (384,708)
2. Cash flows from investing activities:
Cash received from disposal of investments 856 2,218
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets 9,149 9,429
Cash received for other investing activities 6,754 -
Sub-total of cash inflows from investing activities 16,759 11,647
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 588,183 357,353
Net cash paid to acquire subsidiaries or other
business units 54,557 -
Cash paid for other investing activities 78,502 27,393
Sub-total of cash outflows from investing activities 721,242 384,746
Net cash flows from investing activities (704,483) (373,099)
3. Cash flows from financing activities:
Cash received from borrowings 1,861,623 1,194,240
Cash received relating to other financing activities 26,334 -
Sub-total of cash inflows from financing activities 1,887,957 1,194,240
Cash repayment of borrowings 244,391 428,544
Cash payment for dividends, profit distributions or interest 62,847 46,210
Including: dividends paid to non-controlling interest - -
Cash paid relating to other financing activities - 90,259
Sub-total of cash outflows from financing activities 307,238 565,013
Net cash flows from financing activities 1,580,719 629,227
4. Effect of foreign exchange rate changes on cash and cash
equivalents 18,915 46,592
5. Net increase (decrease) in cash and cash equivalents 57,378 (81,988)
Add: Cash and cash equivalents at the beginning of the period 3,835,071 4,319,907
6. Cash and cash equivalents at the end of the period 3,892,449 4,237,919
20
ADAMA Ltd. Full Content of the First Quarter Report 2021
6. Cash flow statement of the Company
Unit: RMB’000
Item January-March, 2021 January-March, 2020
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 427,465 309,170
Refund of taxes and surcharges 15,213 17,306
Cash received relating to other operating activities 12,347 8,199
Sub-total of cash inflows from operating activities 455,025 334,675
Cash paid for goods and services 222,307 169,917
Cash paid to and on behalf of employees 78,419 59,625
Payments of taxes and surcharges 4,274 2,723
Cash paid relating to other operating activities 42,695 43,067
Sub-total of cash outflows from operating activities 347,695 275,332
Net cash flows from operating activities 107,330 59,343
2. Cash flows from investing activities:
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets 8,021 -
Sub-total of cash inflows from investing activities 8,021 -
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 180,143 32,861
Cash paid for investment 54,557 -
Sub-total of cash outflows from investing activities 234,700 32,861
Net cash flows from investing activities (226,679) (32,861)
3. Cash flows from financing activities:
Cash received from borrowings 142,000 114,500
Cash received relating to other financing activities 5,880 2,151
Sub-total of cash inflows from financing activities 147,880 116,651
Cash repayment of borrowings 20,000 100,000
Cash payment for dividends, profit distributions or interest 10,178 3,381
Sub-total of cash outflows from financing activities 30,178 103,381
Net cash flows from financing activities 117,702 13,270
4. Effect of foreign exchange rate changes on cash and cash
equivalents (194) 3,596
5. Net increase (decrease) in cash and cash equivalents (1,841) 43,348
Add: cash and cash equivalents at the beginning of the period 1,022,758 1,395,994
6. Cash and cash equivalents at the end of the period 1,020,917 1,439,342
21
ADAMA Ltd. Full Content of the First Quarter Report 2021
II. Adjustments of the financial statements
1. Opening balance adjustments due to initial adoption of new accounting standards for leases in 2021
□ Applicable √ Not applicable
2. Retrospective adjustments due to initial adoption of new accounting standards for leases in 2021
□ Applicable √ Not applicable
III. Auditor’s report
Is this Report audited?
□ Yes √ No
This Report is unaudited.
ADAMA Ltd.
April 28, 2021
22
