ADAMA Ltd. Annual Report 2022
ADAMA LTD.
ANNUAL REPORT 2022
ADAMA Ltd. 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.
For further important additional information and details, please refer to the Annex.
March 2023
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ADAMA Ltd. Annual Report 2022
Section I - Important Notice, Table of Contents and Definitions
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 Efrat Nagar - the person leading the accounting function (Chief Financial 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.
The forward looking information described in the Report, such as future plans, development strategy etc., does
not constitute, in any manner whatsoever, a substantial commitment of the Company to investors. Investors and
other relevant people are cautioned to be sufficiently mindful of investment risks as well as the difference between
plans, forecasts and commitments.
The Company has described its future development strategies, work plan for 2023 and possible risks in “VIII.
Outlook of the Company’s future development” in Section III. The major risks of the Company include, among
others, exchange rate fluctuations; exposure to interest rate, Israel CPI and NIS exchange rate fluctuations;
fluctuations in raw material inputs and prices, and in sales. Investors and other relevant people are cautioned to
be sufficiently mindful of investment risks. For the complete “Risk factors and countermeasures” of the Company,
please see the relevant section below.
The pre-plan of the dividend distribution approved by the meeting of the Board of Directors on March 19, 2023
refers to the total outstanding 2,329,811,766 shares of the Company on February 28, 2023 as the basis for the
distribution as cash dividend of RMB 0.27 (before tax) per 10 shares, to all the shareholders of the Company. No
shares will be distributed as share dividend, and no reserve will be transferred to equity capital.
This Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancies
between the two versions, the Chinese version shall prevail.
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ADAMA Ltd. Annual Report 2022
Table of Contents
Section I - Important Notice, Table of Contents and Definitions ................................................ 2
Section II - Corporate Profile and Financial Results ......................................................................... 6
Section III - Performance Discussion and Analysis ......................................................................... 12
Section IV - Corporate Governance ........................................................................................................... 54
Section V - Environment and Social Responsibilities .................................................................... 79
Section VI - Significant Events...................................................................................................................... 91
Section VII - Change in Shares & Shareholders ............................................................................... 136
Section VIII - Preferred Stock....................................................................................................................... 148
Section IX - Corporate Bonds ...................................................................................................................... 149
Section X - Financial Report ......................................................................................................................... 150
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ADAMA Ltd. Annual Report 2022
Contents of Documents Available for Reference
(I) Duly signed Financial Statements by the Legal Representative and Accounting Principal as well as Head of the
Accounting Organ.
(II) Duly signed Auditor’s Report and seals the certified public accountants.
(III) Originals of all Company’s documents previously disclosed in media designated by the CSRC as well as the originals
of all the public notices, were deposited in the Company’s office.
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ADAMA Ltd. Annual Report 2022
Definitions
In this Report, the following terms have the meaning appearing alongside them, unless otherwise specified:
General Terms Definition
Company, the Company ADAMA Ltd.
Adama Agricultural Solutions Ltd., a wholly-owned subsidiary of the Company,
Adama Solutions
incorporated in Israel according to its laws
Anpon, ADAMA Anpon ADAMA Anpon (Jiangsu) Ltd., a wholly-owned subsidiary of the Company
Board of Directors/Board The Board of Directors of the Company
Board of Supervisors The Board of Supervisors of the Company
Articles of Association / AOA The Articles of Association of the Company
Group, the Group, ADAMA The Company, including all its subsidiaries, unless expressly stated otherwise
ChemChina China National Chemical Co., Ltd.
CNAC China National Agrochemical Co., Ltd.
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
SASAC State Assets Supervision and Administration Commission of China
Syngenta Group Co., Ltd., the controlling shareholder of the Company as of June
Syngenta Group
15, 2020, a wholly-owned subsidiary of CNAC
Sinochem Holdings Sinochem Holdings Corporation Ltd.
Sinochem Holdings including all its subsidiaries unless otherwise indicated or the
Sinochem Group
context otherwise requires
Report This 2022 Annual Report
Financial Report The Financial Reports for the year 2022, as contained in this Report
Reporting Period, this Period,
Year 2022
Current Year
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
Listing Rules Listing Rules of the SZSE
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ADAMA Ltd. Annual Report 2022
Section II - Corporate Profile and Financial Results
I. Corporate Information
Stock name ADAMA A, ADAMA B Stock code 000553, 200553
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 安道麦股份有限公司
Abbr. 安道麦
Company name in English (if any) ADAMA Ltd.
Abbr. (if any) ADAMA
Legal representative Ignacio Dominguez
Registered address No. 93, East Beijing Road, Jingzhou, Hubei
Zip code 434001
Office address No. 93, East Beijing Road, Jingzhou, Hubei
Zip code 434001
Company website www.adama.com
Email irchina@adama.com
II. Contact Information
Securities Affairs Representative
Board Secretary
Investor Relations Manager
Name Guo Zhi Wang Zhujun
Address 6/F, No.7 Office Building, No.10 Courtyard, Chaoyang Park South Road, Chaoyang District, Beijing
Tel. 010-56718110 010-56718110
Fax 010-59246173 010-59246173
E-mail irchina@adama.com irchina@adama.com
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ADAMA Ltd. Annual Report 2022
III. Information Disclosure
Website of the Stock Exchange on which the Company Discloses China Securities Journal
its Annual Report Securities Times
Media and Website on which the Company Discloses its Annual
http://www.cninfo.com.cn
Report
Location on which this Report is kept Securities office of the Company
IV. Company Registration and Alteration
Credibility code 91420000706962287Q
Changes in main
business activities of
None in the reporting period.
the Company after
going public (if any)
The Company was reorganized as Hubei Sanonda Co., Ltd. in 1992 after being approved by
departments of Commission for Reorganization of Hubei Province. The largest shareholder of
the Company was Shashi State-Owned Assets Administration Bureau.
In 1994, the original Shashi State-Owned Assets Administration Bureau and Jiangling State-
owned Assets Administration Bureau were classified as Jingsha State-Owned Assets
Administration Bureau. Therefore, the shares of the Company held by Shashi State-Owned
Assets Administration Bureau and Jiangling State-Owned Assets Administration Bureau were
all held by Jingsha State-Owned Assets Administration Bureau, and Jingsha State-Owned
Assets Administration Bureau became the controlling shareholder of the Company.
In 1996, according to the Reply of Hubei Provincial People's Government on Authorization of
Sanonda Group Co., Ltd. Operating the State-Owned Assets (EZBH[1995] No.92), Jingsha
State-Owned Assets Administration Bureau set up Sanonda Group Co., Ltd. (renamed
Historic Changes of
“Jingzhou Sanonda Holdings Co., Ltd.”). On March 20, 2005, Jingzhou State-Owned Assets
controlling shareholder
Administration Bureau and China Mingda Chemical and Mining Corporation (later renamed
(if any)
"China National Agrochemical Co., Ltd., CNAC") signed the Asset Transfer Agreement of
Sanonda Group Co., Ltd, and CNAC received 100% equity of Sanonda Group Co., Ltd, from
Jingzhou State-Owned Assets Administration Bureau. After the completion of the above
transfer, the actual controller of the Company was changed from Jingzhou State-Owned
Assets Administration Bureau to SASAC.
In July, 2017, the Company received the Approval on Issuing Shares by Hubei Sanonda Co.,
Ltd. to China National Agrochemical Corporation for Acquiring Assets and Raising Supporting
Funds (CSRC license No. [2017]1096). CSRC approved of the Company’s issuance of
1,810,883,039 shares to China National Agrochemical Corporation for the purchase of 100%
equity of ADAMA Solutions held by it. After the completion of the major assets restructuring,
the controlling shareholder of the Company was changed from Jingzhou Sanonda Holdings
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ADAMA Ltd. Annual Report 2022
Co., Ltd. to CNAC.
In June, 2020, CNAC transferred 1,810,883,039 shares of the Company held by it to Syngenta
Group free of charge and completed the registration procedures for the above transferred
shares. After the completion of the share transfer, Syngenta Group has become the direct
controlling shareholder of the Company.
During the reporting period, the controlling shareholder of the Company did not change.
V. Other Information
The Accounting Firm Engaged by the Company
Company’s Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Auditors
Office address 30/F, Bund Center, 222 Yan An Road East, Shanghai PRC
Signing Certified Public Accountant Ji Yuting and Zhao Jingyuan
Sponsor engaged by the Company to continuously perform its supervisory function during the Reporting Period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to continuously perform its supervisory function during the Reporting Period
□ Applicable √ Not applicable
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ADAMA Ltd. Annual Report 2022
VI. Main Accounting and Financial Results
Whether the Company performed any retroactive adjustments to or restatement of its accounting data
√ Yes □ No
Reasons for Retroactive Adjustments or Restatement of the Accounting Data: Changes to the Accounting Policies
Unit: RMB’000
2021 2020
2022 Before After +/- (%) Before After
adjustment adjustment adjustment adjustment
Operating revenue (RMB’000) 37,381,915 31,038,605 31,038,605 20.44% 28,444,833 28,444,833
Net profit attributable to the
609,391 157,397 157,397 287.17% 352,753 352,753
shareholders (RMB’000)
Net profit attributable to the
shareholders, excluding
490,428 77,853 77,853 529.94% 287,724 287,724
non-recurring profit and loss
(RMB’000)
Net cash flows from operating
940,745 4,561,875 4,561,875 -79.38% 2,023,015 2,023,015
activities (RMB’000)
Basic EPS (RMB/share) 0.2616 0.0676 0.0676 286.98% 0.1505 0.1505
Diluted EPS (RMB/share) N/A N/A N/A N/A N/A N/A
Weighted average return on
2.76% 0.74% 0.74% 2.02% 1.61% 1.61%
equity
31.12.2021 31.12.2020
31.12.2022 Before After +/- (%) Before After
adjustment adjustment adjustment adjustment
Total assets (RMB’000) 57,980,489 50,235,308 50,235,308 15.42% 46,801,034 46,801,034
Net assets attributable to the
23,124,655 21,075,083 21,075,083 9.73% 21,353,752 21,353,752
shareholders (RMB’000)
Reason for retroactive adjustments: According to ASBE 22 - Financial Instruments Recognition and Measurement, starting
from 2022, when disposing derivative instruments, the Group recorded the accumulated gain or loss of derivative instru-
ments in the “Gain (loss) from Changes in Fair Value”. Before 2022, the Group recorded the abovementioned gain or loss
in the “Investment income, net”. The Company reclassified the “Gain(loss) from Changes in Fair Value” and the “Investment
income, net” in the corresponding period in 2021. Such change did not impact the operating results or net assets of the
reporting period.
The net income before or after deduction of non-recurring profit or loss for the last three fiscal years is negative no matter
which amount is less and the audit report for the most recent year shows that there is uncertainty about the company's
ability to continue its operation.
□ Yes √ No
The less amount of the net income before and after extraordinary gain or loss is negative
□ Yes √ No
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ADAMA Ltd. Annual Report 2022
VII. Differences in Accounting Data under Domestic and Foreign Accounting
Standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared
under Chinese and international accounting standards
□ Applicable √ Not applicable
None during the Reporting Period.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared
under Chinese and foreign accounting standards
□ Applicable √ Not applicable
None during the Reporting Period.
3. Explanation on the differences in accounting data
□ Applicable √ Not applicable
VIII. Main Financial Results by Quarter
Unit: RMB’000
Q1 2022 Q2 2022 Q3 2022 Q4 2022
Operating revenue 9,015,991 9,779,837 9,281,986 9,304,101
Net profit attributable to the shareholders 427,652 304,446 36,046 (158,753)
Net profit attributable to the shareholders excluding non-
413,345 241,678 4,353 (168,948)
recurring profit and loss
Net cash flows from operating activities (1,813,846) 467,985 (212,839) 2,499,445
Any material differences between the financial indicators above or their summations and those which have been disclosed
in quarterly or semi-annual reports
□ Yes √ No
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ADAMA Ltd. Annual Report 2022
IX. Non-Recurring profit/loss
√ Applicable □ Not applicable
Unit: RMB’000
Item 2022 2021 2020 Note
Gains/losses on the disposal of non-current
assets (including the offset part of asset 67,525 846 69,710
impairment provisions)
Government grants charged to the profit/loss for
the Reporting Period (except for the government
grants closely related to the regular operation of
36,383 38,543 41,871
the Company and continuously given at a fixed
quota or amount in accordance with certain
standards)
Custodian fees earned from entrusted operation 3,280 - -
Recovery or reversal of provision for bad debts
46,530 32,487 26,102
which is assessed individually during the years
Other non-operating income and expenses other
2,468 12,503 19,989
than the above
Mainly provision for early
Other profit or loss that meets the definition of retirement plan of employees
(6,128) 13,191 (62,855)
non-recurring profit or loss at the Company’s Israeli
manufacturing facilities.
Less: Income tax effects 31,095 18,026 29,788
NCI (after tax) - -
Total 118,963 79,544 65,029
Details of other profit and loss items that meet the definition of non-recurring profit or loss.
√ Applicable □ Not applicable
Mainly provision for early retirement plan of employees at the Company’s Israeli manufacturing facilities as explained above
in the note.
Explanation of non-recurring items of profit or loss listed in "Explanatory Announcement No. 1 on Information Disclosure
for Companies Offering their Securities to the Public-Non-Recurring Profit and Loss" reclassified as recurring items of profit
or loss
□ Applicable √ Not applicable
No such cases during the Reporting Period.
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ADAMA Ltd. Annual Report 2022
Section III - Performance Discussion and Analysis
I. Industry in which the Company Operates during the Reporting Period
The company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shen-
zhen Stock Exchange: No. 3 - Disclosure of Industry Information”.
General Environment and the Effect of External Factors on the Company’s Operations
As a global leader in the crop protection industry, major trends, events and key developments in the Group's macro-
economic environment may materially impact the Group’s business results and development. The impact of these factors
may differ by geographic region and the different products of the Group. Since the Group offers one of the widest and most
diverse product portfolios of crop protection products and since it operates in many geographic regions, the aggregate
effect of these factors in any given year, and during the course thereof, is not uniform and may sometimes be mitigated by
offsetting effects. The activities and results of the Group are further subject to, and affected by, certain global, localized
and other factors, such as: demographic changes; economic growth and rising standards of living; agricultural commodity
prices; significant fluctuations in raw material costs and global energy prices; development of new crop protection
technologies; patent expiries and growth in volumes of off-patent products; the global agricultural markets and volatile
weather conditions; regulatory changes; government policies; world ports, international monetary policies and the financial
markets.
Crop prices reached record levels in May 2022, driven by tight stocks, adverse weather conditions and the Ukraine-Russia
conflict which disrupted the supply of commodities. Prices have since declined but are expected to remain above pre-
pandemic levels. The high crop prices drove strong farmer income, despite the higher cost environment (fertilizer,
chemicals, labor, energy) faced by farmers. As a result, crop protection demand stayed strong in 2022 and farmers were
able to absorb crop protection price increases. Going into 2023, crop protection channel inventories in some regions are
above average, which may dampen demand in the near future.
The cost environment has improved throughout the second half of 2022, as raw material and active ingredient prices in
China continued to decline, logistic prices normalized and energy prices eased. However, costs are still higher than pre-
pandemic levels, with some areas still experiencing especially high costs, like European co-formulants and inland
transportation.
The Company continues to actively manage its procurement and supply chain activities. It also endeavors to adjust its
pricing wherever market conditions allow, to compensate for these increased costs, the results of which were apparent
throughout the year.
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ADAMA Ltd. Annual Report 2022
II. Main business of the Company during the Reporting Period
The company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shen-
zhen Stock Exchange: No. 3 - Disclosure of Industry Information”.
The Company is a corporation incorporated in the People's Republic of China.
The Group is a global leader in crop protection, engaging in the development, manufacturing and commercialization of a
wide range of crop protection products, that are largely off-patent. The Group provides solutions to farmers to combat
weeds, insects and disease, and sells its products in over 100 countries, through approximately 60 subsidiaries worldwide.
The Group's business model integrates end-customer access, regulatory expertise, state-of-the art global R&D, production
and formulation facilities, thereby providing the Group a significant competitive edge and allowing it to launch new and
differentiated products that meet local farmers and customer needs in key markets.
The Group's primary operations are global, spanning activities in Europe, North America, Latin America, Asia-Pacific
(including China) and India, the Middle East and Africa1.
The Group also utilizes its expertise to adapt such products also for the development, manufacturing and commercialization
of similar products for non-agricultural purposes (Consumer and Professional Solutions).
In addition, the Group leverages its core capabilities in the agricultural and chemical fields and operates in several other
non-agricultural areas, none of which, individually, is material for the Group. These activities, collectively reported as
Intermediates and Ingredients, include primarily, (a) the manufacturing and marketing of dietary supplements, food colors,
texture and flavor enhancers, and food fortification ingredients; (b) fragrance products for the perfume, cosmetics, body
care and detergents industries; (c) the manufacturing of industrial products and (d) other non-material activities.
Syngenta Group
As of June 2020, the Group is a distinctive member of Syngenta Group, a world leader in agricultural inputs, spanning crop
protection, seeds, fertilizers, additional agricultural and digital technologies, as well as an advanced distribution network in
China. As of August 2021, following the combination between ChemChina and Sinochem Group, Syngenta Group, and
subsequently the Group, are ultimately controlled by Sinochem Holdings - parent of both ChemChina and Sinochem Group,
subordinated to SASAC.
Crop Protection Products
The Group is focused on the development, manufacturing and commercialization of largely off-patent crop protection
products, which are generally herbicides, insecticides and fungicides, which protect agricultural and other crops against
weeds, insects and disease, respectively.
Herbicides - During cultivation, crops are exposed to various weeds that grow in their environment and compete for water,
light and nutrients. Herbicides are designed to prevent or stunt the development of such weeds to allow the cultivated crop
to develop optimally throughout the different stages of its growth, and therefore to reach optimum yield. The herbicides
sold by the Company are both selective (do not affect or harm the crop itself) and non-selective. The best-selling herbicides
are those designed to protect soy, corn, cereals, rice and cotton.
1
As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that the countries formerly included in this region
will now be included in the Europe region (renamed EAME) or in the Asia Pacific region.
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ADAMA Ltd. Annual Report 2022
Insecticides - Insecticides are designed to control various types of insects and pests in a selective manner (without harming
the crop itself). The best-selling insecticides are designed to protect fruits and vegetables, corn, cotton and soy.
Fungicides - Fungicides are designed to combat various diseases and parasitical fungi. In general, when weather
conditions in the agricultural season are dry, the prevalence of crop diseases is much smaller, reducing demand for such
products. Fungicides are used most frequently in crops such as cereals, fruit, vegetables, soy, grapevines and rice.
Main production processes, and upstream and downstream elements
Production - The Group's manufacturing sites house two types of facilities: (1) dedicated facilities designed to produce a
single product or product family; and (2) multi-purpose facilities - comprising the majority of the Group's facilities where
several kinds of products may be manufactured. The latter provide the Group with manufacturing flexibility and enable it to
prepare for the manufacturing of new products, subject to maintaining and ensuring quality standards.
Value chain - Generally, the value chain between the Group and the end customer who ultimately purchases its products
around the world may be characterized as follows: Importer / Formulator -> Distributor -> Retailer -> Farmer. Due to the
expansion of the Company's activities and the acquisition and establishment of subsidiary companies in different regions
of the world in recent years, in most cases companies owned by the Group carry out the role of the formulator and/or the
importer, and occasionally also the role of the distributor and sometimes the retailer. In the past, farmers stored the
inventory in their own warehouses, but this trend has changed and today most of inventories are stored either in the
importers' or the distributors’ warehouses.
Raw materials and suppliers - The Group procures and manufactures a large variety of raw materials, which may not be
uniformly characterized, together with complementary raw materials or intermediates required to produce the finished
products and/or their formulations. The most significant element of the Group's cost of sales is the cost of raw materials
used in its production processes, which is primarily influenced by global changes in the supply of raw materials, and, to a
certain extent, extreme fluctuations in international oil prices. Similarly, the cost of purchasing finished products for sale to
third parties is also significant. The Group purchases its raw materials from various suppliers, primarily in China, Europe,
the U.S.A., and South America. The Group's supplier network has not changed significantly over the past few years, while
suppliers from China are still a main source for raw material, due to the wide range of products and competitive prices
offered by them, together with the improved quality of the products that are examined by the Group through product quality
testing.
Customers - The Company’s customers are numerous and are distributed across many countries throughout the world,
while in some countries, sales are made to a relatively small number of customers. Generally, the Group's products are
primarily sold to regional and local distributors in the different countries, who in turn market them to end customers in that
country, some of whom are large cooperatives. The Group also sells, inter alia, to multinational companies and to other
producers that manufacture end-use products based on active ingredients sourced from the Group's. The vast majority of
sales are made to returning customers, typically without long-term supply contracts, as is customary in the industry. In
most countries, purchases are made without long-term advance orders, while in some areas they are made based on (non-
binding) rolling sales forecasts and actual orders. The Group's actual production is based on these forecasts.
Distribution and marketing - The Group's marketing operations are global and designed to consistently increase profits and
market share. The Group markets its products directly through local representation in all of the largest agricultural markets
worldwide by means of local salespeople and commercial activities directed at the distributors, agricultural consultants and
farmers.
For further important additional information and details, please refer to the Annex.
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ADAMA Ltd. Annual Report 2022
Procurement model of major raw materials
Significant
change in Average price Average price
Procurement Proportion out of total
Main raw materials the in H1 in H2
model purchase amount
settlement (RMB/Kg)* (RMB/Kg)*
method
AI Tech 38.9% No 75.62 72.87
Raw Materials 20.0% No 8.23 8.98
Co-Formulants Purchase through 6.0% No 19.57 23.46
Formulated Products multiple channels 21.4% No 35.45 35.36
Packaging 4.9% No 1.56 1.88
Other 8.7% No 2.01 4.45
* Prices in RMB are based on average exchange rates for the relevant period.
Reasons for significant changes in raw material prices compared with the previous reporting period
□ Applicable √ Not applicable
Whether the Company spends more than 30% of its total production cost on energy supply
□ Applicable √ Not applicable
Reasons that there is material change to the main energy types during the reporting period
□ Applicable √ Not applicable
Production Technologies of Main Products
Stage of Production
Main Products Technologies of Main Key Technical Experts Patents R&D advantages
Products
Herbicides Industrialized production Employed by the Group Some are patent Off-patent AIs developed into
protected differentiated mixtures and
formulations, in combination
with new formulation and
delivery technologies that
provide more efficient ways
to deliver the products into
the plants
Fungicides Industrialized production Employed by the Group Some are patent Off-patent AIs developed into
protected differentiated mixtures and
formulations, in combination
with new formulation and
delivery technologies that
provide more efficient ways
to deliver the products into
the plants
Insecticides Industrialized production Employed by the Group Some are patent Off-patent AIs developed into
protected differentiated mixtures and
formulations, in combination
with new formulation and
delivery technologies that
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ADAMA Ltd. Annual Report 2022
Stage of Production
Main Products Technologies of Main Key Technical Experts Patents R&D advantages
Products
provide more efficient ways
to deliver the products into
the plants
Capacity of main products
Capacity Construction
Normal Capacity Under Investment in the
Main Products Capacity Utilization (%)
(tons/year) Construction production of Main
(tons/year) Products
Herbicides 56,198 79% 13,000 Ongoing
Fungicides 18,161 68% 5,500 Ongoing
Insecticides 74,724 54% 5,500 Ongoing
Note: Capacity figures in the above table is the synthesis capacity of the Group. In addition, the Group has approximately
590,000 tons of formulation capacity globally.
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ADAMA Ltd. Annual Report 2022
Products Produced in Major Chemical Industry Parks
Major Chemical Industry Parks Products
Neot Hovav, Israel Plant for production of insecticides and fungicides active ingredients
as well as formulations, R&D center and Non-Agro activity
Ashdod, Israel Manufacturing of the herbicides’ active ingredients, formulations and
Non-Agro activity as well
Anpon, China Plant for the manufacturing of insecticides and herbicides active
ingredients, formulations, Flame Retardants and Non-Agro activity
Sanonda, China Plant for the manufacturing of insecticides active ingredients as well
as number of formulations and Non-Agro activity
ADAMA Huifeng, China Plant for production of Herbicides and Fungicides AIs, as well as
number of formulations, alongside a packaging plant
Taquari, Brazil Plant for the manufacturing of active ingredients as well as number
of formulations used for the manufacturing of insecticides, fungicides
and herbicides
EIA approval status that is being applied or newly obtained during the reporting period
√ Applicable □ Not applicable
During the reporting period, the Company didn’t newly receive approval:
ADAMA Anpon, a subsidiary of the Company, received the following EIA approval:
“Reply to the Environmental Impact Report of Expansion of Utilities and Auxiliary Facilities: 110v Transformer Station
and Power Lines”
Abnormal production suspension during the reporting period
□ Applicable √ Not applicable
Relevant approvals, permits and qualifications
√ Applicable □ Not applicable
Entity in Name of the Number Expiration
China Certificate
Pesticide Pesticide Production Permit (E)
August 7th, 2027
Production Permit 0010
Safety Production （E）WH [2022] No. 1139
November 6th, 2025
Permit
Safety Production （E）FM [2021] No.050781
August 13th , 2024
Permit
Business record （E）3J42100111328
certificate of non-
ADAMA pharmaceutical July 2nd , 2024
Ltd. precursor
chemicals
Special Permit for HW-D42I0001
the Manufacturing
April 3rd, 2024
of Monitored
Chemicals
National Industrial XK13-008-00019 of Hubei
November 13th, 2023
Production Permit
Business License No. [2021] 980014 of Safety
July 5th, 2024
for Hazardous Operation of Hubei D
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ADAMA Ltd. Annual Report 2022
Entity in Name of the Number Expiration
China Certificate
Chemicals
Port Operation No.（0045）for Port Operation of
January 20th, 2025
Permit Jingzhou of Hubei
Port Shoreline Use No. 5, 2015 for Use of Port
August 7th, 2061
Permit Shoreline
Water Extraction No. 3, 2020 for Water Extraction
August 13th, 2025
Permit of Jingzhou of Hubei
Registration 421012001
Certificate of
December 9th, 2024
Hazardous
Chemicals
Pollutant Emission 91420000706962287Q001P
December 25th, 2025
Permit
Safety Production WH No. [H00029] for Safety
January 17th, 2025
Permit Production of Jiangsu
Business License No. 00394 for Business of
for Hazardous Hazardous Chemicals of October 11th, 2024
Chemicals Huai’an of Jiangsu
Pesticide Business No. 32080020026 for Pesticide
December 26th, 2024
License Business of Jiangsu
Pesticide No. 0014 for Pesticide
December 6th, 2027
Production Permit Production of Jiangsu
Pollutant Emission 91320800139433337K001P
May 31th,2025
Permit
National Industrial XK13-010-00189 of Jiangsu
ADAMA January 12th, 2024
Production Permit
Anpon
National Industrial XK13-008-00007 of Jiangsu
(Jiangsu) September 23rd, 2023
Production Permit
Ltd.
National Industrial XK13-014-00235 of Jiangsu
July 11th, 2024
Production Permit
Mining License C3200002009096120039192 September 30th, 2025
Water Extraction
D320812G2021-0016 December 22nd, 2027
Permit
Water Extraction
D320812S2021-0014 December 31st, 2027
Permit
Special Permit for
the Manufacturing
HW-32I0001 November 29th, 2027
of Monitored
Chemicals
Safety Production FM No. [2021]0818 of Jiangsu
November 9th, 2024
Permit
Maidao, Business License No. 00641 for Business of
Branch of for Hazardous Hazardous Chemicals of December 11th, 2025
ADAMA Chemicals Jiangsu
Anpon Safety Production WH No. [H00015] for Safety
July 22nd, 2024
(Jiangsu) Permit Production of Jiangsu
Ltd. Pollutant Emission 91320800MA1NX3QW56001P
December 19th, 2026
Permit
Hubei No. 42000010083 for Pesticide
Pesticide Business
Sanonda Business of Hubei September 3rd, 2023
License
Trading
18
ADAMA Ltd. Annual Report 2022
Entity in Name of the Number Expiration
China Certificate
Co., Ltd.
ADAMA No. 11000010005 for Pesticide
(Beijing) Business of Beijing
Agricultural Pesticide Business
April 11th, 2028
Technology License
Company
Limited
ADAMA Pesticide Business No. 31011420006 for Pesticide
September 3rd, 2023
Huifeng License Business of Shanghai
(Shanghai) No. [2020]203153 of Shanghai
Business License
Agricultural for Business of Hazardous
for Hazardous August 25th, 2023
Technology Chemicals
Chemicals
Co., Ltd.
Safety Production （Su）WH No. [J00138]
February 10th, 2024
Permit
Pesticide Business No. 32090420577 for Pesticide
January 6th, 2026
License Business of Jiangsu
Pesticide Pesticide Production Permit
May 13th, 2026
Production Permit (Su) 0199
Registration 320912188
Certificate of
ADAMA March 8th, 2024
Hazardous
Huifeng
Chemicals
(Jiangsu)
Ltd. Pollutant Emission 91320982MA1WNXWQX6001P
December 20th,2025
Permit
Business record （Su）3S32090000086
certificate of non-
pharmaceutical February 9th, 2024
precursor
chemicals
Export Enterprise 04136730
--
Registration Form
Company focused on oil processing and trade
□ Applicable √ Not applicable
Company focused on fertilizer
□ Applicable √ Not applicable
Company focused on agrochemicals
√ Applicable □ Not applicable
Market share - As mentioned herein, ADAMA is a leading company among the crop-protection companies that focus on
off-patent crop protection solutions. The Group’s global crop protection market share was approximately 6.5% in 2022,
based on preliminary estimation made by AgBio Investor regarding total sales in the agrochemical industry, and 6.0% in
2021.
Registration - The materials and products marketed by the Group require, at various stages of their development production
19
ADAMA Ltd. Annual Report 2022
and marketing, registration in every country where the Company intends to market them. The Company has development
and registration centers, located in Europe, Israel, Latin America, Brazil, North America, India and Asia. Further, its global
registration network, providing local registration capabilities in over 100 countries, enables the Group to efficiently introduce
new products in all major markets and provide farmers with a comprehensive portfolio of crop protection solutions. In the
last three years, the Group’s registration network of highly-skilled professionals has obtained approximately 1,300 new
product registrations. These capabilities are increasingly important as regulatory requirements continue to increase globally.
Tax policies - The Group develops, purchases, manufactures and markets its products through many companies worldwide,
and as such operates through approximately 60 subsidiaries. To the best of the Group’s knowledge, it is in material
compliance with applicable tax laws.
Company focused on chlorine alkali and caustic soda business
□ Applicable √ Not applicable
Company focused on chemical fiber industry
□ Applicable √ Not applicable
Company focused on plastic and rubber making
□Applicable √ Not applicable
III. Core Competitiveness Analysis
As a leading off-patent crop protection provider in the global crop protection market, the Group believes that the following
strengths provide it with sustainable competitive advantages and the foundation to capitalize on favorable underlying
agriculture and crop protection industry trends:
Off-patent Industry Leader. The Group’s success as one of the world’s leading off-patent companies has given it
a deep understanding of the industry and enabled it to build one of the most extensive off-patent product offerings,
giving it the ability to provide efficient, value-added solutions to farmers of every major crop around the world.
Moreover, the breadth of the Group’s product portfolio, with no single active ingredient constituting more than 5%
of its sales in 2022, combined with its extensive geographic reach, provide effective diversification and enhanced
stability. The Group strives to continue to gain market share, building on its leading role in the market, farmer-centric
focus and broad product portfolio. Furthermore, the Group’s addressable market continues to expand as the crop
protection market globally continues to shift towards off-patent products, the segment of the market on which the
Group focuses. This shift is the result of significant increases in the costs and risks of discovering and developing
novel and effective Active Ingredients (AIs), which over time has led to fewer introductions of new molecules each
year by the Company’s Research-Based Company (RBC) competitors. The Group believes that its strength in the
off-patent market provides it with a certain competitive advantage relative to RBCs, as it is able, with its research,
technology and know-how, to access off-patent crop protection products developed by all of the various major RBCs.
This allows the Group to enhance existing crop protection products and introduce unique mixtures and formulations.
In parallel, the Group’s global scale, registration expertise and manufacturing footprint are competitive advantages
in comparison to many of its off-patent peers.
Global Reach and Strength in Emerging Markets. The Group has an industry leading global footprint with
extensive market presence. The Group enjoys broad geographic diversification by selling in over 100 countries with
20
ADAMA Ltd. Annual Report 2022
a balanced regional split, as evidenced by its 2022 revenue breakdown of approximately 20% in Europe, 29% in
Latin America, 18% in North America, 21% in Asia Pacific, and 12% in India, the Middle East and Africa. This
regional balance enhances the Group’s growth profile and provides diversification across different countries,
climates, crops and planting seasons. The Group has a particularly strong presence in emerging markets, where
growth is expected to outpace developed markets, and from which it derived more than half of its 2022 sales.
Unique Positioning and Access to China. The Group believes that the foundation provided by the integration of
Adama Solutions with the operational and commercial infrastructure of the Company in China, together with its
unique relationship with its ultimate controlling shareholder, Sinochem Holdings, provides it with a clear advantage
in penetrating the Chinese market, one of the largest and fastest growing agricultural markets in the world. The
Group is one of the only global crop protection providers with a significant integrated commercial and operational
infrastructure within China. The Group intends to leverage this infrastructure to pursue a leading position in the
Chinese crop protection market and capitalize on the growing importance of high-quality global brands in China.
With its activities in China also forming part of Syngenta Group China, the Group believes it is uniquely positioned
to capitalize on the trend toward consolidation within the high-growth, highly fragmented Chinese crop protection
market. In addition to helping it become a leader in the Chinese crop protection market, the integration of the
Company’s China-based manufacturing facilities into the Group’s global manufacturing operations provides it with
the ability to more effectively develop and commercialize advanced, differentiated products, as well as benefit from
improved cost positions in key molecules, enhance the optimization of its global supply chain over time, drive greater
efficiency throughout the organization, and secure both revenue growth as well as increased profitability.
Collaborations with members of the Syngenta Group. The Group is working together with the other companies
within the Syngenta Group to create value for itself and the Syngenta Group through increasing the Group’s sales,
reducing costs and improving processes. Such efforts include various collaboration initiatives for the sale and
distribution of finished products, raw materials supply and procurement, logistics and supply chain, as well as in the
R&D and products’ registration fields.
Vertically Integrated Business with Global Scale. The Group is one of the few off-patent crop protection providers
that is active across virtually the entire value chain, from worldwide marketing, sales and distribution, to registration,
production and R&D. As a result, the Group is able to efficiently manage its product portfolio and operations in
response to the dynamic needs of farmers, changing weather conditions, government policies and regulations, and
capture value at each point in the value chain. Approximately 85% of the Group’s products are synthesized and/or
formulated or both in its world-class, well-invested facilities across the globe. Having deep knowledge, expertise
and experience in all aspects of the development process, integrated chemical synthesis and formulation production
and control over the entire supply chain, provides the Group with cost and control advantages, and the agility to
address market challenges and capture value. Further, its global registration network, providing local registration
capabilities in over 100 countries, enables the Group to efficiently introduce new products in all major markets and
provide farmers with a comprehensive portfolio of crop protection solutions. In the three years, the Group’s
registration network of highly-skilled professionals has obtained approximately 1,300 new product registrations.
These capabilities are increasingly important as regulatory requirements continue to increase globally. The Group’s
sales and marketing infrastructure is characterized by its local sales forces in each of its strategic markets, who
build strong relationships with local distributors and with the end users, the farmers, to better understand their needs.
This drives demand at the wholesale, retail and farmer level and provides the Group with valuable market insight
and understanding.
Extensive, Differentiated Offering. The Group offers farmers a hybrid portfolio of increasingly differentiated
products and solutions that are tailored to the specific needs of each geographic region and each type of crop. The
21
ADAMA Ltd. Annual Report 2022
Group utilizes an integrated, solutions-based approach to its entire offering in order to meet the unique demands of
its global customer base. The Group strives to offer farmers a branded portfolio that is comprised of both high-value
differentiated products as well as high-volume off-patent products, alongside an increasing number of unique
mixtures and formulations and novel, innovative products and services, aimed to provide solutions to farmers in
nearly every region, and for all major crops. The Group’s extensive portfolio is composed of over 300 centrally
managed AIs and over 1,650 mixtures and formulations.
Experienced and Empowered Management Team. With a deep understanding of the crop protection industry and
firm focus on sustaining the Group’s leadership and financial strength, its management team is a cohesive and
integrated team that has the knowledge, skills and experience required to guide the Group on its path to achieving
its ambition of global leadership. The Group believes in empowering its teams and creating leaders from its
strongest performers, with the result that its management team is composed of the people who have successfully
managed its business, and developed and executed its strategy over the last few years, continuing its track record
of consistent, profitable growth.
22
ADAMA Ltd. Annual Report 2022
IV. Main Business Analysis
1. Overview
For general crop protection market environment, please refer to I. Main business of the Company during the Reporting
Period of Section III above.
Fourth Quarter Same period of last year as
Item of the Reporting Period previously reported +/-%
(000’RMB) (000’RMB)
Revenues 9,304,101 8,550,241 8.8%
Pre-Tax Profits (144,277) 299,252 -148.2%
Pre-tax profit margin -1.6% 3.5% -
Net income (158,753) 165,032 -196.2%
Net income margin -1.7% 1.9% -
EBITDA 897,224 1,201,894 -25.4%
EBITDA margin 9.6% 14.1% -
Fourth Quarter Same period of last year as
Item of the Reporting Period previously reported +/-%
(000’USD) (000’USD)
Revenues 1,311,992 1,337,049 -1.9%
Pre-Tax Profits (20,383) 46,767 -143.6%
Pre-tax profit margin -1.6% 3.5%
Net income (22,425) 25,197 -189.0%
Net income margin -1.7% 1.9%
EBITDA 126,520 187,946 -32.7%
EBITDA margin 9.6% 14.1%
Same period of last year as
Reporting Period
Item previously reported +/-%
(000’RMB)
(000’RMB)
Revenues 37,381,915 31,038,605 20.4%
Pre-Tax Profits 756,833 543,802 39.2%
Pre-tax profit margin 2.0% 1.8% -
Net income 609,391 163,313 273.1%
Net income margin 1.6% 0.5% -
EBITDA 4,880,445 3,821,303 27.7%
EBITDA margin 13.1% 12.3% -
Same period of last year as
Reporting Period
Item previously reported +/-%
(000’USD)
(000’USD)
Revenues 5,569,989 4,813,041 15.7%
Pre-Tax Profits 118,470 84,564 40.1%
Pre-tax profit margin 2.1% 1.8% -
Net income 96,307 25,518 277.4%
Net income margin 1.7% 0.5% -
EBITDA 731,118 592,846 23.3%
EBITDA margin 13.1% 12.3% -
23
ADAMA Ltd. Annual Report 2022
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.
2. Revenues and costs
Revenues
Revenues in the fourth quarter declined by approximately 2% (+9% in RMB terms; +1% in CER terms) to $1,312 million,
reflecting an increase of 6% in prices and a decrease of 6% in volumes mainly due to advancement of sales in Brazil from
the fourth quarter in 2022 to the third quarter, a decline in raw material, fine chemicals and intermediates sales in China
and the depreciation of the Euro in comparison to the US Dollar. Despite the shift of sales in Brazil from the fourth quarter
to the third quarter, the Company's sales grew in constant exchange rates across most regions.
In the full year 2022, sales reached a record-high of $5,570 million, an increase of 16% (+20% in RMB terms; +19% in
CER terms), driven by a 16% increase in prices and a 4% growth in volume. The increase in sales in the full year period
reflected the strong demand in the market for crop protection products, led by sales in Brazil and China.
(1) Operating revenues
Unit: RMB’000
2022 2021
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 37,381,915 100% 31,038,605 100% 20.4%
Classified by industries
Manufacture of chemical raw materials
37,381,915 100% 31,038,605 100% 20.4%
and chemical products
Classified by products
Herbicides 16,597,770 44.4% 12,716,458 41.0% 30.5%
Fungicides 7,050,530 18.9% 6,137,712 19.8% 14.9%
Insecticides 10,120,287 27.1% 9,192,554 29.6% 10.1%
Ingredients and Intermediates (Formerly
3,613,328 9.7% 2,991,881 9.6% 20.8%
referred to as Non-Agro)
Classified by regions
Europe 7,449,462 19.9% 6,920,884 22.3% 7.6%
North America 6,895,702 18.4% 5,907,944 19.0% 16.7%
Latin America 10,792,733 28.9% 8,217,586 26.5% 31.3%
Asia-Pacific 7,761,487 20.8% 5,793,987 18.7% 34.0%
India, Middle East and Africa 4,482,531 12.0% 4,198,204 13.5% 6.8%
Classified by Sales Channel
Direct Sales 1,992,450 5.3% 1,300,368 4.1% 53.2%
Dealership 31,782,088 85.0% 26,746,356 86.2% 18.8%
Others 3,607,377 9.7% 2,991,881 9.6% 20.6%
24
ADAMA Ltd. Annual Report 2022
Unit: USD’000
2022 2021
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 5,569,989 100% 4,813,041 100% 15.7%
Classified by industries
Manufacture of chemical raw materials
5,569,989 100% 4,813,041 100% 15.7%
and chemical products
Classified by products
Herbicides 2,478,957 44.5% 1,971,982 41.0% 25.7%
Fungicides 1,048,303 18.8% 951,654 19.8% 10.2%
Insecticides 1,505,222 27.0% 1,425,106 29.6% 5.6%
Ingredients and Intermediates (Non-Agro) 537,507 9.7% 464,299 9.6% 15.8%
Classified by regions
Europe 1,115,384 20.0% 1,072,415 22.3% 4.0%
North America 1,027,291 18.5% 916,603 19.0% 12.1%
Latin America 1,592,287 28.6% 1,275,558 26.5% 24.8%
Asia-Pacific 1,166,262 20.9% 898,084 18.7% 29.9%
India, Middle East and Africa 668,765 12.0% 650,381 13.5% 2.8%
Classified by Sales Channel
Direct Sales 296,880 5.3% 203,364 4.2% 46.0%
Dealership 4,735,602 85.0% 4,145,906 86.1% 14.2%
Others 537,507 9.7% 463,771 9.6% 15.9%
Notes: (1) the sales split per product category is provided for convenience purposes only, and is not representative of the
way the Company is managed or in which it makes its operational decisions; (2) The discrepancies between the ‘ratio of
the operating revenue’ in RMB and USD detailed in the tables above derive mainly from exchange rates recorded at the
end of each quarter.
Regional Performance Review
Europe: Excluding Ukraine based sales, the sales in Europe grew by a double-digit percentage in the fourth quarter and
full year period. This growth was achieved by gaining market share over the year in some key countries such as France,
Italy, Romania and Greece and was also supported by the introduction of the product Soratel, which includes ADAMA’s
proprietary Asorbital formulation technology. The growth was achieved despite drought mainly in the south of Europe,
supply challenges and high channel inventories in some countries.
North America: In the US Ag market, sales increased in the full year period despite adverse weather conditions mainly in
the second half of the year, impacting the California Fruit & Vegetable market and the Cotton market across Texas and the
southwest regions, both important markets for the Company.
Very strong growth in sales achieved in Canada in the full year period and fourth quarter in all categories: herbicides,
fungicides and insecticides. The Company's new in-house production at Huifeng of cereal herbicides supported sales
against the backdrop of supply shortages in the market, while broadening of the fungicide portfolio and increased insect
pressure drove fungicide and insecticide sales, respectively.
The Consumer & Professional business grew nicely over the full year period following robust demand, while in the second
half of the year there was a slowdown in this growth due to inflationary pressure on consumer demand and a slowdown in
the professional market mostly due high levels of inventory in the channel and expectation for price decreases.
25
ADAMA Ltd. Annual Report 2022
Latin America: In the full year period the Company achieved very strong growth in sales in Brazil, driven by prices, volume
and new innovative formulation product launches, such as fungicide ARMERO and herbicide ARADDO. Slowdown in
sales in Brazil in the fourth quarter was due to advancement of sales from the fourth quarter in 2022 to the third quarter.
In other LATAM countries higher sales were achieved in the full year period despite adverse weather conditions. In the
fourth quarter the sales remained stable. During 2022 the Company continued with the rollout of biological products in this
region, which is a key market for Fruit & Vegetable crops for export.
Asia-Pacific: During the full year period of 2022 the Company’s significant growth in Asia Pacific was led by the strong
sales of raw material, intermediates and fine chemicals in China. In the fourth quarter, a decline was recorded in such sales
following the softening of demand in the Chinese market and an overall decline in market prices. The sales in China of
ADAMA's branded portfolio also continued to grow nicely during the full year period despite the strong competition in the
market, and also included the contribution of a company acquired in 2021.
In the wider APAC region growth in sales in the full year period was supported by the positive impact of a rare 3rd
consecutive year of La Nia and despite strong competition from China. In the fourth quarter, sales were negatively
impacted by excessive rain and flooding in some key areas of the region. The slowdown in sales in the fourth quarter in
the Pacific region was also due to advancement of sales from the fourth quarter in 2022 to the third quarter.
India, Middle East & Africa: Sales grew moderately in USD terms and nicely in constant exchange rates in 2022 and in
the fourth quarter. In the full year period the growth was led by Middle Eastern countries, as 2021 was a very strong year
in India. In the fourth quarter the sales in India also grew nicely due to positive weather conditions.
(2) List of the industries, products, regions and distribution models exceed 10% of the operating
revenues or operating profits of the Company
√ Applicable □ Not applicable
The company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shen-
zhen Stock Exchange: No. 3 - Disclosure of Industry Information”.
Unit: RMB’000
YoY YoY YoY
Gross
Operating Cost of increase/decrease increase/decrease increase/decrea
Margin
revenues goods sold of the operating of the cost of goods se of the gross
(%)
revenues sold margin
Classified by industries
Manufacturing
chemical raw
37,381,915 27,984,966 25.1% 20.4% 19.5% 0.6%
materials and
chemical products
Classified by Products
Crop Protection 33,768,587 25,259,667 25.2% 20.4% 20.0% 0.2%
Ingredients and
3,613,328 2,725,299 24.6% 20.8% 15.1% 3.6%
Intermediates
In the event that the statistical manner of the Company's main business data is adjusted during the reporting period, the
Company's main business data for the most recent year adjusted to the manner at the end of the reporting period
□ Applicable √ Not applicable
26
ADAMA Ltd. Annual Report 2022
Production Sales Sales Pricing Trend during Reasons to change
Volume Volume (RMB’000) reporting period
(Ton) (Ton)
price of raw materials
increased, combined
Crop Protection 529,135 690,015 33,768,587 YoY up with inflation and
currency impact in
several markets
Ingredients and
492,188 1,558,390 3,613,328 YoY up High demand in market
Intermediates
Whether the Company generates more than 10% revenue or net profit from its overseas business against the audited
annual revenue and net profit for the most recent accounting year
√ Applicable □ Not applicable
Overseas Business How it operates in foreign Whether the tax policy measures it takes during
markets influences the business the reporting period
overseas
The Group develops, No material influence exists. The Group’s services or
purchases, manufactures and products are priced based on
markets its products through transfer pricing studies
many companies worldwide. conducted to reflect the
As such, the Group operates market price that would have
through approximately 60 been determined for these
subsidiaries, with each of the services or products were
Adama Solutions Group companies being they to be provided to non-
independent and fulfilling a group members. Such
different role and making a transfer prices are reviewed
different contribution to the on a quarterly basis.
Group's operations, and
being assessed according to
the tax laws in their specific
localities.
(3) Whether the Company’s revenue from sale of goods exceed the revenue from services
√ Yes □ No
Industries Items Units 2022 2021 YoY +/-%
Sales volume Ton 690,015 638,873 8%
Crop Protection Production Ton 529,135 501,242 6%
Inventory Ton 241,095 220,547 9%
Subsidiaries acquired during recent years have undergone IT system alignment during 2022, and as a result of which the
volume of the Group in 2021 have been technically reclassified to the figures presented above tons.
Reasons for any over -30% YoY movement of the data above:
□ Applicable √ Not applicable
27
ADAMA Ltd. Annual Report 2022
(4) Execution of the significant sales and procurement contracts signed by the Company up to
the Reporting Period
□ Applicable √ Not applicable
(5) Composition of Operating Costs
Category of the industries
Unit: RMB’000
2022 2021
Industries Items Ratio of the Ratio of the YoY +/-%
Amount Amount
operating costs operating costs
Industry of Cost of
manufacturing chemical materials
26,200,706 93.6% 17,995,565 76.9% 45.6%
raw materials and (procurement
chemical products costs)
Industry of
manufacturing chemical
Labor cost 1,303,087 4.7% 1,201,040 5.1% 8.5%
raw materials and
chemical products
Industry of
manufacturing chemical Depreciation
793,086 2.8% 679,590 2.9% 16.7%
raw materials and expense
chemical products
Explanations:
Over the full-year period, the Company saw higher logistic, procurement and production costs as well as the negative
impact of exchange rates. Despite that, the higher gross profit was mainly driven by the markedly higher prices
complemented by volume growth.
Additionally, in the full year of 2021 certain extraordinary charges related largely to a temporary disruption of the production
of certain products occurred. These charges have significantly declined since the first quarter of 2022, as the relocation
and upgrade of the manufacturing Jingzhou site in China has been completed and is now at a high level of operation.
(6) Has the consolidated scope changed during the Reporting Period
□Yes√ No
(7) List of significant changes or adjustment of the industries, products or services of the
Company during the reporting period
□ Applicable √ Not applicable
28
ADAMA Ltd. Annual Report 2022
(8) List of major trade debtors and major suppliers
List of the major trade debtors of the Company
Total sales to top 5 customers (RMB’000) 3,237,835
Ratio of total sales to top 5 customers to annual total sales 8.35%
Ratio of total sales to related parties (within top 5 customers) to annual total sales 4.32%
Information of the Top 5 Customers
Customers Sales Amount Ratio of the sales to this customer to
(RMB’000) the annual total sales
1 A 1,676,644 4.32%
2 B 457,588 1.18%
3 C 456,244 1.18%
4 D 334,558 0.86%
5 E 312,801 0.81%
Aggregated 3,237,835 8.35%
Notes of other situation of the major customers
□ Applicable √ Not applicable
List of the major suppliers of the Company
Total purchase from top 5 suppliers (RMB’000) 4,399,324
Ratio of total purchase from top 5 suppliers to annual total purchase 18.58%
Ratio of total purchase from related parties (within top 5 suppliers) to annual total purchase 9.55%
Information of the Top 5 Suppliers
Suppliers Purchase Amount Ratio to the annual total sales
(RMB’000)
1 A 1,295,586 5.47%
2 B 1,073,592 4.53%
3 C 965,861 4.08%
4 D 565,859 2.39%
5 E 498,426 2.10%
Aggregated 4,399,324 18.58%
Notes of the other situation of the major suppliers
□ Applicable √ Not applicable
29
ADAMA Ltd. Annual Report 2022
3. Expenses
In RMB ’000 In USD ’000
2022 2021 YoY +/-% 2022 2021 YoY +/-%
Sales and Marketing expenses 4,396,279 4,019,257 9.38% 653,982 623,076 5.0%
General and Administrative expenses 1,406,828 1,089,599 29.11% 208,444 168,937 23.39%
R&D expenses 577,859 501,377 15.25% 85,874 77,787 10.40%
Financial (income) / expenses 325,796 1,939,422 -83.20% 42,854 301,307 -85.78%
Profit or Loss from Changes of Fair
(1,504,832) 597,685 -351.78% (229,774) 93,138 -346.70%
Value
Total Net Financial Expenses 1,830,628 1,341,737 36.44% 272,628 208,169 30.96%
Tax expenses 147,442 380,489 -61.25% 22,163 59,044 -62.46%
Explanations for the change of above expenses:
Note: As noted above and since 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.
(1) Sales and Marketing Expenses
In recent years, the Company conducted various corporate development activities, including mergers and acquisitions,
which resulted in the inclusion within its sales and marketing expenses of various non-operational, mostly non-cash
charges affecting the Company’s reported numbers amounting to RMB 250 million ($37 million) in the full year of 2022 in
comparison to RMB 233 million ($36 million) in 2021. These charges include mainly:
(i) 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) charges related 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.
Excluding the abovementioned non-operational charges, the level of selling and marketing expenses reflected the strong
growth of the business and the contribution of a company acquired in 2021 moderated by the positive impact of exchange
rates.
(2) General and Administrative Expenses
The Company continues to maintain strong operating cost discipline. Nevertheless, the higher general and administrative
expenses are affected by an increase in expenses attributed to company success-based employee compensation and
share-based compensation, as well as the contribution of a company acquired in 2021, moderated by the positive impact
of exchange rates.
In addition, alongside the many benefits the Company enjoys from the collaboration with other companies in the Syngenta
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ADAMA Ltd. Annual Report 2022
Group, most notably in commercial cross-sales as well as in the areas of procurement and operations, ADAMA recorded
certain related expenses.
(3) R&D Expenses
In order to capitalize on future opportunities in the agrochemical market, the Company has intensified its efforts in recent
years to develop a leading pipeline of crop protection products aimed at providing value-added solutions to farmers around
the world and build significant positions in a number of strategic market segments, under the strategic plans named “Core
Leap” and “Formulation Mastery” targeted at AIs and formulation technologies respectively. During 2022, Adama launched
18 new differentiated products and registered 10 new differentiated products in select countries. The R&D expenses
reflected part of the Company’s inputs in innovation, development and registration activities.
(4) Financial Expenses:
“Financial Expenses” alone 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 326 million ($43 million) for 2022 compared with RMB 1,939
million ($301 million) for 2021.
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. The impact of
the hedging transactions which is recorded in “Gains/Losses from Changes in Fair Value” is a net loss of RMB 1,505 million
($230 million) in 2022 compared with a net gain of RMB 598 million ($93 million) in 2021.
The aggregate of Financial Expenses and Gains/Losses from Changes in Fair Value (hereinafter as “Total Net
Financial Expenses”), which more comprehensively reflects the financial expenses of the Company in supporting its main
business and protecting its monetary assets/liabilities, amounts to RMB 1,831 million ($273 million) in 2022 compared with
RMB 1,342 million ($208 million) in 2021.
The higher Total Net Financial Expenses in the full year period were mainly driven by (i) the net effect of the high Israeli
CPI on the ILS-denominated, CPI-linked bonds and (ii) higher hedging costs on exchange rates mainly due to volatility in
the ILS/Dollar exchange rate, partially offset by a non-recurring, non-cash income due to revaluation of the put options
attributed to minority stakes acquired in 2021.
(5) Income Tax expenses:
In the full year of 2022, the Company recognized a higher deferred tax asset, related to inter-group sales, that led to a
decline in the income tax expenses.
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ADAMA Ltd. Annual Report 2022
4. R&D Investment
√ Applicable □ Not applicable
Expected Impact on
Name of Major Objectives the Future
Purpose Progress
R&D Projects to be Achieved Development of the
Company
AI Production to To increase the
achieve pipeline Company’s pipeline
Fungicide project A increase and In launch phase Process improvement and expand future
resistance portfolio
management
AI Production of a To expand the
fungicide for broad Advanced Company’s future
Fungicide project B Tech Transfer
spectrum disease development portfolio
control
AI Production of a To expand the
Herbicide project C selective broad Pre-launch phase Process validation Company’s future
spectrum herbicide portfolio
AI Production of a To expand the
Insecticide project D broad spectrum In launch phase Process improvement Company’s future
insecticide portfolio
AI Production for cross To expand the
Advanced
Insecticide project E spectrum insect control Tech Transfer Company’s future
development
portfolio
R&D Personnel
2022 2021 Change (%)
R&D Headcount 277 263 5.32%
Ratio to the Total Headcount 3.01% 2.86% 0.15%
Composition of Educational Background —— —— ——
B.A. 17 11 54.55%
M.A. 16 11 45.45%
Doctor 5 3 66.67%
College 5 1 400.00%
Composition of Age —— ——
Under 30 Years Old 5 4 25.00%
30 to 40 Years Old 29 18 61.11%
Over 40 Years Old 9 4 125.00%
Note: The figures under “Composition of Educational Background” and “Composition of Age” represent those of the
Company and the domestic subsidiaries held by it and do not cover the Group’s overseas R&D employees.
32
ADAMA Ltd. Annual Report 2022
R&D Investment of the Company
2022 2021 Change (%)
R&D Investment (RMB’000) 577,859 501,377 15.25%
Ratio of R&D investment to operating income 1.55% 1.62% -0.07%
Amount of capitalized R&D investment (RMB’000) - - -
Ratio of capitalized R&D investment to total R&D investment - - -
Reasons for and effects of significant changes to the composition of the Company's R&D personnel
□ Applicable √ Not applicable
Reason of notable changes over the last year in the ratio of total R&D investment amount to operating income
□ Applicable√ Not applicable
Reason of notable change in the ratio of R&D investment capitalization and its reasonable explanation
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB’000
Item 2022 2021 YoY +/-%
Subtotal of cash inflows from operating activities 36,575,473 31,178,654 17.31%
Subtotal of cash outflows from operating activities 35,634,728 26,616,779 33.88%
Net cash flows from operating activities 940,745 4,561,875 -79.38%
Subtotal of cash inflows from investing activities 136,738 40,749 235.56%
Subtotal of cash outflows from investing activities 2,797,180 3,424,200 -18.31%
Net cash flows from investing activities (2,660,442) (3,383,451) -21.37%
Subtotal of cash inflows from financing activities 4,632,633 5,690,509 -18.59%
Subtotal of cash outflows from financing activities 4,688,423 4,853,346 -3.40%
Net cash flows from financing activities (55,790) 837,163 -106.66%
Net increase in cash and cash equivalents (1,534,227) 1,924,409 -179.72%
Notes of the major effects on the YoY significant changes occurred of the data above
√ Applicable □ Not applicable
Cash flow from Operating Activities: The lower cash flow generated in the full year of 2022 was primarily due to higher
payments to suppliers to support the procurement of inventory.
Cash flow from Investing Activities: The cash used in investing activities in the full year of 2022 largely related to
investments in new production facilities at ADAMA Anpon, investments in intangible assets relating to ADAMA's global
registrations and cash used for investing in "Core Leap" manufacturing capabilities in Israel and Brazil (Multi-Purpose
Production Site).
Cash flow from Financing Activities: The Company has seen an outflow of funds in 2022 due to the realization of lose
on hedging positions in respect of the Company's Israeli ILS-denominated bonds, as a result of the weakening of the
Shekel against the US dollar, which was set off by an increase in loan borrowing to support the high level of purchases.
Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profits
33
ADAMA Ltd. Annual Report 2022
of 2022 of the Company during the Reporting Period
√ Applicable □ Not applicable
Please refer to the notes provided above under this item.
V. Analysis of the non-core business
√ Applicable □ Not applicable
Unit: RMB’000
Amount % of total profit Explanation Recurrence
Investment income 12,683 1.68% No
Mainly foreign currency effect on
financial assets and liabilities
Gain/loss from change of FV (1,504,832) -198.83% No
(refer to explanation to Financial
expenses above).
Please refer to the Announcement
Impairment of asset 325,386 42.99% on Asset Impairment No
(Announcement No. 2023-3).
Please refer to the Announcement
Credit impairment loss 91,667 12.11% on Asset Impairment No
(Announcement No. 2023-3).
Gain from disposal of assets 59,596 7.87% No
Non-operating income 58,395 7.72% No
Non-operating loss 31,729 4.19% No
VI. List and Analysis of the assets and liabilities
1. List of significant changes of assets
Unit: RMB’000
As at 31 Dec. 2022 As at 31 Dec. 2021
Explanation for any major
Item % of total % of total % change
Amount Amount change
assets assets
Increasing payments for
Cash at bank and on
4,290,961 7.40% 5,818,835 11.58% -4.18% procurement and
hand
investments in CIP projects.
Accounts receivable 9,018,375 15.55% 8,362,493 16.65% -1.10%
Higher inventory levels
mainly to support expected
future sales, in light of
Inventories 16,927,241 29.19% 11,750,162 23.39% 5.80%
anticipated supply shortages,
logistic challenges and
inventory costs increases.
Investment property 3,168 0.01% 3,716 0.01% 0.00%
The change is mainly due to
Long term equity
26,368 0.05% 15,335 0.03% 0.02% the investment income from
investments
joint venture and associates.
Fixed assets 8,952,184 15.44% 8,048,389 16.02% -0.58%
The change is mainly due to
Construction in
2,961,401 5.11% 2,143,400 4.27% 0.84% investments as part of
progress
upgrade projects.
34
ADAMA Ltd. Annual Report 2022
As at 31 Dec. 2022 As at 31 Dec. 2021
Explanation for any major
Item % of total % of total % change
Amount Amount change
assets assets
Rights of use assets 555,889 0.96% 463,915 0.92% 0.04%
Additional short-term
Short-term loans 3,342,921 5.77% 874,755 1.74% 4.03%
financing.
Contract Liabilities 1,776,573 3.06% 1,381,311 2.75% 0.31%
Long-term loans 3,662,870 6.32% 3,498,912 6.97% -0.65%
Lease liabilities 431,076 0.74% 362,086 0.72% 0.02%
Oversea assets account for a higher proportion
√ Applicable □ Not Applicable
Proporti
Control on of
Signif
Specific Scale measures Net Profit oversea
Operation icant
contents (Amount) of Locati to of the s assets
Reason /Manageme impai
of the the assets on guarantee assets out of
nt mode rment
assets (RMB’000) safety of (RMB’000) total net
risk?
the assets assets
(%)
Acquired
Equity through
Israel
investmen Major Corporate Corporate
19,853,226 and (18,031) 86% No
t in Adama Assets Governance Governance
globally
Solutions Restruct
uring
Other explanations N/A
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB’000
Fair value Fair value
Opening change change Other
Item Purchase Sale Closing
balance recognized in recognized in change
balance
P&L equity
Financial assets
1. Financial assets
measured at FVTPL
1,479 - - 206 - - 1,685
(excluding derivative
financial assets)
2. Derivative financial
243,310 (1,200,368) (79,497) 1,608,741 (338,377) - 233,809
assets
3. Other equity
152,118 - 6,223 - - - 158,341
investments
Total financial assets 396,907 (1,200,368) (73,274) 1,608,947 (338,377) 393,835
Others 199,815 46,304 - 10,386 (66,904) - 189,601
Total of above 596,722 (1,154,064) (73,274) 1,619,333 (405,281) - 583,436
Financial liabilities 176,206 369,310 - - - - 545,516
Significant changes in the measurement attributes of the main assets in the Reporting Period
□ Yes √ No
35
ADAMA Ltd. Annual Report 2022
3. Restriction / limitation on asset rights
At the end of the Reporting Period, restricted assets including Company’s bank balance of RMB 65,708,000 as cash
deposit for bills receivable; and other non-current assets of RMB 154,273,000 as deposit for asset securitization and legal
suits.
VII. List and Analysis of the investment
1. Overall condition
√ Applicable □ Not applicable
Investment during the Reporting Investment during the Same +/-% YoY
Period (RMB'000) Period Last Year (RMB'000)
15,361,143 18,088,184 -15.1%
2. List of the significant equity investment during the Reporting Period
□Applicable √ Not applicable
3. List of the significant non-equity investments executed during the Reporting Period
□ Applicable √ Not applicable
4. Investment on the financial assets
(1) List investments in securities
□ Applicable √ Not applicable
No such investments were executed during the Reporting Period.
36
ADAMA Ltd. Annual Report 2022
(2) Investment in derivative financial instruments
√ Applicable □ Not applicable
(1) Investment in Derivative Financial Instruments for Hedging during the Reporting Period
√ Applicable □ Not Applicable
Unit: 000 RMB
Profit/loss on fair Percentage of
Cumulative fair Purchased in Sold in the
Opening value changes in Closing investment amount
Investment Type value changes the Reporting Reporting
Balance the Reporting Balance divided by net asset
charged to equity Period Period
Period at end of the period
Option 2,561,394 (470,903) (492,901) 1,908,844 (979,528) 3,490,710 15.10%
Forward 14,820,514 (1,098,775) (1,150,101) 13,452,299 (5,408,886) 22,863,927 98.87%
Total 17,381,908 (1,569,678) (1,643,002) 15,361,143 (6,388,414) 26,354,637 113.97%
Explanation of accounting policies and
principles for hedging, and any significant Please refer to section X of this Report, note III. 28.1 for the disclosure of the accounting policies for hedging. There is no change in the ac-
changes compared with last reporting pe- counting policies for hedging during the reporting period.
riod
Explanations about gain/loss during the The loss during the year was RMB 1,643,002,000 compared to a gain of RMB 413,170,000 last year. The loss was mainly due to ILS devalua-
Reporting Period tion of 13% against the USD and the BRL appreciation of 6.5% against USD
Despite of the loss incurred from the hedging transactions, the Group has effectively mitigated the impact from the exchange rate fluctuations
Explanations for hedging effect
during the year.
Source of fund for the investment Internal.
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.
Risk and control analysis for the Report-
ing Period (including but not limited to Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA
market risk, liquidity risk, credit risk, op- agreements.
erational risk, legal risk, etc.)
As to operational risk, the Group is working with relevant software, which is its back office for all transactions.
No legal risk is involved.
The actions taken in order to further reduce risks are:
37
ADAMA Ltd. Annual Report 2022
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 Adama 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.
Market price or fair value change of The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks.
investments during the Reporting Period. Segregation of duties as follows:
Specific methodology and assumptions For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the rele-
should be disclosed in the analysis of fair vant transactions are simple (Options and forwards) for short terms. For fair value methodology see section X of this Report, note IX. Fair Value.
value of the investments The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters are provided by the experts.
Litigation-related situations (if applicable) N/A
Date of disclosure of Board approval (if
December 30, 2017
any)
Date of disclosure of Shareholders’ ap-
N/A
proval (if any)
The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond
Independent Directors’ opinion on the in-
to the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has adopted
vestment in derivative financial instru-
Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against market risk.
ments and related risk controls
The derivative investments do not harm the interests of the Company and its shareholders.
38
ADAMA Ltd. Annual Report 2022
The company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shen-
zhen Stock Exchange: No. 3 - Disclosure of Industry Information”.
The derivative transactions carried out by the Group were mainly through options and forward in order to mitigate the
currency exposure and the fluctuation in Israeli CPI. For more details, please refer to the section above.
(2) Investment in Derivative Financial Instruments for Speculation during the Reporting Pe-
riod
□ Applicable √ Not Applicable
No such situation occurred during the Reporting Period.
5. Use of raised funds
□Applicable √Not applicable
VIII. Sale of significant assets and equities
1. Sale of significant assets
□ Applicable √ Not applicable
No selling of significant assets occurred during the reporting period.
2. Sale of significant equities
□ Applicable √ Not applicable
I. Analysis of major controlling and stock-participating companies
√ Applicable □ Not applicable
List of stock-participating companies responsible for over 10% of the net profits of the Company:
Unit: RMB’000
Name Type Registered Total Operating Operating
Main services Net assets Net profit
capital assets revenues profit
Development,
manufacturing and
marketing of
agrochemicals,
Adama intermediate
Subsidiary 720,085 48,124,396 17,072,777 33,110,290 165,094 15,019
Solutions materials for other
industries, food
additives and synthetic
aromatic products,
mainly for export.
Subsidiaries acquired or disposed during the Reporting Period
□Applicable√ Not applicable
39
ADAMA Ltd. Annual Report 2022
Description of major holding and equity participating companies
During the Reporting Period, total sales of Solutions, a wholly-owned subsidiary of the Company, amounted to USD
4,925 million, an increase of 12%, driven by 16% higher prices, and further aided somewhat by stronger currencies.
Solutions’ full-year net income was USD 8 million in the full year period, lower than the corresponding period last year.
For detailed explanation of the performance movement, see above explanation of the Section.
X. List of the structured main entities controlled by the Company
□ Applicable √ Not applicable
XI. Outlook of the Company’s future development
(I) Industry structure and trends
1. The competitive structure of crop protection industry
(1) The competitive structure of the global crop protection industry
The global crop protection market is dominated by seven multinational companies, including the Group, five of which
are originator companies. In the past decade, a number of mergers and acquisitions were completed among the largest
players in the crop protection industry. Nonetheless, the crop protection industry as a whole is relatively decentralized, with
a number of local manufacturers competing in each country against the global multinational companies. The Group
believes that entry barriers for the crop protection market are relatively high, although they vary from region to region.
ADAMA is a leading company among the crop-protection companies that focus on off-patent crop protection solutions.
The Group’s global crop protection market share was approximately 6.5% in 2022, based on preliminary estimation made
by AgBio Investor regarding total sales in the agrochemical industry, and 6.0% in 2021.
The Group's competitors are multinational Originator Companies that continue producing and marketing their original
products after their patent expiry (“Originator Companies”), as well as other crop protection companies. In the Group's
experience, in most cases the Originator Company’s market share in a particular product fall to approximately 30% - 70%
within a number of years following the expiry of the relevant patent, leaving the remaining market share open to competition
among off-patent crop protection companies, in addition to their competition with the Originator Company (which continues
manufacturing the product and even leads its market prices and sales terms).
The Group competes with Originator Companies and other international off-patent crop protection companies in all
the markets in which it operates, as these companies generally also have global marketing and distribution networks. In
addition, there are several smaller Originator Companies that also compete with the Group. As a rule, other off-patent crop
protection companies that do not have international marketing and distribution networks compete with the Group locally in
those geographical markets in which they operate.
(2) The competitive structure of the crop-protection industry in China
The chemicals industry in China, which the Company understands to be the largest in the world, as well as the
agrochemicals industry in the country, includes thousands of companies which have invested in manufacturing
infrastructure, most of whose production capacity is currently aimed at exports, intended for sale through small and large
companies across the world, including companies like the Group and its competitors. The growth in production capacity,
on one hand, and the price levels and competitiveness of the products produced in China on the other, affect the structure
of competition in the entire industry. However, price levels of the products manufactured in China have risen in recent
years, mainly stemming from the increase of costs relating to environment protection and regulation in China, including by
way of limited granting of production permits, shutting down of plants, fines, etc. Active Ingredient prices in China began
40
ADAMA Ltd. Annual Report 2022
to increase at the end of 2020 due to the recovery of oil prices together with reduced capacities of chemical manufactures
caused by higher raw material costs - a dynamic that has continued throughout 2021. In the beginning of 2022 the prices
of AI peaked, and have since been declining, though maintaining historically elevated levels.
2. The development trends of the crop-protection industry
In the last few years, some new emerging trends that may affect the nature of competition in this sector can be
identified: (1) The market share of products whose patents have expired continues to rise relative to that of patented original
products, primarily due to the fact that the rate of patent expiry exceeds that of the launching of new patent-protected
products; (2) a trend of some off-patent companies expanding and becoming stronger (inter alia, as a result of corporate
mergers and acquisitions as well as product acquisitions), which may lead to them competing with the Group in geographic
markets in which they have not operated up to now; (3) smaller companies have begun operating, in limited scale, in certain
markets with relatively low entry barriers; (4) improvement of the agrochemicals industry in China inter alia, increasing
market entry barriers; (5) price competition in certain markets by multinational Originator Companies and/or increasing the
credit days to its customers; and (6) large mergers and acquisitions among leading companies in the sector.
The Group believes that in view of the industry's development trends, the following are critical success factors: (i)
reputation, branding, expertise and accumulated knowledge in the sector in the various countries and among customers
and suppliers; (ii) financial strength and resilience combined with consistent growth, allowing the Group to realize a
corporate development strategy including the potential for mergers and acquisitions with other companies in the sphere,
and being able to respond efficiently to attractive business opportunities in order to expand its product portfolio and the
scale of its operations; and (iii) access to funding sources and reasonable funding terms allowing the Group to make
investments that earn a positive return.
(II) Development strategy of the Company
The Group strives to be a global leader in the Crop Protection industry, and intends to achieve this aim by execution
of the following strategies:
Utilize the Group’s Differentiated Offering to Strengthen and Grow its Market Position. The Group intends to
continue to drive the growth of its business through effective commercialization of differentiated, high quality products
that meet farmers’ needs efficiently. To that end, the Group will leverage its extensive R&D and registration capabilities
to continue to provide unique yet simple solutions to farmers. In addition, the Group adds value by enhancing the
functionality and efficacy of the industry’s most successful and commercially proven molecules, by developing new and
unique mixtures and advanced formulations. These innovative products are designed to provide farmers with better
solutions to the challenges they face, including weeds, insects and disease, increasing resistance and insufficient pest
control related to the use of genetically modified seeds.
Aiming to provide distinct benefit to farmers and enhance the sustainability of the business, in addition to the ongoing
efforts to expand existing product registrations to additional crops and regions, a key portion of the Group’s strategy
involves the deliberate shift of its product offering towards more innovative and value-added solutions. Such solutions
include higher-margin, higher-value complex off-patent products, unique mixtures and formulations as well as innovative,
novel products that are protected by patents and other intellectual property rights. As evidence of this effort, the Group
has significantly increased the proportion of unique mixtures and formulations in its R&D pipeline over the last several
years. Over the coming years, as this shift in the pipeline towards more differentiated and innovative solutions starts to
be reflected in the Group’s commercial offering, it is expected to be a significant driver of growth, both in revenues and
in profitability. In this respect, and in order to capitalize on future opportunities in the agrochemical market, the Group
has intensified its efforts to develop a leading pipeline of crop protection products aimed at providing value-added
solutions to farmers around the world, based on AIs that are expected to come off-patent in the coming years. These
newly off-patent AIs will be developed into new mixtures and formulations, in combination with new formulation and
delivery technologies that provide more efficient ways to deliver the products into the plants, thereby creating truly unique
41
ADAMA Ltd. Annual Report 2022
and differentiated, value-added solutions to farmers. In this way, the Group strives to achieve a double competitive
advantage – to be the first to market launching new products after the expiry of the patent on the AI, and to capitalize on
cost leadership through increased backward integration through the Group’s global operations capabilities.
Bridge China and the World. The Group is striving to become a leading global crop protection company in China, both
commercially and operationally, and in so doing, to drive its global growth in the future.
China is currently the third largest, and one of the fastest growing, agricultural markets in the world. Furthermore, the
Group believes that, over the long term, China has the potential to grow into the world’s largest crop protection market.
Also, as the Chinese domestic market is highly fragmented, with limited penetration by the global agrochemical
companies, the Group believes that there is a unique opportunity for it to capitalize on the significant untapped potential
of the Chinese market and to gain market share. Moreover, in recent decades, China has become the leading
manufacturing center for the global crop protection industry - from the sourcing of raw materials and chemical
intermediates to the synthesizing of active ingredients and the formulation of finished products.
The Group intends to capitalize on its status in China and its relationship with ChemChina, as well as close collaboration
Syngenta Group, to increase its commercial activity in the country, where it is already building additional infrastructure.
The Group’s commercial teams are working closely together. Through the commercial collaborations, the Group has an
operational infrastructure and commercial foundation upon which a leading Chinese domestic distribution network has
been built, and which the Group believes will make it one of the only global crop protection providers with significant
integrated commercial and operational infrastructures both within and outside of China.
Through the combination with Solutions and the collaboration with the Syngenta Group Companies, the Group intends
to achieve cost savings and improved margins and efficiencies through the vertical integration of manufacturing and
formulation together with the Group’s global supply chain and logistics capabilities. In addition, the Group’s global R&D
efforts are being complemented by a new R&D center in Nanjing to service the Group’s expanded product development
needs and enable the introduction of advanced technologies into China and globally. The Group expects to drive
significant demand for its products by launching new and advanced active ingredients and intermediates with higher R&D
content. In addition, the advanced formulation center in Jiangsu Province will serve as a platform to introduce cost-
advantaged crop protection solutions into China and globally.
The Group expects that its unique positioning and profile in China, including the relationship with Syngenta group and
Sinochem, should establish it as a partner of choice for companies outside China seeking to access its domestic market,
as well as for Chinese companies looking to expand their global footprint. In addition to the combination and the
commercial collaboration, the Group is assessing strategic joint ventures and selected acquisitions to further bolster its
commercial and operational platform in China.
Collaboration of the Company with Syngenta and Sinochem as members of the Syngenta Group. The Company
engaged with Syngenta in collaboration agreements for sale and distribution of finished products, raw materials supply,
joint ventures in the fields of procurement, logistics, production and supply chain as well as in the R&D and products’
registration fields, in order to reduce costs, to improve processes and to increase the Company’s sales. Such
collaborations have and are expected to continue to generate additional revenues, accelerate growth and increase
productivity, for the Group as well as Syngenta Group.
Continue to Strengthen Position in Emerging Markets. In addition to developing its China platform, the Group enjoys
strong and leading positions in key emerging agricultural markets such as Latin America, India, Asia and Eastern Europe,
with around half of its global sales achieved in these emerging markets. Over the last several years, in order to establish
direct market access and distribution capabilities in these markets, the Group has successfully integrated acquisitions in
Colombia, Chile, Poland, Serbia, Romania, the Czech Republic, Slovakia, and South Korea. Similarly, the Group has a
direct go-to-market strategy in many high-growth markets around the world, leveraging a direct sales force and driving
demand at the retail and farmer level. The Group intends to continue to invest in its growth in the key emerging markets
42
ADAMA Ltd. Annual Report 2022
with high growth potential. The Group’s strong global platform and leading commercial infrastructure in such markets will
allow it to capitalize on worldwide growth opportunities, and continue to drive its profitable growth.
Grow Revenues and Increase Profitability. The Group believes that it has the capacity and operational leverage to
increase profitability through focused execution of its strategy within the framework of prudent working capital
management. The Group is aiming to increase its revenues and margins consistently over time as it shifts to a more
differentiated, higher-margin product portfolio and continues to strengthen its product pipeline with significant number of
higher-value products, based on AIs which patent protection has just expired, unique mixtures and formulations, as well
as innovative and, in some cases, patent-protected products. Similarly, the Group intends to drive revenue growth
through increased penetration of high-growth markets including China, Brazil and other key markets in Latin America,
Asia-Pacific and eastern Europe. The Group believes that its investment in developing an operational footprint in China
will lower costs and improve manufacturing efficiency and distribution logistics and reduce inventory requirements in
many markets worldwide.
In recent years, the Group has focused on growing and improving its business, infrastructure and brand. Other than
investments in the further development of its China operations, the Group believes that its existing global infrastructure
is largely of sufficient scale to support higher revenues, allowing it to enjoy economies of scale and continually improve
profitability over time.
Continue to Capitalize on the Global Portfolio Integration and Rebranding Initiative. In 2014 the ADAMA brand
was launched, integrating dozens of legacy brands across the globe to form a single, streamlined sales and distribution
entity under a unified brand name. In 2019, following extensive farmer and customer research in 13 major markets, the
Company further evolved its brand, creating a unique and compelling brand story that elevates ADAMA’s distinct
entrepreneurial and agile culture; increases its relevance to its customers (channel partners and growers); and further
differentiates the Company from key competitors. The evolved brand positioning, known as “Listen, Learn, Deliver”,
focuses on a process of listening to customer needs, bringing insights from the field and combining them with the
extensive know-how and experience in the Company; and delivering solutions that meet local farmer and customer pain
points. The Core Leap strategy discussed above provides the platform needed to create distinct mixtures and
formulations based on farmer needs. With this new brand positioning the Company is investing in platforms to ensure
ongoing and intimate farmer and customer interactions which will provide the source for future product and solution
ideation.
Strategically Pursue Acquisitions to Enhance Market Access and Strengthen the Product Portfolio. Throughout
its history, the Group has successfully completed and integrated several add-on acquisitions across the globe. The Group
intends to continue to pursue acquisitions, in-licensing agreements and joint ventures that offer attractive opportunities
to enhance its market access and position, as well as strengthen and further differentiate its product portfolio. The Group
plans to focus these efforts largely in high-growth geographies, particularly in emerging markets where it aims to gain
market share, as well as access to selected sources of innovation. The Group continues with its track record of making
and integrating selective.
(III) 2023 Business plan
In 2023, the Company anticipates the global crop protection market to gradually return to normalization. Commodity
prices remain elevated, despite declining somewhat, sustaining historically elevated farmer profitability. Despite this, high
inventory accumulated in the market, might dampen demand in the first half of the year, until these inventories are
depleted. Overall, the Group is expecting to see moderate revenue growth driven by volume growth and the continued
launch of new products. The overall pricing environment is expected to be neutral. However, the extent to which this will
materialize will be determined by weather conditions, competition in the market and other unforeseeable dynamics.
Raw material and Active Ingredient (AI) procurement costs are expected to remain relatively high despite resent
easing in these prices as logistic and supply bottlenecks have elevated.
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ADAMA Ltd. Annual Report 2022
The Group aims to continue to exercise discipline in management of its operating expenses, while focusing on
improvement in working capital efficiency and quality of business.
In 2023, the Group strives to expand its differentiated offering, specifically with the registrations and launch of products
with proprietary formulations. This will be driven by investment in Innovation, Research and Development, and focusing
on all aspects of development of its portfolio – product development, obtaining of registrations, development of advanced
formulations and innovative delivery technologies, as well as differentiated mixtures, alongside further investments in
chemical R&D.
Furthermore, following the completion of the Relocation & Upgrade program in Jingzhou, in the coming year the
Group will continue to focus on the upgrading and relocation of the production facilities in Huai’An, as well as the
continued build-up of its commercial and operational presence in China.
Note: The business plan described above does not constitute a commitment to investors on the Company’s
performance, and the Company suggests that investors should maintain adequate risk awareness therefor, and
understand the difference between the Company’s business plan and a performance commitment.
(IV) Company’s financing and credit
The Group finances its business activities by means of its equity as well as credit from external sources. The primary
external financing is by means of long-term bonds issued by Solutions.
The Group has additional sources of external funding from: (1) long-term credit from banks and related parties; (2)
short-term bank credit as well as non-tradable commercial securities; and (3) supplier credit. In addition, the Group has
significant cash balances as well as unused set bank credit lines.
(V) Risk factors and countermeasures
The Group is exposed to several major risk factors, resulting from its economic environment, the industry and the
Group's unique characteristics, as follows (the order below does not indicate priority):
Exchange rate fluctuations
Although the Company reports its consolidated financial statements in RMB, the Company’s material subsidiary Solutions
reports its consolidated financial statements in US dollars, which is its functional currency, while its operations, sales and
purchases of raw materials are carried out in various currencies. Therefore, fluctuations in the exchange rate of the selling
currency against the purchasing currency impact the Company’s results. The Group's most significant exposures are to
the Euro, the Israeli Shekel and the Brazilian Real. The Group has lesser exposures to other currencies. The strengthening
of the US dollar against other currencies in which the Company operates reduces the dollar value of such sales and vice
versa.
On an annual basis, approximately 22% of the Group’s sales are to the European market and therefore the impact of long-
term trends on the Euro may affect the Company's results and profitability.
Analyses of currency exposure from foreign currency exchange rate fluctuations against assets, liabilities and cash flow
denominated in foreign currencies are done constantly. High volatility of the exchange rates of these currencies could
increase the costs of transactions to hedge against currency exposure, thereby increasing the Company's financing costs.
The Group uses commonly accepted financial instruments to hedge most of its substantial net balance sheet exposure to
any particular currency. Nonetheless, since as part of these operations the Group hedges against most of its balance sheet
exposure and only against part of its economic exposure, exchange rate volatility might impact the Group’s results and
profitability. As of the date of publication of this Report, the Group has hedged most of its balance sheet exposure.
In addition, as the Company’s product sales depend directly on the cyclical nature of the agricultural seasons, therefore
the Company’s income and its exposure to the various currencies is not evenly distributed over the year. Countries in the
northern hemisphere have similar agricultural seasons and therefore, in these countries, the highest sales are usually
during the first half of the calendar year. During this period, the Company is most exposed to the Euro. In the southern
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ADAMA Ltd. Annual Report 2022
hemisphere, the seasons are opposite and most of the local sales are carried out during the second half of the year. During
these months, most of the Company's exposure pertains to the Brazilian Real.
Exposure to Interest rate, Israel CPI and NIS exchange rate fluctuations
The debentures issued by Solutions, the material subsidiary of the Company, are Israeli Shekel based and linked to the
Israel Consumer Price Index “CPI” and therefore an increase in the CPI and an appreciation of the shekel rate against the
dollar might lead to a significant increase in its financing expenses. In addition, high volatility of the exchange rate of
USD/NIS and expectations of material changes in the inflation rate, may increase the costs of hedging transactions on
currency exposure, and as a result, may lead to a further increase in the company's financing costs. As of the date of
approval of the financial statements, Solutions hedged most of its exposure to these risks on an ongoing basis, through
CPI hedging and USD-ILS exchange rate hedging transactions.
In addition, inflation in several global markets has a cross effect on the business results of the Group, since on one hand,
it contributes to the Group's ability to increase the sale price of its products, but on the other hand, it may increase the
Group's production costs and operating expenses. As of the date of the Report, the Group is unable to isolate the influence
of inflation on its sale prices and its costs. The Group estimates that the cumulative cross influence of inflation does not
have a material effect on to its financial results.
Since December 31, 2021, the Group have had dollar denominated liabilities bearing variable London Interbank Offered
Rates (LIBOR) interest. As a result, the Group was exposed to changes in the US dollar LIBOR interest rate. The Group
prepares a quarterly summary of its exposure to changes in the relevant interest rate benchmarks (which replaced the
LIBOR interest rate) and periodically examines hedging the variable interest rate by converting it to a fixed rate. As part of
the global reform in interest rate benchmarks, the phasing out of LIBOR (the so-called LIBOR fallback) was scheduled for
the end of 2021. As of January 1, 2022 three global interest rate benchmarks has transitioned to alternative risk-free rates
while replacing the former benchmark LIBOR: SOFR (USD), ESTR (EUR) and SONIA (GBP). As of the date of publication
of this Report, the Group has not carried out hedging for such exposure, since US dollar interest rates have been relatively
stable.
In addition, the effect of interest changes on the debt that serves the Group’s working capital is seasonal. Such debt bears
a variable interest, but has no material effect on the Group’s financing expenses. As a result, the net increase in interest
rate does not have a material effect on the Group’s business.
Business operations in emerging markets
The Group conducts business - mainly product sales and raw material procurement – inter alia, in emerging markets such
as Latin America (particularly in Brazil, the largest market, country wise, in which the Group operates), Eastern Europe,
Southeast Asia and Africa. The Group's activity in emerging markets is exposed to risks typical of those markets, including:
political and regulatory instability; volatile exchange rates; economic and fiscal instability and frequent revisions of
economic legislation; relatively high inflation and interest rates; terrorism or war; restrictions on import and trade; differing
business cultures; uncertainty as to the ability to enforce contractual and intellectual property rights; foreign currency
controls; governmental price controls; restrictions on the withdrawal of money from the country; barter deals and potential
entry of international competitors and accelerated consolidations by large-scale competitors in these markets.
Developments in these regions may have a significant effect on the Group's operations. Distress to the economies of these
markets could impair the ability of the Group's customers to purchase its products or the ability to market them at
international market prices, as well as harm the Group's ability to collect customer debts, in a way that could have a
significant adverse effect on the Group's operating results.
The Group’s operations in multiple regions allows for the diversification of such risks and for the reduction of its dependency
on particular economies. In addition, changes in registration requirements or customers' preferences in developed western
countries, which may limit the use of raw materials purchased from emerging economies, may require redeployment of the
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ADAMA Ltd. Annual Report 2022
Group's procurement organization, which might negatively affect its profitability for a certain period.
Operating in a competitive market
The crop protection products industry is highly competitive. Currently, seven multinational companies, including the
Company, lead the global industry. Five of these, Bayer, Syngenta, Corteva, BASF and FMC, are Originator Companies,
which develop, manufacture and market both patent-protected as well as off-patent products. The Group competes with
the original products with the aim of maintaining and increasing its market share.
The Originator Companies possess resources enabling them to compete aggressively, in the short-to-medium term, on
price and profit margins, so as to protect their market share. Loss of market share or inability to acquire additional market
share from the Originator Companies can affect the Group's position in the market and adversely affect its financial results.
For details regarding the Group’s competitive advantages see section III - subsection III. Core competitiveness analysis
above.
Similarly, the Group also competes in the more decentralized off-patent segment of the market, against other off-patent
companies and smaller-scale Originator Companies, which have significantly grown in number in recent years and are
materially changing the face of the crop protection industry, the majority of whom have not yet deployed global distribution
networks, and are only active locally. These companies often price their products aggressively and at times have lower
profit margins than the Group, which may adversely impact the Group's sales and product prices. The Group's ability to
maintain its revenues and profitability from a specific product in the long term is affected by the number of companies
producing and selling comparable off-patent products and the timing of their entrance to the relevant market.
Any delay in developing or obtaining registrations for products and/or delayed penetration into markets and/or growth of
competitors that focus on off-patent active ingredients (whether by the expansion of their product portfolio, granting
registrations to other manufacturers (including manufacturers in China and India) to operate in additional markets,
transforming their distribution network to a global scale or increasing the competition for distribution access), and/or
difficulty in purchasing low cost raw materials, may harm the Group’s sales, affect its global position and lead to price
erosion.
Decline in scope of agricultural activities; Climate change and exceptional changes in weather conditions
The scope of general agricultural activities worldwide may be negatively affected by many exogenous factors, some
resulting from climate change, including but not limited to extreme weather conditions, natural disasters, a decrease in
agricultural commodity prices, government policies and the economic condition of farmers. A material decline in the scope
of agricultural activities would by necessary implication cause a decline in the demand for the Group’s products, erosion
of its prices and collection difficulties, which may have a significant adverse effect on the Group's results. Extreme weather
conditions, both chronic and acute, as well as other damages caused by nature may have an impact on the demand for
the Group's products, as well as to price thereof. For example, drought may reduce the need for fungicides, which could
result in fewer sales and greater unsold inventories in the market, whereas excessive rain could lead to increased plant
disease or weed growth requiring growers to purchase and use more crop protection products. Drought and/or increased
temperatures may change insect pest pressures, requiring growers to use more, less, or different insecticides. Climate
change may increase the frequency or intensity of extreme weather such as storms, floods, heat waves, droughts and
other events that could affect the demand for the Company’s products. The Group believes, that should extreme weather
conditions or a number of such bad seasons occur in succession, without favorable seasons in the interim, its results may
sustain significant harm.
Environmental, health and safety legislation, standards, regulation and exposure
Many aspects of the Group's operations are strictly regulated, including in relation to production and trading, and particularly
in relation to the storage, treatment, manufacturing, transport, usage and disposal of its products, their ingredients and
byproducts, some of which are considered hazardous. The Group's activities involve hazardous materials. Defective
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ADAMA Ltd. Annual Report 2022
storage or handling of hazardous materials may cause harm to human life or to the environment in which the Group
operates. The regulatory requirements regarding the environment, health and safety could, inter alia, include soil and
groundwater clean-up requirements; as well as restrictions on the volume and type of emissions the Group is permitted to
discharge into the air, water and soil.
The regulatory requirements applicable to the Group vary from product to product and from market to market, and tend to
become stricter with time. In recent years, both government authorities and environmental protection organizations have
been applying increasing pressure, including through investigations and indictments as well as increasingly stricter
legislative proposals and class action suits related to companies and products that may potentially pollute the environment.
Compliance with these legislative and regulatory requirements and protection against such legal actions requires the Group
to commit considerable human and financial resources (both in terms of substantial ongoing costs and in terms of material
one-time investments) to meet mandatory environmental standards. In some instances, this may result in delaying the
introduction of products into new markets or in adverse effects on the Group’s profitability. In addition, the toughening,
material alteration or revocation of environmental licenses or permits, or their stipulations, or the inability to obtain such
licenses and permits, may significantly affect the Group's ability to operate its production facilities, which in turn may have
a material adverse effect on the financial and business results of the Group. The Group may be required to bear significant
civil liabilities (including due to class actions) or criminal liabilities (including high penalties and/or high compensation
payments and/or costs of environmental monitoring and rehabilitation), resulting from violation of environmental, health
and safety regulations, while some of the existing legislation may impose “strict liability” regime on the Group, i.e. the Group
will be held liable, regardless of proof of negligence or malice.
While the Group invests material sums in adapting its facilities and in constructing special facilities in accordance with
environmental requirements, it is currently unable to assess with any certainty whether these investments (current and
future) and their outcomes may satisfy current or future requirements, should these be significantly increased or changed.
In addition, the Group is unable to predict with any certainty the extent of future costs and investments it may incur in order
to meet the requirements of the environmental authorities in the relevant countries in which it operates since, inter alia, the
Group is unable to estimate the extent of potential pollutions, their duration, the extent of the measures required to be
taken by the Group in handling them, the division of responsibility among other parties and the amounts recoverable from
third parties.
Furthermore, the Group may be the target of bodily injury claims and property damage claims caused by exposure to
hazardous materials, which are largely covered under the Group’s insurance policies.
Legislative, standard and regulatory changes in product registration
The majority of the substances and products marketed by the Group require registration at various stages of their
development, production, import, utilization and marketing, and are also subject to strict regulatory supervision by the
regulatory authorities in each country. Compliance with the regulatory requirements that vary from country to country and
which are becoming more stringent with time, involves significant time and costs, and rigorous compliance with individual
registration requirements for each product. Noncompliance with these regulatory requirements might materially adversely
affect the Group’s expenses, cost structure and profit margins, as well as penetration of its products in the relevant market,
and may even lead to suspension of sales of the relevant product, and recall of those products already sold, or to legal
action. Moreover, to the extent new regulatory requirements are imposed on existing registered products (requiring
additional investment or leading to the existing registration's revocation) and/or the Group is required to compensate
another company for its use of the latter's product registration data, these might amount to significant sums, considerably
increasing the Group's costs and adversely affecting its results and reputation. In recent years the industry has been
suffering from revocation of registration for many products around the world. This trend is particularly evident in European
countries as well as in many other countries worldwide.
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ADAMA Ltd. Annual Report 2022
Nevertheless, the Group believes that, in countries where the Group maintains a competitive edge, any toughening of
registration requirements may actually increase this edge, since this will make it difficult for its competitors to penetrate the
same market, whereas in countries in which the Group possesses a small market share, if any, such toughening may make
further penetration of the Group's products into that market more difficult.
Product liability
Product and producer liability are a risk for the Group. Regardless of their prospects or actual results, product liability
lawsuits might involve considerable costs as well as tarnish the Group's reputation, thus potentially impacting its profits.
The Group has a third-party and defective product liability insurance cover. However, there is no certainty that the scope
of insurance cover is sufficient. Any future product liability lawsuit or series of lawsuits could materially affect the Group’s
operations and results, should the Group lose the lawsuit or should its insurance cover not suffice or apply in a particular
instance. In addition, while the Group has not currently encountered any difficulty renewing such insurance policy, it is
possible that it will encounter future difficulties in renewing an insurance policy for third party liability and defective products
on terms acceptable to the Group.
Successful market penetration and product diversification
The Group’s growth and profit margins are affected, inter alia, by the extent of its success in developing differentiated
products and obtaining registrations for them, so as to enable it to gain market share at the expense of its competitors.
Usually, being the first to launch a certain off-patent product affords the Group continuing advantage, even after other
competitors penetrate the same market. As such, the Group's revenues and profit margins from a certain new off-patent
product could be materially affected by its ability to launch such product ahead of the launch of a comparable product by
its competitors.
Should new products fail to meet registration requirements in the different countries or should it take a long period of time
to obtain such registrations, the Group's ability to successfully introduce a new product to the relevant market in the future
may be affected, since entry into the market prior to other competitors is important for successful market penetration.
Furthermore, successful market penetration involves, inter alia, product diversification in order to suit each market's
changing needs. Therefore, if the Group fails to adapt its product mix by developing new products and obtaining the
required regulatory approvals, its future ability to penetrate that market and to maintain its existing market share could be
affected. Failure to introduce new products to given markets and meet Group objectives (given the considerable time and
resources invested in their development and registration) might affect the sales of the product in question in the relevant
market, the Group’s results and margins.
Intellectual property rights of the Group and of third parties
The Group's ability to develop off-patent products is dependent, inter alia, on its ability to oppose patents or patent
application of Originator Companies or other third parties, or to develop products that do not otherwise infringe intellectual
property rights in a manner that may involve significant legal and other costs. Originator Companies tend to vigorously
defend their products and may attempt to delay the launch of competing off-patent products by registering patents on
slightly different versions of products for which the original patent protection is about to expire or has expired, with the aim
of competing against the off-patent versions of the original product. The Originator Companies may also change the
branding and marketing of their products. Such actions may increase the Group's costs and the risk it entails, and harm or
even prevent its ability to launch new products.
The Group is also exposed to legal claims that its products or production processes infringe on third-party intellectual
property rights. Such claims may involve time, costs, substantial damages and management resources, impair the value
of the Group's brands and its sales and adversely affect its results. Such lawsuits that were concluded involved non-
material amounts.
Furthermore, although the Group protects its brands and trade secrets with patents, trademarks and other methods of
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ADAMA Ltd. Annual Report 2022
intellectual property protection, these protective means may not be sufficient for fully safeguarding its intellectual property.
Any unlawful or other unauthorized use of the Group's intellectual property rights could adversely affect the value of its
intellectual property and goodwill. In addition, the Group may be required to take legal actions involving financial costs and
resources to safeguard its intellectual property rights.
Fluctuations in raw material inputs and prices, and in sales costs
Significant percentage of the Groups’ cost of sales derives from raw material costs. Hence, significant increases or
decreases in raw material costs affect the cost of goods sold, and are, due to the length of the Company’s inventory cycle,
generally reflected in the Company’s financials. Most of the Group's raw materials are distant derivatives of oil prices and
therefore, extreme changes or decrease in oil prices may affect the costs of raw materials, although only partially.
To reduce exposure to fluctuations in the prices of raw materials, the Group customarily engages in long-term purchase
contracts for key raw materials, wherever possible. Similarly, the Group acts to adjust its sales prices, wherever possible,
to reflect the changes in the costs of raw materials.
As of the date of approval of the financial statements, the Group has not engaged in any hedging transactions against
increases in oil and other raw material costs.
Exposure due to recent developments in the genetically modified seeds market
Any significant development in the market of genetically modified seeds for agricultural crops, including as a result of
regulatory changes in certain countries currently prohibiting the use of genetically modified seeds, and/or any significant
increase in the sales of genetically modified seeds and/or to the extent new crop protection products are developed for
further crops that would be widely used (substituting traditional products), will affect demand for crop protection products,
requiring the Group to respond by adapting its product portfolio to the new demand structure. Consequently, to the extent
that the Group fails to adapt its product mix accordingly, this may reduce demand for its products, erode their sales price
and by implication affect the Group’s results and market share.
Nevertheless, the fact that the Group itself markets some of the products for which herbicide tolerance traits have been
developed, acts to mitigate this exposure (albeit only in terms of marketing margins).
In addition, natural and/or biological substances that attack weeds, pests and diseases are potential alternatives for the
Company’s products, though as of the date of the report, their efficiency is relatively limited, and they are commercialized
in a relatively small volumes.
Operational risks
The Group’s operations, including its manufacturing activities, rely, inter alia, on state-of-the-art computer systems. The
Group continually invests in upgrading and protecting these systems from malfunctions and attack. Any unexpected failure
of these systems, as well as the integration of new systems, could involve substantial costs and adversely affect the
Group's operations until completion of the repair or integration. The potential occurrence of a substantial failure that cannot
be repaired within a reasonable time frame may also affect the Group's operations and its results. Currently, the Group
has a property and loss-of-profit insurance policy.
The Group's production capacity is affected, among others, by its facilities’ output and individual area and time allocation
at full capacity. The Group's Multi-purpose facilities provide manufacturing flexibility and enable the Group to prepare for
the manufacturing of new products. Although the Group believes that its existing sites have sufficient facilities and land
areas to expand its production capacity, if necessary, in the case of immediate or short-term increases in demand for new
products supply may be delayed due to lack of capacity to meet demand for such new products.
Data protection and cyber security
During its activity, the Group may be exposed to risks and threats, related to the stability of its information technologies
systems, data protection and cyber security, which could appear in many different forms (such as service denial, misleading
employees, malfunction, encryption or data erasing and other cyber-attacks via E-mail or malicious software). An attack
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ADAMA Ltd. Annual Report 2022
on such computerized systems, mainly network based systems may cause the group material damages and expenses and
even partial suspension and disruption of their proper functioning. In order to minimize the abovementioned risks, the group
invests resources in its technological resilience and in proper protection of its systems.
Raw material supply and/or shipping, port service disruptions and inventory
Lack of raw materials or other inputs utilized in the manufacture of the Group’s products may prevent the Group from
supplying its products or significantly increase production costs. Moreover, the Group imports raw materials to its
production facilities worldwide, from where it then exports the technical or formulated products to its subsidiaries around
the world for formulation and/or commercialization purposes. Disruptions in the supply of raw materials from regular
suppliers may adversely affect operations until an alternative supplier is engaged. If any of the Group's suppliers are unable
to supply raw materials for a prolonged period, including due to ongoing disruptions and/or prolonged strikes and/or
infrastructure defects in the operating of a relevant port, and if the Group is unable to engage with an alternative supplier
at similar terms and in accordance with the relevant product registration requirements, this may adversely affect the Group's
results, significantly affect its ability to obtain raw materials in general, or obtain them at reasonable prices, as well as limit
its ability to supply products and/or meet customer supply deadlines. These might negatively affect the Group, its finances
and operating results. In order to reduce this risk, it is the Group's practice to occasionally adjust the volume of its product
inventories or in certain scenarios, to increase the levels of inventory held by the Company to overcome possible supply
shortages, logistic challenges and increases in cost of inventory, as mentioned above, in order to support expected future
sales. Additionally, in the case of fluctuations in the market prices for inventory held by the Company, this may affect its
finances and operating results.
Failed mergers and acquisitions; difficulties in integrating acquired operations
The Group's strategy includes growth through mergers, acquisitions, investments and collaborations designed to expand
its product portfolio and deepen its presence in certain geographical markets.
Growth through mergers and acquisitions requires assimilation of acquired operations and their effective integration in the
Group, including realization of certain forecasts, profitability, market conditions and competition.
Failure to successfully implement the above and/or non-realization of the relevant forecasts may result in not achieving the
incremental value forecasted, loss of customers, exposure to unexpected liabilities, reduced value of the intangible assets
included in the merger or acquisition as well as the loss of professional and skilled human resources.
Production concentration in limited plants
A large portion of the Group’s production operations is concentrated in a relatively small number of locations. Natural
disasters, hostilities, labor disputes, substantial operational malfunction or any other material damage might significantly
affect Group operations, as a result of the difficulty, the time and investment required for relocating the production operation
or any other activity.
International taxation
Most of the Group’s sales are global, through its consolidated subsidiaries worldwide. These individual companies are
assessed in accordance with the tax laws effective in each respective location. The Group’s effective tax rate could be
significantly affected by different classification or attribution of the profits arising from the proportional value of the
components of each of the companies in the Group in the various countries, as is recognized in each tax jurisdiction;
changes in the characteristics (including regarding the location of control and management) of these companies; changes
in the breakdown of the Group's profits into regions where differing tax rates apply; changes in statutory tax rates and other
legislative changes; changes in assessment of the Group's deferred tax assets or deferred tax liabilities; changes in
determining the areas in which the Group is taxed; and potential changes in the Group's organizational structure.
Changes in tax regulations and the manner of their implementation, including with regard to the implementation of BEPS,
may lead to a substantial increase in the Group's applicable tax rates and have a material adverse effect on its financial
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ADAMA Ltd. Annual Report 2022
position, results and cash flows.
The Group’s Financial Statements do not include a material provision for exposure for international taxation, as stated
above.
Risks arising from the Group’s debt
The Group finances its business operations by means of its own equity and loans from external sources (primarily traded
debentures issued by Solutions and bank credit). The Group's main source for servicing the debt and its operating
expenses is by means of the profits from the Group companies’ operations. Restrictions applying to the Group companies
regarding distribution of dividends to the Group, or the tax rate applicable on these dividends, may affect the Group's ability
to finance its operations and service its debt.
In addition, the Group's Finance Documents, as contained in the bank credit agreements, require meeting certain Financial
Covenants. Failure to meet these covenants due to an exogenous event or non-materialization of Group forecasts, and
insofar as the financing parties refuse to extend or update these Financial Covenants as per the Group’s capabilities, may
lead the financing parties to demand the immediate payment of these liabilities (or part thereof).
Exposure to customer credit risks
The Group’s sales to customers worldwide usually involve customer credit as is customary in each market. A portion of
these credit lines is insured, while the remainder are exposed to risk, particularly during economic slowdowns in the
relevant markets. The Group’s aggregate credit, however, is diversified among many customers in dozens of countries,
mitigating this risk. In addition, in certain regions, particularly in South America, credit days are particularly long (compared
to those extended to customers in regions such as Europe), and on occasion, inter alia, owing to agricultural seasons or
economic downturns in those countries, the Group may encounter difficulty in timely collection of customer debts, with the
collection period being extended over several years.
Generally, such issues arise more often in developing countries where the Group may be less familiar with its customers,
the collaterals might be in double until actual repayment and the insurance cover of these customers is likely to be limited.
Credit default by any of the customers may negatively impact the Group's cash flow and financial results.
The Group’s working capital and cash flow needs
Similar to other companies operating in the crop protection industry, the Group has substantial cash flow and working
capital requirements in the ordinary course of operations. In view of the Group's growth and considering its primary growth
regions, the Group’s broad product portfolio and the Group’s investments in manufacturing infrastructures, the Group has
significant financing and investment needs. The Group acts continually to improve the state and management of its working
capital. While currently the Group is in compliance with all its financial covenants, significant deterioration of its operating
results may in the future lead the Group to fail to comply with its financial covenants and fail to meet its financial needs. As
a result, the Group's ability to meet its goals and growth plans, as well as its ability to meet its financial obligations, may
be harmed.
Contagious disease outbreak
Outbreak of a contagious disease and pandemics, or other adverse public health developments, in territories where
significant production activity is taking place or from which raw materials are supplied to a significant extent, may have a
material adverse effect on the Company’s activity, such that the Company may encounter difficulties with procurement of
raw materials and intermediates, experience a certain decrease of activity within its production facilities due to
governmental instructions, and be constrained with respect to its logistics and supply lines. In addition, the Company sales
could be potentially impacted by a temporary decrease in demand for its products, as well as by temporary disruption of
the Company’s ability to sell and distribute products as mentioned above.
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XII. Information regarding communication with investors during the Reporting Period
√ Applicable □ Not applicable
Reception Type of
Date Place Name of the visitor About Index
mode visitor
March Not Phone Call Others CICC, TF Securities, Introduction on 2022
30th, Applicable (Sell-side Everbright Securities, Q4 and FY Record of the
2022 analysts) West Securities, CITIC performance. The Communications
Securities, Haitong corresponding between the
Securities, BOC presentation was Company and the
International Securities, published on the Investors (No.
Guolian Securities, website of the 2022-01) was
Founders Securities, Company(the published by the
Dongxing Securities, Investors’ Relations Company on April
Sealand Securities, Section on 1st, 2022 at
Soochow Securities, www.adamaltd.com.cn) www.cninfo.com.cn.
Northwest Securities, etc. .
March Not Webcasting Institutional Institutional and individual Introduction on 2022 Record of the
31st, Applicable and investors Q4 and FY Communications
2022 individual performance. The between the
investors corresponding Company and the
presentation was Investors (No.
published on the 2022-02) was
website of the published by the
Company (the Company on April
Investors’ Relations 6th, 2022 at
Section on www.cninfo.com.cn.
www.adamaltd.com.cn)
April 28th, Not Phone Call Others CICC, TF Securities, Introduction on 2022 Record of the
2022 Applicable (Sell-side Everbright Securities, Q1 performance. The Communications
analysts) CITIC Securities, Haitong corresponding between the
Securities, North East presentation was Company and the
Securities, Orient published on the Investors (No.
Securities, China website of the 2022-03) was
Securities, Industries Company (the published by the
Securities, Huatai Investors’ Relations Company on May
Securities, SWHY Section on 5th, 2022 at
Securities, and Guolian www.adamaltd.com.cn) www.cninfo.com.cn.
Securities, etc.
August Not Phone Call Others CICC, TF Securities, Introduction on 2022 Record of the
30th, Applicable (Sell-side Everbright Securities, Q2 and Half-year Communications
2022 analysts) CITIC Securities, Haitong performance. between the
Securities, China Corresponding Company and the
Securities, Industries presentation was Investors (No.
Securities, SWHY published on the 2022-04) was
Securities, Dongxing website of the published by the
Securities, Zhongtai Company (the Company on
Securities, BOC Investors’ Relations September 1st,
International Securities, Section on 2022 at
GF Securities, and www.adamaltd.com.cn) www.cninfo.com.cn.
Guosheng Securities, etc.
August Not Webcasting Institutional Institutional and individual Introduction on 2022 Record of the
31st, Applicable and investors Q2 and Half-year Communications
2022 individual performance. between the
52
ADAMA Ltd. Annual Report 2022
Reception Type of
Date Place Name of the visitor About Index
mode visitor
investors Corresponding Company and the
presentation was Investors (No.
published on the 2022-05) was
website of the published by the
Company (the Company on
Investors’ Relations September 2nd,
Section on 2022 at
www.adamaltd.com.cn) www.cninfo.com.cn.
October Not Phone Call Others CICC, TF Securities, Introduction on 2022 Record of the
27th, Applicable (Sell-side Everbright Securities, Q3 and 9M Communications
2022 analysts) CITIC Securities, China performance. between the
Securities, Industries Corresponding Company and the
Securities, Dongxing presentation was Investors (No.
Securities, Huatai published on the 2022-06) was
Securities, BOC website of the published by the
International Securities, Company (the Company on
North East Securities, Investors’ Relations October 31st, 2022
Orient Securities, HSBC Section on at
Qianhai Securities and www.adamaltd.com.cn) www.cninfo.com.cn.
Guosen Securities, etc.
October Not Webcasting Institutional Institutional and individual Introduction on 2022 Record of the
28th, Applicable and investors Q3 and 9M Communications
2022 individual performance. between the
investors Corresponding Company and the
presentation was Investors (No.
published on the 2022-07) was
website of the published by the
Company (the Company on
Investors’ Relations November 1st,
Section on 2022 at
www.adamaltd.com.cn. www.cninfo.com.cn.
53
ADAMA Ltd. Annual Report 2022
Section IV - Corporate Governance
I. Basic details of corporate governance
During the Reporting Period, the Company continuously improved the awareness of corporate governance and corporate
governance structure and perfected the corporate system as well as standardized the operation of the Company, promoted
internal control activities, and constantly improve the Company's management levels stringently according to requirements
of relevant laws and regulations, such as the Company Law, Securities Law, and Corporate Governance Principle of Listed
Company, as well as Rules for Listing Shares in Shenzhen Stock Exchange.
1. About Shareholders and the Shareholders’ meeting
During the Reporting Period, the Company has ensured that all shareholders, especially small and medium shareholders,
are treated equal and able to fully exercise their rights. It held one annual general meeting of shareholders and one interim
shareholders meeting, during which 10 proposals in total were reviewed and approved. Lawyers were invited to attend all
the meetings mentioned above for testimony and issuing legal opinions. Online voting has been applied during all above-
mentioned meetings to ensure that all shareholders, especially small and medium shareholders, enjoy equal status and
fully exercise their rights. Notices of shareholders' meeting, meeting proposals, discussion procedures, voting on proposals
and information disclosure all meet the requirements. Every major decision of the Company has been decided by the
shareholders' meeting according to laws and regulations with lawyers as the witness to ensure that the right to know, to
participate and vote on major issues of all shareholders, especially the small and medium shareholders are properly
protected.
2. About Directors and the Board of Directors
During the Reporting Period, the number, composition and qualifications of the board of directors were in compliance with
the laws and regulations as well as the Articles of Association of the Company. All board members are diligent and
responsible for attending the board and shareholders’ meetings in accordance with the relevant provisions of the Company
Law and the Articles of Association. During the Reporting Period, the Company held 10 board meetings during which 27
proposals were reviewed. The organizing, convening and formation of resolutions were carried out in accordance with
relevant provisions of the Articles of Association and the Rules of Procedure for the Board of Directors. The Company has
established an independent director system in accordance with relevant regulations. Each of the independent directors
have expressed independent opinions on important business of the Company during the Reporting Period. The Company's
board of directors consists of one strategy committee, one nomination committee, one audit committee and one
remuneration and appraisal committee, all of which are functioning with respective implementation rules to ensure the
scientific and compliant decision-making by the board of directors.
3. About Supervisors and the Board of Supervisors
During the Reporting Period, the board of supervisors of the Company consisted of three supervisors. The number,
composition and qualifications of the Board of Supervisors were in compliance with laws and regulations as well as the
Articles of Association of the Company. During the Reporting Period, four meetings were held and 10 proposals were
reviewed. All meetings were organized and convened in accordance with the procedures of the Articles of Association and
the Rules of Procedure for the Board of Supervisors. All supervisors have earnestly performed their duties by reviewing
the company's periodic reports and other matters and issuing verification opinions with a strong sense of responsibilities
to the shareholders. All of them have effectively fulfilled their duties and safeguarded the legitimate rights and interests of
the Company and its shareholders.
4. About Investors’ Relations
54
ADAMA Ltd. Annual Report 2022
The Company communicates with investors through public announcements, consultations by telephone, interactive
platforms, e-mails and other multiple media to enhance opinion exchange. It has been making various efforts on deepening
the understanding of investors about the Company's operation and development outlook and also maintaining good
relations with them. Meanwhile, it has been serious to receive investors' opinions and suggestions and encouraged the
interaction between investors and itself. During the Reporting Period, the Company has been patient to respond investors
by answering calls and questions through all interactive platforms, which has guaranteed a sound and fair access for
investors to obtain information.
Whether there is any difference between the actual corporate governance situation of the Company and the provisions of
the laws, administrative regulations and relevant rules of CSRC or not?
□ Yes √ No
There is no difference between the actual corporate governance situation of the Company and the provisions of the relevant
rules of CSRC.
II. Particulars about the Company’s independence from the controlling shareholder
and the actual controller in ensuring the company’s assets, personnel, financials,
institutions and business, etc.
1. In respect of assets: The assets relationship between the Company and the controlling shareholder is clear. The
company has complete control over all its assets. There is no such thing as a free possession or usage by the controlling
shareholder.
2. In respect of personnel: The Company and controlling shareholder are mutually independent in the labor, personnel and
salary management, the Company CEO and other senior management personnel get the salary in the Company, and not
perform administrative work in the controlling shareholder unit.
3. In respect of financing, the Company owned independent financial department, established independent accounting
system and financial management system, opened independent bank account, paid tax in line with laws.
4. In respect of organization, the Company has set up the organization that was independent from the controlling
shareholder completely, the Board of Directors, the Supervisory Committee and internal organization could operate
independently.
5. In respect of business: the Company had a complete business system and independent operation, and conducts its
independent and complete business with self-management ability.
55
ADAMA Ltd. Annual Report 2022
III. Horizontal competition
√ Applicable □ Not applicable
Type Type of Name of Nature of the Cause of the Solutions Work-
Affiliation the Company problem schedule
with the Company and follow-
Company up plan
Horizontal ultimate Sinochem Central The Sinochem Holdings In process/
competition controlling Holdings enterprise subsidiaries commits itself to take performance
and related party of Corporation controlled by appropriate actions to .
party the Ltd. Sinochem solve the horizontal
transaction Company’ Holdings are competition and related
s s in similar or party transactions
controlling the same between its subsidiaries
sharehold business as and the Company. For
er the Company details, please refer to I
or the Performance of
supplier or commitments of Section
the client of VI of the Annual Report.
the Company.
IV. Particulars regarding the annual shareholders’ general meeting and special
shareholders’ general meetings held during the Reporting Period
1. Particulars regarding the shareholders’ general meeting during Reporting Period
Proportion of
Disclosure
Session Type investors' Convening date Resolution
date
participation
Announcement on the
Resolutions of 1st Interim
1st Interim Interim Shareholders Meeting in 2022
January 10, January 11,
Shareholders Shareholders 1.66% (Announcement Number:
2022 2022
Meeting in 2022 Meeting 2022-3).
Disclosed at the website
CNINFO www.cninfo.com.cn
Announcement on the
Resolutions of 2021 Annual
2021 Annual Annual General Meeting
Shareholders Shareholders 82.06% April 21, 2022 April 22, 2022 (Announcement Number:
Meeting Meeting 2022-17).
Disclosed at the website
CNINFO www.cninfo.com.cn
2. Special Shareholders’ General Meeting applied by the preferred stockholder with restitution of
voting right
□ Applicable √ Not applicable
56
ADAMA Ltd. Annual Report 2022
V. Directors, Members of the Supervisory Board, Senior Management Staff &
Employees
1. Basic Information
57
ADAMA Ltd. Annual Report 2022
Amount of
Shares held
Shares shares Amount of Other
Ending at the end of Reasons for
Beginning held at the increased at shares changes
Office date of the the
Name Position Gender Age date of year- the decreased at increase/
Status office Reporting Shareholding
office term begin Reporting the Reporting decrease
term Period Changes
(share) Period Period (share) (share)
(share)
(share)
Chairman N/A
Erik Fyrwald In Office Male 64 April 9, 2020 0 0 0 0 0
of the BOD
Chen Sep 29, N/A
Director In Office Male 55 0 0 0 0 0
Lichtenstein 2017
An Liru Director In Office Male 53 Apr 29, 2015 0 0 0 0 0 N/A
Independent Dec 25, N/A
Xi Zhen In Office Male 59 0 0 0 0 0
Director 2017
Independent Nov 16, N/A
Ge Ming In Office Male 71 0 0 0 0 0
Director 2020
Ignacio President & March 1, N/A
In Office Male 63 0 0 0 0 0
Dominguez CEO 2020
Chief Financial Feb 16, N/A
Efrat Nagar In Office Female 49 0 0 0 0 0
Officer 2023
Chairman of N/A
Jiang the
In Office Male 48 Jan 6, 2013 6,000 0 0 0 6,000
Chenggang Supervisory
Board
Member of the N/A
May 21,
Liu Jianhua Supervisory In Office Male 44 0 0 0 0 0
2021
Board
Member of the May 21, N/A
Yuan Yuan In Office Male 42 0 0 0 0 0
Supervisory 2021
58
ADAMA Ltd. Annual Report 2022
Amount of
Shares held
Shares shares Amount of Other
Ending at the end of Reasons for
Beginning held at the increased at shares changes
Office date of the the
Name Position Gender Age date of year- the decreased at increase/
Status office Reporting Shareholding
office term begin Reporting the Reporting decrease
term Period Changes
(share) Period Period (share) (share)
(share)
(share)
Board
Secretary of Nov 27, N/A
Guo Zhi In Office Male 45 0 0 0 0 0
the BOD 2020
Shahar Chief Financial Feb 15, N/A
Demission Male 58 May 1, 2022 0 0 0 0 0
Florentz Officer 2023
Michal General Legal Sep 29, Jan 1, N/A
Demission Female 64 0 0 0 0 0
Arlosoroff Counsel 2017 2023
Total -- -- -- -- -- 6,000 0 0 0 6,000 --
59
ADAMA Ltd. Annual Report 2022
VI. Whether there was any departure of directors and supervisors and dismissal of
senior management during the reporting period
√ Yes □ No
1. Ms. Michal Arlosoroff resigned as the General Legal Counsel of the Company, effective from January 1st, 2023, due to
retirement.
2. On February 15, 2023, the Board received notice from Mr. Shahar Florentz informing the Company of his resignation as
the Chief Financial Officer (“CFO”) due to personal reasons. Mr. Shahar Florentz’s resignation came into effect upon the
receiving of the above notice by the Board. Following his resignation, Mr. Shahar Florentz ceased to hold any position in
the Company and its wholly-owned subsidiary, ADAMA Solutions. For details, please refer to the Announcement on the
Change of the Chief Financial Officer (Announcement No. 2023-5).
VII. Particulars regarding changes of Directors, Supervisors and Senior Executives
√ Applicable □ Not applicable
Name Position Type Date Reason
Shahar
Chief Financial Officer Left the position Feb 15, 2023 Resignation for personal reasons
Florentz
Michal
General Legal Counsel Left the position Jan 1, 2023 Retirement
Arlosoroff
Efrat Nagar Chief Financial Officer Accepted the position Feb 16, 2023 --
2. Resumes of important personnel
Professional background, main working experience and main responsibilities of current directors, supervisors and senior
management staff
Mr. Erik Fyrwald, American, serves as the Chairman of the Board of Directors of the Company. He is currently the CEO
of Syngenta Group, CEO and Executive Director of Syngenta A.G. and Chairman of Syngenta Foundation for Sustainable
Agriculture. He currently also serves on the board of directors of CropLife International, the Swiss-American Chamber of
Commerce and the listed entities Bunge Limited and Eli Lilly & Company. Previously served as President and CEO of
Univar, a leading distributor of chemistry and related services, President of Ecolab, a cleaning and sanitation, water
treatment, and oil and gas products and services provider, and Chairman, President and CEO of Nalco, a water treatment
and oil and gas products and services company, and Group Vice President of the Agriculture and Nutrition Division of the
DuPont Company. He graduated from the University of Delaware with a bachelor's degree in Chemical Engineering and
completed the Advanced Management Program at Harvard Business School.
Mr. Chen Lichtenstein, Israeli, serves as a Director of the Company and its wholly-owned subsidiary, Adama Solutions,
CFO of the Syngenta Group (with responsibility also for Strategy, Integration and Productivity), and its wholly-owned
subsidiary - Syngenta AG and a member of the Board of directors of the Israeli Democracy Institute, and Member of the
Board of Trustees of Tel Aviv University. He holds joint doctoral degrees from Stanford University's Graduate School of
60
ADAMA Ltd. Annual Report 2022
Business and School of Law, and B.Sc. (Physics) and LL.B. from the Hebrew University of Jerusalem. He previously served
as the President & CEO of the Company and its wholly-owned subsidiary, Adama Solutions, after holding several executive
positions in the Company (Deputy CEO, running global operations and heading corporate development and capital market
activities) and serving as the President & CEO of China National Agrochemical Corporation (CNAC), Syngenta Group’s
parent.
Mr. An Liru, serves as a Director of the Company. He holds a master degree of chemical engineering and MBA, senior
engineering, senior economist. He used to be the Assistant of General Manager, Vice General Manager, General Manager,
Deputy Party Secretary of Jiangsu Anpon Electrochemical Co., Ltd., Chairman of Directors, Party Secretary of Jiangsu
Huaihe Chemicals Co., Ltd., Executive Director and CEO of Jiangsu Maidao Agrochemical Co., Ltd., the Chairman of the
Board of Directors of the Company, Executive Director of Jiangsu Anpon Electrochemical Co., Ltd., Chairman of Directors
and Party Secretary of China National Agrochemical Co., Ltd. Currently, he serves also as a Director and the Senior Vice
President of Solutions, Executive Director and General Manager of Adama (China) Investment Co., Ltd., Vice president of
Syngenta Group Modern Agricultural Technology Co., Ltd.
Mr. Ge Ming, serves as an independent director of the Company. He holds a master’s degree in western accounting, and
he is a senior accountant, a certified Chinese public accountant as well as an Australian certified public accountant. He
previously served as the chairman and chief accountant of Ernst & Young Hua Ming Certified Public Accountants Firm, and
as the managing partner, chief accountant and senior advisor of Ernst & Young Hua Ming Certified Public Accountants
(special general partnership). Mr. Ge currently serves as an independent director on the boards of AsiaInfo and China
Tourism Group Duty Free Corporation Limited. He currently also serves on the supervisory boards of the Bank of Shanghai,
Tencent Foundation, and serves as the executive director and general manager of Beijing Huaming Fulong Accounting
Consulting Co., Ltd.
Mr. Xi Zhen, serves as an independent director of the Company. He holds a professor degree and a doctor of Bioorganic
Chemistry degree. Mr. Xi was Assistant Professor in Hubei Medical School which is currently the Wuhan University School
of Medicine from 1983 to 1985, was Engineer in Beijing Institute of Chemical Reagents from 1988 to 1990, was a Research
Associate in Department of Biological Chemistry and Molecular Pharmacology of Harvard Medical School from 1997 to
2001. Mr. Xi is currently Cheung Kong Scholar of Pesticide Science of the Ministry of Education of the PRC, Chairman of
Department of Chemical Biology, Professor of Chemistry and Chemical Biology, Fellow of the University Committee of
Nankai University in China, and Director of National Pesticide Engineering Research Center (Tianjin). Mr. Xi is also a
Committee Member of Chinese Chemical Society and Deputy Director of its Division of Chemical Biology, Deputy Director
of the Pesticide Science Division of Chinese Chemical Industry and Engineering Society. In addition, he is a director of
Suzhou Ribo Life Science Co., Ltd.
Mr. Ignacio Dominguez, Spanish, serves as the President & Chief Executive Officer of both the Company and Adama
Solutions, concurrent with his position as Chairman of the Board of Directors of Adama Solutions. He was the CCO of
Solutions and has been with Solutions for more than a decade. Prior to joining Solutions, Ignacio held various management
positions in companies such as Syngenta and American Cyanamid, boasting more than 20 years of experience in the
agrochemical industry. He holds a master's degree in physics from Complutense University of Madrid.
Ms. Efrat Nagar, Israeli, serves as the Chief Financial Officer. She holds master’s degree in business administration (focus
in Finance) from Bar Ilan University, Israel and bachelor's degree in Economics and Accounting from Bar Ilan University,
Israel. She previously served as Regional CFO of India, Middle East and Africa, Executive Corporate Business Director
61
ADAMA Ltd. Annual Report 2022
(serving as the Chief of Staff for ADAMA’s CEO) and VP Finance in ADAMA.
Mr. Jiang Chenggang, serves as the Chairman of the Supervisory Board of the Company. He served as a Deputy Director
of the Office and Deputy Secretaries of the Discipline Inspection Commission of the Company; acted as the Chairman of
the Labor Union, Supervisor, Deputy Director of the Office and Deputy Secretaries of the Discipline Inspection Commission
of the Company from Jun. 2012 to Dec. 2012; has been acting as the Deputy Party Committee Secretary of Jingzhou
Sanonda Holdings Co., Ltd. and Secretary of the Discipline Inspection Commission of the company since January 2017;
and he has been the Chairman of the Labor Union, Supervisor and Secretaries of the Discipline Inspection Commission of
the Company since Jan. 2013.
Mr. Liu Jianhua, Doctor of Engineering, serves as a member of the Supervisory Board of the Company and as the Non
Ag Business Manager of ADAMA China. He previously served as the GM Assistant of Hubei Sanonda Co. Ltd., as the
COO of Jiangsu Anpon Electrochemical Co., Ltd., and as the member of CPC Committee of China National Agrochemical
Corporation.
Ms. Yuan Yuan, serves as a member of the Supervisory Board of the Company and as Strategy & Business Manager of
ADAMA China. She obtained a bachelor’s degree of international trade from Zhongnan University of Economics and Law
and a master degree of business administration from University of International Business and Economics. Before joining
ADAMA，she served as Deputy and Executing Director of Commerce Dept. in China National Agrochemical Corporation.
Mr. Guo Zhi, serves as the secretary of the Board of Directors and the legal head of ADAMA China. Mr. Guo got his
Master of Laws severally from Peking University and Melbourne University. From 2004 to 2017, he practiced law in
Commerce & Finance Law Offices (“C&F”) and had been a partner of C&F for eight years. His practicing area covers
IPO, M&A, and Foreign Investment. From March 19, 2018 to November 16, 2020, he was a member of the Supervisory
Board of the Company.
Positions in shareholder units
√ Applicable □ Not applicable
Name of the
person Receives
holding any Name of the Position in the Beginning date Ending date payment from
post in any shareholder unit shareholder unit of office term of office term the shareholder
shareholder unit?
unit
Syngenta Group CEO January 2020 -- No
Erik
CEO and Executive
Fyrwald Syngenta AG June 2016 -- Yes
Director
Chen Syngenta Group CFO March, 2020 -- Yes
Lichtenstein Syngenta AG CFO March, 2020 -- Yes
Explanations
about
Positions in N/A
Shareholder
Units
62
ADAMA Ltd. Annual Report 2022
Positions in other units
√ Applicable □ Not applicable
Name of the
person
Beginning Receives
holding any Position in other Ending date
Name of other unit date of office payment from
post in any unit of office term
term the other unit?
shareholder
unit
Director of the No
CropLife International -
Board 2016
Swiss-American Chamber of Director of the 2016 No
-
Commerce Board
Erik Fyrwald
Director of the 2018 Yes
Bunge Limited -
Board
Director of the 2005 Yes
Eli Lilly & Co. -
Board
Chen Yes (as of
Solutions Director October 2017 -
Lichtenstein March 1, 2020)
Chen Director of the
The Israeli democracy institute - No
Lichtenstein Board
Chen Member of the
Friends of Tel Aviv University - No
Lichtenstein Board of Trustees
An Liru Solutions Director February 2014 - Yes
Head of China September
An Liru Solutions - Yes
Cluster 2017
Adama (China) Investment Co.,
An Liru General Manager November 2018 - No
Ltd.
Adama (China) Investment Co.,
An Liru Executive Director December 2022 - No
Ltd.
Adama (China) Investment Co., December
An Liru Director November 2018 No
Ltd. 2022
Adama (Beijing) Agricultural Chairman of September
An Liru November 2018 No
Technology Co., Ltd. Directors 2022
Adama Agrochemical (Jiangsu) Chairman of September
An Liru June 2017 No
Co., Ltd. Directors 2022
Syngenta Group Modern
An Liru Vice President August 2022 - No
Agricultural Technology Co., Ltd.
EVP, Chief -
Solutions February 2023 Yes
Financial Officer
Efrat Nagar
Agan Aroma and Fine Chemicals -
Director May 2022 No
Ltd.
China Tourism Group Duty Free Independent
Ge Ming August 2022 -- Yes
Corporation Limited Director
Independent
Ge Ming AsiaInfo December 2018 -- Yes
Director
Ge Ming Bank of Shanghai Supervisor June 2017 -- Yes
December
Ge Ming Bank of Suzhou Supervisor July 2017 Yes
2022
Ge Ming Tencent Foundation Supervisor Jan 2019 -- No
Executive Director
Beijing Huaming Fulong
Ge Ming and General December 2001 -- No
Accounting Consulting Co., Ltd.
Manager
Professor, -
Xi Zhen Nankai University August 2002 Yes
Chairman of
63
ADAMA Ltd. Annual Report 2022
Name of the
person
Beginning Receives
holding any Position in other Ending date
Name of other unit date of office payment from
post in any unit of office term
term the other unit?
shareholder
unit
Department of
Chemical Biology,
Fellow of the
University
Committee
National Agrochemical -
Xi Zhen Engineering Research Center Director May 2014 No
(Tianjin)
Division of Chemical Biology of -
Xi Zhen Deputy Director January 2015 No
Chinese Chemical Society
Agrochemical Science Division -
Xi Zhen of Chinese Chemical Industry Deputy Director November 2014 No
and Engineering Society
Suzhou Ribo Life Science Co., -
Xi Zhen Director January 2007 No
Ltd.
Deputy Party -
Secretary,
Jiang Jingzhou Sanonda Holdings Co., Secretary of the
January 2017 No
Chenggang Ltd. Discipline
Inspection
Commission
Hubei Sanonda Foreign Trade -
Liu Jianhua Executive Director June 2021 No
Co., Ltd.
Jiangsu Anpon International -
Liu Jianhua Executive Director April 2021 No
Trading Co., Ltd.
Explanations
about
N/A
Positions in
Other Units
Particulars regarding the Company's current directors, supervisors and senior managers who received punishments, if any,
from Securities Regulatory Institution during the recent three years (including the Reporting Period)
□ Applicable √ Not applicable
3.Remuneration of directors, supervisors and senior management
Decision-making procedures, basis for determination and actual payment of the remuneration to directors,
supervisors and senior executives
Remuneration of office holders is decided by the authorized organs of the Company according to the Remuneration Policy.
In addition, global professional benchmarks, implementations of performance at the Company level, and the actual
performance of the respective person are also taken into account in the resolutions regarding remuneration.
Independent directors are entitled to receive annual allowance and would not receive salary by the Company. The
Company also adopted a remuneration plan of the non-independent directors. A non-independent director who holds a
management position in the Company and/or any of its subsidiaries, shall receive the remuneration set for such position
64
ADAMA Ltd. Annual Report 2022
and will not be entitled to any additional remuneration for serving as a director; A non-independent director who doesn’t
hold a management position in the Company or any of its subsidiaries, may receive a monthly remuneration. For details,
please see the Announcement of the Resolutions of 25th meeting of the 7th Session of the Board of Directors
(Announcement no. 2018-5) and the Announcement of the Resolutions of 21st meeting of the 8th Session of the Board of
Directors (Announcement no. 2020-7).
Internal supervisors, who are full-time employees of the Company (or any of its subsidiaries), will be entitled to receive a
remuneration set for their posts and will not be entitled to any additional remuneration for serving as supervisors.
External supervisors, who are not employees of the Company (or any of its subsidiaries), will be entitled to receive annual
allowance and would not receive salary by the Company.
For details, please see the Announcement of the Resolutions of 4th meeting of the 8th Session of the Board of Supervisors
(Announcement no. 2018-25).
Total remuneration of the directors, supervisors and senior management of the Company during the Reporting Period is
as follow:
Unit RMB’0000
Total before- Whether gained
tax remuneration
Name Position Gender Age Current/Former remuneration from the related
gained from parties of the
the Company Company
Erik Fyrwald Chairman of the BOD Male 64 Current Yes
Chen
Director Male 55 Current Yes
Lichtenstein
An Liru Director Male 53 Current No
Ge Ming Independent Director Male 71 Current No
Xi Zhen Independent Director Male 59 Current No
Ignacio
President & CEO Male 63 Current No
Dominguez
Jiang Chairman of the
Male 48 Current No
Chenggang Supervisory Board
Member of the
Liu Jianhua Male 44 Current No
Supervisory Board
Member of the
Yuan Yuan Female 42 Current No
Supervisory Board
Guo Zhi Secretary of the BOD Male 45 Current No
Shahar
Chief Financial Officer Male 58 Former No
Florentz
Michal
General Legal Counsel Female 64 Former No
Arlosoroff
Total 11,806
65
ADAMA Ltd. Annual Report 2022
VIII. Performance of Directors of the Board during the Reporting Period
1. Particulars regarding the Board meeting during Reporting Period
Session Convening date Disclosure date Resolutions of the Meeting
the 8th Meeting of
the 9th Session of The Board discussed the 2021 annual report and related
March 23, 2022 --
the Board of matters. No resolution was made.
Directors
The following resolutions were deliberated and adopted:
1. Proposal on the 2021 Annual Report and its Abstract
2. Proposal on the 2021 Financial Statements
3. Proposal on the Pre-Plan of the 2021 Dividend Distribution
4. Proposal on the Self-Assessment report on the 2021 Internal
Control of the Company
5. Proposal on the 2021 Working Report of the Board of
Directors
6. Proposal on the 2021 Risk Appraisal Report of ChemChina
Finance Co., Ltd. and the 2021 Risk Appraisal Report of
Sinochem Finance Co., Ltd.
7. Proposal on the Remuneration of Senior Executives
8. Proposal on the Engagement with an Audit Firm for the Audit
of the Financial Statements and Internal Control of the
Company for 2022
the 9th Meeting of 9. Proposal on Bank Loans for the Working Capital of Jingzhou
the 9th Session of Site
March 29, 2022 March 31, 2022
the Board of 10. Proposal on Providing Guarantees in Favor of the
Directors Company’s Subsidiaries
11. Proposal on the Expected Related Party Transactions in the
Ordinary Course of Business in 2022
12. Proposal on the Special Report on the Deposit and Actual
Use of the Raised Funds in 2021
13. Proposal on Calling for the 2021 Annual General Meeting
14. Proposal on Revisions to the Information Disclosure
Management Rules of ADAMA Ltd.
15. Proposal on Revisions to the Insider Registration
Management Rules of ADAMA Ltd.
16. Proposal on Revisions to the Related-party Transactions
Management Rules of ADAMA Ltd.
17. Proposal on the Disposal of Assets located at the
Company’s Huai’an Site
After the review of the above proposals, 2021 Working Reports
of the Independent Directors were presented to the meeting.
the 10th Meeting
The following resolution was deliberated and adopted:
of the 9th Session
April 11, 2022 April 12, 2022 1. Proposal on the Appointment of the Company’s Chief
of the Board of
Financial Officer
Directors
the 11th Meeting of
the 9th Session of The Board discussed the Q1 2022 report and related matters.
April 25, 2022 --
the Board of No resolution was made.
Directors
the 12th Meeting The following resolutions were deliberated and adopted:
of the 9th Session 1. Proposal on the Q1 2022 Report
April 27, 2022 April 28, 2022
of the Board of 2. Proposal on the Management Measures for the Delegation
Directors of Certain Powers of the Board of Directors to the Chief
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ADAMA Ltd. Annual Report 2022
Session Convening date Disclosure date Resolutions of the Meeting
Executive Officer of ADAMA Ltd.
the 13th Meeting
of the 9th Session The Board discussed the 2022 semi-annual report and related
August 22, 2022 --
of the Board of matters. No resolution was made.
Directors
The following resolutions were deliberated and adopted:
the 14th Meeting 1. Proposal on the 2022 Semi-Annual Report and its Abstract
of the 9th Session 2. Proposal on the Risk Appraisal Report of Sinochem Finance
August 29, 2022 August 30, 2022
of the Board of Co., Ltd.
Directors 3. Proposal on ADAMA’s 2021 Environmental, Social, and
Governance (ESG) Report
the 15th Meeting The following resolution was deliberated and adopted:
of the 9th Session October 27, 1. Proposal on the Q3 2022 Report
October 26, 2022
of the Board of 2022 2. Proposal on the Arrangement for the Retirement of the
Directors General Legal Counsel
the 16th Meeting
December 14, December 16, The following resolution was deliberated and adopted:
of the 9th Session
1. Proposal on Credit Facilities of USD 50 million from the
of the Board of 2022 2022
Related Party
Directors
the 17th Meeting
of the 9th Session December 22, December 23, The following resolution was deliberated and adopted:
of the Board of 2022 2022 1. Proposal on the 2023 Work Plan
Directors
2. Particulars regarding directors’ attendance to board sessions and shareholders’
general meetings
Details of directors’ attendance to board sessions and shareholders’ meetings
Sessions Non- Attendance to
required to Attendance by Entrusted attendance in shareholder
Name of the On-Site Absence
attend during way of presence person for two meetings
Directors Attendance rate
the Reporting communication (times) consecutive
Period times
Erik Fyrwald 10 0 9 1 0 No 1
Chen 10 0 0 No 1
10 0
Lichtenstein
An Liru 10 0 10 0 0 No 2
Ge Ming 10 0 10 0 0 No 2
Xi Zhen 10 0 10 0 0 No 2
Note: As two directors are abroad, the Company’s board meetings in 2022 were all conducted by means of communication,
including video conference.
Explanation of failure to attend two consecutive board meetings in person
No such cases during the reporting period.
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ADAMA Ltd. Annual Report 2022
3. Particulars regarding directors’ objections
Whether directors objected to various events
□ Yes √ No
During the Reporting Period, no directors proposed any objection on relevant events of the Company.
4. Other explanations regarding the directors’ duty performance
Whether directors’ advice were adopted
√ Yes □ No
Explanation regarding advices of directors:
According to the Company Law, the Listed Corporate Governance Standards, and "Articles of Association", the directors,
in general, during the Reporting Period, focus actively over Company’s operation, and earnestly performs their duties,
render professional suggestions to the Company's information disclosure and daily management decision-making, etc.
The directors play a proper role in improving the supervision, and safeguard the legitimate rights and interests of the
Company and its shareholders. The directors especially pay attention (and paid attention - during the Reporting Period) to
the Company’s operation state, dynamic state of the industry, public opinion and dynamic state report of the Company.
They actively and effectively perform the duties of directors and well maintained overall benefits of the Company and the
legal interests of all shareholders, especially the middle and small shareholders. Their roll is required for positive, normal,
stable and healthy development of the Company.
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ADAMA Ltd. Annual Report 2022
IX. Performance of the Special Committees under the Board during the Reporting
Period
Important Specifics
Number
Comments Other of
Name of the Member of of Convening
Themes of Meetings and Performance Objection
Committees Committees Meetings Date
Proposals of Duties Matters (if
Held
Made any)
March 21, 1. Proposal on the 2021 Approved -- --
2022 Financial Report
2. Proposal on the Pre-Plan
of the 2021 Dividend
Distribution
3. Proposal on the
Engagement with an Audit
Firm for the Audit of the
Financial Statements and
Internal Control of the
Company for 2022
4. Proposal on the
Expected Related Party
Transactions in the
Ordinary Course of
Business in 2022
5. Proposal on the Self-
Assessment Report on the
2021 Internal Control of the
Company
6. Proposal on the 2021
Risk Appraisal Report of
Ge Ming
ChemChina Finance Co.,
Audit (Chairperson),
5 Ltd. and the 2021 Risk
Committee Xi Zhen,
Appraisal Report of
An Liru
Sinochem Finance Co.,
Ltd.
7. Proposal on the
Special Report on the
Deposit and Actual Use of
the Raised Funds in 2021
8. Proposal on the
Appointment of the Head of
the Internal Auditing
Department of the
Company
9. Proposal on the 2021
Internal Audit Working
Reports and the 2022
Internal Audit Work Plan
April 24, 1. Proposal on the Q1 Approved -- --
2022 2022 Report
August 18, 1. Proposal on the 2022 Approved -- --
2022 Semi-Annual Report and its
Abstract
2. Proposal on the Risk
Appraisal Report of
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ADAMA Ltd. Annual Report 2022
Important Specifics
Number
Comments Other of
Name of the Member of of Convening
Themes of Meetings and Performance Objection
Committees Committees Meetings Date
Proposals of Duties Matters (if
Held
Made any)
Sinochem Finance Co.,
Ltd.
3. Proposal on the Semi-
annual Internal Audit
Working Report and the
Internal Audit Work Plan for
the Second Half of 2022
October 24, 1. Proposal on the Q3 Approved -- --
2022 2022 Report
2. Proposal on the Q3
Internal Audit Working
Report
December 1. Proposal on Credit Approved -- --
14, 2022 Facilities of USD50 million
from the Related Party
March 21, 1. Proposal on the Approved -- --
2022 Remuneration of Senior
Xi Zhen
Remuneration Executives
(Chairperson),
and Appraisal 2 October 24, 1. Proposal on the Approved -- --
Ge Ming, An
Committee 2022 Arrangement for the
Liru
Retirement of the General
Legal Counsel
Xi Zhen March 21, 1. Proposal on the Approved -- --
Nomination (Chairperson), 2022 Appointment of the
1
Committee Ge Ming, Company’s Chief Financial
An Liru Officer
Erik Fyrwald -- -- -- -- --
(Chairperson),
Chen
Strategy
Lichtenstein, 0
Committee
An Liru,
Ge Ming
Xi Zhen
X. Performance of the Supervisory Committee
Has the Supervisory Committee, during the Reporting Period, found a risk in the Company within its supervisory activity
□ Yes √ No
The Supervisory Committee had no objection on the supervised events during the Reporting Period.
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ADAMA Ltd. Annual Report 2022
XI. Particulars regarding Group’s employees
1. Number of employees, professional composition and educational background
The number of on-duty employees in ADAMA Ltd. (person) 751
The number of on-duty employees in main subsidiary
8,457
companies (person)
The total number of on-duty employees of the Group (person) 9,208
The total number of employees of the Group who received
9,208
salaries in the period (person)
The number of retired employees for whom ADAMA Ltd. and
3,105
main subsidiary companies need to pay retirement expense.
Professional Composition
Category Number
Production personnel 5,223
Sales personnel 2,268
Technicians 646
Financial personnel 498
Administrative personnel* 573
Total 9,208
Educational Background
Category Number
Doctor 8
Master 172
Bachelor 806
College 795
Others 1,848
Total 3,629
Note: The figures under “Educational Background” represent those of the Company and the domestic subsidiaries held by
it and do not cover the Group’s 5,579 overseas employees.
*Administrative personnel include employees of all the functional departments.
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ADAMA Ltd. Annual Report 2022
2. Employee’s remuneration policy
The Company's remuneration policy in 2022 is the same as in 2021. It is still a salary structure that integrates post salary,
quarterly performance bonus and annual performance bonus.
The Company established an online and offline assessment model. Online assessment is carried out by SF system.
Individual goals are set at the beginning of the year and are assessed at the end of the year.
3. Employee’s training plan
The Group usually conducts seminars, trainings, exercises and refresh of procedures (including with respect to increasing
safety awareness) to its various employees in its various entities, as needed and/or required under its applicable
procedures.
4. Labor outsourcing
√ Applicable □ Not applicable
Details of ADAMA Ltd. on labor sourcing are as follows.
Total number of hours of service outsourcing (hours) 920,972
Total remuneration paid for service outsourcing (RMB) 33,028,191
X. Situations for dividend distribution and turning capital reserve into share capital Dividend distribution policies,
especially the formulation, execution or the adjustment of the cash dividend policies during the Reporting Period
√ Applicable □ Not applicable
The Company did not revise its dividend distribution policy over the Reporting Period. The 2021 Annual General Meeting
which was held on April 21, 2022 approved the dividend distribution plan for the year 2021. The Company accordingly
published the Announcement of Dividend Distribution for the Year 2021 on May 31, 2022 (announcement No. 2022-21).
Special explanation of the cash dividend policy
Whether conformed with the regulations of the Articles
of association or the requirements of the resolutions Yes
of the shareholders’ meeting:
Whether the dividend standard and the proportion
Yes
were definite and clear:
Whether the relevant decision-making process and the
Yes
system were complete:
Whether the independent director acted dutifully and
Yes
exerted the proper function:
Whether the medium and small shareholders had the
chances to fully express their suggestions and
Yes
appeals, of which their legal interest had gained fully
protection:
Whether the conditions and the process met the
regulations and was transparent of the adjustment or Not Applicable
altered of the cash dividend policy:
The Company (including its subsidiaries) made profit in the reporting period and the profits distribution of the common
72
ADAMA Ltd. Annual Report 2022
shares held by the shareholders of the Company (without subsidiaries) was positive, but it did not put forward a preplan
for cash dividend distribution of the common shares:
□ Applicable √ Not applicable
Situations for dividend distribution and turning capital reserve into share capital for the Reporting Period
√ Applicable □ Not applicable
The Company plans to distribute cash dividends for the year 2022, and does not intend to issue bonus shares or transfer
capital reserve to share capital.
Bonus shares for every 10-share (Share) Not Applicable.
Dividends for every 10-share (RMB) (Tax included) 0.27
Every 10-share increased the shares’ number 0
Equity base of distribution plan (Share) On the basis of 2,329,811,766 shares
on February 28, 2023
Cash dividend (RMB) (Tax included) 62,904,917.68
Amount of the cash dividend by other methods (e.g. share buyback) 0
Total cash dividend (RMB) (Tax included) 62,904,917.68
Distributable profits (RMB) 607,055,000
Ratio of the Cash dividend (including the amount to be distributed in 100%
other ways) accounting in the total amount of the distributed
dividend
Cash dividends of This Time
If the development phase of the Company was the mature period with significant funds expenditures arrangement, the
proportion of the cash dividend should at least reach 40% of the total profit distribution.
Detailed Description on the Pre-Plan for Profit Allocation or Turning Capital Reserve into Share Capital
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit attributable to shareholders
of the Company is RMB 609,391 thousand. As transfer to statutory surplus reserve (10% of the net profit on a
standalone basis of the Reporting Period is RMB 2,336 thousand) was made, profit available for distribution for the
year 2022 is RMB 607,055 thousand.
The proposal for profit distribution for the year 2022 is a distribution of 10% of the total profit available for distribution,
calculated as follows with no transfer of reserves into equity:
On the basis of 2,329,811,766 shares on February 28, 2023, the Company plans to declare a cash dividend of RMB
0.27 (before tax) for every 10 shares to all shareholders, resulting in a total cash dividend of RMB 62,904,917.68
(before tax). No share will be distributed as share dividend, and no reserve shall be transferred to equity capital.
XII. Stock incentive plans, ESOPs or other employee incentives
□ Applicable √ Not applicable
To the date of the report, the Company does not have stock incentive plans, ESOP or other staff incentives. It shall be
noted, that Adama Solutions currently has several long-term incentive plans according to which it has granted long-term
cash rewards to executive officers and employees. These long-term incentive plans are based either on the performance
of the Company's shares (phantom cash incentives) and/or the Company's performance.. Adama Solutions has further
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ADAMA Ltd. Annual Report 2022
adopted an incentive plan linked to the increase in the Syngenta Group EBITDA.
XIII. System Establishment and Implementation for Internal Control during the
Reporting Period
1. System Establishment and Implementation
The Group's existing internal control system adapts to the management requirements. It also provides a reasonable basis
for the preparation of true and fair financial statements, and ensures the healthy operation of the Group's various business
activities, as well as the implementation and compliance of relevant laws and regulations and the Group's own internal
rules. With the changes in the external environment and the development of the Group's business, the Company plans to
take the following measures to further improve the internal control system:
(1) Further improve the internal control system by strengthening the research and implementation of internal control
management and risk management. Based on the risk assessment result and the needs of the Group, adjust and improve
the relevant business processes in a timely manner to establish effective internal control system which would improve work
efficiency.
(2) Emphasizing on the importance of the internal control system within the Group. Providing training to managerial
personnel on the related laws and regulations regarding internal controls. This would enhance the awareness and level of
standardization of operation, which could further improve the corporate governance structure.
(3) Regularly evaluating key controls in the business processes. Through the rectification of issues identified, the
management and operation risks would be reduced which could lead to a better operation.
(4) Continuously improving the execution of internal controls. Constructing the internal control systems including internal
environment, risk assessment, control activities, information and communication, and internal supervision in accordance
with the requirements by the "Basic Standards for Enterprise Internal Control", in order to improve the systematization and
effectiveness of the internal control.
(5) Strengthening the management and control of high-risk areas through effective integration with the internal control
evaluation system to ensure that the Group's major risks are under control. At the same time, the existing internal control
system is continuously reviewed and improved along with the optimization of management processes, which is to minimize
business risks and ensure the Group's sustainable, stable and healthy development.
For details, please refer to the "2022 Annual Internal Control Self-Assessment Report" published by the Company on
www.cninfo.com.cn on March 21, 2023.
2. Details of the Material deficiencies in internal control identified during the reporting period
□ Yes √ No
XIV. Management control over subsidiaries during the reporting period
□ Applicable √ Not applicable
The Company has completed integration of the subsidiary acquired in 2021. During the reporting period, the Company
didn't add new subsidiary through acquisition.
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ADAMA Ltd. Annual Report 2022
XV. Self-assessment Report or Audit Report on Internal Control
1. Self-assessment report on internal control
Date of disclosure of self-assessment
March 21, 2023
report on internal control
Reference website of self-assessment
www.cninfo.com.cn
report on internal control
Rate of total Assets of Units within the
Assessment Scope Compared to Total
74.4%
Assets in the Consolidated Statements of
the Company
Rate of total Operating Income of Units
within the Assessment Scope Compared
74.0%
to Total Operating Income in the
Consolidated Statements of the Company
Criteria of Deficiency
Internal control not related to financial
Categories Internal control over financial reporting
reporting
Material Deficiency: Resulting in an adverse Material Deficiency:
opinion or disclaimer of opinion, by a CPA, on the 1) Fraud committed in the Company by any of its
Company’s financial statements; or resulting in a directors, supervisors and senior management
material correction of the Company’s publicly personnel;
announced financial statements. 2) The Company materially violates material laws
Significant Deficiency: Resulting in a qualified and regulations, resulting in a material effect on
opinion, by a CPA, on the Company’s financial the Company's business;
statements; or resulting in an adverse opinion or 3) Material design deficiencies in the Company's
disclaimer of opinion, by a CPA, on the Company’s relevant management system;
material subsidiaries’ (i.e. Solutions) financial 4) The Company materially violates the decision-
statements; or resulting in a significant correction making process thereby causing a material
of the Company’s material subsidiaries’ (i.e. negative impact on the Company's business
Solutions) publicly announced financial (generally related to matters that need to be
statements. In addition, where no internal control approved by the shareholders meeting or the
Qualitative
or no relevant compensation control is established board of directors).
criteria
or implemented for the accounting treatment for 5) Material impact to the Company’s reputation.
unusual or special transactions. Significant Deficiency:
General Deficiency: Resulting in an unqualified 1) Significant fraud committed by any department
opinion, with an explanatory paragraph, by a CPA, head of the Company;
on the Company’s financial statements; or 2) Significant fraud committed by a head of any of
resulting in a qualified opinion, or unqualified the Company’s material subsidiaries;
opinion with an explanatory paragraph, by a CPA, 3) The Company violates significant laws and
on the Company’s subsidiaries’ financial regulations, resulting in significant fines as well as
statements. a significant effect on the Company's business;
4) Significant design deficiencies found in the
Company's relevant management system;
Material design deficiencies are found in the
relevant management systems of subsidiaries;
5) The Company violates material decision-
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ADAMA Ltd. Annual Report 2022
making procedures, resulting in a significant effect
on the Company's business (generally referred to
matters subject to senior management's
decision);
6) Material Subsidiaries violate decision-making
process, thereby causing a material negative
impact on the Company's business (generally
referred to matters that need to be decided by the
shareholders’ meeting or the board of directors).
7) Significant impact to the Company’s reputation.
General Deficiency:
1) Fraud committed by any other personnel in the
Company;
2) Fraud committed by any other personnel in
material subsidiaries;
3) The Company materially violates material
internal regulations or non-materially violates
material laws and regulations, resulting in
negative feedback from regulatory authorities;
4) There are other violations of laws and
regulations or internal regulations found in
material subsidiaries.
5) There are general design deficiencies in the
relevant management system of the Company;
other design deficiencies exist in the relevant
management system of the material subsidiaries;
6) The Company violates the decision-making
process, resulting in a negative impact on the
Company's business;
7) Material Subsidiaries violate decision-making
process, resulting in a negative impact on the
Company's business.
Material Deficiency:
The misstatement in financial report relates to an
Material Deficiency: Asset Loss ≥ RMB 150
amount that is greater than or equal to RMB 100
million
million.
Significant Deficiency: RMB 80 million ≤ Asset
Quantitative Significant Deficiency:
Loss < 150 million RMB
criteria The misstatement in financial report relates to an
General Deficiency: Asset Loss < 80 million
amount that is greater than or equal to RMB 50
RMB
million, but less than RMB 100 million.
General Deficiency: Resulting in other
misstatement related amounts.
Number of
material
deficiencies in
0
internal control
over financial
reporting
Number of 0
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ADAMA Ltd. Annual Report 2022
material
deficiencies in
internal control
not related to
financial
reporting
Number of
significant
deficiencies in
1
internal control
over financial
reporting
Number of
significant
deficiencies in
internal control 0
not related to
financial
reporting
2. Audit report on internal control
√ Applicable □ Not applicable
Audit opinion paragraph in the internal control audit report
Disclosure of internal control
Disclose
audit report
Date of disclosure of internal
March 21, 2023
control audit report
Reference website of internal
www.cninfo.com.cn
control audit report
Type of audit opinion in the
Unqualified opinion.
internal control audit report
Is there any material
deficiencies in internal control
No.
not related to financial
reporting
Does the accounting firm issue non-standard audit opinion on internal control?
□ Yes √ No
Is the opinion issued by accounting firm consistent with the opinion in the self-assessment report by the Board?
√ Yes □ No
77
ADAMA Ltd. Annual Report 2022
XVI. Rectification of Problems Identified during the Self-examination Action
Dedicated for Corporate Governance of Listed Companies
According to the self-inspection results on special actions of corporate governance of listed companies in 2021, the
Company should carry out actions on a long-term basis to continuously enhance corporate governance in the following
aspects:
Update relevant policies and procedures of corporate governance and internal control according to latest laws,
regulations and regulatory requirements and in combination with the actual situation of the Company;
Further strengthen training of the Company's directors, supervisors and senior management of relevant laws and
regulations, and further standardize their work and raise self-discipline awareness;
In the year of 2022, the Company carried out the following accordingly:
As approved by the 9th meeting of the 9th Board of Directors on March 29, 2022, the Company updated the Management
Policy of Related-Party Transactions, the Management Policy of Registration of Insiders Information and the
Management Policy of Information Disclosure.
As approved by the 12th meeting of the 9th Board of Directors on April 27, 2022, the Company launched the
Management Measures for the Delegation of Certain Powers of the Board of Directors to the Chief Executive Officer,
to intensify reform of state-owned enterprises and improve decision-making efficiency.
The Company actively organized the directors, supervisors and senior management participate in the relevant trainings
organized by the dispatched organs of CSRC and Shenzhen Stock Exchange, including annual report regulatory meeting
and trainings on anti-bribery practices, the quality of listed companies, and corporate governance. As some directors and
most of the senior management of the Company are foreigners, the Company regularly compiled training material, latest
development of China's capital market laws, regulations and cased studies into Chinese and English regulatory newsletters,
which are sent to directors, supervisors and senior management, to enhance their awareness of China's policies and
promote the implementation in the Company‘s global business.
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ADAMA Ltd. Annual Report 2022
Section V - Environment and Social Responsibilities
I. Major Environmental Protection Issues
Is the Company listed as key polluting entities by environmental protection agencies?
√ Yes □ No
Policies and Sector Standards related to Environmental Protection
The Group complies with the following laws, regulations and sector standards related to environmental protection in the process of production and operation:
1. Laws and Regulations
1) Environmental Protection Law of the People's Republic of China;
2) Law of the People's Republic of China on the Prevention and Control of Air Pollution;
3) Law of the People's Republic of China on the Prevention and Control of Water Pollution;
4) Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste;
5) Law of the People's Republic of China on the Prevention and Control of Environmental Noise Pollution;
6) Law of the People's Republic of China on the Prevention and Control of Soil Pollution;
7) Water Law of the People's Republic of China;
8) Cleaner Production Promotion Law of the People's Republic of China;
9) Yangtze River Protection Law of the People's Republic of China;
10) Regulations on the Administration of Pesticides;
11) Regulations on the Administration of Environmental Protection of Construction Projects;
2. Sector Standards
1) Discharge Standard of Pollutants for Urban Sewage Treatment Plant (GB18918-2002);
2) Water Quality Standard for Sewage Discharged into Urban Sewers (GB/T 31962-2015);
3) Emission Standard of Air Pollutants for Pesticide Manufacturing Industry (GB 39727-2020);
4) Standard for Pollution Control of Hazardous Waste Incineration GB18484-2020;
5) Emission Standard of Air Pollutants for Thermal Power Plants (GB 13223-2011);
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ADAMA Ltd. Annual Report 2022
6) Emission Standard of Air Pollutants for Pesticide Manufacturing Industry (GB 39727-2020);
7) Standard for fugitive emission control of volatile organic compounds (GB37822-2019);
8) Emission Standard for Volatile Organic Compounds in Chemical Industry (DB 32/3151-2016);
9) Emission Standard for Odor Pollutants (GB 14554-93);
10) Emission Standard of Pollutants for Caustic Soda and PVC Industry (GB 15581-2016);
11) Emission Standard for Industrial Enterprises Noise at Boundary GB12348-2008;
12) Standard for Pollution Control of Storage and Landfill of General Industrial Solid Waste GB18599-2020;
13) Standard for Pollution Control of Hazardous Waste Storage GB18597-2023.
Environmental Protection Administrative Permits
1. EIA Approval
During the reporting period, the Company and its subsidiary ADAMA Huifeng didn’t newly receive EIA approval. ADAMA Anpon, a subsidiary of the Company, received the
following EIA approval: “Reply to the Environmental Impact Report of Expansion of Utilities and Auxiliary Facilities: 110v Transformer Station and Power Lines”
2. Waste Discharge Permits
The Company renewed waste discharge license on December 28, 2021 and the license has been valid during 2022. Of the two sites of ADAMA Anpon, a subsidiary of the
Company, Anpon site updated its waste discharge license on December 1, 2022 and Maidao site renewed its waste discharge license on December 21, 2021. The licenses of
the two sites have been valid during 2022. ADAMA Huifeng, a subsidiary of the Company, updated its waste discharge permit on October 9, 2022, and the license has been valid.
Sector Discharge/Emission Standards and Pollutant Discharge and Emission during Operational Activities
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
Waste For the new site: Discharge
water General Standards for Pollutants from
The new site:
COD Continuous 1 Discharge Urban Sewage Treatment 84.19 173.2104 None
ADAMA 21.558mg/L
Port Plant (GB 18918 – 2002), COD
Ltd.
<50mg/L
Waste General For the new site: Discharge
Ammonia The new site:
water Continuous 1 Discharge Standards for Pollutants from 4.25 17.321 None
nitrogen 1.0885mg/L
Port Urban Sewage Treatment
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ADAMA Ltd. Annual Report 2022
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
Plant (GB 18918 – 2002),
ammonia nitrogen<8mg/L;
Waste For the new site: Discharge
water General Standards for Pollutants from
Total The new site:
Continuous 1 Discharge Urban Sewage Treatment 1.242 1.722 None
Phosphorous 0.318 mg/L.
Port Plant (GB 18918 – 2002), total
phosphorous <0.5mg/L
Waste gas (1) The power plant complies
with the ultra-low limit of the
standard range for pollutant
emission, which is NOx <
50mg/m3;
Power plant: (2) Hazardous waste
24.138 mg/m3 incinerator: Table 3 in the
Power plant,
Hazardous waste "Standards for the Control of
Hazardous
incinerator: 56.658 Hazardous Waste Incineration
waste
NOx Continuous 3 mg/m3 Pollution " (GB18484-2020), 39.069 260.27 None
incinerator
Acephate RTO: which is NOx <300mg/m3;
and 3
8.2536 mg/m (3) RTO: Table 1 and 2 and
RTO
ww RTO: 2.7716 specifically the air pollutant
mg/m3 emission limits in Table 2 of
the "Standards for the Air
Pollutant Emission of the
Pesticide manufacturing
Industry" (GB 39727-2020),
which is NOx <200mg/m3;
Waste gas Power plant: 2.537 (1) The power plant complies
mg/m3 with the ultra-low limit of the
Power plant,
Hazardous waste standard range for pollutant
Hazardous
incinerator: 3.6528 emission, which is SO2 < 35
waste
SO2 Continuous 3 mg/m3 mg/m3; 6.941 116.48 None
incinerator
Acephate RTO: (2) Hazardous waste
and
5.8791 mg/m3 incinerator: Table 3 in the
RTO
ww RTO: 2.6437 "Standards for the Control of
mg/m3 Hazardous Waste Incineration
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ADAMA Ltd. Annual Report 2022
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
Pollution " (GB18484-2020),
which is SO2 <100mg/m3;
(3) RTO: Table 1 and 2 and
specifically the air pollutant
emission limits in Table 2 of
the "Standards for the Air
Pollutant Emission of the
Pesticide manufacturing
Industry" (GB 39727-2020),
which is SO2 <200mg/m3;
Waste gas (1) The power plant complies
with the ultra-low limit of the
standard range for pollutant
emission, which is fume and
dust < 10 mg/m3;
(2) Hazardous waste
Power plant:
incinerator: Table 3 in the
0.6473 mg/m3
Power plant, "Standards for the Control of
Hazardous waste
Hazardous Hazardous Waste Incineration
incinerator: 3.719
Fume and waste Pollution " (GB18484-2020),
Continuous 3 mg/m3 10.535 44.8824 None
dust incinerator which is fume and dust <30
Acephate RTO:
and mg/m3;
9.085 mg/m3
RTO (3) RTO: Table 1 and 2 and
ww RTO: 5.8778
specifically the air pollutant
mg/m3
emission limits in the " the
Emission Standards for Air
Pollutants of the Pesticide
Manufacturing Industry" (GB
39727-2020), which is fume
and dust < 30 mg/m3;
Waste gas Table 1 and 2 and specifically,
Acephate RTO:
the emission limits of air
3.1942 mg/m3
VOCs Continuous 1 RTO pollutants in Table 2 of the the 3.81 6.941 t/a None
ww RTO: 3.6411
Emission Standards for Air
mg/m3
Pollutants of the Pesticide
82
ADAMA Ltd. Annual Report 2022
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
Manufacturing Industry (GB
39727-2020), which is VOCs
<100mg/m3
Waste Comprehensive Standard on
water Discharge of Waste Water
General
Maidao: 137.9mg/L (GB8978-2002)，COD< 500 Maidao:182.755
COD Continuous 2 Discharge 124.142 None
Anpon: 69.52mg/L mg/l; Maidao site: industry Anpon: 265.69
Port
park’s waste water discharge
agreement, COD<500mg/L
Waste Water Quality Standard for
water Sewage Discharged into
Urban Sewerage (GBT 31962-
General
Ammonia Maidao: 5.3mg/L; 2015), Ammonia Nitrogen <45 Maidao: 26.39
Continuous 2 Discharge 3.831 None
Nitrogen Anpon: 5.04mg/L mg/l; Maidao site: industry Anpon: 28.348
Port
park’s waste water discharge
agreement, Ammonia Nitrogen
<35 mg/l
ADAMA
Waste For Anpon: Water Quality
Anpon
water Standard for Sewage
(Jiangsu)
Discharged into Urban
Co., Ltd.
Sewerage （GBT 31962-
General
Total Maidao: 1.23mg/L; 2015）, total phosphorous < 8 Maidao: 0.327
Continuous 2 Discharge 0.525 None
Phosphorous Anpon: 0.57mg/L mg/l; Anpon: 20.273
Port
For Anpon’s branch Maidao:
Agreement on Wastewater
Discharge, total phosphorous
< 3 mg/l;
Waste gas None
Standard on Air Pollution of
The power
Thermal Power Plants Maidao: 1,966
NOx Continuous 1 Power Plant / / plant has
（GB13223-2011）NOx < 100 Anpon: 181.516
been
mg/m3
deactivated.
Waste gas Standard on Air Pollution of None
Maidao: 1.673
SO2 Continuous 1 Power Plant / Thermal Power Plants / The power
Anpon: 396.902
（GB13223-2011）SO2 < 50 plant has
83
ADAMA Ltd. Annual Report 2022
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
mg/m3 been
deactivated.
Waste gas Pymetrozine Jiangsu Comprehensive
Maidao: 3.095
Particles Continuous 1 dryer tail 2.09 mg/L Standard on Air Pollutants 0.0888 None
Anpon: 67.515
gas Emission (DB32/4041-2021)
Waste gas Standards for the Volatile
19 in Anpon
Maidao: 6.5mg/m3; Organic Compound Emission Maidao: 2.017
VOCs Continuous 22 Site and 4 in 2.35 None
Anpon:14.57mg/m3 of the Chemical Industry, DB Anpon: 47.313
Maidao
32/3151-2016
Waste General
Standards of the Industrial
water COD Continuous 1 Discharge 210.03 mg/l 101.8847 247.6378 None
Park
Port
Waste General
Ammonia Standards of the Industrial
water Continuous 1 Discharge 6.69 mg/l 2.9667 19.3783 None
Nitrogen Park
Port
Waste General
Total Standards of the Industrial
water Continuous 1 Discharge 0.2867 0.9285 None
Phosphorous 0.6 mg/l Park
Port
Waste General
Standards of the Industrial
water total nitrogen Continuous 1 Discharge 27.08 mg/l 46.77204 None
ADAMA Park 12.81297
Port
Huifeng
Waste gas RTO and
(Jiangsu)
the
Co., Ltd. Jiangsu Comprehensive
Discharge
NOx Continuous 6 9.78 mg/m Standard on Air Pollutants 11.7045 147.7072 None
Ports at
Emission (DB32/4041-2021)
Various
Workshops
Waste gas RTO and
the
Jiangsu Comprehensive
Discharge
SO2 Continuous 6 6.05 mg/m Standard on Air Pollutants 10.5735 47.1958 None
Ports at
Emission (DB32/4041-2021)
Various
Workshops
Waste gas RTO and Jiangsu Comprehensive
Particles Continuous 6 2.33 mg/m 2.9770 22.7146 None
the Standard on Air Pollutants
84
ADAMA Ltd. Annual Report 2022
Category Main Total amount
No. of Layout of Total amount
Company of pollutants Way of emitted/ Exceeding
emission emission Concentration Pollution standards applied Approved
name Pollutants and special emission Discharged limit
points points (ton)
pollutants (ton)
Discharge Emission (DB32/4041-2021)
Ports at
Various
Workshops
Waste gas RTO and
the
Jiangsu Comprehensive
non-methane Discharge
Continuous 9 9.03 mg/m Standard on Air Pollutants 25.45539 62.92994 None
hydrocarbon Ports at
Emission (DB32/4041-2021)
Various
Workshops
85
ADAMA Ltd Annual Report 2022
Treatment of Pollutants
(1) Development and Operation of Waste Water Facilities
The Company has a 20,000 tons/ D wastewater treatment station, adopting the process of "two-layer A / O + MBR + ozone
synergistic oxidation + MBBR + calcium removal of phosphorus". The wastewater treatment facilities are running normally.
After treatment, the COD, ammonia nitrogen and total phosphorus in the discharged wastewater are within the limit.
ADAMA Anpon, the subsidiary of the Company, has a 11,000 tons/ D wastewater treatment station. As all its facilities are
operating well, COD, ammonia nitrogen, and total phosphorous discharged after the treatment are within the limit.
ADAMA Hufieng, the subsidiary of the Company has a 5000 tons/D wastewater treatment station. As all its facilities are
operating well, COD, ammonia nitrogen, total nitrogen and total phosphorous discharged after the treatment are within the
limit.
(2) Development and Operation of Waste Gas Facilities
The Company's coal-fired thermal power plant was carried out ultra-low emission transformation. After the transformation,
the environmental protection facilities of the power plant operate normally. Sulfur dioxide, nitrogen oxides and dust in flue
gas all meet the ultra-low emission standards.
The incinerator of hazardous waste of the Company adopt the process of "SNCR + semi dry (quench) deacidification +
activated carbon injection + bag dust removal + SCR" for the tail gas. Sulfur dioxide, nitrogen oxides and fume and dust in
tail gas all meet the standard.
The RTO of the Company adopts treatment process of VOCs using "acid washing and absorption + alkali washing and
absorption + three-chamber RTO incineration + quench tower + alkali absorption”. Sulfur dioxide, nitrogen oxide, fume and
dust, and VOCs in the tail gas all meet the standard.
ADAMA Anpon, the subsidiary of the Company, is equipped with RTO, TO, resin adsorption and other tail gas treatment
facilities. Under the condition of meeting the emission standard, operation management is strengthened to further reduce
the total VOCs emission.
ADAMA Huifeng, the subsidiary of the Company, has RTO, alkali washing facilities and acid washing facilities, which are
respectively used to treat process waste gas containing volatile organic compounds, acid washing waste gas and alkali
washing waste gas. The main emission indicators of waste gas, such as sulfur dioxide, nitrogen oxides, fume and dust,
and NMHC in tail gas all meet the standard.
ADAMA (Nanjing) Agricultural Technology Co., Ltd，an indirectly owned subsidiary of the Company, is equipped with
blowers and vent piping, each of which has scrubber and active carbon filters. VOC and HCl in treated waste gas meet the
standards.
(3) The Company and its subsidiaries disclose production and pollution information according the Interim Measures
on Environmental Information Disclosure and transfer information of main wastewater and air pollutants to the information
platform of the local environmental bureaus on a daily basis.
Contingency Plan of Environmental Accidents
The Company and its relevant subsidiaries have formulated the Contingency Plan for Environmental Emergencies
according to their production facilities and industry features, and then submitted files to the local environmental protection
authorities as record.
Environment self-monitoring plan
ADAMA attributes great importance to protecting the environment, out of a sense of responsibility to society and the
environment and strives to meet the relevant regulatory requirements and to even go beyond mere compliance, engaging
in constant dialogue with stakeholders, including the authorities and the community.
In order to improve the environmental management, track the discharge of various pollutants, evaluate the impact on the
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ADAMA Ltd Annual Report 2022
surrounding environment, strengthen the discharge management of pollutants in the production process, accept the
supervision and inspection of environmental authorities and provide reference for pollution prevention and control, the
company and its subsidiaries Anpon and Huifeng have formulated a self-monitoring plan, which conducts regular tests in
strict accordance with the requirements.
The major monitored indicators and frequency are as the following:
1. Monitored Indicators
Waste water: COD, NH3-N, PH, SS, Petroleum, TP.
Air Pollutant: SO2, Nitrogen oxide, Fume and Dust, Non Methane Hydrocarbon
Noise: Noise at the Site Border
2. Frequency
Fume and dust and NMHC in boiler emission, SO2, NOx, fume and dust of RTO, and wastewater discharged from the
centralized point (COD, Ammonia Nitrogen and total phosphorous): continuous auto monitoring
Manual sampling: particles from certain air emissions, suspended particles from wastewater and Petroleum once a month.
Noise: once a quarter.
ADAMA continually examines the implications of the environmental laws, takes actions to prevent or mitigate the
environmental risks and to reduce the environmental effects that may result from its activities, and invests extensive
resources to fulfill those legal provisions that are, and are anticipated to, affect it. ADAMA’s plants are subject to
atmospheric emissions regulations, whether by virtue of the stipulations provided in the business licenses or under the
applicable law. Hazardous materials are stored and utilized in the Company's plants, together with infrastructures and
facilities containing fuels and hazardous materials. ADAMA takes actions to prevent soil and water pollution by these
materials and treats them, if revealed. ADAMA’s plants conduct various soil surveys, risk surveys and tests with regard to
treatment of the soil or ground water at the plants.
ADAMA intends to continue investing in environmental protection, to the extent required and beyond this, whether on its
own volition or in compliance with contractual commitments, regulatory or legal standards relating to environmental
protection, so as to realize its best available policy and comply with any legal requirements.
As part of its policy of ecological process improvement, ADAMA also invests in remediation, changes in production
processes, establishment of sewage facilities, as well as in byproduct storage and recycling.
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ADAMA Ltd Annual Report 2022
Inputs in Environmental Protection and Treatment and Payment of Environmental Tax
Inputs in Environmental
Payment of Environmental
Company Name Protection and Treatment
Tax in 2022 (0,000RMB)
during 2022 (0,000RMB)
ADAMA Ltd. 7,904 42.1
Adama Anpon (Jiangsu) Ltd. 1,760 3
Adama Huifeng (Jiangsu) Ltd. 17,000 12.5
Measures taken to reduce its carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
During the reporting period, the Company established the working group on energy conservation and carbon reduction,
formulated the indicators of energy conservation and carbon reduction in the future, completed carbon emission verification
and compliance, and carried out a number of energy conservation and emission reduction work, such as recovering the
waste heat of hydrogen brine by adding heat exchangers, saving steam consumption, and reasonably allocating resources
through the combined transformation of utilities (refrigeration station and compressed air station), reducing energy
consumption and maintaining facilities, changing the model of water pumps and motors, adding frequency converter make
water pump motors better match the actual demand, optimizing the design of chlor-alkali brine process pipeline to reduce
energy consumption and CO2 emission, etc.
Administrative punishment for environmental problems during the reporting period
None
Other environmental information that should be disclosed
None
Other environmental related information
None
The Company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shenzhen Stock
Exchange: No. 3 - Disclosure of Industry Information”, specifically for the chemical sector.
Occurrence of Environmental Accidents
During the reporting period, the Company and its subsidiaries didn’t have material environmental accidents.
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ADAMA Ltd Annual Report 2022
II. Social Responsibilities
ADAMA is being engaged for more than a decade an ongoing commitment to accountability and transparency regarding
its operations and business. In 2022, a new sustainability strategy was established by the Company and integrated into its
Company’s long-term strategy. To oversee the process across ADAMA, a Chief Sustainability Officer was appointed, and
a dedicated team at both global and regional levels was formed to promote sustainability throughout all divisions of the
Company.
During 2022, ADAMA published its ESG report, reflecting its activities and improvements that are the outcome of a long-
term investments. ESG report provides meaningful insights into the challenges and opportunities it faces in becoming not
only a global supplier of crop protection products, solutions, and services, but one that aims to bolster food security in a
world where populations are rising, resources are dwindling, and energy demands are increasing. ADAMA is committed in
its efforts to further increase transparency broadening its disclosures and continuing working closely with all relevant
stakeholders on reporting ESG performance. The Company shares how it integrates sustainability into its business and
operations to create long-term value for all the Company’s stakeholders: customers, people, communities, shareholders,
and society at large. In this respect, the Company is periodically updating the Sustainability Report. The Sustainability
Reports issued are in accordance with the Global Reporting Initiative (GRI) SRS framework at the “Core” level.
In addition, the Company adheres to corporate governance principals to ensure checks and balances in the conduct of its
affairs, among others, the Company enforces a code of conduct that applies to its people and stakeholders and has adopted
internal enforcement programs in several relevant fields of activity.
The Company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shenzhen Stock
Exchange: No. 3 - Disclosure of Industry Information”, specifically for the chemical sector.
The Company and its manufacturing subsidiaries have all passed the safety standardization audit for enterprises
(hazardous chemicals). It integrates the safety standardization with Sinochem’s “FORUS” system and operates effectively
and met the standards for level upgrade in Sinochem FORUS system during year-end evaluation.
According to the structure and functions of each department, it has optimized the management organization, practically
implemented double responsibility for one post, revised the production safety responsibility system, improved the safety
management network and assigned dedicated personnel for production safety. It has also adjusted the composition of the
workforce for safety standardization according to the actual operation and differentiated the responsibilities and duties for
various members. The Company successfully completed renewal of production permits and other compliance procedures.
The Company’s safety performance has been maintained at a sound level with no material casualty occurred. During the
reporting period, the Company improved the safety production process from multiple perspectives, such as resource
budget, equipment process and safety management. The Company built a dual prevention mechanism and IT systems
integrating material hazard source monitoring, personnel positioning, five-in-one, electronic work ticket and on-site
inspection.
In terms of production processes, chemicals of less hazards replaced more hazardous ones, continuous reactions replaced
the batch-based ones, and the safety fundamentals were improved by reducing process temperature and pressure. HAZOP
action items have been continuously reduced, among which Jingzhou site passed internationally certified third-party review
of process safety. In terms of project engineering, automation upgrading and improvement never stopped and various
safety measures and devices for automatic control, alarm, interlock, safety instrumentation system, and emergency
pressure relief were taken and equipped with. In terms of the management, process hazard analysis, change management,
pre-drive safety inspection, mechanical integrity and other procedures related to safety elements were constantly promoted.
Therefore, significant progress had been made on the quality of process safety. At the same time, the Company has
strengthened safety investment in safety protection facilities, equipment maintenance and testing, daily monitoring and
evaluation, training, and the promotion and application of new technologies.
89
ADAMA Ltd Annual Report 2022
In terms of safe production education and training, the Company has carried out HSE training for employees and provided
a series of HSE IDP training for the management. This year, it will continue to promote the implementation of relevant
training at the front line. The Company focuses on learning and implementing various regulatory requirements such as
accountability of hazardous chemical production enterprises. During the reporting period, the Company received
inspections to its sites by government agencies and the shareholding group for more than 100 times and has basically
completed rectification according to the inspection results. In terms of emergency response, the Company organizes
emergency drills and fire drills in various scenarios according to the laws and regulations to strengthen the emergency
response ability of front-line employees. In terms of occupational health, the Company has strengthened its employees'
hazard identification ability, organized chemical protection knowledge assessment and IDP HSE ability examination, and
passed a series of special action plans to effectively enhance employees' safety protection awareness and improve the
safety production management level of the sites.
III. Enhancement of the results of poverty alleviation and rural revitalization
To assist in the smooth development of rural revitalization in the regions where the Company's operation sites are located,
consolidate the achievements of poverty alleviation and continue to move forward, the Company's Jingzhou site actively
responded to the call of the Hubei Provincial Federation of Trade Unions and the Jingzhou Municipal Federation of Trade
Unions, and purchased poverty relief materials of 200,000 RMB from the designated counterpart poverty relief counties in
Jingzhou. Anpon site continued to appoint the vice chairman of its labor union to participate in Huai'an Municipal Party
Committee's working team in Huai'an District. According to the arrangements of the municipal party committee and the
municipal government, Anpon site helped Sanhe Village, Shunhe Town of Huai'an District, a less economically developed
village in the province, and actively explored the ways for assistance to ensure effective execution. In 2022, Anpon site
provided 200,000 RMB special assistance funds for targeted villages and in order to increase the collective income of the
village, it helped to purchase agricultural equipment and leased them to the village cooperatives. The collective income of
the village in that year exceeded 300,000 RMB.
90
ADAMA Ltd Annual Report 2022
Section VI - Significant Events
I. Performance of commitments
1. Commitments completed by the Company, the shareholders, the actual controllers, the purchasers, or the other related parties during the Reporting
Period and those hadn’t been completed execution up to the period-end
√ Applicable □ Not applicable
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
Commitment on - - - - - -
share reform
1. The business of ChemChina’s subsidiaries - Regarding Regarding
Jiangsu Anpon Electrochemical Co., Ltd., Anhui commitment 1, Commitment 1,
Petroleum Chemical Group Co., Ltd., Shangdong September 6, completed.
Dacheng Agrochemical Co., Ltd., Jiamusi Heilong 2020 The committed party
Agrochemicals Co., Ltd., and Hunan Haohua (According to complies with the
Chemical Co., Ltd. and its subsidiary are the same the commitments:(1)
Commitment in
or similar business as the main business of commitments ChemChina had
the acquisition Commitments
ADAMA. As for horizontal domestic competition, September 7, made by transferred its shares
report or the on the horizontal
ChemChina committed to gradually eliminate such 2013 ChemChina on in Anpon to ADAMA;
report on equity ChemChina competition
kind of horizontal competition in the future and to October 12, (2) ChemChina had
changes
fight for the internal assets reconstruction, to 2016, the date transferred its shares
adjust the industrial plan and business structure, to eliminate the in Jiamusi Heilong to a
to transform technology and to upgrade products, domestic third party, such that.
to divide the market so as to make each horizontal Jiangmusi Heilong is
corporation differ in the products and its ultimate competition no longer a subsidiary
users according to the securities laws and between the of ChemChina; (3)
91
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
regulations and industry policy within 7 years, thus Company and Shangdong Dacheng
to eliminate the current domestic horizontal Jiangsu Anpon is not a subsidiary of
competition between ChemChina’s controlled Electrochemical CNAC and doesn’t
subsidiaries and ADAMA. Co., Ltd., Anhui carry out agrochemical
2. Other than the existing and potential horizontal Petroleum business; (4)
competition stated in the acquisition report, Chemical ChemChina is not the
ChemChina will take effective measures to avoid Group Co., actual controller of
engagements by itself and its controlled Ltd., and Haohua; (5) CNAC,
subsidiaries in new business that is in the same or Jiamusi Heilong the wholly-owned
similar business to ADAMA, within the territory in Agrochemicals subsidiary of
future. 3. If ChemChina or its controlled Co., Ltd., is ChemChina, signed an
subsidiaries domestically conduct related business January 4, Entrusted Operation
which form horizontal competition with ADAMA, 2022). and Management
in the future, ChemChina will actively take steps, Regarding Agreement with the
to gradually eliminate the competition, the commitments 2 Company, and
concrete measures including but not limited to and 3, long entrusted the
internal assets reorganization, (including putting term. operation and
the business into ADAMA or operated through management of Anhui
ADAMA) to adjust the industrial plan and business Petrochemical Co.,
structure, to modify technology and to upgrade Ltd.to the Company.
products, to segment the market so as to
distinguish each corporation in terms of products Regarding
and its end users, thus to avoid and eliminate commitments 2 and 3,
domestic horizontal competition between On-going.
ChemChina’s controlled subsidiaries and ADAMA. The committed party
complies with the
commitments.
Commitments ChemChina will comply with laws, regulations and September 7, On-going.
ChemChina on the other regulatory documents to avoid and reduce 2013 and Long term The committed party
independence of related-party transactions with ADAMA. However, January 7, 2020 complies with the
92
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
ADAMA and for related-party transactions that are inevitable or commitments.
related- party based on reasonable grounds, ChemChina will
transactions follow the market principles of just, fairness and
openness, and enter into agreement(s) legally and
go through lawful procedures. ChemChina will
honor its disclosure obligations and apply for
relevant approvals according to the AoA of
ADAMA, rules regarding related-party transactions
and relevant regulations, not impairing the lawful
rights and interest of ADAMA and its shareholders
by related-party transactions.
After completion of the acquisition transaction,
ADAMA will continue to keep complete
procurement, production and sales systems and to
possess independent intellectual properties.
ChemChina and its affiliated parties will be
completely independent from ADAMA in terms of
staff, assets, finance, business and organization.
ADAMA will have full capacity of operation in
Chinese agricultural chemical market. ChemChina
will continue to follow the Company Law and
Securities Law so as to avoid any action that may
impair the operating independence of ADAMA.
ChemChina will keep taking appropriate measures January 7, 2020 January 4, Completed.
to resolve the same issue between ADAMA and 2022 The committed party
Commitments Anhui Petrochemical Co., Ltd. within four years complies with the
ChemChina on horizontal after ADAMA buys 100% shares of ADAMA commitments. CNAC,
competition Solutions through the issuance of shares to CNAC the wholly-owned
and finishes the raising of supporting finance in subsidiary of
accordance with the original commitments as well ChemChina, signed an
93
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
as various the requirements of securities laws and Entrusted Operation
regulations and industry policies. and Management
Agreement with the
Company, and
entrusted the
operation and
management of Anhui
Petrochemical Co.,
Ltd. to the Company.
Note: On January 4,
2018, ADAMA
completed the
purchase of the shares
of ADAMA Agricultural
Solutions Ltd. and the
raising of supporting
finance.
Based on a preliminary review, ChemChina
believes that Syngenta A.G. and ADAMA may
have horizontal competition to some extent. It will
further analyze, confirm and specify if the two
On-going.
companies share the same or similar businesses
January 7, The committed party
and products in terms of business content, January 7, 2020
2025 complies with the
suppliers and customers, product substitution,
commitments.
processes and core technologies and distribution
channels, etc. If the result will be positive,
ChemChina will gradually solve the issue within 5
years after the issuance of this Letter by taking
94
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
appropriate measures, including but not limited to
internal asset restructuring, industrial planning and
business structure adjustment, technology
transformation and product upgrading, market
segmentation or other feasible solutions in
accordance with the requirements of securities
laws and regulations and industry policies.
Once Sinofert and Sinochem Agriculture are the
subsidiaries of ChemChina, ChemChina will
analyze if there are same or similar businesses
among the three subsidiaries. If the result will be On-going.
positive, ChemChina will then propose The committed party
January 7, 2020 Long term
corresponding solutions for any business or product complies with the
that constitutes competition in accordance with the commitments.
requirements of applicable laws, regulations and
regulations to solve the issue of horizontal
competition.
Other than the foregoing, none of the main On-going.
business of ChemChina and other controlled The committed party
January 7, 2020 Long term
subsidiaries is the same or similar to that of complies with the
ADAMA. commitments.
ChemChina will continue to take effective
On-going.
measures to prevent itself and its other
The committed party
subsidiaries from adding new businesses in the January 7, 2020 Long term
complies with the
future that are the same as or similar to those of
commitments.
ADAMA.
95
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
If ChemChina or any of its other subsidiaries
develops related businesses that constitutes
horizontal competition against the domestic
business of ADAMA in the future, it will actively
take relevant measures, including but not limited
to asset restructuring, adjustment of industrial
planning and business structure, technological
transformation and Product upgrades, market
segmentation and other feasible solutions, so that
each enterprise will be different in their portfolio
and end users and avoid and eliminate the
horizontal competition with ADAMA.
From the effective date of the Commitment Letter, On-going.
if ChemChina violates the above commitments, it Long term The committed party
January 7, 2020
should compensate ADAMA for the losses or effective complies with the
expenses suffered or incurred by the violation. commitments.
This acquisition will not materially adversely affect
the independence of ADAMA in terms of staff,
assets, finance, business and organization.
After completion of the acquisition transaction,
continue to be
ADAMA will continue to keep complete
effective during
Commitment to procurement, production and sales systems and to On-going.
the period that
Sinochem maintain the possess independent intellectual properties. September 16, The committed party
Sinochem
Holdings independence of Sinochem Holdings and its affiliated parties will 2021 complies with the
Holdings
ADAMA strictly abide by the relevant provisions on the commitments.
controls
independence of listed companies in relevant
ADAMA
laws, regulations and normative documents and
be completely independent from ADAMA in terms
of staff, assets, finance, business and
organization, so as to ensure ADAMA will have full
96
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
capacity of operation in Chinese agricultural
chemical market. Sinochem Holdings will follow
related regulations in Company Law and
Securities Law, and avoid engagement in any
action that impairs the operating independence of
ADAMA.
continue to be
With regard to the present or future possible
effective during
competition between the subsidiaries of On-going.
the period that
ChemChina and ADAMA, Sinochem Holdings will September 16, The committed party
Sinochem
earnestly urge ChemChina to fulfill its 2021 complies with the
Holdings
commitments to ADAMA to avoid horizontal commitments.
controls
competition.
ADAMA
As for the horizontal competition between
Sinochem Holdings’ subsidiaries and ADAMA
arising from this equity transfer, Sinochem
Holdings will, according to the requirements of
Commitments
Sinochem relevant securities regulatory authorities, within
on the horizontal
Holdings five years from the effective date of this letter of
competition
commitment, comprehensively use entrusted
On-going.
management, asset reorganization, equity
September 16, September 16, The committed party
replacement/transfer, business merger/adjustment
2021 2026 complies with the
or other legal means to steadily promote the
commitments.
integration of related assets or businesses that
meet the requirements of injection into ADAMA in
line with the principle of benefiting the
development of ADAMA and safeguarding
shareholders' interests, especially those of
minority shareholders.
97
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
Sinochem Holdings will strictly abide by the
relevant laws, regulations and normative
documents, AOA and other internal management continue to be
system of ADAMA, exercise the rights of effective during
On-going.
shareholders according to the law through the the period that
September 16, The committed party
equity relationship, in line with the principle of Sinochem
2021 complies with the
state ownership and hierarchical management of Holdings
commitments.
state-owned assets, properly handle matters controls
involving ADAMA's interests, and shall not use the ADAMA
control position to seek improper interests or
transfer interests.
Sinochem Holdings and its controlled subsidiaries
will, as required by law, regulation and other
specifications, avoid and reduce related party
transactions with ADAMA; however, for the related
party transactions that are inevitable or based on continue to be
reasonable grounds, Sinochem Holdings and its effective during
Commitment to On-going.
controlled subsidiaries will strictly abide by the the period that
Sinochem standardize September 16, The committed party
relevant laws, regulations and normative Sinochem
Holdings related-party 2021 complies with the
documents and relevant systems of ADAMA, Holdings
transactions commitments.
legally enter into agreement(s) by law, go through controls
lawful procedures, ensure fair pricing and perform ADAMA
its disclosure obligations. Sinochem Holdings and
its controlled subsidiaries warrant that no related
party transaction will be done to impair lawful
rights and interest of ADAMA and its shareholders.
Commitments The subsidiaries controlled by ChemChina, The commitments
Commitments
made at the namely Anpon, HH, Maidao, Anhui Petrochemical October 12, January 4, listed in the left column
ChemChina on the horizontal
time of assets and Heilong as well as their subsidiaries are in 2016 2022 have been completed.
competition
reorganization similar or the same business as ADAMA. For the The committed party
98
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
horizontal competition in China, ChemChina complies with the
commits to take appropriate actions to solve the commitments: (1) the
horizontal competition between its subsidiaries reorganization, i.e. the
and ADAMA step-by-step in an appropriate way issuance of shares to
within 4 years after completion of the CNAC for purchasing
reorganization, in accordance with securities laws, assets and
regulations and sector/industrial policies. implementation of
The means by which ChemChina addresses the private placement,
horizontal competition include but are not limited completed on January
to the following, 4, 2018; (2) Anpon
ADAMA acquires crop protection-related assets merged with Maidao
under ChemChina. ADAMA holds or controls other and ChemChina’s
crop protection-related assets of ChemChina in shares in Anpon had
line with national laws and by reasonable been transferred to
commercial means such as entrusted operation. ADAMA; (3)
ChemChina divests other crop protection-related ChemChina had
assets or transfers the control power of such transferred its shares
subsidiaries to external parties. ChemChina in Heilong to a third
reorganizes internal assets, adjusts sector party. Heilong is no
planning and business structure, upgrades longer a subsidiary of
technologies and products and makes market ChemChina; (4) HH
segmentation so that each company will withdrew from the
differentiate its products and end users to agrochemical
eliminate horizontal competition between the business;(5) CNAC,
subsidiaries controlled by ChemChina and the wholly-owned
ADAMA. subsidiary of
ChemChina, signed an
Entrusted Operation
and Management
Agreement with the
99
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
Company, and
entrusted the
operation and
management of Anhui
Petrochemical Co.,
Ltd. to the Company.
ChemChina will take effective actions to avoid that
it or its controlled subsidiaries will add new
business in China same or similar to ADAMA.
If ChemChina or its controlled subsidiaries will in
the future be engaged in business in China that
constitutes horizontal competition with ADAMA,
Commitments On-going.
ChemChina will take active actions, including but
on Potential October 12, The committed party
ChemChina not limited to reorganizing internal assets, Long term
Horizontal 2016 complies with the
adjusting sector planning and business structure,
Competition commitments.
upgrading technologies and products and making
market segmentation so that each company will
differentiate its products and end users to avoid
and eliminate horizontal competition between the
subsidiaries controlled by ChemChina and
ADAMA.
ChemChina will, as required by law, regulation and
other specifications, avoid and reduce related
Commitment to party transactions with ADAMA; however, for the
On-going.
reduce and related party transactions that are inevitable or
The committed party
ChemChina standardize based on reasonable grounds, ChemChina will August 4, 2016 Long term
complies with the
related-party follow the just, fairness and open principles in
commitments.
transactions market, legally enter into agreement(s) by law, go
through lawful procedures, and perform its
disclosure obligations and approving procedures
100
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
as required by related systems and regulations.
ChemChina warrants that no related party
transaction will be done to impair lawful rights and
interest of ADAMA and its shareholders.
After completion of the acquisition transaction,
ADAMA will continue to keep complete
procurement, production and sales systems and to
possess independent intellectual properties, and
ChemChina and its affiliated parties will be
Commitment to On-going.
completely independent from ADAMA in terms of
maintain The committed party
ChemChina staff, assets, finance, business and organization, August 4, 2016 Long term
independence of complies with the
and ADAMA will have full capacity of operation in
the ADAMA commitments.
Chinese agricultural chemical market. ChemChina
will follow related regulations in Company Law and
Securities Law, and avoid engagement in any
action that impairs the operating independence of
ADAMA.
Commitments -- -- -- -- -- --
made at IPO or
refinancing
Share incentive -- -- -- -- -- --
commitments
Other Syngenta Commitments November 1,
I. Companies that are controlled by Syngenta
commitments to Group on Horizontal 2021
Group and have horizontal competition with
the company's Competition On-going.
ADAMA
minority January 7, The committed party
shareholders After reviewing, as of the date of issuance of the 2025 complies with the
commitment letter, there is a small amount of commitments.
overlap in the field of off-patent crop protection
products between SAG, a subsidiary of Syngenta
101
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
Group, and the Company, and a small amount of
overlap in the field of active ingredients and
formulation products between Yangnong Chemical
Co., Ltd. (hereinafter referred to as "YN
Chemical") and the Company. In both cases, such
small overlap is not causing a negative impact on
any of the subject companies.
Except for the aforementioned scenarios, the
major business of Syngenta Group and other
companies controlled by Syngenta Group does not
operate the same or similar business with the
Company.
II. Commitment and timetable to address the
horizontal competitions mentioned above
In accordance with and in compliance with the
applicable laws, regulations and relevant
regulatory requirements then in effectiveness,
Syngenta Group will adopt appropriate measures
to gradually solve the horizontal competitions
among SAG, YN Chemical and the Company
within 5 years after the issuance of Supplemental
Commitment Letter of China National Chemical
Corporation on Avoiding Horizontal Competition
with ADAMA by ChemChina on January 7, 2020.
The aforementioned solutions include but not
limited to:
(1) Asset restructuring: adopt different methods
permitted by relevant laws, regulations and
102
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
regulatory policies such as cash or issuance of
shares to purchase assets, asset replacement,
asset transfer or other feasible restructuring
methods. Assets are sorted out and reorganized to
eliminate the overlap of relevant businesses;
(2) Adjust industry planning and business
structure: sort out business boundaries, realize
business differentiation through asset transactions,
business divisions and other different methods,
including but not limited to business composition,
product grades, application areas, and customer
groups. Syngenta Group will try its best to achieve
differentiated business operations;
(3) Technological transformation and product
upgrade: achieve product differentiation through
appropriate technological transformation and
product upgrade, and Syngenta Group will try its
best to achieve differentiated operations;
(4) Market segmentation: signing agreements
while taking into consideration of the business and
other factors to appropriately divide the market;
(5) Entrusted management: by signing an
entrustment agreement, one party will delegate
the decision-making and management involved in
the operation of the overlapped assets to the other
party for unified management;
(6) Establish a joint venture company: jointly
establish a company in an appropriate way;
103
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
(7) Other feasible solutions within the scope
permitted by relevant laws, regulations and
regulatory policies.
The implementation of the above-mentioned
resolution is based on the implementation of the
necessary review procedures for listed companies,
the approval procedures of the securities
regulatory authority and relevant authorities
(including but not limited to the antitrust review
that may be applicable) in accordance with
relevant laws and regulations, and the information
disclosure obligations should be fulfilled according
to relevant laws and regulations.
III. Syngenta Group’s commitment to potential
horizontal competition with the Company in the
future
Syngenta Group will continue to take effective
continue to be
measures to prevent itself and its controlled
valid during the
companies from having new businesses that are
period when On-going.
the same or similar to the Company’s domestic November 1,
Syngenta The committed party
business in the future. If Syngenta Group or a 2021
Group is the complies with the
company controlled by Syngenta Group develops
controlling commitments.
related businesses that constitute horizontal
shareholder of
competition with the Company’s domestic
the Company
business in the future, Syngenta Group will
actively take relevant measures, including but not
limited to asset restructuring, adjustment of
industry planning and business structure,
technological transformation and product
104
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
upgrades, market segmentation or other feasible
solutions to differentiate between products and
end users of each company, so as to avoid and
eliminate horizontal competition between
Syngenta Group or the company controlled by the
Syngenta Group and the Company.
If Syngenta Group breaches the above
undertakings, it will bear the corresponding legal
liabilities in accordance with the relevant laws and
regulations, including the Guidelines for the
Supervision of Listed Companies No. 4 -
Undertakings and Performance by Actual
Controllers, Shareholders, Related Parties,
Purchasers of Listed Companies and Listed
Companies.
The letter of commitment will take effect on the
date of signing and will continue to be valid during
the period when Syngenta Group is the controlling
shareholder of the Company.
Whether the
commitments
Yes
are fulfilled on
time
If the
commitment is
overdue, the
--
specific reasons
for not
completing the
105
ADAMA Ltd Annual Report 2022
Time of
Commitment Commitment Period of
Commitment Contents making Fulfillment
maker type commitment
commitment
performance and
the next work
plan should be
explained in
detail.
106
ADAMA Ltd Annual Report 2022
2. Assets or projects with profit forecast, still relevant for forecast period
□ Applicable √ Not applicable
II. Inadequate use of Company’s capital by the controlling shareholder or by its
related parties for non-operating purposes
□ Applicable √ Not applicable
No such situation occurred during the Reporting Period.
III. Non-compliance with external guarantees
□ Applicable √ Not applicable
No such cases during the reporting period.
IV. Explanation by the board of directors on the latest "non-standard audit report"
□ Applicable √ Not applicable
V. Explanation by the Board of Directors, the Supervisory Board and independent
directors (if any) regarding “non-standard audit report” issued by Company’s
auditor for the Reporting Period
□ Applicable √ Not applicable
VI. Changes in accounting standards, accounting estimates or corrections of
significant accounting errors compared to last financial report
√ Applicable □ Not applicable
On 30 December 2021, the Ministry of Finance issued "Accounting Standards for Business Enterprises Interpretation No.
15” (hereinafter referred to as “Interpretation No. 15”) which clarified the accounting treatments for the sale of the products
or by-products produced before the assets being capable of operating in a predetermined manner or produced during the
research and development process and clarified the costs a company should include as the cost of fulfilling a contract
when assessing whether a contract is onerous.
According to the Interpretation No.15, the above clarifications were effective from 1 January 2022. Adoption of the
interpretations has no significant impact on the Group’s financial statements.
On 30 November 2022, the Ministry of Finance issued "Accounting Standards for Business Enterprises Interpretation No.
16” (hereinafter referred to as “Interpretation No. 16”) which clarified the following accounting treatments:
(1) Deferred tax related to assets and liabilities arising from a single transaction;
(2) The income tax treatment of the dividend paid as the issuer of an equity instrument; and
107
ADAMA Ltd Annual Report 2022
(3) When an entity changes a cash-settled share-based payment to an equity-settled share-based payment.
According to the Interpretation No.16, the second and the third clarifications were effective from 30 November 2022. Adop-
tion of the interpretations has no significant impact on the Group’s financial statements.
VII. Change of the consolidation scope as compared with the financial reporting of
last year
□Applicable √ Not applicable
VIII. Engagement of Company’s Auditor
Auditor engaged at present
Name of domestic Auditor Deloitte Touche Tohmatsu Certified Public Accountants LLP
Remuneration for domestic Auditor for the
320
Reporting Period (RMB Ten Thousand Yuan)
Consecutive years of the audit services
6
provided by domestic Auditor
Name of domestic accountants Ji Yuting and Zhao Jingyuan
Consecutive years of the audit services
3
provided by the domestic accountants
Name of overseas Auditor Not applicable
Remuneration for overseas Auditor for the
--
Reporting Period (RMB Ten Thousand Yuan)
Consecutive years of the audit services
--
provided by overseas Auditor
Name of overseas accountants --
Consecutive years of the audit services
--
provided by the overseas accountants
Change of the Auditor at Reporting Period
□ Yes √ No
Engagement of the Auditor for internal control, financial adviser or sponsor
√ Applicable □ Not applicable
In the Reporting Period, the Company continued to engage Deloitte Touche Tohmatsu Certified Public Accountants LLP as
the auditor of the Company for 2022 annual financial reports and 2022 annual internal control of the Company. Total
remuneration for the Auditor was RMB 3.2 million.
108
ADAMA Ltd Annual Report 2022
IX. Trading termination of Company’s securities that the Company will face after the
disclosure of this annual report
□ Applicable √ Not applicable
X. Bankruptcy and reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI. Material Legal Claims/proceedings
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII. Punishment and rectification
□ Applicable √ Not applicable
None during the Reporting Period.
XIII. Credibility of the Company, its controlling shareholders and actual controller
√ Applicable □ Not applicable
The Company’s controlling shareholder and actual controller are in good credibility status. They are not in the situation that
the effective judgment of the court was not executed and the large amount of debt was not repaid when due during the
reporting period.
109
ADAMA Ltd Annual Report 2022
XIV. Significant related-party transactions
1. Related-party transactions in the ordinary course of business
√ Applicable □Not applicable
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Purchasing Announcement on
raw materi- Expected Related-
Under the
Syngenta als and Purchase of Party Transactions
same control Market Market Cash Set- March
A.G. and its products raw materi- 129,897 4.90% 145,104 No N/A in the Ordinary
of Sinochem price price tlement 31,2022
subsidiaries from re- als/products Course of Business
Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Bluestar raw materi- Expected Related-
Under the
(Beijing) als and Purchase of Party Transactions
same control Market Market Cash Set- March
Chemical products raw materi- 113 0.00% 650 No N/A in the Ordinary
of Sinochem price price tlement 31,2022
Machinery from re- als/products Course of Business
Holdings
Co., Ltd. lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Jiangsu Under the raw materi- Expected Related-
Purchase of
Huaihe same control als and Market Market Cash Set- March Party Transactions
raw materi- 20,187 0.76% 19,830 Yes N/A
Chemicals of Sinochem products price price tlement 31,2022 in the Ordinary
als/products
Co., Ltd. Holdings from re- Course of Business
lated in 2022 (No.2022-
110
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
parties 10)
Purchasing Announcement on
raw materi- Expected Related-
Under the
als and Purchase of Party Transactions
same control Market Market Cash Set- March
Sinofert products raw materi- 414 0.02% 200 Yes N/A in the Ordinary
of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Jiangsu Under the
als and Purchase of Party Transactions
Yangnong same control Market Market Cash Set- March
products raw materi- 55,760 2.11% 129,356 No N/A in the Ordinary
Chemical of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Jiangsu Under the
als and Purchase of Party Transactions
Youshi same control Market Market Cash Set- March
products raw materi- 2,646 0.10% 128 Yes N/A in the Ordinary
Chemical of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Jiangsu Under the Purchasing Announcement on
Purchase of
Ruixiang same control raw materi- Market Market March Expected Related-
raw materi- 0 0.00% 96 No - N/A
Chemical of Sinochem als and price price 31,2022 Party Transactions
als/products
Co., Ltd. Holdings products in the Ordinary
111
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
from re- Course of Business
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Jiangsu Under the
als and Purchase of Party Transactions
Youjia Plant same control Market Market Cash Set- March
products raw materi- 25,516 0.96% 540 Yes N/A in the Ordinary
Protection of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Hangzhou raw materi- Expected Related-
Under the
(Torch) Xidou als and Purchase of Party Transactions
same control Market Market Cash Set- March
Door Film In- products raw materi- 11 0.00% 33 No N/A in the Ordinary
of Sinochem price price tlement 31,2022
dustry Co., from re- als/products Course of Business
Holdings
Ltd. lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Under the
Bluestar En- als and Purchase of Party Transactions
same control Market Market Cash Set- March
gineering products raw materi- 591 0.02% 10 Yes N/A in the Ordinary
of Sinochem price price tlement 31,2022
Co.,Ltd. from re- als/products Course of Business
Holdings
lated par- in 2022 (No.2022-
ties 10)
Sinochem Under the Purchasing Purchase of Market Market Cash Set- March Announcement on
11,006 0.42% 17,329 No N/A
Agro Co.,Ltd. same control raw raw price price tlement 31,2022 Expected Related-
112
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
of Sinochem materials materi- Party Transactions
Holdings and prod- als/products in the Ordinary
ucts from Course of Business
related par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Zhonglan In- Under the
als and Purchase of Party Transactions
ternational same control Market Market Cash Set- March
products raw materi- 16,647 0.63% 18,000 No N/A in the Ordinary
Chemical of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
ELKEM Under the
als and Purchase of Party Transactions
SILICONES same control Market Market Cash Set- March
products raw materi- 193 0.01% - - N/A in the Ordinary
BRASIL of Sinochem price price tlement 31,2022
from re- als/products Course of Business
LTDA Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Shandong raw materi- Expected Related-
Under the
Dacheng Ag- als and Purchase of Party Transactions
same control Market Market Cash Set- March
rochemical products raw materi- 2,551 0.10% - - N/A in the Ordinary
of Sinochem price price tlement 31,2022
Company from re- als/products Course of Business
Holdings
Limited lated par- in 2022 (No.2022-
ties 10)
113
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Announcement on
Receiving Expected Related-
Under the
Shenyang services Party Transactions
same control Regular ser- Market Market Cash Set- March
Chemical from re- 11 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 31,2022
Co., Ltd. lated par- Course of Business
Holdings
ties in 2022 (No.2022-
10)
Announcement on
Receiving Expected Related-
Under the
services Party Transactions
same control Regular ser- Market Market Cash Set- March
Sino MAP from re- 3 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 31,2022
lated par- Course of Business
Holdings
ties in 2022 (No.2022-
10)
Purchasing Announcement on
raw materi- Expected Related-
Sinochem Under the
als and Purchase of Party Transactions
Lantian Fluo- same control Market Market Cash Set- March
products raw materi- 181 0.01% - - N/A in the Ordinary
rine Materi- of Sinochem price price tlement 31,2022
from re- als/products Course of Business
als Co. Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Under the
Bluestar En- fixed as- Expected Related-
same control Purchase of Market Market Cash Set- March
gineering sets from 390 0.01% 6,500 No N/A Party Transactions
of Sinochem fixed assets price price tlement 31,2022
Co.,Ltd. related par- in the Ordinary
Holdings
ties Course of Business
114
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
in 2022 (No.2022-
10)
Announcement on
Shandong Purchasing Expected Related-
Under the
Dacheng Ag- fixed as- Party Transactions
same control Purchase of Market Market Cash Set- March
rochemical sets from 169 0.01% - - N/A in the Ordinary
of Sinochem fixed assets price price tlement 31,2022
Company related par- Course of Business
Holdings
Limited ties in 2022 (No.2022-
10)
Announcement on
Changsha Purchasing Expected Related-
Under the
Huaxing fixed as- Party Transactions
same control Purchase of Market Market Cash Set- March
Construction sets from 25 0.00% - - N/A in the Ordinary
of Sinochem fixed assets price price tlement 31,2022
Supervision related par- Course of Business
Holdings
Co., Ltd. ties in 2022 (No.2022-
10)
Announcement on
Purchasing Expected Related-
Under the
Syngenta fixed as- Party Transactions
same control Purchase of Market Market Cash Set- March
A.G. and its sets from 394 0.01% - - N/A in the Ordinary
of Sinochem fixed assets price price tlement 31,2022
subsidiaries related par- Course of Business
Holdings
ties in 2022 (No.2022-
10)
China Under the Purchasing Purchase of Announcement on
Market Market Cash Set- March
Bluestar same control raw materi- raw materi- 0.2 0.00% - - N/A Expected Related-
price price tlement 31,2022
Chengrand of Sinochem als and als/products Party Transactions
115
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Research In- Holdings products in the Ordinary
stitute Chem- from re- Course of Business
ical Industry lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
Shenyang raw materi- Expected Related-
Under the
Shenhua In- als and Purchase of Party Transactions
same control Market Market Cash Set- March
stitute Test- products raw materi- 3 0.00% - - N/A in the Ordinary
of Sinochem price price tlement 31,2022
ing Technol- from re- als/products Course of Business
Holdings
ogy Co., Ltd. lated par- in 2022 (No.2022-
ties 10)
Purchasing Announcement on
raw materi- Expected Related-
Shenyang Under the
als and Purchase of Party Transactions
Sciencreat same control Market Market Cash Set- March
products raw materi- 110 0.00% - - N/A in the Ordinary
Chemicals of Sinochem price price tlement 31,2022
from re- als/products Course of Business
Co. Ltd. Holdings
lated par- in 2022 (No.2022-
ties 10)
Announcement on
Receiving Expected Related-
Sinochem In- Under the
services Party Transactions
formation same control Value-added Market Market Cash Set- March
from re- 31 0.00% - - N/A in the Ordinary
Technology of Sinochem OA services price price tlement 31,2022
lated par- Course of Business
Co. Ltd. Holdings
ties in 2022 (No.2022-
10)
Syngenta Under the Selling raw Selling Market Market 161,925 4.34% 127,343 Yes Cash N/A March Announcement on
116
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
A.G. and its same control materials products price price Settlement 31,2022 Expected Related-
subsidiaries of Sinochem and prod- Party Transactions
Holdings ucts to re- in the Ordinary
lated par- Course of Business
ties in 2022 (No.2022-
10)
Announcement on
Expected Related-
Under the Rendering
Syngenta Party Transactions
same control services to Regular ser- Market Market Cash Set- March
A.G. and its 975 0.03% - No N/A in the Ordinary
of Sinochem related par- vices price price tlement 31,2022
subsidiaries Course of Business
Holdings ties
in 2022 (No.2022-
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Huaihe same control and prod- Selling prod- Market Market Cash Set- March
24,716 0.66% 23,640 Yes N/A in the Ordinary
Chemicals of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Co., Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Sinofert 10,002 0.27% 10,280 No N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Holdings lated par-
in 2022 (No.2022-
ties
10)
117
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Sino MAP 849 0.02% 541 Yes N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Holdings lated par-
in 2022 (No.2022-
ties
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Yangnong same control and prod- Selling prod- Market Market Cash Set- March
6 0.00% 200 No N/A in the Ordinary
Chemical of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Co., Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Youshi same control and prod- Selling prod- Market Market Cash Set- March
12,344 0.33% 6,100 Yes N/A in the Ordinary
Chemical of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Co., Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Selling raw Announcement on
Zhonglan In- Under the
materials Expected Related-
ternational same control Selling prod- Market Market March
and prod- - 0.00% 300 No - N/A Party Transactions
Chemical of Sinochem ucts price price 31,2022
ucts to re- in the Ordinary
Co., Ltd. Holdings
lated Course of Business
118
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
parties in 2022 (No.2022-
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Youjia Plant same control and prod- Selling prod- Market Market Cash Set- March
181 0.00% 240 No N/A in the Ordinary
Protection of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Co., Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Announcement on
Selling raw
Expected Related-
Shenyang Under the materials
Party Transactions
Sciencreat same control and prod- Selling prod- Market Market Cash Set- March
5 0.00% - - N/A in the Ordinary
Chemicals of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
Co. Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Announcement on
Selling raw
Expected Related-
Syngenta Under the materials
Party Transactions
Nantong same control and prod- Selling prod- Market Market Cash Set- March
2,565 0.07% 4,500 No N/A in the Ordinary
Crop Protec- of Sinochem ucts to re- ucts price price tlement 31,2022
Course of Business
tion Co.,Ltd. Holdings lated par-
in 2022 (No.2022-
ties
10)
Under the Selling raw Announcement on
Sinochem Selling prod- Market Market Cash Set- March
same control materials 209 0.01% - - N/A Expected Related-
Agro Co.,Ltd. ucts price price tlement 31,2022
of Sinochem and Party Transactions
119
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Holdings products to in the Ordinary
related par- Course of Business
ties in 2022 (No.2022-
10)
Announcement on
Selling raw
Sinochem In- Expected Related-
Under the materials
ternational Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Crop Care 3,956 0.11% 3,000 Yes N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 31,2022
Company Course of Business
Holdings lated par-
Limited in 2022 (No.2022-
ties
10)
Announcement on
China Na- Receiving Expected Related-
Under the
tional Chemi- services Party Transactions
same control Value-added Market Market Cash Set- March
cal Infor- from re- 137 0.01% 94 Yes N/A in the Ordinary
of Sinochem OA services price price tlement 31,2022
mation Cen- lated par- Course of Business
Holdings
ter Co. Ltd. ties in 2022 (No.2022-
10)
Announcement on
Receiving Expected Related-
Zhonglan Under the
services Party Transactions
Lianhai De- same control Design ser- Market Market March
from re- - 0.00% 50 No - N/A in the Ordinary
sign Institute of Sinochem vices price price 31,2022
lated par- Course of Business
Co., Ltd. Holdings
ties in 2022 (No.2022-
10)
Syngenta Under the Receiving Regular Market Market 93 0.00% 45 Yes - N/A March Announcement on
120
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
A.G. and its same control services services price price 31,2022 Expected Related-
subsidiaries of Sinochem from re- Party Transactions
Holdings lated par- in the Ordinary
ties Course of Business
in 2022 (No.2022-
10)
Announcement on
Bluestar Receiving Expected Related-
Under the
(Beijing) services Party Transactions
same control Regular ser- Market Market Cash Set- March
Chemical from re- 515 0.02% - - N/A in the Ordinary
of Sinochem vices price price tlement 31,2022
Machinery lated par- Course of Business
Holdings
Co., Ltd. ties in 2022 (No.2022-
10)
Sinochem In- Announcement on
novation Receiving Expected Related-
Under the
(Beijing) services Party Transactions
same control Regular ser- Market Market Cash Set- March
Technology from re- 4.0 0.00% - No N/A in the Ordinary
of Sinochem vices price price tlement 31,2022
Research In- lated par- Course of Business
Holdings
stitute Co., ties in 2022 (No.2022-
Ltd. 10)
Purchasing Announcement on
Sinochem In- raw materi- Expected Related-
Under the
ternational als and Purchase of Party Transactions
same control Market Market Cash Set- March
Crop Care products raw materi- 773 0.03% - No N/A in the Ordinary
of Sinochem price price tlement 31,2022
Company from re- als/products Course of Business
Holdings
Limited lated par- in 2022 (No.2022-
ties 10)
121
ADAMA Ltd Annual Report 2022
Per-
Market
Pricing cent- Ap-
price of
principle age proved Whether
Type of re- Content of similar
of re- Value against transac- exceeds Date of an-
Related lated party related Settlement transac- Index of the dis-
Relationship lated Price (RMB trans- tion the ap- nounce-
party transac- party trans- methods tions if closure
party ‘0000) actions quota proved ment
tion action the Com-
transac- of the (RMB quota
pany
tion same ‘0000)
knows
kind
Total -- -- 486,104 -- 514,109 -- -- -- -- --
Details of large sales return -
According to the Company's daily business operation needs, the Company estimates that the total amount of daily
Execution of related-party transactions in the ordi- related party transactions in 2022 will not exceed RMB 5,141 million. For details, please refer to Announcement on
nary course of business whose value was expected Expected Related-Party Transactions in the Ordinary Course of Business in 2022 (No.: 2022-10). The Company’s actual
by types during this reporting period (if any) amount of daily related party transactions defined in the listing rules incurred for the six months ended December
31,2022 is RMB 4,861 million, which does not exceed the expected amount.
Reasons for large difference between transaction The Company’s related transactions with related party shall be carried out in accordance with the principle of voluntary,
price and market reference price (if applicable) equality and mutual benefit, fair, and will not harm the interests of the Company.
122
ADAMA Ltd Annual Report 2022
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Not applicable
There were no related-party transactions arising from asset acquisition or sale in the Reporting Period.
3. Related-party transitions with joint investments
□ Applicable √ Not applicable
The Company was not involved in any significant related-party transaction with joint investments during the Reporting
Period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there was non-operating credit and liability with related parties
□ Yes √ No
The Company was not involved in any non-operating credit and liability with related parties.
5. Transactions with finance companies with related relationships
√ Applicable □ Not applicable
Deposit business
In RMB ’0000
Transactions during the
Reporting Period
Total Deposit Total
Maximum
Related Range of Opening Amount for Withdrawal Ending
Relations Daily Deposit
Parties Interest Rate Balance the Amount for Balance
Limit
Reporting the
Period Reporting
Period
Under the
Sinochem
same control
Finance Co., 150,000 0.55%-1.9% - 97,997 56,231 41,766
of Sinochem
Ltd
Holdings
Under the
ChemChina
same control
Finance 40,000 0.05%-1.3% 35,888 9 35,897 -
of Sinochem
Corporation
Holdings
123
ADAMA Ltd Annual Report 2022
Facilities and Other Financial Services
In RMB ’0000
Total Amount Actual Amount
Related Party Relations Type of the Services
Incurred
Sinochem Finance Under the same control
Facilities 50,000 -
Co., Ltd of Sinochem Holdings
6. Transactions between the finance company controlled by the Company and related parties
□ Applicable √ Not applicable
The company does not hold any equity interest in any finance company.
7. Other material related-party transactions
√ Applicable □ Not applicable
(1) The 2021 Annual General Meeting approved the expected related-party transactions in the ordinary business
course of the Company in 2022. Please refer to Item 5 of Section X “in “Financial Report” for details of the related-
party transactions in the ordinary business course.
(2) The 16th Meeting of the 9th Session of the Board of Directors approved the Proposal on Credit Facilities of $50m
from the Related Party.
The website to disclose the interim announcements on significant related-party transactions:
Name of the interim Disclosure date of the interim Website to disclose the interim
announcement announcement announcement
Announcement on Expected
Related-Party Transactions in the
Ordinary Course of Business in March 31, 2022 Juchao website www.cninfo.com.cn
2022（Announcement No.2022-
10 ）
Announcement on Credit Facility of
USD 50 million from the Related
December 16, 2022 Juchao website www.cninfo.com.cn
Party（Announcement No.2022-
32 ）
XV. Particulars regarding material contracts and execution thereof
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship of the Company in the reporting period.
(2) Contract Operation
□ Applicable √ Not applicable
124
ADAMA Ltd Annual Report 2022
There was no contract operation of the Company in the reporting period.
(3) Lease
□ Applicable √Not applicable
There is no major lease in the reporting period.
2. Significant guarantees
√ Applicable □ Not applicable
(1) Guarantees
Unless otherwise specified, the unit hereunder is RMB ‘0000
Guarantees provided by the Company in favor of third parties (excluding subsidiaries)
Guarantee
Disclosure date Planned Actual Actual Counter- for a
Guaranteed Type of Collateral Period of expired
of the guarantee occurrence guarantee guarantee related
party guarantee (if any) guarantee or not
announcement amount date amount (if any) party or
not
-- -- -- -- -- -- -- -- -- -- --
Total amount of the
Total guarantee line occurred guarantee in
approved in favor of third favor of third parties
parties (excluding -- (excluding --
subsidiaries) during the subsidiaries) during
reporting period (A1) the reporting period
(A2)
Total guarantee
Aggregated guarantee line
balance in favor of
in favor of third parties
third parties
(excluding subsidiaries)
5,000 (excluding --
that has been approved by
subsidiaries) by the
the end of the reporting
end of the reporting
period (A3)
period (A4)
Guarantees provided by the Company in favor of its subsidiaries
Guarantee
Disclosure Planned Actual Actual Counter- for a
Guaranteed Type of Collateral Period of expired
date of the guarantee occurrence guarantee guarantee related
party guarantee (if any) guarantee or not
announcement amount date amount (if any) party or
not
ADAMA December 22, February Joint Three
125,800 3,000 -- -- Yes No
Anpon 2020 26, 2021 liability years after
125
ADAMA Ltd Annual Report 2022
(Jiangsu) April 29, 2021 and the loan
Ltd. October 28, several matures
2021 liability
Joint
Three
liability
March 18, years after
4,000 and -- -- Yes No
2021 the loan
several
matures
liability
Joint
Two years
liability
April 27, after the
5,950 and -- -- Yes No
2021 loan
several
matures
liability
Joint
Two years
liability
May 21, after the
4,500 and -- -- Yes No
2021 loan
several
matures
liability
Joint Three
liability years after
June 25,
3,000 and -- -- the loan Yes No
2021
several matures
liability
Joint Three
liability years after
December
3,300 and -- -- the loan Yes No
16, 2021
several matures
liability
Joint Three
liability years after
December
4,000 and -- -- the project No No
1, 2021
several loan
liability matures
Joint Three
liability years after
January 1,
3,500 and -- -- the project No No
2022
several loan
liability matures
Joint Three
February liability years after
2,100 -- -- No No
28, 2022 and the project
several loan
126
ADAMA Ltd Annual Report 2022
liability matures
Joint Three
liability years after
April 28,
1,400 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
May 20,
750 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
June 26,
2,350 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
January 1,
4,000 and -- -- the loan Yes No
2022
several matures
liability
Joint Three
liability years after
January 18,
4,000 and -- -- the loan No No
2022
several matures
liability
Joint Three
liability years after
January 25,
400 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
February
390 and -- -- the project No No
28, 2022
several loan
liability matures
Joint Three
liability years after
July 2, 2022 810 and -- -- the project No No
several loan
liability matures
127
ADAMA Ltd Annual Report 2022
Joint Three
liability years after
February
3,000 and -- -- the loan Yes No
26, 2022
several matures
liability
Joint Three
liability years after
March 30,
3,000 and -- -- the loan No No
2022
several matures
liability
Joint
Two years
liability
April 26, after the
500 and -- -- Yes No
2022 loan
several
matures
liability
Joint Three
liability years after
August 11,
1,000 and -- -- the project No No
2022
several loan
liability matures
ADAMA
Anpon Joint Three
March 31, 2022 104,100
(Jiangsu) liability years after
August 31,
Ltd. 1,000 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
October 28,
1,100 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
October 31,
1,000 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
November
2,000 and -- -- the project No No
17, 2022
several loan
liability matures
November Joint Three
2,500 -- -- No No
23, 2022 liability years after
128
ADAMA Ltd Annual Report 2022
and the project
several loan
liability matures
Joint Three
liability years after
November
1,100 and -- -- the project No No
30, 2022
several loan
liability matures
Joint
Three
liability
December years after
2,000 and -- -- No No
17, 2022 the loan
several
matures
liability
Joint Three
liability years after
July 27,
10,000 and -- -- the project Yes No
2021
ADAMA several loan
Huifeng liability matures
June 29, 2021 33,000
(Jiangsu) Joint Two years
Ltd. liability after the
November
5,300 and -- -- expiration Yes No
5, 2021
several of the debt
liability period
Total amount of the
Total guarantee line occurred guarantee in
approved in favor of the favor of the
187,100 37,900
subsidiaries during the subsidiaries during
reporting period (B1) the reporting period
(B2)
Aggregated guarantee line Total guarantee
that has been approved in balance in favor of
favor of the subsidiaries by 345,900 the subsidiaries by 34,400
the end of the reporting the end of the
period (B3) reporting period (B4)
Guarantees provided by subsidiaries in favor of subsidiaries (USD ’0000)
Guarantee
Disclosure Planned Actual Actual Counter- for a
Guaranteed Type of Collateral Period of expired
date of the guarantee occurrence guarantee guarantee related
party guarantee (if any) guarantee or not
announcement amount date amount (if any) party or
not
Control joint and Generally
October 31, 1,300 October 30, 0 -- --
Solutions, several 7 years
129
ADAMA Ltd Annual Report 2022
Inc. 2018 2018 liability (subject to No No
the
overseas
laws)
The loan
term (5
years) and
any
Control joint and applicable
January 10, January 9,
Solutions, 4,000 1,250 several -- -- statute of
2019 2019 No No
Inc. liability limitations
period
(generally
7 years).
Related
guarantees
existed
before the
company
joint and
ADAMA was Valid until
Not applicable 22,229.5 7,740.28 several -- -- No No
Brazil consolidated cancelled
liability
into the
financial
statements
of the
Company.
joint and
ADAMA January 22, December December
900 900 several -- -- No No
Brazil 2022 29, 2021 31, 2025
liability
Related
guarantees
existed
before the
company
Adama joint and
was Valid until
India Private Not applicable 8,884.32 4,833.65 several -- -- No No
consolidated cancelled
Ltd. liability
into the
financial
statements
of the
Company.
130
ADAMA Ltd Annual Report 2022
Related
guarantees
existed
ADAMA
before the
Turkey
company
Tarm joint and
was Valid until
Sanayi ve Not applicable 7,150 983.24 several -- -- No No
consolidated cancelled
Ticaret liability
into the
Limited
financial
irketi
statements
of the
Company.
Related
guarantees
existed
before the
company
joint and
Adama was Valid until
Not applicable unlimited 40,279.16 several -- -- No No
Makhteshim consolidated cancelled
liability
into the
financial
statements
of the
Company.
Related
guarantees
existed
before the
company
joint and
Adama was Valid until
Not applicable unlimited 28,693.14 several -- -- No No
Agan consolidated cancelled
liability
into the
financial
statements
of the
Company.
ADAMA
joint and
Agricultural January 22, January 22, Valid until
399.23 121.73 several -- --
Solutions 2022 2022 cancelled No No
liability
UK Ltd.
ADAMA 4,500 November 0 joint and -- -- Valid until
131
ADAMA Ltd Annual Report 2022
CELSIUS November 25, 24, 2022 several cancelled No No
BV, 2022 liability
Curacao
branch, &
ADAMA
Fahrenheit
BV,
Curacao
Branch
ADAMA
CELSIUS
BV,
Curacao
joint and
branch, & January 22, January 22, Valid until
7,000 6,779.12 several / /
ADAMA 2022 2022 cancelled No No
liability
Fahrenheit
BV,
Curacao
Branch
Related
guarantees
existed
before the
company
ADAMA joint and
was Valid until
Ukraine LLC Not applicable 3,000 1,020 several -- --
consolidated cancelled No No
liability
into the
financial
statements
of the
Company.
Related
guarantees
existed
before the
Makhteshim company
joint and
Agan of was Valid until
Not applicable 4,000 2,000 several -- -- No No
North consolidated cancelled
liability
Amercia Inc. into the
financial
statements
of the
Company.
132
ADAMA Ltd Annual Report 2022
Total guarantee line
10,899.23 Total amount of the guarantee in favor of the
approved in favor of the 94,600.32 (approximately
(approximately RMB subsidiaries occurred during the reporting
subsidiaries during the RMB 6,588.53 million)
725.53million) period (C2)
reporting period (C1)
63,363.05
(approximately RMB
Aggregated guarantee line
4,412.98million)
that has been approved in Total guarantee balance in favor of the
(As for Adama 94,600.32 (approximately
favor of the subsidiaries by subsidiaries by the end of the reporting period
Makhteshim and Adama RMB 6,588.53)
the end of the reporting (C4)
Agan, the planned
period (C3)
guarantee amount is
unlimited)
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
Total guarantee line
approved during the Total actual occurred amount of guarantee
259,653.45 696,753.39
reporting period during the reporting period (A2+B2+C2)
(A1+B1+C1)
Total guarantee line that
has been approved at the Total actual guarantee balance at the end of the
792,198.3 693,253.39
end of the reporting period reporting period (A4+B4+C4)
(A3+B3+C3)
Proportion of total guarantee amount (A4+B4+C4)
29.98%
to the net assets of the Company
Of which:
The balance of the guarantee provided in favor of
0
the controlling shareholder and related party.
Amount of debt guarantee provided for the
USD 530.44 million
guaranteed party whose asset-liability ratio is not
(approximately RMB 3,694.33 million)
less than 70% directly or indirectly (E)
The amount of the guarantee that exceeds 50% of
0
the net assets
Total amount of the above three guarantees USD 530.44 million
(D+E+F) (approximately RMB 3,694.33 million)
As for undue guarantee, liability to guarantee has
happened or there is evidence showing that joint
--
liquidated liability may be undertaken during this
Reporting Period (if existing)
Regulated procedures are violated to offer
--
guarantee (if existing)
133
ADAMA Ltd Annual Report 2022
3. Cash assets management entrustment
(1) Wealth management entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Entrustment loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other significant contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
134
ADAMA Ltd Annual Report 2022
XVI. Other significant events
□ Applicable √ Not applicable
There were no other significant events during the Reporting Period.
XVII. Significant events of subsidiaries
□ Applicable √ Not applicable
135
ADAMA Ltd Annual Report 2022
Section VII - Change in Shares & Shareholders
I. Changes in shares
1. Change in Shares
Unit: share
Before the Change Increase/Decrease (+/-) After the Change
Newly
Bonus Capitalization of
Amount Proportion Issued Other Subtotal Amount Proportion
Shares Public reserves
share
I. Restricted shares 4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
a) State-owned shares -- -- -- -- -- -- -- -- --
b) State-owned legal person’s -- --
0 0.0000% -- -- -- 0 0.0000%
shares
c) Shares held by domestic
4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
investors
i. Shares held by domestic legal -- -- -- -- --
0 0.0000% 0 0.0000%
person
ii. Shares held by domestic
4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
natural person
II. Shares not subject to trading
2,329,807,266 99.9998% -- -- -- -- -- 2,329,807,266 99.9998%
moratorium
a) RMB ordinary shares 2,177,067,461 93.4439% -- -- -- -- -- 2,177,067,461 93.4439%
b) Domestically listed foreign shares 152,739,805 6.5559% -- -- -- -- -- 152,739,805 6.5559%
III. Total shares 2,329,811,766 100.00% -- -- -- -- -- 2,329,811,766 100.00%
136
ADAMA Ltd Annual Report 2022
Reason for the change in shares
□ Applicable √ Not applicable
Approval of the change in shares
□ Applicable √ Not applicable
137
ADAMA Ltd Annual Report 2022
The registered status for the change in shares
□Applicable √ Not applicable
Effects of the change in shares on the basic EPS, diluted EPS, net assets per share attributable to common shareholders
of the Company and other financial indexes over the last year and last period.
□ Applicable √ Not applicable
Other contents that the Company considered necessary or were required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
138
ADAMA Ltd Annual Report 2022
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: share
Shareholders Restricted shares at Shares released in the Restricted shares Ending shares Restricted reasons Date for
the opening of the Reporting Period increased in the restricted released
Reporting Period Reporting Period
six months
Shares held by a
after the
Jiang Chenggang 4,500 0 0 4,500 supervisor should be
expiration of
locked up.
the term
Total 4,500 0 0 4,500 -- --
139
ADAMA Ltd Annual Report 2022
II. Issuance and listing of securities
1. Issuance of securities (excluding preferred stock) during the Reporting Period
□ Applicable √ Not applicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets
and liabilities
□ Applicable √ Not applicable
3. Shares held by internal staffs of the Company as a measure of the reform of State-Owned
Enterprises
□ Applicable √ Not applicable
140
ADAMA Ltd Annual Report 2022
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
39,975(the
number of
Total number of preferred
Total number of ordinary A share Total number of
stockholder with vote
shareholders as shareholders is shareholders on the 30th Total number of preferred
right restored on the 30th
of the end of the 26,705; trading day before the 40,664 stockholder with vote right 0 0
trading day before the
Reporting the number of B disclosure date of the restored (if any)
disclosure date of the
Period share annual report
annual report
shareholders is
13,270)
Shareholding of shareholders holding more than 5% shares
Number of Pledged or frozen shares
Number of Increase and
Holding shares held Number of shares held
Name of Nature of shareholding at the decrease of shares
percentage subject to not subject to trading Status of
shareholder shareholder end of the Reporting during Reporting Amount
(%) trading moratorium shares
Period Period
moratorium
Syngenta Group State-owned
78.47% 1,828,137,961 -- -- 1,828,137,961 -- --
Co., Ltd. legal person
China Cinda Asset
State-owned
Management Co., 1.34% 31,115,916 -- -- 31,115,916 -- --
legal person
Ltd.
Portfolio No.503 of
National Social Others 0.56% 13,000,000 -2,000,000 -- 13,000,000 -- --
Security Fund
CITIC Securities -
Huarong Ruitong
Equity Investment
Management Co.,
Others 0.55% 12,885,900 12,885,900 -- 12,885,900 -- --
Ltd. - CITIC
Securities -
Changfeng Single
Asset Management
141
ADAMA Ltd Annual Report 2022
Plan
Hong Kong
Securities Clearing Overseas legal
0.46% 10,606,080 3,121,003 -- 10,606,080 -- --
Company Ltd. person
(HKSCC)
Domestic
Wang Xiuqin 0.36% 8,487,715 8,487,715 -- 8,487,715 -- --
Individual
Bosera Funds-
China Merchants
Bank- Bosera
Funds Xincheng Others 0.28% 6,500,000 -- -- 6,500,000 -- --
No.2 Collective
Asset Management
Plan
Bosera Funds-
Postal Savings
Bank- Bosera
Funds Xincheng Others 0.26% 6,000,000 -- -- 6,000,000 -- --
No.3 Collective
Asset Management
Plan
Wu Feng Domestic
0.24% 5,479,915 2,077,646 -- 5,479,915 -- --
Individual
China Universal
Fund-Industrial
Bank-China
Universal-Strategic Others 0.19% 4,400,000 4,400,000 -- 4,400,000 -- --
Enhancement No.3
Collective Asset
Management Plan
Strategic investors or the general
legal person due to the placement
Not applicable
of new shares become the top 10
shareholders (if any)
Syngenta Group Co., Ltd. is not related party or acting-in-concert party as prescribed in the Administrative Methods for Acquisition of
Explanation on associated
Listed Companies to other shareholders. It is unknown to the Company whether shareholders above are related parties or acting-in-
relationship or/and persons
concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies.
Description of the above
Not applicable
shareholders involved in
142
ADAMA Ltd Annual Report 2022
proxy/trustee voting rights and
abstention from voting rights
Special note on the existence of
dedicated accounts for repurchase
Not applicable
among the top 10 shareholders (if
any)
Details of shares held by top 10 shareholders not subject to trading moratorium
Number of shares held not subject to Type of share
Name of shareholder trading moratorium at the end of the
Type of share Amount
period
Syngenta Group Co., Ltd. 1,828,137,961 RMB ordinary share 1,828,137,961
China Cinda Asset Management Co., Ltd. 31,115,916 RMB ordinary share 31,115,916
Portfolio No.503 of National Social Security Fund 13,000,000 RMB ordinary share 13,000,000
CITIC Securities - Huarong Ruitong Equity Investment Management Co., Ltd. -
12,885,900 RMB ordinary share 12,885,900
CITIC Securities - Changfeng Single Asset Management Plan
Hong Kong Securities Clearing Company Ltd. (HKSCC) 10,606,080 RMB ordinary share 10,606,080
Wang Xiuqin 8,487,715 RMB ordinary share 8,487,715
Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.2 Collective
6,500,000 RMB ordinary share 6,500,000
Asset Management Plan
Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.3 Collective
6,000,000 RMB ordinary share 6,000,000
Asset Management Plan
Wu Feng 5,479,915 RMB ordinary share 5,479,915
China Universal Fund-Industrial Bank-China Universal-Strategic Enhancement
4,400,000 RMB ordinary share 4,400,000
No.3 Collective Asset Management Plan
Syngenta Group Co., Ltd. is not a related party or acting-in-concert party as prescribed in the
Explanation on associated relationship among the top ten shareholders of
Administrative Methods for Acquisition of Listed Companies to other shareholders. It is
tradable share not subject to trading moratorium, as well as among the top
unknown to the Company whether shareholders above are related parties or acting-in-
ten shareholders of tradable share not subject to trading moratorium and
concert parties as prescribed in the Administrative Methods for Acquisition of Listed
top ten shareholders, or explanation on acting-in-concert
Companies.
Shareholder Wang Xiuqin held 616,261 shares through an ordinary securities trading account
and 7,871,454 shares through a credit collateral securities trading account, thus holding a
Particular about shareholder participate in the securities lending and
total of 8,487,715 shares of the Company. Shareholder Wu Feng held 3,967,889 shares
borrowing business (if any)
through an ordinary securities trading account and 1,512,026 shares through a credit
collateral securities trading account, thus holding a total of 5,479,915 shares of the Company.
143
ADAMA Ltd Annual Report 2022
Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company carry out an agreed buy-back in the Reporting
Period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders of the Company were not subject to trading moratorium of the Company carry out an agreed
buy-back in the reporting period.
144
ADAMA Ltd Annual Report 2022
2. Particulars about the controlling shareholder
Nature of controlling shareholder: The central state-owned
Type of controlling shareholder: legal person
Legal
Name of
representative Date of
controlling Organization code Business scope
/ company establishment
shareholder
principal
General projects: agricultural scientific research and
experimental development; Engineering and
technical research and experimental development;
Natural science research and experimental
development; Research and development of
biopesticide technology; Technology, information,
facility construction and operation and other services
related to agricultural production and operation;
Agricultural specialty and auxiliary activities;
Information technology consulting services;
Technical services, technical development, technical
consultation, technical exchange, technology
transfer and technology promotion; Research and
development of biochemical product technology;
Sales of chemical products (excluding licensed
Syngenta chemical products); Fertilizer sales; General cargo
Group Co., Li Fanrong June 27, 2019 91310000MA1FL6MN13 warehousing services (excluding hazardous
Ltd. chemicals and other items requiring license); Low
temperature storage (excluding hazardous
chemicals and other items requiring license); Socio
economic advisory services; Import and export of
goods; Technology import and export. (except for the
projects that must be approved according to law,
business activities shall be carried out independently
and legally according to the business license).
Licensed projects: seed production of main crops;
Crop seed business; Genetically modified crop seed
production. (for projects that must be approved
according to law, business activities shall be carried
out only with the approval of relevant departments.
The specific business projects shall be subject to the
approval documents or licenses of relevant
departments).
By the end of the Reporting Period, Syngenta Group directly holds 36.17%
Shares held by the controlling
equity of Jiangsu Yangnong Chemical Co., Ltd., and indirectly holds 52.65%
shareholder in other listed companies by
equity of SinoFert Holdings Limited through Syngenta Group (HK) Holdings
holding or shareholding during the
Company Limited and 20.51% equity of Win-All High-tech Seed Co., Ltd.
Reporting Period
through China National Seed Group Co., Ltd.
145
ADAMA Ltd Annual Report 2022
Change of the controlling shareholder during the Reporting Period
□ Applicable √ Not applicable
The controlling shareholder did not change during the Reporting Period.
3. Particulars regarding actual controller and the persons acting in concert
Nature of actual controller: State-owned Assets Supervision and Administration Commission
Type of actual controller: Legal person
Legal representative / Date of Organization Business
Name of the actual controller
company principal establishment code scope
State-owned Assets Supervision and
Administration Commission of the State Zhang Yuzhuo March 16, 2003 - -
Council
Shares held by the actual controller
in other listed companies by holding
Not applicable
or shareholding during the reporting
period
Change of the actual controller during the Reporting Period
□ Applicable √ Not applicable
The actual controller did not change during the Reporting Period.
Block diagram of equity and control relationship between the Company and actual controller:
146
ADAMA Ltd Annual Report 2022
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. The controlling shareholder or the largest shareholder of the Company and its concert parties
have pledged 80% of their shares in the Company
□ Applicable √ Not applicable
5. Particulars regarding other corporate shareholders with over 10% holdings
□ Applicable √ Not applicable
6. Particulars regarding restriction of reducing holding-shares of controlling shareholders, actual
controller, restructuring parties and other commitment entities
□ Applicable √ Not applicable
IV. Specific implementation of share repurchases during the reporting period
□ Applicable √ Not applicable
Status of reducing holding of repurchased shares in the way of centralized bidding
□ Applicable √ Not applicable
147
ADAMA Ltd Annual Report 2022
Section VIII - Preferred stock
□ Applicable √ Not applicable
There was no preferred stock during Reporting Period.
148
ADAMA Ltd Annual Report 2022
Section IX - Corporate Bonds
□ Applicable √ Not applicable
149
ADAMA Ltd Annual Report 2022
Section X - Financial Report
Type of auditor’s opinion Standard Unqualified Opinion
Audit opinion signoff date March 19, 2023
Name of the auditor Deloitte Touche Tohmatsu CPA LLP
Reference number of the audit report De Shi Bao (Shen) Zi (23) No P01721
Name of CPA Ji Yuting and Zhao Jingyuan
150
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (23) No. P01721
(Page 1 of 6)
To the shareholders of ADAMA Ltd.:
I. Opinion
We have audited the financial statements of ADAMA Ltd. (hereinafter referred to as the "Company"), which comprise
the consolidated and the Company's balance sheets as at 31 December 2022, and the consolidated and the Company's
income statements, the consolidated and the Company's statements of changes in shareholders' equity and the consol-
idated and the Company's statements of cash flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and the
Company's financial position as of 31 December 2022, and the consolidated and the Company's results of operations
and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards
are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethics for Chinese Certified Public Accountants
(the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements for the current year. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The followings are key audit matters that we have determined to communicate in the auditor's report.
- 151 -
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P01721
(Page 2 of 6)
III. Key Audit Matters - continued
(I) Cut-off of revenue recognition
Description
ADAMA's sale revenue is mainly contributed by the sales of goods in over 100 countries all over the world. As stated
in Note (V), 42 operating income, ADAMA's consolidated principal activities revenue for 2022 was RMB
37,305,373,000, which was significant to the financial statements. As stated in Note (III), 24, ADAMA recognizes
revenue when the customer obtains control over relevant commodities, and the Company has a risk of overstating the
revenue by late cutoffs. Therefore, we considered the appropriateness of cutoffs and correctness of accounting periods
for principal activities revenue recognition as a key audit matter.
Audit response
Our procedures in relation to this matter mainly include:
1. Testing and assessing the design, implementation and operating effectiveness of internal controls relating to the
cut-off of principal activities revenue recognition;
2. Reviewing the contracts with key customers for the terms and conditions relating to the transfer of controls of
goods and services, and assessing whether the timing of principal activities revenue recognition complies with the
Accounting Standards for Business Enterprises;
3. Performing cut-off test by selecting samples from sales of goods recorded in the current year, checking the sup-
porting documents such as sales invoices and inventory transfer documents, and checking whether the income is
recorded in the correct accounting period;
4. Performing analytic procedures and comparing whether there is abnormal fluctuation in the sales of the major
sales regions in the current period and the previous period, and analyzing whether there is any abnormality in the
sales return of the products.
- 152 -
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P01721
(Page 3 of 6)
III. Key Audit Matters - continued
(II) Provision for Impairment of Goodwill on Crop Protection Units
Description
As stated in Note (V), 18, the carrying amount of goodwill was RMB4,805,157,000 as of 31 December 2022, out of
which RMB4,735,000,000 was allocated to Crop Protection unit. As disclosed in Note III, 19 and 20, ADAMA’s
goodwill arising from business combination is measured at the cost less the accumulated impairment loss after initial
recognition, and should be entitled to impairment test at least at the end of each year. When performing impairment
test of Crop Protection unit with goodwill allocated, the management determined the recoverable amount of relevant
assets group of units based on the model of present value determined on future cash flows, which depend on the
judgement of the management, it requires the management to estimate the cash flows from relevant assets group of
units and select an appropriate discount rate that reflects the time value of money in the current market and the specific
risk of the assets. As significant accounting estimates and judgments are involved and the goodwill allocated to Crop
Protection unit is significant in amount, we considered the provision for impairment of goodwill on Crop Protection
unit as a key audit matter.
Audit response
Our procedures in relation to this matter mainly include:
1. Testing and assessing the design, implementation and operating effectiveness of internal controls relating to the
provision for impairment of goodwill on Crop Protection unit;
2. Checking the basis on which the management allocated goodwill to Crop Protection unit and assessing the rea-
sonableness;
3. Reviewing and assessing the reasonableness of the management's adoption of discount cash flow model for the
Crop Protection unit containing goodwill.
4. Analyzing and reviewing the significant accounting estimates and judgements used in estimation of future cash
flows, including the key parameters such as discount rate and growth rate, etc., with assistance from internal
valuation specialist;
5. Checking the expected future cash flows to historical data and other supporting evidence, and assess the reasona-
bleness;
6. Performing sensitivity analysis on possible changes in relevant key assumptions in impairment test models.
- 153 -
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P01721
(Page 4 of 6)
IV. Other Information
Management of the Company is responsible for the other information. The other information comprises the infor-
mation included in the 2022 annual report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information;
we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The management of the Company is responsible for the preparation and fair presentation of the financial statements
in accordance with Accounting Standards for Business Enterprises, and designing, implementing and maintaining
internal control that is necessary to enable the financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of ac-
counting unless management either intends to liquidate the Company or to ceases operations, or has no realistic alter-
native but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Rea-
sonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with China
Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
- 154 -
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P01721
(Page 5 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
As part of an audit in accordance with China Standards on Auditing, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are ap-
propriate in the circumstances;
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management;
(4) Conclude on the appropriateness of the management' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncer-
tainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the
Company to cease to continue as a going concern;
(5) Evaluate the overall presentation (including the disclosures), structure and content of the financial statements, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation;
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activi-
ties within the Company to express an opinion on the financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
- 155 -
ADAMA Ltd. Annual Report 2022
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P01721
(Page 6 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
We also provide those charged with governance with a statement that we have complied with relevant ethical require-
ments regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current year and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Deloitte Touche Tohmatsu CPA LLP Chinese Certified Public Accountant
Shanghai China Ji Yuting
(Engagement Partner)
Chinese Certified Public Accountant
Zhao Jingyuan
19 March 2023
This independent auditor's report of the financial statements and the accompanying financial statements are English
translations of the independent auditor's report and the financial statements prepared under accounting principles
and practices generally accepted in the People's Republic of China. These financial statements are not intended to
present the balance sheet and results of operations and cash flows in accordance with accounting principles and
practices generally accepted in other countries and jurisdictions. In case the English version does not conform to the
Chinese version, the Chinese version prevails
- 156 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Consolidated Balance Sheet
December 31 December 31
Notes 2022 2021
Current assets
Cash at bank and on hand V.1 4,290,961 5,818,835
Financial assets held for trading V.2 1,685 1,479
Derivative financial assets V.3 233,809 243,316
Bills receivable V.4 112,297 81,992
Accounts receivable V.5 9,018,375 8,362,493
Receivables financing V.6 63,639 120,157
Prepayments V.7 341,102 379,788
Other receivables V.8 1,021,824 691,939
Inventories V.9 16,927,241 11,750,162
Other current assets V.10 1,129,688 938,453
Total current assets 33,140,621 28,388,614
Non-current assets
Long-term receivables V.11 82,510 56,234
Long-term equity investments V.12 26,368 15,335
Other equity investments V.13 158,341 152,118
Investment properties 3,168 3,716
Fixed assets V.14 8,952,184 8,048,389
Construction in progress V.15 2,961,401 2,143,400
Right-of-use assets V.16 555,889 463,915
Intangible assets V.17 5,342,754 5,326,288
Goodwill V.18 4,805,157 4,409,599
Deferred tax assets V.19 1,347,263 723,075
Other non-current assets V.20 604,833 504,625
Total non-current assets 24,839,868 21,846,694
Total assets 57,980,489 50,235,308
- 157 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Consolidated Balance Sheet (continued)
December 31 December 31
Notes 2022 2021
Current liabilities
Short-term loans V.21 3,342,921 874,755
Derivative financial liabilities V.22 545,516 176,206
Bills payable V.23 1,114,775 493,376
Accounts payable V.24 7,527,269 6,294,163
Contract liabilities V.25 1,776,573 1,381,311
Employee benefits payable V.26 1,370,786 1,247,979
Taxes payable V.27 459,574 368,682
Other payables V.28 1,611,282 1,342,188
Non-current liabilities due within one year V.29 2,262,131 1,795,754
Other current liabilities V.30 703,794 412,909
Total current liabilities 20,714,621 14,387,323
Non-current liabilities
Long-term loans V.31 3,662,870 3,498,912
Debentures payable V.32 7,353,511 7,797,131
Lease liabilities V.33 431,076 362,086
Long-term payables 107,686 95,699
Long-term employee benefits payable V.34 792,153 792,358
Provisions V.35 222,181 186,430
Deferred tax liabilities V.19 315,861 380,138
Other non-current liabilities V.36 1,255,875 1,660,148
Total non-current liabilities 14,141,213 14,772,902
Total liabilities 34,855,834 29,160,225
Shareholders' equity
Share capital V.37 2,329,812 2,329,812
Capital reserve V.38 12,986,333 12,977,171
Less: Treasury shares - -
Other comprehensive income V.39 1,080,590 (432,384)
Special reserves 15,818 19,857
Surplus reserve V.40 242,498 240,162
Retained earnings V.41 6,469,604 5,940,465
Total equity attributed to the shareholders
of the company 23,124,655 21,075,083
Non-controlling interests - -
Total Equity 23,124,655 21,075,083
Total liabilities and equity 57,980,489 50,235,308
Ignacio Dominguez Efrat Nagar
Legal representative Chief Financial Officer
These financial statements were approved by the Board of Directors of the Company on March 19 2023.
The notes form part of these financial statements.
- 158 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Company's Balance Sheet
December 31 December 31
Notes 2022 2021
Current assets
Cash at bank and on hand XV.1 271,080 265,558
Accounts receivable XV.2 758,462 208,109
Receivables financing XV.3 2,596 11,752
Prepayments 7,944 29,364
Other receivables XV.4 11,611 21,496
Inventories 256,001 220,329
Non-current assets due within one year 125,000 -
Other current assets 2,312 44,221
Total current assets 1,435,006 800,829
Non-current assets
Long-term equity investments XV.5 17,511,352 17,511,352
Other equity investments 84,720 84,720
Investment properties 3,168 3,716
Fixed assets 1,822,134 1,264,210
Construction in progress 90,074 728,742
Right-of-use assets 2,842 5,453
Intangible assets 258,997 265,510
Deferred tax assets 75,383 60,668
Other non-current assets 269,574 560,982
Total non-current assets 20,118,244 20,485,353
Total assets 21,553,250 21,286,182
Current liabilities
Short-term loans 50,000 -
Bills payables 42,451 20,415
Accounts payables 205,767 205,985
Contract liabilities 15,116 10,145
Employee benefits payable 14,699 28,880
Taxes payable 3,529 2,662
Other payables 730,901 560,098
Non-current liabilities due within one year 671,454 612,666
Total current liabilities 1,733,917 1,440,851
Non-current liabilities
Long-term loans 836,795 905,840
Lease liabilities 701 2,925
Long-term employee benefits payable 97,574 99,495
Provisions 28,516 44,385
Other non-current liabilities 374,360 312,130
Total non-current liabilities 1,337,946 1,364,775
Total liabilities 3,071,863 2,805,626
Shareholders’ equity
Share capital V.37 2,329,812 2,329,812
Capital reserve 15,523,881 15,523,881
Other comprehensive income 30,822 30,668
Special reserves 16,509 20,548
Surplus reserve 242,498 240,162
Retained earnings V.41 337,865 335,485
Total shareholders’ equity 18,481,387 18,480,556
Total liabilities and shareholders’ equity 21,553,250 21,286,182
- 159 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Consolidated Income Statement
Year ended December 31
Notes 2022 2021
I. Operating income V.42 37,381,915 31,038,605
Less: Cost of sales V.42 27,984,966 23,412,519
Taxes and surcharges V.43 110,414 106,282
Selling and Distribution expenses V.44 4,396,279 4,019,257
General and administrative expenses V.45 1,406,828 1,089,599
Research and Development expenses V.46 577,859 501,377
Financial expenses (incomes) V.47 325,796 1,939,422
Including: Interest expense 777,827 659,690
Interest income 180,619 65,059
Add: Investment income (loss), net V.48 12,683 10,168
Including: Income from investment
in associates and joint ventures 10,358 5,923
Gain (loss) from changes in fair value V.49 (1,504,832) 597,685
Credit impairment reversal (losses) V.50 (91,667) 10,884
Asset impairment losses V.51 (325,386) (70,267)
Gain from disposal of assets V.52 59,596 (2,604)
II. Operating profit 730,167 516,015
Add: Non-operating income 58,395 65,240
Less: Non-operating expenses 31,729 37,453
III. Total profit 756,833 543,802
Less: Income tax expenses V.53 147,442 380,489
IV. Net profit 609,391 163,313
(1). Classified by nature of operations
(1.1). Continuing operations 609,391 163,313
(2). Classified by ownership
(2.1). Shareholders of the Company 609,391 157,397
(2.2). Non-controlling interests 5,916
V. Other comprehensive income, net of tax V. 39 1,512,974 (360,329)
Other comprehensive income (net of tax)
attributable to shareholders of the Company 1,512,974 (360,329)
(1) Items that will not be reclassified to profit or loss: 82,699 (31,262)
(1.1) Re-measurement of defined benefit plan liability 82,699 (30,603)
(1.2) Fair Value changes in other equity investment - (659)
(2) Items that were or will be reclassified to profit or loss 1,430,275 (329,067)
(2.1) Effective portion of gains or loss of cash flow hedge (73,324) 252,674
(2.2) Translation differences of foreign financial statements 1,503,599 (581,741)
VI. Total comprehensive income for the period attributable to
Shareholders of the Company 2,122,365 (197,016)
Total comprehensive income for the period
attributable to shareholders of the Company 2,122,365 (202,932)
Total comprehensive income for the period
attributable to Non-controlling interests - 5,916
VII. Earnings per share XIV.2
(1) Basic earnings per share (Yuan/share) 0.26 0.07
(2) Diluted earnings per share (Yuan/share) N/A N/A
- 160 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Company's Income Statement
Year ended December 31
Notes 2022 2021
I. Operating income XV.6 2,297,898 1,157,419
Less: Operating costs XV.6 1,777,065 1,062,232
Taxes and surcharges 8,058 6,637
Selling and Distribution expenses 4,959 5,897
General and administrative expenses 151,840 156,141
Research and Development expenses 74,944 44,661
Financial expenses (income) 45,748 17,599
Including: Interest expense 51,463 26,101
Interest income 8,605 14,491
Add: Investment income, net 13,811 1,808
Gain from changes in fair value (“-” means loss) (314,670) (6,070)
Credit impairment losses (48) (301)
Asset Impairment reversal (losses) 2,816 (9,369)
Gain from disposal of assets 60,292 16,630
II. Operating Profit (2,515) (133,050)
Add: Non-operating income 13,749 15,647
Less: Non-operating expenses 2,595 2,051
III. Total profit 8,639 (119,454)
Less: Income tax expense (income) (14,715) 5,484
IV. Net profit (loss) 23,354 (124,938)
V. Other comprehensive income, net of tax 154 (16,722)
(1) Items that will not be reclassified to profit or loss 154 (16,722)
(1.1) Re-measurement of defined benefit plan liability 154 (16,064)
(1.2) FV changes in other equity investment - (658)
VI. Total comprehensive income (loss) for the period 23,508 (141,660)
- 161 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Consolidated Cash Flow Statement
Year ended December 31
Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 35,470,804 30,128,925
Refund of taxes and surcharges 300,092 184,881
Cash received relating to other operating activities V.56(1) 804,577 864,848
Sub-total of cash inflows from operating activities 36,575,473 31,178,654
Cash paid for goods and services 27,540,166 20,020,798
Cash paid to and on behalf of employees 4,087,028 3,615,590
Payments of taxes and surcharges 871,493 449,010
Cash paid relating to other operating activities V.56(2) 3,136,041 2,531,381
Sub-total of cash outflows from operating activities 35,634,728 26,616,779
Net cash flows from operating activities V.57(1)a 940,745 4,561,875
II. Cash flows from investing activities:
Cash received from disposal of investments 46,366 3,864
Cash received from returns of investments 3,162 867
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 84,885 27,456
Cash received relating to other investing activities V.56(3) 2,325 8,562
Sub-total of cash inflows from investing activities 136,738 40,749
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 2,667,236 2,589,460
Cash paid for acquisition of investments - 2,225
Net cash paid to acquire subsidiaries or other business units - 655,039
Cash paid relating to other investing activities V.56(4) 129,944 177,476
Sub-total of cash outflows from investing activities 2,797,180 3,424,200
Net cash flows used in investing activities (2,660,442) (3,383,451)
III. Cash flows from financing activities:
Cash received from borrowings 3,782,897 4,565,565
Cash received from other financing activities V.56(5) 849,736 1,124,944
Sub-total of cash inflows from financing activities 4,632,633 5,690,509
Cash repayments of borrowings 2,330,610 3,670,409
Cash payment for dividends, profit distributions and interest 951,221 791,993
Including: Dividends paid to non-controlling interest 59,278 42,357
Cash paid relating to other financing activities V.56(6) 1,406,592 390,944
Sub-total of cash outflows from financing activities 4,688,423 4,853,346
Net cash flow provided by (used in) financing activities (55,790) 837,163
IV. Effects of foreign exchange rate changes on cash and cash equiva-
lents 241,260 (91,178)
V. Net increase (decrease) in cash and cash equivalents V.57(1)b (1,534,227) 1,924,409
Add: Cash and cash equivalents at the beginning of the year 5,759,480 3,835,071
VI. Cash and cash equivalents at the end 4,225,253 5,759,480
of the period V.57(2)
- 162 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Company's Cash Flow Statement
Year ended December 31
Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 1,447,293 1,122,545
Refund of taxes and surcharges 78,753 65,104
Cash received relating to other operating activities XV.7(1) 114,271 126,387
Sub-total of cash inflows from operating activities 1,640,317 1,314,036
Cash paid for goods and services 1,230,277 923,676
Cash paid to and on behalf of employees 135,760 185,037
Payments of taxes and surcharges 8,242 10,936
Cash paid relating to other operating activities XV.7(2) 124,903 108,015
Sub-total of cash outflows from operating activities 1,499,182 1,227,664
Net cash flows from operating activities XV.8 141,135 86,372
II. Cash flows from investing activities:
Cash received from returns of investments 13,811 1,808
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets 67,065 19,360
Cash received relating to other investing activities XV.7.(3) 150,000 -
Sub-total of cash inflows from investing activities 230,876 21,168
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 85,707 380,744
Cash paid for acquisition of investments - 697,909
Cash paid for other investing activities XV.7.(4) 250,000 -
Sub-total of cash outflows from investing activities 335,707 1,078,653
Net cash flows used in investing activities (104,831) (1,057,485)
III. Cash flows from financing activities:
Cash received from borrowings 650,000 758,200
Cash received relating to other financing activities XV.7.(5) 24,865 12,345
Sub-total of cash inflows from financing activities 674,865 770,545
Cash repayments of borrowings 610,046 295,046
Cash payment for dividends, profit distributions or interest 71,290 86,524
Cash paid relating to other financing activities XV.7.(6) 31,491 178,186
Sub-total of cash outflows from financing activities 712,827 559,756
Net cash flow provided by (used in) financing activities (37,962) 210,789
IV. Effects of foreign exchange rate changes on cash and cash equivalents 554 (3,000)
V. Net decrease in cash and cash equivalents (1,104) (763,324)
Add: Cash and cash equivalents at the beginning of the year XV.8(2) 259,434 1,022,758
VI. Cash and cash equivalents at the end of the period XV.8(2) 258,330 259,434
- 163 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Consolidated Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2022
Other compre-
Share capi- Capital re- hensive in- Special re- Surplus Retained earn- Non-controlling
tal serve come serves reserve ings Total interests Total equity
I. Balance at January 1, 2022 2,329,812 12,977,171 (432,384) 19,857 240,162 5,940,465 21,075,083 - 21,075,083
II. Changes in equity for the period - 9,162 1,512,974 (4,039) 2,336 529,139 2,049,572 - 2,049,572
1. Total comprehensive income - - 1,512,974 - - 609,391 2,122,365 - 2,122,365
2. Owner’s contributions and reduction - 9,162 - - - - 9,162 - 9,162
2.1 Transactions with holders of - 9,162 - - - - 9,162 - 9,162
non controlling interest
3. Appropriation of profits - - - - 2,336 (80,252) (77,916) - (77,916)
3.1 Transfer to surplus reserve - - - - 2,336 (2,336) - - -
3.2 Distribution to owners - - - - - (18,638) (18,638) - (18,638)
3.3 Distribution to non-controlling - - - - - (59,278) (59,278) - (59,278)
interest
4. Special reserve - - - (4,039) - - (4,039) - (4,039)
4.1 Transfer to special reserve - - - 7,015 - - 7,015 - 7,015
4.2 Amount utilized - - - (11,054) - - (11,054) - (11,054)
III. Balance at December 31, 2022 2,329,812 12,986,333 1,080,590 15,818 242,498 6,469,604 23,124,655 - 23,124,655
- 164 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2021
Attributable to shareholders of the Company
Other compre-
Share capi- Capital re- Less: Treasury hensive in- Special Surplus re- Retained earn- Non-controlling
tal * serve * shares * come reserves serve ings Total interests Total equity
I. Balance at January 1, 2021 2,344,121 13,023,219 60,357 (72,055) 15,960 240,162 5,862,702 21,353,752 80,163 21,433,915
II. Changes in equity for the period (14,309) (46,048) (60,357) (360,329) 3,897 - 77,763 (278,669) (80,163) (358,832)
1. Total comprehensive income - - - (360,329) - - 157,397 (202,932) 5,916 (197,016)
2. Owner’s contributions and reduction (14,309) (46,048) (60,357) - - - - - (86,079) (86,079)
2.1 Cancellation of shares (14,309) (46,048) (60,357) - - - - - - -
2.2 Non-controlling interests in re- - - - - - - - - (86,079) (86,079)
spect of business combination
3. Appropriation of profits - - - - - - (79,634) (79,634) - (79,634)
3.1 Distribution to owners - - - - - - (37,277) (37,277) - (37,277)
3.2 Distribution to non-controlling
interest - - - - - - (42,357) (42,357) - (42,357)
4. Special reserve - - - - 3,897 - - 3,897 - 3,897
4.1 Transfer to special reserve - - - - 7,733 - - 7,733 - 7,733
4.2 Amount utilized - - - - (3,836) - - (3,836) - (3,836)
III. Balance at December 31, 2021 2,329,812 12,977,171 - (432,384) 19,857 240,162 5,940,465 21,075,083 - 21,075,083
- 165 -
ADAMA Ltd. Annual Report 2022
(Expressed in RMB '000)
Company's Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2022
Share Capital re- Other compre- Special Surplus Retained
capital serve hensive income reserves reserve earnings Total
I. Balance at January 1, 2022 2,329,812 15,523,881 30,668 20,548 240,162 335,485 18,480,556
II. Changes in equity for the period - - 154 (4,039) 2,336 2,380 831
1. Total comprehensive income - - 154 - - 23,354 23,508
2. Owner’s contributions and reduction - - - - - - -
2.1 Repurchase of shares - - - - - - -
2.2 Other - - - - - - -
3. Appropriation of profits - - - - 2,336 (20,974) (18,638)
3.1 Appropriations to surplus reserves - - - - 2,336 (2,336) -
3.2 Transfer to Distribution to shareholders - - - - - (18,638) (18,638)
4. Special reserve - - - (4,039) - - (4,039)
4.1 Transfer to special reserve - - - 7,015 - - 7,015
4.2 Amount utilized - - - (11,054) - - (11,054)
Ⅲ. Balance at December 31, 2022 2,329,812 15,523,881 30,822 16,509 242,498 337,865 18,481,387
For the year ended December 31, 2021
Attributable to shareholders of the Company
Less:
Share Capital re- treasury Other compre- Special Surplus Retained
capital serve share hensive income reserves reserve earnings Total
I. Balance at January 1, 2021 2,344,121 15,569,929 60,357 47,390 16,651 240,162 497,700 18,655,596
II. Changes in equity for the period (14,309) (46,048) (60,357) (16,722) 3,897 - (162,215) (175,040)
1. Total comprehensive income - - - (16,722) - - (124,938) (141,660)
2. Owner’s contributions and reduction (14,309) (46,048) (60,357) - - - - -
2.1 Cancellation of shares (14,309) (46,048) (60,357) - - - - -
3. Appropriation of profits - - - - - - (37,277) (37,277)
3.1 Transfer to Distribution to shareholders - - - - - - (37,277) (37,277)
4. Special reserve - - - - 3,897 - - 3,897
4.1 Transfer to special reserve - - - - 7,733 - - 7,733
4.2 Amount utilized - - - - (3,836) - - (3,836)
Ⅲ. Balance at December 31, 2021 2,329,812 15,523,881 - 30,668 20,548 240,162 335,485 18,480,556
- 166 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
I BASIC CORPORATE INFORMATION
ADAMA Ltd. (hereinafter the “Company” or the “Group”) is a company limited by shares established in
China with its head office located in Hubei Jingzhou.
In June 2020, the controlling shareholder of the Company changed from China National Agrochemical Co,.
Ltd. (hereinafter – “CNAC") to Syngenta Group Co., Ltd. (hereinafter “Syngenta Group”). As of August
2021, following the combination between China National Chemical Co., Ltd. (hereinafter - “ChemChina”)
and Sinochem Holdings Corporation Ltd. (hereinafter - “Sinochem Holdings”), Syngenta Group, and subse-
quently the Company, are ultimately controlled by Sinochem Holdings - parent of both ChemChina and
Sinochem Group Co., Ltd. (hereinafter “Sinochem Holdings”), subordinated to SASAC.
The principal activities of the Company and its subsidiaries (together referred to as the “Group”) are engaged
in development, manufacturing and marketing of agrochemicals, intermediate materials for other industries,
food additives and synthetic aromatic products, mainly for export. For information about the largest subsid-
iaries of the Company, refer to Note VII.
The Company’s consolidated financial statements had been approved by the Board of Directors of the Com-
pany on March 19, 2023.
Details of the scope of consolidated financial statements are set out in Note VII "Interest in other entities",
whereas the changes of the scope of consolidation are set out in Note VI "Changes in consolidation scope".
II BASIS OF PREPARATION
1. Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises issued by the Ministry of Finance
(the "MoF"). In addition, the Group has disclosed relevant financial information in these financial statements
in accordance with Information Disclosure and Presentation Rules for Companies Offering Securities to the
Public No. 15－General Provisions on Financial Reporting (revised by China Securities Regulatory Com-
mission (hereinafter "CSRC”) in 2014).
2. Accrual basis and measurement principle
The Group has adopted the accrual basis of accounting. Except for certain financial instruments which are
measured at fair value, deferred tax assets and liabilities, assets and liabilities relating to employee benefits,
provisions, and investments in associated companies and joint ventures, the Group adopts the historical cost
as the principle of measurement in the financial statements. Where assets are impaired, provisions for asset
impairment are made in accordance with relevant requirements.
In the historical cost measurement, assets obtained shall be measured at the amount of cash or cash equiva-
lents or fair value of the consideration paid. Liabilities shall be measured at the actual amount of cash or
assets received, or the contractual amount in a present obligation, or the prospective amount of cash or cash
equivalents paid to discharge the liabilities.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing market participants in an arm’s length transaction at the measurement date. Fair value measured and
disclosed in the financial statements are determined on this basis whether it is observable or estimated by
valuation techniques.
- 167 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
II BASIS OF PREPARATION - (cont’d)
2. Accrual basis and measurement principle - (cont’d)
The following table provides an analysis, grouped into Levels 1 to 3 based on the degree to which the fair
value input is observable and significant to the fair value measurement as a whole:
Level 1 - based on quoted prices (unadjusted) in active markets;
Level 2 - based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable (other than quoted prices included within Level 1), either directly or
indirectly;
Level 3 - based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
3. Going concern
The financial statements have been prepared on the going concern basis.
The Group has performed going concern assessment for the following 12 months and have not identified
any significant doubtful matter or event on the going concern, as such the financial statement have been
prepared on the going concern basis.
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Statement of compliance
These financial statements are in compliance with the Accounting Standards for Business Enterprises to truly
and completely reflect the Company's consolidated financial position as at December 31, 2022 and the Com-
pany's consolidated operating results, changes in shareholders' equity and cash flows for the twelve months
then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
3. Business cycle
The company takes the period from the acquisition of assets for processing to their realisation in cash or cash
equivalents as a normal operating cycle. The operating cycle for the company is 12 months.
4. Reporting currency
The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional cur-
rency. Functional currencies of overseas subsidiaries are determined on the basis of the principal economic
environment in which the overseas subsidiaries operate. The functional currency of the overseas subsidiaries
is mainly the United States Dollar (hereinafter "USD"). The presentation currency of these financial state-
ments is Renminbi.
- 168 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
5. Business combinations
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all
of the combining enterprises are ultimately controlled by the same party or parties both before and after the
combination, and that control is not transitory. Assets and liabilities obtained shall be measured at their
respective carrying amounts as recorded by the combining entities at the date of the combination. The dif-
ference between the carrying amount of the net assets obtained and the carrying amount of the consideration
paid for the combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings. Costs that are
directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill.
A business combination not involving enterprises under common control is a business combination in which
all of the combining enterprises are not ultimately controlled by the same party or parties before and after
the combination.
The costs of business combination are the fair value of the assets paid, liabilities incurred or assumed and
equity instruments issued by the acquirer for the purpose of achieving the control rights over the acquiree.
The intermediary costs such as audit, legal services and assessment consulting costs and other related man-
agement costs that are directly attributable to the combination by the acquirer are charged to profit or loss in
the period in which they are incurred. Direct capital issuance costs incurred in respect of equity instruments
or liabilities issued pursuant to the business combination should be charged to the respect equity instruments
or liabilities upon initial recognition of the underlying equity instruments or liabilities.
The acquiree’s identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a business
combination, that meet the recognition criteria shall be measured at fair value at the acquisition date. Where
the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on initial
recognition. Where the cost of combination is less than the acquirer’s interest in the fair value of the ac-
quiree’s identifiable net assets, the remaining difference is recognized immediately in profit or loss for the
current year.
The goodwill raised because of the business combination should be separately disclosed in the consolidated
financial statement and measured by the initial amount less any accumulative impairment provision.
In a business combination achieved in stages, the Group remeasure its previously held equity interest in the
acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss.
- 169 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
6. Basis for preparation of consolidated financial statements
The scope of consolidation in consolidated financial statements is determined on the basis of control. Control
is achieved when the Company has power over the investee; is exposed, or has rights, to variable returns
from its involvement with the investee; and has the ability to use its power to affect its returns.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of disposal
(the date when control is lost) are included in consolidated income statement and consolidated statement of
cash flows.
For a subsidiary acquired through a business combination not involving enterprises under common control,
the operating results and cash flows from the acquisition date (the date when control is obtained) are included
in consolidated income statement and consolidated statement of cash flows.
For a subsidiary acquired through a business combination involving enterprises under common control, it
will be fully consolidated into consolidated financial statements from the date on which the subsidiary was
ultimately under common control by the same party or parties.
The significant accounting policies and accounting years adopted by the subsidiaries are determined based
on the uniform accounting policies and accounting years set out by the Company.
All significant intra-group balances, transactions and unrealized profits are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as non-controlling inter-
ests and presented as "non-controlling interests" in the shareholders’ equity in consolidated balance sheet.
The portion of net profits or losses of subsidiaries for the period attributable to non-controlling interests is
presented as "non-controlling interests" in consolidated income statement below the "net profit" line item.
Total comprehensive income attributable to non-controlling shareholders is presented separately in the con-
solidated income statement below the total comprehensive income line item.
When the amount of loss for the period attributable to the non-controlling shareholders of a subsidiary ex-
ceeds the non-controlling shareholders' portion of the opening balance of owners' equity of the subsidiary,
the excess amount is still allocated against non-controlling interests.
Acquisition of non-controlling interests or disposal of equity interest in a subsidiary that does not result in
the loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts of the
Company's interests and non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiary. The difference between the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is adjusted to capital reserve under owners' equity. If the
capital reserve is not sufficient to absorb the difference, the excess is adjusted against retained earnings.
Other comprehensive income attributed to the non-controlling interest is reattributed to the shareholders of
the company.
- 170 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
6. Basis for preparation of consolidated financial statements - (cont’d)
A put option issued by the Group to holders of non-controlling interests that is settled in cash or other finan-
cial instrument is recognized as a liability at the present value of the exercise price (according to the "antic-
ipated acquisition method"). The Group’s share of a subsidiary’s profits includes the share of the holders of
the non-controlling interests to which the Group issued a put option.
In cases which the Group has a Call option in addition to the Put option above, due to the anticipated acqui-
sition method implementation no value is given to the Call option in the consolidated financial statements.
When the Group loses control over a subsidiary due to disposal of certain equity interest or other reasons,
any retained interest is re-measured at its fair value at the date when control is lost. The difference between
(i) the aggregate of the consideration received on disposal and the fair value of any retained interest and (ii)
the share of the former subsidiary's net assets cumulatively calculated from the acquisition date according to
the original proportion of ownership interest is recognized as investment income in the period in which
control is lost. Other comprehensive income associated with the disposed subsidiary is reclassified to invest-
ment income in the period in which control is lost.
7. Classification and accounting methods of joint arrangement
Joint arrangement involves by two or more parties jointly control. Joint control is the contractually agreed
sharing of control over an economic activity, and exists only when the strategic financial and operating
decisions relating to the activity require the unanimous consent of the parties sharing control (the ventures).
The Group makes the classification of the joint arrangements according to the rights and obligations in the
joint arrangements to either joint operations or joint ventures.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint arrangement. Joint ventures are accounted for using the equity method.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are
the Group's short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
- 171 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
9. Translation of transactions and financial statements denominated in foreign currencies
9.1 Transactions denominated in foreign currencies
On initial recognition, foreign currency transactions are translated into functional currency using the spot
exchange rate prevailing at the date of transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currency using the
spot exchange rates at the balance sheet date. Exchange differences arising from the differences between the
spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous
balance sheet date are recognized in profit or loss for the period, except that (i) exchange differences related
to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization are capital-
ized as part of the cost of the qualifying asset during the capitalization period. (ii) exchange differences
related to hedging instruments for the purpose of hedging against foreign currency risks are accounted for
using hedge accounting.
When preparing financial statements involving foreign operations, if there is any foreign currency monetary
items, which in substance forms part of the net investment in the foreign operations, exchange differences
arising from the changes of foreign currency are recorded as other comprehensive income, and will be re-
classified to profit or loss upon disposal of the foreign operations.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in functional
currency at the spot exchange rates on the dates of the transactions and the amounts in functional currency
remain unchanged.
9.2 Translation of financial statements denominated in foreign currency
For the purpose of preparing consolidated financial statements, financial statements of a foreign operation
are translated from the foreign currency into RMB using the following method: assets and liabilities on the
balance sheet are translated at spot exchange rate prevailing at the balance sheet date; shareholders' equity
items, except for retained earnings, are translated at the spot exchange rates at the dates on which such items
arose; all items in the income statement as well as items reflecting the distribution of profits are translated at
average rate or at spot exchange rates on the dates of the transactions; the retained earnings opening balance
is previous year's translated retained earnings closing balance; the closing balance of retained earnings is
calculated and presented on the basis of each translated income statement and profit distribution item. The
difference between the translated assets and the aggregate of liabilities and shareholders' equity items is
recorded as other comprehensive income. Cash Flows arising from transaction in foreign currency and the
cash flows of a foreign subsidiary are translated at the spot exchange rate on the date of the cash flow, the
effect of exchange rate changes on the cash and cash equivalents is regarded as a reconciling item and present
separately in the statement “effect of foreign exchange rate changes on the cash and cash equivalents".
The opening balances and the comparative figures of prior year are presented at the translated amounts in
the prior year's financial statements.
On disposal of the Group's entire equity interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain equity interest in it or other reasons, the Group transfers the
accumulated translation differences, which are attributable to the owners' equity of the Company and pre-
sented under other comprehensive income to profit or loss in the period in which the disposal occurs.
- 172 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
9. Translation of transactions and financial statements denominated in foreign currencies - (cont’d)
9.2 Translation of financial statements denominated in foreign currency - (cont’d)
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation,
the proportionate share of accumulated translation differences are re-attributed to non-controlling interests
and are not recognized in profit and loss. For partial disposals of equity interest in foreign operations, which
are associates or joint ventures, the proportionate share of the accumulated translation differences are reclas-
sified to profit or loss.
10. Financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual
provisions of the instrument. At initial recognition, the Group measures a financial asset or financial liability
at its fair value plus or minus (which is not measured at fair value through profit or loss) transaction costs
that are directly attributable to the acquisition or issue of the financial asset or financial liability. Initial
recognition in trade receivables which do not contain a significant financing component, shall be made ac-
cording to their transaction price.
10.1 Classification and measurement of financial assets
After initial recognition, an entity shall measure a financial asset at: (a) amortised cost; (b) fair value through
other comprehensive income (“FVTOCI”); or (c) fair value through profit or loss (“FVTPL”).
10.1.1 Financial assets at amortised cost
A financial asset is measured at amortised cost if both of the following conditions are met: (a) the financial
asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.
Such financial assets are subsequently measured at amortised cost, using effective interest method. Gains or
losses upon impairment and derecognition are recognized in profit or loss.
10.1.1.1 Effective interest method and amortised cost
Effective interest method represents the method for calculating the amortized costs and interest income or
expense of each period in accordance with the effective interest rate of financial assets or financial liabilities
(inclusive of a set of financial assets or financial liabilities). Effective interest rate represents the rate that
discounts the future cash flow over the expected subsisting period or shorter period, if appropriate, of the
financial asset or financial liability to the current carrying value of such financial asset or financial liability.
When calculating the effective interest rate, the Group will consider the anticipated future cash flow (not
considering the future credit loss) on the basis of all contract clauses of financial assets or financial liabilities,
as well as consider all kinds of charges which are an integral part of the effective interest rate, including
transaction fees and discount or premium paid or received between both parties of financial asset or financial
liability contract.
- 173 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.1 Classification and measurement of financial assets - (cont’d)
10.1.2 Financial assets at FVTOCI
A financial asset is measured at fair value through other comprehensive income if both of the following
conditions are met: (a) the financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets and (b) the contractual terms of the finan-
cial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A gain or loss on a financial asset measured at fair value through other comprehensive income is recognized
in other comprehensive income, except for impairment gains or losses, foreign exchange gains and losses
and interest calculated using the effective interest method, until the financial asset is derecognized or reclas-
sified. When the financial asset is derecognized the cumulative gain or loss previously recognized in other
comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are either those that are classified as financial assets at FVTPL or designated as
financial assets at FVTPL.
A financial asset is measured at FVTPL unless it is measured at amortised cost or at FVTOCI.
The Group may, at initial recognition, irrevocably designate a financial asset as measured at FVTPL if doing
so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as
an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognizing the
gains and losses on them on different bases.
A gain or loss on a financial asset that is measured at FVTPL is recognized in profit or loss unless it is part
of a hedging relationship. Dividends are recognized in profit or loss.
10.1.4 Designated financial assets at FVTOCI
At initial recognition, the Group makes an irrevocable election to designate to FVTOCI an investment in an
equity instrument that is not held for trading.
When a non-trading equity instrument investment is designated as a financial asset that is measured at fair
value through other comprehensive income, the changes in the fair value of the financial asset are recognised
in other comprehensive income. Upon realization the accumulated gains or losses from other comprehensive
income are transferred from other comprehensive income and included in retained earnings. During the pe-
riod in which the Group holds these non-trading investment instruments, the right to receive dividends in the
Group has been established, and the economic benefits related to dividends are likely to flow into the Group,
and when the amount of dividends can be reliably measured, the dividend income is recognized in the current
profit and loss.
- 174 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on financial assets that are classified to
amortised cost and FVTOCI.
The Group always measures the loss allowance at an amount equal to lifetime expected credit losses for
trade receivables.
For financial assets other than trade receivables, the Group initially measure the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. At each balance sheet date, if
the credit risk on that financial instrument has increased significantly since initial recognition, the Group
measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses. The Group recognizes in profit or loss, as an impairment gain or loss, the amount of expected credit
losses (or reversal) that is required to adjust the loss allowance to the amount that is required to be recognized.
10.2.1 Significant increases in credit risk
At each balance sheet date, the Group assesses whether the credit risk on a financial instrument has in-
creased significantly since initial recognition.
The Group mainly considers the following list of information in assessing changes in credit risk:
(a) significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception.
(b) significant changes in external market indicators of credit risk for a particular financial instrument
or similar financial instruments with the same expected life.
(c) a significant change in the debtors’ ability to meet its debt obligations.
(d) an actual or expected significant change in the operating results of the debtor.
(e) significant increases in credit risk on other financial instruments of the same debtor.
(f) an actual or expected significant adverse change in the regulatory, economic, or technological envi-
ronment of the debtor.
(g) significant changes in the value of the collateral supporting the obligation or in the quality of third-
party guarantees or credit enhancements, which are expected to reduce the debtor’s economic
incentive to make scheduled contractual payments or to otherwise have an effect on the probability
of a default occurring.
(h) significant changes that are expected to reduce the receivable’s economic incentive to make
scheduled contractual payments.
(i) significant changes in the expected performance and behaviour of the debtor.
(j) past due information.
The Group assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date.
- 175 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets - (cont’d)
10.2.2 Credit-impaired financial asset
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired
include observable data about the following events:
(a) significant financial difficulty of the issuer or the receivable;
(b) a breach of contract, such as a default or past due event;
(c) the lender(s) of the receivable, for economic or contractual reasons relating to the receivable’s finan-
cial difficulty, having granted to the receivable a concession(s) that the lender(s) would not otherwise
consider;
(d) it is becoming probable that the receivable will enter bankruptcy or other financial reorganization;
10.2.3 Recognition of expected credit losses
For the purpose of determining significant increases in credit risk and recognizing a loss allowance on a
collective basis, financial instruments are grouped on the basis of shared credit risk. Examples of shared
credit risk characteristics may include, but are not limited to, the:(a) instrument type; (b) credit risk ratings;
(c) collateral type; (d) industry; (e) geographical location of the debtor; and (f) the value of collateral rela-
tive to the financial asset if it has an impact on the probability of a default occurring.
Expected credit losses of financial instruments are determined as the present value of the difference be-
tween: (a) the contractual cash flows that are due to an entity under the contract; and (b) the cash flows that
the entity expects to receive.
For a financial asset that is credit-impaired at the reporting date, an entity shall measure the expected credit
losses as the difference between the asset’s gross carrying amount and the present value of estimated future
cash flows discounted at the financial asset’s original effective interest rate. Any adjustment is recognized
in profit or loss as an impairment gain or loss.
The Group measures expected credit losses of a financial instrument in a way that reflects:
(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions.
- 176 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets - (cont’d)
10.2.4 Written-off of financial assets
The Group directly reduces the gross carrying amount of a financial asset when the entity has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. A write-off constitutes a
derecognition event.
10.3 Transfer of financial asset
The Group derecognizes a financial asset if one of the following conditions is satisfied: (i) the contractual
rights to the cash flows from the financial asset expire; or (ii) the financial asset has been transferred and
substantially all the risks and rewards of ownership of the financial asset transferred to the transferee; or (iii)
although the financial asset has been transferred, the Group neither transfers nor retains substantially all the
risks and rewards of ownership of the financial asset but has not retained control of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial
asset, and it retains control of the financial asset, it recognizes the financial asset to the extent of its contin-
uing involvement in the transferred financial asset and recognizes an associated liability. The extent of the
Group’s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the
value of the transferred asset.
When the company is derecognizing a financial asset in its entirety, except for equity instrument designated
to FVTOCI, the difference between (i) the carrying amount of the financial asset transferred; and (ii) the sum
of the consideration received from the transfer is recognized in profit or loss.
10.4 Classification and measurement of financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
All financial liabilities are subsequently measured at FVTPL or other financial liabilities.
Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is
designated as at FVTPL. The financial liability other than derivative financial liabilities are stated as liabil-
ities held for trading.
Other financial liabilities are subsequently measured at amortized cost by using effective interest method.
Gain or loss arising from derecognition or amortization is recognized in current profit or loss.
- 177 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.5 Derecognition of financial liabilities
Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full
or in part. An agreement entered into force between the Group (debtor) and a creditor to replace the original
financial liabilities with new financial liabilities with substantially different terms, derecognize the original
financial liabilities as well as recognize the new financial liabilities. When financial liabilities is derecog-
nized in full or in part, the difference between the carrying amount of the financial liabilities derecognized
and the consideration paid (including transferred non-cash assets or new financial liability) is recognized in
profit or loss for the current period.
10.6 Derivatives
Derivative financial instruments include forward exchange contracts, currency swaps and foreign exchange
options, etc. Derivatives are initially measured at fair value at the date when the derivative contracts are
entered into and are subsequently re-measured at fair value. The resulting gain or loss is recognized in profit
or loss unless the derivative is designated and highly effective as a hedging instrument, in which case the
timing of the recognition in profit or loss depends on the nature of the hedge relationship (Note III 28.1).
10.7 Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be
offset, except for circumstances where the Group has a legal right that is currently enforceable to offset the
recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize
the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability
shall be offset and the net amount is presented in the balance sheet.
10.8 Equity instruments
The consideration received from the issuance of equity instruments net of transaction costs is recognized in
shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-issued
equity instruments are deducted from shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditures
relating to the repurchase are recorded in the cost of the treasury shares, with the transaction entering into
the share capital. Treasury shares are excluded from profit distributions and are stated as a deduction under
shareholders’ equity in the balance sheet.
- 178 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Receivables
Receivables are assessed for impairment on a collective group and/or on an individual basis as follows:
Expected credit losses in respect of a receivables is measured at an amount equal to lifetime expected credit
losses. The assessment is made collectively for account receivables, where receivables share similar credit
risk characteristics based on geographical location, using the expected credit losses model including inter-
alia aging analysis, historical loss experiences adjusted by the observable factors reflecting current and ex-
pected future economic conditions. The ratio of the account receivables collective provision for expected
credit losses in which credit losses has not occurred is between 0%-4.36%.
When credit risk on a receivable has increased significantly since initial recognition, the group records spe-
cific provision or collective provision, which is determined for groups of similar assets in countries in which
there are large number of customers with immaterial balances.
In assessing whether the credit risk on a receivable has increased significantly since initial recognition, the
Group compares the risk of a default occurring on the receivable at the reporting date with the risk of a
default occurring on the receivable at the date of initial recognition and considers both quantitative and
qualitative information that is reasonable and supportable, including observable data that comes to the atten-
tion of the Group about loss events such as a significant decline in the solvency of an individual debtor or
the portfolio of debtors, and significant changes in the financial condition that have an adverse effect on the
debtor.
12. Inventories
12.1 Categories of inventories and initial measurement
The Group's inventories mainly include raw materials, work in progress, semi-finished goods, finished goods
and reusable materials. Reusable materials include low-value consumables, packaging materials and other
materials, which can be used repeatedly but do not meet the definition of fixed assets.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of con-
version and other expenditures incurred in bringing the inventories to their present location and condition
including direct labor costs and an appropriate allocation of production overheads.
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
12.3 Basis for determining net realizable value of inventories and provision methods for decline in value of in-
ventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion, the estimated costs necessary to make the sale and relevant taxes.
- 179 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
12. Inventories - (cont’d)
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value of inventories is
higher than their carrying amount, the original provision for decline in value is reversed and the reversal is
included in profit or loss for the period.
12.4 The perpetual inventory system is maintained for stock system.
13. Long-term equity investments
Long-term equity investments include investments in subsidiaries, joint ventures and associates.
Subsidiaries are the companies that are controlled by the Company. Associates are the companies over which
the Group has significant influence. Joint ventures are joint arrangements over which the Group has joint
control along with other investors and has rights to the net assets of the joint arrangement.
The Company accounts for the investment in subsidiaries at historical cost in the Company's financial state-
ments. Investments in associates and joint ventures are accounted for under equity method.
13.1 Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises under
common control, the investment cost of the long-term equity investment is the share of the carrying amount
of the shareholders' equity of the acquiree attributable to the ultimate controlling party at the date of combi-
nation. The difference between initial investment cost and cash paid, non-cash assets transferred and book
value of liabilities assumed, is adjusted in capital reserve. If the balance of capital reserve is not sufficient to
absorb the difference, any excess is adjusted to retained earnings.
For a long-term equity investment acquired through business combination not involving enterprises under
common control, the investment cost of the long-term equity investment is the cost of acquisition. For a
business combination not involving enterprises under common control achieved in stages that involves mul-
tiple exchange transactions, the initial investment cost is carried at the aggregate of the carrying amount of
the acquirer’s previously held equity interest in the acquiree and the new investment cost incurred on the
acquisition date.
Regarding the long-term equity investment acquired otherwise than through a business combination, if the
long-term equity investment is acquired by cash, the historical cost is determined based on the amount of
cash paid and payable; if the long-term equity investment is acquired through the issuance of equity instru-
ments, the historical cost is determined based on the fair value of the equity instruments issued.
- 180 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
13. Long-term equity investments - (cont’d)
13.2 Subsequent measurement and recognition of profit or loss
If the long-term equity investment is accounted for at cost, it should be measured at historical cost less
accumulated impairment losses. Dividend declared by the investee should be accounted for as investment
income.
Under the equity method, where the long-term equity investment initial investment cost exceeds the Group’s
share of the fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is
made to the initial investment cost. Where the initial investment cost is less than the Group’s share of the
fair value of the investee’s identifiable net assets at the time of acquisition, the difference is recognized in
profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive
income of the investee for the period as investment income or loss and other comprehensive income for the
period. The Group recognizes its share of the investee’s net profit or loss based on the fair value of the
investee’s individual separately identifiable assets, etc. at the acquisition date after making appropriate ad-
justments to be confirmed with the Group's accounting policies and accounting period. The Group discon-
tinues recognizing its share of net losses of the investee after the carrying amount of the long-term equity
investment together with any long-term interests that in substance form part of its net investment in the
investee is reduced to zero. If the Group has incurred obligations to assume additional losses of the investee,
a provision is recognized according to the expected obligation, and recorded as investment loss for the period.
13.3 Basis for determining control, joint control and significant influence over investee
Control is achieved when the Company has power over the investee; is exposed, or has rights, to variable
returns from its involvement with the investee; and has the ability to use its power to affect its returns.
Joint control is the contractually agreed sharing of control over an economic activity, and exists only when
the strategic financial and operating policy decisions relating to the activity require the unanimous consent
of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over
an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts)
held by the investing enterprises or other parties that are currently exercisable or convertible shall be con-
sidered.
13.4 Methods of impairment assessment and determining the provision for impairment loss
If the recoverable amounts of the investments to subsidiaries, joint ventures and associates are less than their
carrying amounts, an impairment loss should be recognized to reduce the carrying amounts to the recoverable
amounts (Note III 20).
- 181 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
13. Long-term equity investments - (cont’d)
13.5 The disposal of long-term equity investment
On disposal of a long term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period.
14. Investment properties
Investment property refers to real estate held to earn rentals or for capital appreciation, or both, including
leased land use rights, land use rights held and provided for transferring after appreciation and leased con-
structions, etc.
Investment property is initially measured at cost. Subsequent expenditures related to an investment property
shall be included in cost of investment property only when the economic benefits associated with the asset
will likely flow to the Group and its cost can be measured reliably. All other subsequent expenditures on
investment property shall be included in profit or loss for the current period when incurred.
The Group adopts cost method for subsequent measurement of investment property, which is depreciated or
amortized using the same policy as that for buildings and land use rights.
When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of
the property net of the carrying amount and related taxes and surcharges is recognized in profit or loss for
the current period.
15. Fixed assets
15.1 Recognition criteria for fixed assets
Fixed assets include land owned by the Group and buildings, machinery and equipment, motor vehicles,
office equipment and others.
Fixed assets are tangible assets that are held for use in the production or supply of goods or for administrative
purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only when it
is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset
can be reliably measured. Purchased or constructed fixed assets are initially measured at cost when acquired.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is
probable that economic benefits associated with the asset will flow to the Group and the subsequent expend-
itures can be measured reliably. Other subsequent expenditures are recognized in profit or loss in the period
in which they are incurred.
- 182 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
15. Fixed assets - (cont’d)
15.2 Depreciation of each category of fixed assets
Fixed asset is depreciated based on the cost of fixed asset recognized less expected net residual value over
its useful life using the straight-line method since the month subsequent to the one in which it is ready for
intended use. Depreciation is calculated based on the carrying amount of the fixed asset after impairment
over the estimated remaining useful life of the asset.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year-end, and account for any change as a change in an ac-
counting estimate.
The estimated useful life, estimated net residual value and annual depreciation rate of each category of fixed
assets are as follows:
Residual
Useful life value Annual deprecia-
Category Depreciation (years) (%) tion rate (%)
Buildings the straight-line method 15-50 0-4 1.9-6.7
Machinery and equipment the straight-line method 3-22 0-4 4.4-33.3
Office and other equipment the straight-line method 3-17 0-4 5.6-33.3
Motor vehicles the straight-line method 5-9 0-2 10.9-20.0
Overseas Land owned by the Group is not depreciated.
15.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or
disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the
amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognized
in profit or loss for the period.
The difference between recoverable amounts of the fixed assets under the carrying amount is referred to as
impairment loss (Note III 20).
16. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various construction, instal-
lation costs, borrowing costs capitalized and other expenditures incurred until such time as the relevant assets
are completed and ready for its intended use. When the asset concerned is ready for its intended use, the cost
of the asset is transferred to fixed assets and depreciated starting from the following month.
The difference between recoverable amounts of the construction in progress under the carrying amount is
referred to as impairment loss (Note III 20).
- 183 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
17. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are
capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use
or sale have commenced. Capitalization of borrowing costs ceases when the qualifying asset being acquired,
constructed or produced becomes ready for its intended use or sale. Borrowing costs incurred subsequently
should be charged to profit or loss. Capitalization of borrowing costs is suspended during periods in which
the acquisition, construction or production of a qualifying asset is suspended abnormally and when the sus-
pension is for a continuous period of more than 3 months. Capitalization is suspended until the acquisition,
construction or production of the asset is resumed.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is
the actual interest expenses incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the temporary
investment of those funds.
Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest
to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess
of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalization
rate is the weighted average of the interest rates applicable to the general-purpose borrowings.
During the capitalization period, exchange differences on foreign currency specific-purpose borrowing are
fully capitalized whereas exchange differences on foreign currency general-purpose borrowing, charged to
profit or loss.
18. Intangible assets
18.1 Valuation methods, useful life, impairment test
The Group’s intangible assets include product registration assets, intangible assets upon purchase of products,
marketing rights and rights to use tradenames and trademarks, land use rights, software and customer rela-
tions. Intangible assets are stated at cost less accumulated amortization and impairment losses.
When an intangible asset with a finite useful life is available for use, its original cost less any accumulated
impairment losses is amortized over its estimated useful life using the straight-line method. An intangible
asset with an indefinite useful life is not amortized.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method at
the end of the year, and makes adjustments when necessary.
The respective amortization periods for such intangible assets are as follows:
Item Amortization period (years)
Land use rights 49-50 years
Product registration 8, 11 years
Intangible assets on purchase of products 7-11, 20 years
Marketing rights, tradename and trademarks 4-10, 30 years
Exclusivity agreement 21 years
Software 3-5 years
Customer relations 5-10, 13 years
The difference between recoverable amounts of the intangible assets under the carrying amount is referred
to as impairment loss (see Note III 20).
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
18. Intangible assets - (cont’d)
18.2 Research and development expenditure
Internal research and development project expenditures were classified into research expenditures and de-
velopment expenditures depending on its nature and the greater uncertainty whether the research activities
becoming to intangible assets.
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is
recognized as intangible asset:
- It is technically feasible to complete the intangible asset so that it will be available for use or sale;
- The Group has the intention to complete the intangible asset and use or sell it;
- The Group can demonstrate the ways in which the intangible asset will generate economic benefits;
- The availability of adequate technical, financial and other resources to complete the development and the
ability to use or sell the intangible asset;
- The expenditure attributable to the intangible asset during its development phase can be reliably meas-
ured.
Expenditures that do not meet all of the above conditions at the same time are recognized in profit or loss
when incurred. If the expenditures cannot be distinguished between the research phase and development
phase, the Group recognizes all of them in profit or loss for the period. Expenditures that have previously
been recognized in the profit or loss would not be recognized as an asset in subsequent years. Those expend-
itures capitalized during the development stage are recognized as development costs incurred and will be
transferred to intangible asset when the underlying project is ready for an intended use.
19. Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair
value of the identifiable net assets of the acquiree under a business combination not involving enterprises
under common control.
Goodwill is not amortized and is stated in the balance sheet at cost less accumulated impairment losses (see
Note III 20). On disposal of an asset group or a set of asset groups, any attributable goodwill is written off
and included in the calculation of the profit or loss on disposal.
20. Impairment of long-term assets
The Company assesses at each balance sheet date whether there is any indication that the fixed assets, con-
struction in progress, right of use assets, intangible assets with finite useful lives, investment properties
measured at historical cost, investments in subsidiaries, joint ventures and associates may be impaired. If
there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets.
The recoverable amount of an asset is the higher of its fair value less costs to sell and the present value of
the future cash flow estimated to be derived from the asset. The Group estimates the recoverable amount on
an individual basis. If it is not possible to estimate the recoverable amount of the individual asset, the Group
determines the recoverable amount of the asset group to which the asset belongs. Identification of an asset
group is based on whether major cash inflows generated by the asset group are largely independent of the
cash inflows from other assets or asset groups.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
20. Impairment of long-term assets - (cont’d)
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective
of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the
carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a
reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups,
it is allocated to each of the related set of asset groups. Each of the related asset groups or set of asset groups
is an asset group or set of asset group that is able to benefit from the synergies of the business combination
and shall not be larger than a reportable segment determined by the Group. If the carrying amount of the
asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss
first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and
then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups,
pro rata based on the carrying amount of each asset.
Once the impairment loss of such assets is recognized, it will not be reversed in any subsequent period.
21. Employee benefits
21.1 Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions, measured on a non-discounted basis, and
the expense is recorded when the related service is provided. A provision for short-term employee benefits
in respect of cash bonuses is recognized in the amount expected to be paid where the Group has a current
legal or constructive obligation to pay the said amount for services provided by the employee in the past and
the amount can be estimated reliably.
21.2 Post-employment benefits
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
A defined contribution plan is a post-employment benefit plan under which the Group pays contributions to
a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contri-
butions to defined contribution plans are recognized as an expense in profit or loss in the periods during
which related services are rendered by employees.
Defined benefit plans of the Group are post-employment benefit plans other than defined contribution plans.
In accordance with the projected unit credit method, the Group measures the obligations under defined ben-
efit plans using unbiased and mutually compatible actuarial assumptions to estimate related demographic
variables and financial variables, and discount obligations under the defined benefit plans to determine the
present value of the defined benefit liability. The discount rate used is the yield on the reporting date on
highly-rated corporate debentures denominated in the same currency, that have maturity dates approximating
the terms of the Group’s obligation.
The Group attributes benefit obligations under a defined benefit plan to periods of service provided by re-
spective employees. Service cost and interest expense on the defined benefit liability are charged to profit or
loss and remeasurements of the defined benefit liability are recognized in other comprehensive income.
- 186 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
21. Employee benefits - (cont’d)
21.3 Termination benefits
When the Group terminates the employment with employees or provides compensation under an offer to
encourage employees to accept voluntary redundancy, a provision is recognized with a corresponding ex-
pense in profit or loss at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee
termination plan or a curtailment proposal.
- When the Group has a formal detailed restructuring plan involving the payment of termination benefits
and has raised a valid expectation in those affected that it will carry out the restructuring by starting to
implement that plan or announcing its main features to those affected by it.
If the benefits are payable more than 12 months after the end of the reporting period, they are discounted to
their present value. The discount rate used is the yield on the reporting date on highly-rated corporate de-
bentures denominated in the same currency, that have maturity dates approximating the terms of the Group’s
obligation.
21.4 Other long-term employee benefits
The Group’s net obligation for long-term employee benefits, which are not attributable to post-employment
benefit plans, is for the amount of the future benefit to which employees are entitled for services that were
provided during the current and prior periods.
The amount of these benefits is discounted to its present value and the fair value of the assets related to these
obligations is deducted therefrom. The discount rate used is the yield on the reporting date on highly-rated
corporate debentures denominated in the same currency, that have maturity dates approximating the terms
of the Group’s obligation.
22. Share-based payment
Share-based payment refers to the transaction in order to acquire the service offered by the employees or
other parties that grants equity instruments or liabilities on the basis of the equity instruments. Share-based
payment classified into equity-settled share-based payment and cash-settled share-based payment.
22.1 Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities rec-
ognized based on the shares or other equity instrument undertaken by the Company. For cash-settled share-
based payment made in return for the rendering of employee services that cannot be exercised until the
services are fully provided during the vesting period or specified performance targets are met, on each bal-
ance sheet date within the vesting period, the services acquired in the current period shall, based on the best
estimate of the number of exercisable instruments, be recognized in relevant expenses and the corresponding
liabilities at the fair value of the liability incurred by the Company.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Com-
pany should re-measure the fair value of the liabilities and the changes should be included in the current
period profit and loss.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
23. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency, it is probable
that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation
can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the settlement date, taking into account factors pertaining to a contingency such as the risks,
uncertainties and time value of money. Where the effect of the time value of money is material, the amount
of the provision is determined by discounting the related future cash outflows. The increase in the provision
due to passage of time is recognized as interest expense.
If all or part of the provision settlements is reimbursed by third parties, when the realization of income is
virtually certain, then the related asset should be recognized. However, the amount of related asset recog-
nized should not be exceeding the respective provision amount.
At the balance sheet date, the amount of provision should be re-assessed to reflect the best estimation then.
24. Revenue
Revenue of the Group is mainly from sale of goods.
The Group recognizes revenue when transferring goods to a customer, at the amount of the transaction price.
Goods are considered transferred when the customer obtains control of the goods. Transaction price is the
amount of consideration to which an entity expects to be entitled in exchange for transferring goods to a
customer, excluding amounts collected on behalf of third parties.
Significant financing component
For a contract with a significant financing component, the Group recognize revenue at an amount that reflects
the price that a customer would have paid for the goods if the customer had paid cash for those goods at
receipt. The difference between the amount of consideration and the cash selling price of the goods, is amor-
tized in the contract period using effective interest rate. The Group does not adjust the amount of consider-
ation for the effects of a significant financing component if the Group expects, at contract inception, that the
period between when the entity transfers a good to a customer and when the customer pays for that good
will be one year or less.
Sale with a right of return
For sale with a right of return, the Group recognizes revenue at the amount of consideration to which the
Group expects to be entitled (ie excluding the products expected to be returned). For any amounts received
(or receivable) for which an entity does not expect to be entitled, the entity shall not recognize revenue when
it transfers products to customers but shall recognize those amounts received (or receivable) as a refund
liability. An asset recognized for the Group’s right to recover products from a customer on settling a refund
liability shall initially be measured by reference to the former carrying amount of the product less any ex-
pected costs to recover those products.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
25. Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the
Group at no consideration, including tax returns, financial subsidies and so on. A government grant is rec-
ognized only when the Group can comply with the conditions attached to the grant and the Group will receive
the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received
or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If
the fair value cannot be reliably determined, it is measured at a nominal amount.
Government grants are either related to assets or income.
(1) The basis of judgment and accounting method of the government grants related to assets
Government grants obtained for acquiring long-term assets are government grants related to assets. A gov-
ernment grant related to an asset is offset with the cost of the relevant asset.
(2) The basis of judgment and accounting method of the government grants related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses to be
incurred in subsequent periods, the grant is recognized as deferred income, and recognized in profit or loss
over the periods in which the related costs are recognized. If the grant is a compensation for related expenses
or losses already incurred, the grant is recognized immediately in profit or loss for the period.
Government grants related to the Group’s normal course of business are offset with related costs and ex-
penses. Government grants related that are irrelevant with the Groups’s normal course of business are in-
cluded in non-operating gains.
26. Current and deferred tax
The income tax expenses include current income tax and deferred income tax.
26.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are meas-
ured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
26.2 Deferred tax assets and deferred tax liabilities
Temporary differences are differences between the carrying amounts of certain assets or liabilities and their
tax base.
All taxable temporary differences are recognized as related deferred tax liabilities. Deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which the
deductible losses and tax credits can be utilized.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
26. Current and deferred tax - (cont’d)
26.2 Deferred tax assets and deferred tax liabilities - (cont’d)
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the
extent that it is probable that future taxable profits will be available against which the deductible losses and
tax credits can be utilized. However, for deductible temporary differences associated with the initial recog-
nition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business
combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time
of transaction, no deferred tax asset or liability is recognized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax
laws, that are expected to apply in the period in which the asset is realized or the liability is settled.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in sub-
sidiaries and associates, and interests in joint ventures, except where the Group is able to control the timing
of the reversal of the temporary difference and it is probable that the temporary difference will not reverse
in the foreseeable future.
The Group may be required to pay additional tax in case of distribution of dividends by the Group companies.
This additional tax was not included in the financial statements, since the policy of the Group is not to
distribute in the foreseeable future a dividend which creates a significant additional tax liability.
Except for those current income tax and deferred tax charged to comprehensive income or shareholders’
equity in respect of transactions or events which have been directly recognized in other comprehensive in-
come or shareholders’ equity, and deferred tax recognized on business combinations, all other current in-
come tax and deferred tax items are charged to profit or loss in the current period.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer
probable that sufficient taxable profits will be available in the future to allow the benefit of deferred tax
assets to be utilized. Such reduction is reversed when it becomes probable that sufficient taxable profits will
be available.
26.3 Offset of income tax
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and tax assets and
tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities which intend to realize the assets and liabilities simultaneously, current tax assets
and liabilities are offset and presented on a net basis.
When the Group has a legal right to settle deferred tax assets and liabilities on a net basis which relates to
income taxes levied by the same taxation authority, on either the same taxable entity or different taxable
entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets and
liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabil-
ities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a
net basis.
- 190 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
27. Leases
Lease is a contract, that conveys the right to use an asset for a period of time in exchange for consideration.
27.1 Determining whether an arrangement contains a lease
On the inception date of the lease, the Group determines whether the arrangement is a lease or contains a
lease, while assessing if it conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. In its assessment of whether an arrangement conveys the right to control the use
of an identified asset, the Group assesses whether it has the following two rights throughout the lease term:
(a) The right to obtain substantially all the economic benefits from use of the identified asset; and
(b) The right to direct the identified asset’s use.
An arrangement does not contain a lease if an asset is leased for a period of less than 12 months, or to lease of
asset with low economic value.
27.2 Initial recognition of leased assets and lease liabilities
Upon initial recognition, the Group recognizes a liability at the present value of future lease payments (ex-
clude certain variable lease payments, as detailed in note III 27.4), and concurrently the Group recognizes a
right-of-use asset at the same amount, adjusted for any prepaid lease payments paid at the lease date or before,
plus initial direct costs incurred in respect of the lease.
When the interest rate implicit in the lease is not readily determinable, the incremental borrowing rate of the
lessee is used.
The Group presents right-of-use assets separately from other assets in the balance sheet.
27.3 The lease term
The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination
option, if it is reasonably certain that the lessee will exercise or not exercise the option, respectively.
If there is a change in the lease term, or in the assessment of an option to purchase the underlying asset, the
Group remeasures the lease liability, on the basis of the revised lease term and the revised discount rate and
adjust the right-of-use assets accordingly.
27.4 Variable lease payments
Variable lease payments that depend on an index or a rate, are initially measured using the index or rate
existing at the commencement of the lease. When the cash flows of future lease payments change as the
result of a change in an index or a rate, the balance of the liability is adjusted with a correspondence change
in the right-of-use asset.
Other variable lease payments that are not included in the measurement of the lease liability are recognized
in profit or loss in the period in which the condition that triggers payment occurs.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
27. Leases (cont’d)
27.5 Subsequent measurement
After lease commencement, a right-of-use asset is measured on a cost basis less accumulated depreciation
and accumulated impairment losses and is adjusted for re-measurements of the lease liability. The asset is
depreciated on a straight-line basis over the useful life or contractual lease period, whichever earlier.
The Group applies ASBE8 Impairment of Assets, to determine whether the right-of-use asset is impaired
and to account for any impairment loss identified.
A lease liability is measured after the lease commencement date at amortized cost using the effective interest
method.
28. Other significant accounting policies and accounting estimates
28.1 Hedging
The Group uses derivative financial instruments to hedge its risks related to foreign currency and inflation
risks and derivatives that are not used for hedging.
Hedge accounting
The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing
basis, whether the hedge is expected to be effective in offsetting the changes in the fair value of cash flows
that can be attributed to the hedged risk during the period for which the hedge is designated.
An effective hedge exists when all of the below conditions are met:
There is an economic relationship between the hedged item and the hedging instrument;
the effect of credit risk does not dominate the value changes that result from that economic relation-
ship;
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the
hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity
actually uses to hedge that quantity of hedged item.
On the commencement date of the accounting hedge, the Group formally documents the relationship between
the hedging instrument and hedged item, including the Group’s risk management objectives and strategy in
executing the hedge transaction, together with the methods that will be used by the Group to assess the
effectiveness of the hedging relationship.
With respect to a cash-flow hedge, a forecasted transaction that constitutes a hedged item must be highly
probable and must give rise to exposure to changes in cash flows that could ultimately affect profit or loss.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
28. Other significant accounting policies and accounting estimates - (cont’d)
28.1 Hedging (cont’d)
Measurement of derivative financial instruments
Derivative financial instruments are recognized initially at fair value; attributable transaction costs are rec-
ognized in profit or loss as incurred.
Cash-flow hedges
Subsequent to the initial recognition, changes in the fair value of derivatives used to hedge cash flows are
recognized through other comprehensive income directly in a hedging reserve, with respect to the part of the
hedge that is effective. Regarding the portion of the hedge that is not effective, the changes in fair value are
recognized in profit and loss. The amount accumulated in the hedging reserve is reclassified to profit and
loss in the period in which the hedged cash flows impact profit or loss and is presented in the same line item
in the statement of income as the hedged item.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or
exercised, the hedge accounting is discontinued. The cumulative gain or loss previously recognized in a
hedging reserve through other comprehensive income remains in the reserve until the forecasted transaction
occurs or is no longer expected to occur. If the forecasted transaction is no longer expected to occur, the
cumulative gain or loss in respect of the hedging instrument in the hedging reserve is reclassified to profit
or loss.
Economic hedge
Hedge accounting is not applied with respect to derivative instruments used to economically hedge financial
assets and liabilities denominated in foreign currency or CPI linked. Changes in the fair value of such deriv-
atives are recognized in profit or loss as gain (loss) from changes in fair value.
Derivatives that are not used for hedging
Changes in the fair value of derivatives that are not used for hedging are recognized in profit or loss as gain
(loss) from changes in fair value.
28.2 Securitization of assets
Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account
receivables.
28.3 Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure
of the Group’s internal organization, management requirements and internal reporting system.
- 193 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
28. Other significant accounting policies and accounting estimates - (cont’d)
28.3 Segment reporting - (cont’d)
Two or more operating segments may be aggregated into a single operating segment if the segments have
similar economic characteristics and are same or similar in respect of the nature of each product and service,
the nature of production processes, the type or class of customers for the products and services, the methods
used to distribute the products or provide the services, and the nature of the regulatory environment.
Inter-segment revenues are measured on the basis of actual transaction price for such transactions for seg-
ment reporting. Segment accounting policies are consistent with those for the consolidated financial state-
ments.
28.4 Profit distributions to shareholders
Dividends which are approved after the balance sheet date are not recognized as a liability at the balance
sheet date but are disclosed in the notes separately.
29. Changes in significant accounting policies and accounting estimates
29.1 Changes in significant accounting policies
On 30 December 2021, the Ministry of Finance issued "Accounting Standards for Business Enterprises In-
terpretation No. 15” (hereinafter referred to as “Interpretation No. 15”) which clarified the accounting treat-
ments for the sale of the products or by-products produced before the assets being capable of operating in a
predetermined manner or produced during the research and development process and clarified the costs a
company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
According to the Interpretation No.15, the above clarifications were effective from 1 January 2022. Adoption
of the interpretations has no significant impact on the Group’s financial statements.
On 30 November 2022, the Ministry of Finance issued "Accounting Standards for Business Enterprises In-
terpretation No. 16” (hereinafter referred to as “Interpretation No. 16”) which clarified the following ac-
counting treatments:
(1) Deferred tax related to assets and liabilities arising from a single transaction;
(2) The income tax treatment of the dividend paid as the issuer of an equity instrument; and
(3) When an entity changes a cash-settled share-based payment to an equity-settled share-based payment.
According to the Interpretation No.16, the second and the third clarifications were effective from 30 Novem-
ber 2022. Adoption of the interpretations has no significant impact on the Group’s financial statements.
29.2 Changes in significant accounting estimates
There are no significant changes in accounting estimates in the reporting period.
- 194 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
30. Significant accounting estimates and judgments
The preparation of the financial statements requires management to make estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and ex-
penses. Actual results may differ from these estimates. Estimates as well as underlying assumptions and
uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
Notes V.34, Note VIII, Note IX and Note XIII contain information about the assumptions and their risk
factors relating to post-employment benefits – defined benefit plans, fair value of financial instruments and
share-based payments. Other key sources of estimation uncertainty are as follows:
30.1 Expected credit loss of trade receivables
As described in Note III.11, trade receivables are reviewed at each balance sheet date to determine whether
credit risk on a receivable has increased significantly since initial recognition, lifetime expected losses is
accrued for impairment provision. Evidence of impairment includes observable data that comes to the atten-
tion of the Group about loss events such as a significant decline in the solvency of an individual debtor or
the portfolio of debtors, and significant changes in the financial condition that have an adverse effect on the
debtor. If there is objective evidence of a recovery in the value of receivables which can be related objectively
to an event occurring after the impairment was recognized, the previously recognized impairment loss is
reversed.
30.2 Provision for impairment of inventories
As described in Note III.12, the net realisable value of inventories is under management’s regular review,
and as a result, provision for impairment of inventories is recognized for the excess of inventories’ carrying
amounts over their net realisable value. When making estimates of net realisable value, the Group takes into
consideration the use of inventories held on hand and other information available to form the underlying
assumptions, including the inventories’ market prices and the Group’s historical operating costs. The actual
selling price, the costs of completion and the costs necessary to make the sale and relevant taxes may vary
based on the changes in market conditions and product saleability, manufacturing technology and the actual
use of the inventories, resulting in the changes in provision for impairment of inventories. The net profit or
loss may then be affected in the period when the impairment of inventories is adjusted.
- 195 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
30. Significant accounting estimates and judgments - (cont’d)
30.3 Impairment of assets other than inventories and financial assets
As described in Note III.20, if impairment indication exists, assets other than inventories and financial assets
are assessed at balance sheet date to determine whether the carrying amount exceeds the recoverable amount
of the assets. If any such case exists, an impairment loss is recognized.
The recoverable amount of an asset (or an asset group) is the greater of its fair value less costs to sell and its
present value of expected future cash flows. Since a market price of the asset (or the asset group) cannot be
obtained reliably, the fair value of the asset cannot be estimated reliably, the recoverable amount is calculated
based on the present value of estimated future cash flows. In assessing the present value of estimated future
cash flows, significant judgements are exercised over the asset’s production, selling price, related operating
expenses and discount rate to calculate the present value. All relevant materials which can be obtained are
used for estimation of the recoverable amount, including the estimation of the production, selling price and
related operating expenses based on reasonable and supportable assumptions.
30.4 Depreciation and amortisation of assets such as fixed assets and intangible assets
As described in Note III.15 and III.18, assets such as fixed assets and intangible assets are depreciated and
amortised over their useful lives after taking into account residual value. The estimated useful lives of the
assets are regularly reviewed to determine the depreciation and amortisation costs charged in each reporting
period. The useful lives of the assets are determined based on historical experience of similar assets and the
estimated technical changes. If there have been significant changes in the factors used to determine the de-
preciation or amortisation, the rate of depreciation or amortisation is revised prospectively.
30.5 Income taxes and deferred income tax
The Company and Group companies are assessed for income tax purposes in a large number of jurisdictions
and, therefore, Company management is required to use considerable judgment in determining the total pro-
vision for taxes and attribution of income.
When assessing whether there will be sufficient future taxable profits available against which the deductible
temporary differences can be utilised, the Group recognizes deferred tax assets to the extent that it is probable
that future taxable profits will be available against which the deductible temporary differences can be utilised,
using tax rates that would apply in the period when the asset would be utilised. In determining the amount
of deferred tax assets, the Group makes reasonable judgements and estimates about the timing and amount
of taxable profits to be utilised in the following periods, and of the tax rates applicable in the future according
to the existing tax policies and other relevant regulations. If the actual timing and amount of future taxable
profits or the actual applicable tax rates differ from the estimates made by management, the differences affect
the amount of tax expenses.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
30. Significant accounting estimates and judgments - (cont’d)
30.6 Contingent liabilities
When assessing the possible outcomes of legal claims filed against the Company and its investee companies,
the company positions are based on the opinions of their legal advisors. These assessments by the legal
advisors are based on their professional judgment, considering the stage of the proceedings and the legal
experience accumulated regarding the various matters. Since the results of the claims will be determined by
the courts, the outcomes could be different from the assessments.
In addition to the said claims, the Group is exposed to unasserted claims, inter alia, where there is doubt as
to interpretation of the agreement and/or legal provision and/or the manner of their implementation. This
exposure is brought to the Company’s attention in several ways, among others, by means of contacts made
to Company personnel. In assessing the risk deriving from the unasserted claims, the Company relies on
internal assessments by the parties dealing with these matters and by management, who weigh assessment
of the prospects of a claim being filed, and the chances of its success, if filed. The assessment is based on
experience gained with respect to the filing of claims and the analysis of the details of each claim. By their
nature, in view of the preliminary stage of the clarification of the legal claim, the actual outcome could be
different from the assessment made before the claim was filed.
30.7 Employee benefits
The Group’s liabilities for long-term post-employment and other benefits are calculated according to the
estimated future amount of the benefit to which the employee will be entitled in consideration for his services
during the current period and prior periods. The benefit is stated at present value net of the fair value of the
plan’s assets, based on actuarial assumptions. Changes in the actuarial assumptions could lead to material
changes in the book value of the liabilities and in the operating results.
30.8 Derivative financial instruments
The Group enters into transactions in derivative financial instruments for the purpose of hedging risks related
to foreign currency and inflationary risks. The derivatives are recorded at their fair value. The fair value of
derivative financial instruments is based on quotes from financial institutions. The reasonableness of the
quotes is examined by discounting the future cash flows, based on the terms and length of the period to
maturity of each contract, while using market interest rates of a similar instrument as of the measurement
date. Changes in the assumptions and the calculation model could lead to material changes in the fair value
of the assets and liabilities and in the results.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation
1. Main types of taxes and corresponding tax rates
The income tax rate in China is 25% (2021: 25%). The subsidiaries outside of China are assessed based on
the tax laws in the country of their residence.
Set forth below are the tax rates outside China relevant to the subsidiaries with significant sales to third party:
Name of subsidiary Location 2022
ADAMA agriculture solutions Ltd. Israel 23.0%
ADAMA Makhteshim Ltd. Israel 7.5%
ADAMA Agan Ltd. Israel 7.5%
ADAMA Brasil S/A Brazil 34.0%
Makhteshim Agan of North America Inc. U.S. 24.3%
ADAMA India Private Ltd India 25.2%
ADAMA Deutschland GmbH Germany 32.5%
Control Solutions Inc. U.S. 25.0%
Adama Australia Pty Ltd Australia 30.0%
ADAMA Northern Europe B.V. Netherlands 25.8%
ADAMA Italia SRL Italy 27.9%
Alligare LLC U.S. 28.6%
The VAT rate of the Group's subsidiaries is in the range between 2.5% to 27%.
- 198 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(1) Benefits from High-Tech Certificate
The Company, was jointly approved as new and high-tech enterprise, by the Hubei Provincial Department
of Science and Technology, Department of Finance of Hubei Province and Hubei Provincial Office of the
State Administration of Taxation. The applicable income tax rate from 2020 to 2022 is 15%.
Adama Anpon (Jiangsu) Ltd. (Formally know as Jiangsu Anpon Electrochemical Co. Ltd, hereinafter -
“Anpon"), a subsidiary of the Company, was jointly approved as new and high-tech enterprise, by the Jiangsu
Provincial Department of Science and Technology, Department of Finance of Jiangsu Province and Jiangsu
Provincial Office of the State Administration of Taxation. The applicable income tax rate from 2021 to 2023
is 15%.
(2) Benefits under the Law for the Encouragement of Capital Investments
Industrial enterprises of subsidiaries in Israel were granted “Approved Enterprise” or “Beneficiary Enterprise”
status under the Israeli Law for the Encouragement of Capital Investments, 1959. Should a dividend be
distributed from the retained earning produced in which the company was considered as an “Approved En-
terprise” or “Beneficiary Enterprise” from unreleased retained earnings, based on the temporary order as
described below, the company may be liable for tax at the time of distribution.
On December 29, 2010 the Knesset approved the Economic Policy Law for 2011-2012, which includes an
amendment to the Law for the Encouragement of Capital Investments - 1959 (hereinafter - “the Amend-
ment”). The Amendment is effective from January 1, 2011 and its provisions apply to preferred income
derived or accrued in 2011 and thereafter by a preferred company, per the definition of these terms in the
Amendment.
The Amendment provides that only companies in Development Area A will be entitled to the grants track
and that they will be entitled to receive benefits under this track and under the tax benefits track at the same
time. The tax benefit tracks under the law constitute a preferred enterprise and a special preferred enterprise,
which mainly provide a uniform and reduced tax rate for all the company’s income entitled to benefits. Tax
rates on preferred income as from 2017 tax year are as follows: 7.5% for Development Area A and 16% for
the rest of the country.
The amendment further determined that no tax shall apply to dividend distributed out of preferred income to
Israel resident company shareholder.
As of the date of the report, all subsidiaries in Israel adopted the amendment and the deferred taxes were
calculated accordingly.
- 199 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(2) Benefits under the Law for the Encouragement of Capital Investments - (cont’d)
On December 21, 2016 the Knesset plenum passed the second and third reading of the Economic Efficiency
Law (Legislative Amendments for Achieving Budget Objectives in the Years 2017 and 2018) – 2016 in
which the Encouragement Law was also amended (hereinafter: “the Amendment”). The Amendment is ef-
fective as from January 1, 2017 and added new tax benefit tracks for a “preferred technological enterprise”
and a “special preferred technological enterprise” which award reduced tax rates to a technological industrial
enterprise for the purpose of encouraging activity relating to the development of qualifying intangible assets.
The benefits will be awarded to a “preferred company” that has a “preferred technological enterprise” or a
“special preferred technological enterprise” with respect to taxable “preferred technological income” per its
definition in the Encouragement Law.
Income of a Preferred Technological Enterprise a Special Preferred Technological Enterprise will be subject
to a reduced corporate tax rate of 6% regardless of the development area in which the enterprise is located.
In addition, as part of the amendment, a temporary provision was enacted, valid until June 30, 2021, which
settles tax benefits continuation on income that is eligible to the Preferred Enterprise tax benefits as at June
30, 2016.
On May 16, 2017 the Knesset Finance Committee approved Encouragement of Capital Investment Regula-
tions (Preferred Technological Income and Capital Gain of Technological Enterprise) – 2017 (hereinafter:
“the Regulations”), which provides rules for applying the “preferred technological enterprise” and “special
preferred technological enterprise” tax benefit tracks including the Nexus formula that provides the mecha-
nism for allocating the technological income eligible for the benefits.
On November 15, 2021 the Economic Efficiency Law (Legislative Amendments for the 2021 and 2022
Budget Years) – 2021 was published as well as a Temporary Order to the Law for the Encouragement of
Capital Investments – 1959 (hereinafter: “the temporary order”), which offers a reduced tax rate arrangement
to companies that received an exemption from corporate tax under the aforesaid law. The temporary order
provided that companies that choose to apply the temporary order, which is effective until November 14,
2022, will be entitled to a reduced tax rate on the “release” of exempt profits (hereinafter: “the beneficiary
corporate tax rate”). The release of exempt profits makes it possible to distribute them at a reduced rate of
corporate tax at the company level based on the rate of the profits being distributed pursuant to the conditions
set forth in the Amendment.
During the fourth quarter of 2022, Solutions announced its choice to release the retained earnings in a number
of subsidiaries and committed to pay a reduced corporate tax in the amount of approximately 101 million
RMB, which was recorded as tax expenses in the financial statements of the fourth quarter of 2022.
- 200 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(3) Benefits under the Law for the Encouragement of Industry (Taxes), 1969
Under the Israeli Law for the Encouragement of Industry (Taxes) 1969, Solutions is an Industrial Holding
Company and some of the subsidiaries in Israel are “Industrial Companies”. The main benefit under this law
is the filing of consolidated income tax returns (Solutions files a consolidated income tax return with Adama
Makhteshim and submission of a consolidated report together with Adama Agan as of 2017), amortization
of know-how over 8 years and higher rates of depreciation.
- 201 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements
1. Cash at Bank and On Hand
December 31 December 31
2022 2021
Cash on hand 785 1,196
Deposits in banks 4,224,468 5,758,284
Other cash and bank 65,708 59,355
4,290,961 5,818,835
Including cash and bank placed outside China 3,300,538 4,935,072
As at December 31, 2022 restricted cash and bank balances was 65,708 thousand RMB
(as at December 31, 2021 59,355 thousand RMB) mainly including deposits that guarantee bank acceptance
drafts.
2. Financial assets held for trading
December 31 December 31
2022 2021
Bank deposits 1,685 1,479
1,685 1,479
3. Derivative financial assets
December 31 December 31
2022 2021
Economic hedge 224,128 198,775
Accounting hedge derivatives 9,681 44,541
233,809 243,316
4. Bills Receivable
December 31 December 31
2022 2021
Post-dated checks receivable 112,297 79,996
Bank acceptance draft - 1,996
112,297 81,992
All bills receivables are due within 1 year.
- 202 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable
a. By category
December 31, 2022
Provision for expected
Book value credit losses
Percentage Carrying
Amount (%) Amount Percentage (%) amount
Account receivables assessed 383,265 4 212,640 55 170,625
individually for impairment
Account receivables assessed 8,945,138 96 97,388 1 8,847,750
collectively for impairment
9,328,403 100 310,028 3 9,018,375
December 31, 2021
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 290,224 3 143,827 50 146,397
Account receivables assessed
collectively for impairment 8,300,941 97 84,845 1 8,216,096
8,591,165 100 228,672 3 8,362,493
b. Aging analysis
December 31, 2022
Within 1 year (inclusive) 8,863,940
Over 1 year but within 2 years 245,816
Over 2 years but within 3 years 29,049
Over 3 years but within 4 years 59,095
Over 4 years but within 5 years 28,520
Over 5 years 101,983
9,328,403
- 203 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
Main groups of account receivables assessed collectively for impairment based on geographical loca-
tion:
Geographical location A:
Account receivables in geographical location A are grouped based on similar credit risk:
December 31, 2022
Provision for expected
Book value credit loss Percentage (%)
Credit group A 2,157,637 9,432 0.4
Credit group B 597,058 5,167 0.9
Credit group C 213,109 9,297 4.4
Credit group D 37,549 783 2.1
3,005,353 24,679 0.8
Geographical location B:
Account receivables in geographical location B are grouped based on aging analysis:
December 31, 2022
Provision for expected
Book value credit loss Percentage (%)
Accounts receivable that are not overdue 586,149 5,041 0.9
Debts overdue less than 60 days 114,981 3,448 3.0
Debts overdue less than 180 days but 42,015 4,202
more than 60 days 10.0
Debts overdue above 180 days 13,315 5,325 39.9
Legal Debtors 40,402 40,402 100.0
796,862 58,418 7.3
Other geographical locations:
December 31, 2022
Provision for expected
Book value credit loss Percentage (%)
Other account receivables assessed
collectively for impairment 5,142,923 14,291 0.3
- 204 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
c. Addition, written-back and written-off of provision for expected credit losses during the period
Lifetime expected
credit loss (credit Lifetime expected
losses has not oc- credit loss (credit
curred) losses has occurred) Total
January 1, 2022 36,094 192,578 228,672
Addition (write back) during the period, net 3,941 57,037 60,978
Exchange rate effect 3,977 16,401 20,378
Balance as of December 31, 2022 44,012 266,016 310,028
d. Five largest accounts receivable at December 31, 2022:
Allowance of expected
Proportion of Accounts credit losses (credit losses
Name Closing balance receivable (%) has occurred)
Customer 1 358,001 3.8 -
Customer 2 190,510 2.0 -
Customer 3 139,424 1.5 -
Customer 4 125,732 1.4 -
Customer 5 122,222 1.3 -
Total 935,889 10.0 -
e. Derecognition of accounts receivable due to transfer of financial assets
Certain subsidiaries of the group entered into a securitization transaction with Rabobank International for
sale of trade receivables (hereinafter – “the Securitization Program” and/or “the Securitization Transaction”).
Pursuant to the Securitization Program, the companies will sell their trade receivables debts, in various dif-
ferent currencies, to a foreign company that was set up for this purpose and that is not owned by the Adama
Ltd. (hereinafter – “the Acquiring Company”). Acquisition of the trade receivables by the Acquiring Com-
pany is financed by Cooperative Rabobank U.A..
The trade receivables included as part of the Securitization Transaction are trade receivables that meet the
criteria provided in the agreement.
Every year the credit facility is re approved in accordance with the Securitization Program. As at 31 Decem-
ber 2022, the Securitization agreement was approved up to October 31, 2023.
- 205 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
The maximum scope of the securitization is adjusted for the seasonal changes in the scope of the Company’s
activities, as follows: during the months March through June the maximum scope of the securitization is
$350 million (as of December 31, 2022 – 2,438 million RMB), during the months July through September
the maximum scope of the securitization is $300 million (as of December 31, 2022 – 2,089 million RMB)
and during the months October through February the maximum scope of the securitization is $250 million
(as of December 31, 2022– 1,741 million RMB). In addition the company has uncommitted facility of $50
million (as of December 31, 2022- 348 million RMB) which will be applicable each period. The proceeds
received from those customers whose debts were sold are used for acquisition of new trade receivables.
The price at which the trade receivables debts are sold is the amount of the debt sold less a discount calculated
based on, among other things, the expected length of the period between the date of sale of the trade receiv-
able and its anticipated repayment date. In the month following acquisition of the debt, the Acquiring Com-
pany pays in cash most of the debt while the remainder is recorded as a subordinated note and as continuing
involvement that is paid after collection of the debt sold. If the customer does not pay its debt on the antici-
pated repayment date, the Company bears interest up to the earlier of the date on which the debt is actually
repaid or the date on which debt collection is transferred to the insurance company (the actual costs are not
significant and are not expected to be significant).
The Acquiring Company bears 95% of the credit risk in respect of the customers whose debts were sold and
will not have a right of recourse to the Company in respect of the amounts paid in cash, except regarding
debts with respect to which a commercial dispute arises between the companies and their customers, that is,
a dispute the source of which is a claim of non-fulfillment of an obligation of the seller in the supply agree-
ment covering the product, such as: a failure to supply the correct product, a defect in the product, delin-
quency in the supply date, and the like.
The Acquiring Company appointed a policy manager who will manage for it the credit risk involved with
the trade receivables sold, including an undertaking with an insurance company.
Pursuant to the Receivables Servicing Agreement, the Group subsidiaries handle collection of the trade re-
ceivables as part of the Securitization Transaction for the benefit of the Acquiring Company.
As part of the agreement, Solutions is committed to comply with certain financial covenants, mainly the ratio
of the liabilities to equity and profit ratios. As of December 31, 2022, Solutions was in compliance with the
financial covenants.
The accounting treatment of sale of the trade receivables included as part of the Securitization Program is:
The Company is not controlling the Acquiring Company, therefore the Acquiring Company is not consoli-
dated in the financial statements.
The Company continues to recognize the trade receivables included in the Securitization Program based on
the extent of its continuing involvement therein.
In respect of the part of the trade receivables included in the securitization Program with respect to which
cash proceeds were not yet received, however regarding which the Company has transferred the credit risk,
a subordinated note is recorded.
The continuing involvement and subordinated note recorded in the balance sheet as part of the “other receiv-
ables” line item.
- 206 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
The loss from sale of the trade receivables is recorded at the time of sale in the statement of income in the
“financing expenses”.
f. A subsidiary in Brazil (hereinafter - “the subsidiary”) entered into the following securitization agree-
ments:
(1) Since 2016, a securitization transaction with Rabobank Brazil for sale of customer receivables (herein-
after "FIDC-Donegal agreement"). Under the FIDC-Donegal agreement, the subsidiary will sell its receiva-
bles to a securitization structure (hereinafter - “the entity”) that was formed for this purpose where the sub-
sidiary has subordinate rights of 5% of the entity's capital.
As at 31 December 2022, the FIDC-Donegal agreement was approved up to September 30, 2024.
The maximum securitization scope as of December 31, 2022 is BRL 350 million (as of December 31, 2022
– 467 million RMB), with additional temporary securitization scope of BRL 150 million (as of December
31, 2022 – 200 million RMB) until June 2023.
On the date of the sale of the customer receivables, the entity pays the full amount which is the debt amount
sold net of discount calculated, among others, over the expected length of the period between the date of sale
of the customer receivable and its anticipated repayment date.
The entity bears 95% of the credit risk in respect of the customers whose debts were sold such that the entity
has the right of recourse to 5% of the unpaid amount. The subsidiary has a pledged deposit with regards to
the entity’s right of recourse.
The subsidiary continues to recognize the trade receivables sold to the entity based on the extent of its con-
tinuing involvement therein (5% right of recourse) and also recognizes an associated liability in the same
amount.
In "FIDC-Donegal agreement" the subsidiary handles the collection of receivables included in the securiti-
zation for the entity.
(2) During 2021, the subsidiary has entered into an additional securitization agreement (hereinafter -
“FIDC – Liverpool agreement”) with Itau Bank and Farm investments, for sale of customer receivables to a
securitization structure that was formed for this purpose where the subsidiary has mezzanine quotes of 10.5%
of the entity's capital.
As at 31 December 2022, the FIDC-Liverpool agreement was approved up to November 10, 2024.
The maximum securitization scope as of December 31, 2022 is BRL 300 million (as of December 31, 2022
– 400 million RMB), with additional temporary securitization scope of BRL 200 million (as of December
31, 2022 – 267 million RMB), until June 2023.
The entity bears 100% of the credit risk in respect of the customers whose debts were sold (non-recourse),
therefore the subsidiary has no continuing involvement in those account receivables sold.
In "FIDC-Liverpool agreement" the collection of receivables is being handled by the entity.
- 207 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
f. A subsidiary in Brazil (hereinafter - “the subsidiary”) entered into the following securitization agree-
ments:
(3) During 2022, the subsidiary has entered into an additional new securitization agreement (hereinafter -
“The new agreement”) with Rabobank, for sale of customer receivables to a securitization.
As at 31 December 2022, the new agreement was approved up to March 31, 2023. The maximum securiti-
zation scope as of December 31, 2022 is BRL 100 million (as of December 31, 2022 – 133 million RMB).
On the date of the transaction, the bank pays the full amount which is the debt amount sold net of discount
calculated, among others, over the expected length of the period between the date of sale of the customer
receivable and its anticipated repayment date.
The bank bears 75% of the credit risk in respect of the customers whose debts were sold such that the bank
has the right of recourse to 25% of the unpaid amount.
The subsidiary continues to recognize the trade receivables sold to the bank based on the extent of its con-
tinuing involvement therein (25% right of recourse) and also recognizes an associated liability in the same
amount.
In the new agreement the collection of receivables is being handled by the bank.
In all the agreements above, the subsidiary does not control the entities and therefore the entities are not
consolidated in the Group's financial statements.
The loss from the sale of the trade receivables is recorded at the time of sale in the statement of income in
the “financing expenses” category.
g. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
December 31 December 31
2022 2021
Accounts receivables derecognized 4,039,429 2,962,111
Continuing involvement 193,532 117,995
Subordinated note in respect of trade receivables 591,998 388,631
Liability in respect of trade receivables 79,619 98,836
Year ended December 31
2022 2021
Loss in respect of sale of trade receivables 223,538 93,307
- 208 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
6. Receivables financing
December 31 December 31
2022 2021
Bank acceptance draft 63,639 120,157
63,639 120,157
As at December 31, 2022, bank acceptance endorsed but not yet due amounts to 596,299 thousands RMB.
7. Prepayments
(1) The aging analysis of prepayments is as follows:
December 31 December 31
2022 2021
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 327,809 97 368,565 97
Over 1 year but within 2 years (inclusive) 11,047 3 8,850 2
Over 2 years but within 3 years (inclusive) 1,204 - 429 -
Over 3 years 1,042 - 1,944 1
341,102 100 379,788 100
(2) Total of five largest prepayments by debtor at the end of the period:
Percentage of prepayments
Amount (%)
December 31, 2022 93,930 28%
- 209 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
8. Other Receivables
(1) Other receivables by nature
December 31 December 31
2022 2021
Dividends receivable - 1,599
Others 1,021,824 690,340
1,021,824 691,939
a. Others breakdown by categories
December 31 December 31
2022 2021
Trade receivables as part of securitization transactions
not yet eliminated 193,532 117,995
Subordinated note in respect of trade receivables 591,998 388,631
Financial institutions 38,354 -
Receivables in respect of disposal of fixed assets - 19,940
Other 242,688 174,624
Sub total 1,066,572 701,190
Provision for expected credit losses - other receivables (44,748) (10,850)
1,021,824 690,340
b. Other receivables by aging
December 31
2022
Within 1 year (inclusive) 1,010,037
Over 1 year but within 2 years 39,914
Over 2 years but within 3 years 5,841
Over 3 years but within 4 years 2,575
Over 4 years but within 5 years 1,652
Over 5 years 6,553
1,066,572
(2) Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Year ended
December 31, 2022
Balance as of January 1 2022, 10,850
Addition (written back) during the period 30,689
Write-off during the period -
Exchange rate effect 3,209
Balance as of December 31, 2022 44,748
- 210 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
8. Other Receivables
(3) Five largest other receivables at December 31, 2022:
Allowance of ex-
Proportion of other re- pected credit
Name Closing balance ceivables (%) losses
Party 1 591,998 55 -
Party 2 38,354 4 -
Party 3 15,733 1 -
Party 4 6,905 1 -
Party 5 3,125 - -
Total 656,115 61 -
9. Inventories -
(1) Inventories by category:
December 31, 2022
Provision for impair-
Book value ment Carrying amount
Raw materials 4,341,176 20,939 4,320,237
Work in progress 1,448,041 5,952 1,442,089
Finished goods 10,917,673 237,337 10,680,336
Others 495,125 10,546 484,579
17,202,015 274,774 16,927,241
December 31, 2021
Provision for impair-
Book value ment Carrying amount
Raw materials 4,217,049 26,514 4,190,535
Work in progress 766,650 16,647 750,003
Finished goods 6,545,536 139,307 6,406,229
Others 415,047 11,652 403,395
11,944,282 194,120 11,750,162
- 211 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
9. Inventories - (cont'd)
(2) Provision for impairment of inventories:
For the year ended December 31, 2022
January 1, Reversal or December 31,
2022 Provision write-off Other 2022
Raw material 26,514 14,947 (23,189) 2,667 20,939
Work in progress 16,647 2,144 (17,770) 4,931 5,952
Finished goods 139,307 171,241 (81,698) 8,487 237,337
Others 11,652 2,362 (4,255) 787 10,546
194,120 190,694 (126,912) 16,872 274,774
10. Other Current Assets
December 31 December 31
2022 2021
Deductible VAT 679,428 615,406
Current tax assets 219,057 158,440
Short term investments 171,496 121,629
Others 59,707 42,978
1,129,688 938,453
11. Long-Term Receivables
December 31 December 31
2022 2021
Long term account receivables from sale of goods 82,510 56,234
82,510 56,234
- 212 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
12. Long-Term Equity Investments
(1) Long-term equity investments by category:
December 31 December 31
2022 2021
Joint venture 2,110 2,227
Associate 24,258 13,108
26,368 15,335
(2) Movements of long-term equity investments for the period are as follows:
Declared dis- Change in
January 1, Investment Other Compre- tribution of consolidation Balance at the
2022 income hensive income cash dividend scope end of the period
Joint ven-
ture
Investee A 2,227 531 237 (885) - 2,110
Sub-total 2,227 531 237 (885) - 2,110
Associate
Investee B 13,108 9,827 2,456 (1,411) 278 24,258
Sub-total 13,108 9,827 2,456 (1,411) 278 24,258
Sub-total 15,335 10,358 2,693 (2,296) 278 26,368
13. Other equity investments
December 31, December 31, Dividend received
2022 2021 during 2022
Investment A 84,720 84,720 2,325
Investment B 71,840 65,765 -
Investment C 1,781 1,633 -
158,341 152,118 2,325
Other equity investments are non-core businesses that are intended to be held in the foreseeable future.
- 213 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
14. Fixed assets
Land & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2022 3,825,676 15,410,751 120,698 375,442 19,732,567
Purchases 45,009 168,439 26,654 42,239 282,341
Transfer from construction in progress 399,633 1,074,545 33,053 7,363 1,514,594
Reclassification to construction in progress - (260,130) - - (260,130)
Disposals (197,584) (829,167) (24,342) (19,036) (1,070,129)
Currency translation adjustment 167,924 951,868 10,524 32,534 1,162,850
Balance as at December 31, 2022 4,240,658 16,516,306 166,587 438,542 21,362,093
Accumulated depreciation
Balance as at January 1, 2022 (1,734,850) (9,079,084) (66,602) (299,595) (11,180,131)
Charge for the period (133,903) (816,056) (21,395) (35,144) (1,006,498)
Disposals 155,234 646,443 16,374 18,704 836,755
Reclassification to construction in progress - 22,327 - - 22,327
Currency translation adjustment (77,854) (589,489) (2,825) (26,164) (696,332)
Balance as at December 31, 2022 (1,791,373) (9,815,859) (74,448) (342,199) (12,023,879)
Provision for impairment
Balance as at January 1, 2022 (155,563) (347,068) (646) (770) (504,047)
Charge for the period (17,025) (51,989) (451) (293) (69,758)
Disposals 40,887 158,653 4 21 199,565
Transfer from construction in progress - (3,808) - - (3,808)
Currency translation adjustment (962) (6,978) (14) (28) (7,982)
Balance as at December 31, 2022 (132,663) (251,190) (1,107) (1,070) (386,030)
Carrying amounts
As at December 31, 2022 2,316,622 6,449,257 91,032 95,273 8,952,184
As at January 1, 2022 1,935,263 5,984,599 53,450 75,077 8,048,389
The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.
- 214 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
15. Construction in Progress
(1) Construction in progress
December 31 December 31
2022 2021
Provision for im- Provision for im-
Book value pairment Carrying amount Book value pairment Carrying amount
3,079,882 (118,481) 2,961,401 2,164,394 (20,994) 2,143,400
(2) Details and Movements of major construction projects in progress during period ended December 31, 2022
Actual
Including: Currency Transfer cost to Project
January Interest translation to fixed December budget progress
Budget 1, 2022 Additions capitalized differences assets 31, 2022 (%) (%) Source of funds
Project A 1,509,420 332,722 26,868 1,191 - (359,590) - 100% 100% Bank loan
Project B 765,314 215,571 327,047 5,698 - - 542,618 71% 71% Bank loan
Project C 314,199 174,554 126,049 - 9,449 (310,052) - 100% 100% Internal finance
Project D 561,737 243,367 256,662 29,679 31,788 - 531,817 95% 95% Internal finance
Project E 354,359 105,346 210,792 18,415 17,376 - 333,514 94% 94% Internal finance
Project F 194,604 124,659 20,864 - - (71,000) 74,523 56% 56% Internal finance
Project G 835,752 65,612 270,923 13,737 15,887 - 352,422 42% 42% Internal finance
Project H 146,257 100,256 42,366 - 6,995 (149,617) - 100% 100% Internal finance
Project I 138,000 99,615 5,754 - - (105,369) - 100% 100% Internal finance
Project J 107,016 73,244 160 - - (73,404) - 100% 100% Internal finance
Project K 91,293 81,131 10,867 - - (91,998) - 100% 100% Internal finance
Under re- -
Project L evalution 22,016 240,139 - - - 262,155 - - Internal finance
* As of December 31, 2022 Project B, Project F and Project L are include impairment of RMB 14 million, 35 million and 35 million , respectively.
- 215 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
16. Right-of-use assets
Land & Build- Machinery & Office & other
ings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2022 493,032 44,259 258,111 4,188 799,590
Additions 202,981 27 92,600 164 295,772
Disposals (127,150) (1,938) (76,754) (830) (206,672)
Currency translation adjustment 24,927 4,016 20,165 336 49,444
Balance as at December 31, 2022 593,790 46,364 294,122 3,858 938,134
Accumulated depreciation
Balance as at January 1, 2022 (201,150) (17,393) (115,455) (1,677) (335,675)
Charge for the period (86,282) (5,949) (81,812) (753) (174,796)
Disposals 79,575 1,925 69,202 830 151,532
Currency translation adjustment (13,366) (1,691) (8,100) (149) (23,306)
Balance as at December 31, 2022 (221,223) (23,108) (136,165) (1,749) (382,245)
Provision for impairment
Balance as at January 1, 2022 - - - - -
Balance as at December 31, 2022 - - - - -
Carrying amounts
As at December 31, 2022 372,567 23,256 157,957 2,109 555,889
As at January 1, 2022 291,882 26,866 142,656 2,511 463,915
- 216 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
17. Intangible Assets
Marketing
Intangible assets rights, trade-
Product registra- on Purchase of name and trade- Customers rela-
tion Products Software marks tions Land use rights (1) Others(2) Total
Costs
Balance as at January 1, 2022 10,793,847 3,828,805 998,213 726,947 538,239 498,177 536,691 17,920,919
Purchases 437,323 - 135,933 477 - 9,781 24,339 607,853
Currency translation adjustment 979,781 353,652 89,095 67,153 40,333 3,264 27,555 1,560,833
Disposal (6,575) - (6,992) - - (950) - (14,517)
Balance as at December 31, 2022 12,204,376 4,182,457 1,216,249 794,577 578,572 510,272 588,585 20,075,088
Accumulated amortization
Balance as at January 1, 2022 (8,214,576) (2,649,128) (596,197) (457,479) (249,305) (82,720) (215,008) (12,464,413)
Charge for the period (536,919) (223,805) (87,781) (24,072) (39,213) (10,370) (32,526) (954,686)
Currency translation adjustment (776,624) (253,008) (55,569) (43,179) (23,501) (2,820) (15,450) (1,170,151)
Disposal 2,792 - 6,907 - - 340 - 10,039
Balance as at December 31, 2022 (9,525,327) (3,125,941) (732,640) (524,730) (312,019) (95,570) (262,984) (14,579,211)
Provision for impairment
Balance as at January 1, 2022 (82,278) (47,690) - - - - (250) (130,218)
Charge for the period (6,014) (4,278) (50) - - (277) - (10,619)
Currency translation adjustment (7,659) (4,633) 1 - - 5 - (12,286)
Balance as at December 31, 2022 (95,951) (56,601) (49) - - (272) (250) (153,123)
Carrying amount
As at December 31, 2022 2,583,098 999,915 483,560 269,847 266,553 414,430 325,351 5,342,754
As at January 1, 2022 2,496,993 1,131,987 402,016 269,468 288,934 415,457 321,433 5,326,288
(1) Include land parcel in Israel that has not yet been registered in the name of the Group subsidiaries at the Land Registry Office, mostly due to registration procedures or technical problems.
(2) Mainly non-compete and exclusivity agreements.
- 217 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
18. Goodwill
Changes in goodwill
The Group allocates goodwill to two cash generating units ("CGU"), Crop Protection (Agro) and a non-core ac-
tivity included in the Intermediates and ingredients segment. At the end of the year, or more frequently whether
indicators for impairment exists, the Group estimates the recoverable amount of each CGU for which goodwill
has been allocated to using the DCF model based on the Group business plan. The discount rate used in the DCF
model is determined based on the company's cost of equity and cost of debt, taking into account the comprehensive
risk factors.
The carrying amount of goodwill is mainly allocated to Agro units. Total amount of goodwill allocated to the
Agro units amounts to RMB 4,735 thousand. The goodwill allo-cated to non-core CGU is not significant.
As of December 31, 2022 the fair value of the cash generating units to which goodwill has been allocated to
exceeds its carrying amount.
Currency Balance at De-
January 1, Change dur- translation cember 31,
2022 ing the year adjustment 2022
Book value 4,409,599 - 395,558 4,805,157
Impairment provision - - - -
Carrying amount 4,409,599 - 395,558 4,805,157
19. Deferred Tax Assets and Deferred Tax Liabilities
(1) Deferred tax assets without taking into consideration of the offsetting of balances within the same
tax jurisdiction
December 31 December 31
2022 2021
Deductible Deductible
temporary Deferred tax temporary Deferred tax
differences assets differences assets
Deferred tax assets
Deferred tax assets in respect of carry
forward losses 1,568,088 256,749 1,378,984 197,354
Deferred tax assets in respect of inven-
tories 2,402,900 689,062 1,117,094 294,043
Deferred tax assets in respect of em-
ployee benefits 1,005,874 166,264 1,009,387 150,742
Other deferred tax asset 2,030,651 545,937 1,375,455 331,258
7,007,513 1,658,012 4,880,920 973,397
- 218 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
19. Deferred Tax Assets and Deferred Tax Liabilities - (cont’d)
(2) Deferred tax liabilities without taking into consideration of the offsetting of balances within the
same tax jurisdiction
December 31 December 31
2022 2021
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Deferred tax liabilities
Deferred tax liabilities in respect of
fixed assets and intangible assets 3,430,096 626,610 3,392,987 630,460
3,430,096 626,610 3,392,987 630,460
(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting
December 31 December 31
2022 2021
The offset The offset
amount of Deferred tax amount of de-
deferred tax assets or lia- ferred tax as- Deferred tax
assets and li- bilities after sets and liabili- assets or liabili-
abilities offset ties ties after offset
Presented as:
Deferred tax assets 310,749 1,347,263 250,322 723,075
Deferred tax liabilities 310,749 315,861 250,322 380,138
(4) Details of unrecognized deferred tax assets
December 31 December 31
2022 2021
Deductible temporary differences 518,542 496,972
Deductible losses carry forward 229,672 308,812
748,214 805,784
(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets
December 31 December 31
2022 2021
2022 - 1,596
2023 1,713 2,068
2024 33,646 19,063
2025 6,282 5,751
2026 6,373 5,834
After 2026 181,658 274,500
229,672 308,812
- 219 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
19. Deferred Tax Assets and Deferred Tax Liabilities - (cont'd)
(6) Unrecognized deferred tax liabilities
When calculating the deferred taxes, taxes that would have applied in the event of realizing investments
in subsidiaries were not taken into account since it is the Company’s intention to hold these investments
and not realize them.
20. Other Non-Current Assets
December 31 December 31
2022 2021
Judicial deposits 154,273 115,649
Assets related to securitization 112,388 74,169
Advances in respect of non-current assets 174,035 165,555
Others 164,137 149,252
604,833 504,625
21. Short-Term Loans
Short-term loans by category:
December 31 December 31
2022 2021
Unsecured loans 3,342,921 874,755
3,342,921 874,755
22. Derivative financial liabilities
December 31 December 31
2022 2021
Economic hedge 490,496 167,987
Accounting hedge derivatives 55,020 8,219
545,516 176,206
- 220 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
23. Bills Payables
December 31 December 31
2022 2021
Post-dated checks payables 900,537 371,467
Note payables draft 214,238 121,909
1,114,775 493,376
As at December 31, 2022, none of the bills payable are overdue.
24. Accounts payable
December 31 December 31
2022 2021
Within 1 year (including 1 year) 7,447,355 6,238,230
1-2 years (including 2 years) 59,671 30,707
2-3 years (including 3 years) 2,048 3,181
Over 3 years 18,195 22,045
7,527,269 6,294,163
There are no significant accounts payables aging over one year.
25. Contract liabilities
December 31 December 31
2022 2021
Discount for customers 904,615 763,964
Advances from customers 871,958 617,347
1,776,573 1,381,311
26. Employee Benefits Payable
December 31 December 31
2022 2021
Short-term employee benefits 1,027,543 852,806
Post-employment benefits 33,317 44,260
Share based payment (See note XIII) 76,875 112,176
Other benefits within one year 204,794 205,562
1,342,529 1,214,804
Current maturities 28,257 33,175
1,370,786 1,247,979
- 221 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
27. Taxes Payable
December 31 December 31
2022 2021
Corporate income tax 240,672 174,705
VAT 187,066 153,336
Others 31,836 40,641
459,574 368,682
28. Other Payables
December 31 December 31
2022 2021
Dividends payables 750 750
Other payables 1,610,532 1,341,438
1,611,282 1,342,188
(1) Other payables
December 31 December 31
2022 2021
Accrued expenses 758,158 621,024
Payables in respect of intangible assets 106,510 115,987
Financial institutions - 6,127
Liability in respect of securitization transactions 79,619 98,836
Hold-back payment due to acquistions 254,000 254,000
Others 412,245 245,464
1,610,532 1,341,438
29. Non-Current Liabilities Due Within One Year
Non-current liabilities due within one year by category are as follows:
December 31 December 31
2022 2021
Long-term loans due within one year 1,539,496 1,099,643
Lease liabilities due within one year 156,977 139,162
Debentures payable due within one year 565,658 556,949
2,262,131 1,795,754
- 222 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
30. Other Current Liabilities
December 31 December 31
2022 2021
Put options to holders of non-controlling interests 507,483 170,422
Provision in respect of returns 158,173 196,831
Provision in respect of claims 37,769 45,293
Others 369 363
703,794 412,909
31. Long-Term Loans
Long-term loans by category
December 31 December 31
2022 Interest range 2021 Interest range
Long term loans
Guaranteed loans 404,841 2.92%-3.75% 415,887 3.95% - 4.1%
Unsecured loans 4,797,525 1.73%-7.67% 4,182,668 1.36% - 4.05%
Total Long term loans 5,202,366 4,598,555
Less:
Long term loans from banks due within 1 year (1,539,496) (1,099,643)
Long term loans, net 3,662,870 3,498,912
* For more detailes regarding the guaranteed loans – see note X. related parties and related parties transac-
tions.
For the maturity analysis, see note VIII.C - Liquidity risk.
32. Debentures Payable
December 31 December 31
2022 2021
Debentures Series B 7,919,169 8,354,080
Current maturities (565,658) (556,949)
7,353,511 7,797,131
December 31
2022
First year (current maturities) 565,658
Second year 565,658
Third year 565,658
Fourth year 565,658
Fifth year and thereafter 5,656,537
7,919,169
- 223 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
32. Debentures Payable - (cont'd)
Movements of debentures payable:
For the year ended December 31, 2022:
Balance at Amortization CPI and Repayment Currency Balance at
Maturity Face value Face value Issuance Maturity Issuance January 1, of discounts exchange during the translation December
period in RMB NIS date period amount 2022 or premium rate effect period adjustment 31, 2022
Debentures November
Series B 2,673,640 1,650,000 4.12.2006 2020-2036 3,043,742 3,502,632 221 (243,148) (249,277) 310,643 3,321,071
Debentures November
Series B 843,846 513,527 16.1.2012 2020-2036 842,579 1,046,335 10,570 (72,493) (81,559) 93,384 996,237
Debentures November
Series B 995,516 600,000 7.1.2013 2020-2036 1,120,339 1,296,951 4,607 (89,637) (95,290) 115,316 1,231,947
Debentures November
Series B 832,778 533,330 1.2.2015 2020-2036 1,047,439 1,215,910 (2,847) (84,140) (84,704) 107,726 1,151,945
Debentures November
Series B 418,172 266,665 1-6.2015 2020-2036 556,941 662,990 (7,750) (45,947) (42,349) 58,414 625,358
Debentures November
Series B 497,989 246,499 5.5.2020 2020-2036 692,896 629,262 (9,153) (43,696) (39,146) 55,344 592,611
8,354,080 (4,352) (579,061) (592,325) 740,827 7,919,169
Series B debentures, in amount of NIS 3,810 million par value (3,730 million par value, net of self-purchased), linked to the CPI and bear interest at the base annual rate of
5.15%. The debenture principal shall be repaid in 17 equal payments in the years 2020 through 2036.
- 224 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
33. Lease liabilities
December 31 December 31
2022 Interest range 2021 Interest range
Lease liabilities 588,053 1.1%-9.1% 501,248 1.3%-6.1%
Less: Lease liabilities due within one year (156,977) (139,162)
Long term lease liabilities, net 431,076 362,086
34. Long-Term Employee Benefits Payable
Post-employment benefit plans – defined benefit plan and early retirement
December 31 December 31
2022 2021
Total present value of obligation 566,550 687,759
Less: fair value of plan's assets (70,001) (86,282)
Net liability related to Post-employment benefits 496,549 601,477
Termination benefits 65,782 91,912
Total recognized liability for defined benefit plan, net (1) 562,331 693,389
Share based payment (See note XIII) - 5,674
Other long-term employee benefits 258,079 123,826
Total long-term employee benefits, net 820,410 822,889
Including: Long-term employee benefits payable due within one year 28,257 30,531
792,153 792,358
(1) Movement in the net liability and assets in respect of defined benefit plans, early retirement and
their components
Defined benefit obli-
gation and early re- Fair value of plan's
tirement assets Total
2022 2021 2022 2021 2022 2021
Balance as at January 1, 2022 779,671 693,631 86,282 92,634 693,389 600,997
Expense/income recognized
in profit and loss:
Current service cost 25,954 31,070 - (1,310) 25,954 32,380
Interest costs 16,684 17,836 1,949 2,077 14,735 15,759
Losses on curtailments and settlements 6,098 24,584 - - 6,098 24,584
Changes in exchange rates (74,599) 17,662 (10,222) 3,283 (64,377) 14,379
Actuarial losses due to early retirement (1,087) (11,391) - - (1,087) (11,391)
Included in other comprehensive income:
Actuarial gain (losses) as a result of changes in actu-
arial assumptions (97,666) 39,638 (5,672) 6,077 (91,994) 33,561
Foreign currency translation differences in respect of
foreign operations 57,646 (16,030) 6,776 (2,152) 50,870 (13,878)
Additional movements:
Benefits paid (80,369) (117,368) (12,587) (18,611) (67,782) (98,757)
Classification from short term - 100,039 - - - 100,039
Contributions paid by the Group - - 3,475 4,284 (3,475) (4,284)
Balance as at December 31, 2022 632,332 779,671 70,001 86,282 562,331 693,389
- 225 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
34. Long-Term Employee Benefits Payable - (cont'd)
Post-employment benefit plans – defined benefit plan and early retirement - (cont'd)
(2) Actuarial assumptions and sensitivity analysis
The principal actuarial assumptions at the reporting date for defined benefit plan
December 31 December 31
2022 2021
Discount rate (%)* 1.7%-3.0% (0.8%)-3.0%
* According to the demographic and the benefit components.
The assumptions regarding the future mortality rate are based on published statistical data and acceptable
mortality rates.
Possible reasonable changes as of the date of the report in the discount rate, assuming the other assumptions
remain unchanged, would have affected the defined benefit obligation as follows:
As of December 31, 2022
Increase of 1% Decrease of 1%
Change in defined benefit obligation (45,464) 55,202
35. Provisions
December 31 December 31
2022 2021
Liabilities in respect of contingencies* 149,187 104,220
Provision in respect of site restoration 65,291 62,370
Long-term liability in respect of business combinations 5,182 17,411
Other 2,521 2,429
222,181 186,430
* Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of re-
sources had been reliably estimated.
- 226 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
36. Other Non-Current Liabilities
December 31 December 31
2022 2021
Put options to holders of non- controlling interests 907,644 1,341,362
Long term loans – others 348,231 318,786
1,255,875 1,660,148
Current maturities - -
1,255,875 1,660,148
37. Share Capital
Balance at
Balance at Janu- Issuance of new December 31,
ary 1, 2022 shares Buyback of shares 2022
Share capital 2,329,812 - - 2,329,812
38. Capital Reserve
Balance at
Balance at Janu- Additions during Reductions during December 31,
ary 1, 2022 the period the period 2022
Share premiums 12,606,562 - - 12,606,562
Other capital reserve 370,609 9,162 - 379,771
12,977,171 9,162 - 12,986,333
- 227 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
39. Other Comprehensive Income, net of tax
Attributable to shareholders of the company
Less:
Balance at transfer Less: In-
January 1, Before tax to profit come tax Net-of-tax Balance at Decem-
2022 amount or loss expenses amount ber 31, 2022
Items that will not be re-
classified to profit or loss 18,671 91,994 - 9,295 82,699 101,370
Re-measurement of changes
in liabilities under defined
benefit plans (35,861) 91,994 - 9,295 82,699 46,838
Changes in fair value of
other equity investment 54,532 - - - - 54,532
Items that may be reclassi-
fied to profit or loss (451,055) 1,358,491 (65,611) (6,173) 1,430,275 979,220
Effective portion of gain or
loss of cash flow hedge 31,955 (145,108) (65,611) (6,173) (73,324) (41,369)
Translation difference of for-
eign financial statements (483,010) 1,503,599 - - 1,503,599 1,020,589
(432,384) 1,450,485 (65,611) 3,122 1,512,974 1,080,590
40. Surplus reserve
Additions Reductions Balance at
Balance at during the during the December 31,
January 1, 2022 period period 2022
Statutory surplus reserve 236,348 2,336 - 238,684
Discretional surplus reserve 3,814 - - 3,814
240,162 2,336 - 242,498
- 228 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
41. Retained Earnings
2022 2021
Retained earnings as at January 1 5,940,465 5,862,702
Net profits for the period attributable to shareholders of the Company 609,391 157,397
Appropriation to statutory surplus reserve (2,336) -
Dividends to non-controlling Interest (59,278) (42,357)
Dividend to the shareholders of the company (Note 1 & 2) (18,638) (37,277)
Retained earnings as at December 31 6,469,604 5,940,465
Note 1:
On March 29, 2021, after obtaining the approval of the 31st meeting of the Company's 8th Board of Directors,
the Company declared RMB 0.16 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 37,277 thousands RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital. The proposal was approved by the 2020 Annual General Meeting of the
Company held on May 21, 2021 and was fully paid during the third quarter of 2021.
Note 2:
On March 29, 2022, after obtaining the approval of the 9th meeting of the Company's 9th Board of Directors,
the Company declared RMB 0.08 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 18,638 thousand RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital.
Note 3:
On March 19, 2023, after obtaining the approval of the 19th meeting of the Company's 9th Board of Directors,
the Company declared RMB 0.27 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 62,905 thousand RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital.
- 229 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
42. Operating Income and Cost of Sales
Year ended December 31 Year ended December 31
2022 2021
Income Cost of sales Income Cost of sales
Principal activities 37,305,373 27,948,254 30,971,009 23,375,892
Other businesses 76,542 36,712 67,596 36,627
37,381,915 27,984,966 31,038,605 23,412,519
43. Taxes and Surcharges
Year ended December 31
2022 2021
Tax on turnover 36,202 26,123
Others 74,212 80,159
110,414 106,282
44. Selling and Distribution Expenses
Year ended December 31
2022 2021
Salaries and related expense 1,991,542 1,772,447
Depreciation and amortization 1,012,132 1,012,691
Advertising and sales promotion 356,079 306,292
Travel expenses 144,917 87,212
Warehouse expenses 155,427 155,557
Registration 158,590 123,587
Professional services 115,163 101,275
Insurance 114,650 100,689
Others 347,779 359,507
4,396,279 4,019,257
- 230 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
45. General and Administrative Expenses
Year ended December 31
2022 2021
Salaries and related expenses 807,438 657,074
Professional services 124,159 111,610
Depreciation and amortization 103,209 89,949
IT systems 126,803 107,641
Office rent, maintenance and expenses 48,307 43,525
Cost contribution arrangement 74,845 -
Other 122,067 79,800
1,406,828 1,089,599
46. Research and development expenses
Year ended December 31
2022 2021
Salaries and related expenses 256,060 227,261
Field trial 45,326 45,303
Professional services 47,293 43,894
Depreciation and amortization 78,647 55,086
Materials 82,750 65,950
Office rent, maintenance and expenses 12,738 10,739
Other 55,045 53,144
577,859 501,377
47. Financial expenses (incomes), net
Year ended December 31
2022 2021
Interest expenses on debentures and loans and other charges 782,812 682,919
CPI expenses in respect of debentures 409,078 212,883
Loss in respect of sale of trade receivables 226,575 93,307
Interest expense in respect of post-employment benefits and early retire-
ment, net 18,141 18,833
Revaluation of put option, net (121,172) 141,676
Interest income from customers, banks and others (180,619) (65,059)
Exchange rate differences, net (881,634) 813,567
Interest expense on lease liabilities 25,755 25,500
Others 46,860 15,796
325,796 1,939,422
- 231 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
48. Investment income, net
Year ended December 31
2022 2021
Income from long-term equity investments accounted for using
the equity method 10,358 5,923
Other 2,325 4,245
12,683 10,168
See note 49 below
49. Gain (loss) from Changes in Fair Value
Year ended December 31
2022 2021
Gain (loss) from changes in fair value of derivative financial
Instruments * (1,504,067) 605,638
Others (765) (7,953)
(1,504,832) 597,685
* According to ASBE 22 - Financial Instruments Recognition and Measurement, starting from 2022, when
disposing derivative instruments, the Group recorded the accumulated gain or loss of derivative instruments
in the “Gain (loss) from Changes in Fair Value”. Before 2022, the Group recorded the abovementioned gain
or loss in the “Investment income, net”. The Company reclassified the “Gain(loss) from Changes in Fair
Value” and the “Investment income, net” in the corresponding period in 2021. Such change did not impact
the operating results or net assets of the reporting period.
50. Credit impairment reversal (losses)
Year ended December 31
2022 2021
Bills receivable and accounts receivable (60,978) 5,613
Other receivables (30,689) 5,271
(91,667) 10,884
51. Asset impairment losses
Year ended December 31
2022 2021
Inventories (156,392) (66,838)
Fixed assets (69,758) (932)
Construction in progress (88,617) -
Intangible asset (10,619) (2,497)
(325,386) (70,267)
- 232 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
52. Gain from Disposal of Assets
Year ended December 31 Included in
non-recurring
2022 2021 items
Gain from disposal of fixed assets 62,443 5,698 62,443
Loss from disposal of intangible assets (2,847) (8,302) (2,847)
59,596 (2,604) 59,596
53. Income Tax Expenses
Year ended December 31
2022 2021
Current year 690,601 380,504
Deferred tax expenses (income) (633,071) (66)
Adjustments for previous years, net 89,912 51
147,442 380,489
(1) Reconciliation between income tax expense and accounting profit is as follows:
Year ended December 31
2022 2021
Profit before taxes 756,833 543,802
Statutory tax in china 25% 25%
Tax calculated according to statutory tax in china 189,208 135,951
Tax benefits from Approved Enterprises (85,909) (32,837)
Difference between measurement basis of income for financial
statement and for tax purposes 32,110 34,715
Taxable income and temporary differences at other tax rate (92,093) 91,431
Taxes in respect of prior years 89,912 51
Utilization of tax losses prior years for which deferred taxes were
not created (43,008) (52)
Temporary differences and losses in the report year for which de-
ferred taxes were not created 62,664 38,527
Non-deductible expenses, non-taxable income and other difference,
net (16,474) 48,139
Neutralization of tax calculated in respect of the Company’s share
in results of equity accounted investees (3,495) (1,913)
Effect of change in tax rate in respect of deferred taxes 25,480 71,033
Creation and reversal of deferred taxes for tax losses and temporary
differences from previous years (10,953) (4,556)
Income tax expenses 147,442 380,489
54. Other comprehensive income
Details of the Other comprehensive income are set out in Note V.39
- 233 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
55. Government grants
Amount recognized in the profit
and loss statements during the
year ended December 31
Category Presentation accounts 2022 2021
Government grants related to income Non-Operating income 17,772 19,377
Government grants related to assets Fixed assets, Intangible assets 18,611 19,166
56. Notes to items in the cash flow statements
(1) Cash received relating to other operating activities
Year ended December 31
2022 2021
Derivatives transactions 324,320 191,485
Financial institutions 272,770 441,306
Interest income 103,779 39,316
Government subsidies 20,430 19,856
Others 83,278 172,885
804,577 864,848
(2) Cash paid relating to other operating activities
Year ended December 31
2022 2021
Commissions and Warehouse 161,142 189,988
Advertising and sales promotion 333,890 286,520
Professional services 242,072 242,003
Financial institutions 307,717 211,211
IT and Communication 232,517 186,169
Registration and Field trials 178,793 162,585
Derivatives transactions 535,277 347,874
Travel 151,335 91,581
Insurance 145,518 120,444
Others 847,780 693,006
3,136,041 2,531,381
(3) Cash received relating to other investing activities
Year ended December 31
2022 2021
Dividend received from other equity investment 2,325 1,808
Investment grant - 6,754
2,325 8,562
- 234 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
56. Notes to items in the cash flow statements - (cont'd)
(4) Cash paid relating to other investing activities
Year ended December 31
2022 2021
Increase in securitization facility 51,936 51,121
Increase in short and long term investments,net 78,008 126,355
129,944 177,476
(5) Cash received from other financing activities
Year ended December 31
2022 2021
Cash received in respect of hedging transactions on debentures - 777,968
Deposit for issuing bills payables 164,586 27,234
Borrowing from related party * 685,150 319,742
849,736 1,124,944
* For more detailes regarding the borrowing from related party – see note X. related parties and related par-
ties transactions.
(6) Cash paid relating to other financing activities
Year ended December 31
2022 2021
Repayment of lease liability 162,190 161,400
Payment in respect of hedging transactions on debentures 1,073,463 -
Repayment of loan from others - 171,770
Deposit for issuing bills payable 170,939 57,774
1,406,592 390,944
- 235 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
57. Supplementary Information on Cash Flow Statement
(1) Supplementary information on Cash Flow Statement
a. Reconciliation of net profit to cash flows from operating activities:
Year ended December 31
2022 2021
Net profit 609,391 163,313
Add: Impairment provisions for assets 325,386 70,267
Credit impairment losses (gain) 91,667 (10,884)
Depreciation of fixed assets and investment property 1,007,191 828,561
Depreciation of right-of-use asset 174,796 163,373
Amortization of intangible asset 954,686 950,576
Gains on disposal of fixed assets, intangible assets, and other long-
term assets, net (59,596) 2,604
Losses (gains) from changes in fair value 1,504,832 (597,685)
Financial expenses 69,669 1,193,967
Investment income, net (12,683) (10,168)
Decrease (increase) in deferred tax assets, net (558,878) 37,957
Decrease in deferred tax liabilities, net (74,193) (38,023)
Increase in inventories, net (4,203,112) (1,456,207)
Decrease (increase) in operating receivables, net (975,103) 742,840
Increase in operating payables, net 2,133,585 2,507,501
Others (46,893) 13,883
Net cash flow from operating activities 940,745 4,561,875
b. Net increase (decrease) in cash and cash equivalents
Year ended December 31
2022 2021
Closing balance of cash and cash equivalents 4,225,253 5,759,480
Less: Opening balance of cash and cash equivalents 5,759,480 3,835,071
Increase (decrease) in cash and cash equivalents (1,534,227) 1,924,409
- 236 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
57. Supplementary Information on Cash Flow Statement - (cont'd)
(2) Details of cash and cash equivalents
December 31 December 31
2022 2021
Cash on hand 785 1,196
Bank deposits available on demand without restrictions 4,224,468 5,758,284
4,225,253 5,759,480
58. Assets with Restricted Ownership or Right of Use
December 31
2022 Reason
Cash 65,708 Pledged
Other non-current assets 154,273 Guarantees
219,981
- 237 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
59. Foreign currencies denominated items
(1) Foreign currencies denominated items
As at December 31, 2022
Foreign currency at
the end of the pe- RMB at the end of
riod Exchange rate the period
Cash and bank balances
EUR 36,139 7.428 268,437
BRL 447,712 1.335 597,695
ILS 122,449 1.979 242,326
USD 26,178 6.965 182,327
PLN 19,261 1.582 30,470
AUD 6,436 4.733 30,463
ZAR 109,163 0.411 44,866
ARS 742,891 0.039 28,973
RUB 191,210 0.099 18,930
GBP 3,535 8.387 29,648
TRY 86,664 0.372 32,239
NZD 37,997 4.408 167,492
RON 26,973 1.503 40,541
Other 156,065
Total 1,870,472
Bills and Accounts receivable
EUR 99,344 7.428 737,927
BRL 877,023 1.335 1,170,826
ILS 26,669 1.979 52,778
USD 18,124 6.965 126,234
PLN 38,418 1.582 60,777
GBP 2,795 8.387 23,444
CAD 16,697 5.139 85,804
RUB 1,179,831 0.099 116,803
TRY 629,117 0.372 234,031
ZAR 551,390 0.411 226,621
THB 331,129 0.202 66,888
HUF 1,400,984 0.019 26,619
RON 129,237 1.503 194,243
JPY 913,300 0.052 47,492
IDR 97,664,867 0.001 43,236
CZK 77,719 0.308 23,937
Other 174,688
Total 3,412,348
Other receivables
EUR 32,959 7.428 244,817
ILS 102,815 1.979 203,470
BRL 57,276 1.335 76,464
GBP 23,204 8.387 194,613
Other 53,288
Total 772,652
- 238 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
59. Foreign currencies denominated items - (cont'd)
(1) Foreign currencies denominated items - (cont'd)
As at December 31, 2022
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Other current assets
ILS 101,298 1.979 200,469
BRL 152,616 1.335 203,742
EUR 10,826 7.428 80,413
ARS 855,574 0.039 33,367
UAH 302,960 0.190 57,562
CZK 39,572 0.308 12,188
Other 80,777
Total 668,518
Long-term receivables
BRL 61,805 1.335 82,510
Total 82,510
Other non-current assets
BRL 158,960 1.335 212,211
Other 17,649
Total 229,860
Short-term loans
UAH 373,889 0.190 71,039
TRY 226,743 0.372 84,348
ARS 515,916 0.039 20,121
Other 104
Total 175,612
Bills and Accounts payable
ILS 1,059,193 1.979 2,096,143
EUR 82,667 7.428 614,048
BRL 276,800 1.335 369,528
USD 9,876 6.965 68,788
Other 96,492
Total 3,244,999
Other payables
ILS 154,740 1.979 306,231
BRL 132,975 1.335 177,521
ILS CPI 17,446 1.979 34,526
Other 9,540
Total 527,818
- 239 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
59. Foreign currencies denominated items - (cont'd)
(1) Foreign currencies denominated items - (cont'd)
As at December 31, 2022
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Contract liabilities
EUR 49,724 7.428 369,347
BRL 55,701 1.335 74,361
CAD 14,280 5.139 73,386
UAH 181,410 0.190 34,468
Other 45,561
Total 597,123
Non-current liabilities due within one year
ILS CPI 302,716 1.979 599,074
EUR 55,106 7.428 409,330
Other 45,020
Total 1,053,424
Other current liabilities
EUR 6,591 7.428 48,961
ILS 1,175 1.979 2,326
Other 432
Total 51,719
Long-term loan
EUR 59,498 7.428 441,953
Total 441,953
Debentures payable
ILS CPI 3,715,771 1.979 7,353,511
Total 7,353,511
Provision and Long-term payables
BRL 101,532 1.335 135,545
Other 2,779
Total 138,324
Other non-current liabilities
USD 4,587 6.965 31,947
EUR 5,960 7.428 44,274
ILS CPI 52,201 1.979 103,306
Other 51,135
Total 230,662
- 240 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
59. Foreign currencies denominated items - (cont'd)
(2) Major foreign operations
Registration &
Principal place of Functional
Name of the Subsidiary business Business nature currency
ADAMA France S.A.S France Distribution USD
ADAMA Brasil S/A Brazil Manufacturing; Distribution; Regis- USD
tration
ADAMA Deutschland GmbH Germany Distribution; Registration USD
ADAMA India Private Ltd. India Manufacturing INR
Distribution; Registration
Makhteshim Agan of North United States Manufacturing; Distribution; Regis- USD
America Inc. tration
Control Solutions Inc. United States Manufacturing; Distribution; Regis- USD
tration
ADAMA Agan Ltd. Israel Manufacturing; Distribution; Regis- USD
tration
ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution; Regis- USD
tration
ADAMA Australia Pty Australia Distribution AUD
Limited
ADAMA Italia SRL Italy Distribution USD
ADAMA Northern Netherlands Distribution USD
Europe B.V.
Alligare LLC United States Manufacturing; Distribution; USD
Registration
The functional currency of the subsidiaries above is the main currency that represent the principal economic
environment.
VI. Change in consolidation Scope
There is no change of consolidation scope during the period.
- 241 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VII. Interest in Other Entities
1. Interests in subsidiaries
Composition of the largest subsidiaries of the Group in respect of assets and operating income
Registration & Method of ob-
Principal place of taining the sub-
Name of the Subsidiary business Business nature Direct Indirect sidiary
ADAMA France S.A.S France Distribution 100% Established
ADAMA Brasil S/A Brazil Manufacturing; Distribution; 100% Purchased
Registration
ADAMA Deutschland GmbH Germany Distribution; Registration; 100% Established
ADAMA India Private Ltd. India Manufacturing; 100% Established
Distribution; Registration
Makhteshim Agan of North America United States Manufacturing; Distribution; 100% Established
Inc. Registration
Control Solutions Inc. United States Manufacturing; Distribution; 67% Purchased
Registration
ADAMA Agan Ltd. Israel Manufacturing; Distribution; 100% Restructure
Registration
ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution; 100% Restructure
Registration
ADAMA Australia Pty Limited Australis Distribution 100% Purchased
ADAMA Italia SRL Italy Distribution 100% Established
ADAMA Northern Europe B.V. Netherlands Distribution 55% Purchased
Manufacturing; Distribution; Purchased
Alligare LLC United States 100%
Registration
Adama Anpon (Jiangsu) Ltd. China Manufacturing; Distribution 100% Purchased
Adama Huifeng (Jiangsu) Co. Ltd. China Manufacturing; Distribution 51% Purchased
2. Interests in joint ventures or associates
December 31 December 31
2022 2021
Joint venture 2,110 2,227
Associate 24,258 13,108
26,368 15,335
3. Summarized financial information of joint ventures and associates
December 31, 2022 and December 31, 2021 and
twelve months then twelve months then
ended ended
Joint venture:
Total carrying amount 2,110 2,227
The Group's share of the following items:
Net profit 531 1,010
Other comprehensive income 237 (68)
Total comprehensive income 768 942
Associate:
Total carrying amount 24,258 13,108
The Group's share of the following items:
Net profit 9,827 4,913
Other comprehensive income 2,456 (1,285)
Total comprehensive income 12,283 3,628
- 242 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments
A. General
The Group has extensive international operations, and, therefore, it is exposed to credit risks, liquidity risks
and market risks (including currency risk, interest risk and other price risk). In order to reduce the exposure to
these risks, the Group uses financial derivatives instruments, including forward transactions and options (here-
inafter - “derivatives”).
Transactions in derivatives are undertaken with major financial institutions, and therefore, in the opinion of
Group Management the credit risk in respect thereof is low.
This note provides information on the Group’s exposure to each of the above risks, the Group’s objectives,
policies and processes regarding the measurement and management of the risk. Additional quantitative dis-
closure is included throughout the consolidated financial statements.
The Board of Directors has overall responsibility for establishing and monitoring the framework of the Group's
risk management policy. The Finance Committee is responsible for establishing and monitoring the Group's
actual risk management policy. The Chief Financial Officer reports to the Finance Committee on a regular
basis regarding these risks.
The Group’s risk management policy, established to identify and analyze the risks facing the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. The policy and methods for
managing the risks are reviewed regularly, in order to reflect changes in market conditions and the Group's
activities. The Group, through training, and management standards and procedures, aims to develop a disci-
plined and constructive control environment in which all the employees understand their roles and obligations.
B. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and derives mainly from trade receivables and other receivables as well as
from cash and deposits in financial institutions.
Accounts and other receivables
The Group’s revenues are derived from a large number of widely dispersed customers in many countries.
Customers include multi-national companies and manufacturing companies, as well as distributors, agricul-
turists, agents and agrochemical manufacturers who purchase the products either as finished goods or as in-
termediate products for their own requirements.
The Company entered into an agreement for the sale of trade receivables in a securitization transaction, for
details see note V.5.e. and f.
In June 2022, a two-years agreement with an international insurance company was renewed. The amount of
the insurance coverage was fixed at $150 million cumulative per year. The indemnification is limited to about
90% of the debt.
The Group’s exposure to credit risk is influenced mainly by the personal characterization of each customer,
and by the demographic characterization of the customer’s base, including the risk of insolvency of the indus-
try and geographic region in which the customer operates. No single customer accounted for greater than 5%
of total accounts receivable.
- 243 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
B. Credit risk - (cont’d)
The Company management has prescribed a credit policy, whereby the Company performs current ongoing
credit evaluations of existing and new customers, and every new customer is examined thoroughly regarding
the quality of his credit, before offering him the Group’s customary shipping and payment terms. The exami-
nation made by the Group includes an outside credit rating, if any, and in many cases, receipt of documents
from an insurance company. A credit limit is prescribed for each customer, outstanding amount of the accounts
receivable balance. These limits are examined annually. Customers that do not meet the Group’s criteria for
credit quality may do business with the Group on the basis of a prepayment or against furnishing of appropriate
collateral.
Most of the Group’s customers have been doing business with it for many years. In monitoring customer credit
risk, the customers were grouped according to a characterization of their credit, based on geographical location,
industry, aging of receivables, maturity, and existence of past financial difficulties. Customers defined as “high
risk” are classified to the restricted customer list and are supervised by management. In certain countries,
mainly, Brazil, customers are required to provide property collaterals (such as agricultural lands and equip-
ment) against execution of the sales, the value of which is examined on a current ongoing basis by the Com-
pany. In these countries, in a case of expected credit risk, the Company records a provision for the amount of
the debt less the value of the collaterals provided and acts to realize the collaterals.
The Group closely monitors the economic situation in Eastern Europe, specifically in Ukraine due to the
conflict and in South America on an ongoing basis.
The Group recognizes an impairment provision, which reflects its assessment regarding the credit risk of ac-
count receivables, Other receivables and investments on a lifetime expected credit loss basis. Further to the
conflict in Ukraine and the economic situation the company made an additional provision related to ADAMA
Ukraine account receivables. See also notes Ⅲ.10 – Financial instruments and Ⅲ.11 – Receivables.
Cash and deposits in banks
The Company holds cash and deposits in banks with a high credit rating. These banks are also required to
comply with capital adequacy or maintain a level of security based on different situations.
Guarantees
The Company’s policy is to provide financial guarantees only to investee companies.
Aging of receivables and expected credit risk
Presented below is the aging of the past due trade receivables:
December 31, 2022
Past due by less than 90 days 720,571
Past due by more than 90 days 429,057
1,149,628
- 244 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
B. Credit risk - (cont’d)
The company measure the provision for credit losses on a collective group basis, where receivables share
similar credit risk characteristics based on geographical locations. The examination for expected credit losses
is performed using model including aging analysis and historical loss experiences, and adjusted by the observ-
able factors reflecting current and expected future economic conditions.
When credit risk on a receivable has increased significantly since initial recognition, the group records specific
provision or general provision which is determined for groups of similar assets in countries in which there are
large number of customers with immaterial balances.
The Group has credit risk exposures for accounts receivables amounted to RMB 8,734,425 thousand relate to
category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 593,978
thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has credit
risk exposures for other receivables amounted to RMB 44,748 thousand related to category of "Lifetime ex-
pected credit losses (credit losses occurred)". The credit risk exposures for all remaining balance of financial
assets at amortised cost and financial assets at FVTOCI are related to "12-month expected credit losses".
C. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligation when they
come due. The Group's approach to managing its liquidity risk is to assure, to the extent possible, an adequate
degree of liquidity for meeting its obligations timely, under ordinary conditions and under pressure conditions,
without sustaining unwanted losses or hurting its reputation.
The cash-flow forecast is determined both at the level of the various entities as well as of the consolidated
level. The Company examines the current forecasts of its liquidity requirements in order to ascertain that there
is sufficient cash for the operating needs, including the amounts required in order to comply with the financial
liabilities, while taking strict care that at all times there will be unused credit frameworks so that the Company
will not exceed the credit frameworks granted to it and the financial covenants with which it is required to
comply with. These forecasts take into consideration matters such as the Company’s plans to use debt for
financing its activities, compliance with required financial covenants, compliance with certain liquidity ratios
and compliance with external requirements such as laws or regulation.
The surplus cash held by the Group subsidiaries, which is not required for financing the current ongoing op-
erations, is invested in short-term interest-bearing investment channels.
- 245 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
C. Liquidity risk - (cont’d)
(1) Presented below are the contractual maturities of the financial liabilities at undiscounted amounts,
including estimated interest payments:
As at December 31, 2022
Third- Fifth year Contractual Carrying
First year Second year Fourth year and above Cash flow amount
Non-derivative financial liabili-
ties
Short-term loans 3,395,070 - - - 3,395,070 3,342,921
Bills payables 1,114,775 - - - 1,114,775 1,114,775
Accounts payables 7,527,269 - - - 7,527,269 7,527,269
Other payables 1,611,282 - - - 1,611,282 1,611,282
Other current liabilities 507,483 - - - 507,483 507,483
Debentures payable 939,107 944,497 1,801,582 7,258,673 10,943,859 7,919,169
Long-term loans 1,666,024 1,596,374 1,162,645 1,163,135 5,588,178 5,202,366
Long-term payables 6,006 11,877 22,849 86,022 126,754 107,686
Lease Liabilities 184,137 142,440 161,571 293,321 781,469 588,053
Long-term liability in respect of
business combinations - 3,709 2,664 - 6,373 5,182
Other non-current liabilities 9,402 9,402 1,313,841 357,632 1,690,277 1,255,875
Derivative financial liabilities
Foreign currency derivatives 545,516 - - - 545,516 545,516
17,506,071 2,708,299 4,465,152 9,158,783 33,838,305 29,727,577
D. Market risks
Market risk is the risk that changes in market prices, such as foreign exchange rates, CPI, interest rates and
prices of capital instruments, will affect the Group’s revenues or the value of its holdings in its financial in-
struments. The objective of market risk management is to manage and monitor the exposure to market risks
within acceptable parameters, while optimizing the return.
During the ordinary course of business, the Group purchases and sells derivatives and assumes financial lia-
bilities for the purpose of managing market risks.
(1) CPI and foreign currency risks
Currency risk
The Group is exposed to currency risk from its sales, purchases, expenses and loans denominated in currencies
that differ from the Group’s functional currency. The main exposure is in Euro, Brazilian real, USD and in
NIS. In addition, there are smaller exposures to various currencies such as the British pound, Polish zloty,
Australian dollar, Indian rupee, Argentine peso, Canadian dollar, South African Rand, Ukraine Hryunia, the
Turkish lira and Chinese Yuan Renminbi.
The Group uses foreign currency derivatives – forward transactions and currency options – in order to hedge
the cash flows risk, which derive from existing monetary assets and liabilities and anticipated sales and pur-
chases, which may be affected by exchange rate fluctuations.
- 246 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(1) CPI and foreign currency risks - (cont’d)
The Group hedged a part of the estimated currency exposure to anticipate sales and purchases for the subse-
quent year. Likewise, the Group hedges most of its monetary assets and liabilities denominated in a non- U.S.
dollar currency. The Group uses foreign currency derivatives to hedge its currency risk, mostly with maturity
dates of less than one year from the reporting date.
Solutions debentures are linked to the NIS-CPI and, therefore, an increase in the NIS-CPI, as well as changes
in the NIS exchange rate, could cause significant exposure with respect to the subsidiary functional currency
– the U.S. dollar. As of the approval date of the financial statements, the subsidiary had hedged most of its
exposure deriving from issuance of the debentures, in options and forward contracts.
(A) The Group’s exposure to NIS-CPI and foreign currency risk is as follows:
December 31, 2022
Total assets Total liabilities
In US Dollar 2,385,954 2,417,829
In Euro 1,439,504 1,974,248
In Brazilian real 2,343,448 621,417
CPI-linked NIS 56,713 8,077,531
In New Israeli Shekel 699,043 2,429,334
Denominated in or linked to other foreign currency 3,082,004 507,108
10,006,666 16,027,467
(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:
December 31, 2022
Cur- Cur-
rency/link rency/link Average USD thou- RMB
age receiv- age paya- expiration sands Par thousands
able ble date value Par value Fair value
Forward foreign currency USD EUR 23/02/2023 130,560 909,296 (60,967)
Contracts and call options USD PLN 04/01/2023 33,131 230,747 18,599
USD BRL 23/02/2023 223,146 1,554,120 (55,288)
USD GBP 26/02/2023 43,358 301,970 (5,632)
USD ZAR 18/01/2023 35,355 246,234 (17,763)
ILS USD 22/03/2023 1,498,276 10,434,893 (98,394)
USD OTHER 609,365 4,243,983 (118,493)
CPI forward contracts CPI ILS 05/07/2023 682,012 4,749,940 26,231
- 247 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(1) CPI and foreign currency risks - (cont’d)
(C) Sensitivity analysis
The appreciation or depreciation of the Dollar against the following currencies as of December 31, 2022
and the increase or decrease in the CPI would increase (decrease) the equity and profit or loss by the
amounts presented below. This analysis assumes that all the remaining variables, among others interest
rates, remains constant.
December 31, 2022
Decrease of 5% Increase of 5%
Equity Profit (loss) Equity Profit (loss)
New Israeli shekel 47,820 13,996 (1,847) 33,998
British pound 26,224 24,155 (26,247) (24,177)
Euro 8,538 (54,024) (8,944) 53,747
Brazilian real 6,761 11,178 (14,671) (18,242)
Polish zloty 6,716 6,716 (5,493) (5,493)
South African Rand (1,676) (1,676) 366 366
Chinese Yuan Renminbi 14,964 (2,662) (1,541) 9,841
CPI-linked NIS 243,768 243,768 (243,768) (243,768)
(2) Interest rate risks
The Group has exposure to changes in the variable interest rate. The Group has different assets and liabil-
ities in different countries which bear interest according to the economic environment in each country.
Most of the loans, other than the debentures, bear Dollar and Euro Libor interest. As a result, most of the
variable interest exposure of those loans is to the Libor interest. Due to market conditions, the variable
interest rates on cash are relatively low.
The Company prepares a quarterly summary of exposure to a change in the Libor interest rate. As at the
approval date of the financial statements, the Company had not hedged this exposure.
- 248 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VIII. Risk Related to Financial Instruments - (cont’d)
D. Market risks - (cont’d)
(2) Interest rate risks - (cont’d)
(A) Type of interest
The interest rate profile of the Group’s interest-bearing financial instruments was as follows:
December 31,
2022
Fixed-rate instruments – unlinked to the CPI
Financial assets
Other non-current assets 55,215
Financial liabilities
Long-term loans (1) 3,775,736
Long-term payables 25,650
Other non-current liabilities 348,231
(4,094,402)
Fixed-rate instruments – linked to the CPI
Financial liabilities
Debentures payable (1) 7,919,169
Variable-rate instruments
Financial assets
Cash at banks 881,043
Financial assets at fair value through profit or loss 1,685
Other current assets 171,496
Other non-current assets 14,521
Financial liabilities
Short-term loans and credit from banks 3,342,921
Long-term loans (1) 1,426,630
Long-term payables 71,102
(3,771,908)
(1) Including current maturities.
(B) Sensitivity analysis of cash flows regarding variable-interest instruments
A change of 5% in the interest rates on the reporting date would increase or reduce equity and profit or loss
by the amounts presented below. This analysis assumes that all the remaining variables, among others ex-
change rates, remained fixed.
Profit or loss Equity
Increase in Decrease in Increase in Decrease in
interest interest interest interest
As at December 31, 2022 985 (1,002) 985 (1,002)
249
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IX. Fair Value
The fair value of forward contracts on foreign currency is based on their listed market price, if available. In the
absence of market prices, the fair value is estimated based on the discounted difference between the stated
forward price in the contract and the current forward price for the residual period until redemption, using an
appropriate interest rate.
The fair value of foreign currency options is based on bank quotes. The reasonableness of the quotes is evaluated
through discounting future cash flow estimates, based on the conditions and duration to maturity of each contract,
using the market interest rates of a similar instrument at the measurement date and in accordance with the Black
& Scholes model.
1. Financial instruments measured at fair value for disclosure purposes only
The carrying amount of certain financial assets and liabilities, including cash at bank and on hand, bills and
accounts receivable, receivables financing, other receivables, derivatives financial assets, short-term loans, bills
and accounts payable and other payable, are the same or proximate to their fair value.
The following table details the carrying amount in the books and the fair value of groups of non-current financial
instruments presented in the financial statements not in accordance with their fair values:
December 31, 2022
Carrying amount Fair value
Financial assets
Other non-current assets (a – Level 2) 83,457 72,969
Financial liabilities
Long-term loans and others (b – Level 2) 6,248,858 5,953,737
Debentures (c – Level 1) 7,919,169 9,169,296
a) The fair value of the other non-current assets is based on a discounted future cash flows, using the acceptable
interest rate for similar investment having similar characteristics (Level 2).
b) The fair value of the long-term loans and others is based on a discounted future cash flows, using the acceptable
interest rate for similar loans having similar characteristics (Level 2).
c) The fair value of the debentures is based on stock exchange quotes (Level 1).
2. The interest rates used in determining fair value
The interest rates used to discount the estimate of anticipated cash flows are:
December 31, 2022
%
U.S. dollar interest 4.86% - 5.37%
Chinese Yuan Renminbi 1.42% - 2.20%
Euro 1.86% - 3.90%
250
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IX. Fair Value - (cont’d)
3. Fair value hierarchy of financial instruments measured at fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The table below presents an analysis of financial instru-
ments measured at fair value. The various levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active market for identical instrument.
Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3: inputs that are not based on observable market data (unobservable inputs).
The Company’s forward contracts and options are carried at fair value and are evaluated by observable inputs
and therefore are concurrent with the definition of level 2.
December 31
2022
Forward contracts and options used for hedging the cash flow (Level 2) (45,339)
Forward contracts and options used for economic hedging (Level 2) (266,368)
Other equity investment (Level 2) 158,341
Receivables financing (Level 2) 63,639
Other non-current assets (Level 2) 125,962
Other (Level 2) 1,685
Financial Instrument Fair value
Fair value measured on the basis of discounting the difference between the
stated forward price in the contract and the current forward price for the
Forward contracts
residual period until redemption using an appropriate interest rates.
Foreign currency options The fair value is measured based on the Black&Scholes model.
No transfer between any levels of the fair value hierarchy in the reporting period.
No change in the valuation techniques in the reporting period.
- 251 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions
1. Information on parent Company
Company Registered Registered capital Shareholding Percentage
name place Business nature (Thousand RMB) percentage of voting rights
Production and
sales of agro-
Syngenta Shanghai, chemicals, fertiliz-
Group China ers and GM seeds 11,144,545 78.47% 78.47%
The Company’s ultimate controlling shareholder is Sinochem Holdings .
2. Information on the largest subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
3. Information on largest joint ventures and associates of the Company
For information about the joint ventures and associates of the Company, refer to Note V.12.
Other joint ventures and associates that have related party transactions with the Group during this period or the
previous periods are as follows:
Name of entity Relationship with the Company
Innovaroma SA Joint venture of the Group
- 252 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties
Name of other related parties Related party relationship
Beijing Jiamao Real Estate Co. Ltd. Common control
Bluestar (Beijing )ChemicalMachinery co.,LTD ( consolidated) Common control
Bluestar Engineering co.,LTD . Common control
BluestarEngineeringCo.,Ltd. Common control
Changsha Huaxing Construction Supervision Co., Ltd. Common control
ChemChina AssetManagement co.,LTD .(Headquarter) Common control
ChemChina Finance Corporation Common control
ChemChina Information Center Co.,Ltd. Common control
China Bluestar Chengrand Research Institute Chemical Industry Common control
China Blue Lianhai Design and Research Institute Common control
China National Bluestar (Group) Co. Ltd. Common control
China National Chemical Agrochemical Corporation Common control
China National Chemical Information Center Co. LTD Common control
Elkem Silicones Brasil Ltd. Common control
Hangzhou (Torch)XidoumenMembraneIndustry co.,LTD Common control
Jiangsu Huaihe Chemical Co. Ltd. Common control
Jiangsu Ruixiang Chemical co., LTD . Common control
Jiangsu Yangnong Chemical Co., Ltd. Common control
Jiangsu Youjia Plant Protection Co., Ltd. Common control
Jiangsu Youshi Chemical Co., Ltd. Common control
Jiangsu Yushi Chemical Co., LTD Common control
Jingzhou Sanonda Holdings Co.,Ltd. Common control
(MAP) Sinochem Modern Agriculture Co.LTD Hunan Branch Common control
(MAP) Sinochem Modern Agriculture Co.LTD Xinjiang Branch Common control
(MAP) Sinochem Modern Agriculture Co. Wusu Tech Service
Cent Common control
(MAP) Sinochem Modern Agriculture Co.LTD Yichang Branch Common control
Sanbei Seeds Co. Ltd Common control
OOO Syngenta Common control
PT Syngenta Indonesia Common control
PT Syngenta Seed Indonesia Common control
Shandong Dacheng Agrochemical Company Limited Common control
Shandong Dacheng Biochemical Co., Ltd. Common control
Shenyang Chemical Research Institute Co. LTD Common control
Shenyang Shenhua Institute Testing Technology Co. Ltd. Common control
Shenyang Chemical Institute Testing Technology Co. Ltd Common control
Sinochem (Hainan) Agroecology Co., LTD Common control
Sinochem Agricultural Ecological Technology (Hubei) Co., Ltd. Common control
Sinochem Agriculture (Xinjiang) Biotechnology Co., Ltd. Ma-
nas Branch Common control
Sinochem Agriculture Co., Ltd Common control
Sinochem Agro Co. Ltd Common control
Sinochem Agro Co., Ltd. Common control
Sinochem Crop Protection Products Co. LTD Common control
Sinochem Fertilizer Company Limited Common control
Sinochem Fertilizer Company Limited Fujian Branch Common control
- 253 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties - (cont’d)
Name of other related parties Related party relationship
Sinochem Fertilizer Company Limited Guangxi Branch Common control
Sinochem Fertilizer Company Limited Hebei Branch Common control
Sinochem Fertilizer Company Limited Hubei Branch Common control
Sinochem Fertilizer Company Limited Jiangsu Branch Common control
Sinochem Fertilizer Company Limited Jilin Branch Common control
Sinochem Fertilizer Company Limited Northwest Branch Common control
Sinochem Fertilizer Company Limited Shandong Branch Common control
Sinochem Fertilizer Company Limited Southwest Branch Common control
Sinochem Finance Corporation Common control
Sinochem Information Technology Co. LTD Common control
Sinochem Innovation (Beijing) Technology Research Institute Co., Ltd. Common control
Sinochem International Crop Care (Overseas) Pte. Ltd. Common control
Sinochem Lantian Fluorine Materials Co. Ltd. Common control
Sinochem Modern Agriculture Hebei Co. LTD Common control
Sinochem Modern Agriculture (Guangxi) Co. LTD Common control
Sinochem Modern Agriculture (Hunan) Co. LTD Common control
Sinochem Modern Agriculture (Jiangsu) Co. LTD Common control
Sinochem Modern Agriculture (Shandong) Co. LTD Common control
Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control
Sinochem Modern Agriculture (Zhejiang) Co. LTD Common control
Sinochem Modern Agriculture Anhui Co. LTD Common control
Sinochem Modern Agriculture Sichuan Co. LTD Common control
Sinochem Shandong Fertilizer Co. Ltd. Common control
Syngenta (China) Investment Company Ltd Common control
Syngenta Agro AG Common control
Syngenta Agro GmbH Common control
Syngenta Agro S.A. Common control
Syngenta Agro S.R.L. Common control
Syngenta Australia Pty Limited Common control
Syngenta Canada Inc. Common control
Syngenta coml agr ltda Common control
Syngenta Crop Protection AG Common control
Syngenta Crop Protection B.V. Common control
Syngenta Crop Protection LLC Common control
Syngenta Crop Protection Ltd Common control
Syngenta Crop Protection S.A. Common control
Syngenta Crop Protection, LLC Common control
Syngenta Czech s.r.o. Common control
Syngenta Espana S.A Common control
Syngenta France S.A.S. Common control
Syngenta Group Company Limited Common control
Syngenta Group(NL) B.V. Common control
Syngenta Hellas AEBE Common control
Syngenta India Limited Common control
- 254 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties - (cont’d)
Name of other related parties Related party relationship
Syngenta Italia S.p.A Common control
Syngenta Korea Ltd. Common control
Syngenta Nantong Crop Protection Company Limited Common control
Syngenta Polska Sp.z.o.o. Common control
Syngenta protecao cultivos ltda Common control
Syngenta S.A(Chile) Common control
Syngenta S.A. (Panama) Common control
SYNGENTA SEEDS LTDA Common control
Syngenta Slovakia s.r.o Common control
Syngenta South Africa (Pty) Ltd. Common control
SyngentaTarimSanayiveTicaretA.S. Common control
Zhonglan Chenguang Chemical Research and Design Institute Co.,
LTD. Xinjin branch Common control
Zhonglan International Chemical Co. Ltd Common control
Jiangsu Huifeng Agrochemical Co. Ltd. Minority shareholder and its subsidiary
Jiangsu Huifeng Biological Agriculture Co., Ltd Minority shareholder and its subsidiary
Nongyi Net (Yangling) e-commerce Co., Ltd. Minority shareholder and its subsidiary
Shanghai focus supply chain Co., Ltd Minority shareholder and its subsidiary
Shanghai nengjianyuan Biological Agriculture Co., Ltd Minority shareholder and its subsidiary
- 255 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties
(1) Transactions with related parties
Year ended December 31
Type of purchase Related Party Relationship 2022 2021
Summary of purchase of goods/services:
Purchase of goods/services received Common control under Si-
nochem Holdings 2,673,892 1,798,000
Minority shareholder and 3,155 68,349
its subsidiary
Purchase of fixed assets and other assets Common control under Si- 9,780 51,121
nochem Holdings
Lease expenses Common control under Si- 242 489
nochem Holdings
Minority shareholder and 795 -
its subsidiary
Summary of Sales of goods:
Sale of goods/ Service rendered Common control under Si-
nochem Holdings 2,177,322 1,300,066
Joint venture 104,563 93,388
Minority shareholder and
its subsidiary 54,424 217,444
(2) Guarantees
The Group as the guarantee receiver
Amount of Inception date Maturity date Guaranty com-
Guarantee provider guaranteed loan of guaranty of guaranty pleted (Y / N)
Parent company 333,000 21/04/2021 20/04/2028 N
71,841 01/06/2021 31/05/2028 N
* During the reporting period, the Company paid a guarantee fee amounting to 451 thousand RMB
(2021: 141 thousand RMB) to the parent company.
(3) Remuneration of key management personnel and directors
Periods ended December 31
2022 2021
Remuneration of key management personnel and directors 114,806 99,000
- 256 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties - (cont'd)
(4) Receivables from and payables to related parties (including loans)
Receivable Items
December 31 December 31
2022 2021
Expected Expected
Related Party Relation- Book credit Book credit
Items ship Balance losses Balance losses
Trade receivables Common control under 356,708 - 200,954 -
Sinochem Holdings
Joint venture 25,727 - 23,150 -
Minority shareholder and 13,172 - 32,953 -
its subsidiary
Other receivables Common control under 17 - 83 -
Sinochem Holdings
Other Non-Current assets Common control under 52 - 84 -
Sinochem Holdings
Prepayments Common control under 34,393 - 33,069 -
Sinochem Holdings
Payable Items
December 31 December 31
Items Related Party Relationship 2022 2021
Trade payables Common control under Sinochem Hold- 426,454 489,859
ings
Minority shareholder and its subsidiary - 355
Other payables Common control under Sinochem Hold- 24,974 30,006
ings
Short-term loans * Common control under Sinochem Hold- 696,459 -
ings
Other non-current li- Common control under Sinochem Hold- 348,231 318,786
abilities * ings
* The liabilities are loans from a related party, the interest expenses for the year ended December 31, 2022
is 19,688 thousand RMB (twelve months ended December 31, 2021: 3,897 thousand RMB).
On October 27, 2021, the Board of Directors approved (following the approval of the Company’s Audit
Committee dated October 25, 2021) the Company, through one of its subsidiaries, entering into commit-
ted credit facilities agreements in the aggregate amount of $100 million (RMB 696 million) on market
terms with Syngenta Group, or any of its subsidiaries. On December 14, 2022, the Board of Directors
approved (following the approval of the Company’s Audit Committee on the same date) an increase of
such facilities to an aggregate amount of $150 million (RMB 1,045 million). As of December 31, 2022,
the full amount was utilized.
- 257 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties - (cont'd)
(5) Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil thousand RMB (31.12.21:
358,881 thousand RMB) Interest income of bank deposit for the current period was 90 thousand RMB
(amount for twelve months ended December 31, 2021 was 2,725 thousand RMB).
The closing balance of a loan received from ChemChina Finance corporation was nil (31.12.21: nil). Interest
expenses in the current period was nil (amount for twelve months ended December 31, 2021 was 1,571
thousand RMB).
The closing balance of bank deposit in Sinochem Finance Corporation was 417,661 thousand RMB
(31.12.21: nil) Interest income of bank deposit for the current period was 3,372 thousand RMB (amount for
twelve months ended December 31, 2021 was nil).
According to the Entrusted Operation and Management Agreement signed between the Company and China
National Agrochemical Co., Ltd. (“CNAC”), the Company shall be entrusted with the management rights
held by CNAC over Anhui Petroleum & Chemical Group Co., Ltd during the entrustment period. The Com-
pany received an entrustment fee of 3,280 thousand RMB from CNAC during 2022 (2021: nil).
- 258 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies
1. Significant commitments
December 31 December 31
2022 2021
Investment in Fixed assets 429,862 623,156
2. Commitments and Contingent Liabilities
On December 10, 2018 the 9th meeting of the 8th session of the Board of Directors of the Company approved
the extension of the engagement in annual liability insurance policies for directors, supervisors and senior of-
ficers of the Company (“D&O Liability Insurance) as originally approved by the 22nd meeting of the 7th session
of Board of Directors and the 4th Interim Shareholders Meeting in 2017, and authorized the management to
annually deal with all matters relating to renewal/extension of the customary D&O Liability Insurance policies,
with up to 20% flexibility in the relevant terms of the original policy. On December 26, 2018 the 3rd Interim
Shareholders Meeting approved the above resolution. The current D&O Liability Insurance was renewed for an
additional one-year term commencing November 15, 2022.
Environmental protection
The manufacturing processes of the Company and the products it produces and market, entail environmental
risks that impact the environment. The Company invests substantial resources in order to comply with the ap-
plicable environmental laws and attempts to prevent or minimize the environmental risks that could occur as a
result of its activities. To the best of the Company’s knowledge, at the balance sheet date, there are no material
environmental issues relating to the Company, there are no material administrative penalties or investigations
related to environment, health and safety imposed or initiated by regulatory authorities, and none of the material
permits and licenses regarding environmental issues required for the Company’s day to day operations have
been revoked.
Other
For two of the Company’s production sites in China that have been in the process of relocation, Jingzhou site
in Jingzhou, Hubei Province completed its relocation and upgrade program and is now at high level of opertion
and Anpon old site in Huai’An, Jiangsu Province is in the process of relocating to the new site. As part of the
relocation process, the Company executed in previous years a reduction plan to reduce the number of employees
during the relocation period.
Claims against subsidiaries
In the ordinary course of business, legal claims were filed against subsidiaries, including claims for patent in-
fringement. The Company, inter alia, like other companies operating in the crop protection market, is exposed
to class actions for large amounts, which it must defend against while incurring considerable costs, even if these
claims have no basis in the first place. In the opinion of the Company’s management, which is based, inter alia,
on the opinions of its legal advisors regarding the prospects of the proceedings, the financial statements include
adequate provisions where necessary to cover the exposure resulting from the claims.
- 259 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies - (cont’d)
2. Commitments and Contingent Liabilities - (cont’d)
Claims against subsidiaries (cont’d)
On October 20, 2020, a claim and a motion for its approval as a class action (the “Motion”) was filed against
Monsanto Company and Bayer AG (the “Manufacturers”) as well as against ADAMA Agan Ltd., a wholly-
owned subsidiary of Solutions, with respect to an herbicide bearing the brand name Roundup, which is produced
by the Manufacturers and distributed in Israel in small quantities by Solutions’ subsidiary. The applicants argue
that the product allegedly poses a risk to users or those who have been exposed to it. Solutions and its subsidiary
reject the allegations against the subsidiary in the Motion and in the statement of claim. Based on the opinion
of Solutions’ external counsels given this preliminary stage, as of the date of the financial statements the Motion
and claim are not expected to have any non-negligible effect on the Company’s financial results. In addition,
and as Solutions is an authorized distributor of the Manufactures, the Manufactures undertook to fully indemnify,
defend and hold harmless ADAMA Agan Ltd., for any monetary compensation or any other remedy it will have
to make in connection with the Motion.
In June 2021, a lawsuit was filed against a subsidiary of the Company, alleging two patents owned by a large
competitor of the Company, have been infringed by such subsidiary. Among the claims, the plaintiff seeks
preliminary and permanent injunctions to prevent the subsidiary from manufacturing, using or commercializing
any product that infringes the plaintiff’s patents, and seeks actual damages and profits loss. The said preliminary
injunctions were granted by the court in favor of the plaintiff. The subsidiary has filed appeals against such
preliminary injunctions, which were rejected. Prior to such claims, and on-going, the subsidiary filed several
lawsuits against the said plaintiff seeking to declare the said patents are invalid and the subsidiary does not
infringe them. All these lawsuits are pending as of the approval date of the financial statements. At this stage,
the claims filed by the plaintiff are not expected to have a material effect on the Company.
Various immaterial claims have been filed against Group companies in courts throughout the world, in imma-
terial amounts, for causes of action primarily involving employee-employer relations and various civil claims,
for which the Company did not record a provision in the financial statements. The claims that in the estimation
of Company’s management, based on its legal advisors’ opinion, have lower chances of succeeding than being
rejected, amount to a negligible amount. Furthermore, claims were filed against the Company for product lia-
bility damages, for which the Company has adequate insurance coverage, such that the Company’s exposure in
respect thereof is limited to the deductible amount or the amount thereof does not exceed the deductible amount.
XII. Events subsequent to the balance sheet date
The Company is not aware of any events subsequent to the balance sheet date.
- 260 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIII. Share-based Payments
1. In February 2019, the remuneration committee and Solutions Board of Directors (as well as the General Meet-
ing with respect to theformer CEO and Vice President who also serves as a director) approved the allocation
of 77,864,910 phantom warrants to officers and employees in accordance with the long-term phantom com-
pensation plan (hereinafter - "the 2019 Plan"), out of which 75,814,897 phantom warrants were granted at the
grant date of February 21, 2019. During 2019, 1,206,081 additional Phantom warrants were granted.
The warrants will vest in four equal portions, where the first and second quarters are exercisable after two
years, the third quarter after three years and the fourth quarter after four years from January 1, 2019. The
warrants will be exercisable, in whole or in part, in accordance with the terms of the 2019 plan, and subject to
achieving financial targets as determined in the plan. The warrants will be exercisable until the end of 2025.
Upon exercise of each warrant, the offeree will be entitled to receive cash payment equal to the difference
between the base price as determined at the time of the grant and the closing price of one share of the Company
on the Shenzhen Stock Exchange, as it will be on the exercise date up, to the ceiling that was determined under
the plan.
The fair value of the granted warrants as aforesaid was estimated using the binomial pricing model.
The cost of the benefit embodied in the warrants that were allocated as aforesaid, based on the fair value at the
grant date, amounted to a total of approximately 186 million RMB. The liability at the end of the reporting
period was recorded according to the vesting period as determined in the plan, taking into account the extent
of the service that the employees provided until that date and the Company’s share price at the end of the
reporting period.
Statement of share based payments in the period Phantom warrants
Total number of Phantom warrants at the beginning of the period 55,720,575
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (20,085,474)
Total number of Phantom warrants forfeited in current period (5,438,614)
Total number of Phantom warrants at the end of the period 30,196,487
The exercise prices and the remainder of the contractual period for Phantom RMB 9.90 – 10.85
warrants outstanding at the end of period 3 years
The parameters used in implementing the model at the grant date are as follows:
Stock price (RMB) 10.85
Exercise increment (RMB) 10.03/10.85
Expected volatility 43.97%
Risk-free interest rate 3.06%
Economic value as of February 21, 2019 (in thousands RMB) 186,206
The methods for the determination of the fair value of liabilities arising from
cash-settled share-based payments The binomial pricing model
Accumulated amount of liabilities arising from cash-settled share-based pay-
ments (in thousands RMB) 52,444
Expenses arising from cash-settled share-based payments in current period
(in thousands RMB) (2,303)
- 261 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIII. Share-based Payments - (cont’d)
2. In September 2019, the remuneration committee and Solutions Board of Directors (and the General Meeting
with respect to the CEO and Vice President who also serves as a director) approved the cancellation of 2017
Plan against the allocation of 28,258,248 warrants in accordance with the long-term phantom compensation
plan (hereinafter - "The Alternative Warrants" and "The Alternative Plan"). The cancellation and allocation
date is September 26, 2019. During 2019, an additional 90,130 Alternative Phantom Warrants were granted.
The alternative warrants will vest in four equal portions, where the first quarter is exercisable after one year,
the second quarter after two years, the third quarter after three years and the fourth quarter after four years
from October 1, 2019. The warrants will be exercisable, in whole or in part, in accordance with the terms of
the Alternative Plan, and subject to achieving financial targets as determined in the plan. The warrants will be
exercisable until October 1, 2026.
Upon exercise of each warrant, the offeree will be entitled to receive cash payment equal to the difference
between the base price as determined at the time of the grant and the closing price of one share of the parent
company on the Shenzhen Stock Exchange, as it will be on the exercise date up to the ceiling that was deter-
mined under the plan.
The fair value of the total granted alternative warrants at the allocated date is equal to the fair value of the total
warrants canceled from the 2017 plan.
The cost of the benefit embodied in the warrants that were allocated as aforesaid, based on the fair value at the
cancellation and allocation date, amounted to a total of approximately 69 million RMB. The liability in the
financial statements at the end of the reporting period was recorded at the fair value estimated using the bino-
mial option pricing model and by the vesting period from the original grant date of the 2017 plan to the end
of the service period determined by the alternative plan, taking into account the extent of the service that the
employees provided until that date and the stock price at the reporting date.
Statement of share based payments in the period
Phantom warrants
Changes in the number of 2017 Plan:
Total number of Phantom warrants at the beginning of the period 18,710,787
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (5,221,396)
Total number of Phantom warrants forfeited in current period (1,316,422)
Total number of Phantom warrants at the end of the period 12,172,969
The range of the exercise prices and the remainder of the contractual period RMB 9.40 – 9.43
for Phantom warrants outstanding at the end of period 3.75 years
- 262 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIII. Share-based Payments - (cont’d)
The parameters used in implementing the model at the grant date are as follows:
Stock price (RMB) 9.23
Exercise increment (RMB) 9.43
Expected volatility 40.29%
Risk-free interest rate 3.14%
Economic value as of September 26, 2019 (in thousands RMB) 68,836
The methods for the determination of the fair value of liabilities arising from
cash-settled share-based payments related to the alternative plan The binomial pricing model
Accumulated amount of liabilities arising from cash-settled share-based pay-
ments related to the alternative plan (in thousands RMB) 24,431
Expenses (income) arising from cash-settled share-based payments in cur-
rent period related to the alternative plan (in thousands RMB) 3,078
XIV. Other significant items
1. Segment reporting
The Company presents its segment reporting based on a format that is based on a breakdown by business
segments:
Crop Protection (Agro)
This is the main area of the Company’s operations and includes the manufacture and marketing of conven-
tional agrochemical products.
Intermediates and ingredients
This field of activity includes a large number of sub-fields, including: Lycopan (an oxidization retardant),
aromatic products, and other chemicals. It combines all the Company’s activities not included in the Crop
Protection products segment.
Segment results reported to the chief operating decision maker include items directly attributable to a segment
as well as items that can be allocated on a reasonable basis. Unallocated items comprise mainly financing
expenses, net, gains from changes in fair value, investment income and tax expenses.
All assets and liabilities that can be attributed to a specific segment were allocated accordingly. Attributed
assets include: accounts and bills receivables, receivables financing, inventory, fixed assets, right-of-use assets,
construction in progress, intangible assets, goodwill, non-current trade receivables and long-term equity in-
vestments. Attributed liabilities include account payables, bill payablesand lease liabilities. All other assets
and liabilities which are not attributable to a specific segment are presented as unallocated assets and liabilities.
- 263 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
1. Segment reporting - (cont’d)
Information regarding the results and assets and liabilities of each reportable segment is included below:
Crop Protection Intermediates and ingredients Elimination among segments Total
Year ended Year ended Year ended Year ended
December 31 December 31 December 31 December 31
2022 2021 2022 2021 2022 2021 2022 2021
Operating income from external
customers 33,768,587 28,046,724 3,613,328 2,991,881 - - 37,381,915 31,038,605
Inter-segment operating income - - 1,886 1,649 (1,886) (1,649) - -
Interest in the profit or loss of
associates and joint ventures - - 10,358 5,923 - - 10,358 5,923
Segment's results 2,159,175 1,527,239 425,961 354,055 - - 2,585,136 1,881,294
Financial expenses 325,796 1,939,422
Gain (loss) from changes in fair
value (1,504,832) 597,685
Investment income 2,325 4,245
Profit before tax 756,833 543,802
Income tax expense 147,442 380,489
Net profit 609,391 163,313
Crop Protection Intermediates and ingredients Unallocated assets and liabilities Total
December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31
2022 2021 2022 2021 2022 2021 2022 2021
Total assets 47,113,346 39,213,516 2,520,000 2,071,074 8,347,143 8,950,718 57,980,489 50,235,308
Total liabilities 8,689,479 6,867,619 383,640 282,006 25,782,715 22,010,600 34,855,834 29,160,225
- 264 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
1. Segment reporting - (cont’d)
Geographic information
The following tables sets out information about the geographical segments of the Group’s operating income
based on the location of customers (sales target) and the Group's non-current assets (including mainly fixed
assets, right-of-use assets, construction in progress, investment properties intangible assets and goodwill). In
the case of investment property, fixed assets, right of used assets and construction in progress, the geographical
location of the assets is based on its physical location. In case of intangible assets and goodwill, the geograph-
ical location of the company which owns the assets.
Operating income from external custom-
ers
Year ended December 31
2022 2021
Europe 7,449,462 6,920,884
North America 6,895,702 5,907,944
Latin America 10,792,733 8,217,586
Asia Pacific 7,761,487 5,793,987
Africa, Middle East and India 4,482,531 4,198,204
37,381,915 31,038,605
Specified non-current assets
December 31 December 31
2022 2021
Europe 1,040,501 962,601
Latin America 2,482,569 2,227,234
North America 1,184,067 1,116,510
Asia Pacific 5,601,067 5,609,749
Africa, Middle East and India 12,586,295 10,713,739
22,894,499 20,629,833
2. The dependency on major customers
No single customer's proportion of the total amount of sales is over 10%.
- 265 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
3. Calculation of Earnings per share and Diluted earnings per share
Amount for the Amount for the
current period prior period
Net profit from continuing operations attributable to ordinary
shareholders 609,391 157,397
Amount for the Amount for the
Shares current period prior period
Number of ordinary shares outstanding at the beginning of the
year 2,329,811,766 2,329,811,766
Add: weighted average number of ordinary shares issued during
the year - -
Less: weighted average number of ordinary shares repurchased
during the year - -
Weighted average number of ordinary shares outstanding at the
end of the year 2,329,811,766 2,329,811,766
Amount for Amount for
the current the prior pe-
period riod
Calculated based on net profit attributable to ordinary shareholders
Basic earnings per share 0.26 0.07
Diluted earnings per share N/A N/A
Calculated based on net profit from continuing operations attributa-
ble to ordinary shareholders:
Basic earnings per share 0.26 0.07
Diluted earnings per share N/A N/A
Calculated based on net profit from discontinued operations attribut-
able to ordinary shareholders:
Basic earnings per share N/A N/A
Diluted earnings per share N/A N/A
- 266 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements
1. Cash at bank and on hand
December 31 December 31
2022 2021
Deposits in banks 258,330 259,434
Other cash and bank 12,750 6,124
271,080 265,558
As at December 31, 2022, restricted cash and bank balances was 12,750 thousand RMB (as at December 31,
2021: 6,124 thousand RMB).
2. Accounts receivable
a. By category
December 31, 2022
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 2 13,893 100 -
Account receivables assessed
collectively for impairment 758,471 98 9 - 758,462
772,364 100 13,902 2 758,462
December 31, 2021
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,879 6 13,879 100 -
Account receivables assessed
collectively for impairment 208,125 94 16 - 208,109
222,004 100 13,895 6 208,109
b. Aging analysis
December 31, 2022
Within 1 year (inclusive) 758,471
Over 1 year but within 2 years -
Over 2 years but within 3 years 15
Over 3 years but within 4 years 1
Over 4 years but within 5 years 1
Over 5 years 13,876
772,364
- 267 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
2. Accounts receivable - (cont'd)
c. Addition, written-back and written-off of provision for expected credit losses during the period
Year ended December 31, 2022
Balance as of January 1 13,895
Addition during the year, net 23
Write back during the year (16)
Write-off during the year -
Exchange rate effect -
Balance as of December 31 13,902
d. Five largest accounts receivable at December 31, 2022:
Proportion of Allowance of
Accounts re- expected
Name Closing balance ceivable (%) credit losses
Party 1 536,648 69 -
Party 2 139,424 18 -
Party 3 27,223 4 -
Party 4 13,423 2 -
Party 5 10,842 1 -
727,560 94 -
3. Receivable financing
December 31 December 31
2022 2021
Bank acceptance draft 2,596 11,752
2,596 11,752
As at December 31, 2022, bank acceptance endorsed but not yet due amounts to 186,322 thousand RMB.
- 268 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
4. Other Receivables
December 31 December 31
2022 2021
Other receivables 11,611 21,496
11,611 21,496
(1) Other receivables
a. Other receivables by categories
December 31 December 31
2022 2021
Other 17,633 27,477
Provision for expected credit losses (6,022) (5,981)
11,611 21,496
b. Other receivables by aging
December 31, 2022
Within 1 year (inclusive) 113
Over 1 year but within 2 years * 634
Over 2 years but within 3 years 11,830
Over 3 years but within 4 years -
Over 4 years but within 5 years 92
Over 5 years 4,964
17,633
* Include intergroup balance with Anpon.
- 269 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
4. Other Receivables - (cont'd)
(2) Other receivables - (cont'd)
c. Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Year ended December 31, 2022
Balance as of January 1, 2022 5,981
Addition during the period 656
Written back during the period (615)
Write-off during the period -
Balance as of December 31, 2022 6,022
d. Five largest other receivables at December 31 2022:
Proportion of other re-
Name Closing balance ceivables (%) Credit loss provision
Party 1 11,611 66 -
Party 2 3,125 18 3,125
Party 3 548 3 548
Party 4 543 3 543
Party 5 237 1 237
16,064 91 4,453
- 270 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
5. Long-term equity investments
December 31, 2022 December 31, 2021
Impairment Impairment
Amount balance loss Book value Amount balance loss Book value
Invest in
subsidiaries 17,511,352 - 17,511,352 17,511,352 - 17,511,352
17,511,352 - 17,511,352 17,511,352 - 17,511,352
Investments in subsidiaries
Current pro- Balance pro-
Opening Closing bal- vision Im- vision Im-
Invested unit balance Increase Decrease ance pairment loss pairment loss
ADAMA Agricultural Solutions Ltd. 15,890,213 - - 15,890,213 - -
Adama Anpon (Jiangsu) Ltd. 450,449 - - 450,449 - -
ADAMA Hiufeng (Jiangsu) Co. Ltd. 848,140 - - 848,140 - -
Hubei Sanonda Foreign Trade Co.
Ltd. 11,993 - - 11,993 - -
Adama Huifeng (shanghai) Agricul-
tural Technology Co., Ltd 310,557 - - 310,557 - -
17,511,352 - - 17,511,352 - -
6. Operating Income and operating costs
Year ended December 31, 2022 Year ended December 31, 2021
Operating Operating
Revenue costs Revenue costs
Main operations 2,255,382 1,756,979 1,113,595 1,033,996
Other operations 42,516 20,086 43,824 28,236
2,297,898 1,777,065 1,157,419 1,062,232
- 271 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
7. Notes to items in the cash flow statements
(1) Other cash received relevant to operating activities
Year ended Decem- Year ended De-
ber 31, 2022 cember 31, 2021
Interest income 8,605 14,491
Government subsidies 13,409 15,470
Other 92,257 96,426
114,271 126,387
(2) Other cash paid relevant to operating activities
Year ended De- Year ended De-
cember 31, 2022 cember 31, 2021
Professional services 57,109 68,104
Transportation and Commissions 47,140 24,804
Other 20,654 15,107
124,903 108,015
(3) Other cash received relevant to investing activities
Year ended De- Year ended De-
cember 31, 2022 cember 31, 2021
Loans 150,000 -
150,000 -
(4) Other cash paid relevant to investing activities
Year ended Decem- Year ended Decem-
ber 31, 2022 ber 31, 2021
Loans 250,000 -
250,000 -
(5) Other cash received relevant to financing activities
Year ended De- Year ended De-
cember 31, 2022 cember 31, 2021
Deposit for issuing bills payables 24,865 12,345
24,865 12,345
- 272 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
(6) Other cash paid relevant to financing activities:
Year ended De- Year ended De-
cember 31, 2022 cember 31, 2021
Deposit for issuing bills payables 31,491 6,416
Repayment of loan from others - 171,770
31,491 178,186
8. Supplementary information to cash flow statement
(1) Reconciliation of net profit to net cash flows generated from operating activities:
Year ended December 31
2022 2021
Net profit 23,354 (124,938)
Add: Assets impairment loss (2,816) 9,369
Credit impairment loss 48 301
Depreciation of fixed assets and investment property 209,319 120,046
Depreciation of-right-of use assets 2,611 754
Amortization of intangible assets 11,638 10,418
Gain on disposal of fixed assets, intangible assets and other long-term
assets (57,735) (14,965)
Losses (gains) from changes in fair value 314,670 6,070
Financial expenses 54,209 31,974
Investment loss (income) (13,811) (1,808)
Decrease (increase) in deferred income tax assets (14,715) 5,484
Decrease in inventory (32,857) (88,462)
Increase (decrease) in accounts receivable from operating activities (468,030) 164,507
Increase in payables from operating activities 115,250 (32,378)
Net cash flows generated from operating activities 141,135 86,372
(2) Net increase in cash and cash equivalents
Year ended December 31
2022 2021
Closing balance of cash 258,330 259,434
Less: Opening balance of cash 259,434 1,022,758
Net increase in cash and cash equivalents (1,104) (763,324)
- 273 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Related parties and related parties transactions
(1) Information on parent Company
Registered
Company Registered capital (Thou- Shareholding Percentage
name place Business nature sand RMB) percentage of voting rights
Production and sales
Syngenta Shanghai, of agrochemicals, fer-
Group China tilizers and GM seeds 11,144,545 78.47% 78.47%
The ultimate controlling shareholder is Sinochem Holdings .
(2) Information on the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
(3) Transactions with related parties
a. Transactions of goods and services
Year ended December 31
2022 2021
Summary of Purchase of goods/services Related Party Relationship
received:
Purchase of goods/services received Common control un-
der Sinochem Hold-
ings 167,796 1,469
Subsidiary 112,665 136,070
Purchase of fixed assets and other assets Common control un-
der Sinochem Hold-
ings 4,150 51,044
Summary of Sales of goods:
Sale of goods Common control under
Sinochem Holdings 25,030 1,082
Subsidiary 981,757 552,023
Rendering of services Subsidiary 1,487 6,167
- 274 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees
The Company as the guarantor
Amount of Inception Maturity Guaranty
guaranteed date of date of completed
loan guaranty guaranty (Y/ N)
59,500 2021.04.27 2022.04.26 Y
Subsidiary 33,000 2021.12.16 2022.12.15 Y
30,000 2021.02.26 2022.02.24 Y
30,000 2021.06.25 2022.06.24 Y
45,000 2021.05.21 2022.05.18 Y
40,000 2021.03.18 2022.03.17 Y
100,000 2021.07.19 2022.07.10 Y
33,000 2021.11.05 2022.05.03 Y
20,000 2021.11.05 2022.05.04 Y
40,000 2021.12.01 2024.11.28 N
20,000 2022.12.16 2023.12.12 N
35,000 2022.01.01 2025.11.28 N
21,000 2022.02.28 2027.11.28 N
14,000 2022.03.28 2027.11.28 N
7,500 2022.05.20 2027.11.28 N
23,500 2022.06.26 2027.11.28 N
10,000 2022.10.31 2027.11.28 N
11,000 2022.11.30 2027.11.28 N
40,000 2022.01.18 2023.01.17 N
20,000 2022.11.17 2024.12.20 N
4,000 2022.01.25 2026.09.28 N
3,900 2022.02.28 2026.09.28 N
8,100 2022.07.12 2026.09.28 N
10,000 2022.08.11 2028.06.22 N
10,000 2022.08.31 2028.06.22 N
11,000 2022.10.28 2027.06.22 N
25,000 2022.11.23 2026.12.22 N
30,000 2022.03.30 2023.03.29 N
- 275 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees - (cont'd)
The Company as the guarantee receiver
Amount of Inception date Maturity date Guaranty com-
Guarantee provider guaranteed loan of guaranty of guaranty pleted (Y / N)
Parent company 333,000 21/04/2021 20/04/2028 N
71,841 01/06/2021 31/05/2028 N
During the reporting period, the Company paid a guarantee fee amounting to 451 thousand RMB
(2021.1-12: 141) to the parent company.
c. Intercompany borrowings/lending
Borrowing/ Commencement Termination Balance at
Related party Lending amount date date year end Note
Lending
Subsidiary 50,000 2022.5 2023.12 50,000 Fixed rate at 2.4%
Subsidiary 40,000 2022.6 2023.12 40,000 Fixed rate at 2.4%
Subsidiary 35,000 2022.6 2023.12 35,000 Fixed rate at 2.4%
Subsidiary 125,000 2022.6 2024.5 125,000 Fixed rate at 2.4%
- 276 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
d. Receivables from and payables to related parties (including loans)
Receivable Items
December 31 December 31
2022 2021
Expected Expected
Related Party Relation- Book credit Book credit
Items ship Balance losses Balance losses
Trade receivables Subsidiary 548,601 - 160,190 -
Non-current as-
sets within one
year Subsidiary 125,000 - - -
Other non-current
assets Subsidiary 125,000 - 150,000 -
Other receivables Subsidiary 11,611 - 11,611 -
Trade receivables Common control under
Sinochem Holding 304 - - -
Prepayments Common control under
Sinochem Holding 537 - 10,000 -
Other non-current Common control under
assets Sinochem Holding 52 - 84 -
Payable Items
December December
31 31
Items Related Party Relationship 2022 2021
Trade payables Subsidiary 5,686 71
Trade payables Common control under Sinochem
Holdings 46,152 52,075
Other payables Subsidiary 395,152 241,049
Common control under Sinochem
Holdings 700 249
- 277 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
e. Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil (31.12.21: 189,978
thousand RMB) Interest income of bank deposit for the current period was 67 thousand RMB (amount
for Year ended December 31, 2021 was 1,019 thousand RMB).
The closing balance of bank deposit in SinoChem Finance Corporation was 202,615 thousand RMB
(31.12.21: nil) Interest income of bank deposit for the current period was 1,617 thousand RMB
(amount for Year ended December 31, 2021 was nil).
According to the Entrusted Operation and Management Agreement signed between the Company and
China National Agrochemical Co., Ltd. (“CNAC”), the Company shall be entrusted with the manage-
ment rights held by CNAC over Anhui Petroleum & Chemical Group Co., Ltd during the entrustment
period. The Company received an entrustment fee of 3,280 thousand RMB from CNAC during 2022
(2021: nil).
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ADAMA Ltd Annual Report 2022
Supplementary information
(Expressed in RMB '000)
1. Extraordinary Gain and Loss
Year ended
December 31, 2022
Disposal of non-current assets 67,525
Government grants recognized through profit or loss 36,383
Recovery or reversal of expected credit losses which is assessed individually during
the years 46,530
Custodian fees earned from entrusted operation 3,280
Other non-operating income or expenses other than the above 2,468
Other profit or loss that meets the definition of non-recurring profit or loss (6,128)
Tax effect (31,095)
118,963
2. Return on net assets and earnings per share (“EPS”)
The information of Return on net assets and EPS is in accordance with the Preparation Rules for Infor-
mation Disclosure by Companies Offering Securities to the Public No. 9 – Calculation and Disclosure of
Return on net assets and Earnings per share (2010 Amendment) issued by China Securities Regulatory
Commission.
Weighted average
rate of return on net Basic EPS Diluted EPS
Profit during the reporting period assets (RMB/share) (RMB/share)
Net profit attributable to ordinary
shareholders of the Company 2.76 0.26 N/A
Net profit after deduction of extraordinary
gains/losses attributable to ordinary
shareholders of the Company 2.23 0.21 N/A
ADAMA Ltd.
Legal Representative: Ignacio Dominguez
March 19, 2023
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