ADAMA Ltd.
Annual Report 2023
ADAMA LTD.
ANNUAL REPORT 2023
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 2024
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ADAMA Ltd.
Annual Report 2023
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.
Steven Hawkins, 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 2024 and possible risks in “XI.
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.
Pre-plan of dividend distribution or reserve transfer to equity capital approved for the reporting period by the
meeting of the Board of Directors on March 25, 2024
□Applicable √Not applicable
The Company does not plan to distribute cash or share dividends, nor plan to transfer capital reserve 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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Annual Report 2023
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 ........................................................................................................... 53
Section V - Environment and Social Responsibilities .................................................................... 80
Section VI - Significant Events...................................................................................................................... 93
Section VII - Change in Shares & Shareholders ............................................................................... 141
Section VIII - Preferred Stock....................................................................................................................... 152
Section IX - Corporate Bonds ...................................................................................................................... 153
Section X - Financial Report ......................................................................................................................... 154
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Annual Report 2023
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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Annual Report 2023
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 2023 Annual Report
Financial Report The Financial Reports for the year 2023, as contained in this Report
Reporting Period, this Period,
Year 2023
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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Annual Report 2023
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 Steve Hawkins
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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Annual Report 2023
III. Information Disclosure
Website of the Stock Exchange on which the Company Discloses www.szse.cn
its Annual Report
Media and Website on which the Company Discloses its Annual China Securities Journal Securities Times
Report http://www.cninfo.com.cn
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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Annual Report 2023
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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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: Other reason
Unit: RMB’000
2022 2021
2023 Before After +/- (%) Before After
adjustment adjustment adjustment adjustment
Operating revenue (RMB’000) 32,779,456 37,381,915 37,381,915 -12.31% 31,038,605 31,038,605
Net profit (loss) attributable to
(1,605,887) 609,391 609,391 -363.52% 157,397 157,397
the shareholders (RMB’000)
Net profit (loss) attributable to
the shareholders, excluding
(1,851,491) 490,428 501,621 -469.1% 77,853 106,438
non-recurring profit and loss
(RMB’000)
Net cash flows from operating
2,617,877 940,745 940,745 178.28% 4,561,875 4,561,875
activities (RMB’000)
Basic EPS (RMB/share) (0.6893) 0.2616 0.2616 -363.49% 0.0676 0.0676
Diluted EPS (RMB/share) N/A N/A N/A N/A N/A N/A
Weighted average return on
-7.13% 2.76% 2.76% -9.89% 0.74% 0.74%
equity
31.12.2022 31.12.2021
31.12.2023 Before After +/- (%) Before After
adjustment adjustment adjustment adjustment
Total assets (RMB’000) 55,405,803 57,980,489 57,980,489 -4.44% 50,235,308 50,235,308
Net assets attributable to the
21,924,475 23,124,655 23,124,655 -5.19% 21,075,083 21,075,083
shareholders (RMB’000)
Reason for retroactive adjustments: The Company recognized the non-recurring profit and loss items in accordance with
the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public -
Non-Recurring Profit and Loss (2023 Revised)” and made retrospective adjustments. The implementation of this regulation
has no significant impact on the non-recurring profit and loss in comparable accounting periods.
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
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Annual Report 2023
The less amount of the net income before and after extraordinary gain or loss is negative
√ Yes □ No
Items 2023 2022 Remarks
Sales (RMB’000) 32,779,456 37,381,915
Sales deductions (RMB’000) 49,068 76,542
Sales after deductions
32,730,388 37,305,373
(RMB’000)
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 2023 Q2 2023 Q3 2023 Q4 2023
Operating revenue 8,610,576 8,642,625 7,406,903 8,119,352
Net profit attributable to the shareholders 83,273 (325,429) (800,317) (563,414)
Net profit attributable to the shareholders excluding non-
44,893 (343,038) (845,864) (707,482)
recurring profit and loss
Net cash flows from operating activities (2,905,168) 2,840,292 590,706 2,092,047
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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Annual Report 2023
IX. Non-Recurring profit/loss
√ Applicable □ Not applicable
Unit: RMB’000
Item 2023 2022 2021 Note
Gains/losses on the disposal of non-current
assets (including the offset part of asset 19,679 67,525 846
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
the Company, in line with national policies and in 20,743 17,771 19,377
accordance with defined criteria, and that have a
continuing impact on the Company's profit or
loss)
Custodian fees earned from entrusted operation - 3,280 -
Recovery or reversal of provision for bad debts
57,422 46,530 32,487
which is assessed individually during the years
Post vesting fair value revaluation of cash-settled
41,959 - -
share-based payment
Gains or losses arising from the holding or
disposal of financial assets or financial liabilities
by non-financial corporations, except for effective 123,315 - -
hedging related to the normal operating of the
Company
Other non-operating income and expenses other
31,747 2,475 12,446
than the above
Less: Income tax effects 49,261 29,811 14,197
NCI (after tax) - - -
Total 245,604 107,770 50,959
Details of other profit and loss items that meet the definition of non-recurring profit or loss.
□ Applicable √ Not applicable
No such cases during the Reporting Period.
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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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”.
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 North America, Latin America, Asia-Pacific (including
China) and Europe, Africa and the Middle East1.
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.
For further important additional information and details, please refer to the Annex.
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
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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Annual Report 2023
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.
Key commodity crop prices declined substantially during 2023 as weather conditions normalized and the global crop supply
situation improved. However, key commodity crop prices were still relatively high through 2023, supporting planted area
and investment in crops, leading to healthy demand, at the farmer level, of crop inputs, including crop protection products.
However, due to very high channel inventory across all geographies, channel demand was weak during 2023. The high
interest rate environment coupled with low prices of active ingredient from China, also encouraged the just-in-time
purchasing approach adopted by the channel. As a result, sales into the channel declined sharply across the entire industry.
Going into 2024, channel inventories have improved across most geographies but they have still not normalized
everywhere. The cost environment further improved in 2023 as active ingredient prices in China continued to decline all
through 2023 reaching low levels.
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”.
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 30.8% No 54.08 45.13
Raw Materials 24.6% No 7.51 7.06
Co-Formulants Purchase through 5.9% No 18.49 15.63
Formulated Products multiple channels 22.1% No 36.41 29.28
Packaging 6.7% No 1.43 1.56
Other 9.8% No 6.78 4.19
* 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
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Annual Report 2023
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
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 53,303 46% 0 Ongoing investment
Fungicides 18,636 29% 0 Ongoing investment
Insecticides 75,257 67% 0 Ongoing investment
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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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 received the following EIA approval: "Approval Opinions on the Environmental
Impact Assessment Report Form for the Overall Relocation and Upgrading Project of ADAMA Ltd's Insecticide Series
Products - Recycling Solvent Purification Project".
Abnormal production suspension during the reporting period
□ Applicable √ Not applicable
Relevant approvals, permits and qualifications
√ Applicable □ Not applicable
Entity in China Name of the Certificate Number Expiration
Pesticide Production Permit Pesticide Production Permit (E) 0010 August 7th, 2027
Safety Production Permit （E）WH [2022] No. 1139 November 6th, 2025
Safety Production Permit （E）FM [2021] No.050781 August 13th , 2024
Business record certificate of （E）3J42100111328
non-pharmaceutical precursor July 2nd , 2024
chemicals
Special Permit for the HW-42I0002
Manufacturing of Monitored September 28th, 2027
Chemicals
National Industrial Production XK13-008-00019 of Hubei
ADAMA Ltd. June 5th, 2028
Permit
Business License for No. [2021] 980014 of Safety Operation of Hubei
July 5th, 2024
Hazardous Chemicals D
No.（0045）for Port Operation of Jingzhou of
Port Operation Permit January 20th, 2025
Hubei
Port Shoreline Use Permit No. 5, 2015 for Use of Port Shoreline August 7th, 2061
No. 3, 2020 for Water Extraction of Jingzhou of
Water Extraction Permit August 13th, 2025
Hubei
Registration Certificate of 421012001
December 9th, 2024
Hazardous Chemicals
Pollutant Emission Permit 91420000706962287Q001P December 25th, 2025
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Annual Report 2023
Entity in China Name of the Certificate Number Expiration
WH No. [H00029] for Safety Production of
Safety Production Permit January 17th, 2025
Jiangsu
Business License for No. 00394 for Business of Hazardous
October 11th, 2024
Hazardous Chemicals Chemicals of Huai’an of Jiangsu
No. 32080020026 for Pesticide Business of
Pesticide Business License December 26th, 2024
Jiangsu
Pesticide Production Permit No. 0014 for Pesticide Production of Jiangsu December 6th, 2027
Pollutant Emission Permit 91320800139433337K001P May 31st,2025
National Industrial Production XK13-010-00189 of Jiangsu
January 12th, 2029
ADAMA Anpon Permit
(Jiangsu) Ltd. National Industrial Production XK13-008-00007 of Jiangsu
September 23rd, 2028
Permit
National Industrial Production XK13-014-00235 of Jiangsu
July 11th, 2029
Permit
Mining License C3200002009096120039192 September 30th, 2025
Water Extraction Permit D320812G2021-0016 December 22nd, 2027
Water Extraction Permit D320812S2021-0014 December 31st, 2027
Special Permit for the
Manufacturing of Monitored HW-32I0001 November 29th, 2027
Chemicals
Safety Production Permit FM No. [2021]0818 of Jiangsu November 9th, 2024
Business License for No. 00641 for Business of Hazardous
Maidao, Branch May 18th, 2026
Hazardous Chemicals Chemicals of Jiangsu
of ADAMA Anpon
WH No. [H00015] for Safety Production of
(Jiangsu) Ltd. Safety Production Permit July 22nd, 2024
Jiangsu
Pollutant Emission Permit 91320800MA1NX3QW56001P December 19th, 2026
Jiangsu Anpon No. 32080020050 for Pesticide Business of
International Pesticide Business License Jiangsu May 11th, 2028
Trading Co., Ltd.
No. 42000010083 for Pesticide Business of
Pesticide Business License September 3rd, 2028
Hubei
Hubei Sanonda Business License for No. [2022]000532 of Hubei D for Business of
May 8th, 2025
Trading Co., Ltd. Hazardous Chemicals Hazardous Chemicals
Business License for 42100213202300029
December 7th, 2026
Hazardous Chemicals
ADAMA (Beijing) No. 11000010005 for Pesticide Business of
Agricultural Beijing
Technology Pesticide Business License April 11th, 2028
Company
Limited
ADAMA Huifeng No. 31011420006 for Pesticide Business of
Pesticide Business License August 21st, 2028
(Shanghai) Shanghai
Agricultural No. [2023]203919 of Shanghai for Business of
Business License for
Technology Co., Hazardous Chemicals July 31st , 2026
Hazardous Chemicals
Ltd.
Safety Production Permit （Su）WH No. [J00138] February 10th, 2027
No. 32090420577 for Pesticide Business of
Pesticide Business License January 6th, 2026
ADAMA Huifeng Jiangsu
(Jiangsu) Ltd. Pesticide Production Permit Pesticide Production Permit (Su) 0199 May 13th, 2026
Registration Certificate of 32092400034
March 7th, 2027
Hazardous Chemicals
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Annual Report 2023
Entity in China Name of the Certificate Number Expiration
Pollutant Emission Permit 91320982MA1WNXWQX6001P December 20th,2025
Business record certificate of （Su）3S320900220700005
non-pharmaceutical precursor February 10th, 2027
chemicals
Export Enterprise Registration 04136730
--
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 5.1% in 2023,
based on preliminary estimation made by AgBio Investor regarding total sales in the agrochemical industry, and 6.5% in
2022.
Registration - The materials and products marketed by the Group require, at various stages of their development production
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.
Application of Main 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.
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.
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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
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 most active ingredients individually constituting no more
than 5% of its sales in 2023, 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
a balanced regional split, as evidenced by its 2023 revenue breakdown of approximately 27% in Latin America, 18%
in North America, 28% in Asia Pacific, and 27% in the Europe, Middle East and Africa (EAME). 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 2023 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
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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
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 different 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.
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IV. Main Business Analysis
1. Overview
For general crop protection market environment, please refer to I. Industry in which the Company Operates 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 8,119,352 9,304,101 -12.7%
Pre-Tax Profits (loss) (300,734) (144,277) -108.4%
Pre-tax profit (loss)
-3.7% -1.6% -
margin
Net income (loss) (563,414) (158,753) -254.9%
Net income margin -6.9% -1.7% -
EBITDA 611,456 897,224 -31.9%
EBITDA margin 7.5% 9.6% -
Fourth Quarter Same period of last year as
Item of the Reporting Period previously reported +/-%
(000’USD) (000’USD)
Revenues 1,136,271 1,311,992 -13.4%
Pre-Tax Profits (loss) (42,084) (20,383) -106.5%-
Pre-tax profit margin -3.7% -1.6% -
Net income (loss) (78,844) (22,425) -251.6%
Net income margin -6.9% -1.7% -
EBITDA 85,654 126,520 -32.3%
EBITDA margin 7.5% 9.6% -
Same period of last year as
Reporting Period
Item previously reported +/-%
(000’RMB)
(000’RMB)
Revenues 32,779,456 37,381,915 -12.3%
Pre-Tax Profits (loss) (1,404,910) 756,833 -285.6%
Pre-tax profit margin -4.3% 2.0% -
Net income (loss) (1,605,887) 609,391 -363.5%
Net income margin -4.9% 1.6% -
EBITDA 2,790,156 4,880,445 -42.8%
EBITDA margin 8.5% 13.1% -
Same period of last year as
Reporting Period
Item previously reported +/-%
(000’USD)
(000’USD)
Revenues 4,660,554 5,569,989 -16.3%
Pre-Tax Profits (loss) (196,785) 118,470 -266.1%
Pre-tax profit margin -4.2% 2.1% -
Net income (loss) (224,651) 96,307 -333.3%
Net income margin -4.8% 1.7% -
EBITDA 399,581 731,118 -45.4%
EBITDA margin 8.6% 13.1% -
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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
Sales in the fourth quarter declined by approximately 13% (-13% in RMB terms; -14% in CER terms) to $1,136 million,
reflecting a decrease of 15% in prices and an increase of 1% in volumes. The lower sales reflect the market dynamics of
high channel inventories, last-minute purchasing following channel destocking in light of high interest rates and pressure
on crop protection product pricing due to the lower channel demand and lower active ingredient pricing. In some certain
geographies, the Company sees initial signs of channel normalization.
These results brought the revenues in the full year of 2023 to $4,661 million, a decline of approximately 16% (-12% in RMB
terms; -15% in CER terms), reflecting a decrease of 8% in prices and a decrease of 7% in volumes. This is in comparison
to the record sales the Company achieved in 2022, which reflected the high demand due to supply uncertainty in the
market.
(1) Operating revenues
Unit: RMB’000
2023 2022
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 32,779,456 100% 37,381,915 100% -12.3%
Classified by industries
Manufacture of chemical raw materials
32,779,456 100% 37,381,915 100% -12.3%
and chemical products
Classified by products
Herbicides 13,831,829 42.2% 16,597,770 44.4% -16.7%
Fungicides 6,790,381 20.7% 7,050,530 18.9% -3.7%
Insecticides 9,392,448 28.6% 10,120,287 27.1% -7.2%
Ingredients and Intermediates (Formerly -23.5%
2,764,799 8.4% 3,613,328 9.7%
referred to as non-Agro)
Classified by regions2
Europe, Africa & Middle East (EAME) 8,691,499 26.5% 9,030,951 24.16% -3.8%
North America 5,770,415 17.6% 6,895,702 18.45% -16.3%
Latin America 9,122,996 27.8% 10,792,732 28.87% -15.5%
Asia-Pacific 9,194,546 28.0% 10,662,529 28.52% -13.8%
Classified by Sales Channel
Direct Sales 1,584,828 4.8% 1,992,450 5.3% -20.5%
Dealership 28,429,829 86.7% 31,782,088 85.0% -10.5%
Others 2,764,799 8.4% 3,607,377 9.7% -23.4%
2
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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Unit: USD’000
2023 2022
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 4,660,554 100% 5,569,989 100% -16.3%
Classified by industries
Manufacture of chemical raw materials
4,660,554 100% 5,569,989 100% -16.3%
and chemical products
Classified by products
1,969,111
Herbicides 42.3% 2,478,957 44.5% -20.6%
Fungicides 964,635 20.7% 1,048,303 18.8% -8.0%
Insecticides 1,334,206 28.6% 1,505,222 27.0% -11.4%
Ingredients and Intermediates (Non-Agro) 392,602 8.4% 537,507 9.7% -27.0%
Classified by regions
Europe, Africa & Middle East (EAME) 1,240,151 26.6% 1,352,497 24.3% -8.3%
North America 820,319 17.6% 1,027,292 18.4% -20.1%
Latin America 1,291,606 27.7% 1,592,286 28.6% -18.9%
Asia-Pacific 1,308,478 28.1% 1,597,914 28.7% -18.1%
Classified by Sales Channel
Direct Sales 225,329 4.8% 296,880 5.3% -24.1%
Dealership 4,042,623 86.7% 4,735,602 85.0% -14.6%
Others 392,602 8.4% 537,507 9.7% -27.0%
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, Africa & Middle East (EAME): Sales in EAME decreased in the fourth quarter and full year of 2023 impacted by
high channel inventories, erratic weather patterns and channel destocking, leading to lower volumes and pressure on
prices. While the Company maintained pricing in the first half of 2023, pricing pressure was more notable in the second
half of the year with increased market competition. In Central Eastern Europe demand was particularly impacted by lower
grain market prices and negative weather impacted the cereal season in the North. Despite this, the Company focused on
quality of the business, with sales in the UK increasing in the full year supported by new product introductions.
North America: Consumer & Professional Solutions – Sales in the fourth quarter and twelve-month period were lower
than the corresponding periods. In the consumer market demand was impacted by a decline in disposable income, an
outcome of inflationary pressures and high interest rates, while in the professional market this was due to demand being
supplied from the channel inventories. Despite this, the professional market has begun showing signs of normalization
returning to pre-COVID channel inventory levels for branded products, while commoditized products are still being held at
and lower levels reflecting just-in-time purchasing patterns.
In the US Ag market sales in the fourth quarter and the twelve-month period reflected low demand, weak pricing and strong
competition due to high inventory levels at manufactures. While inventory levels in the channel are steadily declining,
manufactures are still holding high inventory levels leading to strong competition, thus pricing is still not presenting a
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Annual Report 2023
recovery with the market leaning into just-in-time purchasing patterns.
ADAMA reached record sales in Canada in the fourth quarter following expansion to new business segments as well as
renewed demand with the restocking in certain segments where inventories had normalized coming out of the 2023
application season. Despite this, sales in the full year of 2023 remained mostly flat, also impacted by soft pricing for
commoditized products and dry weather conditions in western Canada.
Latin America: Brazil – the Company's sales in the fourth quarter and full year declined following contraction of the overall
crop protection market due to drought conditions leading to a weak soybean crop season, channel destocking and softer
pricing. ADAMA focused on improving the quality of the business with differentiated products and reducing the share of
highly generic sales.
Such differentiated products included Almada (fungicide against soybean rust), Forasteiro (herbicide for pasture) and
Araddo (herbicide for soybean and cotton).
In the rest of LATAM the sales in the fourth quarter recovered and increased with the normalization of channel inventories
in most countries while sales remained flat in the full year of 2023, mainly impacted by pricing of commoditized products.
It is noteworthy that the Company gained market share in key countries Argentina, Paraguay, Columbia and Mexico, while
focusing on improving the quality of the business. Additionally, the Company's biologicals portfolio continued to be well
received in specialty export countries. El Nio was a positive impact on the southern part of the region, with very good
rains and was challenging for the Northern part of the region.
Asia-Pacific: In China, the market is still experiencing high channel inventories and pricing pressure especially in
commodities impacting both the branded formulation and non-ag sales. Sales were supported by the branded business,
driven by recent and new launches of differentiated products, and ADAMA's active ingredient business which recovered
substantially, benefiting from the Sanonda Jingzhou site reaching high utilization after relocation.
In the Pacific region, sales in the full year and fourth quarter were impacted by high channel inventories and pricing
pressure, combined with just in time purchasing patterns. In Australia, dryer weather also impacted sales. Despite this,
sales benefited from the launch of the differentiated product Grindstone and the Company's biologicals portfolio.
Sales in India declined over the full year period following high channel inventory, creating pressure on pricing in the market.
Moreover, the erratic weather did not support the consumption of such inventory. Despite this, it is noteworthy that
differentiated product TrassidTM was well accepted in the market and along with increased focus on farmer demand
generation, the Company's sales increase in Q4.
Sales in the wider APAC region continued to experience pricing pressure, particularly from commoditized products.
Despite this, particularly noteworthy was the performance of the Company's sales in South Korea resulting in market share
gain, supported by 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
Operating Cost of Gross YoY YoY YoY
revenues goods sold Margin increase/decreas increase/decrease increase/decre
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(%) e of the of the cost of ase of the
operating goods sold gross margin
revenues
Classified by industries
Manufacturing
chemical raw
32,779,456 25,984,108 20.7% -12.3% -7.1% -4.4%
materials and
chemical products
Classified by Products
Crop Protection 30,014,657 23,589,113 21.4% -11.1% -6.6% -3.8%
Ingredients and
2,764,799 2,394,995 13.4% -23.5% -12.1% -11.2%
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
Production Sales Sales Pricing Trend during Reasons to change
Volume Volume (RMB’000) reporting period
(Ton) (Ton)
price of raw materials
decreased, combined
Crop Protection 389,772 653,113 30,014,657 YoY down with inflation and high
inventory level in the
channel
price of raw materials
Ingredients and decreased, combined
433,369 1,561,507 2,764,799 YoY down
Intermediates with low demand in the
market
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.
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Annual Report 2023
(3) Whether the Company’s revenue from sale of goods exceed the revenue from services
√ Yes □ No
Industries Items Units 2023 2022 YoY +/-%
Sales volume Ton 653,113 690,015 -5%
Crop Protection Production Ton 389,772 472,619 -18%
Inventory Ton 161,146 241,095 -33%
Reasons for any over -30% YoY movement of the data above:
√ Applicable □ Not applicable
Throughout 2023, the Group strengthened inventory management and implemented selective procurement practices,
prioritizing high margin products. As of December 31st, 2023, the inventory level decreased significantly compared with
December 31, 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
2023 2022
Industries Items Ratio of the Ratio of the YoY +/-%
Amount Amount
operating costs operating costs
Industry of Cost of
manufacturing chemical materials
17,569,198 67.6% 26,200,706 93.6% -32.9%
raw materials and (procurement
chemical products costs)
Industry of
manufacturing chemical
Labor cost 1,258,850 4.8% 1,303,087 4.7% -3.4%
raw materials and
chemical products
Industry of
manufacturing chemical Depreciation
818,569 3.2% 793,086 2.8% 3.2%
raw materials and expense
chemical products
Explanations:
Over the full-year period, the decline in the gross profit was mainly due to the weak pricing, moderated by the positive
impact of new inventory sold, priced at market levels and an improvement in the sales mix of higher margin products,
following management focus on the quality of business. Exchange rates also had an adverse impact moderated by lower
logistic and production costs. Despite that, following focus on the quality of business the Company presented an
improvement in the sales mix of higher margin products.
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(6) Has the consolidated scope changed during the Reporting Period
√ Yes □No
During the reporting period, the Group acquired 100% equity interest in Agrinova New Zealand Limited.
(7) List of significant changes or adjustment of the industries, products or services of the
Company during the reporting period
□ Applicable √ Not applicable
(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) 2,920,686
Ratio of total sales to top 5 customers to annual total sales 8.85%
Ratio of total sales to related parties (within top 5 customers) to annual total sales 3.43%
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 1,130,675 3.43%
2 B 877,773 2.66%
3 C 367,040 1.11%
4 D 303,373 0.92%
5 E 241,825 0.73%
Aggregated 2,920,686 8.85%
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) 2,594,628
Ratio of total purchase from top 5 suppliers to annual total purchase 17.7%
Ratio of total purchase from related parties (within top 5 suppliers) to annual total purchase 9.28%
Information of the Top 5 Suppliers
Suppliers Purchase Amount Ratio to the annual total sales
(RMB’000)
1 A 1,074,590 7.34%
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2 B 522,947 3.57%
3 C 385,504 2.63%
4 D 328,223 2.24%
5 E 283,364 1.94%
Aggregated 2,594,628 17.73%
Notes of the other situation of the major suppliers
□ Applicable √ Not applicable
3. Expenses
In RMB ’000 In USD ’000
2023 2022 YoY +/-% 2023 2022 YoY +/-%
Sales and Marketing expenses 4,208,108 4,396,279 -4.28% 597,966 653,982 -8.6%
General and Administrative expenses 1,057,410 1,406,828 -24.84% 150,011 208,444 -28.03%
R&D expenses 482,754 577,859 -16.46% 68,688 85,874 -20.01%
Financial (income) / expenses 1,183,118 325,796 263.15% 167,378 42,854 290.58%
Profit or (Loss) from Changes of
(650,374) (1,504,832) -56.78% (94,230) (229,774) -58.99%
Fair Value
Total Net Financial Expenses 1,833,492 1,830,628 0.16% 261,608 272,628 -4.04%
Tax expenses 200,977 147,442 36.31% 27,866 22,163 25.73%
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 251 million ($36 million) in the full year of 2023 in
comparison to RMB 250 million ($37 million) in 2022. 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.
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Excluding the abovementioned non-operational charges, the lower selling and marketing expenses reflected the OPEX
management measures taken by the Company to address the market conditions, a reduction in performance-based
compensation, and the positive impact of exchange rates.
(2) General and Administrative Expenses
The Company continues to maintain strong operating cost discipline. The lower general and administrative expenses
reflected the same reasons as the selling and marketing expenses above.
(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 2023, Adama launched
11 new differentiated products and registered 20 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 1,183 million ($167 million) for 2023 compared with RMB 326
million ($43 million) for 2022.
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.
“Gains/Losses from Changes in Fair Value” amounted to a net loss of RMB 650 million ($94 million) in 2023 compared
with a net loss of RMB 1,505 million ($230 million) in 2022.
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 1,833 million ($262 million) in 2023 compared with RMB
1,831 million ($273 million) in 2022.
The level of Total Net Financial Expenses were mainly due to higher bank interest expenses due to the increase in interest
rates and an increase in short-term loans, partially offset by lower bond interest and CPI and holdback release related to
the original acquisition.
(5) Income Tax expenses:
Despite reaching losses before tax, the Company recorded tax expenses in the full year of 2023, mainly because the
losses were primarily incurred by subsidiaries with relatively lower tax rates, while some of them did not create deferred
tax assets on the losses. On the other hand, the subsidiaries that generated profit have a higher tax rate.
28
ADAMA Ltd.
Annual Report 2023
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 Process improvement Company’s future
Fungicide project B In launch phase
spectrum disease portfolio
control
AI Production of a To expand the
Herbicide project C selective broad In 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
Pre-launch phase
Insecticide project E spectrum insect control Tech Transfer Company’s future
portfolio
R&D Personnel
2023 2022 Change (%)
R&D Headcount 289 277 4%
Ratio to the Total Headcount 3.26% 3.01% 8%
Composition of Educational Background —— ——
B.A. 12 17 -29%
M.A. 20 16 25%
Doctor 5 5 0
College 1 5 -80%
Composition of Age —— ——
Under 30 Years Old 1 5 -80%
30 to 40 Years Old 25 29 -14%
Over 40 Years Old 12 9 33%
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.
R&D Investment of the Company
2023 2022 Change (%)
R&D Investment (RMB’000) 482,754 577,859 -16.46%
29
ADAMA Ltd.
Annual Report 2023
2023 2022 Change (%)
Ratio of R&D investment to operating income 1.47% 1.55% -0.08%
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 2023 2022 YoY +/-%
Subtotal of cash inflows from operating activities 33,353,503 36,575,473 -8.81%
Subtotal of cash outflows from operating activities 30,735,626 35,634,728 -13.75%
Net cash flows from operating activities 2,617,877 940,745 178.28%
Subtotal of cash inflows from investing activities 256,312 136,738 87.45%
Subtotal of cash outflows from investing activities 2,644,565 2,797,180 -5.46%
Net cash flows from investing activities (2,388,253) (2,660,442) -10.23%
Subtotal of cash inflows from financing activities 7,127,882 4,632,633 53.86%
Subtotal of cash outflows from financing activities 6,753,600 4,688,423 44.05%
Net cash flows from financing activities 374,282 (55,790) 770.88%
Net increase in cash and cash equivalents 632,105 (1,534,227) 141.20%
Notes of the major effects on the YoY significant changes occurred of the data above
√ Applicable □ Not applicable
Cash flow from Operating Activities: Despite lower sales, the significantly higher cash flow generated in the full year of
2023 was primarily due to a decrease in the procurement of goods as well as intensive collection.
Cash flow from Investing Activities: The cash used in investing activities in the fourth quarter and full year of 2023
reflected the prioritization of investments, part of the actions taken by the Company to improve its cash flow. The Company
invested in fixed assets including its new production facilities in ADAMA Anpon and manufacturing capabilities in Israel and
investments in intangible assets relating to ADAMA's global registrations of the Company's products, integration of an ERP
system as well as the acquisition of AgriNova New Zealand in Q1 2023.
Cash flow from Financing Activities: The cash used in financing activities in 2023 reflected the realization of loss on
hedging positions (in respect to the Company's Israeli ILS-denominated bonds, following the weakening of the Shekel
against the US dollar), which was offset by an increase in loan borrowing to support the negative free cash flow. .
Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profits
of 2023 of the Company during the Reporting Period
30
ADAMA Ltd.
Annual Report 2023
√ 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 loss Explanation Recurrence
Investment income 19,078 -1.36% No
Mainly foreign currency effect on
financial assets and liabilities
Gain/loss from change of FV (650,374) 46.29% No
(refer to explanation to Financial
expenses above).
Please refer to the Announcement
on Asset Impairment
(Announcement No. 2023-30 and
2023-36), Announcement on Asset
Impairments Made by a Controlled
Impairment of asset 549,893 39.14% Subsidiary for the Fourth Quarter No
of 2023 (Announcement No. 2024-
1) and Announcement on Asset
Impairment for 2023 Full Year
(Announcement No. 2024-7)
disclosed on www.cninfo.com.cn
Please refer to the Announcement
on Asset Impairment
(Announcement No. 2023-30 and
Credit impairment loss 54,453 3.88% 2023-36) and Announcement on No
Asset Impairment for 2023 Full
Year (Announcement No. 2024-7)
disclosed on www.cninfo.com.cn
Gain from disposal of assets 19,679 -1.40% No
Non-operating income 110,046 -7.83% No
Non-operating loss 53,941 3.84% No
VI. List and Analysis of the assets and liabilities
1. List of significant changes of assets
Unit: RMB’000
As at 31 Dec. 2023 As at 31 Dec. 2022
Explanation for any major
Item % of total % of total % change
Amount Amount change
assets assets
Cash at bank and on Additional financing and less
4,881,328 8.81% 4,290,961 7.40% 1.41%
hand procurement.
Accounts receivable 8,146,677 14.70% 9,018,375 15.55% -0.85%
Decrease in the procurement
Inventories 13,088,757 23.62% 16,927,241 29.19% -5.57%
of goods.
Investment property 22,145 0.04% 3,168 0.01% 0.03%
Long term equity 31,474 0.06% 26,368 0.05% 0.01%
31
ADAMA Ltd.
Annual Report 2023
As at 31 Dec. 2023 As at 31 Dec. 2022
Explanation for any major
Item % of total % of total % change
Amount Amount change
assets assets
investments
The increase is mainly due to
Fixed assets 10,040,113 18.12% 8,952,184 15.44% 2.68%
transfer of CIP projects.
Construction in
2,507,328 4.53% 2,961,401 5.11% -0.58%
progress
Rights of use assets 625,235 1.13% 555,889 0.96% 0.17%
Supporting the increased
Short-term loans 5,733,522 10.35% 3,342,921 5.77% 4.58%
working capital.
Contract Liabilities 1,514,365 2.73% 1,776,573 3.06% -0.33%
Long-term loans 2,885,939 5.21% 3,662,870 6.32% -1.11%
Lease liabilities 495,459 0.89% 431,076 0.74% 0.15%
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
18,662,632 and (1,701,449) 85% 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
1,685 - - 227 - - 1,912
(excluding derivative
financial assets)
2. Derivative financial
233,809 (808,041) 44,824 1,442,712 (63,167) - 850,137
assets
3. Other equity
158,341 - (26,323) - - - 132,018
investments
Total financial assets 393,835 (808,041) 18,501 1,442,939 (63,167) - 984,067
Others 189,601 (44,539) - 65,163 (5,752) - 204,473
Total of above 583,436 (852,580) 18,501 1,508,102 (68,919) - 1,188,540
Financial liabilities 545,516 62,271 - - - - 607,787
32
ADAMA Ltd.
Annual Report 2023
Significant changes in the measurement attributes of the main assets in the Reporting Period
□ Yes √ No
3. Restriction / limitation on asset rights
At the end of the Reporting Period, restricted assets including Company’s bank balance of RMB 23,970,000 as cash
deposit for bills receivable; and other non-current assets of RMB 207,027,000 as deposit for 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)
16,053,799 15,361,143 4.5%
2. List of the significant equity investment during the Reporting Period
√ Applicable □Not Applicable
33
ADAMA Ltd. Annual Report 2023
Unit: ‘000 RMB yuan
Profit or
Name of Progress Date of
Loss on Involved
the Main Mode of Investme Shareholdin Sourc as of the Disclosur Disclosure
Investme Investme Types of Estimate Investment in
Invested Busines Investme nt g e of Balance e (if Index (if
nt Partner nt Term Products d Return s for the Litigatio
Compan s nt Amount Proportion Funds Sheet applicabl applicable)
Reporting n or Not
y Date e)
Period
Announcement
on the Closing
Acquisition of
Crop
100% Equity
protection
Interests in
products,
Agrinova New
growth
Agrinova Zealand
Self- regulators,
New Pesticide Complete January Limited by a
Acquisition 170,155 100% raised None Long Term biological -- 23,852 No
Zealand s d 6th, 2023 Wholly-Owned
funds formulation
Limited Subsidiary
s and plant
(No.2023-1)
nutrients
disclosed by
for
the Company
horticulture
on
www.cninfo.co
m
Announcement
on the
Acquisition of
Equity Held by
Chemical
Minority
crop
Shareholders
Adama Self- protection
Pesticide Complete March of a Controlling
Chile Acquisition 116,311 100% raised None Long Term products -- --* No
s d 14th, 2023 Subsidiary
S.A.* funds and
(No. 2023-7)
biological
disclosed by
stimulants
the Company
on
www.cninfo.co
m
Total -- -- 286,466 -- -- -- -- -- -- 23,852 -- -- --
*Note: The Company previously indirectly held 60% equity of Adama Chile S.A., and consolidated Adama Chile S.A. in the financial statements as a subsidiary. After the acqui-
sition, the Company indirectly held 100% equity of Adama Chile S.A.
34
ADAMA Ltd.
Annual Report 2023
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.
35
ADAMA Ltd. Annual Report 2023
(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
Initial Cumulative fair
Opening value changes in Purchased in the Sold in the Closing investment amount
Investment Type investment value changes
Balance the Reporting Reporting Period Reporting Period Balance divided by net asset at
amount charged to equity
Period end of the period
Option 3,490,710 3,490,710 (261,094) (249,175) 4,774,021 (3,490,710) 4,774,021 61.03%
Forward 22,863,927 22,863,927 (609,218) (581,407) 11,279,778 (22,863,927) 11,279,778 144.19%
Total 26,354,637 26,354,637 (870,312) (830,582) 16,053,799 (6,354,637) 16,053,799 205.22%
Explanation of accounting pol- 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 accounting policies
icies and principles for hedg- for hedging during the reporting period.
ing, and any significant
changes compared with last
reporting period
Explanations about gain/loss The loss this year is mainly due to the devaluation in the ILS of 3.3% and evaluation in the BRL of 7.2%
during the Reporting Period
Explanations for hedging ef- Despite of the loss incurred from the hedging transactions, the Group has effectively mitigated the impact from the exchange rate fluctuations during the
fect year.
Source of fund for the invest- Internal.
ment
The aforesaid refers to short term hedging currency transactions made with banks.
Risk and control analysis for 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
the Reporting Period (includ- expiration date of the transaction, therefore no market risk is involved.
ing but not limited to market Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA agreements.
risk, liquidity risk, credit risk, As to operational risk, the Group is working with relevant software, which is its back office for all transactions.
operational risk, legal risk, No legal risk is involved.
etc.)
The actions taken in order to further reduce risks are:
The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' financial statements committee of
36
ADAMA Ltd. Annual Report 2023
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 The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks.
change of investments during Segregation of duties as follows:
the Reporting Period. For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the relevant transac-
Specific methodology and as- tions are simple (Options and forwards) for short terms. For fair value methodology see Section X of this Report, note IX. Fair Value. The exchange rates are
sumptions should be dis- provided by the accounting department of the relevant subsidiary and all other parameters are provided by the experts.
closed in the analysis of fair
value of the investments
Litigation-related situations (if N/A
applicable)
Date of disclosure of Board December 30, 2017
approval (if any)
Date of disclosure of Share- N/A
holders’ approval (if any)
Independent Directors’ opinion The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond to the
on the investment in derivative Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has adopted Currency Risk
financial instruments and re- Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against market risk. The derivative investments
lated risk controls do not harm the interests of the Company and its shareholders.
37
ADAMA Ltd.
Annual Report 2023
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
IX. 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,
intermediate
Adama
Subsidiary materials for other 720,085 46,287,085 15,839,934 29,527,356 (1,670,809) (1,730,125)
Solutions
industries, food
additives and
synthetic aromatic
products, mainly for
export.
38
ADAMA Ltd.
Annual Report 2023
Subsidiaries acquired or disposed during the Reporting Period
√ Applicable □Not Applicable
Mode of Acquisition
Name of the and Disposal of
Impact on Production, Operation and Performance
Subsidiary Subsidiaries during
the Reporting Period
The transaction will enable the Company to grow its product portfolio in the New
Zealand market and pave its expansion into the complimentary segments of
biologicals, plant nutrition and Plant Growth Regulators (PGR). Agrinova's
Agrinova New
product portfolio targets the horticulture market, complementing the Company's
Zealand Equity Acquisition
focus in New Zealand on row crops and fodder markets. Its expertise in
Limited
biologicals plant nutrition and PGR is in line with Company's aim to increase its
activities in the emerging market of biological products, increasing its offering
that supports sustainable food production.
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 4,192
million, a decrease of 15% (7% decrease in volume and 7% decrease in prices), driven by high channel inventory and
channel destocking in light of high interest rates creating last-minute purchase patterns, as well as pressure on market
prices. Solutions made a net loss of USD 242 million in the full year period. 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 5.1% in 2023, based on preliminary estimation made
by AgBio Investor regarding total sales in the agrochemical industry, and 6.5% in 2022.
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
39
ADAMA Ltd.
Annual Report 2023
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
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. The cost environment further
improved in 2023 as active ingredient prices in China continued to decline all through 2023 reaching low 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
40
ADAMA Ltd.
Annual Report 2023
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 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 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. 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
41
ADAMA Ltd.
Annual Report 2023
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 meaningful additional benefits 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
Chile, France, Greece, Paraguay, Peru, Romania, New Zealand, China and the US. 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 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. 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.
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(III) 2024 Business plan
In 2024, the Company anticipates a maintained depressed environment in global economic growth due to the high-
interest environment, which will lead to a cautious crop protection channel purchasing behavior, with no sharp inventory
restocking. Despite this, crop protection consumption at the farmer level is expected to remain healthy, supported by
high crop area and reasonable farmer margins. The prices of AI from China are expected to remain low due to over-
capacity in China, however, the eventual increase in volumes may outpace the pricing pressure, leading to somewhat
moderate growth in the market.
Overall, the Group is expecting to see moderate revenue growth driven by volume growth and the continued launch
of new products. However, the extent to which this will materialize will be determined by its ability to execute on its plans,
as well as other external impacts such as weather conditions, competition in the market and other unforeseeable
dynamics.
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 2024, 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, and reaching high utilization
rate, 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 and related parties, 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.
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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
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
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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
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
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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
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
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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.
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
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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
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
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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
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. In addition, war, regional conflicts, acts of terror and/or governmental instability around the
world may negatively impact the Company's operations. This may result, among others, in the suspension of operations
or the shutdown of affected facilities, hence causing production and distribution delays, loss of property, injury to employees,
and increased insurance premiums.
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
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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
position, results and cash flows.
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, bank credit and credit from related parties). 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
50
ADAMA Ltd.
Annual Report 2023
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.
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 Online Institutional Institutional Investors Introduction on 2022 Q4 Record of the
22nd, 2023 Applicable Platform Investors and Securities Firms, and FY performance as Communications
such as CCB Life Asset well as the differentiated between the
Management, China sales strategy around the Company and the
Life Asset Management world. The corresponding Investors (No. 2023-
Company Limited, presentations was 01) was published
Guotai Fund published on the website by the Company on
Management Co., Ltd., of the Company (IR page March 24th, 2023 at
Xinyuan Asset on www.adama.com). www.cninfo.com.cn.
Management, JYAH
Asset Management Co.,
Ltd., Zhonggeng Fund
Management Co., Ltd.,
Foresight Fund
Management Co., Ltd.,
CITIC Pru-fund
Management Co., Ltd.,
China Universal Asset
Management Co., Ltd.
and Southern Asset
Management Co., Ltd.,
etc.
March Not Online Institutional The performance Introduction on 2022 Q4 Record of the
23rd, 2023 Applicable Platform and presentation was a live and FY performance of Communications
individual webcast for all the Company as well as between the
investors investors. its differentiated sales Company and the
strategy around the Investors (No. 2023-
world. The corresponding 02) was published
presentations was by the Company on
published on the website March 27th, 2023 at
of the Company (IR page www.cninfo.com.cn.
on www.adama.com).
April 25th, Not Online Institutional Dacheng Fund Introduction on 2023 Q1 Record of the
2023 Applicable Platform Investors Management Co., Ltd, performance. The Communications
Guangfa Fund corresponding between the
51
ADAMA Ltd.
Annual Report 2023
Reception Type of
Date Place Name of the Visitor About Index
Mode Visitor
Management Co., Ltd, presentation was Company and the
CPIC Fund published on the website Investors (No. 2023-
Management Co., Ltd, of the Company (IR page 03) was published
Guotai Fund on www.adama.com). by the Company on
Management Co., Ltd, April 27th, 2023 at
Focus Bridge Fund www.cninfo.com.cn.
Management Co., Ltd,
BOCOM Schroder Fund
Management Co., Ltd,
AXA SPDB Investment
Managers, CCB Life
Asset Management Co.,
Ltd, CPIC and dozens
of other Institutional
Investors and Securities
Firms
August Not Online Institutional The performance Introduction on 2023 Q2 Record of the
31st, 2023 Applicable Platform and presentation was a live Communications
and Half-year perfor-
individual webcast for all between the
investors investors. mance as well as the Company and the
global operation progress Investors (No. 2023-
and strategies of the 04) was published
by the Company on
Company.
September 4th,
Corresponding 2023 at
presentation was www.cninfo.com.cn
published on the website
of the Company (IR page
on www.adama.com).
November Not Online Institutional The performance Introduction on 2023 Q3 Record of the
1st, 2023 Applicable Platform and presentation was a live and 9M performance. Communications
individual webcast for all Corresponding between the
investors investors. presentation was Company and the
published on the website Investors (No. 2023-
of the Company (IR page 05) was published
on www.adama.com). by the Company on
November 2nd,
2023 at
www.cninfo.com.cn.
XIII. Implementation of Action Plan on Enhancing Quality Returns
Has the Company disclosed Action Plan on Enhancing Quality Returns
□Yes √ No
52
ADAMA Ltd.
Annual Report 2023
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 three
interim shareholders meeting, during which 14 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 12 board meetings during which 37
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 9 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
53
ADAMA Ltd.
Annual Report 2023
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.
54
ADAMA Ltd.
Annual Report 2023
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 2022 Annual
2022 Annual Annual General Meeting
Shareholders Shareholders 80.31% April 12, 2023 April 13, 2023 (Announcement Number:
Meeting Meeting 2023-18).
Disclosed at the website
CNINFO www.cninfo.com.cn
Announcement on the
Resolutions of the 1st Interim
1st Interim Interim Shareholders Meeting in 2023
September 15, September 16,
Shareholders Shareholders 3.07% (Announcement Number:
2023 2023
Meeting in 2023 Meeting 2023-32).
Disclosed at the website
CNINFO www.cninfo.com.cn
Announcement on the
Resolutions of the 2nd Interim
2nd Interim Interim Shareholders Meeting in 2023
December 1, December 2,
Shareholders Shareholders 80.11% (Announcement Number:
2023 2023
Meeting in 2023 Meeting 2023-39).
Disclosed at the website
CNINFO www.cninfo.com.cn
55
ADAMA Ltd.
Annual Report 2023
Proportion of
Disclosure
Session Type investors' Convening date Resolution
date
participation
Announcement on the
Resolutions of the 3rd Interim
3rd Interim Interim Shareholders Meeting in 2023
December 25, December 26,
Shareholders Shareholders 79.97% (Announcement Number:
2023 2023
Meeting in 2023 Meeting 2023-45).
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
V. Directors, Members of the Supervisory Board, Senior Management Staff &
Employees
1. Basic Information
56
ADAMA Ltd. Annual Report 2023
Shares Amount of Amount of Other
Ending Shares held
held at shares shares changes Reasons for the
Office Beginning date date of at the end of
Name Position Gender Age the year- increased at decreased at increase/ Shareholding
Status of office term office the Reporting
begin the Reporting the Reporting decrease Changes
term Period (share)
(share) Period (share) Period (share) (share)
Elected as the
director in Dec 1,
Chairman 2023 and
Qin Hengde In Office Male 54 0 0 0 0 0 N/A
of the BOD Chairman of the
BOD in Dec 18,
2023
Erik Fyrwald Director In Office Male 65 April 9, 2020 0 0 0 0 0 N/A
An Liru Director In Office Male 54 Apr 29, 2015 0 0 0 0 0 N/A
Independent Nov 16,
Ge Ming In Office Male 72 0 0 0 0 0 N/A
Director 2020
Yang Independent
In Office Male 54 Dec 25, 2023 0 0 0 0 0 N/A
Guangfu Director
Steve President &
In Office Male 58 May 1, 2023 0 0 0 0 0 N/A
Hawkins CEO
Chief
Efrat Nagar Financial In Office Female 50 Feb 16, 2023 0 0 0 0 0 N/A
Officer
Chairman of
Jiang the
In Office Male 49 Jan 6, 2013 6,000 0 0 0 6,000 N/A
Chenggang Supervisory
Board
Member of the
Liu Jianhua Supervisory In Office Male 45 May 21, 2021 0 0 0 0 0 N/A
Board
Member of the
Yuan Yuan Supervisory In Office Male 43 May 21, 2021 0 0 0 0 0 N/A
Board
Secretary of Nov 27,
Guo Zhi In Office Male 46 0 0 0 0 0 N/A
the BOD 2020
Chief
Shahar Feb 15,
Financial Demission Male 59 May 1, 2022 0 0 0 0 0 N/A
Florentz 2023
Officer
57
ADAMA Ltd. Annual Report 2023
Shares Amount of Amount of Other
Ending Shares held
held at shares shares changes Reasons for the
Office Beginning date date of at the end of
Name Position Gender Age the year- increased at decreased at increase/ Shareholding
Status of office term office the Reporting
begin the Reporting the Reporting decrease Changes
term Period (share)
(share) Period (share) Period (share) (share)
Michal General Legal Jan 1,
Demission Female 65 Sep 29, 2017 0 0 0 0 0 N/A
Arlosoroff Counsel 2023
Ignacio President & May 1,
Demission Male 64 March 1, 2020 0 0 0 0 0 N/A
Dominguez CEO 2023
Chen Nov 30,
Director Demission Male 56 Sep 29, 2017 0 0 0 0 0 N/A
Lichtenstein 2023
Independent Dec 25,
Xi Zhen Demission Male 60 Dec 25, 2017 0 0 0 0 0 N/A
Director 2023
Total -- -- -- -- -- 6,000 0 0 0 6,000 --
58
ADAMA Ltd.
Annual Report 2023
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. Mr. Shahar Florentz resigned as the Chief Financial Officer, effective from February 15, 2023, due to personal reasons.
3. Mr. Ignacio Dominguez resigned as the President and CEO (legal representative of the Company) due to resignation
from the Company, effective from May 1, 2023.
4. Mr. Chen Lichtenstein resigned as the director in the Company due to his resignation from Syngenta Group, effective
from November 30, 2023.
5. Mr. Xi Zhen resigned from his position as an independent director in the Company due to his consecutive tenure as the
independent director exceeding six years, effective from December 25, 2023.
VII. Particulars regarding changes of Directors, Supervisors and Senior Executives
√ Applicable □ Not applicable
Name Position Type Date Reason
Michal
General Legal Counsel Left the position Jan 1, 2023 Retirement
Arlosoroff
Shahar
Chief Financial Officer Left the position Feb 15, 2023 Resignation for personal reasons
Florentz
Efrat Nagar Chief Financial Officer Accepted the position Feb 16, 2023 --
President and CEO
Ignacio
(legal representative of Left the position May 1, 2023 Resignation from the Company
Dominguez
the Company)
President and CEO
Steve Hawkins (legal representative of Accepted the position May 1, 2023 -
the Company)
Chen November 30,
Director Left the position Resignation from Syngenta Group
Lichtenstein 2023
December 25, Consecutive tenure as the
Xi Zhen Independent Director Left the position
2023 independent director for six years
Change of the December 18, Retire as the CEO of Syngenta
Erik Fyrwald Chairman of the BOD
position 2023 Group
December 1,
Qin Hengde Director Elected --
2023
December 18,
Qin Hengde Chairman of the BOD Elected --
2023
59
ADAMA Ltd.
Annual Report 2023
December 25,
Yang Guangfu Independent Director Elected --
2023
2. Resumes of important personnel
Professional background, main working experience and main responsibilities of current directors, supervisors and senior
management staff
Mr. Qin Hengde, serves as the Chairman of the Board of Directors of the Company. He holds a master's degree, senior
accountant, is the Chief Financial Officer of Syngenta Group Co., Ltd., the Chairman of Winall Hi-tech Seed Co.,Ltd., the
Chairman of Zhenda Xianjing (Shanghai) Science and Technology Development Co., Ltd. He joined in work in August 1991
and served as deputy chief accountant of Hubei Hongqi Cable Factory, chief accountant of SDIC YuanYi Industry Co.,Ltd.,
as well as deputy general manager of investment management department of D'Long International Strategic Investment
Co.,Ltd. Mr. Qin Hengde joined Sinochem in July 2004 and served as General Manager of Business Development
Department, Financial Controller, Deputy General Manager, Executive Deputy General Manager, General Manager and
the Party Secretary of Sinochem International Corporation. He previously served as the Party Secretary and President of
Agricultural Division of Sinochem Corporation, Vice Chairman of Qinghai Salt Lake Industry Co., Ltd., the Party Secretary
and Executive Director of China National Seed Group Co., Ltd, Party Secretary and President of Syngenta Group China,
Chairman and General Manager of Syngenta Group Modern Agricultural Technology Co., Ltd, the Vice President and Chief
Human Resources Officer of Syngenta Group, Party Secretary, General Manager and Executive Director of Sinofert
Holdings Limited, and General Manager and Executive Director of Sinofert Company Limited as well as Chairman of
Jiangsu Yangnong Chemical Co., Ltd..
Mr. Erik Fyrwald, American, serves as a Director of the Company. He is currently a Director of Syngenta Group, 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 Eli Lilly & Company as well as
President and Director of a listed company International Flavors & Fragrances. Previously served as the Chairman of the
Board of Directors of the Company, the CEO of Syngenta Group, and the CEO a of Syngenta A.G,. He also Previously
served as President and CEO 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. 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 Executive
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
60
ADAMA Ltd.
Annual Report 2023
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, China Tourism
Group Duty Free Corporation Limited, GAC Aion New Energy Automobile Co., Ltd. and Apollobio Corp. He currently also
serves on the supervisory boards of the Bank of Shanghai, Tencent Foundation as well as Taikang Insurance Group Inc.,
and serves as the executive director and general manager of Beijing Huaming Fulong Accounting Consulting Co., Ltd.
Mr. Yang Guangfu,
He holds a title of PhD in pesticide science. He is the recipient of National Outstanding Youth Science Fund, and he is also
honored as a leading talent in science and technology innovation of the “Ten Thousand Talents Plan” of the Organization
Department of the Central Commitment of the CPC, the Innovation Team Leader of the Ministry of Education, the National
Model Teacher and one of the National Outstanding Scientific and Technological Professionals, etc. Starting his career life
in July 1997, Yang has successively served as lecturer, associate professor and professor in the Institute of Pesticide
Chemistry of Central China Normal University. He also held positions including dean and professor for the School of
Chemistry as well as the assistant to the President of the University, etc. He is currently a professor, doctoral supervisor,
deputy director of the Academic Committee of the University, director of the National Key Laboratory of Green Pesticide
(based at the University), director of International Joint Research Center for Intelligent Biosensor Technology and Health,
and director of the Pesticide Engineering Research Centre of Hubei Province. Additional academic appointments of
Professor Yang include Member of the 5th and 6th Chemistry and Chemical Engineering Department of the Science and
Technology Committee of the Ministry of Education, Member of the 13th Evaluation Team for Chemistry of the National
Natural Science Foundation of China, Member of the Pesticide Industry Development Guidance Expert Group of the
Ministry of Agriculture and Rural Development, Director of the Chinese Chemical Society, Director of the Chinese Plant
Protection Society, Deputy Director of the Agricultural Chemistry Committee of the Chinese Chemical Society, Member of
the Chemical Biology Committee of the Chinese Chemical Society, Member of the Pesticide Committee of the Chinese
Society of Chemical Engineering, Vice President of the Hubei Chemical Engineering Society, Vice President of the Hubei
Plant Protection Society, and so on..
Mr. Steve Hawkins, Canadian, 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. Holds a Diploma in
Agriculture Engineering and an Executive MBA in Food and Agribusiness, both from the Ontario Agricultural College of the
University of Guelph, and has a Bachelor’s Degree in Administrative Studies from York University. He previously served as
ADAMA’s SVP Americas, and prior to that served as Regional Director EAME for Syngenta Crop Protection A.G.
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
(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, Deputy Secretary of the Party
Committee of Jingzhou Site, the Chairman of the Labor Union and Director of the Discipline Inspection Commission of
Jingzhou Site. He acted as the Chairman of the Labor Union, Supervisor, Deputy Director of the Office and Deputy
Secretary of the Discipline Inspection Commission of the Company from Jun. 2012 to Dec. 2012.
61
ADAMA Ltd.
Annual Report 2023
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, Director of the Discipline Inspection Commission of the
Company 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 CFO December 2023 -- Yes
Qin Hengde Vice President,
Syngenta Group January 2023 December 2023 Yes
CHRO
Syngenta Group CEO June 2016 December 2023 Yes
Yes (starting from
Erik Syngenta Group Director June 2021 --
January 2024)
Fyrwald
CEO and Executive
Syngenta AG June 2016 December 2023 Yes
Director
Non-Executive
Syngenta AG December 2023 -- No
Director
Explanations
about
Positions in N/A
Shareholder
Units
Positions in other units
√ Applicable □ Not applicable
62
ADAMA Ltd.
Annual Report 2023
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
Chairman of January 2019 No
Winall Hi-tech Seed Co.,Ltd. --
Directors
Zhenda Xianjing (Shanghai) January 2022 No
Chairman of
Science and Technology --
Directors
Development Co., Ltd.
Chairman of August, 2022 Yes
Qin Hengde Syngenta Group Modern
Directors, General January 2023
Agricultural Technology Co., Ltd.
Manager
Executive Director, December No
Sinochem Fertilizer Co., Ltd. January, 2023
General Manager 2016
Jiangsu Yangnong Chemical Chairman of June 2022 No
March 2023
Co., Ltd. Directors
International Flavors & President and 2024 Yes
Erik Fyrwald -
Fragrances Director
Director of the No
CropLife International -
Board 2016
Swiss-American Chamber of Director of the 2016 No
-
Commerce Board
Director of the 2018 Yes
Bunge Limited 2023
Board
Director of the 2006 Yes
Eli Lilly & Co. -
Board
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.
Syngenta Group Modern
An Liru Vice President August 2022 - No
Agricultural Technology Co., Ltd.
EVP, Chief -
Solutions February 2023 Yes
Financial Officer
Adama Makhteshim Ltd. Director February 2023 - No
Efrat Nagar Adama Agan Ltd. Director February 2023 - No
Lycored Ltd. Director January 2024 - No
Agan Aroma and Fine Chemicals Director - No
May 2022
Ltd.
China Tourism Group Duty Free Independent
Ge Ming August 2022 -- Yes
Corporation Limited Director
Independent
Ge Ming AsiaInfo December 2018 -- Yes
Director
GAC Aion New Energy Independent September
Ge Ming -- Yes
Automobile Co., Ltd. Director 2022
Independent
Ge Ming Apollobio Corp. August 2021 -- Yes
Director
Ge Ming Bank of Shanghai Supervisor June 2017 -- Yes
Ge Ming Taikang Insurance Group Inc. Supervisor February 2023 -- Yes
Ge Ming Tencent Foundation Supervisor Jan 2019 -- No
63
ADAMA Ltd.
Annual Report 2023
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
Executive Director
Beijing Huaming Fulong
Ge Ming and General December 2001 -- No
Accounting Consulting Co., Ltd.
Manager
Professor, Doctoral
Supervisor, Deputy
Director of the September
Yang Guangfu Central China Normal University - Yes
Academic 2001
Committee of the
University
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.
Liu Jianhua ADAMA Huifeng (Jiangsu) Ltd. Director March 2024 - No
ADAMA Huifeng (Shanghai) -
Guo Zhi Agricultural Technology Director June 2021 No
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
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 25 th 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
64
ADAMA Ltd.
Annual Report 2023
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 4 th 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
Qin Hengde Chairman of the BOD Male 54 Current Yes
Erik Fyrwald Director Male 65 Current Yes
An Liru Director Male 54 Current No
Ge Ming Independent Director Male 72 Current No
Yang Guangfu Independent Director Male 54 Current No
Steve
President & CEO Male 58 Current No
Hawkins
Efrat Nagar CFO Female 49 Current No
Jiang Chairman of the
Male 49 Current No
Chenggang Supervisory Board
Member of the
Liu Jianhua Male 45 Current No
Supervisory Board
Member of the
Yuan Yuan Female 43 Current No
Supervisory Board
Guo Zhi Secretary of the BOD Male 46 Current No
Shahar
Chief Financial Officer Male 59 Former No
Florentz
Michal
General Legal Counsel Female 65 Former No
Arlosoroff
Ignacio
President & CEO Male 64 Former No
Dominguez
Chen
Director Male 56 Former Yes
Lichtenstein
Xi Zhen Independent Director Male 60 Former No
Total 3,273.7
Particulars regarding other information
□ Applicable √ Not applicable
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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 18th Meeting
The following resolutions were deliberated and adopted:
of February 15, February 16, 1. Proposal on the Matters Relating to the Company’s Chief
the 9th Session of
2023 2023 Financial Officer
the Board of
2. Proposal on Credit Facilities from the Related Party
Directors
The following resolutions were deliberated and adopted:
1. Proposal on the 2022 Annual Report and its Abstract
2. Proposal on the 2022 Financial Statements
3. Proposal on the Pre-Plan of the 2022 Dividend Distribution
4. Proposal on the Self-Assessment report on the 2022 Internal
Control of the Company
5. Proposal on the 2022 Working Report of the Board of
Directors
6. Proposal on the 2022 Risk Appraisal Report of Sinochem
Finance Co., Ltd.
7. Proposal on the Remuneration of Senior Executives
the 19th Meeting 8. Proposal on the Engagement with an Audit Firm for the Audit
of of the Financial Statements and Internal Control of the
the 9th Session of March 19, 2023 March 21, 2023 Company for 2023
the Board of 9. Proposal on the Expected Related Party Transactions in the
Directors Ordinary Course of Business in 2023
10. Proposal on Revisions to the Articles of Association of the
Company and relevant Rules of Procedures
11. Proposal on Revisions to the Management Measures for the
Delegation of Certain Powers of the Board of Directors to the
Chief Executive Officer of ADAMA Ltd.
12. Proposal on the Company’s Work Plan on Supporting
External Directors to Perform Duties
13. Proposal on the Work Rules of the President and Chief
Executive Officer of ADAMA Ltd.
After the review of the above proposals, 2022 Working Reports
of the Independent Directors were presented to the meeting.
the 20th Meeting
of the 9th Session The following resolution was deliberated and adopted:
March 20, 2023 March 21, 2023
of the Board of 1. Proposal on Calling for the 2022 Annual General Meeting
Directors
the 21st Meeting of
The following resolution was deliberated and adopted:
the 9th Session of
April 2, 2023 April 4, 2023 1. Proposal on Change of the Senior Executive of the Company
the Board of
Directors
The following resolutions were deliberated and adopted:
the 22nd Meeting 1. Proposal on the Q1 2023 Report
of the 9th Session 2. Proposal on Providing Guarantees in favor of the Company’s
April 24, 2023 April 25, 2023
of the Board of Wholly-owned Subsidiary
Directors 3. Proposal on Bank Loans for the Working Capital of Jingzhou
Site
the 23rd Meeting The following resolutions were deliberated and adopted:
of the 9th Session 1. Proposal on ADAMA’s 2022 Environmental, Social, and
July 25, 2023 July 26, 2023
of the Board of Governance (ESG) Report
Directors
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ADAMA Ltd.
Annual Report 2023
Session Convening date Disclosure date Resolutions of the Meeting
The following resolutions were deliberated and adopted:
1. Proposal on the 2023 Semi-Annual Report and its Abstract
the 24th Meeting 2. Proposal on the Risk Appraisal Report of Sinochem Finance
of the 9th Session Co., Ltd.
August 28, 2023 August 31, 2023
of the Board of 3. Proposal on Bank Loans
Directors 4. Proposal on Credit Facility from the Related Party
5. Proposal on Calling for the 1st Interim Shareholders Meeting
in 2023
the 25th Meeting
The following resolution was deliberated and adopted:
of the 9th Session
October 29, 2023 -- 1. Proposal on the Q3 2023 Report
of the Board of
Directors
The following resolution was deliberated and adopted:
the 26th Meeting
November 15, November 16, 1. Proposal on the Nomination of a Non-Independent Director
of the 9th Session
of the 9th Session of the Board of Directors
of the Board of 2023 2023
2. Proposal on Calling for the 2nd Interim Shareholders Meeting
Directors
in 2023
The following resolution was deliberated and adopted:
1. Proposal on Revisions to the Articles of Association of the
the 27th Meeting
December 8, December 9, Company
of the 9th Session
2. Proposal on the Nomination of an Independent Director of
of the Board of 2023 2023
the 9th Session of the Board of Directors
Directors
3. Proposal on Calling for the 3rd Interim Shareholders Meeting
in 2023
The following resolution was deliberated and adopted:
the 28th Meeting
December 18, December 20, 1. Proposal on the 2024 Work Plan
of the 9th Session
2. Proposal on Change of the Chairman of the Board and
of the Board of 2023 2023
Members of the Special Committees of the 9th Session of the
Directors
Board of Directors
The following resolution was deliberated and adopted:
1. Proposal on Salary Management Measures, External
Guarantee Management Rules, Liability Management
the 29th Meeting
December 29, December 30, Measures and External Donation Management Measures
of the 9th Session
2. Proposal on Revisions to the Management Policy of Investor
of the Board of 2023 2023
Relations
Directors
3. Proposal on Signing of Supplemental Agreement to the
Entrusted Operation and Management Agreement on Anhui
Petro & Chemical
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 12 0 11 1 0 No 4
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ADAMA Ltd.
Annual Report 2023
Chen 9 0 0 No 2
9 0
Lichtenstein
An Liru 12 4 8 0 0 No 4
Ge Ming 12 0 12 0 0 No 4
Xi Zhen 11 0 11 0 0 No 4
Qin Hengde 3 0 3 0 0 No 1
Yang 1 0 0 No --
1 0
Guangfu
Explanation of failure to attend two consecutive board meetings in person
No such cases during the reporting period.
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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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
and Performance Objection
Committees Committees Meetings Date Meetings
Proposals of Duties Matters (if
Held
Made any)
Ge Ming February Proposal on Credit Approved -- --
Audit (Chairperson), 14, 2023 Facilities from the
6
Committee Yang Guangfu, Related Party
An Liru
March 15, 1. Proposal on the Approved -- --
2023 2022 Financial
Report
2. Proposal on the
Pre-Plan of the 2022
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
2023
4. Proposal on the
Expected Related
Party Transactions
in the Ordinary
Course of Business
in 2023
5. Proposal on
the Self-Assessment
Report on the 2022
Internal Control of
the Company
6. Proposal on
the 2022 Risk
Appraisal Report of
Sinochem Finance
Co., Ltd.
7. Proposal on the
2022 Internal Audit
Working Report and
the 2023 Internal
Audit Work Plan
8. Proposal on the
2022 Inspection
Report on Major
Issues.
April 23, 1. Proposal on the Approved -- --
2023 Q1 2022 Report
2. Proposal on the
Q1 Internal Audit
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ADAMA Ltd.
Annual Report 2023
Important Specifics
Number
Comments Other of
Name of the Member of of Convening Themes of
and Performance Objection
Committees Committees Meetings Date Meetings
Proposals of Duties Matters (if
Held
Made any)
Working Report
August 22, 1. Proposal on the Approved -- --
2023 2023 Semi-Annual
Report and its
Abstract
2. Proposal on
the Risk Appraisal
Report of 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 2023
4. Proposal on the
2023 Semi-annual
Inspection Report on
Major Issues
5. Proposal on
Credit Facility from
the Related Party
October 26, 1. Proposal on the Approved -- --
2023 Q3 2023 Report
2. Proposal on
the Q3 Internal Audit
Working Report
December 1. Proposal on Approved -- --
28, 2023 Signing of
Supplemental
Agreement to the
Entrusted Operation
and Management
Agreement on Anhui
Petro & Chemical
February 1. Proposal on the Approved -- --
14, 2023 Remuneration and
resignation
arrangement of the
Chief Financial
Yang Guangfu Officers
Remuneration
(Chairperson), March 15, 1. Proposal on Approved -- --
and Appraisal 3
Ge Ming, An 2023 the Remuneration of
Committee
Liru Senior Executives
March 30, 1. Proposal on Approved -- --
2023 the Remuneration
and Separation
arrangement of the
President and CEO
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ADAMA Ltd.
Annual Report 2023
Important Specifics
Number
Comments Other of
Name of the Member of of Convening Themes of
and Performance Objection
Committees Committees Meetings Date Meetings
Proposals of Duties Matters (if
Held
Made any)
February 1. Proposal on Approved -- --
14, 2023 the Appointment of
the Company’s Chief
Financial Officer
March 30, 1. Proposal on Approved -- --
2023 Change of the
Senior Executive of
the Company
Yang Guangfu November 1. Proposal on the Approved -- --
Nomination (Chairperson), 14, 2023 Nomination of a
4
Committee Ge Ming, Non-Independent
An Liru Director of the 9th
Session of the Board
of Directors
December 1. Proposal on the Approved -- --
7, 2023 Nomination of an
Independent
Director of the 9th
Session of the Board
of Directors
Qin Hengde -- -- -- -- --
(Chairperson),
Erik Fyrwald
Strategy Chen
0
Committee Lichtenstein, An
Liru,
Ge Ming
Yang Guangfu
Note: 1. On December 1, 2023, Mr. Qin Hengde replaced Mr. Chen Lichtenstein as a member of the Strategy Committee,
and on December 18, 2023, he acted as the chairperson of the Strategy Committee.
2. On December 25, 2023, Mr. Yang Guangfu replaced Mr. Xi Zhen as the chairperson of the Nomination Committee, the
chairperson of the Remuneration and Appraisal Committee, the member of the Audit Committee as well as the member of
the Strategy Committee.
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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Annual Report 2023
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) 713
The number of on-duty employees in main subsidiary
8,159
companies (person)
The total number of on-duty employees of the Group (person) 8,872
The total number of employees of the Group who received
8,872
salaries in the period (person)
The number of retired employees for whom ADAMA Ltd. and
3,090
main subsidiary companies need to pay retirement expense.
Professional Composition
Category Number
Production personnel 4,911
Sales personnel 2,243
Technicians 668
Financial personnel 495
Administrative personnel* 555
Total 8,872
Educational Background
Category Number
Doctor 9
Master 171
Bachelor 804
College 770
Others 1,610
Total 3,364
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 5,508 overseas employees.
*Administrative personnel include employees of all the functional departments.
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Annual Report 2023
2. Employee’s remuneration policy
The Company's remuneration policy in 2023 is the same as in 2022. 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) 606,936
Total remuneration paid for service outsourcing (RMB) 31,815,344
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 2022 Annual General Meeting
which was held on April 12, 2023 approved the dividend distribution plan for the year 2022. The Company accordingly
published the Announcement of Dividend Distribution for the Year 2022 on May 31, 2023 (announcement No. 2023-22).
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:
Specific reasons should be disclosed and next steps
to be taken to enhance investors’ returns If the Not Applicable
Company has not made cash dividends
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
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ADAMA Ltd.
Annual Report 2023
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 retained earnings for profit distribution
of the common shares held by the shareholders of the Company (without subsidiaries) were 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 does not plan to distribute cash or share dividends for the year, and does not plan to transfer capital
reserve to equity capital.
XI. 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
adopted an incentive plan linked to the increase in the Syngenta Group EBITDA.
XII. 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 support the
smooth operations of the Company.
(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 operational risks would be reduced which could lead to a better operation and compliant environment.
(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
74
ADAMA Ltd.
Annual Report 2023
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 "2023 Annual Internal Control Self-Assessment Report" published by the Company on
www.cninfo.com.cn on March 27, 2024.
2. Details of the Material deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management and Control of the Company’s Subsidiaries during the Reporting
Period
Challenges Measures
Subsequent
Name of the Integration Encountered Taken to Settlement
Integration Plan Settlement
Company Progress during Resolve the Progress
Plan
Integration Issue
Integrated finance and IT
function immediately after Finance and IT
Agrinova
Closing, further have already No major
New Zealand Not applicable Not applicable Not applicable
integration of commercial fully integrated challenges
Limited
and other supporting with ADAMA.
functions after 3 years.
Note: The Company should disclose its management and control over subsidiaries during the reporting period. Where a
new subsidiary is added as a result of any acquisition during the reporting period, it should provide a detailed description
of the integration plan in terms of assets, personnel, finances, organizations, business, etc., the progress of the integration,
challenges encountered, measures taken to resolve them, the progress of the resolution, and the plan for subsequent
resolution.
XIV. Self-assessment Report or Audit Report on Internal Control
1. Self-assessment report on internal control
Date of disclosure of self-assessment
March 27, 2024
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
70.3%
Assets in the Consolidated Statements of
the Company
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ADAMA Ltd.
Annual Report 2023
Rate of total Operating Income of Units
within the Assessment Scope Compared
70.0%
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 the external 1) Fraud committed in the Company by any of its
auditor, on the Company’s financial statements; or directors, supervisors and senior management
resulting in a material correction of the Company’s personnel;
publicly 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 the external auditor, on the Company’s the Company's business;
financial statements; or resulting in an adverse 3) Material design deficiencies in the Company's
opinion or disclaimer of opinion, by the external relevant management system;
auditor, on the Company’s material subsidiaries’ 4) The Company materially violates the decision-
(i.e. Solutions) financial statements; or resulting in making process thereby causing a material
a significant correction of the Company’s material negative impact on the Company's business
subsidiaries’ (i.e. Solutions) publicly announced (generally related to matters that need to be
financial statements. In addition, where no internal approved by the shareholders meeting or the
control or no relevant compensation control is board of directors).
established or implemented for the accounting 5) Material impact to the Company’s reputation.
treatment for 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 the head of the Company;
external auditor, on the Company’s financial 2) Significant fraud committed by a head of any of
Qualitative statements; or resulting in a qualified opinion, or the Company’s material subsidiaries;
criteria unqualified opinion with an explanatory paragraph, 3) The Company violates significant laws and
by the external auditor, on the Company’s regulations, resulting in significant fines as well as
subsidiaries’ financial 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-
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;
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ADAMA Ltd.
Annual Report 2023
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
material
deficiencies in
internal control 0
not related to
financial
reporting
Number of
significant
deficiencies in
0
internal control
over financial
reporting
Number of 0
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ADAMA Ltd.
Annual Report 2023
significant
deficiencies in
internal control
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 27, 2024
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
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XV. 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 2023, the Company carried out the following accordingly:
Upon consideration and approval at the 19th meeting of the Ninth Session of the Board of Directors held on March
19th, 2023, the Company amended the Articles of Association and the relevant Rules of Procedure (which were later
adopted at the 2022 Annual General Meeting held on 12 April), the Management Measures for the Delegation of Certain
Powers of the Board of Directors to the Chief Executive Officer, and formulated the Work Plan on Supporting External
Directors to Perform Duties and the Work Rules of the President and Chief Executive Officer. It continued to promote
the implementation of relevant requirements for deepening the reform of state-owned enterprises, improve system
development, enhance the efficiency of decision-making and strengthen the services and support for independent
directors to perform their duties.
As being considered and approved by the 27th meeting of the Ninth Session of the Board of Directors held on December
8th, 2023 and the 3rd Extraordinary General Meeting of 2023 held on December 25th, 2023, the Company once again
amended its Articles of Association, which included new provisions reflecting the Measures for the Administration of
Independent Directors issued by CSRC in August 2023.
As being considered and approved at the 29th meeting of the Ninth Session of the Board of Directors held on December
29th, 2023, the Company revised the Management Policy of Investor Relations, and formulated the Remuneration
Management Measures, External Guarantee Management Measures, Liability Management Measures and External
Donation Management Measures to institutionalize the duties and authorities of the Board of Directors and to reach
requirements of SASAC for state-owned held listed companies.
The Company ensures that its directors and supervisors participate in relevant trainings organized by the CSRC's
authorized agencies and the Stock Exchange, which include annual report training and special trainings on the reform
of the independent director system, the quality of listed companies and corporate governance. As some directors and
most of its senior management members are foreigners, the Company regularly compiles newsletters containing the
contents of trainings, important updates on laws and regulations of China's capital market, and regulatory cases in both
English and Chinese versions. The newsletters are sent to the directors, supervisors, and senior management to
enhance their understanding of the policy environment in China and facilitate the implementation of relevant
requirements in the Company's global business.
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ADAMA Ltd. Annual Report 2023
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 2023
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 for Industrial Enterprises Noise at Boundary GB12348-2008;
11) Standard for Pollution Control of Storage and Landfill of General Industrial Solid Waste GB18599-2020;
12) Standard for Pollution Control of Hazardous Waste Storage GB18597-2023.
Environmental Protection Administrative Permits
1. EIA Approval
During the reporting period, the EIA approval obtained by the Company is “Approval Opinions on the Environmental Impact Reporting Form for the Overall Relocation and
Upgrading Project of Insecticides and the Recycled Solvent Purification Project of ADAMA Ltd.”.
2. Waste Discharge Permits
The Company made a change to its discharge permit on 7 November 2023 and therefore, the discharge permit for 2023 is in force. ADAMA Anpon, one of the Company’s
subsidiaries had its discharge permit for its plant changed on 7 September 2023 and reapplied for a discharge permit for its Maidao plant on 4 December 2023. Therefore, both
discharge permits in 2023 are within the validity period. The discharge permit of the Company's subsidiary, ADAMA Huifeng, was changed on 7 December 2023, and it is also
within the validity period for the year.
Sector Discharge/Emission Standards and Pollutant Discharge and Emission during Operational Activities
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
Waste For the new site:
water Discharge Standards
ADAMA General for Pollutants from
The new site:
Ltd. COD Continuous 1 Discharge Urban Sewage 65.4231 173.2104 None
16.7425mg/L
Port Treatment Plant (GB
18918 – 2002), COD
<50mg/L
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
Waste For the new site:
water Discharge Standards
for Pollutants from
General
Ammonia The new site: Urban Sewage
Continuous 1 Discharge 1.1591 17.321 None
nitrogen 0.2966mg/L Treatment Plant (GB
Port
18918 – 2002),
ammonia
nitrogen<8mg/L;
Waste For the new site:
water Discharge Standards
for Pollutants from
General
Total The new site: 0.296 Urban Sewage
Continuous 1 Discharge 1.1568 1.722 None
Phosphorous mg/L. Treatment Plant (GB
Port
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,
Power plant: 12.253
which is NOx <
mg/m3
Power plant, 50mg/m3;
Hazardous waste
Hazardous (2) Hazardous waste
incinerator: 31.8375
waste incinerator: Table 3 in
NOx Continuous 4 mg/m3 33.5304 200.27 None
incinerator the "Standards for the
Acephate RTO:
and Control of Hazardous
6.3942mg/m3
RTO Waste Incineration
ww RTO: 2.5975
Pollution " (GB18484-
mg/m3
2020), which is NOx
<300mg/m3;
(3) RTO: Table 1 and 2
and specifically the air
pollutant emission
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
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 (1) The power plant
complies with the
ultra-low limit of the
standard range for
pollutant emission,
which is SO2 < 35
mg/m3;
(2) Hazardous waste
incinerator: Table 3 in
Power plant: 3.1408
the "Standards for the
mg/m3
Power plant, Control of Hazardous
Hazardous waste
Hazardous Waste Incineration
incinerator: 8.4692
waste Pollution " (GB18484-
SO2 Continuous 4 mg/m3 7.9219 110.48 None
incinerator 2020), which is SO2
Acephate RTO: 6.8752
and <100mg/m3;
mg/m3
RTO (3) RTO: Table 1 and 2
ww RTO: 1.6133
and specifically the air
mg/m3
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;
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
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
incinerator: Table 3 in
Power plant: 0.7353
the "Standards for the
mg/m3
Power plant, Control of Hazardous
Hazardous waste
Hazardous Waste Incineration
incinerator:
Fume and waste Pollution " (GB18484-
Continuous 4 3.3167mg/m3 9.5559 35.126 None
dust incinerator 2020), which is fume
Acephate RTO: 3.5275
and and dust <30 mg/m3;
mg/m3
RTO (3) RTO: Table 1 and 2
ww RTO: 7.8242
and specifically the air
mg/m3
pollutant 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, the
emission limits of air
Acephate RTO:
3 pollutants in Table 2 of
VOCs Continuous 1 RTO 25.5233 mg/m 3.3276 6.221 t/a None
the the Emission
Standards for Air
Pollutants of the
Pesticide
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
Manufacturing Industry
(GB 39727-2020),
which is VOCs
<100mg/m3
Waste Comprehensive
water Standard on
Maidao: 82.85mg/L
Discharge of Waste
Discharge Port at the
Water (GB8978-
General Old Plant of Anpon:
2002)，COD< 500 Maidao:197.718
COD Continuous 2 Discharge 76.13mg/L 87.88 None
mg/l; Maidao site: Anpon: 265.69
Port Discharge Port at the
industry park’s waste
North Plant of Anpon:
water discharge
32.15mg/L
agreement,
COD<500mg/L
Waste Water Quality
water Standard for Sewage
Maidao: 0.62mg/L; Discharged into Urban
ADAMA
Discharge Port at the Sewerage (GBT
Anpon
General Old Plant of Anpon: 31962-2015),
(Jiangsu) Ammonia Maidao: 4.385
Continuous 2 Discharge 4.05mg/L Ammonia Nitrogen 2.633 None
Co., Ltd. Nitrogen Anpon: 28.348
Port Discharge Port at the <45 mg/l; Maidao site:
North Plant of Anpon: industry park’s waste
1.92mg/L water discharge
agreement, Ammonia
Nitrogen <35 mg/l
Waste For Anpon: Water
water Maidao: 0.89mg/L; Quality Standard for
Discharge Port at the Sewage Discharged
General Old Plant of Anpon: into Urban Sewerage
Total Maidao: 0.426
Continuous 2 Discharge 0.29mg/L （GBT 31962-2015）, 0.39 None
Phosphorous Anpon: 20.273
Port Discharge Port at the total phosphorous < 8
North Plant of Anpon: mg/l;
1.34mg/L For Anpon’s branch
Maidao: Agreement on
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
Wastewater
Discharge, total
phosphorous < 3 mg/l;
Waste gas Emission
Standard of Air
DFTO
Pollutants for Pesticide Maidao: 3.986 None
NOx Continuous 1 Incinerator Maidao: 14.64mg/m3 0.1989
Industry GB 39727- Anpon: 181.516
Vent
2020NOx < 200
mg/m3
Waste gas Hazardous Waste
DFTO Incineration Pollution
Maidao: 1.943 None
SO2 Continuous 1 Incinerator Maidao: 1.39mg/m3 Control standards GB 0.0279
Anpon: 396.902
Vent 18484-2020SO2 < 100
mg/m3
Waste gas Emission
Standard of Air
Pymetrozine Maidao: 2.115
Particles Continuous 1 Anpon: 2.5 mg/m3 Pollutants for Pesticide 0.107 None
dryer tail gas Anpon: 67.515
Industry GB 39727-
2020
Waste gas Standards for the
Volatile Organic
17 in Anpon
Maidao: 2.21mg/m3; Compound Emission Maidao: 41.712
VOCs Continuous 22 Site and five 0.6186 None
Anpon:5.28mg/m3 of the Chemical Anpon: 47.313
in Maidao
Industry, DB 32/3151-
2016
Waste General
Standards of the
water COD Continuous 1 Discharge 152.97 mg/l 48.7942 247.6378 None
Industrial Park
ADAMA Port
Huifeng Waste General
Ammonia Standards of the
(Jiangsu) water Continuous 1 Discharge 3.26 mg/l 0.7242 19.3783 None
Nitrogen Industrial Park
Co., Ltd. Port
Waste General
Total Standards of the
water Continuous 1 Discharge 0.1315 0.9285 None
Phosphorous 0.45 mg/l Industrial Park
Port
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ADAMA Ltd. Annual Report 2023
Category Total
Main
of No. of Layout of amount Total amount
Company pollutants Way of Pollution standards Exceeding
Pollutants emission emission Concentration emitted/ Approved
name and special emission applied limit
points points Discharged (ton)
pollutants
(ton)
Waste General
Standards of the
water total nitrogen Continuous 1 Discharge 20.78 mg/l 6.3706 46.77204 None
Industrial Park
Port
Waste gas RTO and the Jiangsu
Discharge Comprehensive
NOx Continuous 6 Ports at 7.33 mg/m Standard on Air 7.4837 147.7072 None
Various Pollutants Emission
Workshops (DB32/4041-2021)
Waste gas RTO and the Jiangsu
Discharge Comprehensive
SO2 Continuous 6 Ports at 6.82 mg/m Standard on Air 4.4502 47.1958 None
Various Pollutants Emission
Workshops (DB32/4041-2021)
Waste gas RTO and the Jiangsu
Discharge Comprehensive
Particles Continuous 6 Ports at 2.22mg/m Standard on Air 1.4009 22.7146 None
Various Pollutants Emission
Workshops (DB32/4041-2021)
Waste gas RTO and the Jiangsu
Discharge Comprehensive
non-methane
Continuous 9 Ports at 11.69 mg/m Standard on Air 21.6505 62.92994 None
hydrocarbon
Various Pollutants Emission
Workshops (DB32/4041-2021)
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ADAMA Ltd Annual Report 2023
Treatment of Pollutants
(1) Development and Operation of Wastewater 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) Implementation of the Interim Measures on Environmental Information
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.
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ADAMA Ltd Annual Report 2023
In order to improve the environmental management, track the discharge of various pollutants, evaluate the impact on the
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 has 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
Wastewater: 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
Continuous auto monitoring: 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)
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 2023
Inputs in Environmental Protection and Treatment and Payment of Environmental Tax
Inputs in Environmental
Payment of Environmental
Company Name Protection and Treatment
Tax in 2023 (0,000RMB)
during 2023 (0,000RMB)
ADAMA Ltd. 5,650 34.2
Adama Anpon (Jiangsu) Ltd. 2,680 1.5
Adama Huifeng (Jiangsu) Ltd. 11,552 6.27
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
Occurrence of Environmental Accidents
During the reporting period, the Company and its subsidiaries didn’t have material environmental accidents.
II. Social Responsibilities
In ADAMA's 2022 Environmental, Social, and Corporate Governance (ESG) report, published July 2023, it set a target of
reducing scope 1 and 2 carbon emissions by 5% on average every year until 2030, in order to support the 1.5°C Paris
Agreement.
As of the end of 2023, ADAMA is in line with achieving this target.
Sustainability in Products:
In 2023 the first product based on Sesgama was launched. Sesgama is ADAMA's proprietary formulation
technology platform for high-load and other challenging formulations, enabling less use of co-formulants, transport and
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ADAMA Ltd Annual Report 2023
packaging materials per acre treated with a resulting improved product sustainability profile. The product launched was
the herbicide FullScript, launched in the US.
During 2023 ADAMA continued to register and launch products based on its proprietary Asorbital formulation tech-
nology platform a unique formulation that improves the leaf penetration and systemic movement of the Active Ingredient
in the plant, while minimizing environmental impact. This technology provides greater efficacy and sustainability and
can be used to reduce application rates.
Expanded use of containers with reduced environmental impact – Containers that have been redesigned to a
rectangular shape from a cylinder allow for product to be placed more densely on pallets and trucks, enabling a 45%
increase in product packed, reducing transportation needs and associated carbon emissions, as well as comprise 10%
less plastic. Following a successful launch in India, this design is expected to be launched in additional geographies
bringing a reduction of 17.2% in GHG emissions, eliminating the release of up to 340 metric tons of CO2e into the
atmosphere annually.
Sustainability in manufacturing:
Shift of Company vehicles to electrical – during 2023 52% of ADAMA's forklifts at its manufacturing sites in Israel
and 42% of its private cars in Israel transitioned to electrical. This trend will continue in 2024, aiming to double the
number of electrical forklifts and increase by 20% the number of electrical private cars. The electrical forklifts saved
160,000 liters of diesel in 2023.
Recycling hazardous waste back to raw materials – ADAMA collaborates with inhouse or external recycling com-
panies to reuse/recycle 13,817 tons of hazardous wastes back to raw materials utilizing by its own operations or other
industries. In Israel, ADAMA operates two plastic recycling centers at its largest formulation sites, Agan and Beer Sheva.
These centers clean contaminated plastic packing products, allowing the use of the plastic to produce pipes in the
construction and communication sectors.
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.
According to the structure and functions of each department, it has strengthened the implementation of the safety
responsibility of the leadership team at all levels, 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 HSE
application 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 principle of safety fundamentals were given priority by buying intermediates directly instead
of operating some high-risk reactions, adopting vacuum feeding machine (PTS) and automatic feeding silo instead of
manual operation, etc. In terms of hardware, the company continuously improves and perfects the application of automation
and implements a number of safety initiatives while being equipped with automatic control, alarms, interlocks, safety
instrumentation systems, emergency pressure relief and other safety devices and instruments, which provide multiple
protections for safe production. In terms of management, it has persistently pushed to ensuring core elements such as
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ADAMA Ltd Annual Report 2023
process safety information, process hazard analysis, change management, pre-start safety inspection, mechanical integrity,
process safety event management, etc., which has resulted in significant progress in the level of process safety
management and obtained the certification of process safety management audits from an internationally renowned third-
party company. Meanwhile, the company continuously strengthens safety investment and attaches importance to the
implementation of safety protection facilities, equipment maintenance and testing, daily monitoring and evaluation, training,
promotion and application of new technologies and other aspects of safety work.
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, focusing on learning and complying with various regulatory requirements such as the tiered
subcontracting accountability for safety guarantee 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
200 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, recruits
professional emergency management personnel, participates in professional emergency training and assessment
organized by Sinochem, so as to strengthen the emergency response ability of front-line employees through daily training
KPIs and drills. 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 through a series of
specialized action plans, it has effectively raised employees' awareness of safety and protection and improved the level of
plant safety and production management. CHRA risk assessment has been promoted for each exposure position across
the company, job-based occupational hazards been identified and risk reduction measures been formulated, all of which
has further laid a solid foundation for enhancing the occupational status.
III. Enhancement of the results of poverty alleviation and rural revitalization
In terms of consolidating and expanding the achievements of poverty eradication and rural revitalization, during 2023, 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 218,100 RMB from the
designated counterpart poverty relief counties in Jingzhou. ADAMA Anpon, one of the Company’s subsidiaries, continued
to provide paired-up assistance to Sanhe Village, Shunhe Township, Huai'an District in Huai’an City of Jiangsu Province in
accordance with the arrangements of the local provincial government for the economically less developed villages. During
the spring farming season, various towns and communities at Huai'an District pushed forward the public space governance
for the countryside. According to the unified planning of the task force, volunteers from ADAMA Anpon analyzed and
deployed with the village councils to facilitate the implementation. Thanks to the efforts on public space governance, Sanhe
Village managed to rectify 235 problems, recovered land area of 743.67 mu, and increased collective income by 321,300
yuan through a variety of methods such as land transfer, revitalization of idle assets and resources, and remediation of
encroached assets and resources.
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ADAMA Ltd Annual Report 2023
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
Commitment Commitment Time of making Period of
Commitment Contents 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
Commitment
Chemical Co., Ltd. and its subsidiary are the same or the commitments:(1)
in the
Commitments similar business as the main business of ADAMA. As commitments ChemChina had
acquisition
on the for horizontal domestic competition, ChemChina September 7, made by transferred its shares
report or the
horizontal committed to gradually eliminate such kind of 2013 ChemChina on in Anpon to ADAMA;
report on ChemChina
competition horizontal competition in the future and to fight for the October 12, (2) ChemChina had
equity
internal assets reconstruction, to adjust the industrial 2016, the date transferred its shares
changes
plan and business structure, to transform technology to eliminate the in Jiamusi Heilong to
and to upgrade products, to divide the market so as to domestic a third party, such
make each corporation differ in the products and its horizontal that. Jiangmusi
ultimate users according to the securities laws and competition Heilong is no longer
regulations and industry policy within 7 years, thus to between the a subsidiary of
93
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
eliminate the current domestic horizontal competition Company and ChemChina; (3)
between ChemChina’s controlled subsidiaries and Jiangsu Anpon Shangdong Dacheng
ADAMA. Electrochemical is not a subsidiary of
2. Other than the existing and potential horizontal Co., Ltd., Anhui CNAC and doesn’t
competition stated in the acquisition report, Petroleum carry out
ChemChina will take effective measures to avoid Chemical agrochemical
engagements by itself and its controlled subsidiaries Group Co., business; (4)
in new business that is in the same or similar Ltd., and ChemChina is not
business to ADAMA, within the territory in future. 3. If Jiamusi Heilong the actual controller
ChemChina or its controlled subsidiaries domestically Agrochemicals of Haohua; (5)
conduct related business which form horizontal Co., Ltd., is CNAC, the wholly-
competition with ADAMA, in the future, ChemChina January 4, owned subsidiary of
will actively take steps, to gradually eliminate the 2022). ChemChina, signed
competition, the concrete measures including but not Regarding an Entrusted
limited to internal assets reorganization, (including commitments 2 Operation and
putting the business into ADAMA or operated through and 3, long Management
ADAMA) to adjust the industrial plan and business term. Agreement as well
structure, to modify technology and to upgrade as a Supplemental
products, to segment the market so as to distinguish Agreement with the
each corporation in terms of products and its end Company, and
users, thus to avoid and eliminate domestic horizontal entrusted the
competition between ChemChina’s controlled operation and
subsidiaries and ADAMA. management of
Anhui Petrochemical
Co., Ltd.to the
Company.
Regarding
commitments 2 and
3, On-going.
The committed party
94
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
complies with the
commitments.
ChemChina will comply with laws, regulations and
other regulatory documents to avoid and reduce
related-party transactions with ADAMA. However, for
related-party transactions that are inevitable or based
on reasonable grounds, ChemChina will 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
Commitments
transactions and relevant regulations, not impairing
on the On-going.
the lawful rights and interest of ADAMA and its September 7,
independence The committed party
ChemChina shareholders by related-party transactions. 2013 and January Long term
of ADAMA and complies with the
After completion of the acquisition transaction, 7, 2020
related- party commitments.
ADAMA will continue to keep complete procurement,
transactions
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 to January 7, 2020 January 4, Completed.
Commitments
resolve the same issue between ADAMA and Anhui 2022 The committed party
ChemChina on horizontal
Petrochemical Co., Ltd. within four years after complies with the
competition
ADAMA buys 100% shares of ADAMA Solutions commitments.
95
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
through the issuance of shares to CNAC and finishes CNAC, the wholly-
the raising of supporting finance in accordance with owned subsidiary of
the original commitments as well as various the ChemChina, signed
requirements of securities laws and regulations and an Entrusted
industry policies. Operation and
Management
Agreement as well
as a Supplemental
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 On-going.
that Syngenta A.G. and ADAMA may have horizontal January 7, The committed party
January 7, 2020
competition to some extent. It will further analyze, 2025 complies with the
confirm and specify if the two companies share the commitments.
96
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
same or similar businesses and products in terms of
business content, suppliers and customers, product
substitution, 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
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
On-going.
subsidiaries. If the result will be positive, ChemChina
The committed party
will then propose corresponding solutions for any January 7, 2020 Long term
complies with the
business or product that constitutes competition in
commitments.
accordance with the requirements of applicable laws,
regulations and regulations to solve the issue of
horizontal competition.
On-going.
Other than the foregoing, none of the main business
The committed party
of ChemChina and other controlled subsidiaries is the January 7, 2020 Long term
complies with the
same or similar to that of ADAMA.
commitments.
ChemChina will continue to take effective measures January 7, 2020 Long term On-going.
97
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
to prevent itself and its other subsidiaries from adding The committed party
new businesses in the future that are the same as or complies with the
similar to those of ADAMA. commitments.
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, if On-going.
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 procurement, effective during
Commitment to On-going.
production and sales systems and to possess the period that
Sinochem maintain the September 16, The committed party
independent intellectual properties. Sinochem Sinochem
Holdings independence 2021 complies with the
Holdings and its affiliated parties will strictly abide by Holdings
of ADAMA commitments.
the relevant provisions on the independence of listed controls
companies in relevant laws, regulations and ADAMA
normative documents and be completely independent
from ADAMA in terms of staff, assets, finance,
business and organization, so as to ensure ADAMA
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ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
will have full 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
On-going.
competition between the subsidiaries of ChemChina the period that
September 16, The committed party
and ADAMA, Sinochem Holdings will earnestly urge Sinochem
2021 complies with the
ChemChina to fulfill its commitments to ADAMA to Holdings
commitments.
avoid horizontal competition. controls
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 relevant securities regulatory
Commitments authorities, within five years from the effective date of
Sinochem on the this letter of commitment, comprehensively use
On-going.
Holdings horizontal entrusted management, asset reorganization, equity
September 16, September 16, The committed party
competition replacement/transfer, business merger/adjustment or
2021 2026 complies with the
other legal means to steadily promote the integration
commitments.
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.
Sinochem Holdings will strictly abide by the relevant continue to be On-going.
laws, regulations and normative documents, AOA and September 16, effective during The committed party
other internal management system of ADAMA, 2021 the period that complies with the
exercise the rights of shareholders according to the Sinochem commitments.
99
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
law through the equity relationship, in line with the Holdings
principle of state ownership and hierarchical controls
management of state-owned assets, properly handle ADAMA
matters involving ADAMA's interests, and shall not
use the 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 documents Sinochem
Holdings related-party 2021 complies with the
and relevant systems of ADAMA, legally enter into Holdings
transactions commitments.
agreement(s) by law, go through lawful procedures, controls
ensure fair pricing and perform its disclosure ADAMA
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.
The subsidiaries controlled by ChemChina, namely The commitments
Anpon, HH, Maidao, Anhui Petrochemical and listed in the left
Heilong as well as their subsidiaries are in similar or column have been
Commitments Commitments the same business as ADAMA. For the horizontal completed.
made at the on the competition in China, ChemChina commits to take January 4, The committed party
ChemChina October 12, 2016
time of assets horizontal appropriate actions to solve the horizontal competition 2022 complies with the
reorganization competition between its subsidiaries and ADAMA step-by-step in commitments: (1) the
an appropriate way within 4 years after completion of reorganization, i.e.
the reorganization, in accordance with securities laws, the issuance of
regulations and sector/industrial policies. shares to CNAC for
100
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
The means by which ChemChina addresses the purchasing assets
horizontal competition include but are not limited to and implementation
the following, of private placement,
ADAMA acquires crop protection-related assets under completed on
ChemChina. ADAMA holds or controls other crop January 4, 2018; (2)
protection-related assets of ChemChina in line with Anpon merged with
national laws and by reasonable commercial means Maidao and
such as entrusted operation. ChemChina divests ChemChina’s shares
other crop protection-related assets or transfers the in Anpon had been
control power of such subsidiaries to external parties. transferred to
ChemChina reorganizes internal assets, adjusts ADAMA; (3)
sector planning and business structure, upgrades ChemChina had
technologies and products and makes market transferred its shares
segmentation so that each company will differentiate in Heilong to a third
its products and end users to eliminate horizontal party. Heilong is no
competition between the subsidiaries controlled by longer a subsidiary
ChemChina and ADAMA. of ChemChina; (4)
HH withdrew from
the agrochemical
business;(5) CNAC,
the wholly-owned
subsidiary of
ChemChina, signed
an Entrusted
Operation and
Management
Agreement as well
as a Supplemental
Agreement with the
Company, and
entrusted the
101
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
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
Commitments constitutes horizontal competition with ADAMA, On-going.
on Potential ChemChina will take active actions, including but not The committed party
ChemChina October 12, 2016 Long term
Horizontal limited to reorganizing internal assets, adjusting complies with the
Competition sector planning and business structure, upgrading commitments.
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 party
transactions with ADAMA; however, for the related
party transactions that are inevitable or based on
Commitment to
reasonable grounds, ChemChina will follow the just, On-going.
reduce and
fairness and open principles in market, legally enter The committed party
ChemChina standardize August 4, 2016 Long term
into agreement(s) by law, go through lawful complies with the
related-party
procedures, and perform its disclosure obligations commitments.
transactions
and approving procedures 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
102
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
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
Commitment to and its affiliated parties will be completely On-going.
maintain independent from ADAMA in terms of staff, assets, The committed party
ChemChina August 4, 2016 Long term
independence finance, business and organization, and ADAMA will complies with the
of the ADAMA have full capacity of operation in Chinese agricultural commitments.
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 Group
commitments to Group on Horizontal 2021
and have horizontal competition with ADAMA
the company's Competition
minority After reviewing, as of the date of issuance of the
shareholders commitment letter, there is a small amount of overlap
On-going.
in the field of off-patent crop protection products
January 7, The committed party
between SAG, a subsidiary of Syngenta Group, and
2025 complies with the
the Company, and a small amount of overlap in the
commitments.
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.
103
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
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 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,
104
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
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;
(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.
105
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
III. Syngenta Group’s commitment to potential
horizontal competition with the Company in the future
Syngenta Group will continue to take effective
measures to prevent itself and its controlled
companies from having new businesses that are the
same or similar to the Company’s domestic business
in the future. If Syngenta Group or a company
controlled by Syngenta Group develops related
businesses that constitute horizontal competition with
the Company’s domestic business in the future,
Syngenta Group will actively take relevant measures,
continue to be
including but not limited to asset restructuring,
valid during the
adjustment of industry planning and business
period when On-going.
structure, technological transformation and product November 1,
Syngenta The committed party
upgrades, market segmentation or other feasible 2021
Group is the complies with the
solutions to differentiate between products and end
controlling commitments.
users of each company, so as to avoid and eliminate
shareholder of
horizontal competition between Syngenta Group or
the Company
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
106
ADAMA Ltd Annual Report 2023
Commitment Commitment Time of making Period of
Commitment Contents Fulfillment
maker type commitment commitment
of signing and will continue to be valid during the
period when Syngenta Group is the controlling
shareholder of the Company.
Other -- -- -- -- --
--
commitments
Whether the
commitments
Yes
are fulfilled on
time
If the
commitment is
overdue, the
specific reasons
for not
completing the
--
performance
and the next
work plan
should be
explained in
detail.
107
ADAMA Ltd Annual Report 2023
2. Assets or projects with profit forecast, still relevant for forecast period
√Applicable □Not applicable
Unit: 10,000 RMB
Assets or Start of End of Estimated Actual Reasons for Original Original Forecast
Projects the the Performance Performance Falling Short Forecast Disclosure Index
with Profit Forecast Forecast for the of the of the Disclosure
Forecast Current Current Forecast (if Time
Period Period applicable)
ADAMA January December 2580 1090.7117 Please refer to February Announcement on Signing
Huifeng 1st, 2021 31st, 2023 “Fulfilment of 27th, 2020 the Supplemental
(Shanghai) Performance Agreement to the Equity
Agricultural Commitments Purchase Agreement
Technology and Their (Announcement No. 2020-
Co., Ltd. Impact on 9) disclosed at
Goodwill http://www.cninfo.com.cn
Impairment
Testing” below
Commitments made by the Company's shareholders and transaction counterparties in respect of operating results for the
reporting period
√Applicable □ Not Applicable
On 26 February 2020, the Company entered into the Supplemental Agreement to the Equity Purchase Agreement with
Jiangsu Huifeng Bio-Agriculture Company Limited (hereinafter referred to as “Jiangsu Huifeng”), pursuant to which Jiangsu
Huifeng undertook that in the full years of 2021, 2022 and 2023, the average annual contribution to the gross profit of
ADAMA Huifeng (Shanghai) Agricultural Technology Co., Ltd. (ADAMA Huifeng (Shanghai)) from the business of its held
company Nongyi E-commerce (Beijing) Co., Ltd., and its subsidiaries (collectively as “Nongyi.Net” and “Nongyi.Net gross
profit”), should be at least RMB 8.6 million (Nongyi.Net business benchmark). If the Nongyi.Net gross profit fails to reach
the Nongyi.Net business benchmark, Jiangsu Huifeng should pay the price to the Company in accordance with the formula
that the amount payable by Jiangsu Huifeng (the “Price Adjustment Payment”) = (Nongyi.Net business benchmark –
Nongyi.Net gross profit) x 13, and it shall also bear all taxes and expenses that the Company undertakes due to the price
adjustment.
Fulfilment of Performance Commitments and their Impact on Goodwill Impairment Test
According to Deloitte’s Special Report on Difference between Actual and Promised Gross Profits for Purchase of ADAMA
Huifeng (Shanghai) Agricultural Technology Co., Ltd (De Shi Bao (He) Zi (24) No. E00116), the total contribution by
Nongyi.Net to the gross profit of ADAMA Huifeng (Shanghai) for the period from 2021 to 2023 totaled RMB 10,907,117,
with an average annual gross profit of RMB 3,635,706.
The procurement volume of Nongyi.Net business from ADAMA Huifeng (Shanghai) during the performance forecast period
fell short of the business benchmark, resulting in the gross profit of Nongyi.Net business not meeting Nongyi.Net business
benchmark. The Company will resolve the above matters with the committed party in accordance with the Agreement.
The goodwill generated from the above acquisition was included in the goodwill allocated to the Crop Protection (Agro)
unit of the Group for the purpose of goodwill impairment testing. The unfulfillment of the performance commitments has
108
ADAMA Ltd Annual Report 2023
already been considered in the future cash flows used in the goodwill impairment testing for the Argo unit. According to the
result of the goodwill impairment testing, there was no need to provide for goodwill impairment.
For details please refer to Announcement on the Fulfillment of Performance Commitments Related to a Controlled
Subsidiary (Announcement No. 2024-9) disclosed on www.cninfo.com.cn on March 27, 2024.
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;
109
ADAMA Ltd Annual Report 2023
(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 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
315
Reporting Period (RMB Ten Thousand Yuan)
Consecutive years of the audit services
7
provided by domestic Auditor
Name of domestic accountants Ji Yuting and Zhao Jingyuan
Consecutive years of the audit services
4
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 2023 annual financial reports and 2023 annual internal control of the Company. Total
remuneration for the Auditor was RMB 3.15 million.
IX. Trading termination of Company’s securities that the Company will face after the
disclosure of this annual report
□ Applicable √ Not applicable
110
ADAMA Ltd Annual Report 2023
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.
111
ADAMA Ltd Annual Report 2023
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 AG als and Purchase of Party Transactions
same control Market Market Cash Set- March
and its sub- products raw materi- 106,418 5.95% 144,486 No N/A in the Ordinary
of Sinochem price price tlement 21,2023
sidiaries from re- als/products Course of Business
Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Bluestar (Bei- Under the
als and Purchase of Market Market March Party Transactions
jing) Chemi- same control Cash Set-
products raw materi- 40 0.00% 856 No N/A in the Ordinary
cal Machin- of Sinochem price price tlement 21,2023
from re- als/products Course of Business
ery Co., Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Jiangsu Under the Purchasing Announcement on
Purchase of March
Huaihe same control raw materi- Market Market Cash Set- Expected Related-
raw materi- 19,917 1.11% 23,512 No N/A
Chemicals of Sinochem als and price price tlement 21,2023 Party Transactions
als/products
Co., Ltd. Holdings products in the Ordinary
112
ADAMA Ltd Annual Report 2023
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 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Under the
als and Purchase of March Party Transactions
same control Market Market Cash Set-
Sinofert products raw materi- 791 0.04% 115 Yes N/A in the Ordinary
of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Jiangsu Under the
als and Purchase of March Party Transactions
Yangnong same control Market Market Cash Set-
products raw materi- 105 0.01% 52,875 No N/A in the Ordinary
Chemical of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
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- 16,866 0.94% 29,561 No N/A in the Ordinary
Protection of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Hangzhou Under the Purchasing Purchase of Market Market Cash Set- March Announcement on
14 0.00% 14 No N/A
(Torch) Xidou same control raw raw price price tlement 21,2023 Expected Related-
113
ADAMA Ltd Annual Report 2023
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
Door Film In- of Sinochem materials materi- Party Transactions
dustry Co., Holdings and prod- als/products in the Ordinary
Ltd. ucts from Course of Business
related par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
Sinochem raw materi- Expected Related-
Under the
Lantian als and Purchase of Market Market Party Transactions
same control Cash Set- March
Fluorine products raw materi- 133 0.01% 288 No N/A in the Ordinary
of Sinochem price price tlement 21,2023
Materials from re- als/products Course of Business
Holdings
Co., Ltd. lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Zhonglan Under the
als and Purchase of Party Transactions
International same control Market Market Cash Set- March
products raw materi- 8,269 0.46% 25,300 No N/A in the Ordinary
Chemical of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Under the
als and Purchase of March Party Transactions
Sinochem same control Market Market Cash Set-
products raw materi- 949 0.05% 8,090 No N/A in the Ordinary
Agro Co.,Ltd. of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Holdings
lated par- in 2023 (No.2023-
ties 12)
114
ADAMA Ltd Annual Report 2023
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-
Jiangsu Under the
als and Purchase of March Party Transactions
Youshi same control Market Market Cash Set-
products raw materi- 611 0.03% - - N/A in the Ordinary
Chemical of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Co., Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Under the
Bluestar En- als and Purchase of March Party Transactions
same control Market Market Cash Set-
gineering products raw materi- 2,011 0.11% - - N/A in the Ordinary
of Sinochem price price tlement 21,2023
Co.,Ltd. from re- als/products Course of Business
Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
ELKEM Under the
als and Purchase of March Party Transactions
SILICONES same control Market Market Cash Set-
products raw materi- 135 0.01% - - N/A in the Ordinary
BRASIL of Sinochem price price tlement 21,2023
from re- als/products Course of Business
LTDA Holdings
lated par- in 2023 (No.2023-
ties 12)
Beijing Purchasing Announcement on
Under the
Guangyuan raw materi- Purchase of March Expected Related-
same control Market Market Cash Set-
Yinong als and raw materi- 15 0.00% - - N/A Party Transactions
of Sinochem price price tlement 21,2023
Chemical products als/products in the Ordinary
Holdings
Co., LTD from Course of Business
115
ADAMA Ltd Annual Report 2023
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
related par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
Syngenta raw materi- Expected Related-
Under the
(China) als and Purchase of March Party Transactions
same control Market Market Cash Set-
Investment products raw materi- 3,583 0.20% - - N/A in the Ordinary
of Sinochem price price tlement 21,2023
Company from re- als/products Course of Business
Holdings
Limited lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
Shandong raw materi- Expected Related-
Under the
Dacheng Ag- als and Purchase of March Party Transactions
same control Market Market Cash Set-
rochemical products raw materi- 311 0.02% - - N/A in the Ordinary
of Sinochem price price tlement 21,2023
Company from re- als/products Course of Business
Holdings
Limited lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
Sinochem In- raw materi- Expected Related-
Under the
ternational als and Purchase of March Party Transactions
same control Market Market Cash Set-
Crop Care products raw materi- 2,602 0.15% - - N/A in the Ordinary
of Sinochem price price tlement 21,2023
Company from re- als/products Course of Business
Holdings
Limited lated par- in 2023 (No.2023-
ties 12)
China Under the Purchasing Purchase of March Announcement on
Market Market Cash Set-
Bluestar same control raw materi- raw materi- 1 0.00% - - N/A Expected Related-
price price tlement 21,2023
Chengrand of Sinochem als and als/products Party Transactions
116
ADAMA Ltd Annual Report 2023
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 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Shenyang Under the
als and Purchase of March Party Transactions
Sciencreat same control Market Market Cash Set-
products raw materi- 445 0.02% - - N/A in the Ordinary
Chemicals of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Co. Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Shenyang Si- Under the
als and Purchase of March Party Transactions
nochem Ag- same control Market Market Cash Set-
products raw materi- 6 0.00% - - N/A in the Ordinary
rochemicals of Sinochem price price tlement 21,2023
from re- als/products Course of Business
R&D Co.,Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Liaocheng Under the
als and Purchase of March Party Transactions
Luxi Methyla- same control Market Market Cash Set-
products raw materi- 81 0.01% - - N/A in the Ordinary
mine Chemi- of Sinochem price price tlement 21,2023
from re- als/products Course of Business
cal Co. Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Liaocheng Under the Purchasing Purchase of Market Market 1,350 0.08% - - Cash N/A March Announcement on
117
ADAMA Ltd Annual Report 2023
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
Luxi Polyol same control raw materi- raw materi- price price Settlement 21,2023 Expected Related-
New Material of Sinochem als and als/products Party Transactions
Technology Holdings products in the Ordinary
Co. Ltd. from re- Course of Business
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Under the
als and Purchase of March Party Transactions
Luxi Group same control Market Market Cash Set-
products raw materi- 1,044 0.06% - - N/A in the Ordinary
Co.Ltd. of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Holdings
lated par- in 2023 (No.2023-
ties 12)
Purchasing Announcement on
raw materi- Expected Related-
Ningxia Under the
als and Purchase of March Party Transactions
Ruitai Tech- same control Market Market Cash Set-
products raw materi- 44 0.00% - - N/A in the Ordinary
nology Co. of Sinochem price price tlement 21,2023
from re- als/products Course of Business
Ltd. Holdings
lated par- in 2023 (No.2023-
ties 12)
Announcement on
Selling raw
Expected Related-
Under the materials
Syngenta AG March Party Transactions
same control and prod- Selling prod- Market Market Cash Set-
and its sub- 111,261 3.40% 159,178 No N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
sidiaries Course of Business
Holdings lated par-
in 2023 (No.2023-
ties
12)
118
ADAMA Ltd Annual Report 2023
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-
Jiangsu Under the materials
March Party Transactions
Huaihe same control and prod- Selling prod- Market Market Cash Set-
21,197 0.65% 26,893 No N/A in the Ordinary
Chemicals of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Co., Ltd. Holdings lated par-
in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Expected Related-
Under the materials
March Party Transactions
same control and prod- Selling prod- Market Market Cash Set-
Sinofert 11,987 0.37% 14,168 No N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Holdings lated par-
in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Sino MAP 1,048 0.03% 1,150 No N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Holdings lated par-
in 2023 (No.2023-
ties
12)
Selling raw Announcement on
Jiangsu Under the
materials March Expected Related-
Yangnong same control Selling prod- Market Market Cash Set-
and prod- 1 0.00% 6 No N/A Party Transactions
Chemical of Sinochem ucts price price tlement 21,2023
ucts to re- in the Ordinary
Co., Ltd. Holdings
lated Course of Business
119
ADAMA Ltd Annual Report 2023
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 2023 (No.2023-
12)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
March Party Transactions
Youshi same control and prod- Selling prod- Market Market Cash Set-
6,410 0.20% 12,650 No N/A in the Ordinary
Chemical of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Co., Ltd. Holdings lated par-
in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Jiangsu Expected Related-
Under the materials
Youjia Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Plant 113 0.00% 173 No N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
Protection Course of Business
Holdings lated par-
Co., Ltd. in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Expected Related-
Syngenta Under the materials
Party Transactions
Nantong same control and prod- Selling prod- Market Market Cash Set- March
328 0.01% 610 No N/A in the Ordinary
Crop Protec- of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
tion Co.,Ltd. Holdings lated par-
in 2023 (No.2023-
ties
12)
Sinochem In- Under the Selling raw March Announcement on
Selling prod- Market Market Cash Set-
ternational same control materials 1,802 0.06% 1,898 No N/A Expected Related-
ucts price price tlement 21,2023
Crop Care of Sinochem and Party Transactions
120
ADAMA Ltd Annual Report 2023
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
Company Holdings products to in the Ordinary
Limited related par- Course of Business
ties in 2023 (No.2023-
12)
Announcement on
Selling raw
Expected Related-
Under the materials
March Party Transactions
Sinochem same control and prod- Selling prod- Market Market Cash Set-
762 0.02% 230 Yes N/A in the Ordinary
Agro Co.,Ltd. of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Holdings lated par-
in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Syngenta Expected Related-
Under the materials
(China) Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Investment 2,906 0.09% 725 Yes N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
Company Course of Business
Holdings lated par-
Limited in 2023 (No.2023-
ties
12)
Announcement on
Selling raw
Beijing Expected Related-
Under the materials
Guangyuan Party Transactions
same control and prod- Selling prod- Market Market Cash Set- March
Yinong 118 0.00% - - N/A in the Ordinary
of Sinochem ucts to re- ucts price price tlement 21,2023
Chemical Course of Business
Holdings lated par-
Co., LTD in 2023 (No.2023-
ties
12)
Henan Under the Selling raw Selling Market Market 4 0.00% - - Cash N/A March Announcement on
121
ADAMA Ltd Annual Report 2023
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
Junhua De- same control materials products price price Settlement 21,2023 Expected Related-
velopment of Sinochem and prod- Party Transactions
Co. Ltd. Holdings ucts to re- in the Ordinary
lated par- Course of Business
ties in 2023 (No.2023-
12)
Announcement on
Selling raw
Expected Related-
Shenyang Under the materials
Party Transactions
Sciencreat same control and prod- Selling prod- Market Market Cash Set- March
2 0.00% - - N/A in the Ordinary
Chemicals of Sinochem ucts to re- ucts price price tlement 21,2023
Course of Business
Co. Ltd. Holdings lated par-
in 2023 (No.2023-
ties
12)
Announcement on
Receiving Expected Related-
Sinochem Under the
services March Party Transactions
Information same control Value-added Market Market Cash Set-
from re- 46 0.00% 40 Yes N/A in the Ordinary
Technology of Sinochem OA services price price tlement 21,2023
lated par- Course of Business
Co., Ltd Holdings
ties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Sinochem Under the
services March Party Transactions
Information same control Market Market Cash Set-
from re- IT services 38 0.00% 35 Yes N/A in the Ordinary
Technology of Sinochem price price tlement 21,2023
lated par- Course of Business
Co., Ltd Holdings
ties in 2023 (No.2023-
12)
122
ADAMA Ltd Annual Report 2023
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
Syngenta AG services Market Market Party Transactions
same control Regular ser- Cash Set- March
and its sub- from re- 370 0.02% 52 Yes N/A in the Ordinary
of Sinochem vices price price tlement 21,2023
sidiaries lated par- Course of Business
Holdings
ties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Under the
services March Party Transactions
same control Regular ser-
Sino MAP from re- - - - - 40 No - N/A in the Ordinary
of Sinochem vices 21,2023
lated par- Course of Business
Holdings
ties in 2023 (No.2023-
12)
Announcement on
Bluestar Receiving Expected Related-
Under the
(Beijing) services March Party Transactions
same control Regular ser-
Chemical from re- - - - - 100 No - N/A in the Ordinary
of Sinochem vices 21,2023
Machinery lated par- Course of Business
Holdings
Co., Ltd. ties in 2023 (No.2023-
12)
Receiving Announcement on
Under the
Shenyang services March Expected Related-
same control Regular ser- Market Market Cash Set-
Chemical from re- 43 0.00% - - N/A Party Transactions
of Sinochem vices price price tlement 21,2023
Co., Ltd. lated par- in the Ordinary
Holdings
ties Course of Business
123
ADAMA Ltd Annual Report 2023
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 2023 (No.2023-
12)
Announcement on
China
Receiving Expected Related-
Bluestar Under the
services March Party Transactions
Chengrand same control Regular ser- Market Market Cash Set-
from re- 1 0.00% - - N/A in the Ordinary
Research In- of Sinochem vices price price tlement 21,2023
lated par- Course of Business
stitute Chem- Holdings
ties in 2023 (No.2023-
ical Industry
12)
Announcement on
Shenyang Receiving Expected Related-
Under the
Shenhua In- services March Party Transactions
same control Regular ser- Market Market Cash Set-
stitute Test- from re- 32 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 21,2023
ing Technol- lated par- Course of Business
Holdings
ogy Co., Ltd. ties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Under the
services March Party Transactions
same control Regular ser- Market Market Cash Set-
Sinofert from re- 1 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 21,2023
lated par- Course of Business
Holdings
ties in 2023 (No.2023-
12)
Syngenta Under the Receiving March Announcement on
Regular ser- Market Market Cash Set-
(China) same control services 45 0.00% - - N/A Expected Related-
vices price price tlement 21,2023
Investment of Sinochem from Party Transactions
124
ADAMA Ltd Annual Report 2023
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
Company Holdings related par- in the Ordinary
Limited ties Course of Business
in 2023 (No.2023-
12)
Sinochem Announcement on
Zhoushan Receiving Expected Related-
Under the
Hazardous services March Party Transactions
same control Regular ser- Market Market Cash Set-
Chemicals from re- 45 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 21,2023
Emergency lated par- Course of Business
Holdings
Rescue Base ties in 2023 (No.2023-
Co. Ltd. 12)
Sinochem Announcement on
Chemical Receiving Expected Related-
Under the
Science and services March Party Transactions
same control Regular ser- Market Market Cash Set-
Technology from re- 4 0.00% - - N/A in the Ordinary
of Sinochem vices price price tlement 21,2023
Research In- lated par- Course of Business
Holdings
stitute Co., ties in 2023 (No.2023-
LTD 12)
Announcement on
Purchasing Expected Related-
Zhonglan Under the
fixed as- March Party Transactions
Lianhai De- same control Purchase of Market Market Cash Set-
sets from 93 0.01% - - N/A in the Ordinary
sign Institute of Sinochem fixed assets price price tlement 21,2023
related par- Course of Business
Co., Ltd. Holdings
ties in 2023 (No.2023-
12)
Bluestar Under the Purchasing Purchase of Market Market 127 0.01% - - Cash N/A March Announcement on
125
ADAMA Ltd Annual Report 2023
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
Engineering same control fixed as- fixed assets price price Settlement 21,2023 Expected Related-
Co.,Ltd. of Sinochem sets from Party Transactions
Holdings related par- in the Ordinary
ties Course of Business
in 2023 (No.2023-
12)
Announcement on
Purchasing Expected Related-
Under the
Syngenta AG fixed as- March Party Transactions
same control Purchase of Market Market Cash Set-
and its sub- sets from 45 0.00% - - N/A in the Ordinary
of Sinochem fixed assets price price tlement 21,2023
sidiaries related par- Course of Business
Holdings
ties in 2023 (No.2023-
12)
Announcement on
Expected Related-
Under the Rendering
Syngenta AG March Party Transactions
same control services to Regular ser- Market Market Cash Set-
and its sub- 72 0.00% - - N/A in the Ordinary
of Sinochem related par- vices price price tlement 21,2023
sidiaries Course of Business
Holdings ties
in 2023 (No.2023-
12)
Total -- -- 324,642 -- 503,045 -- -- -- -- --
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 2023 will not exceed RMB 5,030.45 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 2023 (No.: 2023-12). The Company’s ac-
by types during this reporting period (if any)
tual amount of daily related party transactions defined in the listing rules incurred for the twelve months ended
126
ADAMA Ltd Annual Report 2023
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
December 31,2023 is RMB 3,246.42 million, which does not exceed the expected amount. The gap between the ac-
tual amount and the estimations of the related party transactions in the course of routine business in 2023 is due to
the related impacts from the changing market conditions and the actual needs fluctuation of the Company.
Reasons for large difference between transaction The Company’s related transactions with related party shall be carried out in accordance with the principle of volun-
price and market reference price (if applicable) tary, equality and mutual benefit, fair, and will not harm the interests of the Company.
127
ADAMA Ltd Annual Report 2023
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% 41,766 71,695 56,899 56,562
of Sinochem
Ltd
Holdings
128
ADAMA Ltd Annual Report 2023
Loans
In RMB ’0000
Transactions during the
Reporting Period
Total Loan Total
Related Size of the Range of Opening Amount for Repayment Ending
Relations
Parties Loan Interest Rate Balance the Amount for Balance
Reporting the
Period Reporting
Period
Under the
Sinochem
same control
Finance Co., 50,000 2.7%-3.0% - 5,056 5,056 -
of Sinochem
Ltd
Holdings
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 80,000 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 2022 Annual General Meeting approved the Proposal on Credit Facilities from the Related Party.
(2) The 1st Interim Shareholders Meeting in 2023 approved the Proposal on Credit Facility from the Related Party.
(3) The 29th Meeting of the 9th Session of the Board of Directors approved the Proposal on Signing of Supplemental
Agreement to the Entrusted Operation and Management Agreement on Anhui Petro & Chemical
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 Credit Facility of
USD 250 million from a Related
February 16, 2023 Juchao website www.cninfo.com.cn
Party（Announcement No.2023-
6 ）
Announcement on Expected
March 21, 2023 Juchao website www.cninfo.com.cn
Related-Party Transactions in the
129
ADAMA Ltd Annual Report 2023
Name of the interim Disclosure date of the interim Website to disclose the interim
announcement announcement announcement
Ordinary Course of Business in
2022（Announcement No.2023-
12 ）
Announcement on Credit Facility Juchao website www.cninfo.com.cn
from the Related Party August 31, 2023
（Announcement No.2023-29 ）
Announcement of the Resolutions of Juchao website www.cninfo.com.cn
the 29th Meeting of the 9th Session
December 30, 2023
of the Board of Directors
（Announcement No.2023-46 ）
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
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
-- -- -- -- -- -- -- -- -- -- --
130
ADAMA Ltd Annual Report 2023
Total amount of the
Total guarantee line occurred guarantee
approved in favor of third in favor of third
parties (excluding -- parties (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
Joint Three
liability years after
December 1,
3,600 and -- -- the project No No
2021
several loan
liability matures
Joint Three
liability years after
December 1,
200 and -- -- the project Yes No
2021
several loan
December 22,
liability matures
ADAMA
2020
Anpon Joint Three
April 29, 2021 125,800
(Jiangsu) liability years after
October 28, December 1,
Ltd. 200 and -- -- the project Yes No
2021 2021
several loan
liability matures
Joint Three
liability years after
January 1,
3,500 and -- -- the project No No
2022
several loan
liability matures
February 28, Joint Three
2,100 -- -- No No
2022 liability years after
131
ADAMA Ltd Annual Report 2023
and the project
several loan
liability matures
Joint Three
liability years after
April 28, 2022 1,400 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
May 20, 2022 750 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
June 26, 2022 2,350 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
January 18,
4,000 and -- -- the loan Yes 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 28,
390 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
July 2, 2022 810 and -- -- the project No No
several loan
liability matures
Joint Three
March 30, liability years after
3,000 -- -- Yes No
2022 and the loan
several matures
132
ADAMA Ltd Annual Report 2023
liability
Joint Three
liability years after
August 11,
1,000 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
August 31,
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 loan No No
17, 2022
several matures
liability
Joint Three
liability years after
November 23,
2,500 and -- -- the project No No
ADAMA 2022
several loan
Anpon
March 31, 2022 104,100 liability matures
(Jiangsu)
Joint Three
Ltd.
liability years after
November 30,
1,100 and -- -- the project No No
2022
several loan
liability matures
Joint Three
liability years after
December 17,
2,000 and -- -- the loan Yes No
2022
several matures
liability
133
ADAMA Ltd Annual Report 2023
Joint Three
liability years after
January 12,
1,000 and -- -- the project No No
2023
several loan
liability matures
Joint Three
liability years after
January 16,
1,000 and -- -- the project No No
2023
several loan
liability matures
Joint Three
liability years after
April 4, 2023 1,200 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
April 4, 2023 1,400 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
April 13, 2023 200 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
April 13, 2023 240 and -- -- the project Yes No
several loan
liability matures
Joint Three
liability years after
April 26, 2023 200 and -- -- the project No No
several loan
liability matures
Joint Three
liability years after
October 17,
300 and -- -- the project No No
2023
several loan
liability matures
October 17, Joint Three
500 -- -- No No
2023 liability years after
134
ADAMA Ltd Annual Report 2023
and the loan
several matures
liability
Joint
ADAMA Three
liability
Anpon August 10, years after
April 25, 2023 114,000 4,000 and -- -- No No
(Jiangsu) 2023 the loan
several
Ltd. matures
liability
Total amount of the
Total guarantee line occurred guarantee
approved in favor of the in favor of the
114,000 10,040
subsidiaries during the subsidiaries during
reporting period (B1) the reporting period
(B2)
Total guarantee
Aggregated guarantee line
balance in favor of
that has been approved in
the subsidiaries by
favor of the subsidiaries by 343,900 34,800
the end of the
the end of the reporting
reporting period
period (B3)
(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
Generally
7 years
Control joint and
October 31, October 30, (subject to
Solutions, 1,300 0 several -- --
2018 2018 the No No
Inc. liability
overseas
laws)
The loan
term (5
years) and
any
Control joint and
January 10, January 9, applicable
Solutions, 4,000 250 several -- --
2019 2019 statute of No No
Inc. liability
limitations
period
(generally
7 years).
135
ADAMA Ltd Annual Report 2023
Related
guarantees
existed before
the company
joint and
ADAMA was Valid until
Not applicable 22,299.05 1,635.98 several -- -- No No
Brazil consolidated cancelled
liability
into the
financial
statements of
the Company.
joint and
ADAMA January 22, December 29, December
900 900 several -- -- No No
Brazil 2022 2021 31, 2025
liability
Related
guarantees
existed before
the company
Adama joint and
was Valid until
India Private Not applicable 8,870.91 4,589.20 several -- -- No No
consolidated cancelled
Ltd. liability
into the
financial
statements of
the Company.
Related
guarantees
ADAMA
existed before
Turkey
the company
Tarm joint and
was Valid until
Sanayi ve Not applicable 7,150 615.62 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 Valid until
Not applicable unlimited was 31,131.40 several -- -- No No
Makhteshim cancelled
consolidated liability
into the
financial
statements of
136
ADAMA Ltd Annual Report 2023
the Company.
joint and
Adama Valid until
April 25, 2023 7,875 May 3, 2023 7,500 several -- -- No No
Makhteshim cancelled
liability
Related
guarantees
existed before
the company
joint and
Adama was Valid until
Not applicable unlimited 22,584.10 several -- -- No No
Agan consolidated cancelled
liability
into the
financial
statements of
the Company.
ADAMA
joint and
Agricultural January 22, January 22, Valid until
417.87 33.84 several -- --
Solutions 2022 2022 cancelled No No
liability
UK Ltd.
ADAMA
CELSIUS
BV,
Curacao
joint and
branch, & November 24, Valid until
November 25, 4,500 0 several -- --
ADAMA 2022 cancelled No No
2022 liability
Fahrenheit
BV,
Curacao
Branch
ADAMA
CELSIUS
BV,
Curacao
joint and
branch, & January 22, January 22, Valid until
7,000 2,307.38 several / /
ADAMA 2022 2022 cancelled No No
liability
Fahrenheit
BV,
Curacao
Branch
ADAMA Related joint and Valid until
Not applicable 3,000 0 -- --
Ukraine LLC guarantees several cancelled No No
137
ADAMA Ltd Annual Report 2023
existed before liability
the company
was
consolidated
into the
financial
statements of
the Company.
ADAMA joint and
October 10, October 28, Valid until
Ukraine LLC 773.92 157.97 several -- --
2023 2023 cancelled No No
liability
Related
guarantees
existed before
Makhteshim the company
joint and
Agan of was Valid until
Not applicable 4,000 200 several -- -- No No
North consolidated cancelled
liability
Amercia Inc. into the
financial
statements of
the Company.
Total guarantee line
Total amount of the guarantee in favor of the
approved in favor of the 11,648.92 (approximately 71,905.49 (approximately
subsidiaries occurred during the reporting
subsidiaries during the RMB 813.15million) RMB 5,092.85 million)
period (C2)
reporting period (C1)
75,086.75 (approximately
Aggregated guarantee line RMB 5,318.17million)
that has been approved in (As for Adama Total guarantee balance in favor of the
71,905.49 (approximately
favor of the subsidiaries by Makhteshim and Adama subsidiaries by the end of the reporting period
RMB 5,092.85 million)
the end of the reporting Agan, the planned (C4)
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
195,314.64 519,325.01
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
880,716.92 544,085.01
end of the reporting period the reporting period (A4+B4+C4)
(A3+B3+C3)
138
ADAMA Ltd Annual Report 2023
Proportion of total guarantee amount (A4+B4+C4) to
24.82%
the net assets of the Company
Of which:
The balance of the guarantee provided in favor of the
0
controlling shareholder and related party.
Amount of debt guarantee provided for the
USD 668.66 million
guaranteed party whose asset-liability ratio is not
(approximately RMB 4,735.94 million)
less than 70% directly or indirectly (E)
The amount of the guarantee that exceeds 50% of
0
the net assets
USD 668.66 million
Total amount of the above three guarantees (D+E+F)
(approximately RMB 4,735.94 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)
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.
139
ADAMA Ltd Annual Report 2023
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
140
ADAMA Ltd Annual Report 2023
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%
141
ADAMA Ltd Annual Report 2023
Reason for the change in shares
□ Applicable √ Not applicable
Approval of the change in shares
□ Applicable √ Not applicable
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
142
ADAMA Ltd Annual Report 2023
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 -- --
143
ADAMA Ltd Annual Report 2023
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
144
ADAMA Ltd Annual Report 2023
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
41,388 (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 28,656; trading day before the 41,393 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
12,732)
Shareholding of shareholders holding more than 5% shares (not including Shares Lent for the Relending Financing)
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.
Bosera Funds-
China Merchants
Bank- Bosera
Funds Xincheng Others 0.28% 6,500,000 -- -- 6,500,000 -- --
No.2 Collective
Asset Management
Plan
Hong Kong
Securities Clearing Overseas legal
0.27% 6,374,253 -4,231,827 - 6,374,253 - -
Company Ltd. person
(HKSCC)
Domestic
Wu Feng 0.27% 6,190,669 710,754 - 6,190,669 - -
Individual
145
ADAMA Ltd Annual Report 2023
Bosera Funds-
Postal Savings
Bank- Bosera
Funds Xincheng Others 0.26% 6,000,000 -- -- 6,000,000 -- --
No.3 Collective
Asset Management
Plan
Zhu Shenglan Domestic
0.25% 5,756,000 1,766,000 - 5,756,000 - -
Individual
China Universal
Fund-Industrial
Bank-China
Universal-Strategic Others 0.19% 4,400,000 - -- 4,400,000 -- --
Enhancement No.3
Collective Asset
Management Plan
Qichun County
State-owned State-owned
0.18% 4,169,266 - - 4,169,266 - -
Assets Operation legal person
Center
Bosera Funds-
Postal Savings
Bank- Bosera
Funds Xincheng Others 0.17% 4,000,000 - - 4,000,000 - -
No.4 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
shareholders involved in
Not applicable
proxy/trustee voting rights and
abstention from voting rights
Special note on the existence of Not applicable
146
ADAMA Ltd Annual Report 2023
dedicated accounts for repurchase
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
Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.2 Collective
6,500,000 RMB ordinary share 6,500,000
Asset Management Plan
Hong Kong Securities Clearing Company Ltd. (HKSCC) 6,374,253 RMB ordinary share 6,374,253
Wu Feng 6,190,669 RMB ordinary share 6,190,669
Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.3 Collective
6,000,000 RMB ordinary share 6,000,000
Asset Management Plan
Zhu Shenglan 5,756,000 RMB ordinary share 5,756,000
China Universal Fund-Industrial Bank-China Universal-Strategic Enhancement
4,400,000 RMB ordinary share 4,400,000
No.3 Collective Asset Management Plan
Qichun County State-owned Assets Operation Center 4,169,266 RMB ordinary share 4,169,266
Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.4 Collective
4,000,000 RMB ordinary share 4,000,000
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 Wu Feng held 4,809,943 shares of the Company through a common securities
Particular about shareholder participate in the securities lending and account and 1,380,726 shares of the Company through a credit collateral securities trading
borrowing business (if any) account, altogether 6,190,669 shares. Shareholder Zhu Shenglan held 5,756,000 shares of
the Company through a credit collateral securities trading account.
Involvement of Top 10 Shareholders in Lending of Shares in the Relending Financing of Funds and Securities
□ Applicable √ Not Applicable
Change of the Top 10 Shareholders from the Previous Reporting Period
√ Applicable □ Not Applicable
147
ADAMA Ltd Annual Report 2023
Change of the Top 10 Shareholders from the Previous Reporting Period
Shares in General Shareholders’ Accounts, Credit Ac-
Shares Lent for the Relending Financing at the
Addition or With- counts and Lent for the Relending Financing at the End-
Ending Period and Amount not yet Returned
drawal Shares ing Period and Amount not yet Returned
Full Name of the Shareholder
during the Re- Proportion of Proportion of
porting Period Total the Total Eq- Total the Total Eq-
uity uity
Zhu Shenglan Addition 0 0 5,756,000 0.25%
Qichun County State-owned
Addition 0 0 4,169,266 0.18%
Assets Operation Center
Bosera Funds-Postal Savings
Bank- Bosera Funds Xincheng
Addition 0 0 4,000,000 0.17%
No.4 Collective Asset
Management Plan
Wang Xiuqin Withdrawal 0 0 3,181,579 0.14%
Portfolio No.503 of National
Withdrawal 0 0 0 0
Social Security Fund
CITIC Securities - Huarong
Ruitong Equity Investment
Management Co., Ltd. - CITIC Withdrawal 0 0 0 0
Securities - Changfeng Single
Asset Management Plan
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.
148
ADAMA Ltd Annual Report 2023
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; Smart Agriculture
Management; 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 chemical products); Fertilizer sales;
General cargo warehousing services (excluding
hazardous chemicals and other items requiring
Syngenta license); Low temperature storage (excluding
Group Co., Li Fanrong June 27, 2019 91310000MA1FL6MN13 hazardous chemicals and other items requiring
Ltd. license); Socio economic advisory services; Import
and export of goods; Technology import and export,
Crop seed business (limited to packed seeds without
further repackaging; seed production for non-major
crops. (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, agro-
chemical production, agro-chemical wholesale, crop
seed import and export. (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).
Shares held by the controlling By the end of the Reporting Period, Syngenta Group directly holds 35.86%
shareholder in other listed companies by equity of Jiangsu Yangnong Chemical Co., Ltd., and indirectly holds 52.65%
holding or shareholding during the equity of SinoFert Holdings Limited through Syngenta Group (HK) Holdings
149
ADAMA Ltd Annual Report 2023
Reporting Period Company Limited and 20.51% equity of Win-All High-tech Seed Co., Ltd.
through China National Seed Group Co., Ltd.
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:
150
ADAMA Ltd Annual Report 2023
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
Progress of share repurchase
□ Applicable √ Not applicable
Status of reducing holding of repurchased shares in the way of centralized bidding
□ Applicable √ Not applicable
151
ADAMA Ltd Annual Report 2023
Section VIII - Preferred stock
□ Applicable √ Not applicable
There was no preferred stock during Reporting Period.
152
ADAMA Ltd Annual Report 2023
Section IX - Corporate Bonds
□ Applicable √ Not applicable
153
ADAMA Ltd Annual Report 2023
Section X - Financial Report
Type of auditor’s opinion Standard Unqualified Opinion
Audit opinion signoff date March 25, 2024
Name of the auditor Deloitte Touche Tohmatsu CPA LLP
Reference number of the audit report De Shi Bao (Shen) Zi (24) No. P02683
Name of CPA Ji Yuting and Zhao Jingyuan
154
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (24) No.P02683
(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 2023, 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 2023, 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.
155
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No.P02683
(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 2023 was RMB
32,779,456,000, which was significant to the financial statements. As stated in Note (III), 26, 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.
156
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No.P02683
(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 RMB5,001,538,000 as of 31 December 2023, out of
which RMB4,931,000,000 was allocated to Crop Protection unit. As disclosed in Note III, 20 and 21, 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. Compare the key assumptions used in estimating future cash flows with ADAMA's historical data, approved fi-
nancial budgets and operating plans, and evaluate the reasonableness of the key assumptions used by management
in preparing future cash flows, including expected revenue growth rate and gross profit margin;
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.
157
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No.P02683
(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 2023 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.
158
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No.P02683
(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.
159
ADAMA Ltd. Annual Report 2023
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No.P02683
(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
25 March 2024
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
160
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Consolidated Balance Sheet
December 31 December 31
Notes 2023 2022
Current assets
Cash at bank and on hand V.1 4,881,328 4,290,961
Financial assets held for trading V.2 1,912 1,685
Derivative financial assets V.3 850,137 233,809
Bills receivable V.4 86,303 112,297
Accounts receivable V.5 8,146,677 9,018,375
Receivables financing V.6 123,050 63,639
Prepayments V.7 305,883 341,102
Other receivables V.8 1,054,302 1,021,824
Inventories V.9 13,088,757 16,927,241
Other current assets V.10 1,083,714 1,129,688
Total current assets 29,622,063 33,140,621
Non-current assets
Long-term receivables V.11 68,752 82,510
Long-term equity investments V.12 31,474 26,368
Other equity investments V.13 132,018 158,341
Investment properties 22,145 3,168
Fixed assets V.14 10,040,113 8,952,184
Construction in progress V.15 2,507,328 2,961,401
Right-of-use assets V.16 625,235 555,889
Intangible assets V.17 5,318,281 5,342,754
Goodwill V.18 5,001,538 4,805,157
Deferred tax assets V.19 1,601,641 1,347,263
Other non-current assets V.20 435,215 604,833
Total non-current assets 25,783,740 24,839,868
Total assets 55,405,803 57,980,489
161
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Consolidated Balance Sheet (continued)
December 31 December 31
Notes 2023 2022
Current liabilities
Short-term loans V.21 5,733,522 3,342,921
Derivative financial liabilities V.22 607,787 545,516
Bills payable V.23 613,507 1,114,775
Accounts payable V.24 4,649,733 7,527,269
Contract liabilities V.25 1,514,365 1,776,573
Employee benefits payable V.26 847,039 1,370,786
Taxes payable V.27 407,230 459,574
Other payables V.28 1,469,319 1,611,282
Non-current liabilities due within one year V.29 2,297,888 2,262,131
Other current liabilities V.30 753,827 703,794
Total current liabilities 18,894,217 20,714,621
Non-current liabilities
Long-term loans V.31 2,885,939 3,662,870
Debentures payable V.32 6,919,423 7,353,511
Lease liabilities V.33 495,459 431,076
Long-term payables 97,840 107,686
Long-term employee benefits payable V.34 671,530 792,153
Provisions V.35 299,251 222,181
Deferred tax liabilities V.19 297,103 315,861
Other non-current liabilities V.36 2,920,566 1,255,875
Total non-current liabilities 14,587,111 14,141,213
Total liabilities 33,481,328 34,855,834
Shareholders' equity
Share capital V.37 2,329,812 2,329,812
Capital reserve V.38 12,950,464 12,986,333
Less: Treasury shares - -
Other comprehensive income V.39 1,675,896 1,080,590
Special reserves 16,595 15,818
Surplus reserve V.40 273,617 242,498
Retained earnings V.41 4,678,091 6,469,604
Total equity attributed to the shareholders 21,924,475 23,124,655
of the company
Non-controlling interests - -
Total Equity 21,924,475 23,124,655
Total liabilities and equity 55,405,803 57,980,489
Steve Hawkins Efrat Nagar
Legal representative Chief Financial Officer
These financial statements were approved by the Board of Directors of the Company on March 25 2024.
The notes form part of these financial statements.
162
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Company's Balance Sheet
December 31 December 31
Notes 2023 2022
Current assets
Cash at bank and on hand XV.1 163,646 271,080
Accounts receivable XV.2 1,141,839 758,462
Receivables financing XV.3 7,929 2,596
Prepayments 10,233 7,944
Other receivables XV.4 11,611 11,611
Inventories 218,984 256,001
Non-current assets due within one year 125,000 125,000
Other current assets 7,574 2,312
Total current assets 1,686,816 1,435,006
Non-current assets
Long-term equity investments XV.5 17,430,716 17,511,352
Other equity investments 54,299 84,720
Investment properties 2,619 3,168
Fixed assets 1,711,062 1,822,134
Construction in progress 56,791 90,074
Right-of-use assets 1,877 2,842
Intangible assets 249,236 258,997
Deferred tax assets 80,241 75,383
Other non-current assets 273,783 269,574
Total non-current assets 19,860,624 20,118,244
Total assets 21,547,440 21,553,250
Current liabilities
Short-term loans 100,000 50,000
Bills payables 64,588 42,451
Accounts payables 150,265 205,767
Contract liabilities 12,190 15,116
Employee benefits payable 12,091 14,699
Taxes payable 4,852 3,529
Other payables 619,857 730,901
Non-current liabilities due within one year 537,820 671,454
Total current liabilities 1,501,663 1,733,917
Non-current liabilities
Long-term loans 949,017 836,795
Lease liabilities 885 701
Long-term employee benefits payable 101,628 97,574
Provisions 26,116 28,516
Other non-current liabilities 269,500 374,360
Total non-current liabilities 1,347,146 1,337,946
Total liabilities 2,848,809 3,071,863
Shareholders’ equity
Share capital V.37 2,329,812 2,329,812
Capital reserve 15,523,881 15,523,881
Other comprehensive income (1,002) 30,822
Special reserves 17,286 16,509
Surplus reserve V.40 273,617 242,498
Retained earnings 555,037 337,865
Total shareholders’ equity 18,698,631 18,481,387
Total liabilities and shareholders’ equity 21,547,440 21,553,250
163
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Consolidated Income Statement
Year ended December 31
Notes 2023 2022
I. Operating income V.42 32,779,456 37,381,915
Less: Cost of sales V.42 25,984,108 27,984,966
Taxes and surcharges V.43 109,010 110,414
Selling and Distribution expenses V.44 4,208,108 4,396,279
General and administrative expenses V.45 1,057,410 1,406,828
Research and Development expenses V.46 482,754 577,859
Financial expenses (incomes) V.47 1,183,118 325,796
Including: Interest expense 1,144,515 777,827
Interest income 368,990 180,619
Add: Investment income, net V.48 19,078 12,683
Including: Income from investment
in associates and joint ventures 6,336 10,358
Loss from changes in fair value V.49 (650,374) (1,504,832)
Credit impairment losses V.50 (54,453) (91,667)
Asset impairment losses V.51 (549,893) (325,386)
Gain from disposal of assets V.52 19,679 59,596
II. Operating profit (1,461,015) 730,167
Add: Non-operating income 110,046 58,395
Less: Non-operating expenses 53,941 31,729
III. Total profit (loss) (1,404,910) 756,833
Less: Income tax expenses (income) V.53 200,977 147,442
IV. Net profit (loss) (1,605,887) 609,391
(1). Classified by nature of operations (1,605,887) 609,391
(1.1). Continuing operations
(2). Classified by ownership (1,605,887) 609,391
(2.1). Shareholders of the Company
(2.2). Non-controlling interests
V. Other comprehensive income, net of tax V. 39 595,306 1,512,974
Other comprehensive income (net of tax)
attributable to shareholders of the Company 595,306 1,512,974
(1) Items that will not be reclassified to profit or loss: (18,425) 82,699
(1.1) Re-measurement of defined benefit plan liability 7,432 82,699
(1.2) Fair Value changes in other equity investment (25,857) -
(2) Items that were or will be reclassified to profit or loss 613,731 1,430,275
(2.1) Effective portion of gains or loss of cash flow hedge 39,730 (73,324)
(2.2) Translation differences of foreign financial statements 574,001 1,503,599
VI. Total comprehensive income for the period attributable to (1,010,581) 2,122,365
Shareholders of the Company
Total comprehensive income for the period (1,010,581) 2,122,365
attributable to shareholders of the Company
Total comprehensive income for the period
attributable to Non-controlling interests -
VII. Earnings per share XIV.2
(1) Basic earnings (loss) per share (Yuan/share) (0.69) 0.26
(2) Diluted earnings per share (Yuan/share) N/A N/A
- 164 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Company's Income Statement
Year ended December 31
Notes 2023 2022
I. Operating income XV.6 2,008,574 2,297,898
Less: Operating costs XV.6 1,678,097 1,777,065
Taxes and surcharges 9,819 8,058
Selling and Distribution expenses 8,621 4,959
General and administrative expenses 125,154 151,840
Research and Development expenses 19,226 74,944
Financial expenses 35,061 45,748
Including: Interest expense 48,234 51,463
Interest income 8,584 8,605
Add: Investment income, net 29,818 13,811
Gain from changes in fair value (“-” means loss) 230,135 (314,670)
Credit impairment reversal (losses) 655 (48)
Asset Impairment reversal (losses) (91,574) 2,816
Gain from disposal of assets 17 60,292
II. Operating Profit 301,647 (2,515)
Add: Non-operating income 10,800 13,749
Less: Non-operating expenses 1,546 2,595
III. Total profit 310,901 8,639
Less: Income tax expense (income) (295) (14,715)
IV. Net profit (loss) 311,196 23,354
V. Other comprehensive income, net of tax (31,824) 154
(1) Items that will not be reclassified to profit or loss (31,824) 154
(1.1) Re-measurement of defined benefit plan liability (5,967) 154
(1.2) FV changes in other equity investment (25,857) -
VI. Total comprehensive income (loss) for the period 279,372 23,508
- 165 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Consolidated Cash Flow Statement
Year ended December 31
Notes 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 32,508,956 35,470,804
Refund of taxes and surcharges 153,866 300,092
Cash received relating to other operating activities V.56(1) 690,681 804,577
Sub-total of cash inflows from operating activities 33,353,503 36,575,473
Cash paid for goods and services 22,723,297 27,540,166
Cash paid to and on behalf of employees 4,425,057 4,087,028
Payments of taxes and surcharges 578,482 871,493
Cash paid relating to other operating activities V.56(2) 3,008,790 3,136,041
Sub-total of cash outflows from operating activities 30,735,626 35,634,728
Net cash flows from operating activities V.57(1)a 2,617,877 940,745
II. Cash flows from investing activities:
Cash received from disposal of investments 173,990 46,366
Cash received from returns of investments 4,637 3,162
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 39,701 84,885
Cash received relating to other investing activities V.56(3) 37,984 2,325
Sub-total of cash inflows from investing activities 256,312 136,738
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 2,369,778 2,667,236
Cash paid for acquisition of investments 2,843 -
Net cash paid to acquire subsidiaries or other business units 148,460 -
Cash paid relating to other investing activities V.56(4) 123,484 129,944
Sub-total of cash outflows from investing activities 2,644,565 2,797,180
Net cash flows used in investing activities (2,388,253) (2,660,442)
III. Cash flows from financing activities:
Cash received from borrowings 3,636,887 3,782,897
Cash received from other financing activities V.56(5) 3,490,995 849,736
Sub-total of cash inflows from financing activities 7,127,882 4,632,633
Cash repayments of borrowings 4,175,881 2,330,610
Cash payment for dividends, profit distributions and interest 1,306,996 951,221
Including: Dividends paid to non-controlling interest 91,602 59,278
Cash paid relating to other financing activities V.56(6) 1,270,723 1,406,592
Sub-total of cash outflows from financing activities 6,753,600 4,688,423
Net cash flow provided by (used in) financing activities 374,282 (55,790)
IV. Effects of foreign exchange rate changes on cash and cash equiva-
lents 28,199 241,260
V. Net increase (decrease) in cash and cash equivalents V.57(1)b 632,105 (1,534,227)
Add: Cash and cash equivalents at the beginning of the year 4,225,253 5,759,480
I. VI. Cash and cash equivalents at the end of the period V.57(2) 4,857,358 4,225,253
- 166 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Company's Cash Flow Statement
Year ended December 31
Notes 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 1,276,375 1,447,293
Refund of taxes and surcharges 42,472 78,753
Cash received relating to other operating activities XV.7(1) 39,163 114,271
Sub-total of cash inflows from operating activities 1,358,010 1,640,317
Cash paid for goods and services 1,026,140 1,230,277
Cash paid to and on behalf of employees 124,860 135,760
Payments of taxes and surcharges 12,084 8,242
Cash paid relating to other operating activities XV.7(2) 156,722 124,903
Sub-total of cash outflows from operating activities 1,319,806 1,499,182
Net cash flows from operating activities XV.8 38,204 141,135
II. Cash flows from investing activities:
Cash received from returns of investments 29,818 13,811
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets 17 67,065
Cash received relating to other investing activities XV.7.(3) 131,042 150,000
Sub-total of cash inflows from investing activities 160,877 230,876
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 99,826 85,707
Cash paid for other investing activities XV.7.(4) 125,000 250,000
Sub-total of cash outflows from investing activities 224,826 335,707
Net cash flows used in investing activities (63,949) (104,831)
III. Cash flows from financing activities:
Cash received from borrowings 760,000 650,000
Cash received relating to other financing activities XV.7.(5) 15,960 24,865
Sub-total of cash inflows from financing activities 775,960 674,865
Cash repayments of borrowings 730,046 610,046
Cash payment for dividends, profit distributions or interest 112,199 71,290
Cash paid relating to other financing activities XV.7.(6) 10,297 31,491
Sub-total of cash outflows from financing activities 852,542 712,827
Net cash flow provided by (used in) financing activities (76,582) (37,962)
IV. Effects of foreign exchange rate changes on cash and cash equivalents 1,183 554
V. Net decrease in cash and cash equivalents (101,144) (1,104)
Add: Cash and cash equivalents at the beginning of the year XV.8(2) 258,330 259,434
VI. Cash and cash equivalents at the end of the period XV.8(2) 157,186 258,330
- 167 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Consolidated Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2023
Other compre-
Share cap- Capital re- hensive in- Special Surplus re- Retained earn- Non-controlling
ital serve come reserves serve ings Total interests Total equity
I. Balance at January 1, 2023 2,329,812 12,986,333 1,080,590 15,818 242,498 6,469,604 23,124,655 - 23,124,655
II. Changes in equity for the period - (35,869) 595,306 777 31,119 (1,791,513) (1,200,180) - (1,200,180)
1. Total comprehensive income (loss) - - 595,306 - - (1,605,887) (1,010,581) - (1,010,581)
2. Owner’s contributions and reduction - (35,869) - - - - (35,869) - (35,869)
2.1 Transactions with holders of - (35,869) - - - - (35,869) - (35,869)
non controlling interest
3. Appropriation of profits - - - - 31,119 (185,626) (154,507) - (154,507)
3.1 Transfer to surplus reserve - - - - 31,119 (31,119) - -
3.2 Distribution to owners - - - - - (62,905) (62,905) - (62,905)
3.3 Distribution to non-control- - - - - - (91,602) (91,602) - (91,602)
ling interest
4. Special reserve - - - 777 - - 777 - 777
4.1 Transfer to special reserve - - - 10,021 - - 10,021 - 10,021
4.2 Amount utilized - - - (9,244) - - (9,244) - (9,244)
III. Balance at December 31, 2023 2,329,812 12,950,464 1,675,896 16,595 273,617 4,678,091 21,924,475 - 21,924,475
- 168 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2022
Other compre-
Share cap- Capital re- hensive in- Special Surplus re- Retained earn- Non-controlling
ital serve come reserves serve ings Total interests Total equity
I. Balance at January 1, 2022 12,977,171 (432,384) 19,857 240,162 5,940,465 21,075,083 - 21,075,083
2,329,812
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-control- - - - - - (59,278) (59,278) - (59,278)
ling 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
- 169 -
ADAMA Ltd. Annual Report 2023
(Expressed in RMB '000)
Company's Statement of Changes in Shareholders’ Equity
For the year ended December 31, 2023
Share Capital re- Other compre- Special Surplus Retained
capital serve hensive income reserves reserve earnings Total
I. Balance at January 1, 2023 2,329,812 15,523,881 30,822 16,509 242,498 337,865 18,481,387
II. Changes in equity for the period - - (31,824) 777 31,119 217,172 217,244
1. Total comprehensive income - - (31,824) - - 311,196 279,372
2. Owner’s contributions and reduction - - - - - - -
2.1 Repurchase of shares - - - - - - -
2.2 Other - - - - - - -
3. Appropriation of profits - - - - 31,119 (94,024) (62,905)
3.1 Appropriations to surplus reserves - - - - 31,119 (31,119) -
3.2 Transfer to Distribution to shareholders - - - - - (62,905) (62,905)
4. Special reserve - - - 777 - - 777
4.1 Transfer to special reserve - - - 10,021 - - 10,021
4.2 Amount utilized - - - (9,244) - - (9,244)
Ⅲ. Balance at December 31, 2023 2,329,812 15,523,881 (1,002) 17,286 273,617 555,037 18,698,631
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
- 170 -
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 25, 2024.
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 2023).
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.
- 171 -
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 from Decemberr 31,2023
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, 2023 and the Com-
pany's consolidated operating results, changes in shareholders' equity and cash flows for the six 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.
- 172 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
5. Criteria of determining material item in the report and its benchmark
Item Benchmark for Material Item
Individual construction in progress project with a budget higher than RMB
Material construction in progress projects
100 million
6. Business combinations
6.1 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.
6.2 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.
- 173 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
6. Business combination - (cont’d)
6.2 Business combinations not involving enterprises under common control and goodwill - (cont’d)
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.
7. 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.
- 174 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
7. Basis for preparation of consolidated financial statements - (cont’d)
Acquisition of non-controlling interests or disposal of equity interest in a subsidiary that does not result in
the loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts of the
Company's interests and non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiary. The difference between the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is adjusted to capital reserve under owners' equity. If the
capital reserve is not sufficient to absorb the difference, the excess is adjusted against retained earnings.
Other comprehensive income attributed to the non-controlling interest is reattributed to the shareholders of
the company.
A put option issued by the Group to holders of non-controlling interests that is settled in cash or other 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.
8. Classification and accounting methods of joint arrangement
There are two types of joint arrangements – joint operations and joint ventures. The type of joint arrange-
ments is determined based on the rights and obligations of joint operator to the joint arrangements by con-
sidering the factors, such as the structure, the legal form of the arrangements, and the contractual terms, etc.
A joint operation is a joint arrangement whereby the joint operators have rights to the assets, and obligations
for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the joint ven-
tures have rights to the net assets of the arrangement.
9. 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.
- 175 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Translation of transactions and financial statements denominated in foreign currencies
10.1 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.
10.2 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
- 176 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Translation of transactions and financial statements denominated in foreign currencies - (cont’d)
10.2 Translation of financial statements denominated in foreign currency - (cont’d)
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.
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.
11. 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.
11.1 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”).
11.1.1 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.
11.1.1.1 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.
- 177 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Financial instruments - (cont’d)
11.1 Classification and measurement of financial assets - (cont’d)
11.1.2 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.
11.1.3 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.
11.1.4 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.
- 178 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Financial instruments - (cont’d)
11.2 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.
11.2.1 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.
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.
- 179 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Financial instruments - (cont’d)
11.2 Impairment of financial assets - (cont’d)
11.2.2 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;
11.2.3 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.
- 180 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Financial instruments - (cont’d)
11.2 Impairment of financial assets - (cont’d)
11.2.4 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.
11.3 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.
11.4 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.
- 181 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Financial instruments - (cont’d)
11.5 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.
11.6 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 29.1).
11.7 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.
11.8 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.
- 182 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
12. 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.
13. Inventories
13.1 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.
13.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
13.3 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.
- 183 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
13. Inventories - (cont’d)
13.3 Basis for determining net realizable value of inventories and provision methods for decline in value of in-
ventories - (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.
13.4 The perpetual inventory system is maintained for stock system.
14. 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.
14.1 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.
- 184 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
14. Long-term equity investments - (cont’d)
14.2 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.
14.3 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.
14.4 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 21).
- 185 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
14. Long-term equity investments - (cont’d)
14.5 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.
15. 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.
16. Fixed assets
16.1 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.
- 186 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
16. Fixed assets - (cont’d)
16.2 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.
16.3 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 21).
17. 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 21).
- 187 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
18. 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.
19. Intangible assets
19.1 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.
- 188 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
19. Intangible assets - (cont’d)
19.1 Valuation methods, useful life, impairment test - (cont’d)
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 21).
19.2 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.
20. 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 21). 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.
- 189 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
21. 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.
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.
22. Contract liabilities
Contract liabilities refer to the Group’s obligation to transfer goods or services to a customer for which the
Group has received consideration from the customer.
23. Employee benefits
23.1 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.
- 190 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
23. Employee benefits - (cont’d)
23.2 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.
23.3 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 when the Group can no longer withdraw the offer of the termination
benefit and when it recognises any related restructuring costs.
If the benefits are payable more than 12 months after the end of the reporting period, they are discounted to
their present value. The discount rate used is the yield on the reporting date on highly-rated corporate de-
bentures denominated in the same currency, that have maturity dates approximating the terms of the Group’s
obligation.
23.4 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.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
24. 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.
24.1 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.
25. 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.
26. 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.
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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. Revenue - (cont’d)
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.
27. 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.
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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. Government grants - (cont’d)
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.
28. Current and deferred tax
The income tax expenses include current income tax and deferred income tax.
28.1 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.
28.2 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.
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.
- 194 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
28. Current and deferred tax - (cont’d)
28.2 Deferred tax assets and deferred tax liabilities - (cont’d)
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.
28.3 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.
29. Leases
Lease is a contract, that conveys the right to use an asset for a period of time in exchange for consideration.
29.1 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.
29.2 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 29.4), 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.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
29. Leases - (cont’d)
29.2 Initial recognition of leased assets and lease liabilities - (cont’d)
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.
29.3 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.
29.4 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.
29.5 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.
30. Other significant accounting policies and accounting estimates
30.1 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.
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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. Other significant accounting policies and accounting estimates - (cont’d)
30.1 Hedging - (cont’d)
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.
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.
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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. Other significant accounting policies and accounting estimates - (cont’d)
30.1 Hedging - (cont’d)
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.
30.2 Securitization of assets
Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account
receivables.
30.3 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.
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.
30.4 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.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
31. Changes in significant accounting policies and accounting estimates
31.1 Changes in significant accounting policies
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 clarification regarding “Deferred tax related to assets and liabili-
ties arising from a single transaction” was effective from 1 January 2023. Adoption of the interpretation has
no significant impact on the Group’s financial statements.
31.2 Changes in significant accounting estimates
There are no significant changes in accounting estimates in the reporting period.
32. 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:
32.1 Expected credit loss of trade receivables
As described in Note III.12, trade receivables are reviewed at each balance sheet date to determine whether
credit risk on a receivable has increased significantly since initial recognition, lifetime expected losses is
accrued for impairment provision. Evidence of impairment includes observable data that comes to the 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.
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
32. Significant accounting estimates and judgments - (cont’d)
32.2 Provision for impairment of inventories
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
As described in Note III.13, 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.
32.3 Impairment of assets other than inventories and financial assets
As described in Note III.21, if impairment indication exists, assets other than inventories and financial assets
are assessed at balance sheet date to determine whether the carrying amount exceeds the recoverable amount
of the assets. If any such case exists, an impairment loss is recognized.
If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the
asset group to which the asset belongs will be estimated. Impairment exists if the carrying amount of an asset
or asset group is higher than recoverable amount, the higher of its fair value less costs of disposal and the
present value of the future cash flows expected to be derived from the asset or asset group. In assessing the
present value of estimated future cash flows, significant judgements are exercised over the asset’s production,
selling price, related operating expenses and discount rate to calculate the present value. All the parameters
used for estimation of the recoverable amount are based on reasonable and supportable assumptions.
32.4 Depreciation and amortisation of assets such as fixed assets and intangible assets
As described in Note III.16 and III.19, 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.
32.5 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.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
32. Significant accounting estimates and judgments - (cont’d)
32.5 Income taxes and deferred income tax - (cont’d)
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.
32.6 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.
32.7 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.
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ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
32. Significant accounting estimates and judgments - (cont’d)
32.8 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.
IV. Taxation
1. Main types of taxes and corresponding tax rates
The income tax rate in China is 25% (2022: 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 2023
ADAMA agriculture solutions Ltd. Israel 23.0%
ADAMA Makhteshim Ltd. Israel 7.5%
ADAMA Agan Ltd. Israel 16.0%
ADAMA Brasil S/A Brazil 34.0%
Makhteshim Agan of North America Inc. U.S. 24.3%
ADAMA India Private Ltd India 25.2%
ADAMA Deutschland GmbH Germany 32.5%
Control Solutions Inc. U.S. 26.0%
Adama Australia Pty Ltd Australia 30.0%
ADAMA Northern Europe B.V. Netherlands 25.8%
ADAMA Italia SRL Italy 27.9%
Alligare LLC U.S. 26.1%
The VAT rate of the Group's subsidiaries is in the range between 2.5% to 27%.
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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 for 2023 and 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 for 2023 and 2022
is 15%.
(2) Benefits In Israel under the Law for the Encouragement of Capital Investments
The Israeli enterprises are entitled to tax benefits under the Israeli Law for the Encouragement of Capital
Investments, 1959. The Israeli enterprises have retained earnings that have been generated under the status
of “Approved Enterprise” or “Beneficiary Enterprise”. In the event that a dividend is distributed from these
retained earnings, such dividend may be liable to tax at the time of distribution.
(3) Amendment to the Law for the Encouragement of Capital Investments, 1959
Since 2013 the Israeli enterprises are taxed under the "Preferred Enterprise" regime. The benefits include a
grants track for enterprises located on Area A. Tax rates on preferred income as from 2017 tax year are as
follows: 7.5% for Development Area A and 16% for the rest of the country. The amendment further deter-
mined that no tax shall apply to dividend distributed out of preferred income to Israel resident company
shareholder.
On December 21, 2016 the Israel legislature 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. Regulations that provide a nexus formula for allocating eligible profits
govern these regimes.
Income of a Preferred Technological Enterprise a Special Preferred Technological Enterprise will be subject
to a reduced corporate tax rate of 6% regardless of the development area in which the enterprise is located.
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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) Amendment to the law for the encouragement of Capital Investments, 1959 - (cont’d)
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 condi-
tions set forth in the Amendment.
During 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 2022.
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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
2023 2022
Cash on hand 820 785
Deposits in banks 4,856,538 4,224,468
Other cash and bank balances 23,970 65,708
4,881,328 4,290,961
Including cash and bank balances placed outside China 3,916,967 3,300,538
As at December 31, 2023 restricted cash and bank balances was 23,970 thousand RMB (as at December 31,
2022 65,708 thousand RMB) mainly including deposits that guarantee bank acceptance drafts.
2. Financial assets held for trading
December 31 December 31
2023 2022
Bank deposits 1,912 1,685
1,912 1,685
3. Derivative financial assets
December 31 December 31
2023 2022
Economic hedge 833,400 224,128
Accounting hedge derivatives 16,737 9,681
850,137 233,809
4. Bills Receivable
December 31 December 31
2023 2022
Post-dated checks receivable 86,303 112,297
86,303 112,297
.
- 205 -
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, 2023
Provision for expected
Book value credit losses
Percentage Carrying
Amount (%) Amount Percentage (%) amount
Account receivables assessed 464,335 5 280,971 61 183,364
individually for impairment
Account receivables assessed 8,068,869 95 105,556 1 7,963,313
collectively for impairment
8,533,204 100 386,527 5 8,146,677
December 31, 2022
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) 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
b. Aging analysis
December 31, 2023
Within 1 year (inclusive) 8,067,906
Over 1 year but within 2 years 189,972
Over 2 years but within 3 years 65,317
Over 3 years but within 4 years 18,939
Over 4 years but within 5 years 55,018
Over 5 years 136,052
8,533,204
- 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)
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, 2023
Provision for expected
Book value credit loss Percentage (%)
Credit group A 1,055,296 4,217 0.4
Credit group B 805,354 6,970 0.9
Credit group C 307,447 13,412 4.4
Credit group D 46,770 976 2.1
2,214,867 25,575 1.2
Geographical location B:
Account receivables in geographical location B are grouped based on aging analysis:
December 31, 2023
Provision for expected
Book value credit loss Percentage (%)
Accounts receivable that are not overdue 813,950 7,231 0.9
Debts overdue less than 60 days 91,709 2,751 3.0
Debts overdue less than 180 days but 39,557 3,956 10.0
more than 60 days.
Debts overdue above 180 days 21,221 8,488 40.0
Legal Debtors 44,144 44,144 100.0
1,010,581 66,570 6.6
Other geographical locations:
December 31, 2023
Provision for expected
Book value credit loss Percentage (%)
Other account receivables assessed 4,843,421 13,411 0.3
collectively for impairment
- 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)
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, 2023 44,012 266,016 310,028
Addition (write back) during the period, net 1,029 59,346 60,375
Write-off during the period - 3,345 3,345
Exchange rate effect 1,502 11,277 12,779
Balance as of December 31, 2023 46,543 339,984 386,527
d. Five largest accounts receivable at December 31, 2023:
Allowance of expected
Proportion of Accounts credit losses (credit losses
Name Closing balance receivable (%) has occurred)
Customer 1 148,155 1.7 -
Customer 2 99,037 1.2 -
Customer 3 96,941 1.1 -
Customer 4 96,311 1.1 -
Customer 5 81,671 1.0 -
Total 522,115 6.1 -
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 2023, the Securitization agreement was approved up to October 25, 2024.
- 208 -
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 January - 300m$ (as of Dec-2023 2,124 million RMB), during February –
350m$ (as of Dec-2023 2,478 million RMB), during the months of March through August – 400m$ (as of
Dec-2023 2,832 million RMB), during the months of September through October - 300m$ (as of Dec-2023
2,124 million RMB) and during the months of November through December – 275m$ (as of Dec-2023
1,975 million RMB). In addition the company has a permanent uncommitted facility of 50$ million (as of
December 31, 2023- 354 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, 2023, 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.
A subordinated note is recorded in respect of the portion of trade receivables included in the Securitization
Program with respect to outstanding cash proceeds, however the Company has transferred the credit risk.
The continuing involvement and subordinated note recorded in the balance sheet as part of the “other receiv-
ables” line item.
- 209 -
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 December 31 2023, the FIDC-Donegal agreement was approved up to September 30, 2024. The max-
imum securitization scope as of December 31, 2023 is BRL 385 million (as of December 31, 2023 – 563
million RMB).
On the date of the sale of the customer receivables, the entity pays the full amount which is the debt amount
sold net of discount calculated, among others, over the expected length of the period between the date of sale
of the customer receivable and its anticipated repayment date.
The entity bears 95% of the credit risk in respect of the customers whose debts were sold such that the entity
has the right of recourse to 5% of the unpaid amount. The subsidiary has a pledged deposit with regards to
the entity’s right of recourse.
The subsidiary continues to recognize the trade receivables sold to the entity based on the extent of its 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 December 31 2023, the FIDC-Liverpool agreement was approved up to November 10, 2024. The
maximum securitization scope as of December 31, 2023 is BRL 311 million (as of December 31, 2023 – 455
million RMB).
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.
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.
- 210 -
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. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
December 31 December 31
2023 2022
Accounts receivables derecognized 3,392,091 4,039,429
Continuing involvement 139,862 193,532
Subordinated note in respect of trade receivables 754,739 591,998
Liability in respect of trade receivables 32,368 79,619
Year ended December 31
2023 2022
Loss in respect of sale of trade receivables 283,076 226,575
6. Receivables financing
December 31 December 31
2023 2022
Bank acceptance draft 123,050 63,639
123,050 63,639
As at December 31, 2023, bank acceptance endorsed but not yet due amounts to 272,745 thousands RMB.
7. Prepayments
(1) The aging analysis of prepayments is as follows:
December 31 December 31
2023 2022
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 290,540 95 327,809 97
Over 1 year but within 2 years (inclusive) 11,818 4 11,047 3
Over 2 years but within 3 years (inclusive) 2,925 1 1,204 -
Over 3 years 600 - 1,042 -
305,883 100 341,102 100
(2) Total of five largest prepayments by debtor at the end of the period:
Percentage of prepayments
Amount (%)
December 31, 2023 89,682 29
- 211 -
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
2023 2022
Others 1,054,302 1,021,824
1,054,302 1,021,824
a. Others breakdown by categories
December 31 December 31
2023 2022
Subordinated note in respect of trade receivables 754,739 591,998
Trade receivables as part of securitization transactions
not yet eliminated 139,862 193,532
Financial institutions 44,429 38,354
Other 154,080 242,688
Sub total 1,093,110 1,066,572
Provision for expected credit losses - other receivables (38,808) (44,748)
1,054,302 1,021,824
b. Other receivables by aging
December 31
2023
Within 1 year (inclusive) 1,043,559
Over 1 year but within 2 years 14,043
Over 2 years but within 3 years 26,280
Over 3 years but within 4 years 986
Over 4 years but within 5 years 1,393
Over 5 years 6,849
1,093,110
(2) Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Year ended
December 31, 2023
Balance as of January 1 2023, 44,748
Addition (written back) during the period (5,922)
Write-off during the period -
Exchange rate effect (18)
Balance as of December 31, 2023 38,808
- 212 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
8. Other Receivables – (cont'd)
(3) Five largest other receivables at December 31, 2023:
Allowance of ex-
Proportion of other re- pected credit
Name Closing balance ceivables (%) losses
Party 1 754,739 69 -
Party 2 44,430 4 -
Party 3 6,991 1 -
Party 4 3,125 - -
Party 5 3,074 - -
Total 812,359 74 -
9. Inventories -
(1) Inventories by category:
December 31, 2023
Provision for impair-
Book value ment Carrying amount
Raw materials 3,062,950 20,940 3,042,010
Work in progress 1,834,185 6,277 1,827,908
Finished goods 8,089,285 368,489 7,720,796
Others 507,676 9,633 498,043
13,494,096 405,339 13,088,757
December 31, 2022
Provision for impair-
Book value ment Carrying amount
Raw materials 4,341,176 20,939 4,320,237
Work in progress 2,410,883 5,952 2,404,931
Finished goods 9,954,831 237,337 9,717,494
Others 495,125 10,546 484,579
17,202,015 274,774 16,927,241
- 213 -
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, 2023
January 1, Reversal or December 31,
2023 Provision write-off Other 2023
Raw material 20,939 11,555 (12,085) 531 20,940
Work in progress 5,952 8,721 (8,449) 53 6,277
Finished goods 237,337 526,185 (402,255) 7,222 368,489
Others 10,546 1,295 (2,342) 134 9,633
274,774 547,756 (425,131) 7,940 405,339
10. Other Current Assets
December 31 December 31
2023 2022
Deductible VAT 667,550 679,428
Current tax assets 210,362 219,057
Short term investments 158,603 171,496
Others 47,199 59,707
1,083,714 1,129,688
11. Long-Term Receivables
December 31 December 31
2023 2022
Long term account receivables from sale of goods 68,752 82,510
68,752 82,510
- 214 -
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
2023 2022
Joint venture 1,437 2,110
Associate 30,037 24,258
31,474 26,368
(2) Movements of long-term equity investments for the period are as follows:
Declared dis-
January 1, Investment Other Compre- tribution of Balance at the
2023 income hensive income cash dividend end of the period
Joint ven-
ture
Investee A 2,110 176 6 (855) 1,437
Sub-total 2,110 176 6 (855) 1,437
Associate
Investee B 24,258 6,160 2,412 (2,793) 30,037
Sub-total 24,258 6,160 2,412 (2,793) 30,037
Sub-total 26,368 6,336 2,418 (3,648) 31,474
13. Other equity investments
December 31, December 31, Dividend received
2023 2022 during 2023
Investment A 54,299 84,720 2,325
Investment B 75,905 71,840 10,417
Investment C 1,814 1,781 -
132,018 158,341 12,742
Other equity investments are non-core businesses that are intended to be held in the foreseeable future.
- 215 -
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, 2023 4,240,658 16,516,306 166,587 438,542 21,362,093
Purchases 85,685 129,330 54,999 37,357 307,371
Transfer from construction in progress 264,157 1,455,337 1,835 12,166 1,733,495
Classification to Investment property (20,125) - - - (20,125)
Disposals (8,775) (60,901) (31,396) (9,027) (110,099)
Newly consolidated subsidiaries - 3,483 270 478 4,231
Currency translation adjustment 64,858 239,804 5,035 11,673 321,370
Balance as at December 31, 2023 4,626,458 18,283,359 197,330 491,189 23,598,336
Accumulated depreciation
Balance as at January 1, 2023 (1,791,373) (9,815,859) (74,448) (342,199) (12,023,879)
Charge for the period (126,163) (795,596) (29,909) (39,362) (991,030)
Classification to Investment property 2,149 - - - 2,149
Disposals 3,785 51,689 26,150 8,827 90,451
Newly consolidated subsidiaries - (2,348) (256) (277) (2,881)
Currency translation adjustment (33,729) (148,538) (2,529) (9,051) (193,847)
Balance as at December 31, 2023 (1,945,331) (10,710,652) (80,992) (382,062) (13,119,037)
Provision for impairment
Balance as at January 1, 2023 (132,663) (251,190) (1,107) (1,070) (386,030)
Charge for the period (8,579) (50,172) (35) (46) (58,832)
Disposals 2,866 3,829 390 120 7,205
Currency translation adjustment (1,036) (482) (5) (6) (1,529)
Balance as at December 31, 2023 (139,412) (298,015) (757) (1,002) (439,186)
Carrying amounts
As at December 31, 2023 2,541,715 7,274,692 115,581 108,125 10,040,113
As at January 1, 2023 2,316,622 6,449,257 91,032 95,273 8,952,184
The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.
- 216 -
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
2023 2022
Provision for im- Provision for im-
Book value pairment Carrying amount Book value pairment Carrying amount
2,829,054 (321,726) 2,507,328 3,079,882 (118,481) 2,961,401
(2) Details and Movements of major construction projects in progress during period ended December 31, 2023
Actual
Including: Currency Transfer cost to Project
January Interest translation to fixed December budget progress
Budget 1, 2023 Additions capitalized differences assets Impairment 31, 2023 (%) (%) Source of funds
Project A 837,385 542,618 252,317 10,904 - (674,178) - 120,757 97% 97% Bank loan
Project B 708,072 531,817 130,084 41,732 9,765 - - 671,666 95% 95% Internal finance
Project C 381,495 333,514 34,113 - 3,718 (371,345) - - 100% 100% Internal finance
Project D 180,674 74,523 3,519 - - (39,127) - 38,915 87% 87% Internal finance
Project E 949,082 352,422 248,028 29,803 7,402 - - 607,852 64% 64% Internal finance
Project F - 212,586 319 - - (3,686) (199,218) 10,001 - - Internal finance
* As of December 31, 2023 Project A, Project D and Project F are include impairment of RMB 14 million, 35 million and 225 million , respectively.
- 217 -
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, 2023 593,790 46,364 294,122 3,858 938,134
Additions 152,215 4,110 93,265 594 250,184
Decrease (47,835) (301) (71,074) (358) (119,568)
Currency translation adjustment 28,329 844 6,283 63 35,519
Balance as at December 31, 2023 726,499 51,017 322,596 4,157 1,104,269
Accumulated depreciation
Balance as at January 1, 2023 (221,223) (23,108) (136,165) (1,749) (382,245)
Charge for the period (96,313) (6,627) (94,602) (725) (198,267)
Decrease 44,702 294 66,358 137 111,491
Currency translation adjustment (6,258) (334) (3,363) (58) (10,013)
Balance as at December 31, 2023 (279,092) (29,775) (167,772) (2,395) (479,034)
Provision for impairment
Balance as at January 1, 2023 - - - - -
Balance as at December 31, 2023 - - - - -
Carrying amounts
As at December 31, 2023 447,407 21,242 154,824 1,762 625,235
As at January 1, 2023 372,567 23,256 157,957 2,109 555,889
- 218 -
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, 2023 12,204,376 4,182,457 1,216,249 794,577 578,572 510,272 588,585 20,075,088
Newly consolidated subsidiaries 6,418 - - 30,070 52,182 - - 88,670
Purchases 539,543 - 168,812 - - 517 43,391 752,263
Currency translation adjustment 231,021 70,917 21,139 15,735 11,569 655 7,190 358,226
Disposal (21,147) - (8,836) - - (4,427) - (34,410)
Balance as at December 31, 2023 12,960,211 4,253,374 1,397,364 840,382 642,323 507,017 639,166 21,239,837
Accumulated amortization
Balance as at January 1, 2023 (9,525,327) (3,125,941) (732,640) (524,730) (312,019) (95,570) (262,984) (14,579,211)
Charge for the period (527,003) (167,213) (95,765) (27,808) (46,106) (10,340) (22,483) (896,718)
Currency translation adjustment (180,329) (53,994) (13,503) (10,168) (6,903) (1,684) (4,383) (270,964)
Disposal 2,208 - 8,815 - - 681 - 11,704
Balance as at December 31, 2023 (10,230,451) (3,347,148) (833,093) (562,706) (365,028) (106,913) (289,850) (15,735,189)
Provision for impairment
Balance as at January 1, 2023 (95,951) (56,601) (49) - - (272) (250) (153,123)
Charge for the period (7,989) (21,566) - - - - (1,368) (30,923)
Currency translation adjustment (1,547) (770) - - - (4) - (2,321)
Balance as at December 31, 2023 (105,487) (78,937) (49) - - (276) (1,618) (186,367)
Carrying amount
As at December 31, 2023 2,624,273 827,289 564,222 277,676 277,295 399,828 347,698 5,318,281
As at January 1, 2023 2,583,098 999,915 483,560 269,847 266,553 414,430 325,351 5,342,754
(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.
- 219 -
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 actual results of 2023, 2024 workplan and the forecast results for the next 4 years.
The discount rate (9% WAAC) based on the company's cost of equity and cost of debt, taking into account
the comprehensive risk factors.
The annual growth rate (1.5%) based on the management projections and market expectations.
The carrying amount of goodwill is mainly allocated to Agro units. Total amount of goodwill allocated to the
Agro units amounts to RMB 4,931 thousand. The goodwill allo-cated to non-core CGU is not significant.
As of December 31, 2023 the value in use 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,
2023 ing the year adjustment 2023
Book value 4,805,157 113,075 83,306 5,001,538
Impairment provision - - - -
Carrying amount 4,805,157 113,075 83,306 5,001,538
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
2023 2022
Deductible Deductible
temporary Deferred tax temporary Deferred tax
differences assets differences assets
Deferred tax assets
Deferred tax assets in respect of carry
forward losses 3,544,797 775,364 1,568,088 256,749
Deferred tax assets in respect of inven-
tories 2,387,244 643,527 2,402,900 689,062
Deferred tax assets in respect of em-
ployee benefits 829,840 132,616 1,005,874 166,264
Other deferred tax asset 2,161,309 521,143 2,030,651 545,937
8,923,190 2,072,650 7,007,513 1,658,012
- 220 -
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
2023 2022
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Deferred tax liabilities
Deferred tax liabilities in respect of
fixed assets, intangible assets and
right-of-use assets 4,159,172 768,112 3,430,096 626,610
4,159,172 768,112 3,430,096 626,610
(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting
December 31 December 31
2023 2022
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 471,009 1,601,641 310,749 1,347,263
Deferred tax liabilities 471,009 297,103 310,749 315,861
(4) Details of unrecognized deferred tax assets
December 31 December 31
2023 2022
Deductible temporary differences 803,476 518,542
Deductible losses carry forward 1,819,005 229,672
2,622,481 748,214
(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets
December 31 December 31
2023 2022
2023 - 1,713
2024 36,433 33,646
2025 6,389 6,282
2026 6,481 6,373
2027 170,968 7,724
After 2027 1,598,734 173,934
1,819,005 229,672
- 221 -
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
2023 2022
Judicial deposits 207,027 154,273
Assets related to securitization 81,423 112,388
Advances in respect of non-current assets 18,003 174,035
Others 128,762 164,137
435,215 604,833
21. Short-Term Loans
Short-term loans by category:
December 31 December 31
2023 2022
Unsecured loans 5,733,522 3,342,921
5,733,522 3,342,921
22. Derivative financial liabilities
December 31 December 31
2023 2022
Economic hedge 590,442 490,496
Accounting hedge derivatives 17,345 55,020
607,787 545,516
- 222 -
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
2023 2022
Post-dated checks payables 481,645 900,537
Note payables draft 131,862 214,238
613,507 1,114,775
As at December 31, 2023, none of the bills payable are overdue.
24. Accounts payable
December 31 December 31
2023 2022
Within 1 year (including 1 year) 4,590,057 7,447,355
1-2 years (including 2 years) 23,467 59,671
2-3 years (including 3 years) 14,445 2,048
Over 3 years 21,764 18,195
4,649,733 7,527,269
There are no significant accounts payables aging over one year.
25. Contract liabilities
December 31 December 31
2023 2022
Discount for customers 952,123 904,615
Advances from customers 562,242 871,958
1,514,365 1,776,573
26. Employee Benefits Payable
December 31 December 31
2023 2022
Short-term employee benefits 500,932 1,027,543
Post-employment benefits 60,438 33,317
Share based payment (See note XIII) 18,401 76,875
Other benefits within one year 200,144 204,794
779,915 1,342,529
Current maturities 67,124 28,257
847,039 1,370,786
- 223 -
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
2023 2022
Corporate income tax 197,983 240,672
VAT 179,471 187,066
Others 29,776 31,836
407,230 459,574
28. Other Payables
December 31 December 31
2023 2022
Dividends payables 750 750
Other payables 1,468,569 1,610,532
1,469,319 1,611,282
(1) Other payables
December 31 December 31
2023 2022
Accrued expenses 721,034 758,158
Hold-back payment due to acquistions 131,000 254,000
Payables in respect of intangible assets 115,214 106,510
Financial institutions 50,032 -
Liability in respect of securitization transactions 32,368 79,619
Others 418,921 412,245
1,468,569 1,610,532
29. Non-Current Liabilities Due Within One Year
Non-current liabilities due within one year by category are as follows:
December 31 December 31
2023 2022
Long-term loans due within one year 1,552,217 1,539,496
Debentures payable due within one year 576,638 565,658
Lease liabilities due within one year 169,033 156,977
2,297,888 2,262,131
- 224 -
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
2023 2022
Put options to holders of non-controlling interests 468,514 507,483
Provision in respect of returns 271,629 158,173
Provision in respect of claims 13,294 37,769
Others 390 369
753,827 703,794
31. Long-Term Loans
Long-term loans by category
December 31 December 31
2023 Interest range 2022 Interest range
Long term loans
Guaranteed loans 383,795 3.55%-3.75% 404,841 2.92%-3.75%
Unsecured loans 4,054,361 1.73%-9.28% 4,797,525 1.73%-7.67%
Total Long term loans 4,438,156 5,202,366
Less:
Long term loans from banks due within 1 year (1,552,217) )1,539,496(
Long term loans, net 2,885,939 3,662,870
* 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
2023 2022
Debentures Series B 7,496,061 7,919,169
Current maturities (576,638) (565,658)
6,919,423 7,353,511
December 31
2023
First year (current maturities) 576,638
Second year 576,638
Third year 576,638
Fourth year 576,638
Fifth year and thereafter 5,189,509
7,496,061
- 225 -
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, 2023:
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 2023 or premium rate effect period adjustment 31, 2023
Debentures November
Series B 2,673,640 1,650,000 4.12.2006 2020-2036 3,043,742 3,321,071 232 10,116 (240,845) 54,627 3,145,201
Debentures November
Series B 843,846 513,527 16.1.2012 2020-2036 842,579 996,237 10,698 2,632 (78,794) 16,559 947,332
Debentures November
Series B 995,516 600,000 7.1.2013 2020-2036 1,120,339 1,231,947 4,634 3,320 (92,066) 20,421 1,168,256
Debentures November
Series B 832,778 533,330 1.2.2015 2020-2036 1,047,439 1,151,945 (2,852) 3,163 (81,840) 19,024 1,089,440
Debentures November
Series B 418,172 266,665 1-6.2015 2020-2036 556,941 625,358 (7,719) 1,768 (40,916) 10,258 588,749
Debentures November
Series B 497,989 246,499 5.5.2020 2020-2036 692,896 592,611 (9,106) 1,689 (37,821) 9,710 557,083
7,919,169 (4,113) 22,688 (572,282) 130,599 7,496,061
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.
- 226 -
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
2023 Interest range 2022 Interest range
Lease liabilities 664,492 1.1%-15.3% 588,053 1.1%-9.1%
Less: Lease liabilities due within one year (169,033) (156,977)
Long term lease liabilities, net 495,459 431,076
34. Long-Term Employee Benefits Payable
Post-employment benefit plans – defined benefit plan and early retirement
December 31 December 31
2023 2022
Total present value of obligation 525,316 566,550
Less: fair value of plan's assets (59,884) (70,001)
Net liability related to Post-employment benefits 465,432 496,549
Termination benefits 67,853 65,782
Total recognized liability for defined benefit plan, net (1) 533,285 562,331
Other long-term employee benefits 205,369 258,079
Total long-term employee benefits, net 738,654 820,410
Including: Long-term employee benefits payable due within one year 67,124 28,257
671,530 792,153
(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
2023 2022 2023 2022 2023 2022
Balance as at January 1, 2023 632,332 779,671 70,001 86,282 562,331 693,389
Expense/income recognized
in profit and loss:
Current service cost 24,914 25,954 - - 24,914 25,954
Past service cost 1,782 - 1,782 - - -
Interest costs 22,214 16,684 2,761 1,949 19,453 14,735
Losses on curtailments and settlements 27,611 6,098 - - 27,611 6,098
Changes in exchange rates (13,025) (74,599) (2,000) (10,222) (11,025) (64,377)
Actuarial losses due to early retirement 662 (1,087) - 662 (1,087)
Included in other comprehensive income:
Actuarial gain (losses) as a result of changes in actu-
arial assumptions (9,337) (97,666) (880) (5,672) (8,457) (91,994)
Foreign currency translation differences in respect of
foreign operations 10,760 57,646 1,107 6,776 9,653 50,870
Additional movements:
Benefits paid (96,850) (80,369) (15,993) (12,587) (80,857) (67,782)
Classification to termination (7,894) - - - (7,894) -
Contributions paid by the Group - - 3,106 3,475 (3,106) (3,475)
Balance as at December 31, 2023 593,169 632,332 59,884 70,001 533,285 562,331
- 227 -
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
2023 2022
Discount rate (%)* 2.6%-2.8% 1.7%-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, 2023
Increase of 1% Decrease of 1%
Change in defined benefit obligation (43,840) 53,027
35. Provisions
December 31 December 31
2023 2022
Liabilities in respect of contingencies* 182,172 149,187
Provision in respect of site restoration 62,889 65,291
Long-term liability in respect of business combinations 52,929 5,182
Other 1,261 2,521
299,251 222,181
* Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of re-
sources had been reliably estimated.
- 228 -
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
2023 2022
Put options to holders of non- controlling interests 566,433 907,644
Long term loans – others 2,354,133 348,231
2,920,566 1,255,875
Current maturities - -
2,920,566 1,255,875
37. Share Capital
Balance at
Balance at Janu- Issuance of new December 31,
ary 1, 2023 shares Buyback of shares 2023
Share capital 2,329,812 - - 2,329,812
38. Capital Reserve
Balance at
Balance at Janu- Additions during Reductions during December 31,
ary 1, 2023 the period the period 2023
Share premiums 12,606,562 - - 12,606,562
Other capital reserve 379,771 - (35,869) 343,902
12,986,333 - (35,869) 12,950,464
- 229 -
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-
2023 amount or loss expenses amount ber 31, 2023
Items that will not be re-
classified to profit or loss 101,370 (21,964) - (3,539) (18,425) 82,945
Re-measurement of changes
in liabilities under defined
benefit plans 46,838 8,457 - 1,025 7,432 54,270
Changes in fair value of
other equity investment 54,532 (30,421) - (4,564) (25,857) 28,675
Items that may be reclassi-
fied to profit or loss 979,220 553,331 (65,494) 5,094 613,731 1,592,951
Effective portion of gain or
loss of cash flow hedge (41,369) (20,670) (65,494) 5,094 39,730 (1,639)
Translation difference of for-
eign financial statements 1,020,589 574,001 - - 574,001 1,594,590
1,080,590 531,367 (65,494) 1,555 595,306 1,675,896
40. Surplus reserve
Additions Reductions Balance at
Balance at during the during the December 31,
January 1, 2023 period period 2023
Statutory surplus reserve 238,684 31,119 - 269,803
Discretional surplus reserve 3,814 - - 3,814
242,498 31,119 - 273,617
- 230 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
41. Retained Earnings
2023 2022
Retained earnings as at January 1 6,469,604 5,940,465
Net profits (loss) for the period attributable to shareholders of the Com-
pany (1,605,887) 609,391
Appropriation to statutory surplus reserve (31,119) (2,336)
Dividends to non-controlling Interest (91,602) (59,278)
Dividend to the shareholders of the company (Note 1 & 2) (62,905) (18,638)
Retained earnings as at December 31 4,678,091 6,469,604
Note 1:
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 2:
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.
- 231 -
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
2023 2022
Income Cost of sales Income Cost of sales
Principal activities 32,730,388 25,962,899 37,305,373 27,948,254
Other businesses 49,068 21,209 76,542 36,712
32,779,456 25,984,108 37,381,915 27,984,966
43. Taxes and Surcharges
Year ended December 31
2023 2022
Tax on turnover 40,979 36,202
Others 68,031 74,212
109,010 110,414
44. Selling and Distribution Expenses
Year ended December 31
2023 2022
Salaries and related expense 1,858,970 1,991,542
Depreciation and amortization 950,863 1,012,132
Advertising and sales promotion 341,620 356,079
Warehouse expenses 184,531 155,427
Registration 152,301 158,590
Travel expenses 138,072 144,917
Professional services 117,064 115,163
Insurance 109,577 114,650
Others 355,110 347,779
4,208,108 4,396,279
- 232 -
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
2023 2022
Salaries and related expenses 455,343 807,438
IT systems 134,787 126,803
Professional services 129,064 124,159
Depreciation and amortization 114,722 103,209
Cost contribution arrangement 72,858 74,845
Office rent, maintenance and expenses 44,799 48,307
Other 105,837 122,067
1,057,410 1,406,828
46. Research and development expenses
Year ended December 31
2023 2022
Salaries and related expenses 230,748 256,060
Depreciation and amortization 79,173 78,647
Professional services 38,598 47,293
Materials 35,575 82,750
Field trial 35,124 45,326
Office rent, maintenance and expenses 13,025 12,738
Other 50,511 55,045
482,754 577,859
47. Financial expenses (incomes), net
Year ended December 31
2023 2022
Interest expenses on debentures and loans and other charges 1,147,484 782,812
Loss in respect of sale of trade receivables 283,076 226,575
CPI expenses in respect of debentures 260,063 409,078
Revaluation of put option, net (313,216) (121,172)
Interest income from customers, banks and others (368,990) (180,619)
Exchange rate differences, net 55,459 (881,634)
Interest expense on lease liabilities 34,909 25,755
Interest expense in respect of post-employment benefits and early retire-
ment, net 22,462 18,141
Others 61,871 46,860
1,183,118 325,796
- 233 -
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
2023 2022
Income from long-term equity investments accounted for using
the equity method 6,336 10,358
Other 12,742 2,325
19,078 12,683
49. Gain (loss) from Changes in Fair Value
Year ended December 31
2023 2022
Loss from changes in fair value of derivative financial
Instruments (804,818) (1,504,067)
Others 154,444 (765)
(650,374) (1,504,832)
50. Credit impairment reversal (losses)
Year ended December 31
2023 2022
Bills receivable and accounts receivable (60,375) (60,978)
Other receivables 5,922 (30,689)
(54,453) (91,667)
51. Asset impairment losses
Year ended December 31
2023 2022
Inventories (256,893) (156,392)
Fixed assets (58,832) (69,758)
Construction in progress (203,245) (88,617)
Intangible asset (30,923) (10,619)
(549,893) (325,386)
- 234 -
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
2023 2022 items
Gain from disposal of fixed assets 29,294 62,443 29,294
Loss from disposal of intangible assets (9,615) (2,847) (9,615)
19,679 59,596 19,679
53. Income Tax Expenses
Year ended December 31
2023 2022
Current year 422,601 690,601
Deferred tax expenses (income) (267,749) (633,071)
Adjustments for previous years, net 46,125 89,912
200,977 147,442
(1) Reconciliation between income tax expense and accounting profit is as follows:
Year ended December 31
2023 2022
Profit before taxes (loss) (1,404,910) 756,833
Statutory tax in china 25% 25%
Tax calculated according to statutory tax in china (351,228) 189,208
Tax benefits from Approved Enterprises (33,487) )85,909(
Difference between measurement basis of income for financial
statement and for tax purposes (1,148) 32,110
Taxable income (loss) and temporary differences at other tax rate 11,082 )92,093(
Taxes in respect of prior years 46,125 89,912
Utilization of tax losses prior years for which deferred taxes were
not created (42,896) )43,008(
Temporary differences and losses in the report year for which de-
ferred taxes were not created 302,002 62,664
Non-deductible expenses, non-taxable income and other difference,
net (19,402) )16,474(
Neutralization of tax calculated in respect of the Company’s share
in results of equity accounted investees (2,051) )3,495(
Effect of change in tax rate in respect of deferred taxes 200,538 25,480
Creation and reversal of deferred taxes for tax losses and temporary
differences from previous years 91,442 )10,953(
Income tax expenses 200,977 147,442
54. Other comprehensive income
Details of the Other comprehensive income are set out in Note V.39
- 235 -
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 2023 2022
Government grants related to income Non-Operating income 20,743 17,772
Government grants related to assets Fixed assets, Intangible assets 14,805 18,611
56. Notes to items in the cash flow statements
(1) Cash received relating to other operating activities
Year ended December 31
2023 2022
Derivatives transactions 63,167 324,320
Financial institutions 124,993 272,770
Interest income 255,440 103,779
Government subsidies 30,526 20,430
Others 216,555 83,278
690,681 804,577
(2) Cash paid relating to other operating activities
Year ended December 31
2023 2022
Derivatives transactions 430,629 535,277
Financial institutions 121,234 307,717
Advertising and sales promotion 323,675 333,890
Professional services 305,555 242,072
Commissions and Warehouse 232,285 161,142
IT and Communication 228,792 232,517
Registration and Field trials 164,877 178,793
Insurance 176,239 145,518
Travel 125,173 151,335
Others 900,331 847,780
3,008,790 3,136,041
(3) Cash received relating to other investing activities
Year ended December 31
2023 2022
Investment grant 35,659 -
Dividend received from other equity investment 2,325 2,325
37,984 2,325
- 236 -
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
2023 2022
Increase in short and long term investments 123,484 78,008
Increase in securitization facility - 51,936
123,484 129,944
(5) Cash received from other financing activities
Year ended December 31
2023 2022
Borrowing from related party * 3,393,370 685,150
Deposit for issuing bills payables 97,625 164,586
3,490,995 849,736
* 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
2023 2022
Payment in respect of hedging transactions on debentures 922,137 1,073,463
Repayment of lease liability 175,761 162,190
Realization of Call option 116,938 -
Deposit for issuing bills payable 55,887 170,939
1,270,723 1,406,592
- 237 -
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
2023 2022
Net profit (loss) (1,605,887) 609,391
Add: Impairment provisions for assets 549,893 325,386
Credit impairment losses 54,453 91,667
Depreciation of fixed assets and investment property 992,670 1,007,191
Depreciation of right-of-use asset 198,267 174,796
Amortization of intangible asset 896,718 954,686
Gains on disposal of fixed assets, intangible assets, and other long-
term assets, net (19,679) (59,596)
Losses from changes in fair value 650,374 1,504,832
Financial expenses 797,390 69,669
Investment income, net (19,078) (12,683)
Increase in deferred tax assets, net (222,426) (558,878)
Decrease in deferred tax liabilities, net (45,323) (74,193)
Decrease (increase) in inventories, net 4,136,612 (4,203,112)
Decrease (increase) in operating receivables, net 442,429 (975,103)
Increase (decrease) in operating payables, net (4,171,065) 2,133,585
Others (17,471) (46,893)
Net cash flow from operating activities 2,617,877 940,745
b. Net increase (decrease) in cash and cash equivalents
Year ended December 31
2023 2022
Closing balance of cash and cash equivalents 4,857,358 4,225,253
Less: Opening balance of cash and cash equivalents 4,225,253 5,759,480
Increase (decrease) in cash and cash equivalents 632,105 (1,534,227)
- 238 -
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
2023 2022
Cash on hand 820 785
Bank deposits available on demand without restrictions 4,856,538 4,224,468
4,857,358 4,225,253
58. Assets with Restricted Ownership or Right of Use
December 31
2023 Reason
Cash 23,970 Pledged
Other non-current assets 207,027 Guarantees
230,997
- 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
(1) Foreign currencies denominated items
As at December 31, 2023
Foreign currency at
the end of the pe- RMB at the end of
riod Exchange rate the period
Cash and bank balances
BRL 518,456 1.463 758,501
CNY 351,628 1.000 351,628
EUR 43,800 7.834 343,129
ILS 65,734 1.953 128,378
PLN 64,683 1.800 116,429
USD 10,325 7.083 73,130
ARS 7,432,900 0.009 66,896
TRY 244,985 0.241 59,041
ZAR 149,316 0.382 57,039
GBP 5,547 9.024 50,054
RON 30,215 1.575 47,589
RUB 472,300 0.079 37,312
Other 173,789
Total 2,262,915
Bills and Accounts receivable
BRL 668,015 1.463 977,306
EUR 72,897 7.834 571,079
TRY 1,085,652 0.241 261,642
RON 119,668 1.575 188,478
CAD 34,792 5.349 186,105
ZAR 485,017 0.382 185,276
USD 21,838 7.083 154,669
THB 445,834 0.207 92,288
IDR 202,068 0.4567 92,288
PLN 34,765 1.800 62,576
RUB 789,049 0.079 62,335
HUF 2,622,016 0.020 52,440
GBP 33,14 9.024 29,906
CZK 62,113 0.317 19,690
ILS 24,80 1.953 4,844
Other 228,947
Total 3,169,869
Other receivables
EUR 33,279 7.834 260,704
GBP 14,769 9.024 133,279
ILS 37,194 1.953 72,639
BRL 26,554 1.463 38,849
Other 13,572
Total 519,043
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)
(1) Foreign currencies denominated items - (cont'd)
As at December 31, 2023
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Other current assets
BRL 125,174 1.463 183,130
ARS 17,622,545 0.009 158,603
ILS 31,019 1.953 60,581
EUR 7,650 7.834 59,931
Other 193,083
Total 655,328
Long-term receivables
BRL 46,994 1.463 68,752
Total 68,752
Other non-current assets
BRL 186,668 1.463 273,095
Other 19,445
Total 292,540
Short-term loans
TRY 207,456 0.241 49,997
ARS 3,824,658 0.009 34,422
UAH 60,165 0.186 11,191
Other 2,020
Total 97,630
Bills and Accounts payable
ILS 655,382 1.953 1,279,961
EUR 52,622 7.834 412,238
BRL 166,799 1.463 244,027
USD 10,137 7.083 71,795
Other 228,047
Total 2,236,068
Other payables
ILS 75,297 1.953 147,055
BRL 89,795 1.463 131,370
EUR 11,445 7.834 89,660
ILS CPI 16,407 1.953 32,042
Other 125,760
Total 525,887
241
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, 2023
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Contract liabilities
EUR 46,457 7.834 363,945
BRL 56,676 1.463 82,917
Other 222,170
Total 669,032
Non-current liabilities due within one year
ILS CPI 305,793 1.953 597,213
EUR 58,196 7.834 455,910
Other 69,028
Total 1,122,151
Other current liabilities
EUR 5,696 7.834 44,624
BRL 10,511 1.463 15,377
Other 2,954
Total 62,955
Long-term loan
EUR 3,000 7.834 23,501
Total 23,501
Debentures payable
ILS CPI 3,542,971 1.953 6,919,423
Total 6,919,423
Provision and Long-term payables
BRL 110,830 1.463 162,144
NZD 11,174 4.456 49,791
EUR 372 7.834 2,918
Total 214,853
Other non-current liabilities and lease liabilities
CNY 2,000,000 1.000 2,000,000
USD 9,286 7.083 65,770
ILS CPI 30,844 1.953 60,238
EUR 6,565 7.834 51,427
Other 60,394
Total 2,237,829
242
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.
243
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VI. Change in consolidation Scope
1. Business combinations involving enterprises not under common control
(1) Business combinations involving enterprises not under common control during current period
From acquisition date till pe-
Name of Proportion Basis of ac- riod end
the Com- Acquisition Total consideration of equity Acquisition quisition date Net Cash
Revenue
pany date of equity investment investment method determination profit flow
AgriNova 05.01.2023 214,476 100% Stock pur- Obtained con- 106,820 24,075 12,585
New Zea- chase trol
land Ltd
(2) Acquisition cost and goodwill
Total of AgriNova New Zea-
Acquisition costs land Ltd
Total acquisition cost in cash 170,155
Contingent consideration 44,321
Less: share of the fair value of the identifiable net assets acquired 101,401
Goodwill 113,075
(3) Identifiable assets and liabilities of the acquiree, at acquisition date
AgriNova New Zealand Ltd
Fair value at Book value at ac-
acquisition date quisition date
05.01.2023 05.01.2023
Assets:
Cash and bank balances 21,695 21,695
Bills and Accounts receivable 8,066 8,066
Prepayments 903 903
Inventories 21,898 21,898
Fixed assets 1,350 1,350
Intangible assets 88,670 -
Deferred tax assets 2,354 2,354
Liabilities:
Bills and Accounts payable 7,601 7,601
Employee benefits payable 1,273 1,273
Taxes payable 8,573 8,573
Other payables 452 452
Contract liabilities 807 807
Deferred tax liabilities 24,829 -
Net assets 101,401 37,560
Less: Non-controlling interests - -
Net assets acquired 101,401 37,560
244
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
2023 2022
Joint venture 1,437 2,110
Associate 30,037 24,258
31,474 26,368
3. Summarized financial information of joint ventures and associates
December 31, 2023 and December 31, 2022 and
twelve months then twelve months then
ended ended
Joint venture:
Total carrying amount 1,437 2,110
The Group's share of the following items:
Net profit 176 531
Other comprehensive income 6 237
Total comprehensive income 182 768
Associate:
Total carrying amount 30,037 24,258
The Group's share of the following items:
Net profit 6,160 9,827
Other comprehensive income 2,412 2,456
Total comprehensive income 8,572 12,283
245
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 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.
246
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 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. 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, 2023
Past due by less than 90 days 467,844
Past due by more than 90 days 535,904
1,003,748
247
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 7,872,238 thousand relate to
category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 660,966
thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has credit
risk exposures for other receivables amounted to RMB 38,808 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.
248
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, 2023
Third- Fifth year Contractual Carrying
First year Second year Fourth year and above Cash flow amount
Non-derivative financial liabili-
ties
Short-term loans 5,830,123 - - - 5,830,123 5,733,522
Bills payables 613,507 - - - 613,507 613,507
Accounts payables 4,649,733 - - - 4,649,733 4,649,733
Other payables 1,469,319 - - - 1,469,319 1,469,319
Other current liabilities 468,514 - - - 468,514 468,514
Debentures payable 928,776 931,184 1,773,444 6,512,245 10,145,649 7,496,061
Long-term loans 1,606,445 1,323,831 1,338,591 405,478 4,674,345 4,438,156
Long-term payables 7,023 12,993 24,742 98,165 142,923 97,840
Lease Liabilities 203,140 157,867 163,078 435,806 959,891 664,492
Long-term liability in respect of
business combinations - 59,880 2,709 - 62,589 52,929
Other non-current liabilities 65,562 737,418 2,465,991 - 3,268,971 2,920,566
Derivative financial liabilities
Foreign currency derivatives 586,552 - - - 586,552 586,552
CPI/shekel forward transactions 21,235 - - - 21,235 21,235
16,449,929 3,223,173 5,768,555 7,451,694 32,893,351 29,212,426
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.
249
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, 2023
Total assets Total liabilities
In US Dollar 2,381,653 1,604,729
In Euro 1,310,808 1,467,095
In Brazilian real 2,299,633 473,705
CPI-linked NIS 1,098 7,588,341
In New Israeli Shekel 268,375 1,455,269
Denominated in or linked to other foreign currency 4,243,366 2,905,766
10,504,933 15,494,905
(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:
December 31, 2023
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 10/05/2024 121,443 860,141 (195,093)
Contracts and call options USD PLN 17/01/2024 15,129 107,157 8,529
USD BRL 12/02/2024 196,599 1,392,453 (51,112)
USD GBP 16/01/2024 16,686 118,179 (3,361)
USD ZAR 21/01/2024 33,188 235,060 (4,039)
ILS USD 13/01/2024 1,227,827 8,696,329 639,786
USD OTHER 767,570 5,436,465 (137,063)
CPI forward contracts CPI ILS 04/07/2024 537,634 3,807,903 (15,297)
250
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, 2023
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, 2023
Decrease of 5% Increase of 5%
Equity Profit (loss) Equity Profit (loss)
New Israeli shekel 38,567 26,144 4,027 16,136
British pound 15,020 15,020 (15,020) (15,020)
Euro (48,674) (3,768) 45,754 4,125
Brazilian real 17,092 17,092 (24,131) (24,131)
Polish zloty (1,604) (1,604) 2,180 2,180
South African Rand (1,370) 414 182 (1,432)
Chinese Yuan Renminbi 170,097 166,891 (150,753) (147,826)
CPI-linked NIS 311,378 311,378 (311,378) (311,378)
(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 SOFR and Euro ESTER interest. As a result,
most of the variable interest exposure of those loans is to the SOFR interest.
The Company prepares a quarterly summary of exposure to a change in the SOFR interest rate. As at the
approval date of the financial statements, the Company had not hedged this exposure.
251
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,
2023
Fixed-rate instruments – unlinked to the CPI
Financial assets
Other non-current assets 75,969
Financial liabilities
Long-term loans (1) 3,358,574
Long-term payables 26,164
Other non-current liabilities 2,354,133
(5,662,902)
Fixed-rate instruments – linked to the CPI
Financial liabilities
Debentures payable (1) 7,496,061
Variable-rate instruments
Financial assets
Cash at banks 1,065,918
Financial assets at fair value through profit or loss 1,912
Other current assets 158,603
Financial liabilities
Short-term loans and credit from banks 5,733,522
Long-term loans (1) 1,079,582
Long-term payables 66,400
(5,653,071)
(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, 2023 1,255 (1,269) 1,255 (1,269)
252
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, 2023
Carrying amount Fair value
Financial assets
Other non-current assets (a – Level 2) 106,765 93,918
Financial liabilities
Long-term loans and others (b – Level 2) 7,555,884 7,283,639
Debentures (c – Level 1) 7,496,061 8,521,198
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, 2023
%
U.S. dollar interest 6.90-8.21
Chinese Yuan Renminbi 3.92-4.36
Euro 5.00-6.62
253
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
2023
Forward contracts and options used for hedging the cash flow (Level 2) (608)
Forward contracts and options used for economic hedging (Level 2) 242,958
Other equity investment (Level 2) 132,018
Receivables financing (Level 2) 123,050
Other non-current assets (Level 2) 81,423
Other (Level 2) 1,912
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.
- 254 -
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
255
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 Guangyuan Yinong Chemical Co., LTD Common control
Beijing Junmao Real Estate Co. Ltd. Common control
Zhonglan Lianhai Design and Research Institute Common control
Bluestar (Beijing) Chemical Machinery Co. Ltd. Common control
Bluestar Engineering Co. Ltd. Common control
China Chemical Information Center Common control
China National Bluestar (Group) Co. Ltd. Common control
China National Chemical Agrochemical Corporation Common control
Dipagro LTDA Common control
Elkem Silicones Brasil Ltd. Common control
Elkem Silicones Hong Kong Co. Ltd. Common control
Hangzhou (torch) Xidou door Film Industry Co., LTD Common control
Henan Junhua Development 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
Jingzhou Sanonda Holdings Co. Ltd. Common control
(MAP) Sinochem Modern Agriculture Co.LTD Xinjiang Branch Common control
(MAP) Sinochem Modern Agriculture Co.LTD Yichang Branch Common control
OOO Syngenta Common control
P.T. Syngenta Indonesia Common control
PT Syngenta Seed Indonesia Common control
Shandong Dacheng Agrochemical Company Limited Common control
Shenyang Chemical Co., Ltd. Common control
Shenyang Shenhua Institute Testing Technology Co. Ltd. Common control
Sinochem (Hainan) Agroecology Co. Common control
Sinochem (Linyi) Crop Nutrition Co. Ltd Common control
Sinochem Agriculture (Xinjiang) Biotechnology Co. Ltd. Common control
Sino MAP Common control
Sinochem Agro Co. Ltd. Common control
Sinochem Chemical Science and Technology Research Institute
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
256
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 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 Information Technology Co. Ltd. Common control
Sinochem International Crop Care (Overseas) Pte. Ltd. Common control
Sinochem Innovation (Beijing) Technology Research Institute Co., Ltd. Common control
Sinochem Lantian Fluorine Materials Co. Ltd. Common control
Sinochem Modern Agriculture (Gansu) Co. LTD Common control
Sinochem Modern Agriculture (Guangxi) Co. LTD Common control
Sinochem Modern Agriculture (Hunan) Co. LTD Common control
Sinochem Modern Agriculture (Inner Mongolia) Co. LTD Common control
Sinochem Modern Agriculture (Jiangsu) Co. LTD Common control
Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control
Sinochem Modern Agriculture Anhui Co. LTD Common control
Sinochem Modern Agriculture Sichuan Co. LTD Common control
Syngenta (China) Investment Company Ltd Common control
Syngenta Agro (Argentina) S.A. Common control
Syngenta Agro AG Common control
Syngenta Agro d.o.o. Common control
Syngenta Agro GmbH Common control
Syngenta Agro SA de CV Common control
Syngenta Australia Pty Ltd Common control
Syngenta Canada Inc Common control
Syngenta Comercial Agricola Common control
Syngenta Crop Protection AG Common control
Syngenta Crop Protection BV Common control
Syngenta Crop Protection LLC Common control
Syngenta Crop Protection Ltd. Common control
Syngenta Crop Protection SA Common control
Syngenta Czech s.r.o. Common control
Syngenta Espaa S.A. Common control
Syngenta France S.A.S Common control
Syngenta A.G. Common control
Syngenta Group Saturn (NL) B.V. Common control
Syngenta Hellas AEBE Common control
Syngenta India Ltd Common control
Syngenta Italia SpA Common control
Syngenta Protecao de Cultivos Ltda Common control
Syngenta S.A. Common control
Syngenta Seeds LTDA Common control
Syngenta Slovakia s.r.o. Common control
257
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 Tarim Sanay ve Ticaret AS Common control
Syngenta Vietnam Limited Common control
Syngenta Zambia Limited Common control
Tov Syngenta Common control
Valagro S.p.A. Common control
Syngenta Nantong Crop Protection Co.,LTD Common control
China Bluestar Chengrand Research Institute Chemical Industry Common control
Zhonglan International Chemical Co. Ltd. Common control
Ningxia Ruitai Technology Co. Ltd. Common control
Shenyang Sciencreat Chemicals Co. Ltd. Common control
Shenyang Sinochem Agrochemicals R&D Co.,Ltd. Common control
Sinochem Finance Corporation Common control
Luxi Group Co.Ltd. Common control
Sinochem Zhoushan Hazardous Chemicals Emergency Rescue Common control
Base Co. Ltd.
Liaocheng Luxi Polyol New Material Technology Co. Ltd. Common control
Liaocheng Luxi Methylamine Chemical Co. Ltd. Common control
Jiangsu Huifeng Biological Agriculture Co., Ltd Minority shareholder
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
258
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 2023 2022
Summary of purchase of goods/services:
Purchase of goods/services received Common control under Si-
nochem Holdings 1,663,662 2,673,892
Minority shareholder and 23,470 3,155
its subsidiary
Purchase of fixed assets and other assets Common control under Si- 2,652 9,780
nochem Holdings
Lease expenses Common control under Si- 662 242
nochem Holdings
Minority shareholder and 5,381 795
its subsidiary
Summary of Sales of goods:
Sale of goods/ Service rendered Common control under Si-
nochem Holdings 1,580,123 2,177,322
Joint venture 77,422 104,563
Minority shareholder and
its subsidiary 76,714 54,424
Lease income Minority shareholder 1,175 -
(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 313,000 21/04/2021 20/04/2028 N
70,795 01/06/2021 31/05/2028 N
* During the reporting period, the Company paid a guarantee fee amounting to 434 thousand RMB
(2022: 451 thousand RMB) to the parent company.
(3) Remuneration of key management personnel and directors
Periods ended December 31
2023 2022
Remuneration of key management personnel and directors 28,212 114,806
259
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
2023 2022
Expected Expected
Related Party Relation- Book credit Book credit
Items ship Balance losses Balance losses
Trade receivables Common control under 150,942 - 356,708 -
Sinochem Holdings
Joint venture 23,507 - 25,727 -
Minority shareholder and 22,361 - 13,172 -
its subsidiary
Other receivables Common control under - - 17 -
Sinochem Holdings
Other Non-Current assets Common control under 21 - 52 -
Sinochem Holdings
Prepayments Common control under 19,208 - 34,393 -
Sinochem Holdings
Minority shareholder and 1,530 - - -
its subsidiary
Payable Items
December 31 December 31
Items Related Party Relationship 2023 2022
Trade payables Common control under Sinochem Hold- 272,928 426,454
ings
Minority shareholder and its subsidiary 63 -
Other payables Common control under Sinochem Hold- 32,122 24,974
ings
Minority shareholder and its subsidiary 1,826
Contractual liability Common control under Sinochem Hold- 75,903 35,675
ings
Short-term loans * Common control under Sinochem Hold- 2,124,810 696,459
ings
Other non-current li- Common control under Sinochem Hold- 2,354,133 348,231
abilities * ings
* Include liabilities are loans from a related party, the interest expenses for the year ended December 31,
2023 is 139,457 thousand RMB (twelve months ended December 31, 2022: 19,688 thousand RMB ).
260
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) (cont'd)
On October 27, 2021, the Board of Directors first approved (following the approval of the Company’s Audit
Committee dated October 25, 2021) the Company, through one of its subsidiaries, entering into committed
credit facilities agreements in the aggregate amount of $100 million (RMB 708 million) on market terms
with Syngenta Group, or any of its subsidiaries. Following the approvals of the Company’s requisite organs,
these facilities were amended and further increased in December 2022 and in April 2023, to an aggregate
amount of $400 million (RMB 2,833 million). As of December 31 2023, a total of $350 million (RMB 2,479
million) was utilized.
On August 28, 2023, the Board of Directors approved (following the approval of the Company’s Audit
Committee dated August 22, 2023) the Company, through one of its subsidiaries, entering into an additional
committed credit facility agreement in the amount of RMB 2,000 million with Syngenta Group, or any of its
subsidiaries. As of December 31, 2023, a total of RMB 2,000 million was utilized.
(5) Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil thousand RMB (31.12.22:
nil). Interest income of bank deposit for the current period was nil thousand RMB (amount for twelve months
ended December 31, 2022 was 90 thousand RMB).
The closing balance of bank deposit in Sinochem Finance Corporation was 565,624 thousand RMB
(31.12.22: 417,661) Interest income of bank deposit for the current period was 4,287 thousand RMB (amount
for twelve months ended December , 2022 was 3,372 thousand RMB ).
The closing balance of a loan received from Sinochem Finance Corporation was nil thousand RMB
(31.12.22: nil). The loan and the repayment during the year was 50,561 thousand RMB respectively. Inter-
est expenses in the current period was 561 thousand RMB (amount for twelve months ended December ,
2022 was nil thousand RMB).
261
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies
1. Significant commitments
December 31 December 31
2023 2022
Investment in Fixed assets 308,875 429,862
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 expires on April 30,
2024.
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.
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.
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.
262
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)
In June 2021, a lawsuit was filed against a subsidiary of the Company, alleging two patents owned by a large
competitor of the Company, have been infringed by such subsidiary. Among the claims, the plaintiff seeks
preliminary and permanent injunctions to prevent the subsidiary from manufacturing, using or commercializing
a product that allegedly infringes the plaintiff’s patents, and seeks actual damages and profits loss. The said
preliminary injunctions were granted by the court in favor of the plaintiff. The subsidiary has filed appeals
against such preliminary injunctions, which were rejected. Prior to such claims, 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. In May 2023, an additional lawsuit (including a preliminary injunction) was filed by the
same large competitor against said subsidiary, alleging infringement of the same two patents for a different
product. The said preliminary injunction was rejected by the court, and plaintiff’s appeals with respect thereto
are pending. 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.
Certain claims relating to alleged product liability damages were issued to a Company’s subsidiary. Based on
the opinion of the Company's external counsel, given their current stage, it is too early to assess these claims.
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.
Performance commitments
When the Company acquired the equity interest in Adama Huifeng (shanghai) Agricultural Technology Co.,
Ltd (“Adama Huifeng (Shanghai)”) and Adama Hiufeng (Jiangsu) Co. Ltd.(“Adama Huifeng (Jiangsu)") from
Jiangsu Huifeng Biological Agriculture Co., Ltd (“Jiangsu Huifeng”) during 2020 and 2021, there were perfor-
mance commitments made by Jiangsu Huifeng regarding specific business operations of the acquired subsidi-
aries. If the performance commitments is not met, Jiangsu Huifeng shall make a price adjustment payment
calculated based on a method as agreed. By the end of 2023 when the commitment period ended, the perfor-
mance commitments has not been fulfilled. As of the date of this report, the Company has not received any
confirmation from Jiangsu Huifeng for the price adjustment payment, nor has it received the corresponding
price adjustment payment. There are currently disputes between the Company and Jiangsu Huifeng regarding
the price adjustment payment, and there is uncertainty about the final realization of the above-mentioned price
adjustment payment. Therefore, it is not yet possible to make a reliable estimate of the amount and recoverability
of the price adjustment payment.
XII. Events subsequent to the balance sheet date
The Company is not aware of any events subsequent to the balance sheet date.
XIII. Share-based Payments
263
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
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 30,196,487
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (198,228)
Total number of Phantom warrants forfeited in current period (938,250)
Total number of Phantom warrants at the end of the period 29,060,009
The exercise prices and the remainder of the contractual period for Phantom RMB 9.87 – 10.85
warrants outstanding at the end of period 2 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) 11,274
Expenses arising from cash-settled share-based payments in current period
(in thousands RMB) (41,959)
264
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 12,172,969
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (82,738)
Total number of Phantom warrants forfeited in current period (908,227)
Total number of Phantom warrants at the end of the period 11,182,004
The range of the exercise prices and the remainder of the contractual period RMB 9.37 – 9.43
for Phantom warrants outstanding at the end of period 2.75 years
265
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) 7,127
Expenses (income) arising from cash-settled share-based payments in cur-
rent period related to the alternative plan (in thousands RMB) (17,727)
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.
266
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
2023 2022 2023 2022 2023 2022 2023 2022
Operating income from external
customers 30,014,657 33,768,587 2,764,799 3,613,328 - - 32,779,456 37,381,915
Inter-segment operating income - - 1,152 1,886 (1,152) (1,886) - -
Interest in the profit or loss of
associates and joint ventures - - 6,336 10,358 - - 6,336 10,358
Segment's results 525,631 2,159,175 13,524 425,961 - - 539,155 2,585,136
Financial expenses 1,183,118 325,796
Loss from changes in fair value (650,374) (1,504,832)
Investment income 12,742 2,325
Profit (loss) before tax (1,404,910) 756,833
Income tax expenses (income) 200,977 147,442
Net profit (loss) (1,605,887) 609,391
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
2023 2022 2023 2022 2023 2022 2023 2022
Total assets 43,609,235 47,113,346 2,322,873 2,520,000 9,473,695 8,347,143 55,405,803 57,980,489
Total liabilities 6,574,117 8,689,479 321,614 383,640 26,585,597 25,782,715 33,481,328 34,855,834
267
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
2023 2022
Europe, Africa and Middle East 8,691,499 9,030,951
North America 5,770,415 6,895,702
Latin America 9,122,996 10,792,733
Asia Pacific 9,194,546 10,662,529
32,779,456 37,381,915
Specified non-current assets
December 31 December 31
2023 2022
Europe, Africa and Middle East 14,258,655 13,365,820
North America 1,303,868 1,184,067
Latin America 2,303,208 2,482,569
Asia Pacific 5,747,484 5,862,043
23,613,215 22,894,499
* As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that the countries
formerly included in this region are now included in the Europe region (renamed EAME) or in the Asia Pacific
region. The information for 2022 was re-classified accordingly.
2. The dependency on major customers
No single customer's proportion of the total amount of sales is over 10%.
268
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 (loss) from continuing operations attributable to ordi-
nary shareholders (1,605,887) 609,391
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 (0.69) 0.26
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 (0.69) 0.26
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
269
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
2023 2022
Deposits in banks 157,186 258,330
Other cash and bank balances 6,460 12,750
163,646 271,080
As at December 31, 2023, restricted cash and bank balances was 6,460 thousand RMB (as at December 31,
2022: 12,750 thousand RMB).
2. Accounts receivable
a. By category
December 31, 2023
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 1 13,893 100 -
Account receivables assessed
collectively for impairment 1,141,839 99 - - 1,141,839
1,155,732 100 13,893 1 1,141,839
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
b. Aging analysis
December 31, 2023
Within 1 year (inclusive) 938,408
Over 1 year but within 2 years 203,431
Over 2 years but within 3 years -
Over 3 years but within 4 years 15
Over 4 years but within 5 years 1
Over 5 years 13,877
1,155,732
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)
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, 2023
Balance as of January 1 13,902
Addition during the year, net -
Write back during the year (9)
Write-off during the year -
Exchange rate effect -
Balance as of June 30 13,893
d. Five largest accounts receivable at December 31, 2023:
Proportion of Allowance of
Accounts re- expected
Name Closing balance ceivable (%) credit losses
Party 1 1,008,201 87 -
Party 2 99,037 8 -
Party 3 14,393 1 -
Party 4 6,913 1 -
Party 5 4,377 1 -
1,132,921 98 -
3. Receivable financing
December 31 December 31
2023 2022
Bank acceptance draft 7,929 2,596
7,929 2,596
As at December 31, 2023, bank acceptance endorsed but not yet due amounts to 204,109 thousand RMB.
4. Other Receivables
December 31 December 31
2023 2022
Other receivables 11,611 11,611
11,611 11,611
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)
4. Other Receivables - (cont'd)
(1) Other receivables
a. Other receivables by categories
December 31 December 31
2023 2022
Other 16,987 17,633
Provision for expected credit losses (5,376) (6,022)
11,611 11,611
b. Other receivables by aging
December 31, 2023
Within 1 year (inclusive) -
Over 1 year but within 2 years 113
Over 2 years but within 3 years 91
Over 3 years but within 4 years* 11,830
Over 4 years but within 5 years -
Over 5 years 4,953
16,987
* Include intergroup balance with Anpon
c. Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Year ended December 31, 2023
Balance as of January 1, 2023 6,022
Addition during the period -
Written back during the period (646)
Write-off during the period -
Balance as of December 31, 2023 5,376
d. Five largest other receivables at December 31 2023:
Proportion of other re-
Name Closing balance ceivables (%) Credit loss provision
Party 1* 11,611 68 -
Party 2 3,125 19 3,125
Party 3 548 3 548
Party 4 237 1 237
Party 5 221 1 221
15,742 92 4,131
* Include intergroup balance with Anpon
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)
5. Long-term equity investments
December 31, 2023 December 31, 2022
Impairment Impairment
Amount balance loss Book value Amount balance loss Book value
Invest in
subsidiaries 17,511,352 80,636 17,430,716 17,511,352 - 17,511,352
17,511,352 80,636 17,430,716 17,511,352 - 17,511,352
Investments in subsidiaries
Provision of Balance of
Opening impairment Closing bal- Impairment
Invested unit balance Increase Decrease loss ance 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 - - (59,024) 789,116 (59,024)
Hubei Sanonda Foreign Trade Co.
Ltd. 11,993 - - - 11,993 -
Adama Huifeng (shanghai) Agricul-
tural Technology Co., Ltd 310,557 - - (21,612) 288,945 (21,612)
17,511,352 - - (80,636) 17,430,716 (80,636)
6. Operating Income and operating costs
Year ended December 31, 2023 Year ended December 31, 2022
Operating Operating
Revenue costs Revenue costs
Main operations 1,968,617 1,661,622 2,255,382 1,756,979
Other operations 39,957 16,475 42,516 20,086
2,008,574 1,678,097 2,297,898 1,777,065
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)
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, 2023 cember 31, 2022
Interest income 8,584 8,605
Government subsidies 10,524 13,409
Other 20,055 92,257
39,163 114,271
(2) Other cash paid relevant to operating activities
Year ended De- Year ended De-
cember 31, 2023 cember 31, 2022
Professional services 80,049 57,109
Transportation and Commissions 46,924 47,140
Other 29,749 20,654
156,722 124,903
(3) Other cash received relevant to investing activities
Year ended De- Year ended De-
cember 31, 2023 cember 31, 2022
Loans 125,000 150,000
Other 6,042 -
131,042 150,000
(4) Other cash paid relevant to investing activities
Year ended De- Year ended De-
cember 31, 2023 cember 31, 2022
Loans 125,000 250,000
125,000 250,000
(5) Other cash received relevant to financing activities
Year ended De- Year ended De-
cember 31, 2023 cember 31, 2022
Deposit for issuing bills payables 15,960 24,865
15,960 24,865
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)
(6) Other cash paid relevant to financing activities:
Year ended De- Year ended De-
cember 31, 2023 cember 31, 2022
Deposit for issuing bills payable 9,670 31,491
Other 627 -
10,297 31,491
8. Supplementary information to cash flow statement
(1) Reconciliation of net profit to net cash flows generated from operating activities:
Year ended December 31
2023 2022
Net profit 311,196 23,354
Add: Asset Impairment reversal (losses) 91,574 )2,816(
Credit impairment reversal (losses) (655) 48
Depreciation of fixed assets and investment property 229,740 209,319
Depreciation of-right-of use assets 2,588 2,611
Amortization of intangible assets 12,091 11,638
Gain (losses) on disposal of fixed assets, intangible assets and other
long-term assets 1,509 )57,735(
Losses (gains) from changes in fair value )230,135( 314,670
Financial expenses 37,478 54,209
Investment income (29,818) )13,811(
Increase in deferred income tax assets )295( )14,715(
Decrease (increase) in inventory 30,107 )32,857(
Increase in accounts receivable from operating activities
)395,607( )468,030(
Increase (decrease) in payables from operating activities )21,569( 115,250
Net cash flows generated from operating activities 38,204 141,135
(2) Net increase in cash and cash equivalents
Year ended December 31
2023 2022
Closing balance of cash 157,186 258,330
Less: Opening balance of cash 258,330 259,434
Net increase in cash and cash equivalents (101,144) )1,104(
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. 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
2023 2022
Summary of Purchase of goods/services Related Party Relationship
received:
Purchase of goods/services received Common control un-
der Sinochem
Holdings 93,784 167,796
Subsidiary 96,774 112,665
Purchase of fixed assets and other assets Common control un-
der Sinochem Hold-
ings 1,273 4,150
Summary of Sales of goods:
Sale of goods Common control under
Sinochem Holdings 5,742 25,030
Subsidiary 833,826 981,757
Rendering of services Subsidiary 385 1,487
XV. Notes to major items in the Company's financial statements - (cont'd)
276
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
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 guar- date of guar- completed
loan anty anty (Y/ N)
Subsidiary 20,000 2022.12.16 2023.12.12 Y
40,000 2022.01.18 2023.01.17 Y
30,000 2022.03.30 2023.03.29 Y
36,000 2021.12.01 2024.12.28 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 2023.08.10 2024.08.08 N
10,000 2023.01.12 2025.06.20 N
20,000 2022.11.17 2024.12.20 N
12,000 2023.04.03 2025.06.20 N
3,000 2023.07.28 2027.11.10 N
5,000 2023.10.17 2027.11.10 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
2,000 2023.04.13 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
10,000 2023.01.16 2026.06.22 N
14,000 2023.04.04 2026.06.22 N
2,000 2023.04.26 2028.05.05 N
XV. Notes to major items in the Company's financial statements - (cont'd)
277
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
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 313,000 21/04/2021 20/04/2028 N
70,795 01/06/2021 31/05/2028 N
During the reporting period, the Company paid a guarantee fee amounting to 434 thousand RMB
(2022: 451) 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 - Fixed rate at 2.4%
Subsidiary 40,000 2022.6 2023.12 - Fixed rate at 2.4%
Subsidiary 35,000 2022.6 2023.12 - Fixed rate at 2.4%
Subsidiary 125,000 2022.6 2024.05 125,000 Fixed rate at 2.4%
Subsidiary 125,000 2023.12 2025.12 125,000 Fixed rate at 2.4%
278
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
2023 2022
Ex-
pected Expected
Related Party Relation- Book credit Book credit
Items ship Balance losses Balance losses
Trade receivables Subsidiary 1,008,497 548,601 -
Non-current as-
sets within one
year Subsidiary 125,000 125,000 -
Other non-current
assets Subsidiary 125,000 125,000 -
Other receivables Subsidiary 11,611 11,611 -
Trade receivables Common control under
Sinochem Holding - 304 -
Prepayments Common control under
Sinochem Holding 497 537 -
Other non-current Common control under
assets Sinochem Holding 21 52 -
Payable Items
December December
31 31
Items Related Party Relationship 2023 2022
Trade payables Subsidiary 1,383 5,686
Trade payables Common control under Sinochem
Holdings 9,493 46,152
Other payables Subsidiary 436,815 395,152
Common control under Sinochem
Holdings 507 700
279
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 (31.12.22: nil). Inter-
est income of bank deposit for the current period was nil (amount for period ended December 31, 2022
was 67 thousand RMB).
The closing balance of bank deposit in SinoChem Finance Corporation was 26,552 thousand RMB
(31.12.22: 202,615 thousand RMB) Interest income of bank deposit for the current period was 1,960
thousand RMB (amount for period ended December 31, 2022 was 1,617 thousand RMB).
280
ADAMA Ltd. Annual Report 2023
Supplementary information
(Expressed in RMB '000)
1. Extraordinary Gain and Loss
Year ended
December 31, 2023
Disposal of non-current assets 19,679
Government grants recognized through profit or loss 20,743
Recovery or reversal of expected credit losses which is assessed individually during
the years 57,422
Post vesting fair value revaluation of cash-settled share based payment 41,959
Gains or losses arising from the holding or disposal of financial assets or financial lia-
bilities by non financial corporations, except for effective hedging related to the nor-
mal operating of the Company 123,315
Other non-operating income or expenses other than the above 31,747
Tax effect (49,261)
245,604
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 (7.13) (0.69) N/A
Net profit after deduction of extraordinary
gains/losses attributable to ordinary
shareholders of the Company (8.26) (0.79) N/A
ADAMA Ltd.
Legal Representative: Steven Hawkins
March 25th, 2024
281
