ADAMA Ltd. Short Version of the First Quarter Report 2020 Stock Code: 000553(200553) Stock Abbreviations: ADAMA A(B) Announcement No.2020-28 ADAMA LTD. FIRST QUARTER REPORT 2020 ADAMA Ltd. (hereinafter referred to as “the Company”) is a global leader in crop protection, providing solutions to farmers across the world to combat weeds, insects and disease. ADAMA has one of the widest and most diverse portfolios of active ingredients in the world, state-of-the art R&D, manufacturing and formulation facilities, together with a culture that empowers our people in markets around the world to listen to farmers and ideate from the field. This uniquely positions ADAMA to offer a vast array of distinctive mixtures, formulations and high-quality differentiated products, delivering solutions that meet local farmer and customer needs in over 100 countries globally. Please see important additional information and further details included in the Annex. April 2020 1 ADAMA Ltd. Short Version of the First Quarter Report 2020 Section I - Important Notice The Company’s Board of Directors, Board of Supervisors, directors, supervisors and senior managers confirm that the content of the Report is true, accurate and complete and contains no false statements, misleading presentations or material omissions, and assume joint and several legal liability arising therefrom. Ignacio Dominguez, the person leading the Company (President and Chief Executive Officer) as well as its legal representative, and Aviram Lahav, the person leading the accounting function (Chief Financial Officer & Deputy Chief Executive Officer), hereby assert and confirm the truthfulness, accuracy and completeness of the Financial Report. All of the Company’s directors attended the board meeting for the review of this Report. This Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. 2 ADAMA Ltd. Short Version of the First Quarter Report 2020 Section II - Financial Highlights & Shareholder Changes 1. Main accounting and financial results Whether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year due to change in accounting policies or correction of accounting errors □ Yes√ No January - March 2020 January - March 2019 YoY +/- (%) Operating revenues (RMB’000) 6,782,243 6,787,751 -0.08% Net profit attributable to shareholders of the Company (16,707) 366,756 -104.56% (RMB’000) Net profit attributable to shareholders of the Company 16,813 285,087 -94.10% excluding non-recurring profit and loss (RMB’000) Net cash flow from operating activities (RMB’000) (483,808) (1,289,484) -70.78% Basic EPS (RMB/share) (0.007) 0.150 -104. 67% Diluted EPS (RMB/share) NA NA NA Weighted average return on net assets -0.07% 1.61% -1.68% End of Reporting End of last year +/- (%) Period Total assets (RMB’000) 47,780,240 45,288, 940 5.50% Net assets attributable to shareholders (RMB’000) 22,500,143 22,371,665 0.57% Please see key additional information and further details included in the Annex. Non-Recurring profit/loss √ Applicable □ Not applicable Unit: RMB’000 Item January-March 2020 Notes Gains/losses on the disposal of non-current assets (including the write-off of 7,692 asset impairment provisions accrued during the period) Government grants recognized in profit or loss (other than grants which are closely related to the Company's business and are either in fixed amounts or 10,794 determined under quantitative methods in accordance with the national standard) Reversal of provision for receivables and contract assets, that are subject to 9,871 specific provision Other non-operating income and expenses other than the above 2,176 Employee early Other profit or loss that meets the definition of non-recurring profit or loss (59,752) retirement plan expenses Less: Income tax effects 4,301 Total (33,520) Explanation of why the Company classified an item as non-recurring profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public - Non-recurring Profit and Loss, and reclassified any non-recurring profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss □ Applicable √ Not applicable No such cases during the Reporting Period. 3 ADAMA Ltd. Short Version of the First Quarter Report 2020 I. Total number of shareholders and shareholdings of top 10 shareholders at the period-end 1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right and shareholdings of top 10 shareholders at the period-end Unit: share 51,151 Total number of preference (the number of ordinary A Total number of ordinary shareholders at shareholders who had resumed share shareholders is 35,706; 0 the end of the Reporting Period their voting right at the end of the number of B share the Reporting Period (if any) shareholders is 15,445) Shareholdings of top 10 shareholders Number of Pledged or frozen shares Nature of Shareholding Number of Name of shareholder restricted shares shareholder percentage shares held Status Number held China National Agrochemical State-owned 74.02% 1,810,883,039 1,810,883,039 -- -- Co., Ltd. legal person Jingzhou Sanonda Holding State-owned 4.89% 119,687,202 -- -- -- Co., Ltd. legal person China Cinda Asset State-owned 1.37% 33,557,046 -- -- -- Management Co., Ltd. legal person China Structural Reform State-owned 1.37% 33,557,046 -- -- -- Fund Co., Ltd. legal person Portfolio No.503 of National Others 0.92% 22,500,052 -- -- -- Social Security Fund Overseas UBS AG 0.58% 14,264,374 -- -- -- legal person CCB Principal-ICBC-Avic Trust, Trust Plan of Pooled Funds of CCB Principal Others 0.53% 12,885,906 -- -- -- Private Placement Investment, Tianqi (2016) No. 293 of Avic Trust Caitong Fund Fuchun Chuangyi Private Placement Others 0.19% 4,697,986 -- -- -- No.3 Asset Management Plan GUOTAI JUNAN Overseas SECURITIES(HONGKONG) 0.18% 4,309,872 -- -- -- legal person LIMITED State-owned Assets Administration Bureau of State 0.17% 4,169,266 -- -- -- Qichun County Shareholdings of top 10 non-restricted shareholders Number of non-restricted Type of shares Name of shareholder shares held at the period-end Type Number Jingzhou Sanonda Holding Co., RMB ordinary share 119,687,202 119,687,202 Ltd. China Cinda Asset Management RMB ordinary share 33,557,046 33,557,046 Co., Ltd. China Structural Reform Fund Co., RMB ordinary share 33,557,046 33,557,046 Ltd. Portfolio No.503 of National Social RMB ordinary share 22,500,052 22,500,052 Security Fund UBS AG 14,264,374 RMB ordinary share 14,264,374 CCB Principal-ICBC-Avic Trust, Trust Plan of Pooled Funds of CCB Principal Private Placement 12,885,906 RMB ordinary share 12,885,906 Investment, Tianqi (2016) No. 293 of Avic Trust Caitong Fund Fuchun Chuangyi 4,697,986 RMB ordinary share 4,697,986 4 ADAMA Ltd. Short Version of the First Quarter Report 2020 Private Placement No.3 Asset Management Plan GUOTAI JUNAN SECURITIES(HONGKONG) 4,309,872 Domestically listed foreign share 4,309,872 LIMITED State-owned Assets RMB ordinary share Administration Bureau of Qichun 4,169,266 4,169,266 County China Agricultural Bank-CSI 500 Trading Open Index Investment 4,030,584 RMB ordinary share 4,030,584 Funds Jingzhou Sanonda Holdings Co., Ltd. and CNAC are related parties, and are acting-in-concert parties as prescribed in the Administrative Methods for Acquisition Related or act-in-concert parties of Listed Companies. Sanonda Holding is a wholly-controlled subsidiary of CNAC. It among the shareholders above is unknown to the Company whether the other shareholders are related parties or acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. Top 10 ordinary shareholders conducting securities margin No suc h issue. trading (if any) Note: China National Agrochemical Co., Ltd. (“CNAC”) and Syngenta Group Co., Ltd. (formerly: “China (Shanghai) Agricultural Technology Co., Ltd.”, and hereinafter: the “Syngenta Group”) have signed a Share Transfer Agreement on January 5, 2020 for the transfer of the State-owned 74.02% shares of the Company directly held by CNAC to Syngenta Group. Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct any promissory buy-back transaction during the Reporting Period? □ Yes √ No No such cases in the Reporting Period. 2. Total number of preference shareholders and shareholdings of the top 10 of them □ Applicable √ Not applicable 5 ADAMA Ltd. Short Version of the First Quarter Report 2020 Section III - Significant Events I. Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons for the changes √ Applicable □ Not applicable During the first quarter of 2020, the global agrochemical market, amongst many others, was impacted by the unprecedented Coronavirus pandemic, COVID-19 ("COVID-19"). The pandemic, which started early in the quarter and now continues to rage throughout the rest of the world, has had a number of adverse effects on the Company’s performance in the first quarter, compared to the corresponding period last year, the most significant of which were: In China, while operations at the Company’s Huai’An, Jiangsu site have continued without material interruption, operations at the Jingzhou site in Hubei province were temporarily suspended from late January until the end of February due to the COVID-19 in the province. Although operations at the site recommenced at the beginning of March, restrictions on logistics remained, impacting the free transport of goods to and from the sites and to the ports; Renewed tightening in supply of raw materials and intermediates sourced from third parties in China and around the world; Restrictions on international trading and sales through the Company’s global channels, as well as increased costs of global shipping, airfreight and other logistics; Lower demand in the Company’s US Consumer & Professional (non-crop) businesses, as retailers slowed their restocking of products; Significant impacts on global currency markets, which have seen the rapid depreciation of many currencies against the US dollar, most notably the Brazilian Real, Australian dollar, Turkish Lira and Indian Rupee, as well as increased volatility in the Euro. These movements have negatively impacted the Company’s performance in the first quarter compared to the corresponding period last year. The ongoing spread of the pandemic is expected to continue to negatively impact the performance of the Company in the second quarter, and potentially beyond. The Company is actively managing its response to the outbreak in order to ensure the safety of its employees and limit the impact on the Company’s performance. Actions being taken include extending and strengthening distribution channels, use of expedited transport options where possible, working collaboratively with supply chain partners, and raising prices wherever possible to accommodate the weaker currencies and increased logistics costs. Q1 2020 Q1 2019 Q1 2020 Q1 2019 +/-% +/-% (000’RMB) (000’RMB) (000’USD) (000’USD) 6 ADAMA Ltd. Short Version of the First Quarter Report 2020 Operating income 6,782,243 6,787,751 -0.08% 972,531 1,006,421 -3.37% (Revenues) Cost of goods sold 4,757,413 4,449,236 6.93% 682,181 659,691 3.41% Gross Profits 2,024,833 2,338,515 -13.41% 290,350 346,730 -16.26% % of Sales 29.85% 34.45% - 29.85% 34.45% - *Total Operating 1,647,108 1,682,833 -2.12% 240,055 249,511 -3.79% Expenses Financial Expenses 411,620 479,381 -14.14% 59,022 71,082 -16.97% Gain (loss) from Changes 323,814 794,180 -59.23% 46,433 117,753 -60.57% in Fair Value Investment Income (loss) -129,324 -550,462 -76.51% -18,544 -81,617 -77.28% Total Net Financial Expenses and Investment 217,130 235,663 -7,86% 31,133 34,946 -10.91% Income Total profits 136,632 415,111 -67.09% 19,601 61,547 -68.15% % of Sales 2.02% 6.12% - 2.02% 6.12% - Income tax expenses 153,339 48,355 277.77% 21,988 7,171 206.62% Net income (16,707) 366,756 -104.56% -2,387 54,376 -104.39% % of Sales -0.25% 5.4% - -0.25% 5.4% - EBITDA 927,888 1,232,110 -24.69% 133,058 182,689 -27.17% % of Sales 13.68% 18.15% - 13.68% 18.15% - * Total operating expenses includes Sales and Marketing, General and Administrative and Research and Development expenses Note: As the Company’s functional currency is USD, following explanations and analysis are based on USD-denominated numbers as listed above. Analysis of Financial Highlights (1) Revenues Revenues in the first quarter were $973 million, up 2% at constant exchange rates, with continued business growth in the face of the COVID-19 pandemic. Constant currency sales were constrained by an estimated $47 million due to COVID-19. In addition, sales were heavily impacted by the depreciation of global currencies, resulting in sales in US dollar terms being 3% below those of the same period last year. The Company delivered solid business growth in Europe, driven by a strong performance in Eastern European countries, as well as throughout the India, Middle East & Africa region supported by favorable weather conditions in key areas. In Latin America, the Company was strengthened by its recent acquisition in Peru, but sales were impacted by the depreciation of regional currencies, most notably the Brazilian Real. Sales in North America were lower largely due to the impact of the COVID-19 on demand for the Company’s Consumer & Professional products. In Asia-Pacific (excluding China), a strong performance in Australia, which has begun to see a recovery from the extreme drought conditions of the past few years, largely compensated for a COVID-19-driven slowdown in East-Asian markets and the depreciation of local currencies. In China, despite seeing continued growth in the sales of the Company’s branded, formulated products, overall sales in the country were impacted by lower sales of intermediates and unformulated products, mainly those produced at the Jingzhou site which was temporarily suspended during the quarter. Regional Sales Performance 7 ADAMA Ltd. Short Version of the First Quarter Report 2020 Q1 2020 Q1 2019 Change $m $m USD Europe 357 360 -1.0% North America 168 180 -6.7% Latin America 159 159 -0.3% Asia Pacific 158 186 -14.9% Of which China 68 94 -27.1% India, Middle East & Africa 131 121 +8.3% Total 973 1,006 -3.4% Europe: Sales increased by 2.7% in the first quarter at constant exchange rates, compared with the corresponding period last year, driven by continued business growth, partially offset by lower prices resulting from high inventory levels in the industry’s distribution channels. In Northern Europe, the Company saw pleasing business growth in the quarter, partially recovering from supply constraints seen in 2019 that affected key products. The Company delivered robust growth in most Eastern European countries supported by favorable weather conditions, with noteworthy performances recorded in Russia and Ukraine, where the Company is seeing continued market share gains, as well as Hungary and Romania, which benefited from an early start to the 2020 season. In addition, the Company grew in the key western European markets of France and Italy. In US dollar terms, sales in Europe were lower by 1.0% in the quarter, compared to the corresponding period last year, reflecting the net impact of weaker currencies, largely due to the COVID-19. North America: Sales in the quarter were lower by 6.0%, at constant exchange rates, compared to the corresponding period last year, largely due to the impact of the COVID-19, which reduced demand for the Company’s Consumer & Professional (non-crop) products. The Company recorded strong business growth in Canada with solid demand for crop protection products, as well as favorable weather conditions. In the US, the Company obtained two new rice herbicide registrations in the quarter, enhancing its portfolio of solutions for conventional rice and complementing the Company’s Preface and Postscript herbicides for the FullPage Rice Cropping Solution, furthering the Company’s offering to rice farmers. In US dollar terms, sales in North America were lower by 6.7% in the quarter, compared to the corresponding period last year, reflecting the COVID-19-related weakening of the Canadian Dollar. Latin America: Sales grew by 12.5% in the first quarter, at constant exchange rates, compared to the corresponding period last year. The robust performance was driven by strong business growth, bolstered by the Company’s recent acquisition in Peru, alongside continued price increases. The Company saw continued constant-currency business growth in Brazil in the quarter, despite drought conditions which delayed the planting season in key crops including soybean and reduced application of fungicides. Noteworthy performances were also recorded in the quarter in Mexico, benefiting from good weather conditions particularly in the Pacific region, as well as Colombia and Ecuador, driven by a good harvest season in key crops. The Company continues to expand its differentiated product offering in the region with the launch during the quarter of EMINENT , a dual mode broad-spectrum insecticide, in Argentina. The Company also obtained the registration of UBERTOP , an insecticide used mainly for the control of a wide range of pests in tomato and cabbage, in Mexico. In US dollar terms, sales in Latin America were lower by 0.3% in the quarter, compared to the corresponding period last year, reflecting the significant depreciation of regional currencies, most notably the Brazilian Real, as a result of the 8 ADAMA Ltd. Short Version of the First Quarter Report 2020 COVID-19outbreak. Asia Pacific: Sales were lower by 9.8% in the quarter, at constant exchange rates, compared to the corresponding period last year, due largely to the outbreak of the COVID-19, which started early in the quarter. In Asia-Pacific (excluding China), a strong performance in Australia, which has begun to see a recovery from the extreme drought conditions of the past few years, largely compensated for a COVID-19-driven slowdown in East-Asian markets. In China, despite seeing continued growth in the sales of the Company’s branded, formulated products, overall sales in the country were impacted by the COVID-19 which resulted in logistics and supply challenges, and reduced sales of intermediates and unformulated products from the temporarily suspended Jingzhou site. During the quarter, the Company launched new products including QUALIPRO ENCLAVE, a quadruple-mode of action fungicide mixture for use in turf in Australia, and obtained multiple new product registrations in the region, including BALORIC and SOLITO , an early post-emergence rice herbicide, in Thailand and Indonesia. In US dollar terms, sales in Asia-Pacific were lower by 14.9% in the quarter, compared to the corresponding period last year, reflecting the impact of weaker currencies following the COVID-19. India, Middle East and Africa: Sales in the first quarter grew by 12.5%, at constant exchange rates, compared to the corresponding period last year. The Company recorded robust business growth in all major markets throughout the region, alongside increased prices, despite the impact of the missing sales of Jingzhou old site products resulting from the temporary suspension of operations there due to the COVID-19. The Company delivered solid business growth in India combined with higher pricing, in spite of a countrywide lockdown enforced by the Indian government that commenced towards the end of the quarter. The Company also grew strongly in South Africa and Israel, benefiting from favorable weather conditions, and delivered pleasing results in Turkey from where the Company is also expanding its presence into surrounding countries in the region. In US dollar terms, sales in the region grew by 8.3% in the quarter, compared to the corresponding period last year, reflecting the impact of softer currencies, which were adversely affected by the COVID-19, most notably the Turkish Lira and the Indian Rupee. (2) Gross Profit: Gross margin was lower mainly a result of the material depreciation of global currencies, alongside some pricing pressure, mainly in Europe and China, and sustained high procurement costs, all of which were only partially offset by the business growth achieved in the quarter. (3) Operating Expenses: Operating expenses include Sales and Marketing, General and Administration and R&D - The Company continues to exercise tight control of its operating expenses, assisted by the beneficial impact of the strengthening of the US dollar against global currencies, achieving significant savings even while including companies acquired during 2019. The first quarter this year also saw the recording of Jingzhou-related idleness costs resulting from the temporary suspension of operations there due to the COVID-19 in an amount similar to those recorded also during Q1 2019 when the sites were similarly suspended. In recent years, the Company recorded various one-time or non-cash or non-operational items affecting its reported numbers, including as a result of mergers and acquisitions, which resulted in the inclusion within its operating expenses of, mainly, the following items: 9 ADAMA Ltd. Short Version of the First Quarter Report 2020 Amortization of legacy Purchase Price Allocation (PPA) of 2011 acquisition of Adama Agricultural Solutions Ltd., a wholly-owned subsidiary of the Company (hereinafter: “Solutions”) (non-cash): Under PRC GAAP, since the first combined reporting in Q3 2017 following the combination, the Company has inherited the historical “legacy” amortization charge that ChemChina previously was incurring in respect of its acquisition of Solutions in 2011. This amortization is done in a linear manner on a quarterly basis, most of which will be fully amortized by the end of 2020. Its reported financial impact (affecting the Sales & Marketing expenses) in the first quarter of 2020 is RMB 66.3 million (USD 9.6 million), net of tax, compared with RMB 64.1 million (USD 9.6 million) in the corresponding period in 2019. Amortization of Transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash): The proceeds from the Divestment of crop protection products in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina, net of taxes and transaction expenses, were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature and economic value. Since the products acquired from Syngenta are of the same nature, and with the same net economic value as those divested, the Divestment and Transfer transactions had no net impact on the underlying economic performance of the Company. Its reported financial impact (affecting the Sales & Marketing expenses) in the first quarter of 2020 is RMB 54.9 million (USD 7.9 million), net of tax, compared with RMB 71.7 million (USD 10.6 million) in the corresponding period in 2019. Employee early retirement plan expenses: a one-time provision for the early retirement plan of employees at the Company’s Israeli manufacturing facilities. Its reported financial impact (affecting the General & Administrative expenses) in the first quarter of 2020 is RMB 59.8 million (USD 8.6 million), net of tax. (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 412 million (USD 59 million) for the first three months of 2020 compared with RMB 479 million (USD 71 million) for the corresponding period in 2019. Given the global nature of its operational activities and the composition of its assets and liabilities, the Company, in the ordinary course of its business, uses foreign currency derivatives (forwards and options) to hedge the cash flow risks associated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations. Net gains/losses from hedging of those positions, are recorded in “Gains/Losses from Changes in Fair Value”, and are then transferred to “Investment Income” upon realization. The combined impact of Gains/Losses from Changes in Fair Value and Investment Income is a net gain of RMB 194 million (USD 28 million) in the first three months of 2020 compared with RMB 244 million (USD 36 million) in the corresponding period in 2019. The aggregate of Financial Expenses, Gains/Losses from Changes in Fair Value and Investment Income (hereinafter as “Total Net Financial Expenses and Investment Income”), which more comprehensively reflects the financial expenses of the Company in supporting its main business and protecting its monetary assets/liabilities, amounts to RMB 217 million (USD 31 million) in the first three months of 2020 compared with RMB 236 million (USD 35 million) in the corresponding period in 2019. The lower level in the first quarter compared with the same period last year reflects mainly financial income earned due to the effect of the appreciation of the US dollar against the RMB on the value of US dollar-denominated monetary assets in China, while the higher expenses in the prior year resulted from the opposite. This financial income in the quarter more than offset the slightly increased interest costs on higher net debt levels. (5) Income Tax Expenses 10 ADAMA Ltd. Short Version of the First Quarter Report 2020 The net tax expense in the quarter was higher largely due to the impact of weakening of currencies, against the US dollar, most notably that of the Brazilian Real, driving higher non-cash tax expenses due to differences between the functional (US dollar) and tax (local) currencies regarding the value of non-monetary assets. Changes in main assets and liabilities Unit: RMB’000 Assets and liabilities March 31, 2020 December 31, 2019 % change Explanation for any major change Derivative financial Realization and revaluation of 1,829,988 490,113 273.38% assets* derivatives Due to the Company's strong growth in regions with Accounts receivable 8,577,783 8,004,157 7.17% generally longer credit terms, especially Brazil and Latin America Derivative financial Realization and revaluation of 1,687,360 691,475 144.02% liabilities derivatives. Seasonality increase mainly Taxes payable 515,575 369,038 39.71% due to VAT Seasonality increase mainly Contractual liability 888,232 664,228 33.72% due to rebates Increase mainly due to tax Deferred tax liability 447,499 323,304 38.41% basis revaluation of non-monetary assets in Brazil *Both derivative financial assets and liabilities are hedging instruments, the sum-up of which reflects the net position. II. Progress on significant events, as well as the impact and solutions √ Applicable □ Not applicable 1. In January 2020 the Company announced that it is becoming a distinctive member of the Syngenta Group, a newly-formed ag-industry leader being created through the bringing together of the agricultural businesses of ChemChina and Sinochem. The Syngenta Group, comprising the Company, Syngenta AG and Sinochem’s agriculture-related activities, is expected to become one of the world’s leading agriculture inputs companies, spanning crop protection, seeds, fertilizers, additional agricultural and digital technologies, as well as an advanced distribution network in China, reaching farmers nationwide. As mentioned above, CNAC and Syngenta Group have signed a Share Transfer Agreement on January 5, 2020 for the transfer of the State-owned 74.02% shares of the Company directly held by CNAC to Syngenta Group, which is also owned by ChemChina. The Company will maintain its unique brand and positioning. 2. In this context, Mr. Chen Lichtenstein ceased to serve as the President and CEO of the Company (while continuing to serve as a director) effective as of March 1, 2020, following his nomination as CFO of Syngenta Group, with responsibility also for strategy and Integration; Mr. Ignacio Dominguez was appointed on February 26, 2020 as the President and CEO of the Company also acting as its legal representative, effective from March 1, 2020, after serving as the CCO of the Company’s subsidiary - Adama Agricultural Solutions Ltd. (hereinafter: “Solutions”) for the last 6 years, and in other executive positions prior to that. Due to the impact of the coronavirus pandemic, the Company will register Ignacio Dominguez as the legal representative in Hubei Administration for Market Regulation Bureau when circumstance permits; Mr. Aviram Lahav, the CFO of the Company was also appointed as Deputy CEO, concurrently with his appointment as Solutions’ CEO (on top of his role as Solution’s CFO). 11 ADAMA Ltd. Short Version of the First Quarter Report 2020 Additionally, on April 9, 2020, the shareholders meeting approved the nomination of Mr. Erik Fyrwald, the CEO of Syngenta Group and CEO and Executive Director of Syngenta AG, as director and Chairman of the Board of Directors of the Company, replacing Mr. Yang Xingqiang, and the continuous nomination of Mr. Chen Lichtenstein, CFO of the Syngenta Group and Syngenta AG, as a director of the Board of Directors of the Company. Concurrently, Mr. Ignacio Dominguez was nominated as the Chairman of the board of directors of Solutions, replacing Mr. Yang Xingqiang. 3. Within the context of the 2017 combination between the Company and Solutions, the Company entered into a Performance Compensation Agreement with CNAC, then the 100% owner of Solutions and the controlling shareholder of the Company, according to which, CNAC made a commitment regarding Solutions’ aggregate net profit in the years 2017, 2018 and 2019. In case of failure to meet such commitment, CNAC committed to compensate the Company either through shares or cash according to a predetermined formula. Despite Solutions’ strong performance during the three-year period, due to exogenous reasons, the calculated net profit of Solutions for this period implies a certain shortfall. This shortfall was caused entirely by the impact of the Divestment & Transfer of several products that Solutions implemented to facilitate the approval by the EU Commission of the acquisition of Syngenta by ChemChina, which caused an incremental non-cash amortization charges related to the written-up value of the assets received from Syngenta. Absent these non-cash amortization charges, Solutions would have exceeded the profit commitment. As a result, CNAC shall return to the Company a certain number of shares of the Company it received in exchange for the transfer of 100% of Solutions to the Company, and return an additional amount in dividends it received in respect of such shares. Following their receipt, these shares will be canceled by the Company. As a result, the total number of shares in issue will be reduced, and CNAC’s ownership (directly and indirectly) in the Company will go from 78.9% to 78.0%. Additionally, according to the Impairment Test Report of Solutions due to the Expiration of the Compensation Period of Major Assets Restructuring Project issued by Deloitte, there was no impairment of Solutions on December 31, 2019. In view of CNAC transferring the shares directly held by it in the Company to the Syngenta Group, CNAC and Syngenta Group will compensate the Company. For details, please refer to the Announcement on the Overall Achievement of the Committed Performance in the Major Assets Restructuring and the Planned Compensations to the Company by the Obligors disclosed by the Company on April 28, 2020 on the website www.cninfo.com.cn. For details on the aforesaid compensation, please refer to Item II of Section V of the 2019 Annual Report. Significant Events Date of Index of the Disclosed Announcements Disclosure CNAC is January 6, Announcement on the Transfer of State-owned Shares of transferring its 2020 Controlling Shareholders (Announcement No. 2020-1) direct ownership in January 23, Announcement-SinoChem Group and ChemChina Planning for Strategic the Company to 2020 Restructuring (Announcement No. 2020-4) Syngenta Group March 14, Announcement on Approval from China Securities Regulatory Commission 2020 for the Application of Offeror and its Person Acting in Concert for Waiving of the Obligation of a Mandatory Tender Offer for the Transfer (Announcement No. 2020-12) st th Replacement of February 27, Announcement on the Resolutions of the 21 meeting of the 8 Session of directors and senior 2020 the Board (Announcement No. 2020-7) rd th executives March 26, Announcement on the Resolutions of the 23 meeting of the 8 Session of 2020 the Board (Announcement No. 2020-15) nd April Announcement on the Resolutions of the 2 Interim Shareholders Meeting 10,2020 in 2020 (Announcement No. 2020-20) Please see key additional information and further details included in the Annex. Status of share buyback □Applicable √Not applicable Status of share buyback in the way of centralized bidding □Applicable √Not applicable 12 ADAMA Ltd. Short Version of the First Quarter Report 2020 III. None completion of Commitments that should have been completed in the reporting period by the Company, actual controller, shareholders, related parties, acquirer, and other committed parties □ Applicable √ Not applicable IV. Securities investment □ Applicable √ Not applicable No such cases in the Reporting Period. V. Wealth management entrustment □ Applicable √ Not applicable No such cases in the Reporting Period. 13 ADAMA Ltd. Short Version of the First Quarter Report 2020 VI. Investment in derivative financial instruments √ Applicable □ Not applicable Unit: RMB’000 The party that Related party Initial Investment amount at Amount purchased Percentage of investment Gain/loss during Relation with Expiring Amount sold during Impairment Investment amount operates the transaction or Type investment Starting date beginning of the during the reporting amount divided by net asset at the reporting the Company date the reporting period accrued (if any) at end of the period investment not? amount period period end of the period period Banks No No Option 2,078,908 0202/20/71 26/05/2020 2,078,908 3,703,626 -3,671,174 No 2,111,360 9.38% 73,918 Banks No No Forward 19,122,640 29/11/2019 04/08/2020 19,122,640 37,826,042 -37,527,533 No 19,421,149 86.32% 172,474 Total 21,201,548 -- -- 21,201,548 41,529,668 -41,198,707 21,532,509 95.70% 246,392 Source of fund for the investment Internal litigation-related situations (if applicable) N/A Date of disclosure of Board approval (if any) December 30, 2017 Date of disclosure of Shareholders’ approval (if any) N/A The aforesaid refers to short term hedging currency transactions made with banks. The Group’s transactions are not traded in the market. The Transactions are between the applicable company in the Group and the applicable bank until the expiration date of the transaction, therefore no market risk is involved. Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA agreements. As to operational risk, the Group is working with relevant software, which is its back office for all transactions. Risk and control analysis for the reporting period (including but No legal risk is involved. not limited to market risk, liquidity risk, credit risk, operational The actions taken in order to further reduce risks are: risk, legal risk, etc.) The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' financial statements committee of the board, which specifies, inter alia, the hedging policy, the persons that have the authorization to deal with hedging, the tools, ranges etc. The only subsidiary that has hedging positions in the Group in the period was Solutions and its subsidiaries. The relevant subsidiaries apply management designed procedures and controls, which among other things, monitor the working process and the controls of the hedging transactions and are quarterly reviewed and annually audited. The controllers of the relevant subsidiaries are involved in the process and are monitoring the hedging accounting treatment. Every 2-3 years the internal audit of the relevant subsidiaries’ department is auditing the entire procedure. The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks. Market price or fair value change of investments during the Segregation of duties as follows: reporting period. For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the relevant transactions are simple (Options and forwards) for short Specific methodology and assumptions should be disclosed in terms. For fair value methodology see section XI of the annual report, note IX. Fair Value. The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters the analysis of fair value of the investments are provided by the experts. Explanation for any significant changes in accounting policies N/A and principles, compared with last reporting period The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond to the Company’s routine business demands and are in Independent Directors’ opinion on the investment in derivative accordance with the relevant laws and regulations. Additionally, the Company has adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to financial instruments and related risk controls protect against market risk. The derivative investments do not harm the interests of the Company and its shareholders. 14 ADAMA Ltd. Short Version of the First Quarter Report 2020 VII. Information regarding communication with investors √ Applicable □ Not applicable Date of visit Way of visit Type of visitor About th March 30 , 2020 Tele-conference Institutional Debriefing of 2019 Annual Financial Preview VIII. Illegal provision of guarantees for external parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX. Inadequate use of Company’s capital by the controlling shareholder or by its related parties for non-operating purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 15