ADAMA Ltd. Semi-Annual Report 2022
ADAMA LTD.
SEMI-ANNUAL REPORT 2022
ADAMA Ltd. is a global leader in crop protection, providing solutions to farmers across the
world to combat weeds, insects and disease. ADAMA has one of the widest and most
diverse portfolios of active ingredients in the world, state-of-the art R&D, manufacturing and
formulation facilities, together with a culture that empowers our people in markets around
the world to listen to farmers and ideate from the field. This uniquely positions ADAMA to
offer a vast array of distinctive mixtures, formulations and high-quality differentiated products,
delivering solutions that meet local farmer and customer needs in over 100 countries globally.
Please see important additional information and further details included in the Annex.
August 2022
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ADAMA Ltd. Semi-Annual Report 2022
Section I - Important Notice, Table of Contents and Definitions
The Company’s Board of Directors, Board of Supervisors, directors, supervisors and
senior managers confirm that the content of the Report is true, accurate and complete
and contains no false statement, misleading presentations or material omissions, and
assume joint and several legal liability arising therefrom.
Ignacio Dominguez, the person in charge of the Company (President and Chief
Executive Officer) as well as its legal representative, and Shahar Florentz, the person
leading the accounting function (Chief Financial Officer), hereby assert and confirm the
truthfulness, accuracy and completeness of the Financial Report.
All the Company’s directors attended the board meeting for the review of this Report.
The forward-looking information described in this Report, such as future plans,
development strategy, market trends and their effect 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 possible risks in “X - Risks Facing the Company and
Countermeasures” under Section III herein. 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 “Risks Facing the Company and Countermeasures”
of the Company, please see the relevant section below.
For the Reporting Period, the Company does not plan to distribute cash dividends or
bonus shares or convert capital reserve into share capital.
This Report and its Abstract have been prepared in both Chinese and English. Should
there be any discrepancies between the two versions, the Chinese version shall prevail.
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ADAMA Ltd. Semi-Annual Report 2022
Table of Contents
Section I - Important Notice, Table of Contents and Definitions....................................... 2
Section II - Corporate Profile and Financial Results.......................................................... 6
Section III - Performance Discussion and Analysis........................................................... 9
Section IV – Corporate Governance ................................................................................. 33
Section V – Environmental and Social Responsibilities ................................................. 35
Section VI - Significant Events.......................................................................................... 46
Section VII - Share Changes and Shareholders ............................................................... 78
Section VIII - Preferred stock ............................................................................................ 86
Section IX - Bonds ............................................................................................................. 87
Section X - Financial Report.......................................................................................... - 88 -
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ADAMA Ltd. Semi-Annual Report 2022
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) Originals of all Company’s documents previously disclosed in media designated by the CSRC as well as the originals
of all the public notices, were deposited in the Company’s office.
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ADAMA Ltd. Semi-Annual Report 2022
Definitions
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
ADAMA Anpon (Jiangsu) Ltd., a wholly-owned subsidiary of the Company,
Anpon, ADAMA Anpon
incorporated in China according to its laws
ADAMA Huifeng (Jiangsu) Ltd., a 51% owned subsidiary of the Company,
ADAMA Huifeng
incorporated in China according to its laws
Board of Directors/Board The Board of Directors of the Company
Board of Supervisors The Board of Supervisors of the Company
Group, the Group, ADAMA The Company, including all its subsidiaries, unless expressly stated otherwise
ChemChina China National Chemical Co., Ltd.
ChemChina-Syngenta
The acquisition of Syngenta AG by ChemChina in 2017
Transaction
China National Agrochemical Co., Ltd., the indirect controlling shareholder of the
CNAC
Company, a wholly-owned subsidiary of ChemChina
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
SASAC State Assets Supervision and Administration Commission of China
Syngenta Group Co., Ltd, the controlling shareholder of the Company as of June
Syngenta Group
15, 2020, a wholly-owned subsidiary of CNAC
Sinochem Holdings Sinochem Holdings Corporation Ltd.
Sinochem Holdings including all its subsidiaries unless otherwise indicated or the
Sinochem Group
context otherwise requires
Report This 2022 Semi-Annual Report
Reporting Period, this Period January 1, 2022 - June 30, 2022
2021 Annual Report The Company’s 2021 Annual Report published on March 31, 2022
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ADAMA Ltd. Semi-Annual Report 2022
Section II - Corporate Profile and Financial Results
I. Corporate Information
Stock name ADAMA A, ADAMA B Stock code 000553, 200553
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 安道麦股份有限公司
Abbr. 安道麦
Company name in English (if any) ADAMA Ltd.
Abbr. (if any) ADAMA
Legal representative Ignacio Dominguez
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
III. Other Information
1. Ways to Contact the Company
Indicate by tick mark whether any changes occurred to the registered address, office address and their
postal codes, website address and email address of the Company during the Reporting Period.
□ Applicable √ Not applicable
No changes occurred to the said information during the Reporting Period, which can be found in the 2021
Annual Report.
2. Information Disclosure Media and Place where this Report is Kept
Indicate by tick mark whether any changes occurred to the information disclosure media and the place
where this Report is kept during the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the
CSRC for the publication of this Report and the location where this Report is kept did not change during
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ADAMA Ltd. Semi-Annual Report 2022
the Reporting Period. Said information can be found in the 2021 Annual Report.
3. Other Relevant Documents
Indicate by tick mark whether any changes occurred to the relevant documents during the Reporting
Period.
□ Applicable √ Not applicable
IV. Main Accounting Data and Financial Results
Indicate by tick mark whether the Company needs to retroactively adjust or restate any of its accounting
data.
√Yes □No
January - June 2021 YoY +/- (%)
January - June
Before After After
2022
adjustment adjustment adjustment
Operating revenues (RMB’000) 18,795,828 15,063,780 15,063,780 24.77%
Net profit attributable to shareholders of the
732,098 367,036 367,036 99.46%
Company (RMB’000)
Net profit attributable to shareholders of the
Company excluding non-recurring profit and loss 655,023 322,123 322,123 103.35%
(RMB’000)
Net cash flow from operating activities
(1,345,861) 1,491,293 1,491,293 -190.25%
(RMB’000)
Basic EPS (RMB/share) 0.3142 0.1575 0.1575 99.49%
Diluted EPS (RMB/share) N/A N/A N/A N/A
Weighted average return on net assets 3.35% 1.71% 1.71% 1.64%
End of last year +/- (%)
End of Reporting
Before After After
Period
adjustment adjustment adjustment
Total assets (RMB’000) 55,509,655 50,235,308 50,235,308 10.50%
Net assets attributable to shareholders
22,536,670 21,075,083 21,075,083 6.94%
(RMB’000)
Reason for retroactive adjustments: According to ASBE 22 - Financial Instruments Recognition and Measurement, starting
from 2022 the Group recorded the gain or loss from the disposal of derivative instruments in the “Gain(loss) from Changes
in Fair Value”. Before 2022, the Group recorded the abovementioned gain of loss in the “Investment income, net”. The
Company reclassified the “Gain(loss) from Changes in Fair Value” and the “Investment income, net” in the corresponding
period in 2021. Such change did not impact the operating results or net assets of the reporting period.
V. Differences in Accounting Data under Domestic and Foreign Accounting
Standards
1. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under
Chinese and International Accounting Standards
□ Applicable √ Not applicable
None during the Reporting Period.
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ADAMA Ltd. Semi-Annual Report 2022
2. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under
Chinese and Foreign Accounting Standards
□ Applicable √ Not applicable
None during the Reporting Period.
3. Reason for accounting data differences under Chinese and Foreign Accounting Standards
□ Applicable √ Not applicable
VI. Non-Recurring Profit/Loss
√ Applicable □ Not applicable
Unit: RMB’000
Item Reporting Period Note
Gains/losses on the disposal of non-current assets (including the offset
67,970
part of asset impairment provisions)
Government grants recognized through profit or loss (excluding
government grants closely related to regular operation of the Company
24,834
and continuously given at a fixed quota or amount in accordance with
certain standards)
Recovery or reversal of provision for bad debts which is assessed
17,200
individually during the years
Other non-operating income and expenses other than the above (10,240)
Mainly provision for
early retirement plan
of employees at the
Other profit or loss that meets the definition of non-recurring profit or loss (5,845)
Company’s Israeli
manufacturing
facilities.
Less: Income tax effects 16,844
Total 77,075
Details of other profit and loss items that meet the definition of non-recurring profit or loss.
√ Applicable □ Not applicable
Mainly provisions for early retirement plan of employees at the Company’s Israeli manufacturing facilities
as explained above in the note.
Explanation whether the Company has 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 in the Reporting Period.
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ADAMA Ltd. Semi-Annual Report 2022
Section III - Performance Discussion and Analysis
I. Main Business of the Company during the Reporting Period
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
approximately 100 countries, through approximately 60 subsidiaries worldwide.
The Group's business model integrates end-customer access, regulatory expertise, state-of-the art global
R&D, production and formulation facilities, thereby providing the Group a significant competitive edge
and allowing it to launch new and differentiated products that meet local farmers and customer needs in
key markets.
The Group's primary operations are global, spanning activities in Europe, North America, Latin America,
Asia-Pacific (including China) and India, the Middle-East and Africa.
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.
ADAMA 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.
The General Crop Protection Market Environment
Crop prices remain elevated above historic averages despite decreasing somewhat in Q2 2022 after
reaching historically high levels in Q1 2022. Prices are, however, expected to remain elevated into H2
2022 and beyond, supported by key fundamentals including very low stocks, unfavorable weather
conditions in the Americas and parts of Europe and continued supply and logistics disruptions
exacerbated by the conflict in Ukraine.
The high crop prices incentivize another year of increases in global planted areas. As a result, the global
demand for crop protection remains strong as farmers strive to maximize yields in this high crop price
environment. Farmers continue to face high production costs, mainly from higher fertilizer prices
resulting from disruption to supply and tight availability caused by the conflict in Ukraine, yet their farming
activities are nevertheless still very profitable in most regions.
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ADAMA Ltd. Semi-Annual Report 2022
Global energy prices remain inflated while the challenging cost environment is expected to extend
throughout 2022. Despite this, global energy prices have decreased recently mainly due to concerns
regarding recession, but are expected to remain elevated into H2 2022, due to tight supply and concerns
regarding supply outages following sanctions on Russian energy exports combined with pockets of
increased demand as economies recover from COVID.
Global freight and logistics costs are declining as a result of reduced demand in light of COVID
lockdowns in China as well as high inflation rates, but remain elevated, after reaching record highs in
February 2022. Prices are expected to remain elevated well into H2 2022, due to high fuel costs,
prolonged supply chain disruptions while the availability of shipping resources continues to be limited.
Additionally, global freight volumes are expected to increase as the lockdown in Shanghai Port has eased
and production has resumed.
Despite some easing in global procurement prices for raw materials, intermediates and active
ingredients during the quarter, most products are expected to keep fluctuating at elevated levels in H2
2022. This overall trend is impacted both by the general softening of prices in China and by the increase
in prices of such products in other geographies. In China, an increase in production capacity and an ease
in logistic disruptions led to softening of prices, while in other geographies cost inflation, energy prices,
supply shortages and logistic challenges are driving prices upward and impacting availability. With strong
global crop protection demand, transportation disruptions and supply shortages driven by the ongoing
conflict in Ukraine, as well as the "Zero COVID" policy in China, prices are expected to remain high.
Crop Protection Products
As described within the Company’s 2021 annual report, 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. Since the publication of the 2021 annual report, no major changes occurred
with that respect. For details, please refer to 2021 annual report.
Please see important additional information and further details included in the Annex.
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ADAMA Ltd. Semi-Annual Report 2022
II. Core Competitiveness Analysis
No significant changes occurred to the core competitiveness of the Company during the Reporting Period.
III. Analysis of Main Business
General Description
Whether it is the same as main business of the Company during the Reporting Period disclosed or not?
√ Yes □ No
Please refer to the relevant information in section “I. Main Business of the Company during the Reporting
Period” above.
Year-on-year changes of main financial data:
Same period 2021 Apr- Same period
2022 Apr-June
of last year +/-% June of last year +/-%
(000’RMB)
(000’RMB) (000’USD) (000’USD)
Operating revenues 9,779,837 7,876,616 24.16% 1,479,232 1,219,619 21.29%
Cost of goods sold 7,141,561 5,579,320 28.00% 1,080,253 863,906 25.04%
Selling and Distribution
1,169,181 1,265,126 -7.58% 176,843 196,170 -9.85%
expenses
General and administrative
359,487 305,094 17.83% 54,349 46,972 15.71%
expenses
R&D expenses 144,701 116,458 24.25% 21,886 18,033 21.37%
Financial Expenses
(179,893) 263,858 -168.18% (27,312) 40,837 -166.88%
(income)
Gain (loss) from Changes
(744,824) (86,910) 757.01% (112,657) (13,457) 737.16%
in Fair Value
Total Net Financial
564,931 350,768 61.06% 85,345 54,294 57.19%
Expenses
Profit before tax 379,387 233,415 62.54% 57,441 36,151 58.89%
Income tax expenses 74,941 15,026 398.74% 11,334 2,328 386.86%
Net income 304,446 218,252 39.49% 46,107 33,803 36.40%
EBITDA 1,479,823 1,060,189 39.58% 223,778 164,151 36.32%
Net cash flows from operating
467,985 2,329,066 -79.91% 70,786 360,650 -80.37%
activities
Net cash flows used in
(705,151) (1,187,564) -40.62% (106,656) (183,765) -41.96%
investing activities
Net cash flows used in
(420,688) (371,928) 13.11% (63,630) (57,706) 10.27%
financing activities
Net increase in cash and cash
(483,583) 722,759 -166.91% (103,376) 122,074 -184.68%
equivalents
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ADAMA Ltd. Semi-Annual Report 2022
Same
Reporting Same period Reporting
period of
Period of last year +/-% Period +/-%
last year
(000’RMB) (000’RMB) (000’USD)
(000’USD)
Operating revenues 18,795,828 15,063,780 24.77% 2,898,953 2,328,523 24.50%
Cost of goods sold 13,822,755 10,706,710 29.10% 2,132,317 1,655,008 28.84%
Selling and Distribution
2,159,089 2,506,436 -13.86% 332,721 387,417 -14.12%
expenses
General and administrative
642,313 571,807 12.33% 98,883 88,391 11.87%
expenses
R&D expenses 274,738 226,940 21.06% 42,363 35,080 20.76%
Financial Expenses
(438,224) 448,790 -197.65% (67,991) 69,388 -197.99%
(income)
Gain (loss) from Changes
(1,341,717) (140,069) 857.90% (206,648) (21,659) 854.10%
in Fair Value
Total Net Financial
903,493 588,859 53.43% 138,655 91,047 52.29%
Expenses
Profit before tax 833,374 420,314 98.27% 128,935 64,976 98.43%
Income tax expenses 101,276 51,081 98.27% 15,482 7,890 96.22%
Net income 732,098 367,036 99.46% 113,453 56,748 99.92%
EBITDA 2,772,062 1,952,421 41.98% 427,274 301,820 41.57%
Net cash flows from (used in)
(1,345,861) 1,491,293 -190.25% (214,835) 231,391 -192.85%
operating activities
Net cash flows used in
(1,278,869) (1,892,047) 32.41% (196,998) (292,460) 32.64%
investing activities
Net cash flows provided by
(94,093) 1,208,791 -107.78% (12,203) 186,183 -106.55%
financing activities
Net increase (decrease) in
(2,568,738) 780,137 -429.27% (427,928) 126,656 -437.87%
cash and cash equivalents
Major changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
None during the Reporting Period.
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ADAMA Ltd. Semi-Annual Report 2022
Analysis of Financial Highlights
(1) Operating Revenues
Revenues in the second quarter grew by 21% (+24% in RMB terms; +25% in constant exchange rates
terms (CER)) to $1,479 million, driven by a significant 22% increase in prices, a trend which started in
the third quarter of 2021. The markedly higher prices were complemented by continued volume growth
(+3%), including the contribution of a newly acquired company, achieved despite supply challenges in
the market, and the adverse impact of exchange rate movements.
The accelerated growth in the quarter brought half-year sales to a record-high of $2,899 million, an
increase of 24% (+25% in RMB terms; +28% in CER terms) driven by a 20% increase in prices and an
8% growth in volume.
Unit: RMB’000
2022H1 2021H1
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 18,795,828 100.00% 15,063,780 100.00% 24.8%
Classified by industries
Manufacture of chemical raw materials
18,795,828 100.00% 15,063,780 100.00% 24.8%
and chemical products
Classified by products
Herbicides 8,829,597 47.0% 6,141,269 40.77% 43.8%
Fungicides 4,820,001 25.6% 2,943,265 19.54% 63.8%
Insecticides 3,193,019 17.0% 4,569,132 30.33% -30.1%
Ingredients and Intermediates (Formerly
1,953,211 10.4% 1,410,114 9.36% 38.5%
referred to as Non-Agro)
Classified by regions
Europe 4,202,842 22.4% 3,915,671 25.99% 7.3%
North America 3,639,594 19.4% 2,880,327 19.12% 26.4%
Latin America 3,993,954 21.2% 2,895,965 19.22% 37.9%
Asia-Pacific 4,658,473 24.8% 3,124,576 20.75% 49.1%
India, Middle East and Africa 2,300,965 12.2% 2,247,241 14.92% 2.4%
Note: 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.
Regional Sales Performance in USD
Q2 2022 Q2 2021 Change H1 2022 H1 2021 Change
$m $m USD $m $m USD
Europe 293 261 12.4% 650 605 7.4%
North America 278 256 8.3% 562 445 26.1%
Latin America 379 271 39.9% 613 448 37.0%
Asia Pacific 332 242 37.3% 720 483 49.1%
Of which China 213 135 57.2% 449 259 73.2%
India, Middle East & Africa 197 190 4.0% 354 347 2.0%
Total 1,479 1,220 21.3% 2,899 2,329 24.5%
Note: the following analysis of regional sales performance is based on USD results.
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ADAMA Ltd. Semi-Annual Report 2022
Europe: In Europe, the Company presented strong sales, despite the negative impact of exchange rates,
loss of sales due to the Ukraine-Russia conflict and some supply challenges. The Company continued to
gain market share in the key countries France and Italy, presenting strong sales across most countries in
the region and particularly in France, Germany, Hungary as well as in Scandinavian, BENELUX, Baltic
and Balkan countries, while negative seasonal conditions impacted the sales in Spain and Italy.
Notably, the Company benefited from the sale of Folpet in Germany, which was granted an emergency
registration1 in Barley for 2022.
North America: In the US Ag market, sales increased as the Company focused on the quality of business
and despite drought conditions across western Texas and California that impacted demand.
Very strong growth in sales and gain of market share in Canada due to seizing market opportunity to
supply increased demand for cereal herbicides in light of general market supply shortages. ADAMA
initiated in-house production of cereal herbicide MCPA to meet this demand.
The Consumer & Professional business presented very strong sales achieved through capturing market
opportunities and driven by steady demand mainly attributed to the commercial business (hotels,
restaurants, etc.) coming back to full strength after COVID shutdowns as well as very successful new
launch of Suprado, strengthening ADAMA's position as an innovator in the C&P arena. This is despite
softening of demand in the consumer market and with homeowners as inflation rises and recreational
activities decrease post-COVID.
Latin America:
Significant growth in sales in Brazil as ADAMA continues to reinforce its position in this market while
demand remains strong supported by elevated crop commodities prices.
The Company's innovative herbicides Araddo, Cheval and Arremate and fungicides Armero and
Across continued to be well received in the market.
Higher sales were also achieved in other LATAM countries, particularly in the key countries Colombia,
Argentina and Mexico, despite some supply challenges.
Asia-Pacific:
The Company's strong growth in Asia Pacific was led by the exceptionally strong sales of raw material,
intermediates and fine chemicals in China, driven both by volumes and prices, in light of the strong global
demand for crop protection and achieved despite logistic challenges related to COVID. The sales in China
of ADAMA's branded portfolio also grew significantly as the Company gains market share, despite the
negative impact of some seasonal conditions and the strong competition in the market.
In the wider APAC region, strong sales were delivered in the Pacific region, which continued to benefit
from the favorable La Nia season, that has now potentially ended after an extended two-year season.
1 Despite not having received yet full label registration in Germany, Folpet was granted "Nationwide emergency
registration for FOLPAN 500 SC against Ramularia collo-cygni in barley" allowing it to be used only for this
specification.
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ADAMA Ltd. Semi-Annual Report 2022
India, Middle East & Africa:
The growth in sales was mainly led by Turkey and Israel following favorable weather conditions and was
negatively impacted by the depreciation of the Turkish Lira and by a decline in sales in India.
(2) Cost of Goods Sold:
List of the industries, products or regions which exceed 10% of the operating revenues or
operating profits of the Company as at the Reporting Period
Unit: RMB’000
Gross YoY YoY
Operating Cost of YoY
Margin increase/decrease increase/decrease
revenues goods sold increase/decrease
(%) of the operating of the cost of
of the gross margin
revenues goods sold
Classified by industries
Manufacturing
chemical raw
18,795,828 13,822,755 26. 5% 24.8% 29.1% -2.5%
materials and
chemical products
Classified by products
Crop Protection 16,842,617 12,338,073 26.7% 23.4% 28.0% -2.7%
Ingredients and
1,953,211 1,484,682 24.0% 38.5% 38.6% 0.0%
Intermediates
If the scope of the Company's main business was adjusted during the Reporting Period, the Company's annual financial
data of main business according to the adjusted scope at the end of the year is disclosed as follows:
□ Applicable √ Not applicable
Reasons for any over 30% YoY movement of the data above:
√ Applicable □ Not applicable
In the reported results, as of Q4 2021, following recent changes in the guidelines in China, the
transportations costs to third parties and its marketing subsidiaries and opex idleness have been
reclassified from operating expenses to costs of goods (not impacting the operating results), while
these expenses were not recorded in the cost of goods in the second quarter and first half period 2021,
but rather in the operating expenses.
Additionally, certain extraordinary charges related largely to a temporary disruption of the production of
certain products, were adjusted in the second quarter and first half period in 2021. These charges have
significantly declined since the first quarter of 2022, as the relocation and upgrade of the manufacturing
Jingzhou site in China has been completed and is now at a high level of operation.
Excluding the impact of the abovementioned extraordinary charges, the higher Cost of Goods sold,
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ADAMA Ltd. Semi-Annual Report 2022
both in the quarter and in the half-year periods, reflect the strong growth of the business, higher
logistics, procurement and production costs as well as the negative impact of exchange rates.
Nevertheless, in the quarter and half year period, the Company saw the significantly higher gross profit
and improvement in the adjusted gross margin, mainly driven by the markedly higher prices and
complemented by continued volume growth.
(3) Operating Expenses:
Operating expenses include Sales and Marketing, General and Administration and R&D.
Please refer to the explanation above regarding the reclassification of certain transportation costs
and idleness from operating expenses to COGs.
Additionally, the Company recorded certain non-operational charges within its operating expenses
amounting to RMB 146 million ($ 22 million) in Q2 2022 in comparison to RMB 65 million ($ 10
million) in Q2 2021, and RMB 182 million ($ 28 million) in H1 2022 in comparison to RMB 169
million ($ 26 million) in H1 2021, mainly as follows:
(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 mainly to the
non-cash amortization of intangible assets created as part of the Purchase Price Allocation (PPA)
on acquisitions, with no impact on the ongoing performance of the companies acquired; and (iii)
Incentive plans - share-based compensation.
Excluding the impact of the abovementioned non-operational charges, the higher operating
expenses in the quarter and half-year period reflect the strong growth of the business, an increase
in expenses attributed to company success-based employee compensation, the inclusion of a
recent acquisition and moderated by the positive impact of exchange rates.
In addition, in the first quarter the Company recorded a doubtful debt provision for trade receivables
in Ukraine.
(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 an income of RMB 438 million ($68 million) for the first half of 2022 compared with an expense
of RMB 449 million ($69 million) for the corresponding period in 2021.
Given the global nature of its operational activities and the composition of its assets and liabilities,
the Company, in the ordinary course of its business, uses foreign currency derivatives (forwards
and options) to hedge the cash flow risks associated with existing monetary assets and liabilities
that may be affected by exchange rate fluctuations. The impact of the hedging transactions which
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ADAMA Ltd. Semi-Annual Report 2022
is recorded in “Gains/Losses from Changes in Fair Value” is a net loss of RMB 1,341 million
($207 million) in the first half of 2022 compared with a net loss of RMB 140 million ($22 million) in
the corresponding period in 2021.
The aggregate of Financial Expenses and Gains/Losses from Changes in Fair Value
(hereinafter as “Total Net Financial Expenses”), which more comprehensively reflects the
financial expenses of the Company in supporting its main business and protecting its monetary
assets/liabilities, amounts to RMB 903 million ($139 million) in the first half of 2022 compared with
RMB 589 million ($91 million) in the corresponding period in 2021.
The higher total net Financial Expenses were mainly driven by the net effect of the high Israeli CPI
on the ILS-denominated, CPI-linked bonds, higher hedging costs on exchange rates and the
valuation of put options attributed to minority stakes.
(5) Cash Flow:
Net cash flows from (used in) operating activities: Operating cash flow of $71 million (RMB 468
million) was generated in the quarter and $215 million (RMB 1,346 million) was used in the half-
year period, compared to $361 million (RMB 2,329 million) and $231 million (RMB 1,491 million)
generated in the corresponding periods last year, respectively. The lower cash flow generated in
the quarter was primarily due to an increase in payments for goods procured in previous quarters
supporting the increase in inventory levels.
Net cash used in investing activities was $107 million (RMB 705 million) in the quarter and $197
million (RMB 1,279 million) in the half-year period, compared to $184 million (RMB 1,188 million)
and $292 million (RMB 1,892 million) in the corresponding periods last year, respectively. The cash
used in investing activities in the second quarter of 2022 and the half year period is largely related
to investments in "Core Leap" manufacturing capabilities in Israel and Brazil as well as investments
in intangible assets relating to ADAMA's global registrations. In the corresponding periods in 2021,
cash was also used for the completion of the payment related to the acquisition of Huifeng’s
domestic commercial crop protection business and the acquisition of the Huifeng Dafeng
manufacturing site towards the end of the second quarter in 2021, as well as for the relocation and
upgrade of the manufacturing Sanonda Jingzhou site, which was completed towards the end of the
second quarter of 2021.
Free cash flow of $83 million (RMB 551 million) was consumed in the second quarter and $469
million (RMB 2,999 million) consumed in the half-year period compared to $132 million (RMB 854
million) generated and $116 million (RMB 752 million) consumed in the corresponding periods last
year, respectively, reflecting the aforementioned operating and investing cash flow dynamics.
Cash Flow from Financing Activities was $64 million (RMB 421 million) consumed in the quarter
and $12 million (RMB 94 million) consumed in the half-year period, compared to $58 million (RMB
372 million) consumed and $186 million (RMB 1,209 million) generated in the corresponding
periods last year, respectively, mainly driven by realization of hedging transactions.
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ADAMA Ltd. Semi-Annual Report 2022
IV. Analysis of Non-Core Business
√ Applicable □ Not applicable
Unit: RMB’000
Proportion in Whether
Amount Reasons
total profit sustained
Investment income 4,706 0.56% No
Mainly from changes in fair value and
Gain/loss from change of
(1,341,717) -161.00% realization of derivatives. See No
Fair Value
explanation of financial expenses
Asset impairment losses 85,346 10.24% No
Gain or loss from disposal of No
60,298 7.24%
assets
Non-operating income 29,797 3.58% No
Non-operating loss 16,559 1.99% No
V. Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB’000
End of Reporting Period End of last year Change in Reason for
As a percentage As a percentage percentage significant
Amount Amount
of total assets (%) of total assets (%) (%) change
Cash at bank and on hand 3,296,536 5.94% 5,818,835 11.58% -5.64%
Accounts receivable 10,091,376 18.18% 8,362,493 16.65% 1.53%
Inventories 15,568,631 28.05% 11,750,162 23.39% 4.66%
Investment property 3,442 0.01% 3,716 0.01% 0.00%
Long term equity investments 20,508 0.04% 15,335 0.03% 0.01%
Fixed assets 8,583,316 15.46% 8,048,389 16.02% -0.56%
Construction in progress 2,650,735 4.78% 2,143,400 4.27% 0.51%
Short-term loans 1,635,446 2.95% 874,755 1.74% 1.21%
Contract liabilities 1,442,598 2.60% 1,381,311 2.75% -0.15%
Long-term loans 4,292,178 7.73% 3,498,912 6.97% 0.76%
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ADAMA Ltd. Semi-Annual Report 2022
2. Main Overseas Assets
√ Applicable □ Not applicable
Control Proportion
Scale
measures Net Profit of
Specific (Amount) Operation Significant
to of the overseas
contents of the Reason of the Location /Management impairment
guarantee assets assets out
assets assets mode risk?
safety of (RMB’000) of total net
(RMB’000)
the assets assets (%)
Equity Acquired
investment in through Israel and Corporate Corporate
19,512,834 401,098 87% No
Adama Major Assets globally Governance Governance
Solutions Restructuring
Other explanations N/A
3. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB’000
Profit/loss on Impairment
Cumulative fair Purchased in
fair value provided in Sold in the
Opening value changes the Closing
Item changes in the the Reporting Others
balance charged to Reporting balance
Reporting Reporting Period
equity Period
Period Period
Financial assets
1.Financial assets
held for trading
1,479 - - - 125 - - 1,604
(excluding derivative
financial assets)
2.Derivative financial
assets (including long 243,310 (865,511) (71,431) - 1,273,569 (35,106) - 544,831
term)
3.Other equity
152,118 - 3,548 - - - - 155,666
investments
Total financial assets 396,907 (865,511) (67,883) - 1,273,694 (35,106) - 702,101
Other 199,815 - - - 75,220 (107,253) - 167,782
Total of above 596,722 (865,511) (67,883) - 1,348,914 (142,359) - 869,883
Financial liabilities 176,206 459,437 - - - - - 635,643
Significant changes in the measurement attributes of the main assets in the Reporting Period
□ Yes √ No
4. Limitation on Asset Rights as of End of the Reporting Period
At the end of this Reporting Period, restricted assets included RMB 105,794,000 - restricted cash, most
of which as guarantee for bank acceptance bills; and RMB 142,349,000 - other non-current assets, mainly
as guarantee for asset securitization and lawsuits.
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ADAMA Ltd. Semi-Annual Report 2022
VI. Investments Made
1. Overall Condition of the Total Investments Made
√ Applicable □ Not applicable
Investment during the Investment during the Same +/-% YoY
Reporting Period (RMB'000) Period Last Year (RMB'000)
20,936,565 49,924,938 -58%
2. Significant Equity Investments during the Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments executed during the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Investments in Securities
□ Applicable √ Not applicable
None during the Reporting Period.
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ADAMA Ltd. Semi-Annual Report 2022
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable Unit: RMB’000
The Relati Related Type Initial Starting date Expiring date Investment Amount Amount Impai Investment Percentage Gain/loss
party on party investment amount at purchased sold during rment amount at of during
that with transac amount beginning of during the the accru end of the investment the
operate the tion or the period Reporting Reporting ed (if period amount Reporting
s the Comp not? Period Period any) divided by Period
invest any net asset
ment at end of
the period
Banks No No Option 2,527,930 05/04/2022 25/09/2022 2,527,930 4,894,342 -112,028 No 7,310,244 -1.76% -397,484
Banks No No Forward 14,626,887 13/05/2022 31/07/2022 14,626,887 16,042,223 -5,144,976 No 25,524,134 -4.11% -927,464
Total 17,154,817 -- -- 17,154,817 20,936,565 -5,257,004 32,834,378 -5.88% -1,324,948
Source of fund for the investment Internal.
Litigation-related situations (if
N/A
applicable)
Date of disclosure of Board
December 30, 2017
approval (if any)
Date of disclosure of
N/A
Shareholders’ approval (if any)
The aforesaid refers to short term hedging currency transactions made with banks.
Risk and control analysis for the
The Group’s transactions are not traded in the market. The Transactions are between the applicable company in the Group and the
Reporting Period (including but
applicable bank until the expiration date of the transaction, therefore no market risk is involved.
not limited to market risk,
Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA
liquidity risk, credit risk,
agreements.
operational risk, legal risk, etc.)
As to operational risk, the Group is working with relevant software, which is its back office for all transactions.
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ADAMA Ltd. Semi-Annual Report 2022
No legal risk is involved.
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 the board, which specifies, inter alia, the hedging policy, the persons that have the authorization to deal with
hedging, the tools, ranges etc. The only subsidiary that has hedging positions in the Group in the period was Adama Solutions and its
subsidiaries.
The relevant subsidiaries apply management designed procedures and controls, which among other things, monitor the working
process and the controls of the hedging transactions and are quarterly reviewed and annually audited.
The controllers of the relevant subsidiaries are involved in the process and are monitoring the hedging accounting treatment.
Every 2-3 years the internal audit of the relevant subsidiaries’ department is auditing the entire procedure.
Market price or fair value change
The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks.
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;
Specific methodology and
the relevant transactions are simple (Options and forwards) for short terms. For fair value methodology see section X of the this Report,
assumptions should be
note IX. Fair Value. The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters
disclosed in the analysis of fair
are provided by the experts.
value of the investments
Explanation for any significant
changes in accounting policies
N/A
and principles, compared with
last reporting period
Independent Directors’ opinion The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments
on the investment in derivative respond to the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the
financial instruments and related Company has adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability
risk controls to protect against market risk. The derivative investments do not harm the interests of the Company and its shareholders.
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ADAMA Ltd. Semi-Annual Report 2022
5. Use of Raised Fund
□ Applicable √ Not applicable
None during the Reporting Period.
VII. Sale of Major Assets and Equity Interests
1. Sale of Significant Assets
□ Applicable √ Not applicable
None during the Reporting Period.
2. Sale of Significant Equities
□ Applicable √ Not applicable
VIII. Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
List of main subsidiaries and stock-participating companies influencing over 10% of the net profits on
the Company
Unit: RMB’000
Name Type Registered Total Operating Operating
Main services Net assets Net profit
capital assets revenues profit
Development,
manufacturing and
marketing of
agrochemicals,
Adama intermediate
Subsidiary 720,085 45,524,056 16,830,684 16,427,315 487,687 403,788
Solutions materials for other
industries, food
additives and synthetic
aromatic products,
mainly for export.
Subsidiaries acquired or disposed during the Reporting Period
□ Applicable √ Not applicable
Explanations on the main controlled and joint stock companies
√ Applicable □ Not applicable
During the Reporting Period, total sales of Solutions, a wholly-owned subsidiary of the Company,
amounted to $2,530 million, an increase of 18%, achieved despite supply challenges in the market, and
the adverse impact of exchange rate movements. Solutions’ net income was $ 63 million in the first half
of the year, higher than the corresponding period last year. For detailed explanation of the performance
movement, see above explanation of the Section.
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ADAMA Ltd. Semi-Annual Report 2022
IX. Structured Entities Controlled by the Company
□ Applicable √Not applicable
X. Risks Facing the Company 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 perspective, 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.
Concentration of currency exposure from foreign currency exchange rate fluctuations against assets,
including inventory of finished products in countries of sale, 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 approval of
the financial statements, the Group has hedged most of its balance sheet exposure as it is on the date of
publication of this report.
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. The Company has more sales
in markets in the northern hemisphere and therefore, the Company's sales volume during the first half of
the year is higher than the sales volume during the second half of the year.
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
24
ADAMA Ltd. Semi-Annual Report 2022
expenses. 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.
On 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) 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.
Business operations in emerging markets
The Group conducts business - mainly product sales and raw material procurement - inter alia, in
emerging markets such as Latin America (particularly in Brazil, the largest market, country wise, in which
the Group operates), Eastern Europe, Southeast Asia and Africa. The Group's activity in emerging
markets is exposed to risks typical of those markets, including: political and regulatory instability; volatile
exchange rates; economic and fiscal instability and frequent revisions of economic legislation; relatively
high inflation and interest rates; terrorism or war; restrictions on import and trade; differing business
cultures; uncertainty as to the ability to enforce contractual and intellectual property rights; foreign
currency controls; governmental price controls; restrictions on the withdrawal of money from the country;
barter deals and potential entry of international competitors and accelerated consolidations by large-scale
competitors in these markets. Developments in these regions may have a significant effect on the Group's
operations. Distress to the economies of these markets could impair the ability of the Group's customers
to purchase its products or the ability to market them at international market prices, as well as harm the
Group's ability to collect customer debts, in a way that could have a significant adverse effect on the
Group's operating results.
The Group’s operations in multiple regions allows for the diversification of such risks and for the reduction
of its dependency on particular economies. In addition, changes in registration requirements or
customers' preferences in developed western countries, which may limit the use of raw materials
purchased from emerging economies, may require redeployment of the 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
25
ADAMA Ltd. Semi-Annual Report 2022
advantages see section III - subsection II. 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; exceptional changes in weather conditions
The scope of general agricultural activities worldwide may be negatively affected by many exogenous
factors, such as 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 as well as other damages caused by nature may have
an impact on the demand for the Group's products. The Group believes, that should 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
release 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
26
ADAMA Ltd. Semi-Annual Report 2022
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 obligations on the Group for strict liability, regardless of proof of negligence or
malice.
While the Group invests material sums in adapting its facilities and in constructing special facilities in
accordance with environmental requirements, it is currently unable to assess with any certainty whether
these investments (current and future) and their outcomes may satisfy current or future requirements,
should these be significantly increased or changed. In addition, the Group is unable to predict with any
certainty the extent of future costs and investments it may incur in order to meet the requirements of the
environmental authorities in the relevant countries in which it operates since, inter alia, the Group is
unable to estimate the extent of potential pollutions, their duration, the extent of the measures required
to be taken by the Group in handling them, the division of responsibility among other parties and the
amounts recoverable from third parties.
Furthermore, the Group may be the target of bodily injury claims and property damage claims caused by
exposure to hazardous materials, which are largely covered under the Group’s insurance policies.
Legislative, standard and regulatory changes in product registration
The majority of the substances and products marketed by the Group require registration at various stages
of their development, production, import, utilization and marketing, and are also subject to strict regulatory
supervision by the regulatory authorities in each country. Compliance with the regulatory requirements
that vary from country to country and which are becoming more stringent with time, involves significant
time and costs, and rigorous compliance with individual registration requirements for each product.
Noncompliance with these regulatory requirements might materially adversely affect the Group’s
expenses, cost structure and profit margins, as well as penetration of its products in the relevant market,
and may even lead to suspension of sales of the relevant product, and recall of those products already
sold, or to legal action. Moreover, to the extent new regulatory requirements are imposed on existing
registered products (requiring additional investment or leading to the existing registration's revocation)
and/or the Group is required to compensate another company for its use of the latter's product registration
data, these might amount to significant sums, considerably increasing the Group's costs and adversely
affecting its results and reputation. In recent years the industry has been suffering from revocation of
registration for many products around the world. This trend is particularly evident in European countries
as well as in many other countries worldwide.
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.
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ADAMA Ltd. Semi-Annual Report 2022
Product liability
Product and producer liability are a risk for the Group. Regardless of their prospects or actual results,
product liability lawsuits might involve considerable costs as well as tarnish the Group's reputation, thus
potentially impacting its profits. The Group has a third-party and defective product liability insurance cover.
However, there is no certainty that the scope of insurance cover is sufficient. Any future product liability
lawsuit or series of lawsuits could materially affect the Group’s operations and results, should the Group
lose the lawsuit or should its insurance cover not suffice or apply in a particular instance. In addition,
while the Group has not currently encountered any difficulty renewing such insurance policy, it is possible
that it will encounter future difficulties in renewing an insurance policy for third party liability and defective
products on terms acceptable to the Group.
Successful market penetration and product diversification
The Group’s growth and profit margins are affected, inter alia, by the extent of its success in developing
differentiated products and obtaining registrations for them, so as to enable it to gain market share at the
expense of its competitors. Usually, being the first to launch a certain off-patent product affords the Group
continuing advantage, even after other competitors penetrate the same market. As such, the Group's
revenues and profit margins from a certain new off-patent product could be materially affected by its
ability to launch such product ahead of the launch of a comparable product by its competitors.
Should new products fail to meet registration requirements in the different countries or should it take a
long period of time to obtain such registrations, the Group's ability to successfully introduce a new product
to the relevant market in the future may be affected, since entry into the market prior to other competitors
is important for successful market penetration. Furthermore, successful market penetration involves, inter
alia, product diversification in order to suit each market's changing needs. Therefore, if the Group fails to
adapt its product mix by developing new products and obtaining the required regulatory approvals, its
future ability to penetrate that market and to maintain its existing market share could be affected. Failure
to introduce new products to given markets and meet Group objectives (given the considerable time and
resources invested in their development and registration) might affect the sales of the product in question
in the relevant market, the Group’s results and margins.
Intellectual property rights of the Group and of third parties
The Group's ability to develop off-patent products is dependent, inter alia, on its ability to oppose patents
or patent application of Originator Companies or other third parties, or to develop products that do not
otherwise infringe intellectual property rights in a manner that may involve significant legal and other
costs. Originator Companies tend to vigorously defend their products and may attempt to delay the launch
of competing off-patent products by registering patents on slightly different versions of products for which
the original patent protection is about to expire or has expired, with the aim of competing against the off-
patent versions of the original product. The Originator Companies may also change the branding and
marketing of their products. Such actions may increase the Group's costs and the risk it entails, and harm
or even prevent its ability to launch new products.
The Group is also exposed to legal claims that its products or production processes infringe on third-party
intellectual property rights. Such claims may involve time, costs, substantial damages and management
resources, impair the value of the Group's brands and its sales and adversely affect its results. Such
lawsuits that were concluded involved non-material amounts.
Furthermore, although the Group protects its brands and trade secrets with patents, trademarks and other
methods of intellectual property protection, these protective means may not be sufficient for fully
28
ADAMA Ltd. Semi-Annual Report 2022
safeguarding its intellectual property. Any unlawful or other unauthorized use of the Group's intellectual
property rights could adversely affect the value of its intellectual property and goodwill. In addition, the
Group may be required to take legal actions involving financial costs and resources to safeguard its
intellectual property rights.
Fluctuations in raw material inputs and prices, and in sales costs
Significant percentage of the Groups’ cost of sales derives from raw material costs. Hence, significant
increases or decreases in raw material costs affect the cost of goods sold, and are, due to the length of
the Company’s inventory cycle, generally reflected in the Company’s financials. Most of the Group's raw
materials are distant derivatives of oil prices and therefore, extreme changes or decrease in oil prices
may affect the costs of raw materials, although only partially.
To reduce exposure to fluctuations in the prices of raw materials, the Group customarily engages in long-
term purchase contracts for key raw materials, wherever possible. Similarly, the Group acts to adjust its
sales prices, wherever possible, to reflect the changes in the costs of raw materials.
As of the date of approval of the financial statements, the Group has not engaged in any hedging
transactions against increases in oil and other raw material costs.
Exposure due to recent developments in the genetically modified seeds market
Any significant development in the market of genetically modified seeds for agricultural crops, including
as a result of regulatory changes in certain countries currently prohibiting the use of genetically modified
seeds, and/or any significant increase in the sales of genetically modified seeds and/or to the extent new
crop protection products are developed for further crops that would be widely used (substituting traditional
products), will affect demand for crop protection products, requiring the Group to respond by adapting its
product portfolio to the new demand structure. Consequently, to the extent that the Group fails to adapt
its product mix accordingly, this may reduce demand for its products, erode their sales price and by
implication affect the Group’s results and market share.
Nevertheless, the fact that the Group itself markets some of the products for which herbicide tolerance
traits have been developed, acts to mitigate this exposure (albeit only in terms of marketing margins).
In addition, natural and/or biological substances that attack weeds, pests and diseases are potential
alternatives for the Company’s products, though as of the date of the report, their efficiency is relatively
limited, and they are commercialized in a relatively small volumes.
Operational risks
The Group’s operations, including its manufacturing activities, rely, inter alia, on state-of-the-art computer
systems. The Group continually invests in upgrading and protecting these systems from malfunctions and
attack. Any unexpected failure of these systems, as well as the integration of new systems, could involve
substantial costs and adversely affect the Group's operations until completion of the repair or integration.
The potential occurrence of a substantial failure that cannot be repaired within a reasonable time frame
may also affect the Group's operations and its results. Currently, the Group has a property and loss-of-
profit insurance policy.
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
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ADAMA Ltd. Semi-Annual Report 2022
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 and port service disruptions
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 and at times utilize air
freight.
Failed mergers and acquisitions; difficulties in integrating acquired operations
The Group's strategy includes growth through mergers, acquisitions, investments and collaborations
designed to expand its product portfolio and deepen its presence in certain geographical markets.
Growth through mergers and acquisitions requires assimilation of acquired operations and their effective
integration in the Group, including realization of certain forecasts, profitability, market conditions and
competition.
Failure to successfully implement the above and/or non-realization of the relevant forecasts may result in
not achieving the incremental value forecasted, loss of customers, exposure to unexpected liabilities,
reduced value of the intangible assets included in the merger or acquisition as well as the loss of
professional and skilled human resources.
Production concentration in limited plants
A large portion of the Group’s production operations is concentrated in a relatively small number of
locations. Natural disasters, hostilities, labor disputes, substantial operational malfunction or any other
material damage might significantly affect Group operations, as a result of the difficulty, the time and
investment required for relocating the production operation or any other activity.
International taxation
Most of the Group’s sales are global, through its consolidated subsidiaries worldwide. These individual
companies are assessed in accordance with the tax laws effective in each respective location. The
Group’s effective tax rate could be significantly affected by different classification or attribution of the
profits arising from the proportional value of the components of each of the companies in the Group in
the various countries, as is recognized in each tax jurisdiction; changes in the characteristics (including
regarding the location of control and management) of these companies; changes in the breakdown of the
Group's profits into regions where differing tax rates apply; changes in statutory tax rates and other
legislative changes; changes in assessment of the Group's deferred tax assets or deferred tax liabilities;
changes in determining the areas in which the Group is taxed; and potential changes in the Group's
organizational structure.
30
ADAMA Ltd. Semi-Annual Report 2022
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.
The Group’s Financial Statements do not include a material provision for exposure for international
taxation, as stated above.
Risks arising from the Group’s debt
The Group finances its business operations by means of its own equity and loans from external sources
(primarily traded debentures issued by Solutions and bank credit). The Group's main source for servicing
the debt and its operating expenses is by means of the profits from the Group companies’ operations.
Restrictions applying to the Group companies regarding distribution of dividends to the Group, or the tax
rate applicable on these dividends, may affect the Group's ability to finance its operations and service its
debt.
In addition, the Group's Finance Documents, as contained in the bank credit agreements, require meeting
certain Financial Covenants. Failure to meet these covenants due to an exogenous event or non-
materialization of Group forecasts, and insofar as the financing parties refuse to extend or update these
Financial Covenants as per the Group’s capabilities, may lead the financing parties to demand the
immediate payment of these liabilities (or part thereof).
Exposure to customer credit risks
The Group’s sales to customers worldwide usually involve customer credit as is customary in each market.
A portion of these credit lines is insured, while the remainder are exposed to risk, particularly during
economic slowdowns in the relevant markets. The Group’s aggregate credit, however, is diversified
among many customers in dozens of countries, mitigating this risk. In addition, in certain regions,
particularly in South America, credit days are particularly long (compared to those extended to customers
in regions such as Europe), and on occasion, inter alia, owing to agricultural seasons or economic
downturns in those countries, the Group may encounter difficulty in timely collection of customer debts,
with the collection period being extended over several years.
Generally, such issues arise more often in developing countries where the Group may be less familiar
with its customers, the collaterals might be in double until actual repayment and the insurance cover of
these customers is likely to be limited. Credit default by any of the customers may negatively impact the
Group's cash flow and financial results.
The Group’s working capital and cash flow needs
Similar to other companies operating in the crop protection industry, the Group has substantial cash flow
and working capital requirements in the ordinary course of operations. In view of the Group's growth and
considering its primary growth regions, the Group’s broad product portfolio and the Group’s investments
in manufacturing infrastructures, the Group has significant financing and investment needs. The Group
acts continually to improve the state and management of its working capital. While currently the Group is
in compliance with all its financial covenants, significant deterioration of its operating results may in the
future lead the Group to fail to comply with its financial covenants and fail to meet its financial needs. As
a result, the Group's ability to meet its goals and growth plans, as well as its ability to meet its financial
obligations, may be harmed.
Contagious disease outbreak
Outbreak of a contagious disease and pandemics, or other adverse public health developments, in
territories where significant production activity is taking place or from which raw materials are supplied to
31
ADAMA Ltd. Semi-Annual Report 2022
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.
32
ADAMA Ltd. Semi-Annual Report 2022
Section IV - Corporate Governance
I. Annual and Special Meetings of Shareholders Convened during the Reporting
Period
1. Meetings of Shareholders Convened during the Reporting Period
Investor
Meeting Type participation Convened date Disclosure date Resolutions of the meeting
ratio
Announcement on the
Resolution of the 1st
Interim Shareholders
1st Interim Interim Meeting in 2022
January 11,
Shareholders Shareholders 1.6561% January 10, 2022 (Announcement No.:
2022
Meeting in 2022 Meeting 2022-3).
Disclosed at the website
CNINFO
www.cninfo.com.cn
Announcement on the
Resolutions of 2021
Annual General Meeting
2021 Annual Annual
(Announcement No.:
Shareholders Shareholders 82.0559% April 21, 2022 April 22, 2022
2022-17).
Meeting Meeting
Disclosed at the website
CNINFO
www.cninfo.com.cn
2. Special Meetings of Shareholders Convened at Request of Preference Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Changes in directors, supervisors and senior management during the Reporting Period, were as
follows:
Name Position Type Date Reason
Appointed by
Shahar Florentz Chief Financial Officer May 1, 2022 --
the Board
III. Basic Information on the Profit Distribution and Converting Capital Reserve into
Share Capital in the Reporting Period
□ Applicable √ Not applicable
For the Reporting Period, the Company does not plan to distribute cash dividends or bonus shares or
convert capital reserve into share capital.
33
ADAMA Ltd. Semi-Annual Report 2022
IV. Stock Incentive Plans, ESOP 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 the Company’s subsidiary, 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.
34
ADAMA Ltd. Semi-Annual Report 2022
Section V - Environmental and Social Responsibilities
I. Major Environmental Situation
Is the Company listed as a “Key Polluting Entity” by the environmental protection agencies?
√ Yes □ No
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
(1) For the old site: Comprehensive
Standard on Discharge of Waste
Water (GB8978-2002) ，
General
The new site: COD<100mg/L;
COD Continuous 2 Discharge 55.065 173.2104 None
26.06mg/L. (2) For the new site: Discharge
Port
Standards for Pollutants from Urban
Sewage Treatment Plant (GB 18918
– 2002), COD <50mg/L
ADAMA (1) For the old site: Comprehensive
Ltd. Standard on Discharge of
Wastewater (GB8978-2002),
General
Ammonia The new site: ammonia nitrogen<15mg/L;
Continuous 2 Discharge 2.994 17.321 None
nitrogen 1.41mg/L. (2) For the new site: Discharge
Port
Standards for Pollutants from Urban
Sewage Treatment Plant (GB 18918
– 2002), ammonia nitrogen<8mg/L;
For the old site & new site: Discharge
Total General The new site:
Continuous 2 Standards for Pollutants from Urban 0.577 1.722 None
Phosphorou Discharge 0.27mg/L.
Sewage Treatment Plant (GB 18918 –
35
ADAMA Ltd. Semi-Annual Report 2022
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
s Port The new site: 2002), total phosphorous <0.5mg/L
0.26mg/L.
(1) The power plant complies with the
ultra-low limit of the standard range for
pollutant emission, which is NOx <
50mg/m3;
Power plant:
Power (2) Hazardous waste incinerator: Table 3
32.6mg/m3
plant, in the "Standards for the Control of
Hazardous
Hazardous Hazardous Waste Incineration Pollution "
waste
NOx Continuous 1 waste (GB18484-2020), which is NOx 19.257 260.27 None
incinerator:
incinerator <300mg/m3;
68.34mg/m3
and (3) RTO: Table 1 and 2 and specifically
RTO:
RTO the air pollutant emission limits in Table 2
10.20mg/m3
of the "Standards for the Air Pollutant
Emission of the Pesticide manufacturing
Industry" (GB 39727-2020), which is NOx
<200mg/m3;
(1) The power plant complies with the
Power Power plant:
ultra-low limit of the standard range for
plant, 1.8 mg/m3
pollutant emission, which is SO2 < 35
Hazardous Hazardous
mg/m3;
SO2 Continuous 1 waste waste 4.8882 116.48 None
(2) Hazardous waste incinerator: Table 3
incinerator incinerator:
in the "Standards for the Control of
and 2.22 mg/m3
Hazardous Waste Incineration Pollution "
RTO RTO: 5.36
(GB18484-2020), which is SO2
36
ADAMA Ltd. Semi-Annual Report 2022
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
mg/m3 <100mg/m3;
(3) RTO: Table 1 and 2 and specifically
the air pollutant emission limits in Table 2
of the "Standards for the Air Pollutant
Emission of the Pesticide manufacturing
Industry" (GB 39727-2020), which is SO2
<200mg/m3;
(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;
Power plant:
Power (2) Hazardous waste incinerator: Table 3
0.3 mg/m3
plant, in the "Standards for the Control of
Hazardous
Hazardous Hazardous Waste Incineration Pollution "
Fume and waste
Continuous 1 waste (GB18484-2020), which is fume and dust 5.143 44.8824 None
dust incinerator:
incinerator <30 mg/m3;
3.62 mg/m3
and (3) RTO: Table 1 and 2 and specifically
RTO:
RTO the air pollutant emission limits in the "
5.09mg/m3
the Emission Standards for Air Pollutants
of the Pesticide Manufacturing Industry"
(GB 39727-2020), which is fume and
dust < 30 mg/m3;
Table 1 and 2 and specifically, the
RTO: 1.931
VOCs Continuous 1 RTO emission limits of air pollutants in Table 2 1.565 6.941 t/a None
mg/m3
of the the Emission Standards for Air
37
ADAMA Ltd. Semi-Annual Report 2022
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
Pollutants of the Pesticide Manufacturing
Industry (GB 39727-2020), which is
VOCs <100mg/m3
General Comprehensive Standard on Discharge
COD Continuous 3 Discharge 82.57 mg/l of Waste Water (GB8978-2002)，COD< 69.045 311.202 None
Port 500 mg/l
Water Quality Standard for Sewage
General
Ammonia Discharged into Urban Sewerage（GBT
Continuous 3 Discharge 1.20 mg/l 1.004 31.617 None
Nitrogen 31962-2015）, Ammonia Nitrogen <45
Port
mg/l
For Anpon: Water Quality Standard for
ADAMA
Sewage Discharged into Urban
Anpon
Total General Sewerage （GBT 31962-2015）, total
(Jiangsu)
Phosphorou Continuous 3 Discharge 0.28 mg/l phosphorous < 8 mg/l; 0.2378 20.442 None
Co., Ltd.
s Port For Anpon’s branch Maidao: Agreement
on Wastewater Discharge, total
phosphorous < 3 mg/l;
Standard on Air Pollution of Thermal None
Power
NOx Continuous 1 / Power Plants（GB13223-2011）NOx < / 447.366 The power plant has
Plant
100 mg/m3 been deactivated.
Standard on Air Pollution of Thermal None
Power
SO2 Continuous 1 / Power Plants（GB13223-2011）SO2 < / 447.366 The power plant has
Plant
50 mg/m3 been deactivated.
38
ADAMA Ltd. Semi-Annual Report 2022
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
Standard on Air Pollution of Thermal None
Fume and Power
Continuous 1 / Power Plants（GB13223-2011）Fume / 67.105 The power plant has
Dust Plant
and Dust < 20 mg/m3 been deactivated.
3.86 mg/m3 for
18 in Anpon Standards for the Volatile Organic
Maidao and
VOCs Continuous 22 Site and 4 Compound Emission of the Chemical 0.4214 84.678 None
26.23 mg/m3
in Maidao Industry, DB 32/3151-2016
for Anpon
General
COD Continuous 1 Discharge 230.56 mg/l Standards of the Industrial Park 63.1223 247.6378 None
Port
General
Ammonia
Continuous 1 Discharge 9.71 mg/l Standards of the Industrial Park 2.2113 19.3783 None
Nitrogen
Port
ADAMA
Total General
Huifeng
Phosphorou Continuous 1 Discharge 0.7 mg/l Standards of the Industrial Park 0.184 0.9285 None
(Jiangsu)
s Port
Co., Ltd.
General
total
Continuous 1 Discharge 34.9 mg/l Standards of the Industrial Park 8.838 46.77204 None
nitrogen
Port
RTO and
Discharge Standards for Air Pollutants
the
NOx Continuous 6 10.31 mg/m from Pesticide Manufacturing Industry 7.0859 147.7072 None
Discharge
(GB39727 – 2020)
Ports at
39
ADAMA Ltd. Semi-Annual Report 2022
Main Number Total amount Total
Layout of
Company pollutants Way of of emitted/ amount
emission Concentration Pollution standards applied Exceeding limit
name and special emission emission Discharged Approved
points
pollutants points (ton) (ton)
Various
Workshops
RTO and
the
Discharge Standards for Air Pollutants
Discharge
SO2 Continuous 6 7.72 mg/m from Pesticide Manufacturing Industry 7.0756 47.1958 None
Ports at
(GB39727 – 2020)
Various
Workshops
RTO and
the
Discharge Standards for Air Pollutants
Fume and Discharge
Continuous 6 3.05 mg/m from Pesticide Manufacturing Industry 2.0287 22.7146 None
Dust Ports at
(GB39727 – 2020)
Various
Workshops
RTO and
the
non- Discharge Standard of Volatile Organic
Discharge
methane Continuous 6 8.91 mg/m Compounds in Chemical Industry (DB 10.412 62.92994 None
Ports at
hydrocarbon 32/3151-2016)
Various
Workshops
40
ADAMA Ltd. Semi-Annual Report 2022
1. Development and Operation of Environmental Facilities
(1) Development and Operation of Wastewater Treatment Facilities
The company has a 20,000 tons/day wastewater treatment plant, which adopts the process
composed of "secondary A/O + MBR + ozone co-oxidation + MBBR + calcium used for phosphorus
removal". At present, all the facilities are operating normally, and after treatment, the COD,
ammonia nitrogen and total phosphorus in the discharged wastewater all meet the standards.
Anpon, a subsidiary of the Company, has its own wastewater treatment plant with a design capacity
of 11,000 tons per day. At present, the facilities are operating normally, and the COD, ammonia
nitrogen and total phosphorus in the treated wastewater are all up to the standard.
Huifeng, another subsidiary of the Company, has its own wastewater treatment plant with a
capacity of 5,000 tons per day. At present, the facilities are operating normally, and after treatment,
the COD, ammonia nitrogen, total nitrogen and total phosphorus in the discharged wastewater all
meet the standards.
(2) Development and Operation of Exhaust Gas Treatment Facilities
The Company's self-owned coal-fired thermal power plant had undergone a transformation to
enable ultra-low emission, and since the upgrading completed, the environmental protection
facilities of the plant has been operating normally. The sulfur dioxide, nitrogen oxides, fume and
dust in the exhaust gas have all achieved the target of the ultra-low emission and met the emission
standards. To treat the exhaust gas from the incinerator of the solid waste rotary kiln, the company
adopts a process consisting of "SNCR + semi-dry (rapid cooling) de-acidification + activated carbon
injection + dust removal bag + SCR". The sulfur dioxide, nitrogen oxides, fume and dust in the
exhaust gas all meet the emission standards. As for the RTO treatment process for VOCs, the
company adopts a flow of steps including "acid scrubbing and absorption, alkali scrubbing and
absorption, three-chamber RTO furnace incineration, rapid cooling tower and alkali absorption",
and the sulfur dioxide, nitrogen oxides, fume and dust and VOCs all meet the emission standards.
All chemical production lines at Adama Anpon are equipped with RTO incinerators, TO incinerators
and resin adsorption as well as other exhaust gas treatment facilities to strengthen the operation
management and further reduce the total emission amount of VOC in addition to the efforts to
ensure the emission standards are met.
Adama Huifeng has RTO furnace, alkali washing exhaust gas treatment facilities and pickling
exhaust gas treatment facilities, which are used to treat VOC-containing process exhaust gas,
pickling exhaust gas and alkali washing exhaust gas respectively. The main emission targets of
sulfur dioxide, nitrogen oxides, fume and dust and non-methane total hydrocarbons have all met
the mandatory standards.
(3) Implementation of the "Interim Measures on Environmental Information Disclosure”
The Company and its subsidiaries disclose production and pollution information according to the
Interim Measures on Environmental Information Disclosure and transfers information about all the
main indicators in wastewater and air pollutants to the release platform for environmental
information of key pollution sources set up by the local ecology and environment bureaus on a daily
41
ADAMA Ltd. Semi-Annual Report 2022
basis.
2. EIA of construction projects and other environmental administrative permits
In March 2022, the company passed the environmental protection inspection and acceptance on the
completion of the project carried out according to the "Environmental Impact Report on the Changes to
the Integrated Relocation, Upgrading and Transformation Project for Series of Insecticide Products of
ADAMA Ltd.”. Moreover, it renewed its discharge permit in December 2021, which sufficiently justifies the
validity of the permit.
Adama Anpon and Maidao have their discharge permits within the validity period.
ADAMA Huifeng has obtained the environmental administrative permits in the first half of 2022 after the
independent environmental acceptance for each of the following projects: the technical reform project for
MCPA Isooctyl ester AI production with annual capacity of 5,000 tons completed on February 26, 2022,
the technical reform project for product specification adjustment and production line renovation of
epoxiconazole AI processing project with annual production capacity of 1,000 tons completed on April 18,
2022, the AI technical reform project to use 25% sodium acetate aqueous solution with annual capacity
of 4,880 tons through an integrated approach for the treatment of the waste residue of dithianone
completed on May 23rd, 2022. In addition, Adama Huifeng’s emission permit is within its validity period
because it was newly obtained in December 2021.
3. 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.
4. Environment self-monitoring plan
The Company attributes great importance to protecting the environment, out of a sense of responsibility
to society and the environment and strives to meet the relevant regulatory requirements and to even go
beyond mere compliance, engaging in constant dialogue with stakeholders, including the authorities and
the community.
In order to improve the environmental management, track the discharge of various pollutants, evaluate
the impact on the surrounding environment, strengthen the discharge management of pollutants in the
production process, accept the supervision and inspection of environmental authorities and provide
reference for pollution prevention and control, the Company and its subsidiaries - Anpon and ADAMA
Huifeng have formulated a self-monitoring plan, which conducts regular tests in strict accordance with
the requirements.
The major monitored indicators and frequency of the Company, Anpon and ADAMA Huifeng are as the
following:
1. Monitored Indicators
Waste water: COD, NH3-N, PH, SS, Petroleum, TP.
Air Pollutant: SO2, Nitrogen oxide, Fume and Dust, Non-methane Hydrocarbon.
Noise: Noise at the Site Border
2. Frequency
Boiler emission, Non-methane Hydrocarbon in the waste gas, SO2 in RTO furnace, NOx, Fume and
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ADAMA Ltd. Semi-Annual Report 2022
Dust, and waste water discharged from the centralized point: continuous auto monitoring (COD,
Ammonia nitrogen, Total Phosphorous).
Manual sampling: PM in some waste gas discharge outlets, SS in wastewater discharge outlet,
Petroleum, once a month.
Noise: once a quarter.
While continually examining itself according to the implications of the environmental laws, the Company
have been taking proactive actions to prevent or mitigate the environmental risks, 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. The Company’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. The Company takes actions to
prevent soil and water pollution by these materials and treats them, if revealed. The Company’s plants
conduct various soil surveys, risk surveys and tests with regard to treatment of the soil or ground water
at the plants.
The Company 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, the Company also invests in remediation,
changes in production processes, establishment of sewage facilities, as well as in byproduct storage and
recycling.
5. Administrative punishment due to environmental problems in the Reporting Period
No
6. Other environmental information that should be disclosed
No.
7. Measures of reducing GHGs emissions and their effects
√Applicable □Not applicable
During the reporting period, the company had set up a dedicated work force for energy saving and carbon
reduction, clarified future targets and completed carbon emission verification as well as carbon
compliance. It also carried out a number of energy saving and emission reduction initiates, such as saving
steam consumption by increasing heat exchangers and recovering hydrogen brine waste heat; reducing
energy consumption and equipment maintenance by combining and renovating public works (stations for
refrigeration and compressed air), reasonably allocating resources, replacing pumps and motor types
and increasing frequency converters to better match pumps and motors with actual needs; optimizing the
design of fresh brine process piping for chlor-alkali and reducing CO2 emissions, etc.
8. Other related information on environmental protection
No.
43
ADAMA Ltd. Semi-Annual Report 2022
II. Social Responsibilities
Adama has been unswervingly committed to accountability and transparency in its business operation
over decades. In addition to reports on corporate social responsibilities and sustainable development
published continuously for more than ten years, the company has started to release the Annual Report
for 2021 on Environment, Social Responsibilities and Corporate Governance (hereinafter referred to as
the "ESG Report") in 2022 to present its CSR efforts, improvements and achievements thanks to the
persistent investment for the past decade. The report analyzes the challenges, opportunities and insights
that the company has had during the journey to achieve its sustainable development mission of feeding
a growing global population while meeting the needs of farmers around the world.
Moreover, Adama is firmly committed to enhancing transparency to a new level while expanding the
scope of disclosure and continuing the close cooperation with all stakeholders in the coming years. With
the publication of its ESG Report, the group shares practical experience in how it has integrated
sustainable development into business and operations and demonstrates its efforts to create long-term
values for all stakeholders, including customers, employees, communities, shareholders and the entire
society at large. While following the “Core Level” standards in the SRS framework of Global Reporting
Initiative's (GRI) in making the Report, the company also adheres to various principles of corporate
governance, operates checks and balances in the conduct of its business affairs and implements the
Code of Conduct applicable to all employees and stakeholders. Moreover, the corresponding internal
programs are set up and carried out in relevant areas.
In terms of consolidating and expanding the achievements of poverty eradication and rural revitalization
and in order to thoroughly implement the central, provincial and municipal decisions and deployments on
poverty eradication, Jingzhou Site of the parent company has actively responded to the call of the
provincial and municipal branches of All-China Federation of Trade Unions in Hubei province and at
Jingzhou city by purchasing materials of RMB 200,000 from the designated county for poverty alleviation.
In order to promote the local rural revitalization and effectively connect the consolidation of the results of
poverty eradication and the progress of the rural revitalization, the Municipal Party Committee of Huai’an,
where the company’s wholly-owned subsidiary Anpon is located, set up a dedicated task force in which
the Party Committee of Adama Anpon appointed its vice chairman of the labor union to participate and
contribute in the county-based working team. According to the arrangement of the municipal government,
Adama Anpon has been assigned to support Sanhe Village, Shunhe Town of Huai'an District. The
company has actively explored various ways and means to ensure the implementation. In 2022, it has
provided RMB 100,000 yuan as the special promotion funds to the designated village for the construction
of a service center for all villagers as well as an activity center for the Party members, which is believed
to uplift the cultural and ideological infrastructure for the local people.
The Company should comply with the disclosure requirements for the chemical industry in the SZSE Self-
Disciplinary Guidelines for Listed Companies No. 3: Sector Information Disclosure.
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
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
44
ADAMA Ltd. Semi-Annual Report 2022
for safety standardization according to the actual operation and differentiated the responsibilities and
duties for various members.
During the reporting period, the company improved the safety production process from multiple
perspectives, such as resource budget, equipment process and safety management. The double
prevention mechanism was established, and the monitoring of major hazard sources, personnel
positioning and other information systems were enabled. Chemicals of less danger replaced more
hazardous ones in the process, continuous reactions replaced the batch-based ones, and the safety
fundamentals were improved by reducing process temperature and pressure.
In terms of project engineering, automation upgrading and improvement never stopped and various safety
measures and devices for automatic control, alarm, interlock, safety instrumentation system, and
emergency pressure relief were taken and equipped with.
In terms of the management, process hazard analysis, change management, pre-drive safety inspection,
mechanical integrity and other procedures related to safety elements were constantly promoted.
Therefore, significant progress had been made on the quality of process safety.
At the same time, the company has strengthened safety investment in safety protection facilities,
equipment maintenance and testing, daily monitoring and evaluation, training, and the promotion and
application of new technologies.
In terms of production safety education and training, HSE training has been made mandatory for
employees. The training materials are designed in strict accordance with the FORUS system to ensure
the effect. The company focuses on studying and practicing the "Production Safety Law" and clarifies the
requirements of "Safety Responsibility System of All Employees". Nearly 900 sessions for safety
education and training as well as a competition about the new law were organized to mobilize everyone
in the company to learn and understand essentials.
During the reporting period, all production sites of the company were inspected by authorities and their
managing entities for 76 times, and the follow-up rectification were basically completed according to the
inspection results.
In terms of emergency response, the company organized drills for emergency and firefighting in different
scenarios in accordance with regulatory requirements to strengthen the corresponding capability of
frontline employees.
In terms of occupational health, employees' capability to identify hazards was developed, knowledge and
assessment of chemical protection increased and during the Work Safety Awareness Month, contests
about the new “Production Safety Law” were held. In summary, employees' awareness on safety
protection has enhanced and the safety management at all plants has improved through series of special
actions.
45
ADAMA Ltd. Semi-Annual Report 2022
Section VI - Significant Events
I. Commitments completed by the Company, the shareholders, the actual
controllers, the purchasers, or other related parties during the Reporting Period,
and those which should have been completed failed to be fulfilled during the
Reporting Period
√ Applicable □ Not applicable
Note: No commitment that should have been completed during the Reporting Period failed to be timely
fulfilled. For details of the on-going commitments, please refer to the 2021 Annual Report published on
the website www.cninfo.com.cn
on March 31, 2022. New commitments during the Reporting Period are listed below.
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
I. Companies that
are controlled by
Syngenta Group
and have
horizontal
competition with
ADAMA
After reviewing, as
of the date of
issuance of the
commitment letter,
On-going.
there is a small
The
amount of overlap
Commitments committed
Other Syngenta in the field of off- November 1, January 7,
on Horizontal party
Commitment Group patent crop 2021 2025
Competition complies with
protection products
the
between SAG, a
commitments.
subsidiary of
Syngenta Group,
and the Company,
and a small
amount of overlap
in the field of active
ingredients and
formulation
products between
Yangnong
Chemical Co., Ltd.
(hereinafter
46
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
referred to as "YN
Chemical") and the
Company. In both
cases, such small
overlap is not
causing a negative
impact on any of
the subject
companies.
Except for the
aforementioned
scenarios, the
major business of
Syngenta Group
and other
companies
controlled by
Syngenta Group
does not operate
the same or similar
business with the
Company.
II. Commitment
and timetable to
address the
horizontal
competitions
mentioned above
In accordance with
and in compliance
with the applicable
laws, regulations
and relevant
regulatory
requirements then
in effectiveness,
Syngenta Group
will adopt
appropriate
measures to
gradually solve the
horizontal
competitions
among SAG, YN
Chemical and the
47
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
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
48
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
through asset
transactions,
business divisions
and other different
methods, including
but not limited to
business
composition,
product grades,
application areas,
and customer
groups. Syngenta
Group will try its
best to achieve
differentiated
business
operations;
(3) Technological
transformation and
product upgrade:
achieve product
differentiation
through
appropriate
technological
transformation and
product upgrade,
and Syngenta
Group will try its
best to achieve
differentiated
operations;
(4) Market
segmentation:
signing
agreements while
taking into
consideration of
the business and
other factors to
appropriately
divide the market;
(5) Entrusted
management: by
signing an
49
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
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
50
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
accordance with
relevant laws and
regulations, and
the information
disclosure
obligations should
be fulfilled
according to
relevant laws and
regulations.
III. Syngenta
Group’s
commitment to
potential horizontal
competition with
the Company in
the future
Syngenta Group
will continue to
take effective
measures to
prevent itself and
its controlled continue to
companies from be valid
On-going.
having new during the
The
businesses that period when
November 1, committed
are the same or Syngenta
2021 party
similar to the Group is the
complies with
Company’s controlling
the
domestic business shareholder
commitments.
in the future. If of the
Syngenta Group or Company
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
51
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
relevant measures,
including but not
limited to asset
restructuring,
adjustment of
industry planning
and business
structure,
technological
transformation and
product upgrades,
market
segmentation or
other feasible
solutions to
differentiate
between products
and end users of
each company, so
as to avoid and
eliminate
horizontal
competition
between Syngenta
Group or the
company
controlled by the
Syngenta Group
and the Company.
If Syngenta Group
breaches the
above
undertakings, it will
bear the
corresponding
legal liabilities in
accordance with
the relevant laws
and regulations,
including the
Guidelines for the
Supervision of
Listed Companies
No. 4 -
Undertakings and
Performance by
52
ADAMA Ltd. Semi-Annual Report 2022
Time of Period of
Commitment Commitment
Commitment Contents making making Fulfilment
maker type
commitment commitment
Actual Controllers,
Shareholders,
Related Parties,
Purchasers of
Listed Companies
and Listed
Companies.
The letter of
commitment will
take effect on the
date of signing and
will continue to be
valid during the
period when
Syngenta Group is
the controlling
shareholder of the
Company.
Whether the
commitments
Yes
are fulfilled
on time
II. Inadequate use of Company’s capital by the controlling shareholder or its
related parties for non-operating purposes
□ Applicable √ Not applicable
No such situation occurred during the Reporting Period.
III. Illegal guarantee
□ Applicable √ Not applicable
Non during the Reporting Period.
IV. Engagement and Disengagement of CPA Firm
Has the semi-annual financial report been audited?
□ Yes √ No
This Semi-Annual Report is unaudited.
53
ADAMA Ltd. Semi-Annual Report 2022
V. Explanations Given by the Board of Directors and Board of Supervisors
Regarding “Modified Auditor’s Report” Issued by CPA Firm for the Reporting
Period
□ Applicable √ Not applicable
VI. Explanations Given by Board of Directors Regarding “Modified Auditor’s Report”
Issued for Last Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
None during the Reporting Period.
VIII. Litigation and Arbitration Matters
Material litigations or arbitrations:
□ Applicable √ Not applicable
None during the Reporting Period.
Other litigations or arbitrations:
□ Applicable √ Not applicable
No significant litigation or arbitrations during the Reporting Period.
IX. Punishment and Rectification
□Applicable √Not applicable
None during the Reporting Period.
X. Integrity of the Company, its controlling shareholders and actual controller
□ Applicable √ Not applicable
54
ADAMA Ltd. Semi-Annual Report 2022
XI. Material Related-Party Transactions
1. Related-Party Transactions in the ordinary course of business
√ Applicable □ Not applicable
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
Syngenta Party Transactions
same control and raw Market Market Cash March
A.G. and its 73,193 5.84% 145,104 No N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
subsidiaries Course of Business
Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Bluestar Expected Related-
Under the materials Purchase of
(Beijing) Party Transactions
same control and raw March
Chemical - - - 0.00% 650 No - N/A in the Ordinary
of Sinochem products materials/pr 31,2022
Machinery Course of Business
Holdings from oducts
Co., Ltd. in 2022 (No.2022-
related
10)
parties
Purchasing Announcement on
Jiangsu Under the Purchase of
raw Expected Related-
Huaihe same control raw Market Market Cash March
materials 9,540 0.76% 19,830 No N/A Party Transactions
Chemicals of Sinochem materials/pr price price Settlement 31,2022
and in the Ordinary
Co., Ltd. Holdings oducts
products Course of Business
55
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
from in 2022 (No.2022-
related 10)
parties
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
Party Transactions
same control and raw Market Market Cash March
Sinofert 261 0.02% 200 Yes N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
Party Transactions
Yangnong same control and raw Market Market Cash March
55,671 4.44% 129,356 No N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
Party Transactions
Youshi same control and raw Market Market Cash March
38 0.00% 128 No N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings from oducts
in 2022 (No.2022-
related
10)
parties
56
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
Party Transactions
Ruixiang same control and raw March
- - - 0.00% 96 No - N/A in the Ordinary
Chemical of Sinochem products materials/pr 31,2022
Course of Business
Co., Ltd. Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
Party Transactions
Youjia Plant same control and raw Market Market Cash March
598 0.05% 540 Yes N/A in the Ordinary
Protection of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Hangzhou Expected Related-
Under the materials Purchase of
(Torch) Xidou Party Transactions
same control and raw Market Market Cash March
Door Film 5 0.00% 33 No N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
Industry Co., Course of Business
Holdings from oducts
Ltd. in 2022 (No.2022-
related
10)
parties
Bluestar Under the Purchasing Purchase of Market Market Cash March Announcement on
228 0.02% 10 Yes N/A
Engineering same control raw raw price price Settlement 31,2022 Expected Related-
57
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Co.,Ltd. of Sinochem materials materials/pr Party Transactions
Holdings and oducts in the Ordinary
products Course of Business
from in 2022 (No.2022-
related 10)
parties
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
Party Transactions
Sinochem same control and raw Market Market Cash March
8,003 0.64% 17,329 No N/A in the Ordinary
Agro Co.,Ltd. of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Expected Related-
Zhonglan Under the materials Purchase of
Party Transactions
International same control and raw Market Market Cash March
6,691 0.53% 18,000 No N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Purchasing Announcement on
ELKEM Under the Purchase of
raw Expected Related-
SILICONES same control raw Market Market Cash March
materials 124 0.01% - - N/A Party Transactions
BRASIL of Sinochem materials/pr price price Settlement 31,2022
and in the Ordinary
LTDA Holdings oducts
products Course of Business
58
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
from in 2022 (No.2022-
related 10)
parties
Purchasing
Announcement on
raw
Shandong Expected Related-
Under the materials Purchase of
Dacheng Party Transactions
same control and raw Market Market Cash March
Agrochemica 1,742 0.14% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
l Company Course of Business
Holdings from oducts
Limited in 2022 (No.2022-
related
10)
parties
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
Shenyang Party Transactions
same control and raw Market Market Cash March
Chemical 8 0.00% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
Co., Ltd. Course of Business
Holdings from oducts
in 2022 (No.2022-
related
10)
parties
Announcement on
Receiving Expected Related-
Under the
services Party Transactions
same control Regular Market Market Cash March
Sino MAP from 39 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 31,2022
related Course of Business
Holdings
parties in 2022 (No.2022-
10)
59
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Purchasing
Announcement on
raw
Sinochem Expected Related-
Under the materials Purchase of
Lantian Party Transactions
same control and raw Market Market Cash March
Fluorine 113 0.01% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
Materials Co. Course of Business
Holdings from oducts
Ltd. in 2022 (No.2022-
related
10)
parties
Announcement on
Purchasing Expected Related-
Under the
Bluestar fixed Party Transactions
same control Purchase of Market Market Cash March
Engineering assets from 232 0.02% 6,500 No N/A in the Ordinary
of Sinochem fixed assets price price Settlement 31,2022
Co.,Ltd. related Course of Business
Holdings
parties in 2022 (No.2022-
10)
Announcement on
Changsha Purchasing Expected Related-
Under the
Huaxing fixed Party Transactions
same control Purchase of Market Market Cash March
Construction assets from 25 0.00% - - N/A in the Ordinary
of Sinochem fixed assets price price Settlement 31,2022
Supervision related Course of Business
Holdings
Co., Ltd. parties in 2022 (No.2022-
10)
Under the Purchasing Announcement on
Syngenta
same control fixed Purchase of Market Market Cash March Expected Related-
A.G. and its 590 0.05% - - N/A
of Sinochem assets from fixed assets price price Settlement 31,2022 Party Transactions
subsidiaries
Holdings related in the Ordinary
60
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
parties Course of Business
in 2022 (No.2022-
10)
Announcement on
Selling raw
Expected Related-
Under the materials
Syngenta Party Transactions
same control and Selling Market Market Cash March
A.G. and its 64,393 3.43% 127,343 No N/A in the Ordinary
of Sinochem products to products price price Settlement 31,2022
subsidiaries Course of Business
Holdings related
in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Huaihe same control and Selling Market Market Cash March
12,250 0.65% 23,640 No N/A in the Ordinary
Chemicals of Sinochem products to products price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings related
in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
same control and Selling Market Market Cash March
Sinofert 5,355 0.29% 10,280 No N/A in the Ordinary
of Sinochem products to products price price Settlement 31,2022
Course of Business
Holdings related
in 2022 (No.2022-
parties
10)
Under the Selling raw Selling Market Market Cash March Announcement on
Sino MAP 1,639 0.09% 541 Yes N/A
same control materials products price price Settlement 31,2022 Expected Related-
61
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
of Sinochem and Party Transactions
Holdings products to in the Ordinary
related Course of Business
parties in 2022 (No.2022-
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Yangnong same control and Selling Market Market Cash March
6 0.00% 200 No N/A in the Ordinary
Chemical of Sinochem products to products price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings related
in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Youshi same control and Selling Market Market Cash March
8,551 0.46% 6,100 Yes N/A in the Ordinary
Chemical of Sinochem products to products price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings related
in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Expected Related-
Zhonglan Under the materials
Party Transactions
International same control and Selling March
- - - 0.00% 300 No - N/A in the Ordinary
Chemical of Sinochem products to products 31,2022
Course of Business
Co., Ltd. Holdings related
in 2022 (No.2022-
parties
10)
62
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
Party Transactions
Youjia Plant same control and Selling Market Market Cash March
152 0.01% 240 No N/A in the Ordinary
Protection of Sinochem products to products price price Settlement 31,2022
Course of Business
Co., Ltd. Holdings related
in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Syngenta Expected Related-
Under the materials
Nantong Party Transactions
same control and Selling Market Market Cash March
Crop 2,514 0.13% 4,500 No N/A in the Ordinary
of Sinochem products to products price price Settlement 31,2022
Protection Course of Business
Holdings related
Co.,Ltd. in 2022 (No.2022-
parties
10)
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
Sinochem same control and Selling Market Market Cash March
69 0.00% - - N/A in the Ordinary
Agro Co.,Ltd. of Sinochem products to products price price Settlement 31,2022
Course of Business
Holdings related
in 2022 (No.2022-
parties
10)
Sinochem Selling raw Announcement on
Under the
International materials Expected Related-
same control Selling Market Market Cash March
Crop Care and 3,624 0.19% 3,000 Yes N/A Party Transactions
of Sinochem products price price Settlement 31,2022
Company products to in the Ordinary
Holdings
Limited related Course of Business
63
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
parties in 2022 (No.2022-
10)
Announcement on
China
Receiving Expected Related-
National Under the
services Party Transactions
Chemical same control Value-added Market Market Cash March
from 137 0.01% 94 Yes N/A in the Ordinary
Information of Sinochem OA services price price Settlement 31,2022
related Course of Business
Center Co. Holdings
parties in 2022 (No.2022-
Ltd.
10)
Announcement on
Zhonglan Receiving Expected Related-
Under the
Lianhai services Party Transactions
same control Design March
Design from - - - 0.00% 50 No - N/A in the Ordinary
of Sinochem services 31,2022
Institute Co., related Course of Business
Holdings
Ltd. parties in 2022 (No.2022-
10)
Announcement on
Receiving Expected Related-
Under the
Syngenta services Party Transactions
same control Regular March
A.G. and its from - - - 0.00% 45 No - N/A in the Ordinary
of Sinochem services 31,2022
subsidiaries related Course of Business
Holdings
parties in 2022 (No.2022-
10)
Sinochem Under the Receiving Announcement on
Regular Market Market Cash March
Innovation same control services 4 0.00% - - N/A Expected Related-
services price price Settlement 31,2022
(Beijing) of Sinochem from Party Transactions
64
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Technology Holdings related in the Ordinary
Research parties Course of Business
Institute Co., in 2022 (No.2022-
Ltd. 10)
Announcement on
Receiving Expected Related-
Under the
Shenyang services Party Transactions
same control Regular Market Market Cash March
Chemical from 3 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 31,2022
Co., Ltd. related Course of Business
Holdings
parties in 2022 (No.2022-
10)
Purchasing
Announcement on
raw
Sinochem Expected Related-
Under the materials Purchase of
International Party Transactions
same control and raw Market Market Cash March
Crop Care 333 0.03% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 31,2022
Company Course of Business
Holdings from oducts
Limited in 2022 (No.2022-
related
10)
parties
Total -- -- 256,131 -- 514,109 -- -- -- -- --
Details of large sales return -
According to the Company's daily business operation needs, the Company estimates that the total amount of daily
Execution of related-party transactions in the
related party transactions in 2022 will not exceed RMB 5,141 million. For details, please refer to Announcement on
ordinary course of business whose value was
Expected Related-Party Transactions in the Ordinary Course of Business in 2022 (No.: 2022-10). The Company’s actual
expected by types during this reporting period (if
amount of daily related party transactions defined in the listing rules incurred for the six months ended June 30,2022 is
any)
RMB 2,561 million, which does not exceed the expected amount.
65
ADAMA Ltd. Semi-Annual Report 2022
Percen Market
Pricing
tage Approve price of
Type of principle Whether
Content of against d similar
related of Value exceeds Date of
Related related transac transacti Settlement transacti Index of the
Relationship party related Price (RMB the announce
party party tions of on quota methods ons if disclosure
transactio party ‘0000) approve ment
transaction the (RMB the
n transacti d quota
same ‘0000) Compan
on
kind y knows
Reasons for large difference between transaction The Company’s related transactions with related party shall be carried out in accordance with the principle of voluntary,
price and market reference price (if applicable) equality and mutual benefit, fair, and will not harm the interests of the Company.
66
ADAMA Ltd. Semi-Annual Report 2022
2. Related-Party Transactions arising from Asset acquisition or sale
□ Applicable √ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale
during the Reporting Period.
3. Related-Party Transactions with Joint Investments
□ Applicable √ Not applicable
The Company was not involved in any related-party transaction with joint investments during the
Reporting Period.
4. Credits and Liabilities with Related Parties
√ Applicable □ Not applicable
Whether non-operating credits and liabilities with related parties exist or not?
□ Yes √ No
The Company was not involved in any non-operating credit and liability with related parties in the
Reporting Period.
5. Transactions with financial 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% - 42,293 24,347 17,946
of Sinochem
Ltd
Holdings
Under the
ChemChina
same control
Finance 40,000 0.05%-1.3% 35,888 9 35,897 -
of Sinochem
Corporation
Holdings
67
ADAMA Ltd. Semi-Annual Report 2022
Facilities and Other Financial Services
In RMB ’0000
Total Amount Actual Amount
Related Party Relations Type of the Services
Incurred
Sinochem Finance Under the same control
Facilities 60,000 -
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
None during the Reporting Period.
XII. 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.
68
ADAMA Ltd. Semi-Annual Report 2022
2. Significant Guarantees
(1) Details of guarantees
√Applicable □ Not applicable
Unless otherwise specified, the unit hereunder is RMB ‘0000
Guarantees provided by the Company in favor of third parties (excluding subsidiaries)
Guarant
Disclosure Planned Actual Counter Period
Actual Type of Collater expire ee for a
Guarante date of the guarante guarante Guarant of
occurrence guarante al（if d or related
ed party announceme e e ee（if guarante
date e any） not party or
nt amount amount any） e
not
-- -- -- -- -- -- -- -- -- -- --
Total guarantee line approved in Total amount of the occurred
favor of third parties (excluding guarantee in favor of third parties
0 0
subsidiaries) during the reporting (excluding subsidiaries) during the
period (A1) reporting period (A2)
Aggregated guarantee line in
Total guarantee balance in favor of
favor of third parties (excluding
third parties (excluding subsidiaries)
subsidiaries) that has been 5,000 0
by the end of the reporting period
approved by the end of the
(A4)
reporting period (A3)
Guarantees provided by the Company in favor of its subsidiaries
Guarant
Disclosure Planned Actual Counter Period
Actual Type of Collater expire ee for a
Guarante date of the guarante guarante Guarant of
occurrence guarante al（if d or related
ed party announceme e e ee（if guarante
date e any） not party or
nt amount amount any） e
not
Three
Joint and years
February 26,
3,000 several / / after the Yes No
2021
liability loan
matures
December 22,
ADAMA Three
2020
Anpon Joint and years
April 29, 2021 125,800 March 18,
(Jiangsu) 4,000 several / / after the Yes No
October 2021
Ltd. liability loan
28,2021
matures
Two
Joint and
April 27, years
5,950 several / / Yes No
2021 after the
liability
loan
69
ADAMA Ltd. Semi-Annual Report 2022
matures
Two
Joint and years
May 21,
4,500 several / / after the Yes No
2021
liability loan
matures
Three
Joint and years
June 25,
3,000 several / / after the Yes No
2021
liability loan
matures
Three
Joint and years
December
3,300 several / / after the No No
16, 2021
liability loan
matures
Three
years
Joint and
December 1, after the
4,000 several / / No No
2021 project
liability
loan
matures
Three
years
Joint and
January 1, after the
3,500 several / / No No
2022 project
liability
loan
matures
Three
years
Joint and
February 28, after the
2,100 several / / No No
2022 project
liability
loan
matures
Three
years
Joint and
April 28, after the
1,400 several / / No No
2022 project
liability
loan
matures
May 20, Joint and Three
750 / / No No
2022 several years
70
ADAMA Ltd. Semi-Annual Report 2022
liability after the
project
loan
matures
Three
years
Joint and
June 26, after the
2,350 several / / No No
2022 project
liability
loan
matures
Three
Joint and years
January 1,
4,000 several / / after the Yes No
2022
liability loan
matures
Three
Joint and years
January 18,
5,000 several / / after the No No
2022
liability loan
matures
Three
years
Joint and
January 25, after the
400 several / / No No
2022 project
liability
loan
matures
Three
years
Joint and
February 28, after the
390 several / / No No
2022 project
liability
loan
matures
Three
Joint and years
February 26,
3,000 several / / after the No No
2022
liability loan
March 31, matures
104,100
2022 Three
Joint and years
March 30,
3,000 several / / after the No No
2022
liability loan
matures
71
ADAMA Ltd. Semi-Annual Report 2022
Two
Joint and years
April 26,
4,000 several / / after the No No
2022
liability loan
matures
Three
Joint and years
July 27,
10,000 several / / after the Yes No
2021
liability loan
matures
ADAMA
Two
Huifeng June 29,
33,000 years
(Jiangsu) 2021
after the
Co., Ltd. Joint and
November 5, expiratio
5,300 several / / Yes No
2021 n
liability
of the
debt
period
Total guarantee line
Total amount of the occurred guarantee in
approved in favor of the
187,100 favor of the subsidiaries during the reporting 29,890
subsidiaries during the
period (B2)
reporting period (B1)
Aggregated guarantee
line that has been
Total guarantee balance in favor of the
approved in favor of the
345,900 subsidiaries by the end of the reporting period 33,190
subsidiaries by the end
(B4)
of the reporting period
(B3)
Guarantees provided by subsidiaries in favor of subsidiaries (USD ’0000)
Guarante
Disclosure Actual Counter Period
Planned Actual Type of Collater expire e for a
Guarante date of the guarante Guarant of
guarante occurrenc guarante al（if d or related
ed party announcemen e ee（if guarante
e amount e date e any） not party or
t amount any） e
not
Generall
y 7 years
Control joint and
October 31, October (subject
Solutions, 1,300 0 several / / No No
2018 30, 2018 to the
Inc. liability
overseas
laws)
Control January 10, 4,000 January 9, 1,750 joint and / / The loan No No
72
ADAMA Ltd. Semi-Annual Report 2022
Solutions, 2019 2019 several term (5
Inc. liability years)
and any
applicabl
e statute
of
limitation
s period
(generall
y7
years).
Related
guarantee
existed
before the
company
joint and Valid
ADAMA was 11,804.3
Not applicable 23,736.56 several / / until No No
Brazil consolidat 9
liability cancelled
ed into the
financial
statements
of the
Company.
joint and Decemb
ADAMA January 22, December
900 900 several / / er 31, No No
Brazil 2022 29, 2021
liability 2025
Related
guarantee
existed
before the
Adama company
joint and Valid
India was
Not applicable 9,000.26 3,229.48 several / / until No No
Private consolidat
liability cancelled
Ltd. ed into the
financial
statements
of the
Company.
ADAMA Related
Turkey guarantee joint and Valid
Tarm Not applicable 7,150 existed 1,678.01 several / / until No No
Sanayi ve before the liability cancelled
Ticaret company
73
ADAMA Ltd. Semi-Annual Report 2022
Limited was
irketi consolidat
ed into the
financial
statements
of the
Company.
Related
guarantee
existed
before the
company
Adama joint and Valid
was
Makhteshi Not applicable unlimited 31,213.2 several / / until No No
consolidat
m liability cancelled
ed into the
financial
statements
of the
Company.
Related
guarantee
existed
before the
company
joint and Valid
Adama was
Not applicable unlimited 24,788.5 several / / until No No
Agan consolidat
liability cancelled
ed into the
financial
statements
of the
Company.
ADAMA
joint and Valid
Agricultura January 22, January
400.72 0 several / / until No No
l Solutions 2022 22, 2022
liability cancelled
UK Ltd.
ADAMA Related
CELSIUS guarantee
BV, existed
joint and Valid
Curacao before the
Not applicable 1,000 46.9 several / / until No No
branch, & company
liability cancelled
ADAMA was
Fahrenheit consolidat
BV, ed into the
74
ADAMA Ltd. Semi-Annual Report 2022
Curacao financial
Branch statements
of the
Company.
ADAMA
CELSIUS
BV,
Curacao
joint and Valid
branch, & January 22, January
7,000 7,000 several / / until No No
ADAMA 2022 22, 2022
liability cancelled
Fahrenheit
BV,
Curacao
Branch
Related
guarantee
existed
before the
company
ADAMA joint and Valid
was
Ukraine Not applicable 3,000 892.84 several / / until No No
consolidat
LLC liability cancelled
ed into the
financial
statements
of the
Company.
Related
guarantee
existed
before the
Makhteshi
company
m Agan of joint and Valid
was
North Not applicable 2,500 0 several / / until No No
consolidat
Amercia liability cancelled
ed into the
Inc.
financial
statements
of the
Company.
Total guarantee line
7,400.72 Total amount of the guarantee in
approved in favor of the 83,303.32（approximately
（approximately RMB favor of the subsidiaries occurred
subsidiaries during the RMB 5,590.819 million）
474.7 million） during the reporting period (C2)
reporting period (C1)
Aggregated guarantee 83,303.32 Total guarantee balance in favor of 83,303.32（approximately
75
ADAMA Ltd. Semi-Annual Report 2022
line that has been (approximately RMB the subsidiaries by the end of the RMB 5,590.819 million）
approved in favor of the 5,590.819 million) reporting period (C4)
subsidiaries by the end (the guarantee
of the reporting period amount for Adama
(C3) Makhteshim and
Adama Agan is
unlimited)
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
Total guarantee line
Total actual occurred amount of
approved during the
234,570 guarantee during the reporting 588,971.9
reporting period
period (A2+B2+C2)
(A1+B1+C1)
Total guarantee line that
has been approved at Total actual guarantee balance at the
the end of the reporting 909,981.9 end of the reporting period 592,271.9
period (A4+B4+C4)
(A3+B3+C3)
Proportion of total guarantee amount
26.28%
(A4+B4+C4) to the net assets of the Company
Of which:
The balance of the guarantee provided in favor
of the controlling shareholder and related 0
party.
Amount of debt guarantee provided for the
USD 464.8844 million
guaranteed party whose asset-liability ratio is
(approximately RMB 3,120.0252 million)
not less than 70% directly or indirectly (E)
The amount of the guarantee that exceeds
0
50% of the net assets
Total amount of the above three guarantees USD 464.8844 million
(D+E+F) (approximately RMB 3,120.0252 million)
As for undue guarantee, liability to guarantee
has happened or there is evidence that joint
--
liquidated liability may be undertaken during
this Reporting Period (if existing)
Regulated procedures are violated to offer
--
guarantee (if existing)
76
ADAMA Ltd. Semi-Annual Report 2022
3. Wealth management entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Significant Contracts
□ Applicable √ Not applicable
None during the Reporting Period.
XIII. Other Significant Events
□ Applicable √ Not applicable
None during the Reporting Period.
XIV. Significant Events of Subsidiaries
□ Applicable √ Not applicable
77
ADAMA Ltd. Semi-Annual Report 2022
Section VII - Share Changes and Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before the change Increase/decrease (+/-) After the change
Newly Capitalization
Bonus
Amount Proportion issue of public Other Subtotal Amount Proportion
shares
shares reserves
I. Restricted
4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
shares
a. State-
owned -- -- -- -- -- -- -- -- --
Shares
b. State-
owned legal
0 0.0000% -- -- -- -- -- 0 0.0000%
person’s
shares
c. Shares held
by domestic 4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
investors
i. Shares
held by
domestic 0 0.0000% -- -- -- -- -- 0 0.0000%
legal
person
ii. Shares
held by
4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
domestic
natural
78
ADAMA Ltd. Semi-Annual Report 2022
person
II. Shares not
subject to
2,329,807,266 99.9998% -- -- -- -- -- 2,329,807,266 99.9998%
trading
moratorium
a. RMB
2,177,067,461 93.4439% -- -- -- -- -- 2,177,067,461 93.4439%
ordinary shares
b.
Domestically
152,739,805 6.5559% -- -- 152,739,805 6.5559%
listed foreign
shares
III. Total shares 2,329,811,766 100.0000% -- -- -- -- -- 2,329,811,766 100.00%
79
ADAMA Ltd. Semi-Annual Report 2022
Reasons 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
Status of share buyback
□ Applicable √ Not applicable
Status of share buyback in the way of centralized bidding
□ 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 is required by securities regulatory authorities
to disclose
□ Applicable √ Not applicable
80
ADAMA Ltd. Semi-Annual Report 2022
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Shareholders Restricted Restricted Shares Restricted Restriction Date of
shares at the shares Released shares at the reasons release
opening of increased from end of the
the Reporting in the Restricted Reporting
Period Reporting Sale During Period
Period the Reporting
Period
Six
Shares held
months
by a
after the
Jiang Chenggang 4,500 0 0 4,500 supervisor
expiratio
should be
n of the
locked up.
term
Total 4,500 0 0 4,500 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
81
ADAMA Ltd. Semi-Annual Report 2022
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number Total number of
of 38,521 preferred
shareholders (the number of ordinary A share shareholders stockholders with
as of the end is 25,042; vote right restored 0
of the the number of B share shareholders is (if any) as of the
Reporting 13,479) end of the
Period Reporting Period
Shareholding of Top-10 common shareholders or those holding more than 5% shares
Increase Pledged, marked or
Number of Number of
Number of and frozen shares
common common
Holding shareholding decrease
Name of Nature of shares held shares held
percentage at the end of of shares Status
shareholder shareholder subject to not subject
(%) the Reporting during of Amount
trading to trading
Period Reporting shares
moratorium moratorium
Period
Syngenta
State-owned
Group Co., 78.47% 1,828,137,961 0 0 1,828,137,961 -- 0
legal person
Ltd.
China Cinda
Asset State-owned
1.34% 31,115,916 -- -- 31,115,916 -- --
Management legal person
Co., Ltd.
Portfolio
No.503 of
-
National Others 0.60% 13,999,989 0 13,999,989 -- 0
1,000,011
Social
Security Fund
Huarong
Ruitong
Equity State-owned
0.55% 12,885,906 -- -- 12,885,906 -- --
Investment legal person
Management
Co., Ltd.
Hong Kong
Securities
Overseas
Clearing 0.34% 7,956,190 471,113 0 7,956,190 -- 0
legal person
Company
Ltd.(HKSCC)
Bosera
Funds-China
Merchants
Bank- Bosera
Funds
Xincheng Others 0.28% 6,500,000 6,500,000 -- 6,500,000 -- --
No.2
Collective
Asset
Management
Plan
Bosera
Funds-Postal
Others 0.26% 6,000,000 6,000,000 -- 6,000,000 -- --
Savings
Bank- Bosera
82
ADAMA Ltd. Semi-Annual Report 2022
Funds
Xincheng
No.3
Collective
Asset
Management
Plan
China
Merchants
Securities
International
Co., Ltd.- Others 0.25% 5,788,300 0 5,788,300 -- 0
5,788,300
Tianhong CSI
500 Index
Enhanced
Fund
Domestic
Wang Xiuqin Natural 0.24% 5,555,555 5,555,555 0 5,555,555 -- 0
Person
Industrial
Bank Co.,
Ltd.- Western
Leadbank
Others 0.22% 5,108,700 5,108,700 0 5,108,700 -- 0
CSI 500
Enhanced
Index Fund
(LOF)
Strategic investors or the
general legal person due
to the placement of new
Not applicable
shares become the top 10
common shareholders (if
any)
Syngenta Group Co., Ltd. is neither a related party to any other shareholders listed above,
Explanation on nor any acting-in-concert party as prescribed in the Administrative Methods for Acquisition of
associated relationship Listed Companies. It is unknown whether the other shareholders are related parties or
or/and persons acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed
Companies.
Explanation on situations
of entrusted voting rights
or waiver of voting rights Not applicable
involved by the above
shareholders
Explanation on the
existence of special
repurchase accounts Not applicable
among the top 10
shareholders (if any)
Details of shares held by top 10 common shareholders not subject to trading moratorium
Number of common Type of share
shares held not
Name of shareholder subject to trading
Type of share Amount
moratorium at the end
of the period
Syngenta Group Co., Ltd. 1,828,137,961 RMB ordinary share 1,828,137,961
China Cinda Asset Management Co., Ltd. 31,115,916 RMB ordinary share 31,115,916
Portfolio No.503 of National Social Security Fund 13,999,989 RMB ordinary share 13,999,989
83
ADAMA Ltd. Semi-Annual Report 2022
Huarong Ruitong Equity Investment Management Co.,
12,885,906 RMB ordinary share 12,885,906
Ltd.
Hong Kong Securities Clearing Company Ltd. (HKSCC) 7,956,190 RMB ordinary share 7,956,190
Bosera Funds-China Merchants Bank- Bosera Funds
6,500,000 RMB ordinary share 6,500,000
Xincheng No.2 Collective Asset Management Plan
Bosera Funds-Postal Savings Bank- Bosera Funds
6,000,000 RMB ordinary share 6,000,000
Xincheng No.3 Collective Asset Management Plan
China Merchants Securities International Co., Ltd.-
5,788,300 RMB ordinary share 5,788,300
Tianhong CSI 500 Index Enhanced Fund
RMB ordinary
Wang Xiuqin 5,555,555 5,555,555
share
Industrial Bank Co., Ltd.- Western Leadbank CSI 500 RMB ordinary
5,108,700 5,108,700
Enhanced Index Fund (LOF) share
Syngenta Group Co., Ltd. is neither a related party to any other
Explanation on associated relationship among the top
shareholders listed above, nor any acting-in-concert party as
ten common shareholders of tradable share not
prescribed in the Administrative Methods for Acquisition of
subject to trading moratorium, as well as among the
Listed Companies. It is unknown whether the other
top ten common shareholders of tradable share not
shareholders are related parties or acting-in-concert parties as
subject to trading moratorium and top ten
prescribed in the Administrative Methods for Acquisition of
shareholders, or explanation on acting-in-concert
Listed Companies.
Particular about the top ten common shareholder
participating in the securities lending and borrowing Not applicable
business (if any)
84
ADAMA Ltd. Semi-Annual Report 2022
Did any top 10 common shareholders or the top 10 common shareholders not subject to trading
moratorium of the Company carry out a promissory buy-back in the Reporting Period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading
moratorium of the Company had not carried out any agreed buy-back in the Reporting Period.
IV. Changes in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No such cases in the Reporting Period. For details, see Annual Report 2021.
V. Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
There was no change of the controlling shareholder of the Company in the Reporting Period.
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
There was no change of the actual controller of the Company in the Reporting Period.
85
ADAMA Ltd. Semi-Annual Report 2022
Section VIII - Preferred stock
□ Applicable √ Not applicable
There was no preferred stock during Reporting Period.
86
ADAMA Ltd. Semi-Annual Report 2022
Section IX - Bonds
□ Applicable √ Not applicable
87
ADAMA Ltd. Semi-Annual Report 2022
Section X - Financial Report
I. Audit report
Was the half-year report audited?
□ Yes √ No
The half-year report was not audited.
II. Financial Statements
Notes to the financial statements are presented in RMB’000.
- 88 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Consolidated Balance Sheet
June 30 December 31
Notes 2022 2021
Current assets
Cash at bank and on hand V.1 3,296,536 5,818,835
Financial assets held for trading V.2 1,604 1,479
Derivative financial assets V.3 544,831 243,316
Bills receivable V.4 96,792 81,992
Accounts receivable V.5 10,091,376 8,362,493
Receivables financing V.6 78,634 120,157
Prepayments V.7 389,142 379,788
Other receivables V.8 852,408 691,939
Inventories V.9 15,568,631 11,750,162
Other current assets V.10 1,082,958 938,453
Total current assets 32,002,912 28,388,614
Non-current assets
Long-term receivables V.11 58,309 56,234
Long-term equity investments V.12 20,508 15,335
Other equity investments V.13 155,666 152,118
Investment properties 3,442 3,716
Fixed assets V.14 8,583,316 8,048,389
Construction in progress V.15 2,650,735 2,143,400
Right-of-use assets V.16 485,629 463,915
Intangible assets V.17 5,348,490 5,326,288
Goodwill V.18 4,635,081 4,409,599
Deferred tax assets V.19 1,073,097 723,075
Other non-current assets V.20 492,470 504,625
Total non-current assets 23,506,743 21,846,694
Total assets 55,509,655 50,235,308
- 89 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Consolidated Balance Sheet (continued)
June 30 December 31
Notes 2022 2021
Current liabilities
Short-term loans V.21 1,635,446 874,755
Derivative financial liabilities V.22 635,643 176,206
Bills payable V.23 701,764 493,376
Accounts payable V.24 7,826,483 6,294,163
Contract liabilities V.25 1,442,598 1,381,311
Employee benefits payable V.26 1,041,153 1,247,979
Taxes payable V.27 458,955 368,682
Other payables V.28 1,758,231 1,342,188
Non-current liabilities due within one year V.29 1,637,673 1,795,754
Other current liabilities V.30 402,423 412,909
Total current liabilities 17,540,369 14,387,323
Non-current liabilities
Long-term loans V.31 4,292,178 3,498,912
Debentures payable V.32 7,517,272 7,797,131
Lease liabilities V.33 367,573 362,086
Long-term payables 97,737 95,699
Long-term employee benefits payable V.34 769,276 792,358
Provisions V.35 202,069 186,430
Deferred tax liabilities V.19 392,445 380,138
Other non-current liabilities V.36 1,794,066 1,660,148
Total non-current liabilities 15,432,616 14,772,902
Total liabilities 32,972,985 29,160,225
Shareholders' equity
Share capital V.37 2,329,812 2,329,812
Capital reserve V.38 12,977,171 12,977,171
Less: Treasury shares - -
Other comprehensive income V.39 355,851 (432,384)
Special reserves 18,823 19,857
Surplus reserve V.40 240,162 240,162
Retained earnings V.41 6,614,851 5,940,465
Total equity attributed to the shareholders
of the company 22,536,670 21,075,083
Non-controlling interests - -
Total Equity 22,536,670 21,075,083
Total liabilities and equity 55,509,655 50,235,308
Ignacio Dominguez Shahar Florentz
Legal representative Chief of accounting work & Chief of accounting organ
These financial statements were approved by the Board of Directors of the Company on August 29 2022.
The notes form part of these financial statements.
- 90 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Balance Sheet
June 30 December 31
Notes 2022 2021
Current assets
Cash at bank and on hand XV.1 295,242 265,558
Accounts receivable XV.2 478,073 208,109
Receivables financing XV.3 72,745 11,752
Prepayments 28,980 29,364
Other receivables XV.4 20,923 21,496
Inventories 330,819 220,329
Other current assets 1,383 44,221
Total current assets 1,228,165 800,829
Non-current assets
Long-term equity investments XV.5 17,511,352 17,511,352
Other equity investments 84,720 84,720
Investment properties 3,442 3,716
Fixed assets 1,885,011 1,264,210
Construction in progress 56,212 728,742
Right-of-use assets 4,019 5,453
Intangible assets 264,908 265,510
Deferred tax assets 60,668 60,668
Other non-current assets 662,973 560,982
Total non-current assets 20,533,305 20,485,353
Total assets 21,761,470 21,286,182
Current liabilities
Short-term loans 50,000 -
Bills payables 62,470 20,415
Accounts payables 208,992 205,985
Contract liabilities 11,200 10,145
Employee benefits payable 18,777 28,880
Taxes payable 1,921 2,662
Other payables 681,933 560,098
Non-current liabilities due within one year 427,400 612,666
Total current liabilities 1,462,693 1,440,851
Non-current liabilities
Long-term loans 1,137,108 905,840
Lease liabilities 1,919 2,925
Long-term employee benefits payable 98,150 99,495
Provisions 42,784 44,385
Other non-current liabilities 312,130 312,130
Total non-current liabilities 1,592,091 1,364,775
Total liabilities 3,054.784 2,805,626
Shareholders’ equity
Share capital V.37 2,329,812 2,329,812
Capital reserve 15,523,881 15,523,881
Other comprehensive income 30,668 30,668
Special reserves 19,514 20,548
Surplus reserve 240,162 240,162
Retained earnings V.41 562,649 335,485
Total shareholders’ equity 18,706,686 18,480,556
Total liabilities and shareholders’ equity 21,761,470 21,286,182
- 91 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Consolidated Income Statement
Six months ended June 30
Notes 2022 2021
I. Operating income V.42 18,795,828 15,063,780
Less: Cost of sales V.42 13,822,755 10,706,710
Taxes and surcharges V.43 55,837 59,007
Selling and Distribution expenses V.44 2,159,089 2,506,436
General and administrative expenses V.45 642,313 571,807
Research and Development expenses V.46 274,738 226,940
Financial expenses (incomes) V.47 (438,224) 448,790
Including: Interest expense 326,788 322,765
Interest income 53,960 31,363
Add: Investment income (loss), net V.48 4,706 3,243
Including: Income from investment
in associates and joint ventures 4,706 3,243
Gain (loss) from changes in fair value V.49 (1,341,717) (140,069)
Credit impairment reversal (losses) V.50 (97,125) 10,051
Asset impairment reversal (losses) V.51 (85,346) (29,403)
Gain from disposal of assets V.52 60,298 14,799
II. Operating profit 820,136 402,711
Add: Non-operating income 29,797 33,032
Less: Non-operating expenses 16,559 15,429
III. Total profit 833,374 420,314
Less: Income tax expenses V.53 101,276 51,081
IV. Net profit 732,098 369,233
(1). Classified by nature of operations
(1.1). Continuing operations 732,098 369,233
(2). Classified by ownership
(2.1). Shareholders of the Company 732,098 367,036
(2.2). Non-controlling interests - 2,197
V. Other comprehensive income, net of tax V. 39 788,235 (122,906)
Other comprehensive income (net of tax)
attributable to shareholders of the Company 788,235 (122,906)
(1) Items that will not be reclassified to profit or loss: 61,296 (6,971)
(1.1) Re-measurement of defined benefit plan liability 61,296 (6,971)
(2) Items that were or will be reclassified to profit or loss 726,939 (115,935)
(2.1) Effective portion of gains or loss of cash flow hedge (60,863) 144,297
(2.2) Translation differences of foreign financial 787,802 (260,232)
statements
VI. Total comprehensive income for the period attributable to
Shareholders of the Company 1,520,333 246,327
Total comprehensive income for the period
attributable to shareholders of the Company 1,520,333 244,130
Total comprehensive income for the period
attributable to Non-controlling interests - 2,197
VII. Earnings per share XIV.2
(1) Basic earnings per share (Yuan/share) 0.31 0.16
(2) Diluted earnings per share (Yuan/share) N/A N/A
- 92 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Income Statement
Six months ended June 30
Notes 2022 2021
I. Operating income XV.6 1,185,094 617,097
Less: Operating costs XV.6 881,418 482,937
Taxes and surcharges 3,003 3,982
Selling and Distribution expenses 2,178 19,304
General and administrative expenses 65,151 140,326
Research and Development expenses 38,042 19,709
Financial expenses (income) 25,075 3,523
Including: Interest expense 25,382 10,176
Interest income 3,340 9,971
Add: Investment income (loss), net - -
Gain from changes in fair value (“-” means loss) - -
Credit impairment reversal (losses) (141) 107
Asset Impairment reversal (losses) 3,142 (1,068)
Gain from disposal of assets 59,654 16,081
II. Operating Profit 232,882 (37,564)
Add: Non-operating income 13,082 10,143
Less: Non-operating expenses 162 1,012
III. Total profit 245,802 (28,433)
Less: Income tax expense (income) - (228)
IV. Net profit (loss) 245,802 (28,205)
V. Other comprehensive income, net of tax - (370)
(1) Items that will not be reclassified to profit or loss - (370)
(1.1) Re-measurement of defined benefit plan liability - (370)
(1.2) FV changes in other equity investment -
VI. Total comprehensive income (loss) for the period 245,802 (28,575)
- 93 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Consolidated Cash Flow Statement
Six months ended June 31
Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 16,427,981 14,644,075
Refund of taxes and surcharges 164,802 82,190
Cash received relating to other operating activities V.56(1) 304,088 363,408
Sub-total of cash inflows from operating activities 16,896,871 15,089,673
Cash paid for goods and services 13,683,974 9,737,778
Cash paid to and on behalf of employees 2,329,629 1,988,051
Payments of taxes and surcharges 494,626 208,458
Cash paid relating to other operating activities V.56(2) 1,734,503 1,664,093
Sub-total of cash outflows from operating activities 18,242,732 13,598,380
Net cash flows from operating activities V.57(1)a (1,345,861) 1,491,293
II. Cash flows from investing activities:
Cash received from disposal of investments 5,887 856
Cash received from returns of investments 1,588 -
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 70,264 19,507
Cash received relating to other investing activities V.56(3) - 6,754
Sub-total of cash inflows from investing activities 77,739 27,117
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 1,291,889 1,179,017
Net cash paid to acquire subsidiaries or other business units - 655,039
Cash paid relating to other investing activities V.56(4) 64,719 85,108
Sub-total of cash outflows from investing activities 1,356,608 1,919,164
Net cash flows used in investing activities (1,278,869) (1,892,047)
III. Cash flows from financing activities:
Cash received from borrowings 2,435,083 3,776,407
Cash received from other financing activities V.56(5) 11,012 412,308
Sub-total of cash inflows from financing activities 2,446,095 4,188,715
Cash repayments of borrowings 1,163,615 2,328,962
Cash payment for dividends, profit distributions and interest 431,993 387,611
Including: Dividends paid to non-controlling interest 39,074 35,904
Cash paid relating to other financing activities V.56(6) 944,580 263,351
Sub-total of cash outflows from financing activities 2,540,188 2,979,924
Net cash flows from financing activities (94,093) 1,208,791
IV. Effects of foreign exchange rate changes on cash and cash
equivalents 150,085 (27,900)
V. Net (decrease) increase in cash and cash equivalents V.57(1)b (2,568,738) 780,137
Add: Cash and cash equivalents at the beginning of the year 5,759,480 3,835,071
I. VI. Cash and cash equivalents at the end of the period V.57(2) 3,190,742 4,615,208
- 94 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Cash Flow Statement
Six months ended June 30
Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 786,908 838,428
Refund of taxes and surcharges 51,548 22,166
Cash received relating to other operating activities XV.7(1) 23,102 21,203
Sub-total of cash inflows from operating activities 861,558 881,797
Cash paid for goods and services 653,912 440,234
Cash paid to and on behalf of employees 70,273 122,202
Payments of taxes and surcharges 3,899 6,834
Cash paid relating to other operating activities XV.7(2) 70,927 67,311
Sub-total of cash outflows from operating activities 799,011 636,581
Net cash flows from operating activities XV.8 62,547 245,216
II. Cash flows from investing activities:
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets 66,420 17,630
Cash received relating to other investing activities XV.7.(3) 150,000 -
Sub-total of cash inflows from investing activities 216,420 17,630
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 50,383 280,865
Cash paid for acquisition of investments - 697,909
Cash paid for other investing activities XV.7.(4) 250,000 -
Sub-total of cash outflows from investing activities 300,383 978,774
Net cash flows used in investing activities (83,963) (961,144)
III. Cash flows from financing activities:
Cash received from borrowings 650,000 615,200
Cash received relating to other financing activities XV.7.(5) 6,124 5,880
Sub-total of cash inflows from financing activities 656,124 621,080
Cash repayments of borrowings 553,732 293,732
Cash payment for dividends, profit distributions or interest 45,228 24,027
Cash paid relating to other financing activities XV.7.(6) 18,741 172,061
Sub-total of cash outflows from financing activities 617,701 489,820
Net cash flows from financing activities 38,423 131,260
IV. Effects of foreign exchange rate changes on cash and cash equivalents 60 (1,286)
V. Net increase (decrease) in cash and cash equivalents 17,067 (585,954)
Add: Cash and cash equivalents at the beginning of the year XV.8(2) 259,434 1,022,758
VI. Cash and cash equivalents at the end of the period XV.8(2) 276,501 436,804
- 95 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Consolidated Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2022
Other
Share Capital comprehensive Special Surplus Retained Non-controlling
capital reserve income reserves reserve earnings Total interests Total equity
I. Balance at December 31, 2021 2,329,812 12,977,171 (432,384) 19,857 240,162 5,940,465 21,075,083 - 21,075,083
II. Changes in equity for the period - - 788,235 (1,034) - 674,386 1,461,587 - 1,461,587
1. Total comprehensive income - - 788,235 - - 732,098 1,520,333 - 1,520,333
2. Owner’s contributions and reduction - - - - - - - - -
2.1 Cancellation of shares - - - - - - - - -
2.2 Non-controlling interests in - - - - - - - - -
respect of business combination
3. Appropriation of profits - - - - - (57,712) (57,712) - (57,712)
3.1 Distribution to owners - - - - - (18,638) (18,638) - (18,638)
3.2 Distribution to non-controlling - - - - - (39,074) (39,074) - (39,074)
interest
4. Special reserve - - - (1,034) - - (1,034) - (1,034)
4.1 Transfer to special reserve - - - 3,507 - - 3,507 - 3,507
4.2 Amount utilized - - - (4,541) - - (4,541) - (4,541)
III. Balance at June 30, 2022 2,329,812 12,977,171 355,851 18,823 240,162 6,614,851 22,536,670 - 22,536,670
- 96 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2021
Attributable to shareholders of the Company
Other
Share Capital Less: Treasury comprehensive Special Surplus Retained Non-controlling
capital * reserve * shares * income reserves reserve earnings Total interests Total equity
I. Balance at December 31, 2020 2,344,121 13,023,219 60,357 (72,055) 15,960 240,162 5,862,702 21,353,752 80,163 21,433,915
II. Changes in equity for the period (14,309) (140,895) (60,357) (122,906) 2,498 - 293,855 78,600 (80,163) (1,563)
1. Total comprehensive income - - - (122,906) - - 367,036 244,130 2,197 246,327
2. Owner’s contributions and reduction (14,309) (140,895) (60,357) - - - - (94,847) (82,360) (177,207)
2.1 Repurchase of shares (14,309) (46,048) (60,357) - - - - - - -
2.2 Non-controlling interests in
respect of business combination - (94,847) - - - - - (94,847) (82,360) (177,207)
3. Appropriation of profits - - - - - - (73,181) (73,181) - (73,181)
3.1 Distribution to owners - - - - - - (37,277) (37,277) - (37,277)
3.2 Distribution to non-controlling - - - - - - -
interest (35,904) (35,904) (35,904)
4. Special reserve - - - - 2,498 - - 2,498 - 2,498
4.1 Transfer to special reserve - - - - 3,866 - - 3,866 - 3,866
4.2 Amount utilized - - - - (1,368) - - (1,368) - (1,368)
III. Balance at June 30, 2021 2,329,812 12,882,324 - (194,961) 18,458 240,162 6,156,557 21,432,352 - 21,432,352
* Following the approval and execution of the repurchase plan for part of the Company’s domestically listed foreign shares (B share) on 2020 and the repurchase of 14,309,536 B-
Shares, the Company cancelled said amount of B-Shares at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on June 17, 2021.
.
- 97 -
ADAMA Ltd. Semi-Annual Report 2022
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2022
Other
Share Capital comprehensive Special Surplus Retained
capital reserve income reserves reserve earnings Total
I. Balance at December 31, 2021 2,329,812 15,523,881 30,668 20,548 240,162 335,485 18,480,556
II. Changes in equity for the period - - - (1,034) - 227,164 226,130
1. Total comprehensive income - - - - - 245,802 245,802
2. Appropriation of profits - - - - - (18,638) (18,638)
2.1 Transfer to Distribution to shareholders - - - - - (18,638) (18,638)
3. Special reserve - - - (1,034) - - (1,034)
3.1 Transfer to special reserve - - - 3,507 - - 3,507
3.2 Amount utilized - - - (4,541) - - (4,541)
Ⅲ. Balance at June 30, 2022 2,329,812 15,523,881 30,668 19,514 240,162 562,649 18,706,686
For the six months ended June 30, 2021
Less: Other
Share Capital treasury comprehensive Special Surplus Retained
capital reserve share income reserves reserve earnings Total
I. Balance at December 31, 2020 2,344,121 15,569,929 60,357 47,390 16,651 240,162 497,700 18,655,596
II. Changes in equity for the period (14,309) (46,048) (60,357) (370) 2,498 - (65,482) (63,354)
1. Total comprehensive income - - - (370) - - (28,205) (28,575)
2. Owner’s contributions and reduction (14,309) (46,048) (60,357) - - - - -
2.1 Repurchase of shares (14,309) (46,048) (60,357) - - - - -
3. Appropriation of profits - - - - - - (37,277) (37,277)
3.1 Transfer to Distribution to shareholders - - - - - - (37,277) (37,277)
4. Special reserve - - - - 2,498 - - 2,498
4.1 Transfer to special reserve - - - - 3,866 - - 3,866
4.2 Amount utilized - - - - (1,368) - - (1,368)
Ⅲ. Balance at June 30, 2021 2,329,812 15,523,881 - 47,020 19,149 240,162 432,218 18,592,242
- 98 -
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
subsequently 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
subsidiaries of the Company, refer to Note VII.
The Company’s consolidated financial statements had been approved by the Board of Directors of the
Company on August 29, 2022.
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
Commission (hereinafter "CSRC”) in 2014).
2. Accrual basis and measurement principle
The Group has adopted the accrual basis of accounting. Except for certain financial instruments which are
measured at fair value, deferred tax assets and liabilities, assets and liabilities relating to employee benefits,
provisions, and investments in associated companies and joint ventures, the Group adopts the historical cost
as the principle of measurement in the financial statements. Where assets are impaired, provisions for asset
impairment are made in accordance with relevant requirements.
In the historical cost measurement, assets obtained shall be measured at the amount of cash or cash
equivalents 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.
- 99 -
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 June 30, 2022 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, 2021 and the
Company's consolidated operating results, changes in shareholders' equity and cash flows for the twelve
months then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
3. Business cycle
The company takes the period from the acquisition of assets for processing to their realisation in cash or cash
equivalents as a normal operating cycle. The operating cycle for the company is 12 months.
4. Reporting currency
The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional
currency. 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 statements is Renminbi.
- 100 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
5. Business combinations
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all
of the combining enterprises are ultimately controlled by the same party or parties both before and after the
combination, and that control is not transitory. Assets and liabilities obtained shall be measured at their
respective carrying amounts as recorded by the combining entities at the date of the combination. The
difference between the carrying amount of the net assets obtained and the carrying amount of the
consideration paid for the combination is adjusted to the share premium in capital reserve. If the share
premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they
are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill.
A business combination not involving enterprises under common control is a business combination in which
all of the combining enterprises are not ultimately controlled by the same party or parties before and after
the combination.
The costs of business combination are the fair value of the assets paid, liabilities incurred or assumed and
equity instruments issued by the acquirer for the purpose of achieving the control rights over the acquiree.
The intermediary costs such as audit, legal services and assessment consulting costs and other related
management 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
acquiree’s identifiable net assets, the remaining difference is recognized immediately in profit or loss for the
current year.
The goodwill raised because of the business combination should be separately disclosed in the consolidated
financial statement and measured by the initial amount less any accumulative impairment provision.
In a business combination achieved in stages, the Group remeasure its previously held equity interest in the
acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss.
- 101 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
6. Basis for preparation of consolidated financial statements
The scope of consolidation in consolidated financial statements is determined on the basis of control. Control
is achieved when the Company has power over the investee; is exposed, or has rights, to variable returns
from its involvement with the investee; and has the ability to use its power to affect its returns.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of disposal
(the date when control is lost) are included in consolidated income statement and consolidated statement of
cash flows.
For a subsidiary acquired through a business combination not involving enterprises under common control,
the operating results and cash flows from the acquisition date (the date when control is obtained) are included
in consolidated income statement and consolidated statement of cash flows.
For a subsidiary acquired through a business combination involving enterprises under common control, it
will be fully consolidated into consolidated financial statements from the date on which the subsidiary was
ultimately under common control by the same party or parties.
The significant accounting policies and accounting years adopted by the subsidiaries are determined based
on the uniform accounting policies and accounting years set out by the Company.
All significant intra-group balances, transactions and unrealized profits are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as non-controlling
interests 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 consolidated 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
exceeds the non-controlling shareholders' portion of the opening balance of owners' equity of the subsidiary,
the excess amount is still allocated against non-controlling interests.
Acquisition of non-controlling interests or disposal of equity interest in a subsidiary that does not result in
the loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts of the
Company's interests and non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiary. The difference between the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is adjusted to capital reserve under owners' equity. If the
capital reserve is not sufficient to absorb the difference, the excess is adjusted against retained earnings.
Other comprehensive income attributed to the non-controlling interest is reattributed to the shareholders of
the company.
- 102 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
6. Basis for preparation of consolidated financial statements - (cont’d)
A put option issued by the Group to holders of non-controlling interests that is settled in cash or other
financial instrument is recognized as a liability at the present value of the exercise price (according to the
"anticipated 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
acquisition 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
investment income in the period in which control is lost.
7. Classification and accounting methods of joint arrangement
Joint arrangement involves by two or more parties jointly control. Joint control is the contractually agreed
sharing of control over an economic activity, and exists only when the strategic financial and operating
decisions relating to the activity require the unanimous consent of the parties sharing control (the ventures).
The Group makes the classification of the joint arrangements according to the rights and obligations in the
joint arrangements to either joint operations or joint ventures.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint arrangement. Joint ventures are accounted for using the equity method.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are
the Group's short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
- 103 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
9. Translation of transactions and financial statements denominated in foreign currencies
9.1 Transactions denominated in foreign currencies
On initial recognition, foreign currency transactions are translated into functional currency using the spot
exchange rate prevailing at the date of transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currency using the
spot exchange rates at the balance sheet date. Exchange differences arising from the differences between the
spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous
balance sheet date are recognized in profit or loss for the period, except that (i) exchange differences related
to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization are
capitalized 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
reclassified to profit or loss upon disposal of the foreign operations.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in functional
currency at the spot exchange rates on the dates of the transactions and the amounts in functional currency
remain unchanged.
9.2 Translation of financial statements denominated in foreign currency
For the purpose of preparing consolidated financial statements, financial statements of a foreign operation
are translated from the foreign currency into RMB using the following method: assets and liabilities on the
balance sheet are translated at spot exchange rate prevailing at the balance sheet date; shareholders' equity
items, except for retained earnings, are translated at the spot exchange rates at the dates on which such items
arose; all items in the income statement as well as items reflecting the distribution of profits are translated at
average rate or at spot exchange rates on the dates of the transactions; the retained earnings opening balance
is previous year's translated retained earnings closing balance; the closing balance of retained earnings is
calculated and presented on the basis of each translated income statement and profit distribution item. The
difference between the translated assets and the aggregate of liabilities and shareholders' equity items is
recorded as other comprehensive income. Cash Flows arising from transaction in foreign currency and the
cash flows of a foreign subsidiary are translated at the spot exchange rate on the date of the cash flow, the
effect of exchange rate changes on the cash and cash equivalents is regarded as a reconciling item and present
separately in the statement “effect of foreign exchange rate changes on the cash and cash equivalents".
The opening balances and the comparative figures of prior year are presented at the translated amounts in
the prior year's financial statements.
On disposal of the Group's entire equity interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain equity interest in it or other reasons, the Group transfers the
accumulated translation differences, which are attributable to the owners' equity of the Company and
presented under other comprehensive income to profit or loss in the period in which the disposal occurs.
- 104 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
9. Translation of transactions and financial statements denominated in foreign currencies - (cont’d)
9.2 Translation of financial statements denominated in foreign currency - (cont’d)
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation,
the proportionate share of accumulated translation differences are re-attributed to non-controlling interests
and are not recognized in profit and loss. For partial disposals of equity interest in foreign operations, which
are associates or joint ventures, the proportionate share of the accumulated translation differences are
reclassified to profit or loss.
10. Financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual
provisions of the instrument. At initial recognition, the Group measures a financial asset or financial liability
at its fair value plus or minus (which is not measured at fair value through profit or loss) transaction costs
that are directly attributable to the acquisition or issue of the financial asset or financial liability. Initial
recognition in trade receivables which do not contain a significant financing component, shall be made
according to their transaction price.
10.1 Classification and measurement of financial assets
After initial recognition, an entity shall measure a financial asset at: (a) amortised cost; (b) fair value through
other comprehensive income (“FVTOCI”); or (c) fair value through profit or loss (“FVTPL”).
10.1.1 Financial assets at amortised cost
A financial asset is measured at amortised cost if both of the following conditions are met: (a) the financial
asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.
Such financial assets are subsequently measured at amortised cost, using effective interest method. Gains or
losses upon impairment and derecognition are recognized in profit or loss.
10.1.1.1 Effective interest method and amortised cost
Effective interest method represents the method for calculating the amortized costs and interest income or
expense of each period in accordance with the effective interest rate of financial assets or financial liabilities
(inclusive of a set of financial assets or financial liabilities). Effective interest rate represents the rate that
discounts the future cash flow over the expected subsisting period or shorter period, if appropriate, of the
financial asset or financial liability to the current carrying value of such financial asset or financial liability.
When calculating the effective interest rate, the Group will consider the anticipated future cash flow (not
considering the future credit loss) on the basis of all contract clauses of financial assets or financial liabilities,
as well as consider all kinds of charges which are an integral part of the effective interest rate, including
transaction fees and discount or premium paid or received between both parties of financial asset or financial
liability contract.
- 105 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.1 Classification and measurement of financial assets - (cont’d)
10.1.2 Financial assets at FVTOCI
A financial asset is measured at fair value through other comprehensive income if both of the following
conditions are met: (a) the financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets and (b) the contractual terms of the
financial 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
reclassified. When the financial asset is derecognized the cumulative gain or loss previously recognized in
other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are either those that are classified as financial assets at FVTPL or designated as
financial assets at FVTPL.
A financial asset is measured at FVTPL unless it is measured at amortised cost or at FVTOCI.
The Group may, at initial recognition, irrevocably designate a financial asset as measured at FVTPL if doing
so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as
an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognizing the
gains and losses on them on different bases.
A gain or loss on a financial asset that is measured at FVTPL is recognized in profit or loss unless it is part
of a hedging relationship. Dividends are recognized in profit or loss.
10.1.4 Designated financial assets at FVTOCI
At initial recognition, the Group makes an irrevocable election to designate to FVTOCI an investment in an
equity instrument that is not held for trading.
When a non-trading equity instrument investment is designated as a financial asset that is measured at fair
value through other comprehensive income, the changes in the fair value of the financial asset are recognised
in other comprehensive income. Upon realization the accumulated gains or losses from other comprehensive
income are transferred from other comprehensive income and included in retained earnings. During the
period 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.
- 106 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on financial assets that are classified to
amortised cost and FVTOCI.
The Group always measures the loss allowance at an amount equal to lifetime expected credit losses for
trade receivables.
For financial assets other than trade receivables, the Group initially measure the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. At each balance sheet date, if
the credit risk on that financial instrument has increased significantly since initial recognition, the Group
measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses. The Group recognizes in profit or loss, as an impairment gain or loss, the amount of expected credit
losses (or reversal) that is required to adjust the loss allowance to the amount that is required to be recognized.
10.2.1 Significant increases in credit risk
At each balance sheet date, the Group assesses whether the credit risk on a financial instrument has
increased 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
environment of the debtor.
(g) significant changes in the value of the collateral supporting the obligation or in the quality of third-
party guarantees or credit enhancements, which are expected to reduce the debtor’s economic
incentive to make scheduled contractual payments or to otherwise have an effect on the probability
of a default occurring.
(h) significant changes that are expected to reduce the receivable’s economic incentive to make
scheduled contractual payments.
(i) significant changes in the expected performance and behaviour of the debtor.
(j) past due information.
The Group assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date.
- 107 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets - (cont’d)
10.2.2 Credit-impaired financial asset
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired
include observable data about the following events:
(a) significant financial difficulty of the issuer or the receivable;
(b) a breach of contract, such as a default or past due event;
(c) the lender(s) of the receivable, for economic or contractual reasons relating to the receivable’s
financial difficulty, having granted to the receivable a concession(s) that the lender(s) would not
otherwise consider;
(d) it is becoming probable that the receivable will enter bankruptcy or other financial reorganization;
10.2.3 Recognition of expected credit losses
For the purpose of determining significant increases in credit risk and recognizing a loss allowance on a
collective basis, financial instruments are grouped on the basis of shared credit risk. Examples of shared
credit risk characteristics may include, but are not limited to, the:(a) instrument type; (b) credit risk ratings;
(c) collateral type; (d) industry; (e) geographical location of the debtor; and (f) the value of collateral
relative 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
between: (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.
- 108 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.2 Impairment of financial assets - (cont’d)
10.2.4 Written-off of financial assets
The Group directly reduces the gross carrying amount of a financial asset when the entity has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. A write-off constitutes a
derecognition event.
10.3 Transfer of financial asset
The Group derecognizes a financial asset if one of the following conditions is satisfied: (i) the contractual
rights to the cash flows from the financial asset expire; or (ii) the financial asset has been transferred and
substantially all the risks and rewards of ownership of the financial asset transferred to the transferee; or (iii)
although the financial asset has been transferred, the Group neither transfers nor retains substantially all the
risks and rewards of ownership of the financial asset but has not retained control of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial
asset, and it retains control of the financial asset, it recognizes the financial asset to the extent of its continuing
involvement in the transferred financial asset and recognizes an associated liability. The extent of the
Group’s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the
value of the transferred asset.
When the company is derecognizing a financial asset in its entirety, except for equity instrument designated
to FVTOCI, the difference between (i) the carrying amount of the financial asset transferred; and (ii) the sum
of the consideration received from the transfer is recognized in profit or loss.
10.4 Classification and measurement of financial liabilities
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
All financial liabilities are subsequently measured at FVTPL or other financial liabilities.
Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is
designated as at FVTPL. The financial liability other than derivative financial liabilities are stated as
liabilities 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.
- 109 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
10. Financial instruments - (cont’d)
10.5 Derecognition of financial liabilities
Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full
or in part. An agreement entered into force between the Group (debtor) and a creditor to replace the original
financial liabilities with new financial liabilities with substantially different terms, derecognize the original
financial liabilities as well as recognize the new financial liabilities. When financial liabilities is
derecognized in full or in part, the difference between the carrying amount of the financial liabilities
derecognized and the consideration paid (including transferred non-cash assets or new financial liability) is
recognized in profit or loss for the current period.
10.6 Derivatives
Derivative financial instruments include forward exchange contracts, currency swaps and foreign exchange
options, etc. Derivatives are initially measured at fair value at the date when the derivative contracts are
entered into and are subsequently re-measured at fair value. The resulting gain or loss is recognized in profit
or loss unless the derivative is designated and highly effective as a hedging instrument, in which case the
timing of the recognition in profit or loss depends on the nature of the hedge relationship (Note III 28.1).
10.7 Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be
offset, except for circumstances where the Group has a legal right that is currently enforceable to offset the
recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize
the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability
shall be offset and the net amount is presented in the balance sheet.
10.8 Equity instruments
The consideration received from the issuance of equity instruments net of transaction costs is recognized in
shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-issued
equity instruments are deducted from shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditures
relating to the repurchase are recorded in the cost of the treasury shares, with the transaction entering into
the share capital. Treasury shares are excluded from profit distributions and are stated as a deduction under
shareholders’ equity in the balance sheet.
- 110 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
11. Receivables
Receivables are assessed for impairment on a collective group and/or on an individual basis as follows:
Expected credit losses in respect of a receivables is measured at an amount equal to lifetime expected credit
losses. The assessment is made collectively for account receivables, where receivables share similar credit
risk characteristics based on geographical location, using the expected credit losses model including inter-
alia aging analysis, historical loss experiences adjusted by the observable factors reflecting current and
expected 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
specific 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
attention of the Group about loss events such as a significant decline in the solvency of an individual debtor
or the portfolio of debtors, and significant changes in the financial condition that have an adverse effect on
the debtor.
12. Inventories
12.1 Categories of inventories and initial measurement
The Group's inventories mainly include raw materials, work in progress, semi-finished goods, finished goods
and reusable materials. Reusable materials include low-value consumables, packaging materials and other
materials, which can be used repeatedly but do not meet the definition of fixed assets.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of
conversion and other expenditures incurred in bringing the inventories to their present location and condition
including direct labor costs and an appropriate allocation of production overheads.
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
12.3 Basis for determining net realizable value of inventories and provision methods for decline in value of
inventories
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.
- 111 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
12. Inventories - (cont’d)
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value of inventories is
higher than their carrying amount, the original provision for decline in value is reversed and the reversal is
included in profit or loss for the period.
12.4 The perpetual inventory system is maintained for stock system.
13. Long-term equity investments
Long-term equity investments include investments in subsidiaries, joint ventures and associates.
Subsidiaries are the companies that are controlled by the Company. Associates are the companies over which
the Group has significant influence. Joint ventures are joint arrangements over which the Group has joint
control along with other investors and has rights to the net assets of the joint arrangement.
The Company accounts for the investment in subsidiaries at historical cost in the Company's financial
statements. Investments in associates and joint ventures are accounted for under equity method.
13.1 Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises under
common control, the investment cost of the long-term equity investment is the share of the carrying amount
of the shareholders' equity of the acquiree attributable to the ultimate controlling party at the date of
combination. 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
multiple 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
instruments, the historical cost is determined based on the fair value of the equity instruments issued.
- 112 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
13. Long-term equity investments - (cont’d)
13.2 Subsequent measurement and recognition of profit or loss
If the long-term equity investment is accounted for at cost, it should be measured at historical cost less
accumulated impairment losses. Dividend declared by the investee should be accounted for as investment
income.
Under the equity method, where the long-term equity investment initial investment cost exceeds the Group’s
share of the fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is
made to the initial investment cost. Where the initial investment cost is less than the Group’s share of the
fair value of the investee’s identifiable net assets at the time of acquisition, the difference is recognized in
profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive
income of the investee for the period as investment income or loss and other comprehensive income for the
period. The Group recognizes its share of the investee’s net profit or loss based on the fair value of the
investee’s individual separately identifiable assets, etc. at the acquisition date after making appropriate
adjustments to be confirmed with the Group's accounting policies and accounting period. The Group
discontinues recognizing its share of net losses of the investee after the carrying amount of the long-term
equity investment together with any long-term interests that in substance form part of its net investment in
the investee is reduced to zero. If the Group has incurred obligations to assume additional losses of the
investee, a provision is recognized according to the expected obligation, and recorded as investment loss for
the period.
13.3 Basis for determining control, joint control and significant influence over investee
Control is achieved when the Company has power over the investee; is exposed, or has rights, to variable
returns from its involvement with the investee; and has the ability to use its power to affect its returns.
Joint control is the contractually agreed sharing of control over an economic activity, and exists only when
the strategic financial and operating policy decisions relating to the activity require the unanimous consent
of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over
an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts)
held by the investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
13.4 Methods of impairment assessment and determining the provision for impairment loss
If the recoverable amounts of the investments to subsidiaries, joint ventures and associates are less than their
carrying amounts, an impairment loss should be recognized to reduce the carrying amounts to the recoverable
amounts (Note III 20).
- 113 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
13. Long-term equity investments - (cont’d)
13.5 The disposal of long-term equity investment
On disposal of a long term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period.
14. Investment properties
Investment property refers to real estate held to earn rentals or for capital appreciation, or both, including
leased land use rights, land use rights held and provided for transferring after appreciation and leased
constructions, etc.
Investment property is initially measured at cost. Subsequent expenditures related to an investment property
shall be included in cost of investment property only when the economic benefits associated with the asset
will likely flow to the Group and its cost can be measured reliably. All other subsequent expenditures on
investment property shall be included in profit or loss for the current period when incurred.
The Group adopts cost method for subsequent measurement of investment property, which is depreciated or
amortized using the same policy as that for buildings and land use rights.
When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of
the property net of the carrying amount and related taxes and surcharges is recognized in profit or loss for
the current period.
15. Fixed assets
15.1 Recognition criteria for fixed assets
Fixed assets include land owned by the Group and buildings, machinery and equipment, motor vehicles,
office equipment and others.
Fixed assets are tangible assets that are held for use in the production or supply of goods or for administrative
purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only when it
is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset
can be reliably measured. Purchased or constructed fixed assets are initially measured at cost when acquired.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is
probable that economic benefits associated with the asset will flow to the Group and the subsequent
expenditures can be measured reliably. Other subsequent expenditures are recognized in profit or loss in the
period in which they are incurred.
- 114 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
15. Fixed assets - (cont’d)
15.2 Depreciation of each category of fixed assets
Fixed asset is depreciated based on the cost of fixed asset recognized less expected net residual value over
its useful life using the straight-line method since the month subsequent to the one in which it is ready for
intended use. Depreciation is calculated based on the carrying amount of the fixed asset after impairment
over the estimated remaining useful life of the asset.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year-end, and account for any change as a change in an
accounting estimate.
The estimated useful life, estimated net residual value and annual depreciation rate of each category of fixed
assets are as follows:
Residual Annual
Useful life value depreciation rate
Category Depreciation (years) (%) (%)
Buildings the straight-line method 15-50 0-4 1.9-6.7
Machinery and equipment the straight-line method 3-22 0-4 4.4-33.3
Office and other equipment the straight-line method 3-17 0-4 5.6-33.3
Motor vehicles the straight-line method 5-9 0-2 10.9-20.0
Overseas Land owned by the Group is not depreciated.
15.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or
disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the
amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognized
in profit or loss for the period.
The difference between recoverable amounts of the fixed assets under the carrying amount is referred to as
impairment loss (Note III 20).
16. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various construction,
installation costs, borrowing costs capitalized and other expenditures incurred until such time as the relevant
assets are completed and ready for its intended use. When the asset concerned is ready for its intended use,
the cost of the asset is transferred to fixed assets and depreciated starting from the following month.
The difference between recoverable amounts of the construction in progress under the carrying amount is
referred to as impairment loss (Note III 20).
- 115 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
17. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are
capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use
or sale have commenced. Capitalization of borrowing costs ceases when the qualifying asset being acquired,
constructed or produced becomes ready for its intended use or sale. Borrowing costs incurred subsequently
should be charged to profit or loss. Capitalization of borrowing costs is suspended during periods in which
the acquisition, construction or production of a qualifying asset is suspended abnormally and when the
suspension is for a continuous period of more than 3 months. Capitalization is suspended until the acquisition,
construction or production of the asset is resumed.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is
the actual interest expenses incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the temporary
investment of those funds.
Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest
to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess
of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalization
rate is the weighted average of the interest rates applicable to the general-purpose borrowings.
During the capitalization period, exchange differences on foreign currency specific-purpose borrowing are
fully capitalized whereas exchange differences on foreign currency general-purpose borrowing, charged to
profit or loss.
18. Intangible assets
18.1 Valuation methods, useful life, impairment test
The Group’s intangible assets include product registration assets, intangible assets upon purchase of products,
marketing rights and rights to use tradenames and trademarks, land use rights, software and customer
relations. Intangible assets are stated at cost less accumulated amortization and impairment losses.
When an intangible asset with a finite useful life is available for use, its original cost less any accumulated
impairment losses is amortized over its estimated useful life using the straight-line method. An intangible
asset with an indefinite useful life is not amortized.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method at
the end of the year, and makes adjustments when necessary.
The respective amortization periods for such intangible assets are as follows:
Item Amortization period (years)
Land use rights 49-50 years
Product registration 8, 11 years
Intangible assets on purchase of products 7-11, 20 years
Marketing rights, tradename and trademarks 4-10, 30 years
Exclusivity agreement 21 years
Software 3-5 years
Customer relations 5-10, 13 years
The difference between recoverable amounts of the intangible assets under the carrying amount is referred
to as impairment loss (see Note III 20 – Impairment of long-term assets).
- 116 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
18. Intangible assets - (cont’d)
18.2 Research and development expenditure
Internal research and development project expenditures were classified into research expenditures and
development 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
measured.
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
expenditures capitalized during the development stage are recognized as development costs incurred and
will be transferred to intangible asset when the underlying project is ready for an intended use.
19. Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair
value of the identifiable net assets of the acquiree under a business combination not involving enterprises
under common control.
Goodwill is not amortized and is stated in the balance sheet at cost less accumulated impairment losses (see
Note III 20 – Impairment of long-term assets). On disposal of an asset group or a set of asset groups, any
attributable goodwill is written off and included in the calculation of the profit or loss on disposal.
20. Impairment of long-term assets
The Company assesses at each balance sheet date whether there is any indication that the fixed assets,
construction 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.
- 117 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
20. Impairment of long-term assets - (cont’d)
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective
of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the
carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a
reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups,
it is allocated to each of the related set of asset groups. Each of the related asset groups or set of asset groups
is an asset group or set of asset group that is able to benefit from the synergies of the business combination
and shall not be larger than a reportable segment determined by the Group. If the carrying amount of the
asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss
first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and
then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups,
pro rata based on the carrying amount of each asset.
Once the impairment loss of such assets is recognized, it will not be reversed in any subsequent period.
21. Employee benefits
21.1 Short-term employee benefits
Employee wages or salaries, bonuses, social security contributions, measured on a non-discounted basis, and
the expense is recorded when the related service is provided. A provision for short-term employee benefits
in respect of cash bonuses is recognized in the amount expected to be paid where the Group has a current
legal or constructive obligation to pay the said amount for services provided by the employee in the past and
the amount can be estimated reliably.
21.2 Post-employment benefits
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
A defined contribution plan is a post-employment benefit plan under which the Group pays contributions to
a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for
contributions 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
benefit 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
respective 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.
- 118 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
21. Employee benefits - (cont’d)
21.3 Termination benefits
When the Group terminates the employment with employees or provides compensation under an offer to
encourage employees to accept voluntary redundancy, a provision is recognized with a corresponding
expense in profit or loss at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee
termination plan or a curtailment proposal.
- When the Group has a formal detailed restructuring plan involving the payment of termination benefits
and has raised a valid expectation in those affected that it will carry out the restructuring by starting to
implement that plan or announcing its main features to those affected by it.
If the benefits are payable more than 12 months after the end of the reporting period, they are discounted to
their present value. The discount rate used is the yield on the reporting date on highly-rated corporate
debentures denominated in the same currency, that have maturity dates approximating the terms of the
Group’s obligation.
21.4 Other long-term employee benefits
The Group’s net obligation for long-term employee benefits, which are not attributable to post-employment
benefit plans, is for the amount of the future benefit to which employees are entitled for services that were
provided during the current and prior periods.
The amount of these benefits is discounted to its present value and the fair value of the assets related to these
obligations is deducted therefrom. The discount rate used is the yield on the reporting date on highly-rated
corporate debentures denominated in the same currency, that have maturity dates approximating the terms
of the Group’s obligation.
22. Share-based payment
Share-based payment refers to the transaction in order to acquire the service offered by the employees or
other parties that grants equity instruments or liabilities on the basis of the equity instruments. Share-based
payment classified into equity-settled share-based payment and cash-settled share-based payment.
22.1 Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities
recognized 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
balance 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
Company should re-measure the fair value of the liabilities and the changes should be included in the current
period profit and loss.
- 119 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
23. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency, it is probable
that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation
can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the settlement date, taking into account factors pertaining to a contingency such as the risks,
uncertainties and time value of money. Where the effect of the time value of money is material, the amount
of the provision is determined by discounting the related future cash outflows. The increase in the provision
due to passage of time is recognized as interest expense.
If all or part of the provision settlements is reimbursed by third parties, when the realization of income is
virtually certain, then the related asset should be recognized. However, the amount of related asset
recognized should not be exceeding the respective provision amount.
At the balance sheet date, the amount of provision should be re-assessed to reflect the best estimation then.
24. Revenue
Revenue of the Group is mainly from sale of goods.
The Group recognizes revenue when transferring goods to a customer, at the amount of the transaction price.
Goods are considered transferred when the customer obtains control of the goods. Transaction price is the
amount of consideration to which an entity expects to be entitled in exchange for transferring goods to a
customer, excluding amounts collected on behalf of third parties.
Significant financing component
For a contract with a significant financing component, the Group recognize revenue at an amount that reflects
the price that a customer would have paid for the goods if the customer had paid cash for those goods at
receipt. The difference between the amount of consideration and the cash selling price of the goods, is
amortized in the contract period using effective interest rate. The Group does not adjust the amount of
consideration 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
expected costs to recover those products.
- 120 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
25. Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the
Group at no consideration, including tax returns, financial subsidies and so on. A government grant is
recognized 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
government grant related to an asset is offset with the cost of the relevant asset.
(2) The basis of judgment and accounting method of the government grants related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses to be
incurred in subsequent periods, the grant is recognized as deferred income, and recognized in profit or loss
over the periods in which the related costs are recognized. If the grant is a compensation for related expenses
or losses already incurred, the grant is recognized immediately in profit or loss for the period.
Government grants related to the Group’s normal course of business are offset with related costs and
expenses. Government grants related that are irrelevant with the Groups’s normal course of business are
included in non-operating gains.
26. Current and deferred tax
The income tax expenses include current income tax and deferred income tax.
26.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
26.2 Deferred tax assets and deferred tax liabilities
Temporary differences are differences between the carrying amounts of certain assets or liabilities and their
tax base.
All taxable temporary differences are recognized as related deferred tax liabilities. Deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which the
deductible losses and tax credits can be utilized.
- 121 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
26. Current and deferred tax - (cont’d)
26.2 Deferred tax assets and deferred tax liabilities - (cont’d)
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the
extent that it is probable that future taxable profits will be available against which the deductible losses and
tax credits can be utilized. However, for deductible temporary differences associated with the initial
recognition 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
subsidiaries 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
income or shareholders’ equity, and deferred tax recognized on business combinations, all other current
income tax and deferred tax items are charged to profit or loss in the current period.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer
probable that sufficient taxable profits will be available in the future to allow the benefit of deferred tax
assets to be utilized. Such reduction is reversed when it becomes probable that sufficient taxable profits will
be available.
26.3 Offset of income tax
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and tax assets and
tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities which intend to realize the assets and liabilities simultaneously, current tax assets
and liabilities are offset and presented on a net basis.
When the Group has a legal right to settle deferred tax assets and liabilities on a net basis which relates to
income taxes levied by the same taxation authority, on either the same taxable entity or different taxable
entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets and
liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented
on a net basis.
- 122 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
27. Leases
Lease is a contract, that conveys the right to use an asset for a period of time in exchange for consideration.
27.1 Determining whether an arrangement contains a lease
On the inception date of the lease, the Group determines whether the arrangement is a lease or contains a
lease, while assessing if it conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. In its assessment of whether an arrangement conveys the right to control the use
of an identified asset, the Group assesses whether it has the following two rights throughout the lease term:
(a) The right to obtain substantially all the economic benefits from use of the identified asset; and
(b) The right to direct the identified asset’s use.
An arrangement does not contain a lease if an asset is leased for a period of less than 12 months, or to lease of
asset with low economic value.
27.2 Initial recognition of leased assets and lease liabilities
Upon initial recognition, the Group recognizes a liability at the present value of future lease payments
(exclude certain variable lease payments, as detailed in note III 27.4), and concurrently the Group recognizes
a right-of-use asset at the same amount, adjusted for any prepaid lease payments paid at the lease date or
before, plus initial direct costs incurred in respect of the lease.
When the interest rate implicit in the lease is not readily determinable, the incremental borrowing rate of the
lessee is used.
The Group presents right-of-use assets separately from other assets in the balance sheet.
27.3 The lease term
The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination
option, if it is reasonably certain that the lessee will exercise or not exercise the option, respectively.
If there is a change in the lease term, or in the assessment of an option to purchase the underlying asset, the
Group remeasures the lease liability, on the basis of the revised lease term and the revised discount rate and
adjust the right-of-use assets accordingly.
27.4 Variable lease payments
Variable lease payments that depend on an index or a rate, are initially measured using the index or rate
existing at the commencement of the lease. When the cash flows of future lease payments change as the
result of a change in an index or a rate, the balance of the liability is adjusted with a correspondence change
in the right-of-use asset.
Other variable lease payments that are not included in the measurement of the lease liability are recognized
in profit or loss in the period in which the condition that triggers payment occurs.
- 123 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
27. Leases (cont’d)
27.5 Subsequent measurement
After lease commencement, a right-of-use asset is measured on a cost basis less accumulated depreciation
and accumulated impairment losses and is adjusted for re-measurements of the lease liability. The asset is
depreciated on a straight-line basis over the useful life or contractual lease period, whichever earlier.
The Group applies ASBE8 Impairment of Assets, to determine whether the right-of-use asset is impaired
and to account for any impairment loss identified.
A lease liability is measured after the lease commencement date at amortized cost using the effective interest
method.
28. Other significant accounting policies and accounting estimates
28.1 Hedging
The Group uses derivative financial instruments to hedge its risks related to foreign currency and inflation
risks and derivatives that are not used for hedging.
Hedge accounting
The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing
basis, whether the hedge is expected to be effective in offsetting the changes in the fair value of cash flows
that can be attributed to the hedged risk during the period for which the hedge is designated.
An effective hedge exists when all of the below conditions are met:
There is an economic relationship between the hedged item and the hedging instrument;
the effect of credit risk does not dominate the value changes that result from that economic
relationship;
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.
- 124 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
28. Other significant accounting policies and accounting estimates - (cont’d)
28.2 Hedging (cont’d)
Measurement of derivative financial instruments
Derivative financial instruments are recognized initially at fair value; attributable transaction costs are
recognized in profit or loss as incurred.
Cash-flow hedges
Subsequent to the initial recognition, changes in the fair value of derivatives used to hedge cash flows are
recognized through other comprehensive income directly in a hedging reserve, with respect to the part of the
hedge that is effective. Regarding the portion of the hedge that is not effective, the changes in fair value are
recognized in profit and loss. The amount accumulated in the hedging reserve is reclassified to profit and
loss in the period in which the hedged cash flows impact profit or loss and is presented in the same line item
in the statement of income as the hedged item.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or
exercised, the hedge accounting is discontinued. The cumulative gain or loss previously recognized in a
hedging reserve through other comprehensive income remains in the reserve until the forecasted transaction
occurs or is no longer expected to occur. If the forecasted transaction is no longer expected to occur, the
cumulative gain or loss in respect of the hedging instrument in the hedging reserve is reclassified to profit
or loss.
Economic hedge
Hedge accounting is not applied with respect to derivative instruments used to economically hedge financial
assets and liabilities denominated in foreign currency or CPI linked. Changes in the fair value of such
derivatives are recognized in profit or loss as gain (loss) from changes in fair value.
Derivatives that are not used for hedging
Changes in the fair value of derivatives that are not used for hedging are recognized in profit or loss as gain
(loss) from changes in fair value.
28.3 Securitization of assets
Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account
receivables.
28.4 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.
- 125 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
28. Other significant accounting policies and accounting estimates - (cont’d)
28.3 Segment reporting - (cont’d)
Two or more operating segments may be aggregated into a single operating segment if the segments have
similar economic characteristics and are same or similar in respect of the nature of each product and service,
the nature of production processes, the type or class of customers for the products and services, the methods
used to distribute the products or provide the services, and the nature of the regulatory environment.
Inter-segment revenues are measured on the basis of actual transaction price for such transactions for
segment reporting. Segment accounting policies are consistent with those for the consolidated financial
statements.
28.4 Profit distributions to shareholders
Dividends which are approved after the balance sheet date are not recognized as a liability at the balance
sheet date but are disclosed in the notes separately.
29. Changes in significant accounting policies and accounting estimates
29.1 Changes in significant accounting policies
There are no significant changes in accounting policies in the reporting period.
29.2 Changes in significant accounting estimates
There are no significant changes in accounting estimates in the reporting period.
- 126 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
30. Significant accounting estimates and judgments
The preparation of the financial statements requires management to make estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates as well as underlying assumptions and
uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
Notes V.34, Note VIII, Note IX and Note XIII contain information about the assumptions and their risk
factors relating to post-employment benefits – defined benefit plans, fair value of financial instruments and
share-based payments. Other key sources of estimation uncertainty are as follows:
30.1 Expected credit loss of trade receivables
As described in Note III.11, trade receivables are reviewed at each balance sheet date to determine whether
credit risk on a receivable has increased significantly since initial recognition, lifetime expected losses is
accrued for impairment provision. Evidence of impairment includes observable data that comes to the
attention of the Group about loss events such as a significant decline in the solvency of an individual debtor
or the portfolio of debtors, and significant changes in the financial condition that have an adverse effect on
the debtor. If there is objective evidence of a recovery in the value of receivables which can be related
objectively to an event occurring after the impairment was recognized, the previously recognized impairment
loss is reversed.
30.2 Provision for impairment of inventories
As described in Note III.12, the net realisable value of inventories is under management’s regular review,
and as a result, provision for impairment of inventories is recognized for the excess of inventories’ carrying
amounts over their net realisable value. When making estimates of net realisable value, the Group takes into
consideration the use of inventories held on hand and other information available to form the underlying
assumptions, including the inventories’ market prices and the Group’s historical operating costs. The actual
selling price, the costs of completion and the costs necessary to make the sale and relevant taxes may vary
based on the changes in market conditions and product saleability, manufacturing technology and the actual
use of the inventories, resulting in the changes in provision for impairment of inventories. The net profit or
loss may then be affected in the period when the impairment of inventories is adjusted.
- 127 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
30. Significant accounting estimates and judgments - (cont’d)
30.3 Impairment of assets other than inventories and financial assets
As described in Note III.20, if impairment indication exists, assets other than inventories and financial assets
are assessed at balance sheet date to determine whether the carrying amount exceeds the recoverable amount
of the assets. If any such case exists, an impairment loss is recognized.
The recoverable amount of an asset (or an asset group) is the greater of its fair value less costs to sell and its
present value of expected future cash flows. Since a market price of the asset (or the asset group) cannot be
obtained reliably, the fair value of the asset cannot be estimated reliably, the recoverable amount is calculated
based on the present value of estimated future cash flows. In assessing the present value of estimated future
cash flows, significant judgements are exercised over the asset’s production, selling price, related operating
expenses and discount rate to calculate the present value. All relevant materials which can be obtained are
used for estimation of the recoverable amount, including the estimation of the production, selling price and
related operating expenses based on reasonable and supportable assumptions.
30.4 Depreciation and amortisation of assets such as fixed assets and intangible assets
As described in Note III.15 and III.18, assets such as fixed assets and intangible assets are depreciated and
amortised over their useful lives after taking into account residual value. The estimated useful lives of the
assets are regularly reviewed to determine the depreciation and amortisation costs charged in each reporting
period. The useful lives of the assets are determined based on historical experience of similar assets and the
estimated technical changes. If there have been significant changes in the factors used to determine the
depreciation or amortisation, the rate of depreciation or amortisation is revised prospectively.
30.5 Income taxes and deferred income tax
The Company and Group companies are assessed for income tax purposes in a large number of jurisdictions
and, therefore, Company management is required to use considerable judgment in determining the total
provision for taxes and attribution of income.
When assessing whether there will be sufficient future taxable profits available against which the deductible
temporary differences can be utilised, the Group recognizes deferred tax assets to the extent that it is probable
that future taxable profits will be available against which the deductible temporary differences can be utilised,
using tax rates that would apply in the period when the asset would be utilised. In determining the amount
of deferred tax assets, the Group makes reasonable judgements and estimates about the timing and amount
of taxable profits to be utilised in the following periods, and of the tax rates applicable in the future according
to the existing tax policies and other relevant regulations. If the actual timing and amount of future taxable
profits or the actual applicable tax rates differ from the estimates made by management, the differences affect
the amount of tax expenses.
- 128 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)
30. Significant accounting estimates and judgments - (cont’d)
30.6 Contingent liabilities
When assessing the possible outcomes of legal claims filed against the Company and its investee companies,
the company positions are based on the opinions of their legal advisors. These assessments by the legal
advisors are based on their professional judgment, considering the stage of the proceedings and the legal
experience accumulated regarding the various matters. Since the results of the claims will be determined by
the courts, the outcomes could be different from the assessments.
In addition to the said claims, the Group is exposed to unasserted claims, inter alia, where there is doubt as
to interpretation of the agreement and/or legal provision and/or the manner of their implementation. This
exposure is brought to the Company’s attention in several ways, among others, by means of contacts made
to Company personnel. In assessing the risk deriving from the unasserted claims, the Company relies on
internal assessments by the parties dealing with these matters and by management, who weigh assessment
of the prospects of a claim being filed, and the chances of its success, if filed. The assessment is based on
experience gained with respect to the filing of claims and the analysis of the details of each claim. By their
nature, in view of the preliminary stage of the clarification of the legal claim, the actual outcome could be
different from the assessment made before the claim was filed.
30.7 Employee benefits
The Group’s liabilities for long-term post-employment and other benefits are calculated according to the
estimated future amount of the benefit to which the employee will be entitled in consideration for his services
during the current period and prior periods. The benefit is stated at present value net of the fair value of the
plan’s assets, based on actuarial assumptions. Changes in the actuarial assumptions could lead to material
changes in the book value of the liabilities and in the operating results.
30.8 Derivative financial instruments
The Group enters into transactions in derivative financial instruments for the purpose of hedging risks related
to foreign currency and inflationary risks. The derivatives are recorded at their fair value. The fair value of
derivative financial instruments is based on quotes from financial institutions. The reasonableness of the
quotes is examined by discounting the future cash flows, based on the terms and length of the period to
maturity of each contract, while using market interest rates of a similar instrument as of the measurement
date. Changes in the assumptions and the calculation model could lead to material changes in the fair value
of the assets and liabilities and in the results.
- 129 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation
1. Main types of taxes and corresponding tax rates
The income tax rate in China is 25% (2021: 25%). The subsidiaries outside of China are assessed based on
the tax laws in the country of their residence.
Set forth below are the tax rates outside China relevant to the subsidiaries with significant sales to third party:
Name of subsidiary Location 2022
ADAMA agriculture solutions Ltd. Israel 23.0%
ADAMA Makhteshim Ltd. Israel 7.5%
ADAMA Agan Ltd. Israel 7.5%
ADAMA Brasil S/A Brazil 34.0%
Makhteshim Agan of North America Inc. U.S. 24.7%
ADAMA India Private Ltd India 25.2%
ADAMA Deutschland GmbH Germany 32.5%
Control Solutions Inc. U.S. 24.0%
Adama Australia Pty Ltd Australia 30.0%
ADAMA France S.A.S France 27.5%
ADAMA Northern Europe B.V. Netherlands 25.0%
ADAMA Italia S.R.L. Italy 27.9%
Alligare Inc. U.S. 27.5%
The VAT rate of the Group's subsidiaries is in the range between 2.5% to 27%.
- 130 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(1) Benefits from High-Tech Certificate
The Company, was jointly approved as new and high-tech enterprise, by the Hubei Provincial Department
of Science and Technology, Department of Finance of Hubei Province and Hubei Provincial Office of the
State Administration of Taxation. The applicable income tax rate from 2020 to 2022 is 15%.
Adama Anpon (Jiangsu) Ltd. (Formally know as Jiangsu Anpon Electrochemical Co. Ltd, hereinafter -
“Anpon"), a subsidiary of the Company, was jointly approved as new and high-tech enterprise, by the Jiangsu
Provincial Department of Science and Technology, Department of Finance of Jiangsu Province and Jiangsu
Provincial Office of the State Administration of Taxation. The applicable income tax rate from 2021 to 2023
is 15%.
(2) Benefits under the Law for the Encouragement of Capital Investments
Industrial enterprises of subsidiaries in Israel were granted “Approved Enterprise” or “Beneficiary Enterprise”
status under the Israeli Law for the Encouragement of Capital Investments, 1959. Should a dividend be
distributed from the retained earning produced in which the company was considered as an “Approved
Enterprise” or “Beneficiary Enterprise”, the company may be liable for tax at the time of distribution.
On December 29, 2010 the Knesset approved the Economic Policy Law for 2011-2012, which includes an
amendment to the Law for the Encouragement of Capital Investments - 1959 (hereinafter - “the
Amendment”). The Amendment is effective from January 1, 2011 and its provisions apply to preferred
income derived or accrued in 2011 and thereafter by a preferred company, per the definition of these terms
in the Amendment.
The Amendment provides that only companies in Development Area A will be entitled to the grants track
and that they will be entitled to receive benefits under this track and under the tax benefits track at the same
time. The tax benefit tracks under the law constitute a preferred enterprise and a special preferred enterprise,
which mainly provide a uniform and reduced tax rate for all the company’s income entitled to benefits. Tax
rates on preferred income as from 2017 tax year are as follows: 7.5% for Development Area A and 16% for
the rest of the country.
The amendment further determined that no tax shall apply to dividend distributed out of preferred income to
Israel resident company shareholder.
As of the date of the report, all subsidiaries in Israel adopted the amendment and the deferred taxes were
calculated accordingly.
- 131 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(2) Benefits under the Law for the Encouragement of Capital Investments - (cont’d)
On December 21, 2016 the Knesset plenum passed the second and third reading of the Economic Efficiency
Law (Legislative Amendments for Achieving Budget Objectives in the Years 2017 and 2018) – 2016 in
which the Encouragement Law was also amended (hereinafter: “the Amendment”). The Amendment is
effective 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.
Preferred technological income that meets the conditions required in the law, will be subject to a reduced
corporate tax rate of 12%, and if the preferred technological enterprise is located in Development Area A to
a tax rate of 7.5%. Special preferred technological enterprise will be subject to a reduced corporate tax rate
of 6% regardless of the development area in which the enterprise is located.
In addition, as part of the amendment, a temporary provision was enacted, valid until June 30, 2021, which
settles tax benefits continuation on income that is eligible to the Preferred Enterprise tax benefits as at June
30, 2016. The Israelis subsidiaries implemented and acted accordance with the temporary provision.
On May 16, 2017 the Knesset Finance Committee approved Encouragement of Capital Investment
Regulations (Preferred Technological Income and Capital Gain of Technological Enterprise) – 2017
(hereinafter: “the Regulations”), which provides rules for applying the “preferred technological enterprise”
and “special preferred technological enterprise” tax benefit tracks including the Nexus formula that provides
the mechanism for allocating the technological income eligible for the benefits.
Solutions, through a subsidiary, filed an application to the Israeli Tax Authority for settling its eligibility to
the tax benefits in accordance with the amendment to the Encouragement Law.
On November 15, 2021 the Economic Efficiency Law (Legislative Amendments for the 2021 and 2022
Budget Years) – 2021 was published as well as a Temporary Order to the Law for the Encouragement of
Capital Investments – 1959 (hereinafter: “the temporary order”), which offers a reduced tax rate arrangement
to companies that received an exemption from corporate tax under the aforesaid law. The temporary order
provided that companies that choose to apply the temporary order, which is effective until November 14,
2022, will be entitled to a reduced tax rate on the “release” of exempt profits (hereinafter: “the beneficiary
corporate tax rate”). The release of exempt profits makes it possible to distribute them at a reduced rate of
corporate tax at the company level based on the rate of the profits being distributed pursuant to the
conditions set forth in the Amendment.
- 132 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(2) Benefits under the Law for the Encouragement of Capital Investments - (cont’d)
The reduced corporate tax rate will be determined according to the rate of exempt profits the company
chooses to release from its entire exempt profits, and will be between 40% and 70% of the corporate tax rate
that would have applied to the revenue in the year it was produced if it had not been exempt, but in any event
no less than 6%. Furthermore, a company that chooses to release its exempt profits and pay a beneficiary
corporate tax rate will be required to invest in its enterprise, within a period of 5 years beginning from the
tax year it elected, an amount calculated according to a formula provided in the temporary order (30% of the
exempt income multiplied by the corporate tax rate and multiplied by the release rate). The investment will
be made in productive assets (with the exclusion of buildings), research and development in Israel and
salaries to new employees of the enterprise. Failure to comply with this condition will require the company
to pay additional corporate tax.
In addition, an amendment was made to Section 74 of the Law for the Encouragement of Capital Investments
– 1959 with respect to identifying the sources of dividend distributions as from August 15, 2021.
The amendment requires companies to allocate the sources of dividends between exempt profits and other
profits, pro-rata, as well as the imposition of corporate tax and withholding tax on dividends accordingly. It
is noted that the amendment to the section may contradict section 72a of the Law, which provides for stability
in the benefits awarded to companies that chose this track.
As of this date, Solutions is examining the effect of the amendment on its financial position and financial
results. Solutions has not yet decided whether and how much accumulated profits will be “released”. Thus,
in these financial statements the aforementioned amendment had no effect on Solutions current and deferred
tax balances.
(3) Benefits under the Law for the Encouragement of Industry (Taxes), 1969
Under the Israeli Law for the Encouragement of Industry (Taxes) 1969, Solutions is an Industrial Holding
Company and some of the subsidiaries in Israel are “Industrial Companies”. The main benefit under this law
is the filing of consolidated income tax returns (Solutions files a consolidated income tax return with Adama
Makhteshim and submission of a consolidated report together with Adama Agan as of 2017), amortization
of know-how over 8 years and higher rates of depreciation.
- 133 -
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
June 30 December 31
2022 2021
Cash on hand 1,138 1,196
Deposits in banks 3,189,604 5,758,284
Other cash and bank 105,794 59,355
3,296,536 5,818,835
Including cash and bank placed outside China 2,288,205 4,935,072
As at June 30, 2022 restricted cash and bank balances was 105,794 thousand RMB (as at December 31, 2021
59,355 thousand RMB) mainly including deposits that guarantee bank acceptance drafts.
2. Financial assets held for trading
June 30 December 31
2022 2021
Bank deposits 1,604 1,479
1,604 1,479
3. Derivative financial assets
June 30 December 31
2022 2021
Economic hedge 470,858 198,775
Accounting hedge derivatives 73,973 44,541
544,831 243,316
4. Bills Receivable
June 30 December 31
2022 2021
Post-dated checks receivable 95,020 79,996
Bank acceptance draft 1,772 1,996
96,792 81,992
All bills receivables are due within 1 year.
- 134 -
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
June 30, 2022
Provision for expected
Book value credit losses
Percentage Carrying
Amount (%) Amount Percentage (%) amount
Account receivables assessed 690,591 7 224,141 32 466,450
individually for impairment
Account receivables assessed
collectively for impairment 9,714,771 93 89,845 1 9,624,926
10,405,362 100 313,986 3 10,091,376
December 31, 2021
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 290,224 3 143,827 50 146,397
Account receivables assessed
collectively for impairment 8,300,941 97 84,845 1 8,216,096
8,591,165 100 228,672 3 8,362,493
b. Aging analysis
June 30, 2022
Within 1 year (inclusive) 9,955,745
Over 1 year but within 2 years 207,872
Over 2 years but within 3 years 46,289
Over 3 years but within 4 years 55,859
Over 4 years but within 5 years 40,356
Over 5 years 99,241
10,405,362
- 135 -
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
location:
Geographical location A:
Account receivables in geographical location A are grouped based on similar credit risk:
June 30, 2022
Provision for expected
Book value credit loss Percentage (%)
Credit group A 1,445,412 4,862 0.34
Credit group B 725,931 6,282 0.9
Credit group C 162,058 7,070 4.4
Credit group D 33,034 689 2.1
2,366,435 18,903 0.8
Geographical location B:
Account receivables in geographical location B are grouped based on aging analysis:
June 30, 2022
Provision for expected
Book value credit loss Percentage (%)
Accounts receivable that are not overdue 612,084 5,438 0.89
Debts overdue less than 60 days 24,013 720 3
Debts overdue less than 180 days but
more than 60 days 30,378 3,105 10
Debts overdue above 180 days 15,656 6,262 40
Legal Debtors 39,190 39,190 100
721,321 54,715 7.6
Other geographical locations:
June 30, 2022
Provision for expected
Book value credit loss Percentage (%)
Other account receivables assessed
collectively for impairment 6,627,015 16,227 0.24
- 136 -
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 credit loss (credit
occurred) losses has occurred) Total
January 1, 2022 36,094 192,578 228,672
Addition (write back) during the period, net 2,266 62,437 64,703
Write-off during the period (17) 6,025 6,008
Exchange rate effect 2,231 12,372 14,603
Balance as of June 30, 2022 40,574 273,412 313,986
d. Five largest accounts receivable at June 30, 2022:
Allowance of expected
Proportion of Accounts credit losses (credit losses
Name Closing balance receivable (%) has occurred)
Customer 1 272,724 3 -
Customer 2 131,906 1 -
Customer 3 127,490 1 -
Customer 4 84,926 1 14,000
Customer 5 70,785 1 -
Total 687,831 7 14,000
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
different 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
Company 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 the report
date, the Securitization agreement was approved up to October 31, 2022.
- 137 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
The maximum scope of the securitization is adjusted for the seasonal changes in the scope of the Company’s
activities, as follows: during the months March through June the maximum scope of the securitization is
$350 million (as of June 30, 2022 – 2,349 million RMB), during the months July through September the
maximum scope of the securitization is $300 million (as of June 30, 2022 – 2,013 million RMB) and during
the months October through February the maximum scope of the securitization is $250 million (as of as of
June 30, 2022 – 1,678 million RMB). In addition the company has uncommitted facility of $50 million (as
of as of June 30, 2022 - 336 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
receivable and its anticipated repayment date. In the month following acquisition of the debt, the Acquiring
Company 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 anticipated 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
agreement covering the product, such as: a failure to supply the correct product, a defect in the product,
delinquency 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
receivables 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 June 30, 2022, Solutions was in compliance with the
financial covenants.
The accounting treatment of sale of the trade receivables included as part of the Securitization Program is:
The Company is not controlling the Acquiring Company, therefore the Acquiring Company is not
consolidated in the financial statements.
The Company continues to recognize the trade receivables included in the Securitization Program based on
the extent of its continuing involvement therein.
In respect of the part of the trade receivables included in the securitization Program with respect to which
cash proceeds were not yet received, however regarding which the Company has transferred the credit risk,
a subordinated note is recorded.
The continuing involvement and subordinated note recorded in the balance sheet as part of the “other
receivables” line item.
- 138 -
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”.
The Company’s subsidiary in Brazil (hereinafter - “the subsidiary”) entered into a securitization agreement
with Rabobank Brazil for sale of trade receivables. Under the agreement, the subsidiary will sell its trade
receivables to a securitization structure (hereinafter - “the entity”) that was formed for this purpose where
the subsidiary has subordinate rights of 5% of the entity's capital.
As at the report date, the subsidiary agreement was approved up to September 24, 2022. The maximum
securitization scope as of June 30, 2022 is BRL 500 million (RMB 641 million).
On the date of the sale of the trade 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 of 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 entitiy based on the extent of its
continuing involvement therein (5% right of recourse) and also recognizes an associated liability in the same
amount.
During the fourth quarter of 2021, the subsidiary has entered into an additional securitization agreement with
Itau Bank and Farm investments, for sale of trade 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 the report date, the subsidiary agreement was approved up to November 10, 2025. The agreement has
a maximum scope of BRL 306 million (RMB 392 million).
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 the those account receivables sold.
In both agreements, the subsidiary handles the collection of receivables included in the securitization for the
entities.
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 to profit and loss under financing
expenses.
- 139 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
6. Accounts Receivable – (cont'd)
f. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
June 30 December 31
2022 2021
Accounts receivables derecognized 2,899,622 2,962,111
Continuing involvement 115,637 117,995
Subordinated note in respect of trade receivables 397,147 388,631
Liability in respect of trade receivables 191,302 98,836
Six months ended June 30
2022 2021
Loss in respect of sale of trade receivables 70,123 15,403
7. Receivables financing
June 30 December 31
2022 2021
Bank acceptance draft 78,634 120,157
78,634 120,157
As at June 30, 2022, bank acceptance endorsed but not yet due amounts to 769,413 thousands RMB.
8. Prepayments
(1) The aging analysis of prepayments is as follows:
June 30 December 31
2022 2021
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 375,453 97 368,565 97
Over 1 year but within 2 years (inclusive) 12,005 3 8,850 2
Over 2 years but within 3 years (inclusive) 609 - 429 -
Over 3 years 1,075 - 1,944 1
389,142 100 379,788 100
(2) Total of five largest prepayments by debtor at the end of the period:
Percentage of prepayments
Amount (%)
June 30, 2022 104,220 27
- 140 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
9. Other Receivables
(1) Other receivables by nature
June 30 December 31
2022 2021
Dividends receivable 1,578 1,599
Others 850,830 690,340
852,408 691,939
a. Others breakdown by categories
June 30 December 31
2022 2021
Trade receivables as part of securitization transactions
not yet eliminated 115,637 117,995
Subordinated note in respect of trade receivables 397,147 388,631
Financial institutions 32,805 -
Receivables in respect of disposal of fixed assets 9,313 19,940
Other 340,974 174,624
Sub total 895,876 701,190
Provision for expected credit losses - other receivables (45,046) (10,850)
850,830 690,340
b. Other receivables by aging
June 30
2022
Within 1 year (inclusive) 855,008
Over 1 year but within 2 years 1,763
Over 2 years but within 3 years 18,201
Over 3 years but within 4 years 2,040
Over 4 years but within 5 years 268
Over 5 years 18,596
895,876
- 141 -
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)
(2) Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Six months ended
June 30, 2022
Balance as of January 1 2022, 10,850
Addition during the period 32,817
Written back during the period (395)
Write-off during the period (3)
Exchange rate effect 1,777
Balance as of June 30, 2022 45,046
(3) Five largest other receivables at June 30, 2022:
Allowance of
Proportion of other expected credit
Name Closing balance receivables (%) losses
Party 1 397,147 44.3 -
Party 2 91,671 10.2 -
Party 3 32,805 3.7 -
Party 4 16,658 1.9 -
Party 5 13,581 1.5 -
Total 551,862 61.6 -
9. Inventories
(1) Inventories by category:
June 30, 2022
Provision for
Book value impairment Carrying amount
Raw materials 6,042,396 26,401 6,015,995
Work in progress 677,248 3,812 673,436
Finished goods 8,593,829 191,818 8,402,011
Others 486,561 9,372 477,189
15,800,034 231,403 15,568,631
December 31, 2021
Provision for
Book value impairment Carrying amount
Raw materials 4,217,049 26,514 4,190,535
Work in progress 766,650 16,647 750,003
Finished goods 6,545,536 139,307 6,406,229
Others 415,047 11,652 403,395
11,944,282 194,120 11,750,162
- 142 -
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 six months ended June 30, 2022
January 1, Reversal or
2022 Provision write-off Other June 30, 2022
Raw material 26,514 18,474 (19,864) 1,277 26,401
Work in progress 16,647 743 (13,615) 37 3,812
Finished goods 139,307 90,662 (48,889) 10,738 191,818
Others 11,652 687 (3,377) 410 9,372
194,120 110,566 (85,745) 12,462 231,403
10. Other Current Assets
June 30 December 31
2022 2021
Deductible VAT 642,921 615,406
Current tax assets 202,723 158,440
Short term investments 179,349 121,629
Others 57,965 42,978
1,082,958 938,453
11. Long-Term Receivables
June 30 December 31
2022 2021
Long term account receivables from sale of goods 58,309 56,234
58,309 56,234
- 143 -
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:
June 30 December 31
2022 2021
Investments in Joint ventures 20,508 15,335
20,508 15,335
(2) Movements of long-term equity investments for the period are as follows:
Other Declared Change in
January 1, Investment Comprehensive distribution of consolidation Balance at the
2022 income income cash dividend scope end of the period
Joint
ventures
Investee A 2,227 234 123 - - 2,584
Investee B 13,108 4,472 1,754 (1,410) - 17,924
Sub-total 15,335 4,706 1,877 (1,410) - 20,508
13. Other equity investments
December 31, Dividend received
June 30, 2022 2021 during 2022
Investment A 84,720 84,720 -
Investment B 69,228 65,765 -
Investment C 1,718 1,633 -
155,666 152,118 -
Other equity investments are non-core businesses that are intended to be held in the foreseeable future.
- 144 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
14. Fixed assets
Land & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2022 3,825,676 15,410,751 120,698 375,442 19,732,567
Purchases 32,716 100,947 20,216 25,982 179,861
Transfer from construction in progress 170,267 674,646 - 1,801 846,714
Reclassification to construction in progress - (252,941) - - (252,941)
Disposals (182,047) (737,979) (6,924) (5,788) (932,738)
Currency translation adjustment 82,534 532,908 10,928 14,518 640,888
Balance as at June 30, 2022 3,929,146 15,728,332 144,918 411,955 20,214,351
Accumulated depreciation
Balance as at January 1, 2022 (1,734,850) (9,079,083) (66,602) (299,595) (11,180,130)
Charge for the period (66,004) (406,740) (9,596) (17,135) (499,475)
Disposals 141,128 584,657 6,105 5,431 737,321
Reclassification to construction in progress - 21,992 - - 21,992
Currency translation adjustment (43,770) (331,341) (4,675) (11,576) (391,362)
Balance as at June 30, 2022 (1,703,496) (9,210,515) (74,768) (322,875) (11,311,654)
Provision for impairment
Balance as at January 1, 2022 (155,563) (347,068) (646) (770) (504,047)
Charge for the period - (1,435) (9) (178) (1,622)
Disposals 40,887 153,343 - 14 194,244
Transfer from construction in progress - (3,808) - - (3,808)
Currency translation adjustment (338) (3,798) - (12) (4,148)
Balance as at June 30, 2022 (115,014) (202,766) (655) (946) (319,381)
Carrying amounts
As at June 30, 2022 2,110,636 6,315,051 69,495 88,134 8,583,316
As at January 1, 2022 1,935,263 5,984,599 53,450 75,077 8,048,389
The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.
- 145 -
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
June 30 December 31
2022 2021
Provision for Provision for
Book value impairment Carrying amount Book value impairment Carrying amount
2,681,642 (30,907) 2,650,735 2,164,394 (20,994) 2,143,400
(1) Details and Movements of major construction projects in progress during period ended June 30, 2022
Actual
Including: Currency Transfer cost to Project
January Interest translation to fixed June 30, budget progress
Budget 1, 2022 Additions capitalized differences assets 2022 (%) (%) Source of funds
Project A 1,509,420 332,722 17,738 1,195 - (341,764) 8,696 86% 86% Bank loan
Project B 765,314 215,571 137,657 1,995 - - 353,228 46% 46% Bank loan
Project C 512,550 174,554 87,383 - 12,298 - 274,235 54% 54% Internal finance
Project D 477,805 243,367 133,042 14,200 17,543 - 393,952 82% 82% Internal finance
Project E 297,852 105,346 155,621 8,289 11,080 - 272,047 91% 91% Internal finance
Project F 194,604 124,659 65,750 - - (21,394) 169,015 87% 87% Internal finance
Project G 155,033 21,920 57,603 2,268 3,202 - 82,725 96% 96% Internal finance
Project H 140,939 100,256 29,881 - 6,341 - 136,478 97% 97% Internal finance
Project I 138,000 99,615 4,505 - - (104,120) - 100% 100% Internal finance
Project J 96,401 73,244 - - - (73,244) - 100% 100% Internal finance
Project K 82,247 81,131 2,723 - - (83,854) - 100% 100% Internal finance
Under re- -
Project L evalution 22,016 251,132 - - - 273,148 - - Internal finance
* As of June 30, 2022 Project B and Project F are include impairment of RMB 14 million and 17 million , respectively.
- 146 -
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 & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2022 493,032 44,259 258,111 4,188 799,590
Additions 59,029 13 38,095 - 97,137
Disposals (28,166) (298) (49,016) (298) (77,778)
Currency translation adjustment 16,553 2,281 10,959 184 29,977
Balance as at June 30, 2022 540,448 46,255 258,149 4,074 848,926
Accumulated depreciation
Balance as at January 1, 2022 (201,150) (17,393) (115,455) (1,677) (335,675)
Charge for the period (40,757) (551) (39,035) (557) (80,900)
Disposals 21,284 298 44,835 298 66,715
Currency translation adjustment (7,603) (898) (4,859) (77) (13,437)
Balance as at June 30, 2022 (228,226) (18,544) (114,514) (2,013) (363,297)
Provision for impairment
Balance as at January 1, 2022 - - - - -
Balance as at June 30, 2022 - - - - -
Carrying amounts
As at June 30, 2022 312,222 27,711 143,635 2,061 485,629
As at January 1, 2022 291,882 26,866 142,656 2,511 463,915
- 147 -
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,
Product on Purchase of tradename and Customers
registration Products Software trademarks relations Land use rights (1) Others(2) Total
Costs
Balance as at January 1, 2022 10,793,847 3,828,805 998,213 726,947 538,239 498,177 536,691 17,920,919
Purchases 183,431 - 59,561 568 - 7,135 9,643 260,338
Currency translation adjustment 557,774 201,599 49,229 37,901 22,444 1,862 17,577 888,386
Transfer from construction in progress - - - - - - - -
Disposal (2,819) - - - - (950) - (3,769)
Balance as at June 30, 2022 11,532,233 4,030,404 1,107,003 765,416 560,683 506,224 563,911 19,065,874
Accumulated amortization
Balance as at January 1, 2022 (8,214,576) (2,649,128) (596,197) (457,479) (249,305) (82,720) (215,008) (12,464,413)
Charge for the period (253,627) (108,562) (39,489) (11,835) (19,046) (5,151) (15,677) (453,387)
Currency translation adjustment (438,424) (143,344) (30,515) (24,192) (12,737) (1,474) (10,503) (661,189)
Disposal 2,670 - - - - 340 - 3,010
Balance as at June 30, 2022 (8,903,957) (2,901,034) (666,201) (493,506) (281,088) (89,005) (241,188) (13,575,979)
Provision for impairment
Balance as at January 1, 2022 (82,278) (47,690) - - - - (250) (130,218)
Charge for the period - (4,193) - - - - - (4,193)
Currency translation adjustment (4,333) (2,661) - - - - - (6,994)
Balance as at June 30, 2022 (86,611) (54,544) - - - - (250) (141,405)
Carrying amount
As at June 30, 2022 2,541,665 1,074,826 440,802 271,910 279,595 417,219 322,473 5,348,490
As at January 1, 2022 2,496,993 2,496,993 402,016 269,468 288,934 415,457 321,433 5,326,288
(1) Include land parcel in Israel that has not yet been registered in the name of the Group subsidiaries at the Land Registry Office, mostly due to registration procedures or technical problems.
(2) Mainly non-compete and exclusivity agreements.
- 148 -
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
activity included in the Intermediates and ingredients segment. At the end of the year, or more frequently whether
indicators for impairment exists, the Group estimates the recoverable amount of each CGU for which goodwill
has been allocated to using the DCF model based on the Group business plan. The discount rate used in the DCF
model is determined based on the company's cost of equity and cost of debt, taking into account the comprehensive
risk factors.
As of December 31, 2021 the fair value of the cash generating units to which goodwill has been allocated to
exceeds its carrying amount.
Change Currency
January 1, during the translation Balance at
2022 year (*) adjustment June 30, 2022
Book value 4,409,599 - 225,482 4,635,081
Impairment provision - - - -
Carrying amount 4,409,599 - 225,482 4,635,081
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
June 30 December 31
2022 2021
Deductible Deductible
temporary Deferred tax temporary Deferred tax
differences assets differences assets
Deferred tax assets
Deferred tax assets in respect of carry
forward losses 1,236,551 180,164 1,378,984 197,354
Deferred tax assets in respect of
inventories 1,930,617 547,559 1,117,094 294,043
Deferred tax assets in respect of
employee benefits 857,197 136,406 1,009,387 150,742
Other deferred tax asset 1,738,906 442,036 1,375,455 331,258
5,763,271 1,306,165 4,880,920 973,397
- 149 -
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
June 30 December 31
2022 2021
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Deferred tax liabilities
Deferred tax liabilities in respect of
fixed assets and intangible assets 3,388,980 625,513 3,392,987 630,460
3,388,980 625,513 3,392,987 630,460
(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting
June 30 December 31
2022 2021
The offset The offset
amount of Deferred tax amount of Deferred tax
deferred tax assets or deferred tax assets or
assets and liabilities assets and liabilities after
liabilities after offset liabilities offset
Presented as:
Deferred tax assets 233,068 1,073,097 250,322 723,075
Deferred tax liabilities 233,068 392,445 250,322 380,138
(4) Details of unrecognized deferred tax assets
June 30 December 31
2022 2021
Deductible temporary differences 446,259 496,972
Deductible losses carry forward 352,466 308,812
798,725 805,784
(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets
June 30 December 31
2022 2021
2022 1,663 1,596
2023 2,151 2,068
2024 20,067 19,063
2025 9,255 5,751
2026 6,141 5,834
After 2027 313,189 274,500
352,466 308,812
- 150 -
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
June 30 December 31
2022 2021
Judicial deposits 142,349 115,649
Assets related to securitization 75,792 74,169
Advances in respect of non-current assets 80,928 165,555
Others 193,401 149,252
492,470 504,625
21. Short-Term Loans
Short-term loans by category:
June 30 December 31
2022 2021
Unsecured loans 1,635,446 874,755
1,635,446 874,755
22. Derivative financial liabilities
June 30 December 31
2022 2021
Economic hedge 524,502 167,987
Accounting hedge derivatives 111,141 8,219
635,643 176,206
- 151 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
23. Bills Payables
June 30 December 31
2022 2021
Post-dated checks payables 537,013 371,467
Note payables draft 164,751 121,909
701,764 493,376
As at June 30, 2022, none of the bills payable are overdue.
24. Accounts payable
June 30 December 31
2022 2021
Within 1 year (including 1 year) 7,709,098 6,238,230
1-2 years (including 2 years) 91,456 30,707
2-3 years (including 3 years) 7,212 3,181
Over 3 years 18,717 22,045
7,826,483 6,294,163
There are no significant accounts payables aging over one year.
25. Contract liabilities
June 30 December 31
2022 2021
Discount for customers 1,139,256 763,964
Advances from customers 303,342 617,347
1,442,598 1,381,311
26. Employee Benefits Payable
June 30 December 31
2022 2021
Short-term employee benefits 619,193 852,806
Post-employment benefits 36,558 44,260
Share based payment (See note XIII) 148,402 112,176
Other benefits within one year 209,811 205,562
1,013,964 1,214,804
Current maturities 27,189 33,175
1,041,153 1,247,979
- 152 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
27. Taxes Payable
June 30 December 31
2022 2021
Corporate income tax 211,763 174,705
VAT 219,790 153,336
Others 27,402 40,641
458,955 368,682
28. Other Payables
June 30 December 31
2022 2021
Dividends payables 750 750
Other payables 1,757,481 1,341,438
1,758,231 1,342,188
(1) Other payables
June 30 December 31
2022 2021
Accrued expenses 747,705 621,024
Payables in respect of intangible assets 118,792 115,987
Financial institutions 111,933 6,127
Liability in respect of securitization transactions 191,302 98,836
Hold-back payment due to acquistions 254,000 254,000
Others 333,749 245,464
1,757,481 1,341,438
As at June 30, 2022, the Group did not have any significant other payables overdue.
29. Non-Current Liabilities Due Within One Year
Non-current liabilities due within one year by category are as follows:
June 30 December 31
2022 2021
Long-term loans due within one year 965,629 1,099,643
Lease liabilities due within one year 135,085 139,162
Debentures payable due within one year 536,959 556,949
1,637,673 1,795,754
- 153 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
30. Other Current Liabilities
June 30 December 31
2022 2021
Put options to holders of non-controlling interests 176,637 170,422
Provision in respect of returns 187,530 196,831
Provision in respect of claims 37,907 45,293
Others 349 363
402,423 412,909
31. Long-Term Loans
Long-term loans by category
June 30 December 31
2022 Interest range 2021 Interest range
Long term loans
Guaranteed loans 410,154 1.1%-4.89% 415,887 3.95% - 4.1%
Unsecured loans 4,847,653 3.75%-4.05% 4,182,668 1.36% - 4.05%
Total Long term loans 5,257,807 4,598,555
Less:
Long term loans from banks due within 1 year (965,629) (1,099,643)
Long term loans, net 4,292,178 3,498,912
* For more detailes regarding the guaranteed loans – see note X. related parties and related parties
transactions.
For the maturity analysis, see note VIII.C - Liquidity risk.
32. Debentures Payable
June 30 December 31
2022 2021
Debentures Series B 8,054,231 8,354,080
Current maturities (536,959) (556,949)
7,517,272 7,797,131
June 30
2022
First year (current maturities) 536,959
Second year 536,959
Third year 536,959
Fourth year 536,959
Fifth year and thereafter 5,906,395
8,054,231
- 154 -
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 June 30, 2022:
Balance at Amortization CPI and Repayment Currency Balance at
Maturity Face value Face value Issuance Maturity Issuance January 1, of discounts exchange during the translation June 30,
period in RMB NIS date period amount 2022 or premium rate effect period adjustment 2022
Debentures November
Series B 2,673,640 1,650,000 4.12.2006 2020-2036 3,043,742 3,502,632 117 (303,233) - 178,486 3,378,002
Debentures November
Series B 843,846 513,527 16.1.2012 2020-2036 842,579 1,046,335 4,980 (90,871) - 53,501 1,013,945
Debentures November
Series B 995,516 600,000 7.1.2013 2020-2036 1,120,339 1,296,951 2,173 (112,211) - 66,173 1,253,086
Debentures November
Series B 832,778 533,330 1.2.2015 2020-2036 1,047,439 1,215,910 (1,345) (105,214) - 61,909 1,171,260
Debentures November
Series B 418,172 266,665 1-6.2015 2020-2036 556,941 662,990 (3,674) (57,346) - 33,647 635,617
Debentures November
Series B 497,989 246,499 5.5.2020 2020-2036 692,896 629,262 (4,340) (54,503) - 31,902 602,321
8,354,080 (2,089) (723,378) - 425,618 8,054,231
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.
- 155 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
33. Lease liabilities
June 30 December 31
2022 Interest range 2021 Interest range
Lease liabilities 502,658 1.3%-7.4% 501,248 1.3%-6.1%
Less: Lease liabilities due within one year (135,085) (139,162)
Long term lease liabilities, net 367,573 362,086
34. Long-Term Employee Benefits Payable
Post-employment benefit plans – defined benefit plan and early retirement
June 30 December 31
2022 2021
Total present value of obligation 581,961 687,759
Less: fair value of plan's assets (72,826) (86,282)
Net liability related to Post-employment benefits 509,135 601,477
Termination benefits 78,126 91,912
Total recognized liability for defined benefit plan, net (1) 587,261 693,389
Share based payment (See XIII) 12,067 5,674
Other long-term employee benefits 197,137 123,826
Total long-term employee benefits, net 796,465 822,889
Including: Long-term employee benefits payable due within one year 27,189 30,531
769,276 792,358
(1) Movement in the net liability and assets in respect of defined benefit plans, early retirement and
their components
Defined benefit
obligation and early Fair value of plan's
retirement assets Total
2022 2021 2022 2021 2022 2021
Balance as at January 1, 2022 779,671 693,631 86,282 92,634 693,389 600,997
Expense/income recognized
in profit and loss:
Current service cost 12,707 7,595 - - 12,707 7,595
Interest costs 6,682 9,495 648 1,113 6,034 8,382
Losses (gains) on curtailments and settlements 5,478 9,369 - - 5,478 9,369
Changes in exchange rates (68,417) (9,436) (9,611) (1,204) (58,806) (8,232)
Actuarial gain (losses) due to early retirement (77) (10,298) - - (77) (10,298)
Included in other comprehensive income:
Actuarial gain (losses) as a result of changes in
actuarial assumptions (72,633) 9,121 (3,474) 1,540 (69,159) 7,581
Foreign currency translation differences in respect of
foreign operations 31,967 (6,859) 3,743 (967) 28,224 (5,892)
Additional movements:
Benefits paid (35,291) (47,174) (6,104) (6,825) (29,187) (40,349)
Classification from short term - 99,974 - - - 99,974
Contributions paid by the Group - - 1,342 1,870 (1,342) (1,870)
Balance as at June 30, 2022 660,087 755,418 72,826 88,161 587,261 667,257
- 156 -
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
June 30 December 31
2022 2021
Discount rate (%)* 0.4%-3% (0.8%)-3%
* 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 June 30, 2022
Increase of 1% Decrease of 1%
Change in defined benefit obligation (48,248) 57,855
35. Provisions
June 30 December 31
2022 2021
Liabilities in respect of contingencies* 121,204 104,220
Provision in respect of site restoration 60,557 62,370
Long-term liability in respect of business combinations 17,872 17,411
Other 2,436 2,429
202,069 186,430
* Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of
resources had been reliably estimated.
- 157 -
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
June 30 December 31
2022 2021
Put options to holders of non- controlling interests 1,458,496 1,341,362
Long term loans – others 335,570 318,786
1,794,066 1,660,148
Current maturities - -
1,794,066 1,660,148
37. Share Capital
Balance at Issuance of new Balance at
January 1, 2022 shares Buyback of shares June 30, 2022
Share capital 2,329,812 - - 2,329,812
38. Capital Reserve
Balance at Additions during Reductions during Balance at
January 1, 2022 the period the period June 30, 2022
Share premiums 12,606,562 - - 12,606,562
Other capital reserve 370,609 - - 370,609
12,977,171 - - 12,977,171
- 158 -
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:
January 1, Before tax to profit Income tax Net-of-tax Balance at June
2022 amount or loss expenses amount 30, 2022
Items that will not be
reclassified to profit or loss 18,671 69,160 - 7,864 61,296 79,967
Re-measurement of changes
in liabilities under defined
benefit plans (35,861) 69,160 - 7,864 61,296 25,435
Changes in fair value of
other equity investment 54,532 - - - - 54,532
Items that may be
reclassified to profit or loss (451,055) 721,617 5,246 (10,568) 726,939 275,884
Effective portion of gain or
loss of cash flow hedge 31,955 (66,185) 5,246 (10,568) (60,863) (28,908)
Translation difference of
foreign financial statements (483,010) 788,802 - - 787,802 304,792
(432,384) 790,777 5,246 (2,704) 788,235 355,851
40. Surplus reserve
Additions Reductions
Balance at during the during the Balance at
January 1, 2022 period period June 30, 2022
Statutory surplus reserve 236,348 - - 236,348
Discretional surplus reserve 3,814 - - 3,814
240,162 - - 240,162
- 159 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
41. Retained Earnings
2022 2021
Retained earnings as at January 1 5,940,465 5,862,702
Net profits for the period attributable to shareholders of the Company 732,098 367,036
Dividends to non-controlling Interest (39,074) (35,904)
Dividend to the shareholders of the company (Note 1 & 2) (18,638) (37,277)
Retained earnings as at June 30 6,614,851 6,156,557
Note 1:
On March 29, 2021, after obtaining the approval of the 31st meeting of the Company's 8th Board of Directors,
the Company declared RMB 0.16 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 37,277 thousands RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital. The proposal was approved by the 2020 Annual General Meeting of the
Company held on May 21, 2021 and was fully paid during the third quarter of 2021.
Note 2:
On March 29, 2022, after obtaining the approval of the 9th meeting of the Company's 9th Board of Directors,
the Company declared RMB 0.08 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 18,638 thousand RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital.
- 160 -
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
Six months ended June 30 Six months ended June 30
2022 2021
Income Cost of sales * Income Cost of sales
Principal activities 18,761,356 13,802,108 15,037,841 10,694,295
Other businesses 34,472 20,647 25,939 12,415
18,795,828 13,822,755 15,063,780 10,706,710
* According to the Q&A issued by the Ministry of Finance during the year, the transportation expenses
incurred before the transfer of control over goods to customers in order to fulfil the contract does not
constitute a separate performance obligation and shall be regarded as the cost to fulfil the contract.
Therefore, starting from 2021, the transportation expenses are recorded as cost of sales.
43. Taxes and Surcharges
Six months ended June 30
2022 2021
Tax on turnover 17,666 12,693
Others 38,171 46,314
55,837 59,007
44. Selling and Distribution Expenses
Six months ended June 30
2022 2021
Salaries and related expense 1,015,829 885,153
Depreciation and amortization 481,460 536,516
Transportation and Commissions * 19,056 481,263
Advertising and sales promotion 173,457 154,157
Travel expenses 62,794 38,180
Warehouse expenses 75,378 83,456
Registration 64,983 62,030
Professional services 53,811 51,735
Insurance 56,054 48,945
Others 156,267 165,001
2,159,089 2,506,436
* See note 42 above.
- 161 -
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
Six months ended June 30
2022 2021
Salaries and related expenses 375,272 265,783
Idleness expenses - 96,638
Professional services 56,828 47,805
Depreciation and amortization 48,168 41,558
IT systems 58,466 49,294
Office rent, maintenance and expenses 24,348 19,315
Other 79,231 51,414
642,313 571,807
46. Research and development expenses
Six months ended June 30
2022 2021
Salaries and related expenses 127,574 109,731
Field trial 16,475 18,063
Professional services 17,350 22,169
Depreciation and amortization 42,400 22,194
Materials 38,803 27,714
Office rent, maintenance and expenses 6,077 4,946
Other 26,059 22,123
274,738 226,940
47. Financial expenses (incomes), net
Six months ended June 30
2022 2021
Interest expenses on debentures and loans 341,633 333,733
CPI expense (income) in respect of debentures 236,815 118,106
Loss in respect of sale of trade receivables 51,063 15,403
Interest expense in respect of post-employment benefits and early
retirement, net 7,000 12,967
Revaluation of put option, net 101,901 24,449
Interest income from customers, banks and others (53,960) (31,363)
Exchange rate differences, net (1,153,323) (45,084)
Interest expense on lease liabilities 11,962 12,364
Others 18,685 8,215
(438,224) 448,790
- 162 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
48. Investment income, net
Six months ended June 30
2022 2021
Income from long-term equity investments accounted for using
the equity method 4,706 3,243
4,706 3,243
See note 49 below
49. Gain (loss) from Changes in Fair Value
Six months ended June 30
2022 2021
Gain (loss) from changes in fair value of derivative financial
Instruments * (1,330,194) (136,462)
Others (11,523) (3,607)
(1,341,717) (140,069)
* According to ASBE 22 - Financial Instruments Recognition and Measurement, starting from 2022 the
Group recorded the gain or loss from the disposal of derivative instruments in the “Gain(loss) from Changes
in Fair Value”. Before 2022, the Group recorded the abovementioned gain of loss in the “Investment income,
net”. The Company reclassified the “Gain(loss) from Changes in Fair Value” and the “Investment income,
net” in the corresponding period in 2021. Such change did not impact the operating results or net assets of
the reporting period.
50. Credit impairment reversal (losses)
Six months ended June 30
2022 2021
Bills receivable and accounts receivable (64,703) 9,937
Other receivables (32,422) 114
(97,125) 10,051
51. Asset impairment reversal (losses)
Six months ended June 30
2022 2021
Inventories (79,445) (29,403)
Fixed assets (1,623) -
Other (4,278) -
(85,346) (29,403)
- 163 -
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
Six months ended June 30 Included in
non-recurring
2022 2021 items
Gain from disposal of fixed assets 60,572 15,654 60,572
Loss from disposal of intangible assets (274) (855) (274)
60,298 14,799 60,298
53. Income Tax Expenses
Six months ended June 30
2022 2021
Current year 431,750 204,125
Deferred tax expenses (income) (306,884) (120,113)
Adjustments for previous years, net (23,590) (32,931)
101,276 51,081
(1) Reconciliation between income tax expense and accounting profit is as follows:
Six months ended June 30
2022 2021
Profit before taxes 833,374 420,314
Statutory tax in china 25% 25%
Tax calculated according to statutory tax in china 208,344 105,079
Tax benefits from Approved Enterprises (98,005) (48,293)
Difference between measurement basis of income for financial
statement and for tax purposes 3,085 (5,629)
Taxable income and temporary differences at other tax rate (58,494) (32,963)
Taxes in respect of prior years (23,590) (32,931)
Utilization of tax losses prior years for which deferred taxes were
not created (31,440) -
Temporary differences and losses in the report year for which
deferred taxes were not created 34,798 9,293
Non-deductible expenses and other differences 21,569 22,144
Neutralization of tax calculated in respect of the Company’s share
in results of equity accounted investees (1,599) (1,051)
Effect of change in tax rate in respect of deferred taxes 13,979 15,399
Creation and reversal of deferred taxes for tax losses and temporary
differences from previous years 32,629 20,033
Income tax expenses 101,276 51,081
54. Other comprehensive income
Details of the Other comprehensive income are set out in Note V.39
- 164 -
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 six
months ended June 30
Category Presentation accounts 2022 2021
Government grants related to income Non-Operating income 15,623 10,899
Government grants related to assets Fixed assets, Intangible assets 9,211 9,731
56. Notes to items in the cash flow statements
(1) Cash received relating to other operating activities
Six months ended June 30
2022 2021
Derivatives transactions - 19,943
Financial institutions 231,142 265,280
Interest income 30,761 24,203
Government subsidies 15,623 10,922
Others 26,562 43,060
304,088 363,408
(2) Cash paid relating to other operating activities
Six months ended June 30
2022 2021
Transportation, Commissions and Warehouse 75,076 507,772
Advertising and sales promotion 181,788 146,744
Professional services 122,886 117,566
Financial institutions 116,107 211,211
IT and Communication 125,187 87,785
Registration and Field trials 86,410 79,988
Derivatives transactions 471,332 168,475
Travel 64,767 35,094
Insurance 37,655 41,736
Others 453,295 267,722
1,734,503 1,664,093
(3) Cash received relating to other investing activities
Six months ended June 30
2022 2021
Investment grant - 6,754
- 6,754
- 165 -
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
Six months ended June 30
2022 2021
Increase in short and long term investments 64,719 85,108
64,719 85,108
(5) Cash received from other financing activities
Six months ended June 30
2022 2021
Cash received in respect of hedging transactions on debentures - 396,096
Deposit for issuing bills payables 11,012 16,212
11,012 412,308
(6) Cash paid relating to other financing activities
Six months ended June 30
2022 2021
Repayment of lease liability 84,743 85,595
Payment in respect of hedging transactions on debentures 802,237 -
Repayment of loan from others 153 171,770
Deposit for issuing bills payable 57,447 5,986
944,580 263,351
- 166 -
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:
Six months ended June 30
2022 2021
Net profit 732,098 369,233
Add: Impairment provisions for assets 85,346 29,403
Credit impairment losses (gain) 97,125 (10,051)
Depreciation of fixed assets and investment property 499,714 365,261
Depreciation of right-of-use asset 80,900 79,685
Amortization of intangible asset 453,387 502,745
Gains on disposal of fixed assets, intangible assets, and other long-
term assets, net (60,298) (14,799)
Losses (gains) from changes in fair value 1,341,717 140,069
Financial expenses (342,658) 340,716
Investment income, net (4,706) (3,243)
Increase in deferred tax assets, net (318,979) (159,673)
Increase in deferred tax liabilities, net 12,095 39,560
Increase in inventories, net (3,360,343) (748,037)
Increase in operating receivables, net (2,842,961) (556,167)
Increase in operating payables, net 2,248,418 1,069,229
Others 33,284 47,362
Net cash flow from operating activities (1,345,861) 1,491,293
b. Net increase (decrease) in cash and cash equivalents
Six months ended June 30
2022 2021
Closing balance of cash 3,190,742 4,615,208
Less: Opening balance of cash 5,759,480 3,835,071
Increase in cash and cash equivalents (2,568,738) 780,137
- 167 -
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
June 30 December 31
2022 2021
Cash on hand 1,138 1,196
Bank deposits available on demand without restrictions 3,189,604 5,758,284
3,190,742 5,759,480
58. Assets with Restricted Ownership or Right of Use
June 30
2022 Reason
Cash 105,794 Pledged
Other non-current assets 142,349 Guarantees
248,143
- 168 -
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 June 30, 2022
Foreign currency at
the end of the RMB at the end of
period Exchange rate the period
Cash and bank balances
EUR 35,705 6.977 249,114
BRL 188,176 1.281 241,053
ILS 97,315 1.918 186,651
USD 15,855 6.711 106,401
PLN 97,977 1.497 146,671
AUD 7,644 4.613 35,262
ZAR 166,385 0.417 69,382
ARS 1,916,478 0.054 103,490
RUB 164,096 0.131 21,497
GBP 5,740 8.125 46,638
TRY 37,204 0.403 14,993
CAD 4,325 5.191 22,450
UAH 171,859 0.229 39,356
Other 221,227
Total 1,504,185
Bills and Accounts receivable
EUR 156,523 6.977 1,092,061
BRL 1,385,571 1.281 1,774,917
ILS 68,922 1.918 132,193
USD 40,676 6.711 272,977
COP 50,439,527 0.002 100,879
CAD 23,051 5.191 119,658
RUB 1,120,804 0.131 146,825
TRY 689,725 0.403 277,959
ZAR 170,618 0.417 71,148
THB 377,675 0.190 71,758
HUF 8,186,417 0.018 147,355
RON 214,973 1.415 304,187
Other 190,577
Total 4,702,494
Other receivables
EUR 57,447 6.977 400,805
ILS 41,010 1.918 78,658
BRL 10,473 1.281 13,416
Other 260,885
Total 753,764
Other current assets
ILS 118,423 1.918 227,135
BRL 109,006 1.281 139,637
EUR 9,381 6.977 65,452
Other 85,191
Total 517,415
- 169 -
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 June 30, 2022
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Long-term receivables
BRL 45,518 1.281 58,309
Total 58,309
Other non-current assets
BRL 130,607 1.281 167,308
Other 18,784
Total 186,092
Short-term loans
EUR 71,672 6.977 500,053
INR 2,549,937 0.085 216,745
Other 43,700
Total 760,498
Bills and Accounts payable
ILS 778,356 1.918 1,492,886
EUR 78,598 6.977 548,378
BRL 159,135 1.281 203,852
USD 17,909 6.711 120,184
Other 155,538
Total 2,520,838
Other payables
ILS 65,403 1.918 125,442
BRL 73,427 1.281 94,060
EUR 178 6.977 1,242
ILS CPI 17,717 1.918 33,982
Other 89,049
TOTAL 343,775
Contract liabilities
EUR 54,148 6.977 377,791
BRL 72,269 1.281 92,577
CAD 37,185 5.191 193,027
UAH 174,379 0.229 39,933
Other 93,530
Total 796,858
- 170 -
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 June 30, 2022
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Non-current liabilities due within one year
ILS CPI 291,865 1.918 559,798
EUR 29,938 6.977 208,879
Other 44,088
Total 812,765
Other current liabilities
EUR 6,048 6.977 42,195
ILS 1,410 1.918 2,705
Other 1,280
Total 46,180
Long-term loan
EUR 95,154 6.977 663,892
Total 663,892
Debentures payable
ILS CPI 3,919,328 1.918 7,517,271
Total 7,517,271
Provision and Long-term payables
BRL 78,787 1.281 100,926
EUR 372 6.977 2,597
Other 822,972
Total 926,495
Other non-current liabilities
USD 3,414 6.711 22,913
EUR 6,101 6.977 42,564
ILS CPI 15,298 1.918 29,342
ILS 6,113 1.918 11,725
Other 101,920
Total 208,464
- 171 -
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; USD
Registration
ADAMA Deutschland GmbH Germany Distribution; Registration USD
ADAMA India Private Ltd. India Manufacturing INR
Distribution; Registration
Makhteshim Agan of North United States Manufacturing; Distribution; USD
America Inc. Registration
Control Solutions Inc. United States Manufacturing; Distribution; USD
Registration
ADAMA Agan Ltd. Israel Manufacturing; Distribution; USD
Registration
ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution; USD
Registration
ADAMA Australia Pty Australia Distribution AUD
Limited
ADAMA Italia SRL Italy Distribution USD
ADAMA Northern Netherlands Distribution USD
Europe B.V.
Alligare LLC United States Manufacturing; Distribution; USD
Registration
The functional currency of the subsidiaries above is the main currency that represent the principal economic
environment.
VI. Change in consolidation Scope
There is no change of consolidation scope during the period.
- 172 -
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
Principal place of obtaining the
Name of the Subsidiary business Business nature Direct Indirect subsidiary
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
ADAM 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
June 30 December 31
2022 2021
Joint ventures 20,508 15,335
Associates - -
20,508 15,335
3. Summarized financial information of joint ventures and associates
June 30, 2022 and six June 30, 2021 and six
months then ended months then ended
Joint ventures:
Total carrying amount 20,508 15,847
The Group's share of the following items:
Net profit 4,706 3,244
Other comprehensive income 1,877 239
Total comprehensive income 6,583 3,483
Associates:
Total carrying amount - -
The Group's share of the following items:
Net profit - -
Other comprehensive income - -
Total comprehensive income
- -
- 173 -
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
(hereinafter - “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
disclosure 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
disciplined 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,
agriculturists, agents and agrochemical manufacturers who purchase the products either as finished goods or
as intermediate 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.
In April 2021, a two-years agreement with an international insurance company was renewed. The amount of
the insurance coverage was fixed at $150 million cumulative per year. The indemnification is limited to about
90% of the debt.
The Group’s exposure to credit risk is influenced mainly by the personal characterization of each customer,
and by the demographic characterization of the customer’s base, including the risk of insolvency of the
industry and geographic region in which the customer operates. No single customer accounted for greater than
5% of total accounts receivable.
- 174 -
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
examination 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 equipment)
against execution of the sales, the value of which is examined on a current ongoing basis by the Company. 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 South America on an ongoing basis.
The Group recognizes an impairment provision, which reflects its assessment regarding the credit risk of
account 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:
June 30, 2022
Past due by less than 90 days 557,888
Past due by more than 90 days 524,732
1,082,620
- 175 -
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
observable 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 9,605,534 thousand relate to
category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 799,828
thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has credit
risk exposures for other receivables amounted to RMB 45,046 thousand related to category of "Lifetime
expected 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
operations, is invested in short-term interest-bearing investment channels.
- 176 -
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 June 30, 2022
Third- Fifth year Contractual Carrying
First year Second year Fourth year and above Cash flow amount
Non-derivative financial
liabilities
Short-term loans 1,646,897 - - - 1,646,897 1,635,446
Bills payables 701,764 - - - 701,764 701,764
Accounts payables 7,826,483 - - - 7,826,483 7,826,483
Other payables 1,758,231 - - - 1,758,231 1,758,231
Other current liabilities 176,637 - - - 176,637 176,637
Debentures payable 710,395 924,126 1,765,300 7,731,862 11,131,683 8,054,231
Long-term loans 1,099,779 1,831,179 1,517,491 1,236,226 5,684,675 5,257,807
Long-term payables 1,079 6,720 13,126 78,919 99,844 97,737
Lease Liabilities 157,127 118,879 128,651 251,443 656,100 502,658
Long-term liability in respect of
business combinations - 1,007 34,229 2,567 37,803 17,872
Other non-current liabilities - 321,860 1,687,677 71,632 2,081,169 1,794,066
Derivative financial liabilities
Foreign currency derivatives 635,643 - - - 635,643 635,643
14,714,035 3,203,771 5,146,474 9,372,649 32,436,929 28,458,575
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
instruments. 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
liabilities 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
purchases, which may be affected by exchange rate fluctuations.
- 177 -
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
subsequent 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:
June 30, 2022
Total assets Total liabilities
In US Dollar 2,055,380 2,148,120
In Euro 1,992,295 2,418,712
In Brazilian real 2,394,640 390,489
CPI-linked NIS - 8,129,816
In New Israeli Shekel 624,634 1,643,335
Denominated in or linked to other foreign currency 4,428,621 1,028,883
11,495,570 15,759,335
(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:
June 30, 2022
Currency/ Currency/ Average USD RMB
linkage linkage expiration thousands thousands
receivable payable date Par value Par value Fair value
Forward foreign currency USD EUR 17/09/2022 332,326 2,118,809 (26,882)
Contracts and call options USD PLN 26/07/2022 38,608 246,152 438
USD BRL 05/09/2022 477,937 3,047,180 71,102
USD GBP 20/07/2022 20,956 133,612 9,862
USD ZAR 31/07/2022 22,436 143,047 17,698
ILS USD 09/08/2022 1,555,247 9,915,791 (325,001)
USD OTHER 2,724,057 17,367,770 102,402
CPI forward contracts CPI ILS 09/04/2022 700,000 4,462,990 61,672
- 178 -
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, 2021
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.
June 30, 2022
Decrease of 5% Increase of 5%
Equity Profit (loss) Equity Profit (loss)
New Israeli shekel 57,166 21,876 (8,062) 23,842
British pound 7,810 7,810 (7,810) (7,810)
Euro (51,173) (55,280) 51,173 55,280
Brazilian real (41,833) 5,361 23,301 (14,269)
Polish zloty 1,641 1,641 (1,649) (1,649)
South African Rand (482) (482) (196) (196)
Chinese Yuan Renminbi 3,933 (12,310) (30,333) 15,188
CPI-linked NIS 505,895 505,895 (505,895) (505,895)
(2) Interest rate risks
The Group has exposure to changes in the variable interest rate. The Group has different assets and
liabilities in different countries which bear interest according to the economic environment in each country.
Most of the loans, other than the debentures, bear Dollar and Euro Libor interest. As a result, most of the
variable interest exposure of those loans is to the Libor interest. Due to market conditions, the variable
interest rates on cash are relatively low.
The Company prepares a quarterly summary of exposure to a change in the Libor interest rate. As at the
approval date of the financial statements, the Company had not hedged this exposure.
- 179 -
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:
June 30, 2022
Fixed-rate instruments – unlinked to the CPI
Financial assets
Other non-current assets 51,611
Financial liabilities
Long-term loans (1) 3,902,399
Long-term payables 24,799
Other non-current liabilities 335,570
(4,211,157)
Fixed-rate instruments – linked to the CPI
Financial liabilities
Debentures payable (1) 8,054,230
Variable-rate instruments
Financial assets
Cash at banks 446,207
Financial assets at fair value through profit or loss 1,604
Other current assets 179,349
Other non-current assets 14,322
Financial liabilities
Short-term loans and credit from banks 1,635,447
Long-term loans (1) 1,355,408
Long-term payables 68,295
(2,417,668)
(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
exchange rates, remained fixed.
Profit or loss Equity
Increase in Decrease in Increase in Decrease in
interest interest interest interest
As at June 30, 2022 1,802 (1,825) 1,802 (1,825)
180
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:
June 30, 2022
Carrying amount Fair value
Financial assets
Other non-current assets (a – Level 2) 87,758 122,434
Financial liabilities
Long-term loans and others (b – Level 2) 6,196,217 5,973,567
Debentures (c – Level 1) 8,054,230 9,930,540
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:
June 30, 2022
%
U.S. dollar interest 2.36% - 4.02%
Chinese Yuan Renminbi 0.99% - 2.22%
Euro (0.51%) - 2.16%
181
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
instruments 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.
June 30
2022
Forward contracts and options used for hedging the cash flow (Level 2) (37,168)
Forward contracts and options used for economic hedging (Level 2) (53,644)
Other equity investment (Level 2) 155,666
Receivables financing (Level 2) 78,634
Other non-current assets (Level 2) 89,148
Other (Level 2) 1,604
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.
- 182 -
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
agrochemicals,
Syngenta Shanghai, fertilizers and GM
Group China 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
- 183 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties
Name of other related parties Related party relationship
Beijing Jiamao Real Estate Co. Ltd. Common control
Bluestar (Beijing )ChemicalMachinery co.,LTD ( consolidated) Common control
Bluestar Engineering co.,LTD . Common control
Changsha Huaxing Construction Supervision Co., Ltd. Common control
Chem China Asset Management co.,LTD .(Headquarter) Common control
Chem China Information Center Co.,Ltd. Common control
China Bluestar Chengrand Research Institute Chemical Industry Common control
China National Bluestar (Group) Co. Ltd. Common control
China National Chemical Agrochemical Corporation Common control
China National Chemical Information Center Co. LTD Common control
Elkem Silicones Brasil LTDA Common control
Hangzhou (Torch)XidoumenMembraneIndustry co.,LTD Common control
Jiangsu Huaihe Chemical Co. Ltd. Common control
Jiangsu Ruixiang Chemical co., LTD . Common control
Jiangsu Yangnong Chemical co., LTD . Common control
Jiangsu Yangnong Chemical Group Co. Ltd. Common control
Jiangsu Youjia Plant Protection Co., Ltd. Common control
Jiangsu Youshi Chemical Co., Ltd. Common control
Jiangsu Yushi Chemical Co., LTD Common control
Jingzhou Sanonda Holdings Co.,Ltd. Common control
(MAP) Sinochem Modern Agriculture Co.LTD Xinjiang Branch Common control
OOO Syngenta Common control
PT Syngenta Indonesia Common control
PT Syngenta Seed Indonesia Common control
Shandong Dacheng Agrochemical Company Limited Common control
Shandong Dacheng Biochemical Co., Ltd. Common control
Shenyang Chemical Research Institute Co. LTD Common control
Shenyang Shenhua Institute Testing Technology Co. Ltd. Common control
Shenyang Chemical Institute Testing Technology Co. Ltd Common control
Sinochem (Hainan) Agroecology Co., LTD Common control
Sinochem Agricultural Ecological Technology (Hubei) Co., Ltd. Common control
Sinochem Agriculture (Xinjiang) Biotechnology Co., Ltd. Common control
Manas Branch
Sinochem Agriculture Co., Ltd Common control
Sinochem Agro Co. Ltd Common control
Sinochem Crop Protection Products Co. LTD Common control
Sinochem Fertilizer Company Limited Common control
Sinochem Fertilizer Company Limited Fujian Branch Common control
Sinochem Fertilizer Company Limited Guangxi Branch Common control
Sinochem Fertilizer Company Limited Hebei Branch Common control
Sinochem Fertilizer Company Limited Hubei Branch Common control
Sinochem Fertilizer Company Limited Jiangsu Branch Common control
Sinochem Fertilizer Company Limited Jilin Branch Common control
Sinochem Fertilizer Company Limited Northwest Branch Common control
- 184 -
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 Shandong Branch Common control
Sinochem Information Technology Co. LTD Common control
Sinochem Innovation (Beijing) Technology Research Institute Co., Ltd. Common control
Sinochem International Crop Care (Overseas) Pte. Ltd. Common control
Sinochem Lantian Fluorine Materials Co. Ltd. Common control
Sinochem Modern Agriculture (Guangxi) Co. LTD Common control
Sinochem Modern Agriculture (Hunan) Co. LTD Common control
Sinochem Modern Agriculture (Hunan) Co. LTD Common control
Sinochem Modern Agriculture (Jiangsu) Co. LTD Common control
Sinochem Modern Agriculture (Shandong) Co. LTD Common control
Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control
Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control
Sinochem Modern Agriculture Anhui Co. LTD Common control
Sinochem Modern Agriculture Sichuan Co. LTD Common control
Sinochem Modern Agriculture Sichuan Co. LTD Common control
Sinochem Shandong Fertilizer Co. Ltd. Common control
Syngenta (China) Investment Company Ltd Common control
Syngenta Agro AG Common control
Syngenta Agro GmbH Common control
Syngenta Agro S.A. Common control
Syngenta Agro SRL Common control
Syngenta Australia Pty Limited Common control
Syngenta Canada Inc. Common control
Syngenta coml agr ltda Common control
Syngenta Crop Protection AG Common control
Syngenta Crop Protection B.V. Common control
Syngenta Crop Protection LLC Common control
Syngenta Crop Protection Ltd Common control
Syngenta Crop Protection S.A. Common control
Syngenta Crop Protection, LLC Common control
Syngenta Czech s.r.o. Common control
Syngenta Espana S.A Common control
Syngenta France S.A.S. Common control
Syngenta Group Company Limited Common control
Syngenta Group(NL) B.V. Common control
Syngenta Hellas AEBE Common control
Syngenta India Limited Common control
Syngenta Italia S.p.A Common control
Syngenta Korea Ltd. Common control
Syngenta Nantong Crop Protection Company Limited Common control
Syngenta Polska Sp.z.o.o. Common control
Syngenta protecao cultivos ltda Common control
Syngenta S.A(Chile) Common control
- 185 -
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 S.A. (Panama) Common control
SYNGENTA SEEDS LTDA Common control
Syngenta Slovakia s.r.o Common control
Syngenta South Africa (Pty) Ltd. Common control
SyngentaTarimSanayiveTicaretA.S. Common control
Zhonglan International Chemical Co. Ltd Common control
Zhonglan LianhaiDesignInstitute co.,LTD .( consolidated) Common control
Jiangsu Huifeng Agrochemical Co. Ltd. Minority shareholder and its subsidiary
Jiangsu Huifeng Biological Agriculture Co., Ltd Minority shareholder and its subsidiary
Nongyi Net (Yangling) e-commerce Co., Ltd. Minority shareholder and its subsidiary
Shanghai focus supply chain Co., Ltd Minority shareholder and its subsidiary
Shanghai nengjianyuan Biological Agriculture Co., Ltd Minority shareholder and its subsidiary
- 186 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. (1) Transactions and balances with related parties
Six months ended June 30
Type of purchase Related Party Relationship 2022 2021
Summary of purchase of goods/services:
Purchase of goods/services received Common control under
Sinochem Holdings 1,567,313 875,206
Minority shareholder and 3,232 -
its subsidiary
Purchase of fixed assets and other assets Common control under 8,474 42,917
Sinochem Holdings
Lease expenses Common control under 117 -
Sinochem Holdings
Minority shareholder and 410 -
its subsidiary
Summary of Sales of goods:
Sale of goods/ Service rendered Common control under
Sinochem Holdings 987,560 550,260
Joint venture 51,757 45,515
Minority shareholder and
its subsidiary 44,658 -
(2) Guarantees
The Group as the guarantee receiver
Amount of Inception date Maturity date Guaranty
Guarantee provider guaranteed loan of guaranty of guaranty completed (Y / N)
Parent company 338,000 21/04/2021 20/04/2028 N
72,154 01/06/2021 31/05/2028 N
* During the reporting period, the Company paid a guarantee fee amounting to 227 thousand RMB
(2021 1-6: nil) to the parent company.
(1) Remuneration of key management personnel and directors
Periods ended June 30
2022 2021
Remuneration of key management personnel and directors 52,977 34,203
- 187 -
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)
(2) Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
2022 2021
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Common control under 338,272 - 200,954 -
Sinochem Holdings
Joint venture 25,074 - 23,150 -
Minority shareholder and 40,618 - 32,953 -
its subsidiary
Other receivables Common control under 1,007 - 83 -
Sinochem Holdings
Other Non-Current assets Common control under 84 - 84 -
Sinochem Holdings
Prepayments Common control under 10,813 - 33,069 -
Sinochem Holdings
Payable Items
June 30 December 31
Items Related Party Relationship 2022 2021
Trade payables Common control under Sinochem 619,837 489,859
Holdings
Minority shareholder and its subsidiary 3,096 355
Other payables Common control under Sinochem 21,636 30,006
Holdings
Minority shareholder and its subsidiary 207 -
Other non-current Common control under Sinochem 335,570 -
liabilities due within Holdings
one year *
Other non-current Common control under Sinochem 335,570 318,786
liabilities * Holdings
* The liabilities are loans from a related party, the interest expenses for the six months ended June 30, 2022
is 3,033 thousand RMB (six months ended June 30, 2021: 2,865 thousand RMB).
Following the approvals from Solutions Board of Directors and the Audit Committee dated October 25,
2021, on October 27, 2021, Solutions, through one of its subsidiaries, entered into a committed credit
facilities agreements in the aggregate amount of USD 100 million on market terms with Syngenta Group, or
any of its subsidiaries. As of 30 June 2022, the total amount of USD 100 million has been fully utilized
(RMB 671 million).
- 188 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
6. Transactions and balances with related parties - (cont'd)
(3) Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil thousand RMB (31.12.21:
358,881 thousand RMB) Interest income of bank deposit for the current period was 90 thousand RMB
(amount for six months ended June 30, 2021 was 810 thousand RMB).
The closing balance of a loan received from ChemChina Finance corporation was nil (31.12.20: nil). Interest
expenses in the current period was nil (six months ended June 30, 2021 was 1,471 thousand RMB).
The closing balance of bank deposit in Sinochem Finance Corporation was 179,469 thousand RMB
(31.12.21: nil) Interest income of bank deposit for the current period was 976 thousand RMB (amount for
six months ended June 30, 2021 was nil).
- 189 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies
1. Significant commitments
June 30 December 31
2022 2021
Investment in Fixed assets 549,096 623,156
2. Commitments and Contingent Liabilities
On December 10, 2018 the 9th meeting of the 8th session of the Board of Directors of the Company approved
the extension of the engagement in annual liability insurance policies for directors, supervisors and senior
officers of the Company (“D&O Liability Insurance) as originally approved by the 22nd meeting of the 7th
session of Board of Directors and the 4th Interim Shareholders Meeting in 2017, and authorized the management
to annually deal with all matters relating to renewal/extension of the customary D&O Liability Insurance
policies, with up to 20% flexibility in the relevant terms of the original policy. On December 26, 2018 the 3rd
Interim Shareholders Meeting approved the above resolution. The current D&O Liability Insurance was
renewed for an additional one-year term commencing November 15, 2021.
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
applicable environmental laws and attempts to prevent or minimize the environmental risks that could occur as
a result of its activities. To the best of the Company’s knowledge, at the balance sheet date, there are no material
environmental issues relating to the Company, there are no material administrative penalties or investigations
related to environment, health and safety imposed or initiated by regulatory authorities, and none of the material
permits and licenses regarding environmental issues required for the Company’s day to day operations have
been revoked.
Other
For two of the Company’s production sites in China that have been in the process of relocation, Jingzhou site
in Jingzhou, Hubei Province completed its relocation and upgrade program and is now at high level of opertion
and Anpon old site in Huai’An, Jiangsu Province is in the process of relocating to the new site. As part of the
relocation process, the Company executed in previous years a reduction plan to reduce the number of employees
during the relocation period.
Claims against subsidiaries
In the ordinary course of business, legal claims were filed against subsidiaries, including claims for patent
infringement. 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.
- 190 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies - (cont’d)
2. Commitments and Contingent Liabilities - (cont’d)
Claims against subsidiaries (cont’d)
On October 20, 2020, a claim and a motion for its approval as a class action (the “Motion”) was filed against
Monsanto Company and Bayer AG (the “Manufacturers”) as well as against ADAMA Agan Ltd., a wholly-
owned subsidiary of the Company, with respect to an herbicide bearing the brand name Roundup, which is
produced by the Manufacturers and distributed in Israel in small quantities by the subsidiary. The applicants
argue that the product allegedly poses a risk to users or those who have been exposed to it. The Company and
the subsidiary reject the allegations against the subsidiary in the Motion and in the statement of claim. As the
Company is an authorized distributor of the Manufactures, which 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, the Motion and claim are not expected to have any non-negligible effect on the
Company’s financial results.
In June 2021, a lawsuit was filed against a subsidiary of the Company, alleging two patents owned by a large
competitor of the Company, have been infringed by such subsidiary. Among the claims, the plaintiff seeks
preliminary and permanent injunctions to prevent the subsidiary from manufacturing, using or commercializing
any product that infringes the plaintiff’s patents, and seeks actual damages and profits loss. The said preliminary
injunctions were granted by the court in favor of the plaintiff. The subsidiary has filed appeals against such
preliminary injunctions, which one was rejected and the second is still pending. Prior to such claims, and on-
going, the subsidiary filed several lawsuits against the said plaintiff seeking to declare the said patents are invalid
and the subsidiary does not infringe them. All these lawsuits are pending as of the approval date of the financial
statements. At this stage, the claims filed by the plaintiff are not expected to have a material effect on the
Company.
Various immaterial claims have been filed against Group companies in courts throughout the world, in
immaterial 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 liability damages, for which the Company has adequate insurance coverage, such that the Company’s
exposure in respect thereof is limited to the deductible amount or the amount thereof does not exceed the
deductible amount.
XII. Events subsequent to the balance sheet date
With respect to the current events in Ukraine, at this stage, the Company cannot definitively estimate the
potential impact of these events on the financial performance of the Company. The Company is continuously
reviewing the situation on the ground and assessing the potential risks involved, and will provide a further
update in due course.
- 191 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIII. Share-based Payments
1. In February 2019, the remuneration committee and Solutions Board of Directors (as well as the General
Meeting 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 compensation plan (hereinafter - "the 2019 Plan"), out of which 75,814,897 phantom warrants were
granted at the grant date of February 21, 2019. During 2019, 1,206,081 additional Phantom warrants were
granted.
The warrants will vest in four equal portions, where the first and second quarters are exercisable after two
years, the third quarter after three years and the fourth quarter after four years from January 1, 2019. The
warrants will be exercisable, in whole or in part, in accordance with the terms of the 2019 plan, and subject to
achieving financial targets as determined in the plan. The warrants will be exercisable until the end of 2025.
Upon exercise of each warrant, the offeree will be entitled to receive cash payment equal to the difference
between the base price as determined at the time of the grant and the closing price of one share of the Company
on the Shenzhen Stock Exchange, as it will be on the exercise date up, to the ceiling that was determined under
the plan.
The fair value of the granted warrants as aforesaid was estimated using the binomial pricing model.
The cost of the benefit embodied in the warrants that were allocated as aforesaid, based on the fair value at the
grant date, amounted to a total of approximately 186 million RMB. The liability at the end of the reporting
period was recorded according to the vesting period as determined in the plan, taking into account the extent
of the service that the employees provided until that date and the Company’s share price at the end of the
reporting period.
Statement of share based payments in the period Phantom warrants
Total number of Phantom warrants at the beginning of the period 55,720,575
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (19,391,502)
Total number of Phantom warrants forfeited in current period (3,189,393)
Total number of Phantom warrants at the end of the period 33,139,680
The exercise prices and the remainder of the contractual period for Phantom RMB 9.90 – 10.85
warrants outstanding at the end of period 3.5 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
payments (in thousands RMB) 114,172
Expenses arising from cash-settled share-based payments in current period
(in thousands RMB) 51,627
- 192 -
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
determined 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
binomial option pricing model and by the vesting period from the original grant date of the 2017 plan to the
end of the service period determined by the alternative plan, taking into account the extent of the service that
the employees provided until that date and the stock price at the reporting date.
Statement of share based payments in the period
Phantom warrants
Changes in the number of 2017 Plan:
Total number of Phantom warrants at the beginning of the period 18,710,787
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (4,893,994)
Total number of Phantom warrants forfeited in current period (493,963)
Total number of Phantom warrants at the end of the period 13,322,830
The range of the exercise prices and the remainder of the contractual period RMB 9.40 – 9.43
for Phantom warrants outstanding at the end of period 4.25 years
- 193 -
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
payments related to the alternative plan (in thousands RMB) 46,306
Expenses (income) arising from cash-settled share-based payments in
current period related to the alternative plan (in thousands RMB) 25,993
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
conventional 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
investments. 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.
- 194 -
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
Six months ended Six months ended Six months ended Six months ended
June 30 June 30 June 30 June 30
2022 2021 2022 2021 2022 2021 2022 2021
Operating income from external
customers 16,842,617 13,653,666 1,953,211 1,410,114 - - 18,795,828 15,063,780
Inter-segment operating income - - 870 977 (870) (977) - -
Interest in the profit or loss of
associates and joint ventures - - 4,706 3,243 - - 4,706 3,243
Segment's results 1,385,155 840,793 351,710 168,380 - - 1,736,865 1,009,173
Financial expenses (incomes) (438,224) 448,790
Gain (loss) from changes in fair
value (1,341,717) (140,069)
Profit before tax 833,374 420,314
Income tax expense (101,276) (51,081)
Net profit 732,098 369,233
Crop Protection Intermediates and ingredients Unallocated assets and liabilities Total
June 30 December 31 June 30 December 31 June 30 December 31 June 30 December 31
2022 2021 2022 2021 2022 2021 2022 2021
Total assets 45,611,876 39,213,516 2,518,410 2,071,074 7,379,370 8,950,718 55,509,655 50,235,308
Total liabilities 8,532,547 6,867,619 363,273 282,006 24,077,165 22,010,600 32,972,985 29,160,225
- 195 -
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 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 geographical
location of the company which owns the assets.
Operating income from external
customers
Six months ended June 30
2022 2021
Europe 4,202,841 3,915,671
North America 3,639,600 2,880,327
Latin America 3,993,953 2,895,965
Asia Pacific 4,658,470 3,124,576
Africa, Middle East and India 2,300,964 2,247,241
18,795,828 15,063,780
Specified non-current assets
June 30 December 31
2022 2021
Europe 999,698 962,601
Latin America 2,391,232 2,227,234
North America 1,159,861 1,116,510
Asia Pacific 5,556,399 5,609,749
Africa, Middle East and India 11,774,777 10,713,739
21,881,967 20,629,833
2. The dependency on major customers
No single customer's proportion of the total amount of sales is over 10%.
- 196 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
3. Calculation of Earnings per share and Diluted earnings per share
Amount for the Amount for the
current period prior period
Net profit from continuing operations attributable to ordinary
shareholders 732,098 367,036
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
period period
Calculated based on net profit attributable to ordinary shareholders
Basic earnings per share 0.31 0.16
Diluted earnings per share N/A N/A
Calculated based on net profit from continuing operations
attributable to ordinary shareholders:
Basic earnings per share 0.31 0.16
Diluted earnings per share N/A N/A
Calculated based on net profit from discontinued operations
attributable to ordinary shareholders:
Basic earnings per share N/A N/A
Diluted earnings per share N/A N/A
- 197 -
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
June 30 December 31
2022 2021
Deposits in banks 276,501 259,434
Other cash and bank 18,741 6,124
295,242 265,558
As at June 30, 2022, restricted cash and bank balances was 18,741 thousand RMB (as at December 31, 2021:
6,124 thousand RMB).
2. Accounts receivable
a. By category
June 30, 2022
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 3 13,893 100 -
Account receivables assessed
collectively for impairment 478,104 97 31 - 478,073
491,997 100 13,924 3 478,073
December 31, 2021
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,879 6 13,879 100 -
Account receivables assessed
collectively for impairment 208,125 94 16 - 208,109
222,004 100 13,895 6 208,109
b. Aging analysis
June 30, 2022
Within 1 year (inclusive) 478,104
Over 1 year but within 2 years -
Over 2 years but within 3 years 15
Over 3 years but within 4 years 1
Over 4 years but within 5 years 1
Over 5 years 13,876
491,997
- 198 -
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
Six months ended June 30, 2022
Balance as of January 1 13,895
Addition during the year, net 31
Write back during the year (2)
Write-off during the year -
Exchange rate effect -
Balance as of June 30 13,924
d. Five largest accounts receivable at June 30, 2022:
Proportion of Allowance of
Accounts expected
Name Closing balance receivable (%) credit losses
Party 1 317,841 65 -
Party 2 70,812 14 -
Party 3 37,139 8 -
Party 4 17,216 3 -
Party 5 9,886 2 -
452,894 92 -
3. Receivable financing
June 30 December 31
2022 2021
Bank acceptance draft 72,745 11,752
72,745 11,752
As at June 30, 2022, bank acceptance endorsed but not yet due amounts to 239,571 thousand RMB.
- 199 -
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
June 30 December 31
2022 2021
Other receivables 20,923 21,496
20,923 21,496
(1) Other receivables
a. Other receivables by categories
June 30 December 31
2022 2021
Other 27,016 27,477
Provision for expected credit losses (6,093) (5,981)
20,923 21,496
b. Other receivables by aging
June 30, 2022
Within 1 year (inclusive) 204
Over 1 year but within 2 years * 563
Over 2 years but within 3 years 11,830
Over 3 years but within 4 years 9,456
Over 4 years but within 5 years -
Over 5 years 4,963
27,016
* Include intergroup balance with Anpon.
- 200 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
4. Other Receivables - (cont'd)
(2) Other receivables - (cont'd)
c. Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Period ended June 30, 2022
Balance as of January 1, 2022 5,981
Addition during the period 512
Written back during the period (400)
Write-off during the period -
Balance as of June 30, 2022 6,093
d. Five largest other receivables at June 30 2022:
Proportion of other
Name Closing balance receivables (%) Credit loss provision
Party 1 11,611 43 -
Party 2 9,313 34 -
Party 3 3,125 12 3,125
Party 4 548 2 548
Party 5 543 2 543
25,140 93 4,216
- 201 -
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
June 30, 2022 December 31, 2021
Impairment Impairment
Amount balance loss Book value Amount balance loss Book value
Invest in
subsidiaries 17,511,352 - 17,511,352 17,511,352 - 17,511,352
17,511,352 - 17,511,352 17,511,352 - 17,511,352
Investments in subsidiaries
Current Balance
provision provision
Opening Closing Impairment Impairment
Invested unit balance Increase Decrease balance loss loss
ADAMA Agricultural Solutions Ltd. 15,890,213 - - 15,890,213 - -
Adama Anpon (Jiangsu) Ltd. 450,449 - - 450,449 - -
ADAMA Hiufeng (Jiangsu) Co. Ltd. 848,140 - - 848,140 - -
Hubei Sanonda Foreign Trade Co.
Ltd. 11,993 - - 11,993 - -
Adama Huifeng (shanghai)
Agricultural Technology Co., Ltd 310,557 - - 310,557 - -
17,511,352 - - 17,511,352 - -
6. Operating Income and operating costs
Six months ended June 30, 2022 Six months ended June 30, 2021
Operating Operating
Revenue costs Revenue costs
Main operations 1,162,352 870,245 591,292 467,717
Other operations 22,742 11,173 25,805 15,220
1,185,094 881,418 617,097 482,937
- 202 -
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
Six months ended Six months ended
June 30, 2022 June 30, 2021
Interest income 3,340 9,971
Government subsidies 13,377 9,976
Other 6,385 1,256
23,102 21,203
(2) Other cash paid relevant to operating activities
Six months ended Six months ended
June 30, 2022 June 30, 2021
Professional services 37,608 48,027
Transportation and Commissions 26,622 11,122
Other 6,697 8,162
70,927 67,311
(3) Other cash received relevant to investing activities
Six months ended Six months ended
June 30, 2022 June 30, 2021
Loans 150,000 -
(4) Other cash paid relevant to investing activities
Six months ended Six months ended
June 30, 2022 June 30, 2021
Loans 250,000 -
(5) Other cash received relevant to financing activities
Six months ended Six months ended
June 30, 2022 June 30, 2021
Deposit for issuing bills payables 6,124 5,880
- 203 -
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:
Six months ended Six months ended
June 30, 2022 June 30, 2021
Repayment of loan from others 18,741 171,770
Other - 291
18,741 172,061
8. Supplementary information to cash flow statement
(1) Reconciliation of net profit to net cash flows generated from operating activities:
Six months ended June 30
2022 2021
Net profit 245,802 )28,205(
Add: Assets impairment loss )3,142( 1,068
Credit impairment loss 141 )107(
Depreciation of fixed assets 100,485 53,021
Depreciation of-right-of use assets 1,434 28
Amortization of intangible assets 5,727 5,099
Loss (gain) on disposal of fixed assets, intangible assets and
other long-term assets )59,538( )15,239(
Financial expenses 28,333 13,438
Increase in deferred income tax assets - )228(
Decrease (increase) in inventory )107,348( 88,421
Decrease (increase) in accounts receivable from operating
activities )287,302( 227,772
Increase (decrease) in payables from operating activities 137,955 )99,852(
Net cash flows generated from operating activities 62,547 245,216
(2) Net increase in cash and cash equivalents
Six months ended June 30
2022 2021
Closing balance of cash 276,501 436,804
Less: Opening balance of cash 259,434 1,022,758
Net increase in cash and cash equivalents 17,067 )585,954(
- 204 -
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
capital
Company Registered (Thousand Shareholding Percentage
name place Business nature RMB) percentage of voting rights
Production and sales
of agrochemicals,
Syngenta Shanghai, fertilizers and GM
Group China 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
Six months ended June 30
2022 2021
Summary of Purchase of goods/services Related Party Relationship
received:
Purchase of goods/services received Common control
under ChemChina 67,101 40
Subsidiary 47,970 58,038
Purchase of fixed assets and other assets Common control
under ChemChina 2,569 39,580
Summary of Sales of goods:
Sale of goods Common control under
ChemChina 20,068 -
Associated enterprises
under ChemChina - 1,082
Subsidiary 497,938 328,762
Sale of raw materials Subsidiary 1,003 3,396
- 205 -
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees
The Company as the guarantor
Amount of Inception Maturity Guaranty
guaranteed date of date of completed
loan guaranty guaranty (Y/ N)
Subsidiary 59,500 27/04/2021 26/04/2022 Y
30,000 26/02/2021 24/02/2022 Y
30,000 25/06/2021 24/06/2022 Y
45,000 21/05/2021 18/05/2022 Y
40,000 18/03/2021 17/03/2022 Y
100,000 19/07/2021 10/07/2022 Y
33,000 05/11/2021 03/05/2022 Y
20,000 05/11/2021 04/05/2022 Y
141,000 01/12/2021 28/10/2027 N
33,000 16/12/2021 15/12/2022 N
40,000 26/04/2022 27/04/2023 N
30,000 26/02/2022 24/02/2023 N
50,000 18/01/2022 17/01/2023 N
7,900 25/01/2022 28/09/2026 N
30,000 30/03/2022 29/03/2023 N
The Company as the guarantee receiver
Amount of Inception date Maturity date Guaranty
Guarantee provider guaranteed loan of guaranty of guaranty completed (Y / N)
Parent company 338,000 21/04/2021 20/04/2028 N
72,154 01/06/2021 31/05/2028 N
During the reporting period, the Company paid a guarantee fee amounting to 227 thousand RMB
(2021.1-6: nil) to the parent company.
- 206 -
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)
c. Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
2022 2021
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Subsidiary 338,683 - 160,190 -
Other non-current
assets Subsidiary 250,000 - 150,000 -
Other receivables Subsidiary 11,611 - 11,611 -
Trade rceivables Holding Common
control under Sinochem 3,767 - - -
Holding Common
control under
Prepayments Sinochem Holding 10.812 - 10,000 -
Other non-current Common control under
assets Sinochem Holding 84 - 84 -
Payable Items
December
June 30 31
Items Related Party Relationship 2022 2021
Trade payables Subsidiary 1,432 71
Common control under Sinochem
Trade payables Holdings 45,562 52,075
Other payables Subsidiary 346,739 241,049
Common control under Sinochem
Holdings 475 249
Associated enterprises under Sinochem
Contract liability Holdings 611 -
- 207 -
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. Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil (31.12.21:
189,978 thousand RMB) Interest income of bank deposit for the current period was 67
thousand RMB (amount for six months ended June 30, 2021 was 598 thousand RMB).
The closing balance of bank deposit in SinoChem Finance Corporation was 15,368 thousand
RMB (31.12.21: nil) Interest income of bank deposit for the current period was 493 thousand
RMB (amount for six months ended June 30, 2021 was nil).
- 208 -
ADAMA Ltd. Semi-Annual Report 2022
Supplementary information
(Expressed in RMB '000)
1. Extraordinary Gain and Loss
Six months ended
June 30, 2022
Disposal of non-current assets 67,970
Government grants recognized through profit or loss 24,834
Recovery or reversal of expected credit losses which is assessed individually during
the years 17,200
Other non-operating income or expenses other than the above (10,240)
Other profit or loss that meets the definition of non-recurring profit or loss (5,845)
Tax effect (16,844)
77,075
Note 1: Extraordinary gain and loss items listed above are presented in the amount before taxation
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
Information 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 3.35 0.31 N/A
Net profit after deduction of extraordinary
gains/losses attributable to ordinary
shareholders of the Company 3.01 0.28 N/A
ADAMA Ltd.
Legal Representative：Ignacio Dominguez
August 29, 2022
209
