ADAMA Ltd. Semi-Annual Report 2023
ADAMA LTD.
SEMI-ANNUAL REPORT 2023
ADAMA Ltd. is a global leader in crop protection, providing solutions to farmers across the
world to combat weeds, insects and disease. ADAMA has one of the widest and most
diverse portfolios of active ingredients in the world, state-of-the art R&D, manufacturing and
formulation facilities, together with a culture that empowers our people in markets around
the world to listen to farmers and ideate from the field. This uniquely positions ADAMA to
offer a vast array of distinctive mixtures, formulations and high-quality differentiated products,
delivering solutions that meet local farmer and customer needs in over 100 countries globally.
Please see important additional information and further details included in the Annex.
August 2023
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ADAMA Ltd. Semi-Annual Report 2023
Section I - Important Notice, Table of Contents and Definitions
The Company’s Board of Directors, Board of Supervisors, directors, supervisors and
senior managers confirm that the content of the Report is true, accurate and complete
and contains no false statement, misleading presentations or material omissions, and
assume joint and several legal liability arising therefrom.
Steve Hawkins, the person in charge of the Company (President and Chief Executive
Officer) as well as its legal representative, and Efrat Nagar, the person leading the
accounting function (Chief Financial Officer), hereby assert and confirm the
truthfulness, accuracy and completeness of the Financial Report.
All 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 2023
Table of Contents
Section I - Important Notice, Table of Contents and Definitions....................................... 2
Section II - Corporate Profile and Financial Results.......................................................... 6
Section III - Performance Discussion and Analysis........................................................... 9
Section IV – Corporate Governance ................................................................................. 36
Section V – Environmental and Social Responsibilities ................................................. 38
Section VI - Significant Events.......................................................................................... 51
Section VII - Share Changes and Shareholders ............................................................... 80
Section VIII - Preferred stock ............................................................................................ 87
Section IX - Bonds ............................................................................................................. 88
Section X - Financial Report.............................................................................................. 89
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ADAMA Ltd. Semi-Annual Report 2023
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 2023
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 2023 Semi-Annual Report
Reporting Period, this Period January 1, 2023 - June 30, 2023
2022 Annual Report The Company’s 2022 Annual Report published on March 21, 2023
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ADAMA Ltd. Semi-Annual Report 2023
Section II - Corporate Profile and Financial Results
I. Corporate Information
Stock name ADAMA A, ADAMA B Stock code 000553, 200553
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 安道麦股份有限公司
Abbr. 安道麦
Company name in English (if any) ADAMA Ltd.
Abbr. (if any) ADAMA
Legal representative Steve Hawkins
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 2022
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 2023
the Reporting Period. Said information can be found in the 2022 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 2023 January - June 2022 YoY +/- (%)
Operating revenues (RMB’000) 17,253,201 18,795,828 -8.21%
Net profit attributable to shareholders of the
(242,156) 732,098 -133.08%
Company (RMB’000)
Net profit attributable to shareholders of the
Company excluding non-recurring profit and loss (304,966) 655,023 -146.56%
(RMB’000)
Net cash flow from operating activities
(64,876) (1,345,861) 95.18%
(RMB’000)
Basic EPS (RMB/share) (0.1039) 0.3142 -133.07%
Diluted EPS (RMB/share) NA NA NA
Weighted average return on net assets -1.03% 3.35% -4.38%
End of Reporting Period End of last year +/- (%)
Total assets (RMB’000) 59,901,902 57,980,489 3.31%
Net assets attributable to shareholders
23,644,510 23,124,655 2.25%
(RMB’000)
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.
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
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ADAMA Ltd. Semi-Annual Report 2023
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
23,402
part of asset impairment provisions)
Government grants recognized through profit or loss (excluding
government grants closely related to regular operation of the Company
19,053
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
27,325
individually during the years
Other non-operating income and expenses other than the above 13,569
Mainly provision for
early retirement plan
of employees at the
Other profit or loss that meets the definition of non-recurring profit or loss (2,751)
Company’s Israeli
manufacturing
facilities.
Less: Income tax effects 17,788
Total 62,810
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 2023
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 over 100
countries, through approximately 60 subsidiaries worldwide.
The Group's business model integrates end-customer access, regulatory expertise, state-of-the art global
R&D, production and formulation facilities, thereby providing the Group a significant competitive edge
and allowing it to launch new and differentiated products that meet local farmers and customer needs in
key markets.
The Group's primary operations are global, spanning activities in Europe, Africa & Middle East (EAME),
North America, Latin America and Asia-Pacific (including China)1.
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
Over Q2 2023 the price trend of crop commodities was mixed, with corn, wheat and soybean prices
continuing to decline while sugar and rice prices increased. Overall, crop commodity prices remain above
the 10-yr average and global planted area remains high compared to previous years, supporting healthy
input demand from farmers.
Despite relatively healthy farmer consumption, crop protection sales into the distribution channel have
slowed down significantly due to high channel inventory levels, following channel loading in 2022. In
addition, the distribution channel across all geographies is opting to buy crop inputs on a "just in time"
basis and striving to carry minimal inventory given wide high interest rate environment outside China and
abundant supply of CP products. This trend, coupled with the ongoing decline in AI prices coming out of
China, is putting pressure on crop protection prices.
1 As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that the countries formerly included in this
region will now be included in the Europe region (renamed EAME) or in the Asia Pacific region.
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ADAMA Ltd. Semi-Annual Report 2023
Crop Protection Products
As described within the Company’s 2022 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 2022 annual report, no major changes occurred
with that respect. For details, please refer to 2022 annual report.
Please see important additional information and further details included in the Annex.
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ADAMA Ltd. Semi-Annual Report 2023
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 2023 Apr- Same period
2023 Apr-June
of last year +/-% June of last year +/-%
(000’RMB)
(000’RMB) (000’USD) (000’USD)
Operating revenues 8,642,625 9,779,837 -11.63% 1,233,158 1,479,232 -16.64%
Cost of goods sold 6,865,895 7,141,561 -3.86% 979,683 1,080,253 -9.31%
Selling and Distribution
1,095,906 1,169,181 -6.27% 156,372 176,843 -11.58%
expenses
General and administrative
194,777 359,487 -45.82% 27,779 54,349 -48.89%
expenses
R&D expenses 127,476 144,701 -11.90% 18,188 21,886 -16.90%
Financial Expenses
249,143 (179,893) 238.50% 35,505 (27,312) 230.00%
(income)
Gain (loss) from Changes
(430,092) (744,824) -42.26% (61,367) (112,657) -45.53%
in Fair Value
Total Net Financial
679,235 564,931 20.23% 96,872 85,345 13.51%
Expenses
Profit (loss) before tax (389,700) 379,387 -202.72% (55,586) 57,441 -196.77%
Tax expenses (income) (64,271) 74,941 -185.76% (9,171) 11,334 -180.92%
Net income (loss) (325,429) 304,446 -206.89% (46,415) 46,107 -200.67%
EBITDA 806,267 1,479,823 -45.52% 115,014 223,778 -48.60%
Net cash flows from operating
2,840,293 467,985 506.92% 405,262 70,786 472.52%
activities
Net cash flows used in
(481,744) (705,151) 31.68% (68,737) (106,656) 35.55%
investing activities
Net cash flows used in
(1,449,755) (420,688) -244.62% (206,855) (63,630) -225.09%
financing activities
Net increase in cash and cash
1,091,971 (483,583) 325.81% 126,311 (103,376) 222.19%
equivalents
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ADAMA Ltd. Semi-Annual Report 2023
Same
Reporting Same period Reporting
period of
Period of last year +/-% Period +/-%
last year
(000’RMB) (000’RMB) (000’USD)
(000’USD)
Operating revenues 17,253,201 18,795,828 -8.21% 2,491,683 2,898,953 -14.05%
Cost of goods sold 13,358,727 13,822,755 -3.36% 1,928,680 2,132,317 -9.55%
Selling and Distribution
2,161,199 2,159,089 0.10% 312,074 332,721 -6.21%
expenses
General and administrative
461,146 642,313 -28.21% 66,708 98,883 -32.54%
expenses
R&D expenses 262,378 274,738 -4.50% 37,905 42,363 -10.52%
Financial Expenses
455,855 (438,224) 204.02% 65,727 (67,991) 196.67%
(income)
Gain (loss) from Changes
(782,218) (1,341,717) -41.70% (112,834) (206,648) -45.40%
in Fair Value
Total Net Financial
1,238,073 903,493 37.03% 178,561 138,657 28.78%
Expenses
Profit (loss) before tax (318,589) 833,374 -138.23% (45,200) 128,935 -135.06%
Tax expenses (income) (76,433) 101,276 -175.47% (10,948) 15,482 -170.71%
Net income (242,156) 732,098 -133.08% (34,252) 113,453 -130.19%
EBITDA 1,940,990 2,772,062 -29.98% 280,866 427,274 -34.27%
Net cash flows from (used in)
(64,876) (1,345,861) 95.18% (19,357) (214,835) 90.99%
operating activities
Net cash flows used in
(1,121,109) (1,278,869) 12.34% (162,187) (196,998) 17.67%
investing activities
Net cash flows provided by
1,401,023 (94,095) 1588.98% 209,817 (12,203) 1819.39%
financing activities
Net increase (decrease) in
345,284 (2,568,738) 113.44% 25,853 (427,928) 106.04%
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 2023
Analysis of Financial Highlights
(1) Operating Revenues
Revenues in the second quarter declined by approximately 17% (-12% in RMB terms; -15% in CER
terms) to $1,233 million, reflecting a decrease of 10% in volumes and a decrease of 5% in prices.
The lower sales reflect market dynamics of channel destocking in light of high interest rates and a
"wait and see" approach, given the market overstocking in 2022 and declining active ingredient and
raw material costs impacting the crop protection market pricing. Additionally, sales were also
impacted by negative weather conditions in certain geographies.
These results brought the revenues in the first half of 2023 to $2,492 million, a decline of
approximately 14% (-8% in RMB terms; -11% in CER terms), reflecting a decrease of 9% in volumes
and a decrease of 2% in prices. This is in comparison to the record sales the Company achieved in
2022, which reflected the high demand due to supply uncertainty in the market.
Unit: RMB’000
2023H1 2022H1
Ratio of the Ratio of the
YoY +/-%
Amount operating Amount operating
revenue revenue
Total operating revenue 17,253,201 100.0% 18,795,828 100.0% -8.2%
Classified by industries
Manufacture of chemical raw materials
17,253,201 100.0% 18,795,828 100.0% -8.2%
and chemical products
Classified by products
Herbicides 7,630,195 44.2% 8,829,597 47.0% -13.6%
3,193,019
Fungicides 3,475,688 20.1% 17.0% 8.9%
Insecticides 4,749,282 27.5% 4,820,001 25.6% -1.5%
Ingredients and Intermediates (Formerly
1,398,036 8.1% 1,953,211 10.4% -28.4%
referred to as Non-Agro)
Classified by regions
Europe, Africa & Middle East (EAME)* 5,286,856 30.6% 5,136,114 27.3% 2.9%
North America 3,018,617 17.5% 3,639,600 19.4% -17.1%
Latin America 3,902,210 22.6% 3,993,953 21.2% -2.3%
Asia-Pacific* 5,045,518 29.2% 6,026,161 32.1% -16.3%
* 2022 denote proforma sales. As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that
the countries formerly included in this region are now included in the Europe region (renamed EAME) or in the Asia
Pacific region.
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.
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ADAMA Ltd. Semi-Annual Report 2023
Regional Sales Performance in USD
Q2 2023 Q2 2022 Change H1 2023 H1 2022 Change
$m $m USD $m $m USD
Europe, Africa & Middle East (EAME)* 334 365 -8.4% 765 794 -3.7%
North America 225 278 -19.1% 436 562 -22.4%
Latin America 329 379 -13.1% 562 613 -8.3%
Asia Pacific 345 458 -24.6% 729 930 -21.6%
Of which China 141 213 -33.6% 323 449 -28.1%
Total 1,233 1,479 -16.6% 2,492 2,899 -14.0%
Note: the following analysis of regional sales performance is based on USD results, and the numbers in this table may not
sum due to rounding.
Europe, Africa & Middle East (EAME): Sales in EAME in constant exchange rates were lower in the
quarter due to a decrease in volumes exacerbated by negative weather conditions and high inventory
levels in the market, and higher in the half year period, reflecting generally higher prices in comparison
to the same periods in 2022. While prices were higher on a year-to-year basis, market prices are currently
presenting a downward trend. The fungicide Soratel based on ADAMA’s Asorbital formulation mastery
technology, continues to be well received in the UK.
North America: Consumer & Professional Solutions - Sales were impacted by lower demand following
inflationary pressures and high channel inventories.
In the US Ag market the channel is lowering inventory levels due to high interest rates with demand
focusing on "just-in-time" supply from producers. Sales were also impacted by drought in the Mid-West
and pressure on prices following channel destocking.
Sales in Canada increased as the Company expanded its product portfolio during 2022, while pricing in
the market was more insulated with overall market inventories better controlled.
Latin America: Brazil – strong competition and channel destocking put pressure on prices led to a
decline in sales, while the Company is successfully consuming the high-cost inventory accumulated.
In LATAM, sales are supported by the strong performance of the biologicals portfolio. Looking forward,
El Nio is expected to have a positive effect on rainfall in the South of LATAM.
Asia-Pacific: In China, the market is experiencing oversupply and pricing pressure impacting both the
branded and industrial sales, while the branded portfolio was significantly supported by the sales of
differentiated products.
Sales in the wider APAC & Pacific region were negatively impacted by strong competition from China
and by the commencement and negative impact of El Nio.
In India sales were impacted by the delayed Monsoon season.
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ADAMA Ltd. Semi-Annual Report 2023
(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
17,253,201 13,358,727 22.6% -8.2% -3.4% -3.9%
materials and
chemical products
Classified by products
Crop Protection 15,855,165 12,109,321 23.6% -5.9% -1.9% -3.1%
Ingredients and
1,398,036 1,249,406 10.6% -28.4% -15.7% -13.5%
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
The cost of goods sold in the first half of the year reflected the decline in sales, high-cost inventory and the negative impact
of exchange rates moderated by lower transportation and logistics costs. These impacts on the gross profit were slightly
moderated by the improvement in the Company's sales mix of higher margin products.
(3) Operating Expenses:
Operating expenses include Sales and Marketing, General and Administration and R&D.
The Company recorded certain non-operational charges within its operating expenses amounting
to RMB 39 million ($ 6 million) in Q2 2023 in comparison to RMB 146 million ($ 22 million) in Q2
2022, and RMB 104 million ($ 15 million) in H1 2023 in comparison to RMB 182 million ($ 28 million)
in H1 2022, 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 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.
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ADAMA Ltd. Semi-Annual Report 2023
Excluding the impact of the abovementioned non-operational items, the lower operating expenses
in the second quarter and half year period of 2023 were mainly due to Company OPEX
management measures, an adjustment of a provision for success-based compensation, and the
positive impact of exchange rates. Additionally, in the first half year of 2023 the company did not
increase the doubtful debt provision that was recorded for trade receivables in Ukraine during the
first half year of 2022.
(4) Financial Expenses:
“Financial Expenses” alone mainly reflect interest payments on corporate bonds and bank loans
as well as foreign exchange gains/losses on the bonds and other monetary assets and liabilities
before the Company carries out any hedging. The impact of Financial Expenses (before hedging)
is RMB 456 million ($66 million) for the first half of 2023 compared to an income of RMB 438 million
($68 million) for the corresponding period in 2022.
Given the global nature of its operational activities and the composition of its assets and liabilities,
the Company, in the ordinary course of its business, uses foreign currency derivatives (forwards
and options) to hedge the cash flow risks associated with existing monetary assets and liabilities
that may be affected by exchange rate fluctuations. “Gains/Losses from Changes in Fair Value”
amounted to a net loss of RMB 782 million ($113 million) in the first half of 2023, mainly due to
hedging transactions, compared with a net loss of RMB 1,341 million ($207 million) in the
corresponding period in 2022.
The aggregate of Financial Expenses and Gains/Losses from Changes in Fair Value
(hereinafter as “Total Net Financial Expenses”), which more comprehensively reflects the
financial expenses of the Company in supporting its main business and protecting its monetary
assets/liabilities, amounts to RMB 1,238 million ($179 million) in the first half of 2023 compared
with RMB 903 million ($139 million) in the corresponding period in 2022.
The higher financial expenses were mainly driven by higher bank interest expenses due to the
sharp increase in interest rates and an increase in short-term loans as well as higher hedging costs
on exchange rates. These financial expenses were moderated by the net effect of lower Israeli CPI
on the ILS-denominated, CPI-linked bonds.
(5) Cash Flow:
Net cash flows from (used in) operating activities: Operating cash flow of $405 million (RMB
2,840 million) was generated in the quarter and $19 million (RMB 65 million) was used in the half-
year period, compared to $71 million (RMB 468 million) generated in the quarter and $215 million
(RMB 1,346 million) used in the corresponding periods last year, respectively. The higher cash flow
generated in the quarter was primarily due to a decrease in the procurement of goods.
Net cash used in investing activities was $69 million (RMB 482 million) in the quarter and $162
million (RMB 1,121 million) in the half-year period, compared to $107 million (RMB 705 million) and
$197 million (RMB 1,279 million) in the corresponding periods last year, respectively. The cash
used in investing activities in the second quarter and first half period of 2023 included investments
in new production facilities in ADAMA Anpon, investments in manufacturing capabilities in Israel
and investments in intangible assets relating to ADAMA's global registrations as well as the
acquisition of AgriNova New Zealand in Q1 2023.
Free cash flow of $288 million (RMB 2,021 million) was generated in the second quarter and $254
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ADAMA Ltd. Semi-Annual Report 2023
million (RMB 1,689 million) consumed in the half-year period compared to $83 million (RMB 551
million) and $469 million (RMB 2,999 million) consumed in the corresponding periods last year,
respectively, reflecting the aforementioned operating and investing cash flow dynamics.
Cash Flow from Financing Activities was $207 million (RMB 1,450 million) consumed in the
quarter and $210 million (RMB 1,401 million) generated in the half-year period, compared to $64
million (RMB 421 million) and $12 million (RMB 94 million) consumed in the corresponding periods
last year, respectively, mainly driven by the paydown of short terms loans due to the positive free
cash flow in the quarter.
17
ADAMA Ltd. Semi-Annual Report 2023
IV. Analysis of Non-Core Business
√ Applicable □ Not applicable
Unit: RMB’000
Proportion in Whether
Amount Reasons
total profit sustained
Investment income 10,090 -3.17% No
Mainly from changes in fair value and
Gain/loss from change of
(782,218) 245.53% realization of derivatives. See No
Fair Value
explanation of financial expenses
Asset impairment losses 105,887 33.24% No
Gain or loss from disposal of No
23,402 -7.35%
assets
Non-operating income 36,073 -11.32% No
Non-operating loss 11,015 3.46% 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 4,604,523 7.69% 4,290,961 7.40% 0.29%
Accounts receivable 9,363,758 15.63% 9,018,375 15.55% 0.08%
Inventories 16,667,957 27.83% 16,927,241 29.19% -1.36%
Investment property 22,963 0.04% 3,168 0.01% 0.03%
Long term equity investments 29,272 0.05% 26,368 0.05% 0.00%
Fixed assets 9,476,560 15.82% 8,952,184 15.44% 0.38%
Construction in progress 3,147,493 5.25% 2,961,401 5.11% 0.14%
Right of use assets 640,996 1.07% 555,889 0.96% 0.11%
Supportin
g the
Short-term loans 6,341,677 10.59% 3,342,921 5.77% 4.82% increased
working
capital.
Contract liabilities 1,446,129 2.41% 1,776,573 3.06% -0.65%
Lease liabilities 498,967 0.83% 431,076 0.74% 0.09%
18
ADAMA Ltd. Semi-Annual Report 2023
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
20,463,717 (229,154) 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
1,685 - - - 245 - - 1,930
(excluding derivative
financial assets)
2.Derivative financial
assets (including long 233,809 (636,076) 30,319 - 573,688 (9,599) - 192,141
term)
3.Other equity
158,341 - 4,564 - - - - 162,905
investments
Total financial assets 393,835 (636,076) 34,883 - 573,933 (9,599) - 356,976
Other 189,601 - - - 66,056 (33,901) - 221,756
Total of above 583,436 (636,076) 34,883 - 639,989 (43,500) - 578,732
Financial liabilities 545,516 190,142 - - - - - 735,658
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 33,986,000 - restricted cash, most of
which as guarantee for bank acceptance bills; and RMB 195,920,000 - other non-current assets, mainly
as guarantee for asset securitization and lawsuits.
19
ADAMA Ltd. Semi-Annual Report 2023
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)
29,389,828 20,936,565 40.38%
2. Significant Equity Investments during the Reporting Period
√ Applicable □ Not applicable
20
ADAMA Ltd. Semi-Annual Report 2023
Profit
or Loss
on
Name Invest Progre Disclos
Invest Involve
of the Mode ment Shareh Types ss as ure
Main Source Invest Invest Estimat ments d in Date of
Investe of Amoun olding of of the Index
Busine of ment ment ed for the Litigati Disclos
d Invest t Proport Produc Balanc (if
ss Funds Partner Term Return Reporti on or ure
Compa ment (RMB'0 ion ts e Sheet applica
ng Not
ny 00) Date ble)
Period
(RMB'0
00)
Announ
cement
on
Closing
of the
Acquisit
Crop ion of
protecti 100%
on Equity
product of
s, Agrinov
growth a New
Agrinov regulato Zealand
Self-
a New Agroch Acquisit Long- rs, bio- Comple Jan 6, Limited
170,155 100% raised None -- 6,286 No
Zealand emical ion term solution ted 2023 by a
funds
Limited s and Wholly
plant Owned
nutrient Subsidi
s for the ary
horticult (Annou
ural ncemen
market t No.
2023-1)
disclose
d at
www.cn
info.co
m
Announ
cement
on the
Acquisit
ion of
Equity
Held by
Minority
Chemic
Shareh
al crop
olders
protecti
Adama of a
Self- on March
Agroch Acquisit Long- Comple Controll
Chile emical 116,311 100% raised None product -- --* No 14,
ion term ted ed
S.A. funds s and 2023
Subsidi
bio-
ary
stimula
(Annou
nts
ncemen
t No.
2023-7)
disclose
d at
www.cn
info.co
m
Total -- -- 286,466 -- -- -- -- -- -- -- 6,286 -- -- --
21
ADAMA Ltd. Semi-Annual Report 2023
*Note: The Company previously indirectly held 60% equity of Adama Chile S.A., and consolidated Adama Chile S.A. in
the financial statements as a subsidiary. After the acquisition, the Company indirectly held 100% equity of Adama Chile
S.A.
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.
22
ADAMA Ltd. Semi-Annual Report 2023
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
(1) Investment in Derivative Financial Instruments for Hedging during the Reporting Period
√ Applicable □ Not Applicable
Unit: 000 RMB
Profit/loss on fair Percentage of
Cumulative fair Purchased in Sold in the
Opening value changes in Closing investment amount
Investment Type value changes the Reporting Reporting
Balance the Reporting Balance divided by net asset
charged to equity Period Period
Period at end of the period
Option 3,490,710 -247,866 -243,643 8,899,295 -3,490,710 8,899,295 37.64%
Forward 22,863,927 -578,354 -568,501 20,490,533 -22,863,927 20,490,533 86.66%
Total 26,354,637 -826,220 -812,144 29,389,828 -26,354,637 29,389,828 124.30%
Explanation of accounting policies and
principles for hedging, and any significant Please refer to section X of this Report, note III. 28.1 for the disclosure of the accounting policies for hedging. There is no change in the
changes compared with last reporting accounting policies for hedging during the reporting period.
period
Explanations about gain/loss during the The loss during the year was RMB 812,144,000 compared to a loss of RMB 1,324,948,000 in the same period last year. The loss was mainly
Reporting Period due to the devaluation of the ILS of 5.1% compared to 13.9% last year.
Despite of the loss incurred from the hedging transactions, the Group has effectively mitigated the impact from the exchange rate fluctuations
Explanations for hedging effect
during the year.
Source of fund for the investment Internal.
The aforesaid refers to short term hedging currency transactions made with banks.
The Group’s transactions are not traded in the market. The Transactions are between the applicable company in the Group and the applicable
bank until the expiration date of the transaction, therefore no market risk is involved.
Risk and control analysis for the Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA
Reporting Period (including but not
agreements.
limited to market risk, liquidity risk, credit
risk, operational risk, legal risk, etc.) As to operational risk, the Group is working with relevant software, which is its back office for all transactions.
No legal risk is involved.
The actions taken in order to further reduce risks are:
The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' financial statements
23
ADAMA Ltd. Semi-Annual Report 2023
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.
The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks.
Market price or fair value change of
Segregation of duties as follows:
investments during the Reporting Period.
For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the
Specific methodology and assumptions
relevant transactions are simple (Options and forwards) for short terms. For fair value methodology see section X of this Report, note IX. Fair
should be disclosed in the analysis of fair
Value. The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters are provided by the
value of the investments
experts.
Litigation-related situations (if applicable) N/A
Date of disclosure of Board approval (if
December 30, 2017
any)
Date of disclosure of Shareholders’
N/A
approval (if any)
The derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond
Independent Directors’ opinion on the
to the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has adopted
investment in derivative financial
Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against market risk.
instruments and related risk controls
The derivative investments do not harm the interests of the Company and its shareholders.
The company is required to comply with the “Self-regulatory Guidelines for Listed Companies on Shenzhen Stock Exchange: No. 3 - Disclosure of
Industry Information”.
The derivative transactions carried out by the Group were mainly through options and forward in order to mitigate the currency exposure and the fluctuation in Israeli CPI. For
more details, please refer to the section above.
(2) Investment in Derivative Financial Instruments for Speculation during the Reporting Period
□ Applicable √ Not Applicable
No such situation occurred during the Reporting Period.
24
ADAMA Ltd. Semi-Annual Report 2023
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 50,595,236 17,581,989 15,440,683 (318,175) (226,280)
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
Way of Acquirement or Impact on the Business Operation and
Company Name
Disposal Performance of the Company
Upon the completion of the Transaction,
Adama New Zealand Ltd., the Company’s
indirectly wholly-owned subsidiary, owns
and hold 100% equity in Agrinova New
Purchase 100% of Share Zealand Limited, and Agrinova became an
Agrinova New Zealand Limited
Equity indirectly wholly controlled subsidiary of the
Company. Based on the Accounting
Standards for Business Enterprises,
Agrinova is included in the Company’s
consolidated financial statements.
25
ADAMA Ltd. Semi-Annual Report 2023
For details, please refer to the
Announcement on Closing of the
Acquisition of 100% Equity of Agrinova New
Zealand Limited by a Wholly Owned
Subsidiary (Announcement No. 2023-1)
After completion of the Transaction, Adama
Chile S.A. became an indirect wholly-owned
subsidiary of the Company, which is
conducive to enhancing the Company's
decision-making efficiency, promoting
development strategy, further integrating
local market resources, and meeting the
Company's production, operation and
development needs. The Transaction will
Purchase the remaining 40% not lead to any change in the Company's
Adama Chile S.A. Share Equity of the controlled combination scope. The transaction price is
subsidiary fair and reasonable. There is no situation
that will harm the interests of the Company's
shareholders and will not have an adverse
impact on the Company's financial situation
and operating results.
For details, please refer to the
Announcement on the Acquisition of Equity
Held by Minority Shareholders of a
Controlled Subsidiary (Announcement No.
2023-7)
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 $2,227 million, a decline of 12%, reflecting a decrease of 9% in volumes and stable prices.
Solutions’ net loss was $32 million in the first half of the year, compared with net income of $63 million in
the corresponding period last year. For detailed explanation of the performance movement, see above
explanation of the Section.
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
26
ADAMA Ltd. Semi-Annual Report 2023
and the Brazilian Real. The Group has lesser exposures to other currencies. The strengthening of the US
dollar against other currencies in which the Company operates reduces the dollar value of such sales
and vice versa.
On an annual basis, approximately 20% of the Group’s sales are to the European market and therefore
the impact of long-term trends on the Euro may affect the Company's results and profitability.
Analyses of currency exposure from foreign currency exchange rate fluctuations against assets, liabilities
and cash flow denominated in foreign currencies are done constantly. High volatility of the exchange
rates of these currencies could increase the costs of transactions to hedge against currency exposure,
thereby increasing the Company's financing costs.
The Group uses commonly accepted financial instruments to hedge most of its substantial net balance
sheet exposure to any particular currency. Nonetheless, since as part of these operations the Group
hedges against most of its balance sheet exposure and only against part of its economic exposure,
exchange rate volatility might impact the Group’s results and profitability. As of the date of publication of
this Report, the Group has hedged most of its balance sheet exposure.
In addition, as the Company’s product sales depend directly on the cyclical nature of the agricultural
seasons, therefore the Company’s income and its exposure to the various currencies is not evenly
distributed over the year. Countries in the northern hemisphere have similar agricultural seasons and
therefore, in these countries, the highest sales are usually during the first half of the calendar year. During
this period, the Company is most exposed to the Euro. In the southern hemisphere, the seasons are
opposite and most of the local sales are carried out during the second half of the year. During these
months, most of the Company's exposure pertains to the Brazilian Real.
Exposure to Interest rate, Israel CPI and NIS exchange rate fluctuations
The debentures issued by Solutions, the material subsidiary of the Company, are Israeli Shekel based
and linked to the Israel Consumer Price Index “CPI” and therefore an increase in the CPI and an
appreciation of the shekel rate against the dollar might lead to a significant increase in its financing
expenses. In addition, high volatility of the exchange rate of USD/NIS and expectations of material
changes in the inflation rate, may increase the costs of hedging transactions on currency exposure, and
as a result, may lead to a further increase in the company's financing costs. As of the date of approval of
the financial statements, Solutions hedged most of its exposure to these risks on an ongoing basis,
through CPI hedging and USD-ILS exchange rate hedging transactions.
In addition, inflation in several global markets has a cross effect on the business results of the Group,
since on one hand, it contributes to the Group's ability to increase the sale price of its products, but on
the other hand, it may increase the Group's production costs and operating expenses. As of the date of
the Report, the Group is unable to isolate the influence of inflation on its sale prices and its costs. The
Group estimates that the cumulative cross influence of inflation does not have a material effect on to its
financial results.
Since December 31, 2021the Group have had dollar denominated liabilities bearing variable London
Interbank Offered Rates (LIBOR) interest. As a result, the Group was exposed to changes in the US
dollar LIBOR interest rate. The Group prepares a quarterly summary of its exposure to changes in the
relevant interest rate benchmarks (which replaced the LIBOR interest rate) and periodically examines
hedging the variable interest rate by converting it to a fixed rate. As part of the global reform in interest
rate benchmarks, the phasing out of LIBOR (the so-called LIBOR fallback) was scheduled for the end of
2021. As of January 1, 2022 three global interest rate benchmarks has transitioned to alternative risk-
27
ADAMA Ltd. Semi-Annual Report 2023
free rates while replacing the former benchmark LIBOR: SOFR (USD), ESTR (EUR) and SONIA (GBP).
As of the date of publication of this Report, the Group has not carried out hedging for such exposure,
since US dollar interest rates have been relatively stable.
In addition, the effect of interest changes on the debt that serves the Group’s working capital is seasonal.
Such debt bears a variable interest, but has no material effect on the Group’s financing expenses. As a
result, the net increase in interest rate does not have a material effect on the Group’s business.
Business operations in emerging markets
The Group conducts business - mainly product sales and raw material procurement - inter alia, in
emerging markets such as Latin America (particularly in Brazil, the largest market, country wise, in which
the Group operates), Eastern Europe, Southeast Asia and Africa. The Group's activity in emerging
markets is exposed to risks typical of those markets, including: political and regulatory instability; volatile
exchange rates; economic and fiscal instability and frequent revisions of economic legislation; relatively
high inflation and interest rates; terrorism or war; restrictions on import and trade; differing business
cultures; uncertainty as to the ability to enforce contractual and intellectual property rights; foreign
currency controls; governmental price controls; restrictions on the withdrawal of money from the country;
barter deals and potential entry of international competitors and accelerated consolidations by large-scale
competitors in these markets. Developments in these regions may have a significant effect on the Group's
operations. Distress to the economies of these markets could impair the ability of the Group's customers
to purchase its products or the ability to market them at international market prices, as well as harm the
Group's ability to collect customer debts, in a way that could have a significant adverse effect on the
Group's operating results.
The Group’s operations in multiple regions allows for the diversification of such risks and for the reduction
of its dependency on particular economies. In addition, changes in registration requirements or
customers' preferences in developed western countries, which may limit the use of raw materials
purchased from emerging economies, may require redeployment of the Group's procurement
organization, which might negatively affect its profitability for a certain period.
Operating in a competitive market
The crop protection products industry is highly competitive. Currently, seven multinational companies,
including the Company, lead the global industry. Five of these, Bayer, Syngenta, Corteva, BASF and
FMC, are Originator Companies, which develop, manufacture and market both patent-protected as well
as off-patent products. The Group competes with the original products with the aim of maintaining and
increasing its market share.
The Originator Companies possess resources enabling them to compete aggressively, in the short-to-
medium term, on price and profit margins, so as to protect their market share. Loss of market share or
inability to acquire additional market share from the Originator Companies can affect the Group's position
in the market and adversely affect its financial results. For details regarding the Group’s competitive
advantages see section III - subsection 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
28
ADAMA Ltd. Semi-Annual Report 2023
profitability from a specific product in the long term is affected by the number of companies producing
and selling comparable off-patent products and the timing of their entrance to the relevant market.
Any delay in developing or obtaining registrations for products and/or delayed penetration into markets
and/or growth of competitors that focus on off-patent active ingredients (whether by the expansion of their
product portfolio, granting registrations to other manufacturers (including manufacturers in China and
India) to operate in additional markets, transforming their distribution network to a global scale or
increasing the competition for distribution access), and/or difficulty in purchasing low cost raw materials,
may harm the Group’s sales, affect its global position and lead to price erosion.
Decline in scope of agricultural activities; Climate change and exceptional changes in weather
conditions
The scope of general agricultural activities worldwide may be negatively affected by many exogenous
factors, some resulting from climate change, including but not limited to extreme weather conditions,
natural disasters, a decrease in agricultural commodity prices, government policies and the economic
condition of farmers. A material decline in the scope of agricultural activities would by necessary
implication cause a decline in the demand for the Group’s products, erosion of its prices and collection
difficulties, which may have a significant adverse effect on the Group's results. Extreme weather
conditions, both chronic and acute, as well as other damages caused by nature may have an impact on
the demand for the Group's products as well as to price thereof. For example, drought may reduce the
need for fungicides, which could result in fewer sales and greater unsold inventories in the market,
whereas excessive rain could lead to increased plant disease or weed growth requiring growers to
purchase and use more crop protection products. Drought and/or increased temperatures may change
insect pest pressures, requiring growers to use more, less, or different insecticides. Climate change may
increase the frequency or intensity of extreme weather such as storms, floods, heat waves, droughts and
other events that could affect the demand for the Company’s products. The Group believes, that should
a number of such bad seasons occur in succession, without favorable seasons in the interim, its results
may sustain significant harm.
Environmental, health and safety legislation, standards, regulation and exposure
Many aspects of the Group's operations are strictly regulated, including in relation to production and
trading, and particularly in relation to the storage, treatment, manufacturing, transport, usage and disposal
of its products, their ingredients and byproducts, some of which are considered hazardous. The Group's
activities involve hazardous materials. Defective storage or handling of hazardous materials may cause
harm to human life or to the environment in which the Group operates. The regulatory requirements
regarding the environment, health and safety could, inter alia, include soil and groundwater clean-up
requirements; as well as restrictions on the volume and type of emissions the Group is permitted to
discharge into the air, water and soil.
The regulatory requirements applicable to the Group vary from product to product and from market to
market, and tend to become stricter with time. In recent years, both government authorities and
environmental protection organizations have been applying increasing pressure, including through
investigations and indictments as well as increasingly stricter legislative proposals and class action suits
related to companies and products that may potentially pollute the environment. Compliance with these
legislative and regulatory requirements and protection against such legal actions requires the Group to
commit considerable human and financial resources (both in terms of substantial ongoing costs and in
terms of material one-time investments) to meet mandatory environmental standards. In some instances,
this may result in delaying the introduction of products into new markets or in adverse effects on the
29
ADAMA Ltd. Semi-Annual Report 2023
Group’s profitability. In addition, the toughening, material alteration or revocation of environmental
licenses or permits, or their stipulations, or the inability to obtain such licenses and permits, may
significantly affect the Group's ability to operate its production facilities, which in turn may have a material
adverse effect on the financial and business results of the Group. The Group may be required to bear
significant civil liabilities (including due to class actions) or criminal liabilities (including high penalties
and/or high compensation payments and/or costs of environmental monitoring and rehabilitation),
resulting from violation of environmental, health and safety regulations, while some of the existing
legislation may impose “strict liability” regime on the Group, i.e. the Group will be held liable, regardless
of proof of negligence or malice.
While the Group invests material sums in adapting its facilities and in constructing special facilities in
accordance with environmental requirements, it is currently unable to assess with any certainty whether
these investments (current and future) and their outcomes may satisfy current or future requirements,
should these be significantly increased or changed. In addition, the Group is unable to predict with any
certainty the extent of future costs and investments it may incur in order to meet the requirements of the
environmental authorities in the relevant countries in which it operates since, inter alia, the Group is
unable to estimate the extent of potential pollutions, their duration, the extent of the measures required
to be taken by the Group in handling them, the division of responsibility among other parties and the
amounts recoverable from third parties.
Furthermore, the Group may be the target of bodily injury claims and property damage claims caused by
exposure to hazardous materials, which are largely covered under the Group’s insurance policies.
Legislative, standard and regulatory changes in product registration
The majority of the substances and products marketed by the Group require registration at various stages
of their development, production, import, utilization and marketing, and are also subject to strict regulatory
supervision by the regulatory authorities in each country. Compliance with the regulatory requirements
that vary from country to country and which are becoming more stringent with time, involves significant
time and costs, and rigorous compliance with individual registration requirements for each product.
Noncompliance with these regulatory requirements might materially adversely affect the Group’s
expenses, cost structure and profit margins, as well as penetration of its products in the relevant market,
and may even lead to suspension of sales of the relevant product, and recall of those products already
sold, or to legal action. Moreover, to the extent new regulatory requirements are imposed on existing
registered products (requiring additional investment or leading to the existing registration's revocation)
and/or the Group is required to compensate another company for its use of the latter's product registration
data, these might amount to significant sums, considerably increasing the Group's costs and adversely
affecting its results and reputation. In recent years the industry has been suffering from revocation of
registration for many products around the world. This trend is particularly evident in European countries
as well as in many other countries worldwide.
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.
30
ADAMA Ltd. Semi-Annual Report 2023
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
31
ADAMA Ltd. Semi-Annual Report 2023
safeguarding its intellectual property. Any unlawful or other unauthorized use of the Group's intellectual
property rights could adversely affect the value of its intellectual property and goodwill. In addition, the
Group may be required to take legal actions involving financial costs and resources to safeguard its
intellectual property rights.
Fluctuations in raw material inputs and prices, and in sales costs
Significant percentage of the Groups’ cost of sales derives from raw material costs. Hence, significant
increases or decreases in raw material costs affect the cost of goods sold, and are, due to the length of
the Company’s inventory cycle, generally reflected in the Company’s financials. Most of the Group's raw
materials are distant derivatives of oil prices and therefore, extreme changes or decrease in oil prices
may affect the costs of raw materials, although only partially.
To reduce exposure to fluctuations in the prices of raw materials, the Group customarily engages in long-
term purchase contracts for key raw materials, wherever possible. Similarly, the Group acts to adjust its
sales prices, wherever possible, to reflect the changes in the costs of raw materials.
As of the date of approval of the financial statements, the Group has not engaged in any hedging
transactions against increases in oil and other raw material costs.
Exposure due to recent developments in the genetically modified seeds market
Any significant development in the market of genetically modified seeds for agricultural crops, including
as a result of regulatory changes in certain countries currently prohibiting the use of genetically modified
seeds, and/or any significant increase in the sales of genetically modified seeds and/or to the extent new
crop protection products are developed for further crops that would be widely used (substituting traditional
products), will affect demand for crop protection products, requiring the Group to respond by adapting its
product portfolio to the new demand structure. Consequently, to the extent that the Group fails to adapt
its product mix accordingly, this may reduce demand for its products, erode their sales price and by
implication affect the Group’s results and market share.
Nevertheless, the fact that the Group itself markets some of the products for which herbicide tolerance
traits have been developed, acts to mitigate this exposure (albeit only in terms of marketing margins).
In addition, natural and/or biological substances that attack weeds, pests and diseases are potential
alternatives for the Company’s products, though as of the date of the report, their efficiency is relatively
limited, and they are commercialized in a relatively small volumes.
Operational risks
The Group’s operations, including its manufacturing activities, rely, inter alia, on state-of-the-art computer
systems. The Group continually invests in upgrading and protecting these systems from malfunctions and
attack. Any unexpected failure of these systems, as well as the integration of new systems, could involve
substantial costs and adversely affect the Group's operations until completion of the repair or integration.
The potential occurrence of a substantial failure that cannot be repaired within a reasonable time frame
may also affect the Group's operations and its results. Currently, the Group has a property and loss-of-
profit insurance policy.
The Group's production capacity is affected, among others, by its facilities’ output and individual area and
time allocation at full capacity. The Group's Multi-purpose facilities provide manufacturing flexibility and
enable the Group to prepare for the manufacturing of new products. Although the Group believes that its
existing sites have sufficient facilities and land areas to expand its production capacity, if necessary, in
the case of immediate or short-term increases in demand for new products supply may be delayed due
to lack of capacity to meet demand for such new products.
32
ADAMA Ltd. Semi-Annual Report 2023
Data protection and cyber security
During its activity, the Group may be exposed to risks and threats, related to the stability of its information
technologies systems, data protection and cyber security, which could appear in many different forms
(such as service denial, misleading employees, malfunction, encryption or data erasing and other cyber-
attacks via E-mail or malicious software). An attack on such computerized systems, mainly network based
systems may cause the group material damages and expenses and even partial suspension and
disruption of their proper functioning. In order to minimize the abovementioned risks, the group invests
resources in its technological resilience and in proper protection of its systems.
Raw material supply and/or shipping, port service disruptions and inventory
Lack of raw materials or other inputs utilized in the manufacture of the Group’s products may prevent the
Group from supplying its products or significantly increase production costs. Moreover, the Group imports
raw materials to its production facilities worldwide, from where it then exports the technical or formulated
products to its subsidiaries around the world for formulation and/or commercialization purposes.
Disruptions in the supply of raw materials from regular suppliers may adversely affect operations until an
alternative supplier is engaged. If any of the Group's suppliers are unable to supply raw materials for a
prolonged period, including due to ongoing disruptions and/or prolonged strikes and/or infrastructure
defects in the operating of a relevant port, and if the Group is unable to engage with an alternative supplier
at similar terms and in accordance with the relevant product registration requirements, this may adversely
affect the Group's results, significantly affect its ability to obtain raw materials in general, or obtain them
at reasonable prices, as well as limit its ability to supply products and/or meet customer supply deadlines.
These might negatively affect the Group, its finances and operating results. In order to reduce this risk, it
is the Group's practice to occasionally adjust the volume of its product inventories or in certain scenarios,
to increase the levels of inventory held by the Company to overcome possible supply shortages, logistic
challenges and increases in cost of inventory, as mentioned above, in order to support expected future
sales. Additionally, in the case of fluctuations in the market prices for inventory held by the Company, this
may affect its finances and operating results.
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
33
ADAMA Ltd. Semi-Annual Report 2023
companies are assessed in accordance with the tax laws effective in each respective location. The
Group’s effective tax rate could be significantly affected by different classification or attribution of the
profits arising from the proportional value of the components of each of the companies in the Group in
the various countries, as is recognized in each tax jurisdiction; changes in the characteristics (including
regarding the location of control and management) of these companies; changes in the breakdown of the
Group's profits into regions where differing tax rates apply; changes in statutory tax rates and other
legislative changes; changes in assessment of the Group's deferred tax assets or deferred tax liabilities;
changes in determining the areas in which the Group is taxed; and potential changes in the Group's
organizational structure.
Changes in tax regulations and the manner of their implementation, including with regard to the
implementation of BEPS, may lead to a substantial increase in the Group's applicable tax rates and have
a material adverse effect on its financial position, results and cash flows.
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
34
ADAMA Ltd. Semi-Annual Report 2023
in manufacturing infrastructures, the Group has significant financing and investment needs. The Group
acts continually to improve the state and management of its working capital. While currently the Group is
in compliance with all its financial covenants, significant deterioration of its operating results may in the
future lead the Group to fail to comply with its financial covenants and fail to meet its financial needs. As
a result, the Group's ability to meet its goals and growth plans, as well as its ability to meet its financial
obligations, may be harmed.
Contagious disease outbreak
Outbreak of a contagious disease and pandemics, or other adverse public health developments, in
territories where significant production activity is taking place or from which raw materials are supplied to
a significant extent, may have a material adverse effect on the Company’s activity, such that the Company
may encounter difficulties with procurement of raw materials and intermediates, experience a certain
decrease of activity within its production facilities due to governmental instructions, and be constrained
with respect to its logistics and supply lines. In addition, the Company sales could be potentially impacted
by a temporary decrease in demand for its products, as well as by temporary disruption of the Company’s
ability to sell and distribute products as mentioned above.
35
ADAMA Ltd. Semi-Annual Report 2023
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
Resolutions of 2022
Annual General Meeting
2022 Annual Annual
(Announcement No.:
Shareholders Shareholders 80.3123% April 12, 2023 April 13, 2023
2023-18).
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
Left the
Michal Arlosoroff General Legal Counsel January 1, 2023 Retirement
position
Left the February 15,
Shahar Florentz Chief Financial Officer Resignation for personal reasons
position 2023
Accepted the February 16,
Efrat Nagar Chief Financial Officer --
position 2023
President and CEO (legal
Left the
Ignacio Dominguez representative of the May 1, 2023 Resignation from the Company
position
Company)
President and CEO (legal
Accepted the
Steve Hawkins representative of the May 1, 2023 --
position
Company)
36
ADAMA Ltd. Semi-Annual Report 2023
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.
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.
37
ADAMA Ltd. Semi-Annual Report 2023
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
Policies and Sector Standards related to Environmental Protection
The Group complies with the following laws, regulations and sector standards related to environmental protection in the
process of production and operation:
1. Laws and Regulations
1) Environmental Protection Law of the People's Republic of China;
2) Law of the People's Republic of China on the Prevention and Control of Air Pollution;
3) Law of the People's Republic of China on the Prevention and Control of Water Pollution;
4) Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste;
5) Law of the People's Republic of China on the Prevention and Control of Environmental Noise Pollution;
6) Law of the People's Republic of China on the Prevention and Control of Soil Pollution;
7) Water Law of the People's Republic of China;
8) Cleaner Production Promotion Law of the People's Republic of China;
9) Yangtze River Protection Law of the People's Republic of China;
10) Regulations on the Administration of Pesticides;
11) Regulations on the Administration of Environmental Protection of Construction Projects;
2. Sector Standards
1) Discharge Standard of Pollutants for Urban Sewage Treatment Plant (GB18918-2002);
2) Water Quality Standard for Sewage Discharged into Urban Sewers (GB/T 31962-2015);
3) Emission Standard of Air Pollutants for Pesticide Manufacturing Industry (GB 39727-2020);
4) Standard for Pollution Control of Hazardous Waste Incineration GB18484-2020;
5) Emission Standard of Air Pollutants for Thermal Power Plants (GB 13223-2011);
6) Emission Standard of Air Pollutants for Pesticide Manufacturing Industry (GB 39727-2020);
7) Standard for fugitive emission control of volatile organic compounds (GB37822-2019);
8) Emission Standard for Volatile Organic Compounds in Chemical Industry (DB 32/3151-2016);
9) Emission Standard for Odor Pollutants (GB 14554-93);
10) Emission Standard of Pollutants for Caustic Soda and PVC Industry (GB 15581-2016);
11) Emission Standard for Industrial Enterprises Noise at Boundary GB12348-2008;
12) Standard for Pollution Control of Storage and Landfill of General Industrial Solid Waste GB18599-2020;
13) Standard for Pollution Control of Hazardous Waste Storage GB18597-2023.
14) Technical Specification for Setting Identification Signs of Hazardous Waste HJ1276-2022.
38
ADAMA Ltd. Semi-Annual Report 2023
Environmental Protection Administrative Permits
1. EIA Approval
On 12 June 2023, the Company received the "Approval of Environmental Impact Assessment Statement for the Recycled
Solvent Purification Project of the Overall Relocation and Upgrading Project for Insecticides of ADAMA Ltd.". The
subsidiaries, including Adama Anpon and Adama Huifeng have had EIA approvals for all the projects in operation and
under construction.
2. Waste Discharge Permits
The Company reapplied for Emission Permit on 17 April 2023 which remains valid during the reporting period. Adama
Anpon, the Company's subsidiary, had its discharge permit changed for Anpon site on December 1st, 2022 and renewed
the discharge permit for Maidao site on December 20th, 2021, which means the discharge permits for both plants are within
the validity period in H1 2023. The waste discharge permit of Adama Huifeng, another subsidiary of the Company, was
changed on 9 October 2022 and remains valid during the reporting period.
39
ADAMA Ltd. Semi-Annual Report 2023
Sector Discharge/Emission Standards and Pollutant Discharge and Emission during Operational Activities
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
Discharge Standards
for Pollutants from
General The new site: Urban Sewage
COD Continuous 1 33.3612 173.2104 None
Discharge Port 16.27mg/L Treatment Plant (GB
18918 – 2002), COD
<50mg/L
Discharge Standards
for Pollutants from
Urban Sewage
Ammonia General The new site:
Continuous 1 Treatment Plant (GB 0.6834 17.321 None
nitrogen Discharge Port 0.33mg/L
18918 – 2002),
ammonia
nitrogen<8mg/L;
Discharge Standards
for Pollutants from
Urban Sewage
ADAMA Total General The new site:
Continuous 1 Treatment Plant (GB 0.7151 1.722 None
Ltd. Phosphorous Discharge Port 0.34mg/L.
18918 – 2002), total
phosphorous
<0.5mg/L
(1) The power plant
complies with the
Power plant:
ultra-low limit of the
26.76 mg/m3
standard range for
Hazardous
Power plant, pollutant emission,
waste
Hazardous waste which is NOx <
incinerator: 52.3
incinerator, 50mg/m3;
NOx Continuous 4 mg/m3 19.9538 260.27 None
Acephate RTO, (2) Hazardous waste
Acephate RTO:
and Wastewater incinerator: Table 3 in
6.3 mg/m3
RTO the "Standards for the
Wastewater
Control of Hazardous
RTO: 3.17
Waste Incineration
mg/m3
Pollution " (GB18484-
2020), which is NOx
40
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
<300mg/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 NOx
<200mg/m3;
(1) The power plant
complies with the
ultra-low limit of the
standard range for
pollutant emission,
which is SO2 < 35
Power plant: mg/m3;
6.04 mg/m3 (2) Hazardous waste
Hazardous incinerator: Table 3 in
Power plant, waste the "Standards for the
Hazardous waste incinerator: Control of Hazardous
SO2 Continuous 4 incinerator, 12.33 mg/m3 Waste Incineration 5.1977 116.48 None
Acephate RTO, Acephate RTO: Pollution " (GB18484-
Wastewater RTO 7.2 mg/m3 2020), which is SO2
Wastewater <100mg/m3;
RTO: 1.47 (3) RTO: Table 1 and
mg/m3 2 and specifically the
air pollutant emission
limits in Table 2 of the
"Standards for the Air
Pollutant Emission of
the Pesticide
manufacturing
41
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
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: (2) Hazardous waste
0.6mg/m3 incinerator: Table 3 in
Hazardous the "Standards for the
waste Control of Hazardous
Power plant,
incinerator: 3.8 Waste Incineration
Hazardous waste
mg/m3 Pollution " (GB18484-
incinerator,
Acephate RTO: 2020), which is fume
Acephate RTO,
5.09 mg/m3 and dust <30 mg/m3;
Wastewater
Wastewater (3) RTO: Table 1 and
Fume and Dust Continuous 7 RTO , Acephate 4.7118 44.726 None
RTO: 7.7 mg/m3 2 and specifically the
powder outlet,
Acephate air pollutant emission
Acephate
powder outlet: limits in the " the
granule outlet,
7.89mg/m3. Emission Standards
Sodium sulfate
Acephate for Air Pollutants of
outlet
granule outlet: the Pesticide
7.93mg/m3. Manufacturing
Sodium sulfate Industry" (GB 39727-
outlet: 59mg/m3. 2020), which is fume
and dust < 30 mg/m3;
(4) Table 1
particulates of the
Emission Standards
for Air Pollutants in the
Pesticide
Manufacturing
42
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
Industry (GB39727-
2020) <20mg/m3. (5)
Table 2 particulates of
the Comprehensive
Emission Standards
for Air Pollutants (GB
16297-1996)
<120mg/m3.
(1) Table 1 and 2 and
specifically, the
emission limits of air
pollutants in Table 2 of
Acephate RTO: the Emission
17.84 mg/m3 Standards for Air
Acephate RTO, Wastewater Pollutants of the
Wastewater RTO: 3.56 Pesticide
RTO, Outlet of mg/m3 Manufacturing
Class A Class A Industry (GB 39727-
VOCs Continuous 5 Warehouse, Warehouse: 2020), which is VOCs 2.9095 6.221 None
Outlet of Class C 0.95mg/m3 <100mg/m3;
Warehouse, Class C (2) Table 1 Air
Outlet of the Lab Warehouse: Pollutant Emission
Building 1.04mg/m3 Limits in "Volatile
Lab Building: Organic Compounds
1.43mg/m3 Emission Control
Standards for
Industrial Enterprises"
(DB12/524-2020) of
VOCs <60mg/m3
Comprehensive
ADAMA
Standard on
Anpon
General Discharge of Waste
(Jiangsu) COD Continuous 2 52.57mg/L 35.42 265.69 None
Discharge Port Water (GB8978-
Co., Ltd.
1996)，COD< 500
mg/l;
43
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
Water Quality
Standard for Sewage
Discharged into Urban
Ammonia General
Continuous 2 2.77mg/L Sewerage (GBT 1.87 28.348 None
Nitrogen Discharge Port
31962-2015),
Ammonia Nitrogen
<45 mg/l;
Water Quality
Standard for Sewage
Total General Discharged into Urban
Continuous 2 0.10mg/L 0.0655 20.273 None
Phosphorous Discharge Port Sewerage （GBT
31962-2015）, total
phosphorous < 8 mg/l;
Standard on Air None
Pollution of Thermal The power
NOx Continuous 1 Power Plant / Power Plants / 181.516 plant has
（GB13223-2011） been
NOx < 100 mg/m3 deactivated.
Standard on Air None
Pollution of Thermal The power
SO2 Continuous 1 Power Plant / Power Plants / 396.902 plant has
（GB13223-2011） been
SO2 < 50 mg/m3 deactivated.
Standard on Air
None
Pollution of Thermal
The power
Power Plants
Fume and Dust Continuous 1 Power Plant / / 67.515 plant has
（GB13223-2011）
been
Fume and Dust <
deactivated.
20mg/m3
Standards for the
Volatile Organic
Compound Emission
VOCs Continuous 13 Various Facilities 28.26mg/m3 0.257 47.313 None
of the Chemical
Industry, DB 32/3151-
2016
44
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
General Agreement on
COD Continuous 1 Discharge Port 54.16mg/l Discharged Water: 3.258 182.755 None
COD<500mg/L
General Agreement on
Ammonia Discharge Port Discharged Water:
Continuous 1 0.91mg/l 0.055 4.084 None
Nitrogen ammonia nitrogen
<35mg/L
General Agreement on
Total Discharge Port Discharged Water:
Continuous 1 0.83mg/l 0.05 0.327 None
Phosphorous total phosphorus
<3mg/L
Emission Standards
for Pollutants in
Outlet of DFTO Petrochemical
NOx Continuous 1 / / 1.966 None
Maidao Furnace Industry (GB31571-
Branch 2015)
of NOx<100mg/m3
ADAMA Emission Standards
Anpon for Pollutants in
Outlet of DFTO
(Jiangsu) SO2 Continuous 1 / Petrochemical / 1.673 None
Furnace
Co., Ltd. Industry (GB31571-
2015) SO2 <50mg/m3
Emission Standards
for Pollutants in
Fume and Outlet of DFTO Petrochemical
Continuous 1 / 0 3.095 None
Dust Furnace Industry (GB31571-
2015): Fume and
Dust <20mg/ m.
Standards for the
Volatile Organic
Compound Emission
VOCs Continuous 10 Various Facilities 20.26mg/m3 of the Chemical 0.03 2.017 None
Industry, DB
32/3151-2016, Total
non-methane
45
ADAMA Ltd. Semi-Annual Report 2023
Main
No. of Total amount
Company pollutants and Way of Layout of Pollution standards Total amount emitted/ Exceeding
emission Concentration Approved
name special emission emission points applied Discharged (ton) limit
points (ton)
pollutants
hydrocarbons ≤ 80
mg/m3
General Standards of the
COD Continuous 1 185.9 mg/l 34.236 247.6378 None
Discharge Port Industrial Park
Ammonia General Standards of the
Continuous 1 2.89mg/l 0.4229 19.3783 None
Nitrogen Discharge Port Industrial Park
Total General Standards of the
Continuous 1 0.0546 0.9285 None
Phosphorous Discharge Port 0.32mg/l Industrial Park
General Standards of the
Total Nitrogen Continuous 1 19.08 mg/l 3.4031 46.77204 None
Discharge Port Industrial Park
Jiangsu
RTO and the
Comprehensive
Discharge Ports
NOx Continuous 10 7.44 mg/m Standard on Air 4.7532 147.7072 None
ADAMA at Various
Pollutants Emission
Huifeng Workshops
(DB32/4041-2021)
(Jiangsu)
Jiangsu
Co., Ltd. RTO and the
Comprehensive
Discharge Ports
SO2 Continuous 10 4.43 mg/m Standard on Air 3.2517 47.1958 None
at Various
Pollutants Emission
Workshops
(DB32/4041-2021)
RTO and the Comprehensive
Discharge Ports Standard on Air
Fume and Dust Continuous 10 1.92 mg/m 0.8033 22.7146 None
at Various Pollutants Emission
Workshops (DB32/4041-2021)
RTO and the Comprehensive
Discharge Ports Standard on Air
VOCs Continuous 10 7.92 mg/m 10.8160 62.92994 None
at Various Pollutants Emission
Workshops (DB32/4041-2021)
46
ADAMA Ltd. Semi-Annual Report 2023
Treatment of Pollutants
(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.
ADAMA 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.
ADAMA 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.
The COD and SS volume discharged by Adama (Nanjing) Agricultural Science and Technology
Co., Ltd, a subsidiary of the Company meet the emission 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.
Adama (Nanjing) Agricultural Science and Technology Co., Ltd. has installed five sets of fans and
supporting exhaust pipelines, each of which is equipped with a set of "water spray + activated
carbon adsorption" treatment facilities. It also has two general pipes for exhaust. The emission of
VOCs and hydrogen chloride is compliant with the required standards.
47
ADAMA Ltd. Semi-Annual Report 2023
(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
basis.
Contingency plan of environmental accidents
The Company and its relevant subsidiaries have formulated the Contingency Plan for Environmental
Emergencies according to their production facilities and industry features, and then submitted files to the
local environmental protection authorities as record.
Inputs in Environmental Protection and Treatment and Payment of Environmental Tax
Inputs in Environmental Payment of Environmental
Company Name Protection and Treatment Tax during H1 2023
during H1 2023 (0,000RMB) (0,000RMB)
ADAMA Ltd. 3,450.48 18.8933
Adama Anpon (Jiangsu) Ltd. 1,200 1.44
Adama Huifeng (Jiangsu) Ltd. 5,997 4.158
Adama (Nanjing) Agricultural
Science and Technology Co., 12.87 /
Ltd
Note: Adama (Nanjing) Agricultural Science and Technology Co., Ltd. is not required to pay environmental
protection tax because it is not a key environmental enterprise.
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.
48
ADAMA Ltd. Semi-Annual Report 2023
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
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
has 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.
Administrative punishment due to environmental problems in the Reporting Period
No
Other environmental information that should be disclosed
No.
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 the renovation of chlor-alkali chemical water steam pipeline, the optimization of
49
ADAMA Ltd. Semi-Annual Report 2023
public utility engineering and upgrading of brine pumps, reducing energy consumption and maintenance
frequency of equipment by the optimization of public utility engineering and rational resource allocation,
and decreasing both energy consumption and CO2 emission by the replacement of water pumps and
motor types, the increase of frequency converters so as to better match pumps and motors with actual
needs, etc.
Other related information on environmental protection
No.
II. Social Responsibilities
In terms of consolidating and expanding the achievements of poverty eradication and rural revitalization,
in the first half of 2023, ADAMA Anpon, one of the Company’s subsidiaries, continued to provide paired-
up assistance to Sanhe Village, Shunhe Township, Huai'an District in Huai’an City of Jiangsu Province
in accordance with the arrangements of the local provincial government for the economically less
developed villages. During the spring farming season, various towns and communities at Huai'an District
pushed forward the public space governance for the countryside. According to the unified planning of the
task force, volunteers from ADAMA Anpon analyzed and deployed with the village councils to facilitate
the implementation. Thanks to the efforts on public space governance, Sanhe Village managed to rectify
235 problems, recovered land area of 743.67 mu, and increased collective income by 321,300 yuan
through a variety of methods such as land transfer, revitalization of idle assets and resources, and
remediation of encroached assets and resources.
50
ADAMA Ltd. Semi-Annual Report 2023
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 2022 Annual Report published on
the website www.cninfo.com.cn on March 21, 2023.
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.
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
51
ADAMA Ltd. Semi-Annual Report 2023
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
52
ADAMA Ltd. Semi-Annual Report 2023
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 AG Party Transactions
same control and raw Market Market Cash March
and its 61,684 7.51% 144,486 No N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
subsidiaries Course of Business
Holdings from oducts
in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Bluestar Expected Related-
Under the materials Purchase of
(Beijing) March Party Transactions
same control and raw
Chemical - - - - 856 No - N/A in the Ordinary
of Sinochem products materials/pr 21,2023
Machinery Course of Business
Holdings from oducts
Co., Ltd. in 2023 (No.2023-
related
12)
parties
Purchasing Announcement on
Jiangsu Under the Purchase of
raw March Expected Related-
Huaihe same control raw Market Market Cash
materials 12,367 1.51% 23,512 No N/A Party Transactions
Chemicals of Sinochem materials/pr price price Settlement 21,2023
and in the Ordinary
Co., Ltd. Holdings oducts
products Course of Business
53
ADAMA Ltd. Semi-Annual Report 2023
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 2023 (No.2023-
related 12)
parties
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
March Party Transactions
same control and raw Market Market Cash
Sinofert 46 0.01% 115 No N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Course of Business
Holdings from oducts
in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
March Party Transactions
Yangnong same control and raw Market Market Cash
39 0.00% 52,875 No N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 21,2023
Course of Business
Co., Ltd. Holdings from oducts
in 2023 (No.2023-
related
12)
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
10,696 1.30% 29,561 No N/A in the Ordinary
Protection of Sinochem products materials/pr price price Settlement 21,2023
Course of Business
Co., Ltd. Holdings from oducts
in 2023 (No.2023-
related
12)
parties
54
ADAMA Ltd. Semi-Annual Report 2023
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
Hangzhou Expected Related-
Under the materials Purchase of
(Torch) Xidou Party Transactions
same control and raw Market Market Cash March
Door Film 7 0.00% 14 No N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Industry Co., Course of Business
Holdings from oducts
Ltd. in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Sinochem Expected Related-
Under the materials Purchase of
Lantian Party Transactions
same control and raw March
Fluorine - - - - 288 No - N/A in the Ordinary
of Sinochem products materials/pr 21,2023
Materials Course of Business
Holdings from oducts
Co., Ltd. in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Expected Related-
Zhonglan Under the materials Purchase of
Party Transactions
International same control and raw Market Market Cash March
4,448 0.54% 25,300 No N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 21,2023
Course of Business
Co., Ltd. Holdings from oducts
in 2023 (No.2023-
related
12)
parties
Sinochem Under the Purchasing Purchase of Market Market Cash March Announcement on
721 0.09% 8,090 No N/A
Agro Co.,Ltd. same control raw raw price price Settlement 21,2023 Expected Related-
55
ADAMA Ltd. Semi-Annual Report 2023
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 materials materials/pr Party Transactions
Holdings and oducts in the Ordinary
products Course of Business
from in 2023 (No.2023-
related 12)
parties
Purchasing
Announcement on
raw
Expected Related-
Jiangsu Under the materials Purchase of
March Party Transactions
Youshi same control and raw Market Market Cash
601 0.07% - - N/A in the Ordinary
Chemical of Sinochem products materials/pr price price Settlement 21,2023
Course of Business
Co., Ltd. Holdings from oducts
in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Expected Related-
Under the materials Purchase of
Bluestar March Party Transactions
same control and raw Market Market Cash
Engineering 1,114 0.14% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Co.,Ltd. Course of Business
Holdings from oducts
in 2023 (No.2023-
related
12)
parties
Purchasing Announcement on
ELKEM Under the Purchase of
raw March Expected Related-
SILICONES same control raw Market Market Cash
materials 26 0.00% - - N/A Party Transactions
BRASIL of Sinochem materials/pr price price Settlement 21,2023
and in the Ordinary
LTDA Holdings oducts
products Course of Business
56
ADAMA Ltd. Semi-Annual Report 2023
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 2023 (No.2023-
related 12)
parties
Purchasing
Announcement on
raw
Beijing Expected Related-
Under the materials Purchase of
Guangyuan March Party Transactions
same control and raw Market Market Cash
Yinong 15 0.00% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Chemical Course of Business
Holdings from oducts
Co., LTD in 2023 (No.2023-
related
12)
parties
Purchasing
Sinochem Announcement on
raw
Chemical Expected Related-
Under the materials Purchase of
Science and March Party Transactions
same control and raw Market Market Cash
Technology 4 0.00% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Research Course of Business
Holdings from oducts
Institute Co., in 2023 (No.2023-
related
LTD 12)
parties
Purchasing
Announcement on
raw
Syngenta Expected Related-
Under the materials Purchase of
(China) March Party Transactions
same control and raw Market Market Cash
Investment 3,583 0.44% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Company Course of Business
Holdings from oducts
Limited in 2023 (No.2023-
related
12)
parties
57
ADAMA Ltd. Semi-Annual Report 2023
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
Shandong Expected Related-
Under the materials Purchase of
Dacheng March Party Transactions
same control and raw Market Market Cash
Agrochemica 275 0.03% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
l Company Course of Business
Holdings from oducts
Limited in 2023 (No.2023-
related
12)
parties
Purchasing
Announcement on
raw
Sinochem Expected Related-
Under the materials Purchase of
International March Party Transactions
same control and raw Market Market Cash
Crop Care 2,484 0.30% - - N/A in the Ordinary
of Sinochem products materials/pr price price Settlement 21,2023
Company Course of Business
Holdings from oducts
Limited in 2023 (No.2023-
related
12)
parties
Announcement on
Selling raw
Expected Related-
Under the materials
Syngenta AG March Party Transactions
same control and Selling Market Market Cash
and its 64,150 3.72% 159,178 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
subsidiaries Course of Business
Holdings related
in 2023 (No.2023-
parties
12)
Jiangsu Under the Selling raw March Announcement on
Selling Market Market Cash
Huaihe same control materials 11,835 0.69% 26,893 No N/A Expected Related-
products price price Settlement 21,2023
Chemicals of Sinochem and Party Transactions
58
ADAMA Ltd. Semi-Annual Report 2023
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. Holdings products to in the Ordinary
related Course of Business
parties in 2023 (No.2023-
12)
Announcement on
Selling raw
Expected Related-
Under the materials
March Party Transactions
same control and Selling Market Market Cash
Sinofert 9,966 0.58% 14,168 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Course of Business
Holdings related
in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Expected Related-
Under the materials
Party Transactions
same control and Selling Market Market Cash March
Sino MAP 788 0.05% 1,150 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Course of Business
Holdings related
in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Expected Related-
Jiangsu Under the materials
March Party Transactions
Yangnong same control and Selling Market Market Cash
1 0.00% 6 No N/A in the Ordinary
Chemical of Sinochem products to products price price Settlement 21,2023
Course of Business
Co., Ltd. Holdings related
in 2023 (No.2023-
parties
12)
Jiangsu Under the Selling raw Selling Market Market 2,451 0.14% 12,650 No Cash N/A March Announcement on
59
ADAMA Ltd. Semi-Annual Report 2023
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
Youshi same control materials products price price Settlement 21,2023 Expected Related-
Chemical of Sinochem and Party Transactions
Co., Ltd. Holdings products to in the Ordinary
related Course of Business
parties in 2023 (No.2023-
12)
Announcement on
Selling raw
Jiangsu Expected Related-
Under the materials
Youjia Market Market Party Transactions
same control and Selling Cash March
Plant 51 0.00% 173 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Protection Course of Business
Holdings related
Co., Ltd. in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Syngenta Expected Related-
Under the materials
Nantong Party Transactions
same control and Selling Market Market Cash March
Crop 170 0.01% 610 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Protection Course of Business
Holdings related
Co.,Ltd. in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Sinochem Expected Related-
Under the materials
International March Party Transactions
same control and Selling Market Market Cash
Crop Care 1,426 0.08% 1,898 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Company Course of Business
Holdings related
Limited in 2023 (No.2023-
parties
12)
60
ADAMA Ltd. Semi-Annual Report 2023
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-
Under the materials
March Party Transactions
Sinochem same control and Selling Market Market Cash
268 0.02% 230 Yes N/A in the Ordinary
Agro Co.,Ltd. of Sinochem products to products price price Settlement 21,2023
Course of Business
Holdings related
in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Syngenta Expected Related-
Under the materials
(China) Market Market Party Transactions
same control and Selling Cash March
Investment 646 0.04% 725 No N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Company Course of Business
Holdings related
Limited in 2023 (No.2023-
parties
12)
Announcement on
Selling raw
Beijing Expected Related-
Under the materials
Guangyuan Market Market Party Transactions
same control and Selling Cash March
Yinong 109 0.01% - - N/A in the Ordinary
of Sinochem products to products price price Settlement 21,2023
Chemical Course of Business
Holdings related
Co., LTD in 2023 (No.2023-
parties
12)
Selling raw Announcement on
Henan Under the
materials Market Market Expected Related-
Junhua same control Selling Cash March
and 4 0.00% - - N/A Party Transactions
Development of Sinochem products price price Settlement 21,2023
products to in the Ordinary
Co. Ltd. Holdings
related Course of Business
61
ADAMA Ltd. Semi-Annual Report 2023
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 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Sinochem Under the
services March Party Transactions
Information same control Value-added Market Market Cash
from 43 0.01% 40 Yes N/A in the Ordinary
Technology of Sinochem OA services price price Settlement 21,2023
related Course of Business
Co., Ltd Holdings
parties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Sinochem Under the
services March Party Transactions
Information same control Market Market Cash
from IT services 2 0.00% 35 No N/A in the Ordinary
Technology of Sinochem price price Settlement 21,2023
related Course of Business
Co., Ltd Holdings
parties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Under the
Syngenta AG services Market Market Party Transactions
same control Regular Cash March
and its from 45 0.01% 52 No N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
subsidiaries related Course of Business
Holdings
parties in 2023 (No.2023-
12)
Under the Receiving March Announcement on
Regular
Sino MAP same control services - - - - 40 No - N/A Expected Related-
services 21,2023
of Sinochem from Party Transactions
62
ADAMA Ltd. Semi-Annual Report 2023
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
Holdings related in the Ordinary
parties Course of Business
in 2023 (No.2023-
12)
Announcement on
Bluestar Receiving Expected Related-
Under the
(Beijing) services March Party Transactions
same control Regular
Chemical from - - - - 100 No - N/A in the Ordinary
of Sinochem services 21,2023
Machinery related Course of Business
Holdings
Co., Ltd. parties in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Under the
Shenyang services March Party Transactions
same control Regular Market Market Cash
Chemical from 58 0.01% - - N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
Co., Ltd. related Course of Business
Holdings
parties in 2023 (No.2023-
12)
China Announcement on
Bluestar Receiving Expected Related-
Under the
Chengrand services March Party Transactions
same control Regular Market Market Cash
Research from 1 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
Institute related Course of Business
Holdings
Chemical parties in 2023 (No.2023-
Industry 12)
Shenyang Under the Receiving Regular Market Market 2 0.00% - - Cash N/A March Announcement on
63
ADAMA Ltd. Semi-Annual Report 2023
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
Shenhua same control services services price price Settlement 21,2023 Expected Related-
Institute of Sinochem from Party Transactions
Testing Holdings related in the Ordinary
Technology parties Course of Business
Co., Ltd. in 2023 (No.2023-
12)
Announcement on
Receiving Expected Related-
Under the
services March Party Transactions
same control Regular Market Market Cash
Sinofert from 1 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
related Course of Business
Holdings
parties in 2023 (No.2023-
12)
Announcement on
Syngenta Receiving Expected Related-
Under the
(China) services March Party Transactions
same control Regular Market Market Cash
Investment from 31 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
Company related Course of Business
Holdings
Limited parties in 2023 (No.2023-
12)
Sinochem Announcement on
Innovation Receiving Expected Related-
Under the
(Beijing) services March Party Transactions
same control Regular Market Market Cash
Technology from 4 0.00% - - N/A in the Ordinary
of Sinochem services price price Settlement 21,2023
Research related Course of Business
Holdings
Institute Co., parties in 2023 (No.2023-
Ltd. 12)
64
ADAMA Ltd. Semi-Annual Report 2023
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
Zhonglan Purchasing Expected Related-
Under the
Lianhai fixed March Party Transactions
same control Purchase of Market Market Cash
Design assets from 40 0.00% - - N/A in the Ordinary
of Sinochem fixed assets price price Settlement 21,2023
Institute Co., related Course of Business
Holdings
Ltd. parties in 2023 (No.2023-
12)
Announcement on
Expected Related-
Under the Rendering
Syngenta AG March Party Transactions
same control services to Regular Market Market Cash
and its 187 0.01% - - N/A in the Ordinary
of Sinochem related services price price Settlement 21,2023
subsidiaries Course of Business
Holdings parties
in 2023 (No.2023-
12)
Total -- -- 190,389 -- 503,045 -- -- -- -- --
Details of large sales return -
According to the Company's daily business operation needs, the Company estimates that the total amount of daily
Execution of related-party transactions in the
related party transactions in 2023 will not exceed RMB 5,030.45 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 2023 (No.: 2023-12). The Company’s
expected by types during this reporting period (if
actual amount of daily related party transactions defined in the listing rules incurred for the six months ended June
any)
30,2023 is RMB 1,903.89 million, which does not exceed the expected amount.
Reasons for large difference between transaction The Company’s related transactions with related party shall be carried out in accordance with the principle of
price and market reference price (if applicable) voluntary, equality and mutual benefit, fair, and will not harm the interests of the Company.
65
ADAMA Ltd. Semi-Annual Report 2023
2. Related-Party Transactions arising from Asset/Equity acquisition or sale
□ Applicable √ Not applicable
The Company was not involved in any related-party transactions arising from asset/equity 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% 41,766 16,183 47,550 10,399
of Sinochem
Ltd
Holdings
66
ADAMA Ltd. Semi-Annual Report 2023
Loans
In RMB ’0000
Transactions during the
Reporting Period
Credit Total Amount Total Amount
Related Range of Opening Ending
Relations Amount of of Loans for of Payment
Parties Interest Rate Balance Balance
the Loan the for the
Reporting Reporting
Period Period
Under the
Sinochem
same control
Finance Co., 50,000 2.7%-3.0% - 5,000 - 5,000
of Sinochem
Ltd
Holdings
Facilities and Other Financial Services
In RMB ’0000
Total Amount Actual Amount
Related Party Relations Type of the Services
Incurred
Sinochem Finance Under the same control
Facilities 50,000 -
Co., Ltd of Sinochem Holdings
6. Transactions between the finance company controlled by the Company and related parties
□ Applicable √ Not applicable
The company does not hold any equity interest in any finance company.
7. Other material related-party transactions
√Applicable □ Not applicable
The 18th Meeting of the 9th Session of the Board of Directors approved the Proposal on Credit Facilities
from the Related Party.
The website to disclose the interim announcements on significant related-party transactions:
Name of the interim Disclosure date of the interim Website to disclose the interim
announcement announcement announcement
Announcement on Credit Facility of
USD 250 million from a Related February 16, 2023 Juchao website www.cninfo.com.cn
Party (Announcement No.2023-6)
67
ADAMA Ltd. Semi-Annual Report 2023
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 2023
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 guarant Guarant of
occurrence guarant al（if d or related
ed party announceme e ee ee（if guarant
date ee any） not party or
nt amount amount any） ee
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 guarant Guarant of
occurrence guarant al（if d or related
ed party announceme e ee ee（if guarant
date ee any） not party or
nt amount amount any） ee
not
Three
years
December Joint and
December 1, after the
ADAMA 22, 2020 3,800 several / / No No
2021 project
Anpon liability
125,800 loan
(Jiangsu) April 29, 2021
October matures
Ltd.
28,2021
December 1, Joint and Three
200 / / Yes No
2021 several years
69
ADAMA Ltd. Semi-Annual Report 2023
liability after the
project
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
Three
years
Joint and
after the
May 20, 2022 750 several / / No No
project
liability
loan
matures
Three
years
Joint and
June 26, after the
2,350 several / / No No
2022 project
liability
loan
matures
Joint and Three
January 18, years
4,000 several / / Yes No
2022 after the
liability
loan
70
ADAMA Ltd. Semi-Annual Report 2023
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
years
Joint and
after the
July 2, 2022 810 several / / No No
project
liability
loan
matures
Three
Joint and years
March 30,
3,000 several / / after the Yes No
2022
liability loan
matures
Three
years
Joint and
August 11, after the
March 31, 1,000 several / / No No
104,100 2022 project
2022 liability
loan
matures
Three
years
Joint and
August 31, after the
1,000 several / / No No
2022 project
liability
loan
matures
71
ADAMA Ltd. Semi-Annual Report 2023
Three
years
Joint and
October 28, after the
1,100 several / / No No
2022 project
liability
loan
matures
Joint and Three
several years
October 31, liability after the
1,000 / / No No
2022 project
loan
matures
Three
years
Joint and
November after the
2,000 several / / No No
17, 2022 project
liability
loan
matures
Three
years
Joint and
November after the
2,500 several / / No No
23, 2022 project
liability
loan
matures
Three
years
Joint and
November after the
1,100 several / / No No
30, 2022 project
liability
loan
matures
Three
Joint and years
December
2,000 several / / after the No No
17, 2022
liability loan
matures
January 12, Joint and Three
1,000 / / No No
2023 several years
72
ADAMA Ltd. Semi-Annual Report 2023
liability after the
loan
matures
Three
Joint and years
January 16,
1,000 several / / after the No No
2023
liability loan
matures
Three
Joint and years
April 4, 2023 1,200 several / / after the No No
liability loan
matures
Three
Joint and years
April 4, 2023 1,400 several / / after the No No
liability loan
matures
Three
Joint and years
April 13,
440 several / / after the No No
2023
liability loan
matures
Three
Joint and years
April 26,
200 several / / after the No No
2023
liability loan
matures
Total guarantee line
Total amount of the occurred guarantee in
approved in favor of the
114,000 favor of the subsidiaries during the reporting 5,240
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 343,900 subsidiaries by the end of the reporting period 32,440
subsidiaries by the end (B4)
of the reporting period
73
ADAMA Ltd. Semi-Annual Report 2023
(B3)
Guarantees provided by subsidiaries in favor of subsidiaries (USD ’0000)
Guarante
Planned Actual Counter Period
Disclosure date Actual Type of Collater expire e for a
Guarante guarante guarant Guarant of
of the occurrenc guarant al（if d or related
ed party e ee ee（if guarant
announcement e date ee any） not party or
amount amount any） ee
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)
The loan
term (5
years)
and any
applicabl
Control joint and
January 10, January 9, e statute
Solutions, 4,000 750 several / / No No
2019 2019 of
Inc. liability
limitation
s period
(generall
y7
years).
Related
guarantee
s existed
before the
company Valid
joint and
ADAMA 22,287.0 was until
Not applicable 2.10 several / / No No
Brazil 8 consolidat cancelle
liability
ed into the d
financial
statements
of the
Company.
74
ADAMA Ltd. Semi-Annual Report 2023
joint and Decemb
ADAMA January 22, December
900 900 several / / er 31, No No
Brazil 2022 29, 2021
liability 2025
Related
guarantee
s existed
before the
Adama company Valid
joint and
India was until
Not applicable 8,915.34 3,684.38 several / / No No
Private consolidat cancelle
liability
Ltd. ed into the d
financial
statements
of the
Company.
Related
guarantee
s existed
ADAMA
before the
Turkey
company Valid
Tarm joint and
was until
Sanayi ve Not applicable 7,150 711.95 several / / No No
consolidat cancelle
Ticaret liability
ed into the d
Limited
financial
irketi
statements
of the
Company.
Related
guarantee
s existed
before the
company Valid
Adama joint and
was until
Makhteshi Not applicable unlimited 50,440 several / / No No
consolidat cancelle
m liability
ed into the d
financial
statements
of the
Company.
75
ADAMA Ltd. Semi-Annual Report 2023
Valid
Adama joint and
May 3, until
Makhteshi April 25, 2023 7,875 0 several / / No No
2023 cancelle
m liability
d
Related
guarantee
s existed
before the
company Valid
joint and
Adama was until
Not applicable unlimited 29,570 several / / No No
Agan consolidat cancelle
liability
ed into the d
financial
statements
of the
Company.
ADAMA Valid
joint and
Agricultura January 22, January until
423.58 113.01 several / / No No
l Solutions 2022 22, 2022 cancelle
liability
UK Ltd. d
ADAMA
CELSIUS
BV,
Curacao Valid
joint and
branch, & November 25, November until
4,500 0 several / / No No
ADAMA 2022 24, 2022 cancelle
liability
Fahrenheit d
BV,
Curacao
Branch
ADAMA
CELSIUS
BV, Valid
Curacao joint and
January 22, January until
branch, & 7,000 3,133.97 several / / No No
2022 22, 2022 cancelle
ADAMA liability
d
Fahrenheit
BV,
Curacao
76
ADAMA Ltd. Semi-Annual Report 2023
Branch
Related
guarantee
s existed
before the
company Valid
ADAMA joint and
was until
Ukraine Not applicable 3,000 0 several / / No No
consolidat cancelle
LLC liability
ed into the d
financial
statements
of the
Company.
Related
guarantee
s existed
Makhteshi before the
m Agan of company Valid
joint and
was until
North Not applicable 4,000 3,100 several / / No No
consolidat cancelle
Amercia liability
ed into the d
Inc. financial
statements
of the
Company.
Total guarantee line 7,875
Total amount of the guarantee in
approved in favor of the （approximately 92,405.41（approximately
favor of the subsidiaries occurred
subsidiaries during the RMB 541.15 RMB 6,677.03 million）
during the reporting period (C2)
reporting period (C1) million）
71,351
(approximately RMB
Aggregated guarantee line
5,155.68 million) (the
that has been approved in Total guarantee balance in favor of
guarantee amount 92,405.41（approximately
favor of the subsidiaries the subsidiaries by the end of the
for Adama RMB 6,677.03 million）
by the end of the reporting reporting period (C4)
Makhteshim and
period (C3)
Adama Agan is
unlimited)
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
77
ADAMA Ltd. Semi-Annual Report 2023
Total guarantee line
Total actual occurred amount of
approved during the
168,114.64 guarantee during the reporting 672,943.01
reporting period
period (A2+B2+C2)
(A1+B1+C1)
Total guarantee line
that has been approved Total actual guarantee balance at the
at the end of the 864,468.06 end of the reporting period 700,143.01
reporting period (A4+B4+C4)
(A3+B3+C3)
Proportion of total guarantee amount
29.61%
(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 553.01 million
guaranteed party whose asset-liability ratio is
not less than 70% directly or indirectly (E) (approximately RMB 3,995.94 million)
The amount of the guarantee that exceeds 50%
0
of the net assets
Total amount of the above three guarantees USD 553.01 million
(D+E+F) (approximately RMB 3,995.94 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)
78
ADAMA Ltd. Semi-Annual Report 2023
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
79
ADAMA Ltd. Semi-Annual Report 2023
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 Issued of Public Other Subtotal Amount Proportion
Shares
Shares Reserves
I. Restricted
4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
Shares
1. State-owned
-- -- -- -- -- -- -- -- --
Shares
2. State-owned
Legal Person’s 0 0.00% -- -- -- -- -- 0 0.00%
Shares
3. Shares Held by
Domestic 4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
Investors
Among which,
Shares Held by
0 0.00% -- -- -- -- -- 0 0.00%
Domestic Legal
Person
Shares Held by
Domestic Natural 4,500 0.0002% -- -- -- -- -- 4,500 0.0002%
Person
II. Shares not
2,329,807,266 99.9998% -- -- -- -- -- 2,329,807,266 99.9998%
Subject to
80
ADAMA Ltd. Semi-Annual Report 2023
Trading
Moratorium
1.RMB Ordinary
2,177,067,461 93.4439% -- -- -- -- -- 2,177,067,461 93.4439%
Shares
2.Domestically
Listed Foreign 152,739,805 6.5559% -- -- -- -- -- 152,739,805 6.5559%
Shares
III. Total Shares 2,329,811,766 100.00% -- -- -- -- -- 2,329,811,766 100.00%
81
ADAMA Ltd. Semi-Annual Report 2023
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
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 -- --
82
ADAMA Ltd. Semi-Annual Report 2023
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
83
ADAMA Ltd. Semi-Annual Report 2023
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total Number of Shareholders 42,447 (the number of ordinary A share Total Number of Preferred Stockholders with
as of the End of the Reporting shareholders is 29,382; the number of B Vote Right Restored (if any) as of the End of 0
Period share shareholders is 13,065) the Reporting Period
Shareholding of Top 10 Common Shareholders or Those Holding More than 5% Shares
Pledged,
Increase Marked or
Number of Number of
Number of and Frozen
Common Common
Holding Shareholding Decrease of Shares
Nature of Shares Held Shares Held
Number of Shareholder Percent at the End of Shares
Shareholder Subject to Not Subject to Statu
age (%) the Reporting during the
Trading Trading s of Amou
Period Reporting
Moratorium Moratorium Shar nt
Period
es
State-owned
Syngenta Group Co., Ltd. 78.47% 1,828,137,961 0 0 1,828,137,961 -- 0
Legal Person
China Cinda Asset Management State-owned
1.34% 31,115,916 0 0 31,115,916 -- 0
Co., Ltd. Legal Person
Domestic
Wang Xiuqin Natural 0.31% 7,216,454 -1,271,261 0 7,216,454 -- 0
Person
Bosera Funds-China Merchants
Bank- Bosera Funds Xincheng
Others 0.28% 6,500,000 0 0 6,500,000 -- 0
No.2 Collective Asset
Management Plan
Domestic
Wu Feng Natural 0.26% 6,141,269 661,354 0 6,141,269 -- 0
Person
Bosera Funds-Postal Savings
Bank- Bosera Funds Xincheng
Others 0.26% 6,000,000 0 0 6,000,000 -- 0
No.3 Collective Asset
Management Plan
Domestic
Zhu Shenglan Natural 0.25% 5,756,000 1,766,000 0 5,756,000 -- 0
Person
Hong Kong Securities Clearing Overseas
0.22% 5,118,398 -5,487,682 0 5,118,398 -- 0
Company Ltd. (HKSCC) Legal Person
China Universal Asset
Management Fund-Industrial
Bank-CUAM-Strategic Others 0.19% 4,400,000 0 0 4,400,000 -- 0
Enhancement No.3 Collective
Asset Management Plan
Qichun County State-owned
Assets Supervision and State-owned 0.18% 4,169,266 0 0 4,169,266 -- 0
Administration Bureau
Strategic Investors or the
General Legal Person Who
Not Applicable
Become the Top 10 Common
Shareholders (if any) due to the
84
ADAMA Ltd. Semi-Annual Report 2023
Placement of New Shares
Syngenta Group Co., Ltd. is neither a related party to any other shareholders listed above, nor any
Explanation on Associated acting-in-concert party as prescribed in the Administrative Methods for Acquisition of Listed
Relationship or/and Persons Companies. It is unknown whether the other shareholders are related parties or 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 Shares Type of Shares
Held Not Subject to Trading
Number of Shareholders
Moratorium at the End of the Type of Shares Amount
Period
Syngenta Group Co., Ltd. 1,828,137,961 RMB Ordinary Share 1,828,137,961
China Cinda Asset Management Co., Ltd. 31,115,916 RMB Ordinary Share 31,115,916
Wang Xiuqin 7,216,454 RMB Ordinary Share 7,216,454
Bosera Funds-China Merchants Bank- Bosera Funds RMB Ordinary Share
6,500,000 6,500,000
Xincheng No.2 Collective Asset Management Plan
Wu Feng 6,141,269 RMB Ordinary Share 6,141,269
Bosera Funds-Postal Savings Bank- Bosera Funds RMB Ordinary Share
6,000,000 6,000,000
Xincheng No.3 Collective Asset Management Plan
Zhu Shenglan 5,756,000 RMB Ordinary Share 5,756,000
Hong Kong Securities Clearing Company Ltd. (HKSCC) 5,118,398 RMB Ordinary Share 5,118,398
China Universal Asset Management Fund-Industrial Bank- RMB Ordinary Share
CUAM-Strategic Enhancement No.3 Collective Asset 4,400,000 4,400,000
Management Plan
Qichun County State-owned Assets Supervision and
4,169,266 RMB Ordinary Share 4,169,266
Administration Bureau
Explanation on associated relationship among the top Syngenta Group Co., Ltd. is neither a related party to any other shareholders
ten common shareholders of tradable share not listed above, nor any acting-in-concert party as prescribed in the
subject to trading moratorium, as well as among the Administrative Methods for Acquisition of Listed Companies. It is unknown
top ten common shareholders of tradable share not whether the other shareholders are related parties or acting-in-concert
subject to trading moratorium and top ten parties as prescribed in the Administrative Methods for Acquisition of Listed
shareholders, or explanation on acting-in-concert Companies.
Shareholder Wang Xiuqin held 7,216,454 shares of the Company through a
credit collateral securities trading account. Shareholder Wu Feng held
Particular about the top ten common shareholder 4,776,243 shares of the Company through a common securities account
participating in the securities lending and borrowing and 1,365,026 shares of the Company through a credit collateral securities
business (if any) trading account, altogether 6,141,269 shares. Shareholder Zhu Shenglan
held 5,756,000 shares of the Company through a credit collateral securities
trading account.
85
ADAMA Ltd. Semi-Annual Report 2023
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 2022.
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.
86
ADAMA Ltd. Semi-Annual Report 2023
Section VIII - Preferred stock
□ Applicable √ Not applicable
There was no preferred stock during Reporting Period.
87
ADAMA Ltd. Semi-Annual Report 2023
Section IX - Bonds
□ Applicable √ Not applicable
88
ADAMA Ltd. Semi-Annual Report 2023
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.
89
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Consolidated Balance Sheet
June 30 December 31
Notes 2023 2022
Current assets
Cash at bank and on hand V.1 4,604,523 4,290,961
Financial assets held for trading V.2 1,930 1,685
Derivative financial assets V.3 192,141 233,809
Bills receivable V.4 107,296 112,297
Accounts receivable V.5 9,363,758 9,018,375
Receivables financing V.6 125,292 63,639
Prepayments V.7 375,984 341,102
Other receivables V.8 870,122 1,021,824
Inventories V.9 16,667,957 16,927,241
Other current assets V.10 1,168,948 1,129,688
Total current assets 33,477,951 33,140,621
Non-current assets
Long-term receivables V.11 59,273 82,510
Long-term equity investments V.12 29,272 26,368
Other equity investments V.13 162,905 158,341
Investment properties 22,963 3,168
Fixed assets V.14 9,476,560 8,952,184
Construction in progress V.15 3,147,493 2,961,401
Right-of-use assets V.16 640,996 555,889
Intangible assets V.17 5,533,495 5,342,754
Goodwill V.18 5,100,028 4,805,157
Deferred tax assets V.19 1,759,583 1,347,263
Other non-current assets V.20 491,383 604,833
Total non-current assets 26,423,951 24,839,868
Total assets 59,901,902 57,980,489
90
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Consolidated Balance Sheet (continued)
June 30 December 31
Notes 2023 2022
Current liabilities
Short-term loans V.21 6,341,677 3,342,921
Derivative financial liabilities V.22 735,658 545,516
Bills payable V.23 497,344 1,114,775
Accounts payable V.24 5,944,976 7,527,269
Contract liabilities V.25 1,446,129 1,776,573
Employee benefits payable V.26 856,181 1,370,786
Taxes payable V.27 575,271 459,574
Other payables V.28 2,489,597 1,611,282
Non-current liabilities due within one year V.29 2,591,835 2,262,131
Other current liabilities V.30 749,821 703,794
Total current liabilities 22,228,489 20,714,621
Non-current liabilities
Long-term loans V.31 3,276,454 3,662,870
Debentures payable V.32 7,433,065 7,353,511
Lease liabilities V.33 498,967 431,076
Long-term payables 108,886 107,686
Long-term employee benefits payable V.34 762,792 792,153
Provisions V.35 297,238 222,181
Deferred tax liabilities V.19 332,560 315,861
Other non-current liabilities V.36 1,318,941 1,255,875
Total non-current liabilities 14,028,903 14,141,213
Total liabilities 36,257,392 34,855,834
Shareholders' equity
Share capital V.37 2,329,812 2,329,812
Capital reserve V.38 12,945,837 12,986,333
Less: Treasury shares - -
Other comprehensive income V.39 1,964,795 1,080,590
Special reserves 15,788 15,818
Surplus reserve V.40 242,498 242,498
Retained earnings V.41 6,145,780 6,469,604
Total equity attributed to the shareholders
of the company 23,644,510 23,124,655
Non-controlling interests - -
Total Equity 23,644,510 23,124,655
Total liabilities and equity 59,901,902 57,980,489
Steve Hawkins Efrat Nagar
Legal representative Chief Financial Officer
These financial statements were approved by the Board of Directors of the Company on August 28 2023.
The notes form part of these financial statements.
91
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Company's Balance Sheet
June 30 December 31
Notes 2023 2022
Current assets
Cash at bank and on hand XV.1 124,556 271,080
Accounts receivable XV.2 1,031,440 758,462
Receivables financing XV.3 47,446 2,596
Prepayments 18,305 7,944
Other receivables XV.4 11,611 11,611
Inventories 175,209 256,001
Non-current assets due within one year 125,000 125,000
Other current assets 1,415 2,312
Total current assets 1,534,982 1,435,006
Non-current assets
Long-term equity investments XV.5 17,511,352 17,511,352
Other equity investments 84,720 84,720
Investment properties 2,893 3,168
Fixed assets 1,777,912 1,822,134
Construction in progress 71,832 90,074
Right-of-use assets 1,665 2,842
Intangible assets 255,294 258,997
Deferred tax assets 55,004 75,383
Other non-current assets 271,708 269,574
Total non-current assets 20,032,380 20,118,244
Total assets 21,567,362 21,553,250
Current liabilities
Short-term loans 50,000 50,000
Bills payables 10,676 42,451
Accounts payables 185,854 205,767
Contract liabilities 23,468 15,116
Employee benefits payable 6,881 14,699
Taxes payable 2,558 3,529
Other payables 729,711 730,901
Non-current liabilities due within one year 718,780 671,454
Total current liabilities 1,727,928 1,733,917
Non-current liabilities
Long-term loans 829,063 836,795
Lease liabilities 184 701
Long-term employee benefits payable 96,417 97,574
Provisions 27,326 28,516
Other non-current liabilities 374,360 374,360
Total non-current liabilities 1,327,350 1,337,946
Total liabilities 3,055,278 3,071,863
Shareholders’ equity
Share capital V.37 2,329,812 2,329,812
Capital reserve 15,523,881 15,523,881
Other comprehensive income 30,822 30,822
Special reserves 16,479 16,509
Surplus reserve V.40 242,498 242,498
Retained earnings 368,592 337,865
Total shareholders’ equity 18,512,084 18,481,387
Total liabilities and shareholders’ equity 21,567,362 21,553,250
92
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Consolidated Income Statement
Six months ended June 30
Notes 2023 2022
I. Operating income V.42 17,253,201 18,795,828
Less: Cost of sales V.42 13,358,727 13,822,755
Taxes and surcharges V.43 51,420 55,837
Selling and Distribution expenses V.44 2,161,199 2,159,089
General and administrative expenses V.45 461,146 642,313
Research and Development expenses V.46 262,378 274,738
Financial expenses (incomes) V.47 455,855 (438,224)
Including: Interest expense 565,782 326,788
Interest income 134,254 53,960
Add: Investment income, net V.48 10,090 4,706
Including: Income from investment
in associates and joint ventures 3,439 4,706
Loss from changes in fair value V.49 (782,218) (1,341,717)
Credit impairment reversal (losses) V.50 8,490 (97,125)
Asset impairment losses V.51 (105,887) (85,346)
Gain from disposal of assets V.52 23,402 60,298
II. Operating profit (343,647) 820,136
Add: Non-operating income 36,073 29,797
Less: Non-operating expenses 11,015 16,559
III. Total profit (loss) (318,589) 833,374
Less: Income tax expenses (income) V.53 (76,433) 101,276
IV. Net profit (loss) (242,156) 732,098
(1). Classified by nature of operations
(1.1). Continuing operations (242,156) 732,098
(2). Classified by ownership
(2.1). Shareholders of the Company (242,156) 732,098
(2.2). Non-controlling interests -
V. Other comprehensive income, net of tax V. 39 884,205 788,235
Other comprehensive income (net of tax)
attributable to shareholders of the Company 884,205 788,235
(1) Items that will not be reclassified to profit or loss: 14,741 61,296
(1.1) Re-measurement of defined benefit plan liability 14,741 61,296
(1.2) Fair Value changes in other equity investment - -
(2) Items that were or will be reclassified to profit or loss 869,464 726,939
(2.1) Effective portion of gains or loss of cash flow hedge 26,534 (60,863)
(2.2) Translation differences of foreign financial statements 842,930 787,802
VI. Total comprehensive income for the period attributable to
Shareholders of the Company 642,049 1,520,333
Total comprehensive income for the period
attributable to shareholders of the Company 642,049 1,520,333
Total comprehensive income for the period
attributable to Non-controlling interests - -
VII. Earnings per share XIV.2
(1) Basic earnings (loss) per share (Yuan/share) (0.10) 0.31
(2) Diluted earnings per share (Yuan/share) N/A N/A
93
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Company's Income Statement
Six months ended June 30
Notes 2023 2022
I. Operating income XV.6 1,093,709 1,185,094
Less: Operating costs XV.6 893,238 881,418
Taxes and surcharges 4,292 3,003
Selling and Distribution expenses 2,744 2,178
General and administrative expenses 66,887 65,151
Research and Development expenses 16,129 38,042
Financial expenses 755 25,075
Including: Interest expense 24,412 25,382
Interest income 4,814 3,340
Add: Investment income, net - -
Gain from changes in fair value (losses) - -
Credit impairment losses 91 (141)
Asset Impairment reversal (losses) (3,067) 3,142
Gain from disposal of assets 17 59,654
II. Operating Profit 106,705 232,882
Add: Non-operating income 7,815 13,082
Less: Non-operating expenses 509 162
III. Total profit 114,011 245,802
Less: Income tax expense 20,379 -
IV. Net profit 93,632 245,802
V. Other comprehensive income, net of tax - -
(1) Items that will not be reclassified to profit or loss - -
(1.1) Re-measurement of defined benefit plan liability - -
(1.2) FV changes in other equity investment - -
VI. Total comprehensive income for the period 93,632 245,802
94
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Consolidated Cash Flow Statement
Six months ended June 30
Notes 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 17,397,575 16,427,981
Refund of taxes and surcharges 93,456 164,802
Cash received relating to other operating activities V.56(1) 201,011 304,088
Sub-total of cash inflows from operating activities 17,692,042 16,896,871
Cash paid for goods and services 13,362,264 13,683,974
Cash paid to and on behalf of employees 2,464,353 2,329,629
Payments of taxes and surcharges 388,247 494,626
Cash paid relating to other operating activities V.56(2) 1,542,054 1,734,503
Sub-total of cash outflows from operating activities 17,756,918 18,242,732
Net cash flows from operating activities V.57(1)a (64,876) (1,345,861)
II. Cash flows from investing activities:
Cash received from disposal of investments 158,498 5,887
Cash received from returns of investments 1,710 1,588
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 30,688 70,264
Cash received relating to other investing activities V.56(3) 16,643 -
Sub-total of cash inflows from investing activities 207,539 77,739
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 1,178,443 1,291,889
Cash paid for acquisition of investments 1,745 -
Net cash paid to acquire subsidiaries or other business units 148,460 -
Cash paid relating to other investing activities V.56(4) - 64,719
Sub-total of cash outflows from investing activities 1,328,648 1,356,608
Net cash flows used in investing activities (1,121,109) (1,278,869)
III. Cash flows from financing activities:
Cash received from borrowings 2,711,547 2,435,083
Cash received from other financing activities V.56(5) 1,428,302 11,012
Sub-total of cash inflows from financing activities 4,139,849 2,446,095
Cash repayments of borrowings 1,599,428 1,163,615
Cash payment for dividends, profit distributions and interest 584,774 431,993
Including: Dividends paid to non-controlling interest 18,763 39,074
Cash paid relating to other financing activities V.56(6) 554,624 944,580
Sub-total of cash outflows from financing activities 2,738,826 2,540,188
Net cash flow provided by (used in) financing activities 1,401,023 (94,093)
IV. Effects of foreign exchange rate changes on cash and cash
equivalents 130,246 150,085
V. Net increase (decrease) in cash and cash equivalents V.57(1)b 345,284 (2,568,738)
Add: Cash and cash equivalents at the beginning of the year 4,225,253 5,759,480
I. VI. Cash and cash equivalents at the end of the period V.57(2) 4,570,537 3,190,742
95
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Company's Cash Flow Statement
Six months ended June 30
Notes 2023 2022
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 621,379 786,908
Refund of taxes and surcharges 28,662 51,548
Cash received relating to other operating activities XV.7(1) 25,659 23,102
Sub-total of cash inflows from operating activities 675,700 861,558
Cash paid for goods and services 551,879 653,912
Cash paid to and on behalf of employees 68,837 70,273
Payments of taxes and surcharges 6,605 3,899
Cash paid relating to other operating activities XV.7(2) 112,039 70,927
Sub-total of cash outflows from operating activities 739,360 799,011
Net cash flows from operating activities XV.8 (63,660) 62,547
II. Cash flows from investing activities:
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets 17 66,420
Cash received relating to other investing activities XV.7.(3) 2,850 150,000
Sub-total of cash inflows from investing activities 2,867 216,420
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 36,808 50,383
Cash paid for other investing activities XV.7.(4) - 250,000
Sub-total of cash outflows from investing activities 36,808 300,383
Net cash flows used in investing activities (33,941) (83,963)
III. Cash flows from financing activities:
Cash received from borrowings 450,000 650,000
Cash received relating to other financing activities XV.7.(5) 12,750 6,124
Sub-total of cash inflows from financing activities 462,750 656,124
Cash repayments of borrowings 409,732 553,732
Cash payment for dividends, profit distributions or interest 87,684 45,228
Cash paid relating to other financing activities XV.7.(6) 3,837 18,741
Sub-total of cash outflows from financing activities 501,253 617,701
Net cash flow provided by (used in) financing activities (38,503) 38,423
IV. Effects of foreign exchange rate changes on cash and cash equivalents (880) 60
V. Net decrease in cash and cash equivalents (136,984) 17,067
Add: Cash and cash equivalents at the beginning of the year XV.8(2) 258,330 259,434
VI. Cash and cash equivalents at the end of the period XV.8(2) 121,346 276,501
96
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Consolidated Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2023
Other
Share Capital comprehensive Special Surplus Retained Non-controlling
capital reserve income reserves reserve earnings Total interests Total equity
I. Balance at December 31, 2022 2,329,812 12,986,333 1,080,590 15,818 242,498 6,469,604 23,124,655 - 23,124,655
II. Changes in equity for the period - (40,496) 884,205 (30) - (323,824) 519,855 - 519,855
1. Total comprehensive income (loss) - - 884,205 - - (242,156) 642,049 - 642,049
2. Owner’s contributions and reduction - (40,496) - - - - (40,496) - (40,496)
2.1 Transactions with holders of - (40,496) - - - - (40,496) - (40,496)
non controlling interest
3. Appropriation of profits - - - - - (81,668) (81,668) - (81,668)
3.1 Distribution to owners - - - - - (62,905) (62,905) - (62,905)
3.2 Distribution to non-controlling - - - - - (18,763) (18,763) - (18,763)
interest
4. Special reserve - - - (30) - - (30) - (30)
4.1 Transfer to special reserve - - - 5,010 - - 5,010 - 5,010
4.2 Amount utilized - - - (5,040) - - (5,040) - (5,040)
III. Balance at June 30, 2023 2,329,812 12,945,837 1,964,795 15,788 242,498 6,145,780 23,644,510 - 23,644,510
97
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2022
Other
Share Capital comprehensiv Special Surplus Retained Non-controlling
capital reserve e 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- - - - - - (39,074) (39,074) - (39,074)
controlling 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
98
ADAMA Ltd. Semi-Annual Report 2023
(Expressed in RMB '000)
Company's Statement of Changes in Shareholders’ Equity
For the six months ended June 30, 2023
Other
Share Capital comprehensive Special Surplus Retained
capital reserve income reserves reserve earnings Total
I. Balance at December 31, 2022 2,329,812 15,523,881 30,822 16,509 242,498 337,865 18,481,387
II. Changes in equity for the period - - - (30) - 30,727 30,697
1. Total comprehensive income - - - - - 93,632 93,632
2. Appropriation of profits - - - - - (62,905) (62,905)
2.1 Transfer to Distribution to shareholders - - - - - (62,905) (62,905)
3. Special reserve - - - (30) - - (30)
3.1 Transfer to special reserve - - - 5,010 - - 5,010
3.2 Amount utilized - - - (5,040) - - (5,040)
Ⅲ. Balance at June 30, 2023 2,329,812 15,523,881 30,822 16,479 242,498 368,592 18,512,084
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
99
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 28, 2023.
Details of the scope of consolidated financial statements are set out in Note VII "Interest in other entities",
whereas the changes of the scope of consolidation are set out in Note VI "Changes in consolidation scope".
II BASIS OF PREPARATION
1. Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises issued by the Ministry of Finance
(the "MoF"). In addition, the Group has disclosed relevant financial information in these financial statements
in accordance with Information Disclosure and Presentation Rules for Companies Offering Securities to the
Public No. 15 － General Provisions on Financial Reporting (revised by China Securities Regulatory
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.
100
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 30,2023 and
have not identified any significant doubtful matter or event on the going concern, as such the financial
statement have been prepared on the going concern basis.
III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Statement of compliance
These financial statements are in compliance with the Accounting Standards for Business Enterprises to truly
and completely reflect the Company's consolidated financial position as at June 30, 2023 and the Company's
consolidated operating results, changes in shareholders' equity and cash flows for the six months then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
3. Business cycle
The company takes the period from the acquisition of assets for processing to their realisation in cash or cash
equivalents as a normal operating cycle. The operating cycle for the company is 12 months.
4. Reporting currency
The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional
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.
101
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.
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
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.
103
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.
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
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.
105
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.
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)
10.1 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.
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
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.
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)
10.2.2 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.
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)
10.2 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.
110
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.
111
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.
112
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.
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)
13.2 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).
114
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.
115
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).
116
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).
117
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). 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.
118
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.
119
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.
120
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.
121
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.
122
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.
123
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.
124
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.
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)
28.1 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.
28.2 Securitization of assets
Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account
receivables.
28.3 Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure
of the Group’s internal organization, management requirements and internal reporting system.
126
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
On 30 November 2022, the Ministry of Finance issued "Accounting Standards for Business Enterprises
Interpretation No. 16” (hereinafter referred to as “Interpretation No. 16”) which clarified the following
accounting treatments:
(1) Deferred tax related to assets and liabilities arising from a single transaction;
(2) The income tax treatment of the dividend paid as the issuer of an equity instrument; and
(3) When an entity changes a cash-settled share-based payment to an equity-settled share-based payment.
According to the Interpretation No.16, the clarification regarding “Deferred tax related to assets and
liabilities arising from a single transaction” was effective from 1 January 2023. Adoption of the interpretation
has no significant impact on the Group’s financial statements.
29.2 Changes in significant accounting estimates
There are no significant changes in accounting estimates in the reporting period.
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
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.
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)
30.3 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.
129
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.
130
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% (2022: 25%). The subsidiaries outside of China are assessed based on
the tax laws in the country of their residence.
Set forth below are the tax rates outside China relevant to the subsidiaries with significant sales to third party:
Name of subsidiary Location 2023
ADAMA agriculture solutions Ltd. Israel 23.0%
ADAMA Makhteshim Ltd. Israel 7.5%
ADAMA Agan Ltd. Israel 7.5%
ADAMA Brasil S/A Brazil 34.0%
Makhteshim Agan of North America Inc. U.S. 24.3%
ADAMA India Private Ltd India 25.2%
ADAMA Deutschland GmbH Germany 32.5%
Control Solutions Inc. U.S. 25.3%
Adama Australia Pty Ltd Australia 30.0%
ADAMA Northern Europe B.V. Netherlands 25.8%
ADAMA Italia SRL Italy 27.9%
Alligare LLC U.S. 26.1%
The VAT rate of the Group's subsidiaries is in the range between 2.5% to 27%.
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)
(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” from unreleased retained earnings, based on the temporary order as
described below, the company may be liable for tax at the time of distribution.
On December 29, 2010 the Knesset approved the Economic Policy Law for 2011-2012, which includes an
amendment to the Law for the Encouragement of Capital Investments - 1959 (hereinafter - “the
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.
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)
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.
Income of a Preferred Technological Enterprise a Special Preferred Technological Enterprise will be subject
to a reduced corporate tax rate of 6% regardless of the development area in which the enterprise is located.
In addition, as part of the amendment, a temporary provision was enacted, valid until June 30, 2021, which
settles tax benefits continuation on income that is eligible to the Preferred Enterprise tax benefits as at June
30, 2016.
On May 16, 2017 the Knesset Finance Committee approved Encouragement of Capital Investment
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.
On November 15, 2021 the Economic Efficiency Law (Legislative Amendments for the 2021 and 2022
Budget Years) – 2021 was published as well as a Temporary Order to the Law for the Encouragement of
Capital Investments – 1959 (hereinafter: “the temporary order”), which offers a reduced tax rate arrangement
to companies that received an exemption from corporate tax under the aforesaid law. The temporary order
provided that companies that choose to apply the temporary order, which is effective until November 14,
2022, will be entitled to a reduced tax rate on the “release” of exempt profits (hereinafter: “the beneficiary
corporate tax rate”). The release of exempt profits makes it possible to distribute them at a reduced rate of
corporate tax at the company level based on the rate of the profits being distributed pursuant to the
conditions set forth in the Amendment.
During 2022, Solutions announced its choice to release the retained earnings in a number of subsidiaries and
committed to pay a reduced corporate tax in the amount of approximately 101 million RMB, which was
recorded as tax expenses in the financial statements of 2022.
133
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
IV. Taxation - (cont’d)
1. Main types of taxes and corresponding tax rates - (cont’d)
(3) Benefits under the Law for the Encouragement of Industry (Taxes), 1969
Under the Israeli Law for the Encouragement of Industry (Taxes) 1969, Solutions is an Industrial Holding
Company and some of the subsidiaries in Israel are “Industrial Companies”. The main benefit under this law
is the filing of consolidated income tax returns (Solutions files a consolidated income tax return with Adama
Makhteshim and submission of a consolidated report together with Adama Agan as of 2017), amortization
of know-how over 8 years and higher rates of depreciation.
134
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
2023 2022
Cash on hand 960 785
Deposits in banks 4,569,577 4,224,468
Other cash and bank balances 33,986 65,708
4,604,523 4,290,961
Including cash and bank balances placed outside China 3,890,804 3,300,538
As at June 30, 2023 restricted cash and bank balances was 33,986 thousand RMB (as at December 31, 2022
65,708 thousand RMB) mainly including deposits that guarantee bank acceptance drafts.
2. Financial assets held for trading
June 30 December 31
2023 2022
Bank deposits 1,930 1,685
1,930 1,685
3. Derivative financial assets
June 30 December 31
2023 2022
Economic hedge 170,384 224,128
Accounting hedge derivatives 21,757 9,681
192,141 233,809
4. Bills Receivable
June 30 December 31
2023 2022
Post-dated checks receivable 107,296 112,297
107,296 112,297
All bills receivables are due within 1 year.
135
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, 2023
Provision for expected
Book value credit losses
Percentage Carrying
Amount (%) Amount Percentage (%) amount
Account receivables assessed 993,479 10 229,040 23 764,439
individually for impairment
Account receivables assessed 8,700,720 90 101,401 1 8,599,319
collectively for impairment
9,694,199 100 330,441 3 9,363,758
December 31, 2022
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed 383,265 4 212,640 55 170,625
individually for impairment
Account receivables assessed 8,945,138 96 97,388 1 8,847,750
collectively for impairment
9,328,403 100 310,028 3 9,018,375
b. Aging analysis
June 30, 2023
Within 1 year (inclusive) 9,217,990
Over 1 year but within 2 years 246,154
Over 2 years but within 3 years 25,500
Over 3 years but within 4 years 34,619
Over 4 years but within 5 years 54,576
Over 5 years 115,360
9,694,199
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)
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, 2023
Provision for expected
Book value credit loss Percentage (%)
Credit group A 1,928,342 8,868 0.5
Credit group B 556,005 4,812 0.9
Credit group C 129,336 5,643 4.4
Credit group D 46,583 972 2.1
2,660,266 20,295 0.8
Geographical location B:
Account receivables in geographical location B are grouped based on aging analysis:
June 30, 2023
Provision for expected
Book value credit loss Percentage (%)
Accounts receivable that are not overdue 746,193 6,629 0.9
Debts overdue less than 60 days 29,054 872 3.0
Debts overdue less than 180 days but 37,678 3,768
more than 60 days 10.0
Debts overdue above 180 days 24,684 9,874 40.0
Legal Debtors 41,960 41,960 100.0
879,569 63,103 7.2
Other geographical locations:
June 30, 2023
Provision for expected
Book value credit loss Percentage (%)
Other account receivables assessed
collectively for impairment 5,160,885 18,003 0.35
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)
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, 2023 44,012 266,016 310,028
Addition (write back) during the period, net (2,285) 1,420 (865)
Exchange rate effect 3,259 18,019 21,278
Balance as of June 30, 2023 44,986 285,455 330,441
d. Five largest accounts receivable at June 30, 2023:
Allowance of expected
Proportion of Accounts credit losses (credit losses
Name Closing balance receivable (%) has occurred)
Customer 1 190,711 2.0 -
Customer 2 188,882 1.9 -
Customer 3 140,159 1.4 -
Customer 4 114,009 1.2 -
Customer 5 97,122 1.0 -
Total 730,883 7.5 -
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 30 June
2023, the Securitization agreement was approved up to October 31, 2023.
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 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, 2023 – 2,529 million RMB), during the months July through September the
maximum scope of the securitization is $300 million (as of June 30, 2023 – 2,168 million RMB) and during
the months October through February the maximum scope of the securitization is $250 million (as of June
30, 2023– 1,806 million RMB).In addition the company has a temporary uncommitted facility of $150
million (as of June 30, 2023- 1,084 million RMB) until September 20th 2023 and permanent uncommitted
facility of 50$ million (as of June 30, 2023- 361 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, 2023, Solutions was in compliance with the
financial covenants.
The accounting treatment of sale of the trade receivables included as part of the Securitization Program is:
The Company is not controlling the Acquiring Company, therefore the Acquiring Company is not
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.
139
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 continuing involvement and subordinated note recorded in the balance sheet as part of the “other
receivables” line item.
The loss from sale of the trade receivables is recorded at the time of sale in the statement of income in the
“financing expenses”.
f. A subsidiary in Brazil (hereinafter - “the subsidiary”) entered into the following securitization
agreements:
(1) Since 2016, a securitization transaction with Rabobank Brazil for sale of customer receivables
(hereinafter "FIDC-Donegal agreement"). Under the FIDC-Donegal agreement, the subsidiary will sell its
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 30 June 2023, the FIDC-Donegal agreement was approved up to September 30, 2024. The maximum
securitization scope as of June 30, 2023 is BRL 350 million (as of June 30, 2023 – 525 million RMB).
On the date of the sale of the customer receivables, the entity pays the full amount which is the debt amount
sold net of discount calculated, among others, over the expected length of the period between the date of sale
of the customer receivable and its anticipated repayment date.
The entity bears 95% of the credit risk in respect of the customers whose debts were sold such that the entity
has the right of recourse to 5% of the unpaid amount. The subsidiary has a pledged deposit with regards to
the entity’s right of recourse.
The subsidiary continues to recognize the trade receivables sold to the entity based on the extent of its
continuing involvement therein (5% right of recourse) and also recognizes an associated liability in the same
amount.
In "FIDC-Donegal agreement" the subsidiary handles the collection of receivables included in the
securitization for the entity.
(2) During 2021, the subsidiary has entered into an additional securitization agreement (hereinafter -
“FIDC – Liverpool agreement”) with Itau Bank and Farm investments, for sale of customer receivables to a
securitization structure that was formed for this purpose where the subsidiary has mezzanine quotes of 10.5%
of the entity's capital.
As at 30 June 2023, the FIDC-Liverpool agreement was approved up to November 10, 2024. The maximum
securitization scope as of June 30, 2023 is BRL 300 million (as of June 30, 2023 – 450 million RMB).
The entity bears 100% of the credit risk in respect of the customers whose debts were sold (non-recourse),
therefore the subsidiary has no continuing involvement in those account receivables sold.
In "FIDC-Liverpool agreement" the collection of receivables is being handled by the entity.
140
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
5. Accounts Receivable – (cont'd)
f. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)
June 30 December 31
2023 2022
Accounts receivables derecognized 3,963,341 4,039,429
Continuing involvement 155,564 193,532
Subordinated note in respect of trade receivables 512,533 591,998
Liability in respect of trade receivables 741,512 79,619
Six months ended June 30
2023 2022
Loss in respect of sale of trade receivables 115,531 70,123
6. Receivables financing
June 30 December 31
2023 2022
Bank acceptance draft 125,292 63,639
125,292 63,639
As at June 30, 2023, bank acceptance endorsed but not yet due amounts to 342,458 thousands RMB.
7. Prepayments
(1) The aging analysis of prepayments is as follows:
June 30 December 31
2023 2022
Amount Percentage (%) Amount Percentage (%)
Within 1 year (inclusive) 364,240 97 327,809 97
Over 1 year but within 2 years (inclusive) 9,597 3 11,047 3
Over 2 years but within 3 years (inclusive) 1,434 - 1,204 -
Over 3 years 713 - 1,042 -
375,984 100 341,102 100
(2) Total of five largest prepayments by debtor at the end of the period:
Percentage of prepayments
Amount (%)
June 30, 2023 78,554 21%
141
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
8. Other Receivables
(1) Other receivables by nature
June 30 December 31
2023 2022
Dividends receivable 3,187 -
Others 866,935 1,021,824
870,122 1,021,824
a. Others breakdown by categories
June 30 December 31
2023 2022
Trade receivables as part of securitization transactions
not yet eliminated 155,564 193,532
Subordinated note in respect of trade receivables 512,533 591,998
Financial institutions 69,223 38,354
Other 167,851 242,688
Sub total 905,171 1,066,572
Provision for expected credit losses - other receivables (38,236) (44,748)
866,935 1,021,824
b. Other receivables by aging
June 30
2023
Within 1 year (inclusive) 842,680
Over 1 year but within 2 years 46,924
Over 2 years but within 3 years 1,292
Over 3 years but within 4 years 7,403
Over 4 years but within 5 years 152
Over 5 years 6,720
905,171
(2) Additions, recovery or reversal and written-off of provision for expected credit losses during the
period:
Six months ended
June 30, 2023
Balance as of January 1 2023, 44,748
Addition (written back) during the period (7,625)
Write-off during the period -
Exchange rate effect 1,113
Balance as of June 30, 2023 38,236
142
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
8. Other Receivables – (cont'd)
(3) Five largest other receivables at June 30, 2023:
Allowance of
Proportion of other expected credit
Name Closing balance receivables (%) losses
Party 1 512,533 57 -
Party 2 69,223 8 -
Party 3 7,164 1 -
Party 4 6,865 1 -
Party 5 5,231 1 -
Total 601,016 68 -
9. Inventories -
(1) Inventories by category:
June 30, 2023
Provision for
Book value impairment Carrying amount
Raw materials 4,216,888 22,972 4,193,916
Work in progress 1,907,103 6,465 1,900,638
Finished goods 10,371,744 305,963 10,065,781
Others 518,011 10,389 507,622
17,013,746 345,789 16,667,957
December 31, 2022
Provision for
Book value impairment Carrying amount
Raw materials 4,341,176 20,939 4,320,237
Work in progress 2,410,883 5,952 2,404,931
Finished goods 9,954,831 237,337 9,717,494
Others 495,125 10,546 484,579
17,202,015 274,774 16,927,241
143
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, 2023
January 1, Reversal or
2023 Provision write-off Other June 30, 2023
Raw material 20,939 7,969 (6,850) 914 22,972
Work in progress 5,952 5,613 (5,168) 68 6,465
Finished goods 237,337 152,191 (94,325) 10,760 305,963
Others 10,546 570 (1,053) 326 10,389
274,774 166,343 (107,396) 12,068 345,789
10. Other Current Assets
June 30 December 31
2023 2022
Deductible VAT 728,516 679,428
Current tax assets 325,136 219,057
Short term investments 56,730 171,496
Others 58,566 59,707
1,168,948 1,129,688
11. Long-Term Receivables
June 30 December 31
2023 2022
Long term account receivables from sale of goods 59,273 82,510
59,273 82,510
144
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
2023 2022
Joint venture 1,358 2,110
Associate 27,914 24,258
29,272 26,368
(2) Movements of long-term equity investments for the period are as follows:
Other Declared
January 1, Investment Comprehensive distribution of Balance at the
2023 income income cash dividend end of the period
Joint
venture
Investee A 2,110 70 33 (855) 1,358
Sub-total 2,110 70 33 (855) 1,358
Associate
Investee B 24,258 3,369 3,072 (2,785) 27,914
Sub-total 24,258 3,369 3,072 (2,785) 27,914
Sub-total 26,368 3,439 3,105 (3,640) 29,272
13. Other equity investments
December 31, Dividend received
June 30, 2023 2022 during 2023
Investment A 84,720 84,720 -
Investment B 76,334 71,840 6,651
Investment C 1,851 1,781 -
162,905 158,341 6,651
Other equity investments are non-core businesses that are intended to be held in the foreseeable future.
145
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements – (cont'd)
14. Fixed assets
Land & Machinery & Office & other
Buildings equipment Motor vehicles equipment Total
Cost
Balance as at January 1, 2023 4,240,658 16,516,306 166,587 438,542 21,362,093
Purchases 11,656 49,281 44,044 20,307 125,288
Transfer from construction in progress 38,105 610,084 1,855 8,051 658,095
Classification to Investment property (20,125) - - - (20,125)
Disposals (8,175) (20,132) (11,547) (3,533) (43,387)
Newly consolidated subsidiaries - 3,483 270 478 4,231
Currency translation adjustment 100,486 501,709 8,295 19,007 629,497
Balance as at June 30, 2023 4,362,605 17,660,731 209,504 482,852 22,715,692
Accumulated depreciation
Balance as at January 1, 2023 (1,791,373) (9,815,859) (74,448) (342,199) (12,023,879)
Charge for the period (69,021) (384,563) (14,206) (19,210) (487,000)
Classification to Investment property 2,149 - - - 2,149
Disposals 1,353 19,084 9,561 3,500 33,498
Newly consolidated subsidiaries - (2,348) (256) (277) (2,881)
Currency translation adjustment (53,730) (301,637) (3,276) (15,319) (373,962)
Balance as at June 30, 2023 (1,910,622) (10,485,323) (82,625) (373,505) (12,852,075)
Provision for impairment
Balance as at January 1, 2023 (132,663) (251,190) (1,107) (1,070) (386,030)
Charge for the period - (634) (15) (41) (690)
Disposals 1,553 1,925 38 107 3,623
Currency translation adjustment (678) (3,254) (15) (13) (3,960)
Balance as at June 30, 2023 (131,788) (253,153) (1,099) (1,017) (387,057)
Carrying amounts
As at June 30, 2023 2,320,195 6,922,255 125,780 108,330 9,476,560
As at January 1, 2023 2,316,622 6,449,257 91,032 95,273 8,952,184
The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.
146
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
2023 2022
Provision for Provision for
Book value impairment Carrying amount Book value impairment Carrying amount
3,265,974 (118,481) 3,147,493 3,079,882 (118,481) 2,961,401
(2) Details and Movements of major construction projects in progress during period ended June 30, 2023
Actual
Including: Currency Transfer cost to Project
January Interest translation to fixed June 30, budget progress
Budget 1, 2023 Additions capitalized differences assets 2023 (%) (%) Source of funds
Project A 765,314 542,618 111,861 5,264 - (66,338) 588,141 77% 77% Bank loan
Project B 639,165 531,817 72,285 19,363 411 - 604,513 95% 95% Internal finance
Project C 367,649 333,514 30,609 - (1,888) (362,235) - 100% 100% Internal finance
Project D 194,604 74,523 1,625 - - (22,282) 53,866 49% 49% Internal finance
Project E 968,257 352,423 123,192 13,026 18,565 - 494,180 51% 51% Internal finance
Project G 74,173 17,070 3,123 616 776 - 20,969 28% 28% Internal finance
Under re- -
Project F evalution 238,078 319 - - 238,397 - - Internal finance
* As of June 30, 2023 Project A Project D and are include impairment of RMB 14 million and 35 million , respectively.
147
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, 2023 593,790 46,364 294,122 3,858 938,134
Additions 106,292 3,072 44,577 - 153,941
Disposals (21,010) (301) (23,340) - (44,651)
Currency translation adjustment 32,328 1,851 12,490 145 46,814
Balance as at June 30, 2023 711,400 50,986 327,849 4,003 1,094,238
Accumulated depreciation
Balance as at January 1, 2023 (221,223) (23,108) (136,165) (1,749) (382,245)
Charge for the period (47,496) (617) (45,246) (360) (93,719)
Disposals 17,793 301 21,116 - 39,210
Currency translation adjustment (9,159) (876) (6,350) (103) (16,488)
Balance as at June 30, 2023 (260,085) (24,300) (166,645) (2,212) (453,242)
Provision for impairment
Balance as at January 1, 2023 - - - - -
Balance as at June 30, 2023 - - - - -
Carrying amounts
As at June 30, 2023 451,315 26,686 161,204 1,791 640,996
As at January 1, 2023 372,567 23,256 157,957 2,109 555,889
148
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, 2023 12,204,376 4,182,457 1,216,249 794,577 578,572 510,272 588,585 20,075,088
Newly consolidated subsidiaries 6,418 - - 30,070 52,182 - - 88,670
Purchases 295,676 - 63,975 48 - - 13,585 373,284
Currency translation adjustment 478,902 156,860 46,267 32,422 22,190 1,451 15,623 753,715
Transfer from construction in progress - - 8,898 - - - - 8,898
Disposal (3,231) - (137) - - (4,427) - (7,795)
Balance as at June 30, 2023 12,982,141 4,339,317 1,335,252 857,117 652,944 507,296 617,793 21,291,860
Accumulated amortization
Balance as at January 1, 2023 (9,525,327) (3,125,941) (732,640) (524,730) (312,019) (95,570) (262,984) (14,579,211)
Charge for the period (265,738) (82,684) (46,927) (14,308) (22,750) (5,173) (11,792) (449,372)
Currency translation adjustment (375,438) (120,835) (30,302) (21,254) (13,339) (1,296) (9,252) (571,716)
Disposal - 116 - - 682 - 798
Balance as at June 30, 2023 (10,166,503) (3,329,460) (809,753) (560,292) (348,108) (101,357) (284,028) (15,599,501)
Provision for impairment
Balance as at January 1, 2023 (95,951) (56,601) (49) - - (272) (250) (153,123)
Charge for the period - - - - - - - -
Currency translation adjustment (3,599) (2,123) (9) - - (10) - (5,741)
Balance as at June 30, 2023 (99,550) (58,724) (58) - - (282) (250) (158,864)
Carrying amount
As at June 30, 2023 2,716,088 951,133 525,441 296,825 304,836 405,657 333,515 5,533,495
As at January 1, 2023 2,583,098 999,915 483,560 269,847 266,553 414,430 325,351 5,342,754
(1) Include land parcel in Israel that has not yet been registered in the name of the Group subsidiaries at the Land Registry Office, mostly due to registration procedures or technical problems.
(2) Mainly non-compete and exclusivity agreements.
149
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, 2022 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
2023 year adjustment June 30, 2023
Book value 4,805,157 113,075 181,796 5,100,028
Impairment provision - - - -
Carrying amount 4,805,157 113,075 181,796 5,100,028
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
2023 2022
Deductible Deductible
temporary Deferred tax temporary Deferred tax
differences assets differences assets
Deferred tax assets
Deferred tax assets in respect of carry
forward losses 2,532,017 506,105 1,568,088 256,749
Deferred tax assets in respect of
inventories 3,132,366 921,585 2,402,900 689,062
Deferred tax assets in respect of
employee benefits 953,114 155,405 1,005,874 166,264
Other deferred tax asset 2,529,942 606,021 2,030,651 545,937
9,147,439 2,189,116 7,007,513 1,658,012
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)
(2) Deferred tax liabilities without taking into consideration of the offsetting of balances within the
same tax jurisdiction
June 30 December 31
2023 2022
Taxable Taxable
temporary Deferred tax temporary Deferred tax
differences liabilities differences liabilities
Deferred tax liabilities
Deferred tax liabilities in respect of
fixed assets and intangible assets 4,046,916 762,093 3,430,096 626,610
4,046,916 762,093 3,430,096 626,610
(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting
June 30 December 31
2023 2022
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 429,533 1,759,583 310,749 1,347,263
Deferred tax liabilities 429,533 332,560 310,749 315,861
(4) Details of unrecognized deferred tax assets
June 30 December 31
2023 2022
Deductible temporary differences 468,300 518,542
Deductible losses carry forward 259,775 229,672
728,075 748,214
(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets
June 30 December 31
2023 2022
2023 1,778 1,713
2024 36,310 33,646
2025 6,518 6,282
2026 6,612 6,373
2027 8,013 7,724
After 2027 200,544 173,934
259,775 229,672
151
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
2023 2022
Judicial deposits 195,920 154,273
Assets related to securitization 96,464 112,388
Advances in respect of non-current assets 62,729 174,035
Others 136,270 164,137
491,383 604,833
21. Short-Term Loans
Short-term loans by category:
June 30 December 31
2023 2022
Unsecured loans 6,341,677 3,342,921
6,341,677 3,342,921
22. Derivative financial liabilities
June 30 December 31
2023 2022
Economic hedge 698,821 490,496
Accounting hedge derivatives 36,837 55,020
735,658 545,516
152
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
2023 2022
Post-dated checks payables 392,325 900,537
Note payables draft 105,019 214,238
497,344 1,114,775
As at June 30, 2023, none of the bills payable are overdue.
24. Accounts payable
June 30 December 31
2023 2022
Within 1 year (including 1 year) 5,861,662 7,447,355
1-2 years (including 2 years) 27,861 59,671
2-3 years (including 3 years) 35,547 2,048
Over 3 years 19,906 18,195
5,944,976 7,527,269
There are no significant accounts payables aging over one year.
25. Contract liabilities
June 30 December 31
2023 2022
Discount for customers 1,273,467 904,615
Advances from customers 172,662 871,958
1,446,129 1,776,573
26. Employee Benefits Payable
June 30 December 31
2023 2022
Short-term employee benefits 515,938 1,027,543
Post-employment benefits 49,251 33,317
Share based payment (See note XIII) 49,771 76,875
Other benefits within one year 216,605 204,794
831,565 1,342,529
Current maturities 24,616 28,257
856,181 1,370,786
153
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
2023 2022
Corporate income tax 291,828 240,672
VAT 244,410 187,066
Others 39,033 31,836
575,271 459,574
28. Other Payables
June 30 December 31
2023 2022
Dividends payables 750 750
Other payables 2,488,847 1,610,532
2,489,597 1,611,282
(1) Other payables
June 30 December 31
2023 2022
Accrued expenses 776,142 758,158
Payables in respect of intangible assets 169,120 106,510
Liability in respect of securitization transactions 741,512 79,619
Hold-back payment due to acquistions 254,000 254,000
Others 548,073 412,245
2,488,847 1,610,532
29. Non-Current Liabilities Due Within One Year
Non-current liabilities due within one year by category are as follows:
June 30 December 31
2023 2022
Long-term loans due within one year 1,852,573 1,539,496
Lease liabilities due within one year 167,492 156,977
Debentures payable due within one year 571,770 565,658
2,591,835 2,262,131
154
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
2023 2022
Put options to holders of non-controlling interests 483,688 507,483
Provision in respect of returns 231,117 158,173
Provision in respect of claims 34,626 37,769
Others 390 369
749,821 703,794
31. Long-Term Loans
Long-term loans by category
June 30 December 31
2023 Interest range 2022 Interest range
Long term loans
Guaranteed loans 394,108 3.55%-3.75% 404,841 2.92%-3.75%
Unsecured loans 4,734,919 1.73%-8.72% 4,797,525 1.73%-7.67%
Total Long term loans 5,129,027 5,202,366
Less:
Long term loans from banks due within 1 year (1,852,573) )1,539,496(
Long term loans, net 3,276,454 3,662,870
* 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
2023 2022
Debentures Series B 8,004,835 7,919,169
Current maturities (571,770) (565,658)
7,433,065 7,353,511
June 30
2023
First year (current maturities) 571,770
Second year 571,770
Third year 571,770
Fourth year 571,770
Fifth year and thereafter 5,717,755
8,004,835
155
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, 2023:
Balance at Amortization CPI and Repayment Currency Balance at
Maturity Face value Face value Issuance Maturity Issuance January 1, of discounts exchange during the translation June 30,
period in RMB NIS date period amount 2023 or premium rate effect period adjustment 2023
Debentures November
Series B 2,673,640 1,650,000 4.12.2006 2020-2036 3,043,742 3,321,071 117 (83,196) - 120,704 3,358,696
Debentures November
Series B 843,846 513,527 16.1.2012 2020-2036 842,579 996,237 5,075 (25,386) - 36,409 1,012,335
Debentures November
Series B 995,516 600,000 7.1.2013 2020-2036 1,120,339 1,231,947 2,209 (31,263) - 44,851 1,247,744
Debentures November
Series B 832,778 533,330 1.2.2015 2020-2036 1,047,439 1,151,945 (1,357) (29,233) - 41,789 1,163,144
Debentures November
Series B 418,172 266,665 1-6.2015 2020-2036 556,941 625,358 (3,683) (15,863) - 22,558 628,370
Debentures November
Series B 497,989 246,499 5.5.2020 2020-2036 692,896 592,611 (4,348) (15,055) - 21,338 594,546
7,919,169 (1,987) (199,996) - 287,649 8,004,835
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.
156
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
2023 Interest range 2022 Interest range
Lease liabilities 666,459 1.1%-9.0% 588,053 1.1%-9.1%
Less: Lease liabilities due within one year (167,492) (156,977)
Long term lease liabilities, net 498,967 431,076
34. Long-Term Employee Benefits Payable
Post-employment benefit plans – defined benefit plan and early retirement
June 30 December 31
2023 2022
Total present value of obligation 537,594 566,550
Less: fair value of plan's assets (63,399) (70,001)
Net liability related to Post-employment benefits 474,195 496,549
Termination benefits 63,771 65,782
Total recognized liability for defined benefit plan, net (1) 537,966 562,331
Other long-term employee benefits 249,442 258,079
Total long-term employee benefits, net 787,408 820,410
Including: Long-term employee benefits payable due within one year 24,616 28,257
762,792 792,153
(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
2023 2022 2023 2022 2023 2022
Balance as at January 1, 2023 632,332 779,671 70,001 86,282 562,331 693,389
Expense/income recognized
in profit and loss:
Current service cost 17,410 12,707 - - 17,410 12,707
Past service cost 1,724 - 1,717 - 7 -
Interest costs 10,046 6,682 1,295 648 8,751 6,034
Losses on curtailments and settlements 10,221 5,478 - - 10,221 5,478
Changes in exchange rates (22,559) (68,417) (3,206) (9,611) (19,353) (58,806)
Actuarial losses due to early retirement 122 (77) - - 122 (77)
Included in other comprehensive income:
Actuarial gain (losses) as a result of changes in
actuarial assumptions (17,680) (72,633) (1,766) (3,474) (15,914) (69,159)
Foreign currency translation differences in respect of
foreign operations 21,971 31,967 2,276 3,743 19,695 28,224
Additional movements:
Benefits paid (37,361) (35,291) (3,330) (6,104) (34,031) (29,187)
Classification to termination (14,861) - (4,211) - (10,650) -
Contributions paid by the Group - - 623 1,342 (623) (1,342)
Balance as at June 30, 2023 601,365 660,087 63,399 72,826 537,966 587,261
157
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
2023 2022
Discount rate (%)* 2.2%-3.0% 1.7%-3.0%
* According to the demographic and the benefit components.
The assumptions regarding the future mortality rate are based on published statistical data and acceptable
mortality rates.
Possible reasonable changes as of the date of the report in the discount rate, assuming the other assumptions
remain unchanged, would have affected the defined benefit obligation as follows:
As of June 30, 2023
Increase of 1% Decrease of 1%
Change in defined benefit obligation (43,856) 53,030
35. Provisions
June 30 December 31
2023 2022
Liabilities in respect of contingencies* 181,871 149,187
Provision in respect of site restoration 64,627 65,291
Long-term liability in respect of business combinations 49,454 5,182
Other 1,286 2,521
297,238 222,181
* Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of
resources had been reliably estimated.
158
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
2023 2022
Put options to holders of non- controlling interests 957,651 907,644
Long term loans – others 361,290 348,231
1,318,941 1,255,875
Current maturities - -
1,318,941 1,255,875
37. Share Capital
Balance at Issuance of new Balance at
January 1, 2023 shares Buyback of shares June 30, 2023
Share capital 2,329,812 - - 2,329,812
38. Capital Reserve
Balance at Additions during Reductions during Balance at
January 1, 2023 the period the period June 30, 2023
Share premiums 12,606,562 - - 12,606,562
Other capital reserve 379,771 - (40,496) 339,275
12,986,333 - (40,496) 12,945,837
159
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
2023 amount or loss expenses amount 30, 2023
Items that will not be
reclassified to profit or loss 101,370 15,914 - 1,173 14,741 116,111
Re-measurement of changes
in liabilities under defined
benefit plans 46,838 15,914 - 1,173 14,741 61,579
Changes in fair value of
other equity investment 54,532 - - - - 54,532
Items that may be
reclassified to profit or loss 979,220 822,559 (50,690) 3,785 869,464 1,848,684
Effective portion of gain or
loss of cash flow hedge (41,369) (20,371) (50,690) 3,785 26,534 (14,835)
Translation difference of
foreign financial statements 1,020,589 842,930 - - 842,930 1,863,519
1,080,590 838,473 (50,690) 4,958 884,205 1,964,795
40. Surplus reserve
Additions Reductions
Balance at during the during the Balance at
January 1, 2023 period period June 30, 2023
Statutory surplus reserve 238,684 - - 238,684
Discretional surplus reserve 3,814 - - 3,814
242,498 - - 242,498
160
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
V. Notes to the consolidated financial statements - (cont'd)
41. Retained Earnings
2023 2022
Retained earnings as at January 1 6,469,604 5,940,465
Net profits (loss) for the period attributable to shareholders of the
Company (242,156) 732,098
Dividends to non-controlling Interest (18,763) (39,074)
Dividend to the shareholders of the company (Note 1 & 2) (62,905) (18,638)
Retained earnings as at June 30 6,145,780 6,614,851
Note 1:
On March 29, 2022, after obtaining the approval of the 9th meeting of the Company's 9th Board of Directors,
the Company declared RMB 0.08 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 18,638 thousand RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital.
Note 2:
On March 19, 2023, after obtaining the approval of the 19th meeting of the Company's 9th Board of Directors,
the Company declared RMB 0.27 (before tax) per 10 shares as cash dividend to all shareholders, resulting in a
total cash dividend of 62,905 thousand RMB (before tax). No shares were distributed as share dividend and no
reserve was transferred to equity capital.
161
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
2023 2022
Income Cost of sales Income Cost of sales
Principal activities 17,232,976 13,349,948 18,761,356 13,802,108
Other businesses 20,225 8,779 34,472 20,647
17,253,201 13,358,727 18,795,828 13,822,755
43. Taxes and Surcharges
Six months ended June 30
2023 2022
Tax on turnover 16,382 17,666
Others 35,038 38,171
51,420 55,837
44. Selling and Distribution Expenses
Six months ended June 30
2023 2022
Salaries and related expense 972,566 1,015,829
Depreciation and amortization 476,152 481,460
Advertising and sales promotion 179,661 173,457
Warehouse expenses 98,906 75,378
Travel expenses 72,342 62,794
Registration 69,834 64,983
Professional services 56,550 53,811
Insurance 47,574 56,054
Others 187,614 175,323
2,161,199 2,159,089
162
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
2023 2022
Salaries and related expenses 157,127 375,272
Professional services 61,710 56,828
IT systems 61,002 58,466
Depreciation and amortization 55,710 48,168
Cost contribution arrangement 39,065 33,864
Office rent, maintenance and expenses 22,964 24,348
Other 63,568 45,367
461,146 642,313
46. Research and development expenses
Six months ended June 30
2023 2022
Salaries and related expenses 134,457 127,574
Depreciation and amortization 38,407 42,400
Professional services 23,639 17,350
Field trial 21,526 16,475
Materials 13,741 38,803
Office rent, maintenance and expenses 5,416 6,077
Other 25,192 26,059
262,378 274,738
47. Financial expenses (incomes), net
Six months ended June 30
2023 2022
Interest expenses on debentures and loans and other charges 562,720 341,633
CPI expenses in respect of debentures 184,710 236,815
Loss in respect of sale of trade receivables 115,352 51,063
Interest expense in respect of post-employment benefits and early
retirement, net 11,287 7,000
Revaluation of put option, net 83,584 101,901
Interest income from customers, banks and others (134,254) (53,960)
Exchange rate differences, net (414,163) (1,153,323)
Interest expense on lease liabilities 16,132 11,962
Others 30,487 18,685
455,855 (438,224)
163
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
2023 2022
Income from long-term equity investments accounted for using
the equity method 3,439 4,706
Other 6,651 -
10,090 4,706
49. Gain (loss) from Changes in Fair Value
Six months ended June 30
2023 2022
Gain (loss) from changes in fair value of derivative financial
Instruments (775,528) (1,330,194)
Others (6,690) (11,523)
(782,218) (1,341,717)
50. Credit impairment reversal (losses)
Six months ended June 30
2023 2022
Bills receivable and accounts receivable 865 (64,703)
Other receivables 7,625 (32,422)
8,490 (97,125)
51. Asset impairment losses
Six months ended June 30
2023 2022
Inventories (105,197) (79,445)
Fixed assets (690) (1,623)
Intangible asset - (4,278)
(105,887) (85,346)
164
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
2023 2022 items
Gain from disposal of fixed assets 23,402 60,572 23,402
Loss from disposal of intangible assets - (274) -
23,402 60,298 23,402
53. Income Tax Expenses
Six months ended June 30
2023 2022
Current year 286,525 431,750
Deferred tax expenses (income) (367,924) (306,884)
Adjustments for previous years, net 4,966 (23,590)
(76,433) 101,276
(1) Reconciliation between income tax expense and accounting profit is as follows:
Six months ended June 30
2023 2022
Profit before taxes (loss) (318,589) 833,374
Statutory tax in china 25% 25%
Tax calculated according to statutory tax in china (79,647) 208,344
Tax benefits from Approved Enterprises (14,942) (98,005)
Difference between measurement basis of income for financial
statement and for tax purposes (28,110) 3,085
Taxable income and temporary differences at other tax rate (128,074) (58,494)
Taxes in respect of prior years 4,966 (23,590)
Utilization of tax losses prior years for which deferred taxes were
not created (5,308) (31,440)
Temporary differences and losses in the report year for which
deferred taxes were not created 14,398 34,798
Non-deductible expenses, non-taxable income and other difference,
net 93,470 21,569
Neutralization of tax calculated in respect of the Company’s share
in results of equity accounted investees (931) (1,599)
Effect of change in tax rate in respect of deferred taxes 66,971 13,979
Creation and reversal of deferred taxes for tax losses and temporary
differences from previous years 774 32,629
Income tax expenses (76,433) 101,276
54. Other comprehensive income
Details of the Other comprehensive income are set out in Note V.39
165
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 2023 2022
Government grants related to income Non-Operating income 11,665 15,623
Government grants related to assets Fixed assets, Intangible assets 7,388 9,211
56. Notes to items in the cash flow statements
(1) Cash received relating to other operating activities
Six months ended June 30
2023 2022
Interest income 80,270 30,761
Financial institutions 38,020 231,142
Government subsidies 12,883 15,623
Others 69,838 26,562
201,011 304,088
(2) Cash paid relating to other operating activities
Six months ended June 30
2023 2022
Derivatives transactions 225,818 471,332
Advertising and sales promotion 167,451 181,788
Professional services 164,944 122,886
Commissions and Warehouse 118,902 75,076
IT and Communication 114,304 125,187
Registration and Field trials 85,831 86,410
Travel 83,184 64,767
Insurance 70,183 37,655
Financial institutions 67,142 116,107
Others 444,295 453,295
1,542,054 1,734,503
(3) Cash received relating to other investing activities
Six months ended June 30
2023 2022
Investment grant 16,643 -
16,643 -
166
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
2023 2022
Increase in short and long term investments,net - 64,719
- 64,719
(5) Cash received from other financing activities
Six months ended June 30
2023 2022
Deposit for issuing bills payables 34,932 11,010
Borrowing from related party * 1,393,370 -
1,428,302 11,010
* For more detailes regarding the borrowing from related party – see note X. related parties and related
parties transactions.
(6) Cash paid relating to other financing activities
Six months ended June 30
2023 2022
Payment in respect of hedging transactions on debentures 347,870 802,237
Realization of Call option 116,311 -
Repayment of lease liability 86,608 84,743
Deposit for issuing bills payable 3,210 57,447
Repayment of loan from others 625 153
554,624 944,580
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
(1) Supplementary information on Cash Flow Statement
a. Reconciliation of net profit to cash flows from operating activities:
Six months ended June 30
2023 2022
Net profit (loss) (242,156) 732,098
Add: Impairment provisions for assets 105,887 85,346
Credit impairment losses (gain) (8,490) 97,125
Depreciation of fixed assets and investment property 487,815 499,714
Depreciation of right-of-use asset 93,719 80,900
Amortization of intangible asset 449,372 453,387
Gains on disposal of fixed assets, intangible assets, and other long-
term assets, net (23,402) (60,298)
Losses from changes in fair value 782,218 1,341,717
Financial expenses 329,817 (342,658)
Investment income, net (10,090) (4,706)
Increase in deferred tax assets, net (350,613) (318,979)
Decrease in deferred tax liabilities, net (17,311) 12,095
Decrease (increase) in inventories, net 905,851 (3,360,343)
Increase in operating receivables, net (752,091) (2,842,961)
Increase (decrease) in operating payables, net (1,786,212) 2,248,418
Others (29,190) 33,284
Net cash flow from operating activities (64,876) (1,345,861)
b. Net increase (decrease) in cash and cash equivalents
Six months ended June 30
2023 2022
Closing balance of cash and cash equivalents 4,570,537 3,190,742
Less: Opening balance of cash and cash equivalents 4,225,253 5,759,480
Increase (decrease) in cash and cash equivalents 345,284 (2,568,738)
168
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
2023 2022
Cash on hand 960 785
Bank deposits available on demand without restrictions 4,569,577 4,224,468
4,570,537 4,225,253
58. Assets with Restricted Ownership or Right of Use
June 30
2023 Reason
Cash 33,986 Pledged
Other non-current assets 195,920 Guarantees
229,906
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
(1) Foreign currencies denominated items
As at June 30, 2023
Foreign currency at
the end of the RMB at the end of
period Exchange rate the period
Cash and bank balances
BRL 329,919 1.499 494,548
EUR 41,621 7.848 326,642
GBP 24,852 9.121 226,673
ILS 93,092 1.953 181,808
ARS 6,262,188 0.028 175,341
RON 72,130 1.579 113,893
USD 12,806 7.226 92,533
PLN 50,745 1.760 89,311
ZAR 96,680 0.387 37,415
RUB 274,232 0.083 22,761
TRY 46,142 0.280 12,920
Other 186,253
Total 1,960,098
Bills and Accounts receivable
BRL 964,126 1.499 1,445,225
EUR 97,454 7.848 764,822
TRY 1,282,941 0.280 359,223
USD 45,302 7.226 327,344
RON 184,439 1.579 291,229
HUF 9,349,497 0.021 196,339
CAD 24,370 5.448 132,767
ZAR 265,954 0.387 102,924
THB 460,422 0.203 93,466
ILS 39,995 1.953 78,110
RUB 891,820 0.083 74,021
CZK 173,747 0.331 57,510
IDR 84,611 0.4809 40,688
Other 204,059
Total 4,167,727
Other receivables
EUR 31,965 7.848 250,860
GBP 7,378 9.121 67,293
ILS 21,769 1.953 42,515
BRL 20,689 1.499 31,013
Other 76,742
Total 468,423
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, 2023
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Other current assets
BRL 154,460 1.499 231,536
ILS 69,801 1.953 136,322
EUR 8,418 7.848 66,065
UAH 301,622 0.198 59,721
ARS 1,236,386 0.028 34,619
Other 100,056
Total 628,319
Long-term receivables
BRL 39,542 1.499 59,273
Total 59,273
Other non-current assets
BRL 156,948 1.499 235,265
Other 64,339
Total 299,604
Short-term loans
ILS 165,883 1.953 323,969
EUR 28,108 7.848 220,589
TRY 205,316 0.280 57,488
Other 19,590
Total 621,636
Bills and Accounts payable
ILS 749,274 1.953 1,463,333
EUR 63,553 7.848 498,761
BRL 152,884 1.499 229,173
USD 9,175 7.226 66,297
Other 132,045
Total 2,389,609
Other payables
ILS 97,401 1.953 190,225
BRL 123,967 1.499 185,826
ILS CPI 22,230 1.953 43,416
Other 139,548
Total 559,015
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)
(1) Foreign currencies denominated items - (cont'd)
As at June 30, 2023
Foreign currency at RMB at the end of
the end of the period Exchange rate the period
Contract liabilities
EUR 53,046 7.848 416,307
CAD 47,966 5.448 261,321
BRL 45,143 1.499 67,670
UAH 335,708 0.198 66,470
Other 95,366
Total 907,134
Non-current liabilities due within one year
ILS CPI 317,339 1.953 619,764
EUR 67,984 7.848 533,539
Other 50,501
Total 1,203,804
Other current liabilities
EUR 8,047 7.848 63,153
Other 3,468
Total 66,621
Long-term loan
EUR 28,999 7.848 227,584
Total 227,584
Debentures payable
ILS CPI 3,805,973 1.953 7,433,065
Total 7,433,065
Provision and Long-term payables
BRL 111,510 1.499 167,154
Other 2,919
Total 170,073
Other non-current liabilities
ILS CPI 48,183 1.953 94,102
EUR 5,526 7.848 43,369
USD 3,358 7.226 24,264
Other 51,723
Total 213,458
172
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.
173
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
VI. Change in consolidation Scope
1. Business combinations involving enterprises not under common control
(1) Business combinations involving enterprises not under common control during current period
Total Basis of From acquisition
consideration Proportion acquisition date till period end
Name of the Acquisition of equity of equity Acquisition date Net
Revenue
Company date investment investment method determination profit
AgriNova New 05.01.2023 214,476 100% Stock Obtained 35,158 6,286
Zealand Ltd purchase control
(2) Acquisition cost and goodwill
Total of AgriNova New
Acquisition costs Zealand Ltd
Total acquisition cost in cash 170,155
Contingent consideration 44,321
Less: share of the fair value of the identifiable net assets acquired 101,401
Goodwill 113,075
(3) Identifiable assets and liabilities of the acquiree, at acquisition date
AgriNova New Zealand Ltd
Fair value at Book value at
acquisition date acquisition date
05.01.2023 05.01.2023
Assets:
Cash and bank balances 21,695 21,695
Bills and Accounts receivable 8,066 8,066
Prepayments 903 903
Inventories 21,898 21,898
Fixed assets 1,350 1,350
Intangible assets 88,670 -
Deferred tax assets 2,354 2,354
Liabilities:
Bills and Accounts payable 7,601 7,601
Employee benefits payable 1,273 1,273
Taxes payable 8,573 8,573
Other payables 452 452
Contract liabilities 807 807
Deferred tax liabilities 24,829 -
Net assets 101,401 37,560
Less: Non-controlling interests - -
Net assets acquired 101,401 37,560
174
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
ADAMA Italia SRL Italy Distribution 100% Established
ADAMA Northern Europe B.V. Netherlands Distribution 55% Purchased
Manufacturing; Distribution; Purchased
Alligare LLC United States 100%
Registration
Adama Anpon (Jiangsu) Ltd. China Manufacturing; Distribution 100% Purchased
Adama Huifeng (Jiangsu) Co. Ltd. China Manufacturing; Distribution 51% Purchased
2. Interests in joint ventures or associates
June 30 December 31
2023 2022
Joint venture 1,358 2,110
Associate 27,914 24,258
29,272 26,368
3. Summarized financial information of joint ventures and associates
June 30, 2023 and six June 30, 2022 and six
months then ended months then ended
Joint venture:
Total carrying amount 1,358 2,584
The Group's share of the following items:
Net profit 70 234
Other comprehensive income 33 123
Total comprehensive income 103 357
Associate:
Total carrying amount 27,914 17,924
The Group's share of the following items:
Net profit 3,369 4,472
Other comprehensive income 3,072 1,754
Total comprehensive income 6,441 6,226
175
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. and f.
In June 2022, a two-years agreement with an international insurance company was renewed. The amount of
the insurance coverage was fixed at $150 million cumulative per year. The indemnification is limited to about
90% of the debt.
The Group’s exposure to credit risk is influenced mainly by the personal characterization of each customer,
and by the demographic characterization of the customer’s base, including the risk of insolvency of the
industry and geographic region in which the customer operates. No single customer accounted for greater than
5% of total accounts receivable.
176
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, specifically in Ukraine due to the
conflict and in South America on an ongoing basis.
The Group recognizes an impairment provision, which reflects its assessment regarding the credit risk of
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, 2023
Past due by less than 90 days 1,041,318
Past due by more than 90 days 557,013
1,598,331
177
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 8,567,344 thousand relate to
category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 1,126,855
thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has credit
risk exposures for other receivables amounted to RMB 38,236 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.
178
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, 2023
Third- Fifth year Contractual Carrying
First year Second year Fourth year and above Cash flow amount
Non-derivative financial
liabilities
Short-term loans 6,445,953 - - - 6,445,953 6,341,677
Bills payables 497,344 - - - 497,344 497,344
Accounts payables 5,944,976 - - - 5,944,976 5,944,976
Other payables 2,489,597 - - - 2,489,597 2,489,597
Other current liabilities 483,688 - - - 483,688 483,688
Debentures payable 934,238 937,974 1,787,786 7,174,504 10,834,502 8,004,835
Long-term loans 1,941,192 1,557,367 1,274,012 657,204 5,429,775 5,129,027
Long-term payables 7,233 13,324 25,436 88,402 134,395 108,886
Lease Liabilities 199,842 157,989 173,183 359,338 890,352 666,459
Long-term liability in respect of
business combinations - 59,240 2,764 - 62,004 49,454
Other non-current liabilities 9,754 9,755 1,307,083 371,044 1,697,636 1,318,941
Derivative financial liabilities
Foreign currency derivatives 735,658 - - - 735,658 735,658
19,689,475 2,735,649 4,570,264 8,650,492 35,645,880 31,770,542
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.
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)
(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, 2023
Total assets Total liabilities
In US Dollar 2,868,242 2,226,263
In Euro 1,559,256 2,048,441
In Brazilian real 2,496,860 482,676
CPI-linked NIS 45,205 8,169,485
In New Israeli Shekel 438,755 2,015,990
Denominated in or linked to other foreign currency 4,977,640 874,345
12,385,958 15,817,200
(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:
June 30, 2023
Currency/ Currency/ Average USD RMB
linkage linkage expiration thousands thousands
receivable payable date Par value Par value Fair value
Forward foreign currency USD EUR 20/10/2023 340,684 2,461,716 (328,803)
Contracts and call options USD PLN 12/07/2023 18,177 131,346 2,586
USD BRL 01/08/2023 203,448 1,470,076 (28,237)
USD GBP 10/07/2023 13,022 94,098 (5,172)
USD ZAR 19/08/2023 33,812 244,316 7,164
ILS USD 04/08/2023 1,418,850 10,252,324 (194,263)
USD OTHER 608,192 4,394,672 (45,549)
CPI forward contracts CPI ILS 20/09/2023 608,108 4,394,068 48,757
180
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 June 30, 2023 and
the increase or decrease in the CPI would increase (decrease) the equity and profit or loss by the amounts
presented below. This analysis assumes that all the remaining variables, among others interest rates,
remains constant.
June 30, 2023
Decrease of 5% Increase of 5%
Equity Profit (loss) Equity Profit (loss)
New Israeli shekel (645,224) (667,211) 51,429 73,568
British pound 12,622 12,622 (12,622) (12,622)
Euro 8,066 (38,484) (7,087) 41,087
Brazilian real 96,127 100,709 (97,004) (100,709)
Polish zloty 2,468 2,468 (1,798) (1,798)
South African Rand (6,378) 371 5,200 (912)
Chinese Yuan Renminbi (11,105) (11,105) 15,721 15,721
CPI-linked NIS 232,100 232,100 (232,100) (232,100)
(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.
181
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, 2023
Fixed-rate instruments – unlinked to the CPI
Financial assets
Other non-current assets 66,044
Financial liabilities
Long-term loans (1) 3,845,009
Long-term payables 27,610
Other non-current liabilities 361,290
(4,167,865)
Fixed-rate instruments – linked to the CPI
Financial liabilities
Debentures payable (1) 8,004,835
Variable-rate instruments
Financial assets
Cash at banks 855,860
Financial assets at fair value through profit or loss 1,930
Other current assets 56,730
Financial liabilities
Short-term loans and credit from banks 6,341,677
Long-term loans (1) 1,284,018
Long-term payables 70,755
(6,781,930)
(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, 2023 981 (997) 981 (997)
182
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, 2023
Carrying amount Fair value
Financial assets
Other non-current assets (a – Level 2) 102,845 88,714
Financial liabilities
Long-term loans and others (b – Level 2) 6,266,949 6,015,605
Debentures (c – Level 1) 8,004,835 9,105,391
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, 2023
%
U.S. dollar interest 5.85% - 7.03%
Chinese Yuan Renminbi 1.08% - 1.96%
Euro 3.18% - 3.66%
183
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
2023
Forward contracts and options used for hedging the cash flow (Level 2) (15,080)
Forward contracts and options used for economic hedging (Level 2) (528,437)
Other equity investment (Level 2) 162,905
Receivables financing (Level 2) 125,292
Other non-current assets (Level 2) 96,464
Other (Level 2) 1,930
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.
184
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
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
Name of other related parties Related party relationship
Beijing Guangyuan Yinong Chemical Co., LTD Common control
Beijing Junmao Real Estate Co. Ltd. Common control
Zhonglan Lianhai Design and Research Institute Common control
Bluestar (Beijing) Chemical Machinery Co. Ltd. Common control
Bluestar Engineering Co. Ltd. Common control
China Chemical Information Center Common control
China National Bluestar (Group) Co. Ltd. Common control
China National Chemical Agrochemical Corporation Common control
Dipagro LTDA Common control
Elkem Silicones Brasil Ltd. Common control
Elkem Silicones Hong Kong Co. Ltd. Common control
Hangzhou (torch) Xidou door Film Industry Co., LTD Common control
Henan Junhua Development Co. Ltd. Common control
Jiangsu Huaihe Chemical Co. Ltd. Common control
Jiangsu Ruixiang Chemical Co., LTD Common control
Jiangsu Yangnong Chemical Co. Ltd. Common control
Jiangsu Youjia Plant protection Co., LTD Common control
Jiangsu Youshi Chemical Co., LTD Common control
Jingzhou Sanonda Holdings Co. Ltd. Common control
(MAP) Sinochem Modern Agriculture Co.LTD Xinjiang Branch Common control
(MAP) Sinochem Modern Agriculture Co.LTD Yichang Branch Common control
OOO Syngenta Common control
P.T. Syngenta Indonesia Common control
PT Syngenta Seed Indonesia Common control
Shandong Dacheng Agrochemical Company Limited Common control
Shenyang Chemical Co., Ltd. Common control
Shenyang Shenhua Institute Testing Technology Co. Ltd. Common control
Sinochem (Hainan) Agroecology Co. Common control
Sinochem (Linyi) Crop Nutrition Co. Ltd Common control
Sinochem Agriculture (Xinjiang) Biotechnology Co. Ltd. Common control
Sino MAP Common control
Sinochem Agro Co. Ltd. Common control
Sinochem Chemical Science and Technology Research Institute
Co., LTD Common control
Sinochem Crop Protection Products Co. LTD Common control
Sinochem Fertilizer Company Limited Common control
Sinochem Fertilizer Company Limited Fujian Branch Common control
186
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties - (cont’d)
Name of other related parties Related party relationship
Sinochem Fertilizer Company Limited Guangxi Branch Common control
Sinochem Fertilizer Company Limited Hebei Branch Common control
Sinochem Fertilizer Company Limited Jiangsu Branch Common control
Sinochem Fertilizer Company Limited Jilin Branch Common control
Sinochem Fertilizer Company Limited Northwest Branch Common control
Sinochem Fertilizer Company Limited Shandong Branch Common control
Sinochem Fertilizer Company Limited Southwest Branch Common control
Sinochem Information Technology Co. Ltd. Common control
Sinochem International Crop Care (Overseas) Pte. Ltd. Common control
Sinochem Innovation (Beijing) Technology Research Institute Co., Ltd. Common control
Sinochem Lantian Fluorine Materials Co. Ltd. Common control
Sinochem Modern Agriculture (Gansu) Co. LTD Common control
Sinochem Modern Agriculture (Guangxi) Co. LTD Common control
Sinochem Modern Agriculture (Hunan) Co. LTD Common control
Sinochem Modern Agriculture (Inner Mongolia) Co. LTD Common control
Sinochem Modern Agriculture (Jiangsu) Co. LTD Common control
Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control
Sinochem Modern Agriculture Anhui Co. LTD Common control
Sinochem Modern Agriculture Sichuan Co. LTD Common control
Syngenta (China) Investment Company Ltd Common control
Syngenta Agro (Argentina) S.A. Common control
Syngenta Agro AG Common control
Syngenta Agro d.o.o. Common control
Syngenta Agro GmbH Common control
Syngenta Agro SA de CV Common control
Syngenta Australia Pty Ltd Common control
Syngenta Canada Inc Common control
Syngenta Comercial Agricola Common control
Syngenta Crop Protection AG Common control
Syngenta Crop Protection BV Common control
Syngenta Crop Protection LLC Common control
Syngenta Crop Protection Ltd. Common control
Syngenta Crop Protection SA Common control
Syngenta Czech s.r.o. Common control
Syngenta Espaa S.A. Common control
Syngenta France S.A.S Common control
Syngenta A.G. Common control
Syngenta Group Saturn (NL) B.V. Common control
Syngenta Hellas AEBE Common control
Syngenta India Ltd Common control
Syngenta Italia SpA Common control
Syngenta Nantong Crop Protection Co., LTD Common control
Syngenta Protecao de Cultivos Ltda Common control
Syngenta S.A. Common control
Syngenta Seeds LTDA Common control
Syngenta Slovakia s.r.o. Common control
187
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
4. Information on other related parties - (cont’d)
Name of other related parties Related party relationship
Syngenta Tarim Sanay ve Ticaret AS Common control
Syngenta Vietnam Limited Common control
Syngenta Zambia Limited Common control
Tov Syngenta Common control
Valagro S.p.A. Common control
China Bluestar Chengrand Research Institute Chemical Industry Common control
Zhonglan International Chemical Co. Ltd. Common control
Ningxia Ruitai Technology Co. Ltd. Common control
Sinochem Finance Corporation 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
188
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties
(1) Transactions with related parties
Six months ended June 30
Type of purchase Related Party Relationship 2023 2022
Summary of purchase of goods/services:
Purchase of goods/services received Common control under
Sinochem Holdings 982,940 1,567,313
Minority shareholder and 7,478 3,232
its subsidiary
Purchase of fixed assets and other assets Common control under 396 8,474
Sinochem Holdings
Lease expenses Common control under 97 117
Sinochem Holdings
Minority shareholder and 2,668 410
its subsidiary
Summary of Sales of goods:
Sale of goods/ Service rendered Common control under
Sinochem Holdings 920,513 987,560
Joint venture 34,979 51,757
Minority shareholder and
its subsidiary 38,840 44,658
Lease income Minority shareholder and
its subsidiary 631 -
(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 323,000 21/04/2021 20/04/2028 N
71,108 01/06/2021 31/05/2028 N
* During the reporting period, the Company paid a guarantee fee amounting to 219 thousand RMB
(2022 1-6: 227 thousand RMB) to the parent company.
(3) Remuneration of key management personnel and directors
Periods ended June 30
2023 2022
Remuneration of key management personnel and directors 33,773 52,977
189
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties - (cont'd)
(4) Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
2023 2022
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Common control under 153,673 - 356,708
Sinochem Holdings
Joint venture 16,273 - 25,727 -
Minority shareholder and 24,839 - 13,172 -
its subsidiary
Other receivables Common control under - - 17 -
Sinochem Holdings
Other Non-Current assets Common control under 37 - 52 -
Sinochem Holdings
Prepayments Common control under 9,685 - 34,393 -
Sinochem Holdings
Payable Items
June 30 December 31
Items Related Party Relationship 2023 2022
Trade payables Common control under Sinochem 486,257 426,454
Holdings
Minority shareholder and its subsidiary 2,899 -
Other payables Common control under Sinochem 21,850 24,974
Holdings
Short-term loans * Common control under Sinochem 2,167,740 696,459
Holdings
Other non-current Common control under Sinochem 361,290 348,231
liabilities * Holdings
* The liabilities are loans from a related party, the interest expenses for the year ended June 30, 2023 is
43,976 thousand RMB (six months ended June 30, 2022: 3,033 thousand RMB ).
On October 27, 2021, the Board of Directors first approved (following the approval of the Company’s
Audit Committee dated October 25, 2021) the Company, through one of its subsidiaries, entering into
committed credit facilities agreements in the aggregate amount of $100 million (RMB 696 million) on
market terms with Syngenta Group, or any of its subsidiaries. Following the approvals of the Company’s
requisite organs, these facilities were amended and further increased in December 2022 and in April 2023,
to an aggregate amount of $400 million (RMB 2,890 million). As of 30 June 2023, a total of $350 million
(RMB 2,529 million) was utilized.
190
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
X. Related parties and related party transactions - (cont’d)
5. Transactions and balances with related parties - (cont'd)
(5) Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil thousand RMB (31.12.22:
nil) Interest income of bank deposit for the current period was nil thousand RMB (amount for six months
ended June 30, 2022 was 90 thousand RMB).
The closing balance of bank deposit in Sinochem Finance Corporation was 103,987 thousand RMB
(31.12.22: 417,661) Interest income of bank deposit for the current period was 2,802 thousand RMB (amount
for six months ended June 30, 2022 was 976 thousand RMB ).
The closing balance of a loan received from Sinochem Finance Corporation was 50,000 thousand RMB
(31.12.22: nil) Interest expenses in the current period was 137 thousand RMB (amount for six months ended
June 30, 2022 was nil thousand RMB).
191
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies
1. Significant commitments
June 30 December 31
2023 2022
Investment in Fixed assets 439,492 429,862
2. Commitments and Contingent Liabilities
On December 10, 2018 the 9th meeting of the 8th session of the Board of Directors of the Company approved
the extension of the engagement in annual liability insurance policies for directors, supervisors and senior
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, 2022.
Environmental protection
The manufacturing processes of the Company and the products it produces and market, entail environmental
risks that impact the environment. The Company invests substantial resources in order to comply with the
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.
192
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XI. Commitments and contingencies - (cont’d)
2. Commitments and Contingent Liabilities - (cont’d)
Claims against subsidiaries (cont’d)
On October 20, 2020, a claim and a motion for its approval as a class action (the “Motion”) was filed against
Monsanto Company and Bayer AG (the “Manufacturers”) as well as against ADAMA Agan Ltd., a wholly-
owned subsidiary of Solutions, with respect to an herbicide bearing the brand name Roundup, which is produced
by the Manufacturers and distributed in Israel in small quantities by Solutions’ subsidiary. The applicants argue
that the product allegedly poses a risk to users or those who have been exposed to it. Solutions and its subsidiary
reject the allegations against the subsidiary in the Motion and in the statement of claim. Based on the opinion
of Solutions’ external counsels given this preliminary stage, as of the date of the financial statements the Motion
and claim are not expected to have any non-negligible effect on the Company’s financial results. In addition,
and as Solutions is an authorized distributor of the Manufactures, the Manufactures undertook to fully indemnify,
defend and hold harmless ADAMA Agan Ltd., for any monetary compensation or any other remedy it will have
to make in connection with the Motion.
In June 2021, a lawsuit was filed against a subsidiary of the Company, alleging two patents owned by a large
competitor of the Company, have been infringed by such subsidiary. Among the claims, the plaintiff seeks
preliminary and permanent injunctions to prevent the subsidiary from manufacturing, using or commercializing
a product that allegedly infringes the plaintiff’s patents, and seeks actual damages and profits loss. The said
preliminary injunctions were granted by the court in favor of the plaintiff. The subsidiary has filed appeals
against such preliminary injunctions, which were rejected. Prior to such claims, and on-going, the subsidiary
filed several lawsuits against the said plaintiff seeking to declare the said patents are invalid and the subsidiary
does not infringe them. In May 2023, an additional lawsuit (including a preliminary injunction) was filed by the
same large competitor against said subsidiary, alleging infringement of the same two patents for a different
product. The said preliminary injunction was rejected by the court, and plaintiff’s appeals with respect thereto
are pending. All these lawsuits are pending as of the approval date of the financial statements. At this stage, the
claims filed by the plaintiff are not expected to have a material effect on the Company.
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
The Company is not aware of any events subsequent to the balance sheet date.
193
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 30,196,487
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (198,228)
Total number of Phantom warrants forfeited in current period (632,648)
Total number of Phantom warrants at the end of the period 29,365,611
The exercise prices and the remainder of the contractual period for Phantom RMB 9.87 – 10.85
warrants outstanding at the end of period 2.5 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) 32,977
Expenses arising from cash-settled share-based payments in current period
(in thousands RMB) (20,682)
194
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 12,172,969
Total number of Phantom warrants granted in current period -
Total number of Phantom warrants exercised in current period (82,739)
Total number of Phantom warrants forfeited in current period (317,967)
Total number of Phantom warrants at the end of the period 11,772,263
The range of the exercise prices and the remainder of the contractual period RMB 9.37 – 9.43
for Phantom warrants outstanding at the end of period 3.25 years
195
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) 16,794
Expenses (income) arising from cash-settled share-based payments in
current period related to the alternative plan (in thousands RMB) (8,288)
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.
196
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
2023 2022 2023 2022 2023 2022 2023 2022
Operating income from external
customers 15,855,165 16,842,617 1,398,036 1,953,211 - - 17,253,201 18,795,828
Inter-segment operating income - - 709 870 (709) (870) - -
Interest in the profit or loss of
associates and joint ventures - - 3,439 4,706 - - 3,439 4,706
Segment's results 954,027 1,385,155 (41,194) 351,710 - - 912,833 1,736,865
Financial expenses 455,855 (438,224)
Loss from changes in fair value (782,218) (1,341,717)
Investment income 6,651 -
Profit before tax (318,589) 833,374
Income tax income (expense) 76,433 (101,276)
Net profit (242,156) 732,098
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
2023 2022 2023 2022 2023 2022 2023 2022
Total assets 48,359,453 47,113,346 2,440,361 2,520,000 9,102,088 8,347,143 59,901,902 57,980,489
Total liabilities 6,628,775 8,689,479 312,512 383,640 29,316,105 25,782,715 36,257,392 34,855,834
197
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
1. Segment reporting - (cont’d)
Geographic information
The following tables sets out information about the geographical segments of the Group’s operating income
based on the location of customers (sales target) and the Group's non-current assets (including mainly fixed
assets, right-of-use assets, construction in progress, investment properties intangible assets and goodwill). In
the case of investment property, fixed assets, right of used assets and construction in progress, the geographical
location of the assets is based on its physical location. In case of intangible assets and goodwill, the
geographical location of the company which owns the assets.
Operating income from external
customers
Six months ended June 30
2023 2022
Europe, Africa and Middle East 5,286,856 5,136,114
North America 3,018,617 3,639,600
Latin America 3,902,210 3,993,953
Asia Pacific 5,045,518 6,026,161
17,253,201 18,795,828
Specified non-current assets
June 30 December 31
2023 2022
Europe, Africa and Middle East 14,141,270 13,365,820
North America 1,346,640 1,184,067
Latin America 2,589,195 2,482,569
Asia Pacific 5,996,887 5,862,043
24,073,992 22,894,499
* As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that the countries
formerly included in this region are now included in the Europe region (renamed EAME) or in the Asia Pacific
region. The information for 2022 was re-classified accordingly.
2. The dependency on major customers
No single customer's proportion of the total amount of sales is over 10%.
198
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XIV. Other significant items - (cont'd)
3. Calculation of Earnings per share and Diluted earnings per share
Amount for the Amount for the
current period prior period
Net profit (loss) from continuing operations attributable to
ordinary shareholders (242,156) 732,098
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 (0.10) 0.31
Diluted earnings per share N/A N/A
Calculated based on net profit from continuing operations
attributable to ordinary shareholders:
Basic earnings per share (0.10) 0.31
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
199
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
2023 2022
Deposits in banks 121,346 258,330
Other cash and bank balances 3,210 12,750
124,556 271,080
As at June 30, 2023, restricted cash and bank balances was 3,210 thousand RMB (as at December 31, 2022:
12,750 thousand RMB).
2. Accounts receivable
a. By category
June 30, 2023
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables
assessed
individually for impairment 13,893 1 13,893 100 -
Account receivables
assessed
collectively for impairment 1,031,461 99 21 - 1,031,440
1,045,354 100 13,914 1 1,031,440
December 31, 2022
Provision for expected
Book value credit losses
Carrying
Amount Percentage (%) Amount Percentage (%) amount
Account receivables assessed
individually for impairment 13,893 2 13,893 100 -
Account receivables assessed
collectively for impairment 758,471 98 9 - 758,462
772,364 100 13,902 2 758,462
b. Aging analysis
June 30, 2023
Within 1 year (inclusive) 1,031,461
Over 1 year but within 2 years -
Over 2 years but within 3 years -
Over 3 years but within 4 years 15
Over 4 years but within 5 years 1
Over 5 years 13,877
1,045,354
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)
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, 2023
Balance as of January 1 13,902
Addition during the year, net 21
Write back during the year (9)
Write-off during the year -
Exchange rate effect -
Balance as of June 30 13,914
d. Five largest accounts receivable at June 30, 2023:
Proportion of Allowance of
Accounts expected
Name Closing balance receivable (%) credit losses
Party 1 815,623 78 -
Party 2 114,009 11 -
Party 3 20,520 2 -
Party 4 18,965 2 -
Party 5 18,056 2 -
987,173 95 -
3. Receivable financing
June 30 December 31
2023 2022
Bank acceptance draft 47,446 2,596
47,446 2,596
As at June 30, 2023, bank acceptance endorsed but not yet due amounts to 218,243 thousand RMB.
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)
4. Other Receivables
June 30 December 31
2023 2022
Other receivables 11,611 11,611
11,611 11,611
(1) Other receivables
a. Other receivables by categories
June 30 December 31
2023 2022
Other 17,530 17,633
Provision for expected credit losses (5,919) (6,022)
11,611 11,611
b. Other receivables by aging
June 30, 2023
Within 1 year (inclusive) -
Over 1 year but within 2 years 113
Over 2 years but within 3 years 634
Over 3 years but within 4 years* 11,830
Over 4 years but within 5 years -
Over 5 years 4,953
17,530
* Include intergroup balance with Anpon
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)
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, 2023
Balance as of January 1, 2023 6,022
Addition during the period -
Written back during the period (103)
Write-off during the period -
Balance as of June 30, 2023 5,919
d. Five largest other receivables at June 30 2023:
Proportion of other
Name Closing balance receivables (%) Credit loss provision
Party 1 11,611 66 -
Party 2 3,125 18 3,125
Party 3 548 3 548
Party 4 543 3 543
Party 5 237 1 237
16,064 91 4,453
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)
5. Long-term equity investments
June 30, 2023 December 31, 2022
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, 2023 Six months ended June 30, 2022
Operating Operating
Revenue costs Revenue costs
Main operations 1,073,326 884,306 1,162,352 870,245
Other operations 20,383 8,932 22,742 11,173
1,093,709 893,238 1,185,094 881,418
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)
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, 2023 June 30, 2022
Interest income 1,964 3,340
Government subsidies 7,766 13,377
Other 15,929 6,385
25,659 23,102
(2) Other cash paid relevant to operating activities
Six months ended Six months ended
June 30, 2023 June 30, 2022
Professional services 71,288 37,608
Transportation and Commissions 26,151 26,622
Other 14,600 6,697
112,039 70,927
(3) Other cash received relevant to investing activities
Six months ended Six months ended
June 30, 2023 June 30, 2022
Loans 2,850 150,000
2,850 150,000
(4) Other cash paid relevant to investing activities
Six months ended Six months ended
June 30, 2023 June 30, 2022
Loans - 250,000
- 250,000
(5) Other cash received relevant to financing activities
Six months ended Six months ended
June 30, 2023 June 30, 2022
Deposit for issuing bills payables 12,750 6,124
12,750 6,124
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)
(6) Other cash paid relevant to financing activities:
Six months ended Six months ended
June 30, 2023 June 30, 2022
Deposit for issuing bills payable 3,210 18,741
Other 627 -
3,837 18,741
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
2023 2022
Net profit 93,632 245,802
Add: Assets impairment loss 3,067 )3,142(
Credit impairment loss (91) 141
Depreciation of fixed assets and investment property 114,931 100,485
Depreciation of-right-of use assets 1,177 1,434
Amortization of intangible assets 6,033 5,727
Gain on disposal of fixed assets, intangible assets and other long-term
assets 472 )59,538(
Financial expenses 2,661 28,333
Decrease in deferred income tax assets 20,379 -
Decrease (increase) in inventory 77,725 )107,348(
Decrease in accounts receivable from operating activities )327,200( )287,302(
Increase (decrease) in payables from operating activities )56,446) 137,955
Net cash flows generated from operating activities (63,660) 62,547
(2) Net increase in cash and cash equivalents
Six months ended June 30
2023 2022
Closing balance of cash 121,346 276,501
Less: Opening balance of cash 258,330 259,434
Net increase in cash and cash equivalents (136,984) 17,067
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. 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
2023 2022
Summary of Purchase of goods/services Related Party Relationship
received:
Purchase of goods/services received Common control
under ChemChina 50,950 67,101
Subsidiary 53,851 47,970
Purchase of fixed assets and other assets Common control
under ChemChina
Holdings - 2,569
Summary of Sales of goods:
Sale of goods Common control under
ChemChina 2,553 20,068
Subsidiary 499,786 497,938
Sale of raw materials Subsidiary 164 1,003
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)
b. Guarantees
The Company as the guarantor
Amount of Inception Maturity Guaranty
guaranteed date of date of completed
loan guaranty guaranty (Y/ N)
40,000 2022.01.18 2023.01.17 Y
Subsidiary 30,000 2022.03.30 2023.03.29 Y
38,000 2021.12.01 2024.11.28 N
20,000 2022.12.16 2023.12.12 N
35,000 2022.01.01 2025.11.28 N
21,000 2022.02.28 2027.11.28 N
14,000 2022.03.28 2027.11.28 N
7,500 2022.05.20 2027.11.28 N
23,500 2022.06.26 2027.11.28 N
10,000 2022.10.31 2027.11.28 N
11,000 2022.11.30 2027.11.28 N
10,000 2023.01.12 2025.06.20 N
20,000 2022.11.17 2024.12.20 N
12,000 2023.04.03 2025.06.20 N
4,000 2022.01.25 2026.09.28 N
3,900 2022.02.28 2026.09.28 N
8,100 2022.07.12 2026.09.28 N
4,400 2023.04.13 2026.09.28 N
10,000 2022.08.11 2028.06.22 N
10,000 2022.08.31 2028.06.22 N
11,000 2022.10.28 202706.22 N
25,000 2022.11.23 2026.12.22 N
10,000 2023.01.16 2026.06.22 N
14,000 2023.04.04 2026.06.22 N
2,000 2023.04.26 2028.05.05 N
208
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
b. Guarantees - (cont'd)
The Company as the guarantee receiver
Amount of Inception date Maturity date Guaranty
Guarantee provider guaranteed loan of guaranty of guaranty completed (Y / N)
Parent company 323,000 21/04/2021 20/04/2028 N
71,108 01/06/2021 31/05/2028 N
During the reporting period, the Company paid a guarantee fee amounting to 219 thousand RMB
(2022.1-6: 227) to the parent company.
c. Intercompany borrowings/lending
Borrowing/ Commencement Termination Balance at
Related party Lending amount date date year end Note
Lending
Subsidiary 50,000 2022.5 2023.12 50,000 Fixed rate at 2.4%
Subsidiary 40,000 2022.6 2023.12 40,000 Fixed rate at 2.4%
Subsidiary 35,000 2022.6 2023.12 35,000 Fixed rate at 2.4%
Subsidiary 125,000 2022.6 2024.05 125,000 Fixed rate at 2.4%
209
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
d. Receivables from and payables to related parties (including loans)
Receivable Items
June 30 December 31
2023 2022
Expected Expected
Related Party Book credit Book credit
Items Relationship Balance losses Balance losses
Trade receivables Subsidiary 834,588 - 548,601 -
Non-current
assets within one
year Subsidiary 125,000 - 125,000 -
Other non-current
assets Subsidiary 125,000 - 125,000 -
Other receivables Subsidiary 11,611 - 11,611 -
Trade receivables Common control under
Sinochem Holding 955 - 304 -
Prepayments Common control under
Sinochem Holding 1,311 - 537 -
Other non-current Common control under
assets Sinochem Holding 37 - 52 -
Payable Items
June 30 December 31
Items Related Party Relationship 2023 2022
Trade payables Subsidiary 19 5,686
Trade payables Common control under Sinochem
Holdings 44,877 46,152
Other payables Subsidiary 311,065 395,152
Common control under Sinochem
Holdings 327 700
210
ADAMA Ltd.
(Expressed in RMB '000)
Notes to the Financial Statements
XV. Notes to major items in the Company's financial statements - (cont'd)
9. Transactions and balances with related parties - (cont'd)
(3) Transactions with related parties - (cont'd)
e. Other related party transactions
The closing balance of bank deposit in ChemChina Finance Corporation was nil (31.12.22: nil).
Interest income of bank deposit for the current period was nil (amount for period ended June 30, 2022
was 67 thousand RMB).
The closing balance of bank deposit in SinoChem Finance Corporation was 42,360 thousand RMB
(31.12.22: 202,615 thousand RMB) Interest income of bank deposit for the current period was 1,490
thousand RMB (amount for period ended June 30, 2022 was 493 thousand RMB).
211
ADAMA Ltd. Semi-Annual Report 2023
Supplementary information
(Expressed in RMB '000)
1. Extraordinary Gain and Loss
Six months ended
June 30, 2023
Disposal of non-current assets 23,402
Government grants recognized through profit or loss 19,053
Recovery or reversal of expected credit losses which is assessed individually during
the years 27,325
Other non-operating income or expenses other than the above 13,569
Other profit or loss that meets the definition of non-recurring profit or loss (2,751)
Tax effect (17,788)
62,810
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 (1.03) (0.10) N/A
Net profit after deduction of extraordinary
gains/losses attributable to ordinary
shareholders of the Company (1.30) (0.13) N/A
ADAMA Ltd.
Legal Representative：Steve Hawkins
August 28, 2023
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