ADAMALtd.FINANCIAL STATEMENTS ANDAUDITOR’S REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025ADAMALtd.FINANCIAL STATEMENTS ANDAUDITOR'S REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

CONTENTS PAGES

AUDITOR'S REPORT 1 - 7

THE CONSOLIDATEDAND COMPANY'S BALANCE SHEETS 8 - 10

THE CONSOLIDATEDAND COMPANY'S INCOME STATEMENTS 11 - 12

THE CONSOLIDATEDAND COMPANY'S CASH FLOW STATEMENTS 13 - 14

THE CONSOLIDATEDAND COMPANY'S STATEMENTS

OF CHANGES IN SHAREHOLDERS' EQUITY 15 - 17

NOTES TO THE FINANCIAL STATEMENTS 18 – 126AUDITOR'S REPORT

KPMG Huazhen Shen Zi No.2605093

To the shareholders of ADAMA Ltd.:

I. Opinion

We have audited the accompanying financial statements of ADAMA Ltd. (hereinafter referred to as

the "Adama") which comprise the consolidated and company balance sheets as at 31 December 2025

the consolidated and company income statements the consolidated and company cash flows

statements and the consolidated and company statements of changes in shareholders' equity for the

year then ended and notes to the financial statements.In our opinion the accompanying financial statements present fairly in all material respects the

consolidated and company financial position of Adama as at 31 December 2025 and the consolidated

and company financial performance and cash flows of Adama for the year then ended in accordance with

the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People’s

Republic of China (hereinafter referred to as the “ASBEs”).II. Basis for Opinion

We conducted our audit in accordance with China Standards on Auditing for Certified Public

Accountants (“CSAs”). Our responsibilities under those standards are further described in the

Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are

independent of Adama in accordance with the the Independence Standards for Chinese Certified

Public Accountants No. 1 – Independence Requirements for Audit and Review Engagements as

applicable to audits of financial statements of public interest entities and the China Code of Ethics for

Certified Public Accountants (“the Code”) and we have fulfilled our other ethical responsibilities in

accordance with the Code. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.III. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in

our audit of the financial statements for the current year. These matters were addressed in the context

of our audit of the financial statements as a whole and in forming our opinion thereon and we do not

provide a separate opinion on these matters.- 1 -AUDITOR'S REPORT - continued

KPMG Huazhen Shen Zi No.2605093

III. Key Audit Matters - continued

Cut-off of revenue recognition

Please refer to the accounting policies described in Note (III) 28 and details in Note (V) 42 to the

financial statements.Description Audit response

The principal activities of ADAMA Ltd. and its The audit procedures performed in relation to the

subsidiaries (hereinafter referred to as the assessment of revenue cut? off included the

“ADAMA”) are the production and sale of following:

agrochemical products intermediate materials

for other industries food additives and synthetic Understand and evaluate the design and

aromatic products. operation effectiveness of key internal

In 2025 ADAMA’s consolidated revenue from controls over financial reporting related to

principal business amounted to RMB 28.9 revenue recognition by management;

billion. Check key sales contracts on a sampling

ADAMA recognizes revenue when the customer basis to identify relevant trading terms

obtains control of the relevant goods. Depending related to the transfer of control of goods

on the trading terms of the sales contracts entered and evluate whether ADAMA’s revenue

into with customers and the specific business recognition accounting policies are in

arrangements ADAMA generally considers that compliance with the requirements of the

control of the relevant goods has been transferred ASBEs;

to the customer and recognizes sales revenue On a sampling basis reconcile the revenue

when the customer signs for or picks up the recorded around the balance sheet date to the

goods when shipment of the goods is completed related sales orders customer delivery notes

or when the goods arrive at the warehouse or bills of lading and other supporting

designated by the customer. documents to assess whether revenue was

As revenue is one of the key performance recorded in the appropriate accounting

indicators of ADAMA there is a risk that period;

management may advance or defer the timing of

revenue recognition in order to achieve specific Check the sales records after the balance

targets or expectations. Accordingly we have sheet date to identify any material sales

? returns and where applicable check theidentified the risk of cut off misstatements in relevant supporting documents to assess

revenue recognition as a key audit matter. whether the related revenue was recorded in

the appropriate accounting period; and

Selecting revenue journal entries that meet

specific risk criteria and inspecting the

related supporting documentation.- 2 -AUDITOR'S REPORT - continued

KPMG Huazhen Shen Zi No.2605093

III. Key Audit Matters - continued

Provision for Impairment of Goodwill on Crop Protection Units

Please refer to the accounting policies described in Note (III) 22 and 23 and details in Note (V) 18 to

the financial statements.Description Audit response

As at 31 December 2025 the carrying amount of The audit procedures performed in relation to the

goodwill of ADAMA was RMB 4.96 billion of assessment of the potential impairment of

which RMB 4.89 billion related to the groups of goodwill included the following:

cash generating unit (hereinafter referred to as the

"CGU") of crop protection. Understand and evaluate the design and

operation effectiveness of key internal

Management of ADAMA performs an controls of ADAMA relating to goodwill

impairment test on goodwill at each year? end impairment testing;

by comparing the carrying amount of the groups Based on our understanding of ADAMA’s

of CGUs that includes goodwill with its business assesse whether management’s

recoverable amount in order to determine identification of the relevant groups of CGUs

whether an impairment provision is required. The and the method of allocating goodwill to

recoverable amount is determined as the higher those groups of CGUs as well as the method

of the fair value less costs of disposal of the used to determine the recoverable amount of

groups of CGUs and the present value of the the groups of CGUs are in compliance with

groups of CGUs’s estimated future cash flows. the requirements of the ASBEs;

Determining the present value of the estimated

future cash flows involves significant Based on our understanding experience and

management judgement in particular in knowledge of the industry in which ADAMA

estimating the projected sales growth rate gross operates and taking into account both

profit margins terminal growth rate and discount internal and external information such as

rate applied. ADAMA’s approved business plans and

Given the materiality of the carrying amount of industry research reports evaluate the

goodwill to the financial statements and the fact reasonableness of key assumptions adopted

that the parameters used in the goodwill by management in estimating the present

impairment test involve significant management value of future cash flows including

judgement which is subject to inherent projected sales growth rate and gross profit

uncertainty and may be influenced by margin;

management bias we identified the potential Engage KPMG’s internal valuation experts to

impairment of goodwill as a key audit matter. evaluate the appropriateness of the valuation

methodologies adopted by management in

determining the present value of the

estimated future cash flows of the relevant

groups of CGU and the reasonableness of

the discount rate and terminal growth rate

used;

- 3 - Perform sensitivity analyses on the discount

rate and other key assumptions used by

management in estimating the present value

of future cash flows to assess the impact of

changes in key assumptions on the results of

the impairment test and whether there are

any indications of management bias;

Compare the key assumptions used by

management in estimating the present value

of future cash flows in the prior year with the

actual performance of the relevant groups of

CGU in the current year to assess whether

there are any indications of management

bias; and

Evaluate whether the disclosures in the

financial statements in respect of goodwill

impairment and the key assumptions adopted

are in compliance with the requirements of

the ASBEs.- 4 -AUDITOR'S REPORT - continued

KPMG Huazhen Shen Zi No.2605093

IV. Other Information

Adama’s management is responsible for the other information. The other information comprises the

information included in 2025 annual report of Adama other than the financial statements and our

auditor's report thereon.Our opinion on the financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other

information and in doing so consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated.If based on the work we have performed we conclude that there is a material misstatement of this

other information; we are required to report that fact. We have nothing to report in this regard.V. Responsibilities of Management and Those Charged with Governance for the Financial

Statements

Management is responsible for the preparation and fair presentation of the financial statements in

accordance with ASBEs and for the design implementation and maintenance of such internal control

necessary to enable that the financial statements are free from material misstatement whether due to

fraud or error.In preparing the financial statements management is responsible for assessing Adama's ability to

continue as a going concern disclosing as applicable matters related to going concern and using the

going concern basis of accounting unless management either intends to liquidate Adama or to ceases

operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing Adama's financial reporting process.VI. Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement whether due to fraud or error and to issue an auditor's report that

includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an

audit conducted in accordance with CSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individually or in the

aggregate they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.- 5 -AUDITOR'S REPORT - continued

KPMG Huazhen Shen Zi No.2605093

VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued

As part of an audit in accordance with CSAs we exercise professional judgment and maintain

professional skepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements whether due to

fraud or error design and perform audit procedures responsive to those risks and obtain audit

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error

as fraud may involve collusion forgery intentional omissions misrepresentations or the override

of internal control;

(2) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances;

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the management;

(4) Conclude on the appropriateness of the management' use of the going concern basis of accounting

and based on the audit evidence obtained whether a material uncertainty exists related to events

or conditions that may cast significant doubt on Adama's ability to continue as a going concern. If

we conclude that a material uncertainty exists we are required to draw attention in our auditor's

report to the related disclosures in the financial statements or if such disclosures are inadequate

to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of

our auditor's report. However future events or conditions may cause Adama to cease to continue

as a going concern;

(5) Evaluate the overall presentation structure and content of the financial statements including the

disclosures and whether the financial statements represent the underlying transactions and events

in a manner that achieves fair presentation;

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within Adama to express an opinion on the financial statements. We are

responsible for the direction supervision and performance of the group audit. We remain solely

responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned

scope and timing of the audit and significant audit findings including any significant deficiencies in

internal control that we identify during our audit.- 6 -AUDITOR'S REPORT - continued

KPMG Huazhen Shen Zi No.2605093

VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence and to communicate with them all relationships and

other matters that may reasonably be thought to bear on our independence and where applicable

related safeguards.From the matters communicated with those charged with governance we determine those matters that

were of most significance in the audit of the financial statements of the current year and are therefore

the key audit matters. We describe these matters in our auditor's report unless law or regulation

precludes public disclosure about the matter or when in extremely rare circumstances we determine

that a matter should not be communicated in our report because the adverse consequences of doing so

would reasonably be expected to outweigh the public interest benefits of such communication.KPMG Huazhen CPA LLP Chinese Certified Public Accountant

Beijing China Wang Jia

(Engagement Partner)

Chinese Certified Public Accountant

Wang Shan

26 March 2026

This independent auditor's report of the financial statements and the accompanying financial statements are

English translations of the independent auditor's report and the financial statements prepared under

accounting principles and practices generally accepted in the People's Republic of China. These financial

statements are not intended to present the balance sheet and results of operations and cash flows in

accordance with accounting principles and practices generally accepted in other countries and jurisdictions.In case the English version does not conform to the Chinese version the Chinese version prevails

- 7 -ADAMALtd.

(Expressed in RMB '000)

Consolidated Balance Sheet

December 31 December 31

Notes 2025 2024

Current assets

Cash at bank and on hand V.1 3450300 3630608

Financial assets held for trading V.2 1223 1035

Derivative financial assets V.3 449379 483822

Bills receivable V.4 358489 65565

Accounts receivable V.5 7124736 7977830

Receivables financing V.6 30767 144763

Prepayments V.7 368012 313542

Other receivables V.8 1076164 1147469

Inventories V.9 11607842 11164663

Other current assets V.10 1094273 988093

Total current assets 25561185 25917390

Non-current assets

Long-term receivables V.11 118203 159813

Long-term equity investments V.12 39312 30227

Other equity investments V.13 129796 131473

Investment properties 18869 20509

Fixed assets V.14 10073551 9762895

Construction in progress V.15 897175 1996892

Right-of-use assets V.16 661443 557159

Intangible assets V.17 4302343 4796655

Goodwill V.18 4964450 5074283

Deferred tax assets V.19 1294176 1291654

Other non-current assets V.20 403459 320827

Total non-current assets 22902777 24142387

Total assets 48463962 50059777

- 8 -ADAMALtd.

(Expressed in RMB '000)

Consolidated Balance Sheet (continued)

December 31 December 31

Notes 2025 2024

Current liabilities

Short-term loans V.21 6673792 4748720

Derivative financial liabilities V.22 189581 278580

Bills payable V.23 622660 439495

Accounts payable V.24 5461749 4934865

Contract liabilities V.25 1789490 1810764

Employee benefits payable V.26 936724 851784

Taxes payable V.27 539168 516761

Other payables V.28 1418093 1417319

Non-current liabilities due within one year V.29 3825203 2230713

Other current liabilities V.30 929259 784456

Total current liabilities 22385719 18013457

Non-current liabilities

Long-term loans V.31 1507514 2166625

Debentures payable V.32 4894076 6320157

Lease liabilities V.33 751226 610415

Long-term payables 164735 191103

Long-term employee benefits payable V.34 536895 543855

Provisions V.35 424347 316490

Deferred tax liabilities V.19 224024 283081

Other non-current liabilities V.36 - 2623500

Total non-current liabilities 8502817 13055226

Total liabilities 30888536 31068683

Shareholders' equity

Share capital V.37 2329812 2329812

Capital reserve V.38 12867123 12950464

Less: Treasury shares - -

Other comprehensive income V.39 1570748 1721028

Special reserves 6156 10798

Surplus reserve V.40 298610 298610

Retained earnings V.41 502977 1680382

Total equity attributed to the shareholders 17575426 18991094

of the company

Non-controlling interests - -

Total Equity 17575426 18991094

Total liabilities and equity 48463962 50059777

Gael Hili Efrat Nagar

Legal representative Chief Financial Officer

These financial statements were approved by the Board of Directors of the Company on March 26 2026.The notes form part of these financial statements.- 9 -ADAMALtd.

(Expressed in RMB '000)

Company's Balance Sheet

December 31 December 31

Notes 2025 2024

Current assets

Cash at bank and on hand XV.1 64964 41031

Bills receivable 112369 -

Accounts receivable XV.2 1636608 1182104

Receivables financing XV.3 10490 34350

Prepayments 92227 50485

Other receivables XV.4 26434 24393

Inventories 210072 252747

Non-current assets due within one year - 70000

Other current assets 14923 5739

Total current assets 2168087 1660849

Non-current assets

Long-term equity investments XV.5 17430716 17430716

Other equity investments 54299 54299

Investment properties 1522 2071

Fixed assets 1252804 1361190

Construction in progress 10184 88292

Right-of-use assets 1354 1297

Intangible assets 227391 237120

Deferred tax assets 46359 51640

Other non-current assets 230156 265572

Total non-current assets 19254785 19492197

Total assets 21422872 21153046

Current liabilities

Short-term loans 418692 100000

Bills payables 155220 98584

Accounts payables 280455 148262

Contract liabilities 21420 10854

Employee benefits payable 9800 9709

Taxes payable 3171 2748

Other payables 778254 716369

Non-current liabilities due within one year 13930 641392

Other current liabilities 116585 -

Total current liabilities 1797527 1727918

Non-current liabilities

Long-term loans 642000 308357

Lease liabilities 443 592

Long-term employee benefits payable 63175 67154

Provisions 24871 25507

Other non-current liabilities - 55860

Total non-current liabilities 730489 457470

Total liabilities 2528016 2185388

Shareholders’ equity

Share capital V.37 2329812 2329812

Capital reserve 15523881 15523881

Other comprehensive income 24916 23894

Special reserves 6847 11489

Surplus reserve V.40 298610 298610

Retained earnings 710790 779972

Total shareholders’ equity 18894856 18967658

Total liabilities and shareholders’ equity 21422872 21153046

- 10 -ADAMALtd.

(Expressed in RMB '000)

Consolidated Income Statement

Year ended December 31

Notes 2025 2024

I. Operating income V.42 28944586 29488046

Less: Cost of sales V.42 21321853 22748925

Taxes and surcharges V.43 102238 100327

Selling and Distribution expenses V.44 3986175 4400770

General and administrative expenses V.45 1473980 1185443

Research and Development expenses V.46 424700 416327

Financial expenses V.47 2232695 1769830

Including: Interest expense 1021329 1054856

Interest income 192291 242845

Add: Investment income net V.48 11963 10525

Including: Income from investment

in associates and joint ventures 9638 8201

Gain (loss) from changes in fair value V.49 219486 (46074)

Credit impairment losses V.50 (115546) (99713)

Asset impairment losses V.51 (432930) (961358)

Gain from disposal of assets V.52 16716 48108

II. Operating loss (897366) (2182088)

Add: Non-operating income 239224 83702

Less: Non-operating expenses 41456 25916

III. III. Total loss (699598) (2124302)

Less: Income tax expenses (income) V.53 346121 778902

IV. Net loss (1045719) (2903204)

(1). Classified by nature of operations

(1.1). Continuing operations (1045719) (2903204)

(2). Classified by ownership

(2.1). Shareholders of the Company (1045719) (2903204)

(2.2). Non-controlling interests - -

V. Other comprehensive income (loss)net of tax V. 39 (150280) 45132

Other comprehensive income (loss) (net of tax)

attributable to shareholders of the Company (150280) 45132

(1) Items that will not be reclassified to profit or loss: (2443) 33639

(1.1) Re-measurement of defined benefit plan liability (2443) 33639

(1.2) Fair Value changes in other equity investment - -

(2) Items that were or will be reclassified to profit or loss (147837) 11493

(2.1) Effective portion of gains or loss of cash flow hedge (14361) 24880

(2.2) Translation differences of foreign financial statements (133476) (13387)

VI. Total comprehensive loss for the period attributable to (1195999) (2858072)

Shareholders of the Company

Total comprehensive loss for the period (1195999) (2858072)

attributable to shareholders of the Company

Total comprehensive income for the period - -

attributable to Non-controlling interests

VII. Earnings per share XIV.3

(1) Basic loss per share (Yuan/share) (0.45) (1.25)

(2) Diluted earnings per share (Yuan/share) N/A N/A

- 11 -ADAMALtd.

(Expressed in RMB '000)

Company's Income Statement

Year ended December 31

Notes 2025 2024

I. Operating income XV.6 2011533 1801793

Less: Operating costs XV.6 1670990 1566346

Taxes and surcharges 12905 10830

Selling and Distribution expenses 11394 7442

General and administrative expenses 211925 128902

Research and Development expenses 21964 4699

Financial expenses 48257 10384

Including: Interest expense 29163 34071

Interest income 3291 6109

Add: Investment income net 34769 34070

Gain from changes in fair value (“-” means loss) (130730) 326340

Credit impairment reversal (losses) (902) -

Asset Impairment reversal (losses) (10258) (160041)

Gain from disposal of assets 3618 865

II. Operating Profit (69405) 274424

Add: Non-operating income 5636 4689

Less: Non-operating expenses 132 584

III. Total profit (63901) 278529

Less: Income tax expense 5281 28601

IV. Net profit (loss) (69182) 249928

V. Other comprehensive income net of tax 1022 24896 -

(1) Items that will not be reclassified to profit or loss 1022 24896 -

(1.1) Re-measurement of defined benefit plan liability 1022 24896 -

(1.2) FV changes in other equity investment - - -

VI. Total comprehensive income (loss) for the period (68160) 274824 (12812)

- 12 -ADAMALtd.

(Expressed in RMB '000)

Consolidated Cash Flow Statement

Year ended December 31

Notes 2025 2024

I. Cash flows from operating activities:

Cash received from sale of goods and rendering of services 29417810 27271860

Refund of taxes and surcharges 206689 205975

Cash received relating to other operating activities V.56(1) 351471 548629

Sub-total of cash inflows from operating activities 29975970 28026464

Cash paid for goods and services 18277314 16805907

Cash paid to and on behalf of employees 3783982 3859369

Payments of taxes and surcharges 549750 600027

Cash paid relating to other operating activities V.56(2) 3316231 3000530

Sub-total of cash outflows from operating activities 25927277 24265833

Net cash flows provided by operating activities V.57(1)a 4048693 3760631

II. Cash flows from investing activities:

Cash received from disposal of investments 114278 117325

Cash received from returns of investments 3336 2705

Net cash received from disposal of fixed assets intangible

assets and other long-term assets 68540 272730

Cash received relating to other investing activities V.56(3) - 2324

Sub-total of cash inflows from investing activities 186154 395084

Cash paid to acquire fixed assets intangible assets and

other long-term assets 1213660 1423510

Net cash paid to acquire subsidiaries or other business units 56272 -

Cash paid relating to other investing activities V.56(4) 124725 125641

Sub-total of cash outflows from investing activities 1394657 1549151

Net cash flows used in investing activities (1208503) (1154067)

III. Cash flows from financing activities:

Cash received from borrowings 2476543 1496057

Cash received from other financing activities V.56(5) 1860911 1029698

Sub-total of cash inflows from financing activities 4337454 2525755

Cash repayments of borrowings 5241628 4834040

Cash payment for dividends profit distributions and interest 1057729 1127326

Including: Dividends paid to non-controlling interest 131686 69512

Cash paid relating to other financing activities V.56(6) 1047822 523578

Sub-total of cash outflows from financing activities 7347179 6484944

Net cash flow used in financing activities (3009725) (3959189)

IV. Effects of foreign exchange rate changes on cash and cash equivalent

equivalent (61102) 79230

V. Net decrease in cash and cash equivalents V.57(1)b (230637) (1273395)

Add: Cash and cash equivalents at the beginning of the year 3583963 4857358

I. VI. Cash and cash equivalents at the end of the period V.57(2) 3353326 3583963

- 13 -ADAMALtd.

(Expressed in RMB '000)

Company's Cash Flow Statement

Year ended December 31

Notes 2025 2024

I. Cash flows from operating activities:

Cash received from sale of goods and rendering of services 1050255 1299202

Refund of taxes and surcharges 64246 73706

Cash received relating to other operating activities XV.7(1) 20551 17172

Sub-total of cash inflows from operating activities 1135052 1390080

Cash paid for goods and services 664297 953203

Cash paid to and on behalf of employees 130321 119998

Payments of taxes and surcharges 21141 16624

Cash paid relating to other operating activities XV.7(2) 129106 55675

Sub-total of cash outflows from operating activities 944865 1145500

Net cash flows provided by operating activities XV.8 190187 244580

II. Cash flows from investing activities:

Cash received from returns of investments 32445 34070

Net cash received from disposal of fixed assets intangible assets and other

long-term assets 11222 977

Cash received relating to other investing activities XV.7.(3) 71599 184147

Sub-total of cash inflows from investing activities 115266 219194

Cash paid to acquire fixed assets intangible assets and

other long-term assets 11617 27413

Cash paid for other investing activities XV.7.(4) 50000 -

Sub-total of cash outflows from investing activities 61617 27413

Net cash flows provided by investing activities 53649 191781

III. Cash flows from financing activities:

Cash received from borrowings 857000 100000

Cash received relating to other financing activities XV.7.(5) 16105 9884

Sub-total of cash inflows from financing activities 873105 109884

Cash repayments of borrowings 1052017 636779

Cash payment for dividends profit distributions or interest 29216 33819

Cash paid relating to other financing activities XV.7.(6) 20699 5742

Sub-total of cash outflows from financing activities 1101932 676340

Net cash flow used in financing activities (228827) (566456)

IV. Effects of foreign exchange rate changes on cash and cash equivalents 4768 12082

V. Net increase (decrease) in cash and cash equivalents 19777 (118013)

Add: Cash and cash equivalents at the beginning of the year XV.8(2) 39173 157186

VI. Cash and cash equivalents at the end of the period XV.8(2) 58950 39173

- 14 -ADAMALtd.

(Expressed in RMB '000)

Consolidated Statement of Changes in Shareholders’ Equity

For the year ended December 31 2025

Other

Share Capital comprehensive Special Surplus Retained Non-controlling

capital reserve income reserves reserve earnings Total interests Total equity

I. Balance at January 1 2025 2329812 12950464 1721028 10798 298610 1680382 18991094 - 18991094

II. Changes in equity for the period - (83341) (150280) (4642) - (1177405) (1415668) - (1415668)

1. Total comprehensive loss - - (150280) - - (1045719) (1195999) - (1195999)

2. Owner’s contributions and - (83341) - - - - (83341) - (83341)

reduction

2.1 Transactions with holders of - (83341) - - - - (83341) - (83341)

non controlling interest

3. Appropriation of profits - - - - - (131686) (131686) - (131686)

3.1 Distribution to non-controlling - - - - - (131686) (131686) - (131686)

interest

4. Special reserve - - - (4642) - - (4642) - (4642)

4.1 Transfer to special reserve - - - 9029 - - 9029 - 9029

4.2 Amount utilized - - - (13671) - - (13671) - (13671)

III. Balance at December 31 2025 2329812 12867123 1570748 6156 298610 502977 17575426 - 17575426

- 15 -ADAMALtd.

(Expressed in RMB '000)

Statement of Changes in Shareholders’ Equity

For the year ended December

312024

Other

Share Capital comprehensive Special Surplus Retained Non-controlling

capital reserve income reserves reserve earnings Total interests Total equity

I. Balance at January 1 2024 2329812 12950464 1675896 16595 273617 4678091 21924475 - 21924475

II. Changes in equity for the period - - 45132 (5797) 24993 (2997709) (2933381) - (2933381)

1. Total comprehensive loss - - 45132 - - (2903204) (2858072) - (2858072)

2. Appropriation of profits - - - - 24993 (94505) (69512) - (69512)

2.1 Transfer to surplus reserve - - - - 24993 (24993) - - -

2.2 Distribution to non-controlling - - - - - (69512) (69512) - (69512)

interest

3. Special reserve - - - (5797) - - (5797) - (5797)

3.1 Transfer to special reserve - - - 9442 - - 9442 - 9442

3.2 Amount utilized - - - (15239) - - (15239) - (15239)

III. Balance at December 31 2024 2329812 12950464 1721028 10798 298610 1680382 18991094 - 18991094

- 16 -ADAMALtd.

(Expressed in RMB '000)

Company's Statement of Changes in Shareholders’ Equity

For the year ended December 31 2025

Other

Share Capital comprehensive Special Surplus Retained

capital reserve income reserves reserve earnings Total

I. Balance at January 1 2025 2329812 15523881 23894 11489 298610 779972 18967658

II. Changes in equity for the period - - 1022 (4642) - (69182) (72802)

1. Total comprehensive income - - 1022 - - (69182) (68160)

2. Special reserve - - - (4642) - - (4642)

2.1 Transfer to special reserve - - - 9029 - - 9029

2.2 Amount utilized - - - (13671) - - (13671)

Ⅲ. Balance at December 31 2025 2329812 15523881 24916 6847 298610 710790 18894856

For the year ended December 31 2024

Other

Share Capital comprehensive Special Surplus Retained

capital reserve income reserves reserve earnings Total

I. Balance at January 1 2024 2329812 15523881 (1002) 17286 273617 555037 18698631

II. Changes in equity for the period - - 24896 (5797) 24993 224935 269027

1. Total comprehensive income - - 24896 - - 249928 274824

2. Appropriation of profits - - - - 24993 (24993) -

2.1 Appropriations to surplus reserves - - - - 24993 (24993) -

3. Special reserve - - - (5797) - - (5797)

3.1 Transfer to special reserve - - - 9442 - - 9442

3.2 Amount utilized - - - (15239) - - (15239)

Ⅲ. Balance at December 31 2024 2329812 15523881 23894 11489 298610 779972 18967658

- 17 -ADAMALtd.

(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 March 26 2026.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 SecuritiesRegulatory Commission (hereinafter "CSRC”) in 2023).

2. Accrual basis and measurement principle

The Group has adopted the accrual basis of accounting.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.- 18 -ADAMALtd.

(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 December 312025

and have not identified any significant doubtful matter or event on the going concern as such the financial

statement have been prepared on the going concern basis.III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

1. Statement of compliance

These financial statements are in compliance with the Accounting Standards for Business Enterprises to

truly and completely reflect the Company's consolidated financial position as at December 31 2025 and

the Company's consolidated operating results changes in shareholders' equity and cash flows for the

twelve months then ended.

2. Accounting period

The Group has adopted the calendar year as its accounting year i.e. from 1 January to 31 December.

3. Business cycle

The company takes the period from the acquisition of assets for processing to their realisation in cash or

cash equivalents as a normal operating cycle. The operating cycle for the company is 12 months.

4. Reporting currency

The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional

currency. Functional currencies of overseas subsidiaries are determined on the basis of the principal

economic environment in which the overseas subsidiaries operate. The functional currency of the overseas

subsidiaries is mainly the United States Dollar (hereinafter "USD"). The presentation currency of these

financial statements is Renminbi.- 19 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

5. Criteria of determining material item in the report and its benchmark

Item Benchmark for Material Item

Material construction in progress projects Individual construction in progress project with a budget higher than RMB100 million

Material receivables assessed individually for

impairment Individual impairment higher than RMB 150 million

6. Business combinations

6.1 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.The consideration transferred includes the fair value of any contingent consideration. (such as earnout

arrangements with the former shareholders). After the acquisition date the Group recognizes changes in

the fair value of contingent consideration classified as a financial liability at fair value through profit or

loss.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.- 20 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

7. Basis for preparation of consolidated financial statements

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.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.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.- 21 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

7. Basis for preparation of consolidated financial statements - (cont’d)

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.

8. Classification and accounting methods of joint arrangement

There are two types of joint arrangements – joint operations and joint ventures. The type of joint

arrangements is determined based on the rights and obligations of joint operator to the joint arrangements

by considering the factors such as the structure the legal form of the arrangements and the contractual

terms etc. A joint operation is a joint arrangement whereby the joint operators have rights to the assets

and obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement

whereby the joint ventures have rights to the net assets of the arrangement.

9. Cash and cash equivalents

Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are

the Group's short-term highly liquid investments that are readily convertible to known amounts of cash

and which are subject to an insignificant risk of changes in value.

10. Translation of transactions and financial statements denominated in foreign currencies

10.1 Transactions denominated in foreign currencies

On initial recognition foreign currency transactions are translated into functional currency using the spot

exchange rate prevailing at the date of transaction.At the balance sheet date foreign currency monetary items are translated into functional currency using the

spot exchange rates at the balance sheet date. Exchange differences arising from the differences between

the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the

previous balance sheet date are recognized in profit or loss for the period except that (i) exchange

differences related to a specific-purpose borrowing denominated in foreign currency that qualify for

capitalization are 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.- 22 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

10. Translation of transactions and financial statements denominated in foreign currencies - (cont’d)

10.1 Transactions denominated in foreign currencies - (cont’d)

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.

10.2 Translation of financial statements denominated in foreign currency

For the purpose of preparing consolidated financial statements financial statements of a foreign operation

are translated from the foreign currency into RMB using the following method: assets and liabilities on the

balance sheet are translated at spot exchange rate prevailing at the balance sheet date; shareholders' equity

items except for retained earnings are translated at the spot exchange rates at the dates on which such

items arose; all items in the income statement as well as items reflecting the distribution of profits are

translated at average rate or at spot exchange rates on the dates of the transactions; the retained earnings

opening balance is previous year's translated retained earnings closing balance; the closing balance of

retained earnings is calculated and presented on the basis of each translated income statement and profit

distribution item. The difference between the translated assets and the aggregate of liabilities and

shareholders' equity items is recorded as other comprehensive income. Cash Flows arising from transaction

in foreign currency and the cash flows of a foreign subsidiary are translated at the spot exchange rate on

the date of the cash flow the effect of exchange rate changes on the cash and cash equivalents is regardedas a reconciling item and present separately in the statement “effect of foreign exchange rate changes onthe 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.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.- 23 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments

The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual

provisions of the instrument. At initial recognition the Group measures a financial asset or financial

liability at its fair value plus or minus (which is not measured at fair value through profit or loss)

transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial

liability. Initial recognition in trade receivables which do not contain a significant financing component

shall be made according to their transaction price.

11.1 Classification and measurement of financial assets

After initial recognition an entity shall measure a financial asset at: (a) amortised cost; (b) fair value

through other comprehensive income (“FVTOCI”); or (c) fair value through profit or loss (“FVTPL”).

11.1.1 Financial assets at amortised cost

A financial asset is measured at amortised cost if both of the following conditions are met: (a) the financial

asset is held within a business model whose objective is to hold financial assets in order to collect

contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates to

cash flows that are solely payments of principal and interest on the principal amount outstanding.Such financial assets are subsequently measured at amortised cost using effective interest method. Gains

or losses upon impairment and derecognition are recognized in profit or loss.

11.1.1.1 Effective interest method and amortised cost

Effective interest 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.- 24 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments - (cont’d)

11.1 Classification and measurement of financial assets - (cont’d)

11.1.2 Financial assets at FVTOCI

A financial asset is measured at fair value through other comprehensive income if both of the following

conditions are met: (a) the financial asset is held within a business model whose objective is achieved by

both collecting contractual cash flows and selling financial assets and (b) the contractual terms of the

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.

11.1.3 Financial assets at FVTPL

Financial assets at FVTPL are either those that are classified as financial assets at FVTPL or designated as

financial assets at FVTPL.A financial asset is measured at FVTPL unless it is measured at amortised cost or at FVTOCI.The Group may at initial recognition irrevocably designate a financial asset as measured at FVTPL if

doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes

referred to as an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or

recognizing the gains and losses on them on different bases.A gain or loss on a financial asset that is measured at FVTPL is recognized in profit or loss unless it is part

of a hedging relationship. Dividends are recognized in profit or loss.

11.1.4 Designated financial assets at FVTOCI

At initial recognition the Group makes an irrevocable election to designate to FVTOCI an investment in

an equity instrument that is not held for trading.When a non-trading equity instrument investment is designated as a financial asset that is measured at fair

value through other comprehensive income the changes in the fair value of the financial asset are

recognised in other comprehensive income. Upon realization the accumulated gains or losses from other

comprehensive income are transferred from other comprehensive income and included in retained earnings.During the 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.- 25 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments - (cont’d)

11.2 Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets that are classified to

amortised cost and FVTOCI.The Group always measures the loss allowance at an amount equal to lifetime expected credit losses for

trade receivables and notes receivables.For financial assets other than trade receivables the Group initially measure the loss allowance for that

financial instrument at an amount equal to 12-month expected credit losses. At each balance sheet date if

the credit risk on that financial instrument has increased significantly since initial recognition the Group

measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit

losses. The Group recognizes in profit or loss as an impairment gain or loss the amount of expected credit

losses (or reversal) that is required to adjust the loss allowance to the amount that is required to be

recognized.

11.2.1 Significant increases in credit risk

At each balance sheet date the Group assesses whether the credit risk on a financial instrument has

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.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.- 26 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments - (cont’d)

11.2 Impairment of financial assets - (cont’d)

11.2.2 Credit-impaired financial asset

A financial asset is credit-impaired when one or more events that have a detrimental impact on the

estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-

impaired include observable data about the following events:

(a) significant financial difficulty of the issuer or the receivable;

(b) a breach of contract such as a default or past due event;

(c) the lender(s) of the receivable for economic or contractual reasons relating to the receivable’s

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;

11.2.3 Recognition of expected credit losses

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.- 27 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments - (cont’d)

11.2 Impairment of financial assets - (cont’d)

11.2.4 Written-off of financial assets

The Group directly reduces the gross carrying amount of a financial asset when the entity has no

reasonable expectations of recovering a financial asset in its entirety or a portion thereof. A write-off

constitutes a derecognition event.

11.3 Transfer of financial asset

The Group derecognizes a financial asset if one of the following conditions is satisfied: (i) the contractual

rights to the cash flows from the financial asset expire; or (ii) the financial asset has been transferred and

substantially all the risks and rewards of ownership of the financial asset transferred to the transferee; or

(iii) although the financial asset has been transferred the Group neither transfers nor retains substantially

all the risks and rewards of ownership of the financial asset but has not retained control of the financial

asset.If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial

asset and it retains control of the financial asset it recognizes the financial asset to the extent of its

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 the difference between (i) the carrying

amount of the financial asset transferred; and (ii) the sum of the consideration received from the transfer is

recognized in profit or loss.

11.4 Classification and measurement of financial liabilities

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the

substance of the contractual arrangements and the definitions of a financial liability and an equity

instrument.All financial liabilities are subsequently measured at FVTPL or other financial liabilities.Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is

designated as at FVTPL. The financial liability other than derivative financial liabilities are stated as

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.- 28 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

11. Financial instruments - (cont’d)

11.5 Derecognition of financial liabilities

Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full

or in part. An agreement entered into force between the Group (debtor) and a creditor to replace the

original financial liabilities with new financial liabilities with substantially different terms derecognize the

original financial liabilities as well as recognize the new financial liabilities. When financial liabilities is

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.

11.6 Derivatives

Derivative financial instruments include forward exchange contracts currency swaps and foreign exchange

options etc. Derivatives are initially measured at fair value at the date when the derivative contracts are

entered into and are subsequently re-measured at fair value. The resulting gain or loss is recognized in

profit or loss unless the derivative is designated and highly effective as a hedging instrument in which case

the timing of the recognition in profit or loss depends on the nature of the hedge relationship (Note III

32.1).

11.7 Offsetting financial assets and financial liabilities

Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be

offset except for circumstances where the Group has a legal right that is currently enforceable to offset the

recognized financial assets and financial liabilities and intends either to settle on a net basis or to realize

the financial asset and settle the financial liability simultaneously a financial asset and a financial liability

shall be offset and the net amount is presented in the balance sheet.

11.8 Equity instruments

The consideration received from the issuance of equity instruments net of transaction costs is recognized in

shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-

issued equity instruments are deducted from shareholders’ equity.When the Company repurchases its own shares those shares are treated as treasury shares. All

expenditures relating to the repurchase are recorded in the cost of the treasury shares with the transaction

entering into the share capital. Treasury shares are excluded from profit distributions and are stated as a

deduction under shareholders’ equity in the balance sheet.- 29 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

12. Accounts receivables

Accounts receivables are assessed for impairment on a collective group and/or on an individual basis as

follows:

Expected credit losses in respect of accounts 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%-2.81%.When credit risk on accounts 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 accounts receivables has increased significantly since initial

recognition the Group compares the risk of a default occurring on the accounts receivables at the reporting

date with the risk of a default occurring on the accounts receivables 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.

13. Receivables financing

All receivbales financing are bank acceptance notes due within 1 year. From the past experience the

possibility of significant losses due to banks default is low the Group believes that there is no significant

credit risk in the bank acceptances notes held.

14. Other receivables

The Group determines expected credit losses for other receivables on an individual basis.

15. Inventories

15.1 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.- 30 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

15. Inventories - (cont’d)

15.2 Valuation method of inventories upon delivery

The actual cost of inventories upon delivery is calculated using the weighted average method.

15.3 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. In determining the

realizable value of inventory it is based on solid evidence obtained while also considering the purpose of

holding the inventory and the impact of events after the balance sheet date.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.

15.4 The perpetual inventory system is maintained for stock system.

16. Long-term equity investments

Long-term equity investments include investments in subsidiaries joint ventures and associates.

16.1 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.- 31 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

16. Long-term equity investments - (cont’d)

16.2 Determination of investment cost

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.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.

16.3 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.- 32 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

16. Long-term equity investments - (cont’d)

16.3 Subsequent measurement and recognition of profit or loss - (cont’d)

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.

16.4 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 23).

16.5 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.

17. 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.- 33 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

18. Fixed assets

18.1 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.

18.2 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.- 34 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

18. Fixed assets - (cont’d)

18.3 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 23).

19. 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 23).

20. 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.- 35 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

21. Intangible assets

21.1 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 7-20 years

Marketing rights tradename and trademarks 4-10 30 years

Exclusivity agreement 21 years

Software 3-5 years and 12 years for ERP

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 23).- 36 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

21. Intangible assets - (cont’d)

21.2 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.The research and development expenditure includes salaries and welfare expenses of personnel directly

engaged in research and development activities depreciation expenses of instruments and equipment used

in research and development activities expenses for field trial and professional services materials

consumed and lease and maintenance expenses related to research and development activities.- 37 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

22. 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 23). 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.

23. 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.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.

24. Contract liabilities

Contract liabilities refer to the Group’s obligation to transfer goods or services to a customer for which the

Group has received consideration from the customer.- 38 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

25. Employee benefits

25.1 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.

25.2 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.

25.3 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 when the Group can no longer withdraw the offer of the

termination benefit and when it recognises any related restructuring costs.If the benefits are payable more than 12 months after the end of the reporting period they are discounted to

their present value. The discount rate used is the yield on the reporting date on highly-rated corporate

debentures denominated in the same currency that have maturity dates approximating the terms of the

Group’s obligation.- 39 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

25. Employee benefits - (cont’d)

25.4 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.

26. 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.

26.1 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.

27. 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.- 40 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

At the balance sheet date the amount of provision should be re-assessed to reflect the best estimation then.- 41 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

28. 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. The timing of transferring the control of goods changes according to the specific terms of the sale

contract. Regarding sales of products transfer of the control of goods generally occurs when the products

arrive at the customer’s warehouse while for certain overseas shipments the transfer occurs when the

products are loaded on the shipper’s transport vehicles.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.Variable consideration

Variable consideration includes sales with a right of return (see below) refunds discounts volume rebates

etc. The amounts of variable consideration are estimated using the Group’s past experience in the relevant

markets. The Group includes in the transaction price the amounts of variable consideration only to the

extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized

will not occur when the uncertainty associated with the variable consideration is subsequently resolved.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.Advance receipts for the sale of goods

When the Group receives advance payments from customers for the sale of goods it first recognizes such

payments as liabilities and then transfers them to revenue when the relevant performance obligations are

fulfilled.- 42 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

29. 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.

30. Current and deferred tax

The income tax expenses include current income tax and deferred income tax.

30.1 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.

30.2 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.- 43 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

30. Current and deferred tax - (cont’d)

30.2 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.

30.3 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.- 44 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

31. Leases

Lease is a contract that conveys the right to use an asset for a period of time in exchange for consideration.

31.1 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.

31.2 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 31.4) 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.

31.3 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.

31.4 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.- 45 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

31. Leases - (cont’d)

31.5 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.

32. Other significant accounting policies and accounting estimates

32.1 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.- 46 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

32. Other significant accounting policies and accounting estimates - (cont’d)

32.1 Hedging - (cont’d)

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.

32.2 Securitization of assets

Details of the securitization of asset agreements and accounting policy are set out in Note V.5 - Account

receivables.

32.3 Segment reporting

Reportable segments are identified based on operating segments which are determined based on the

structure of the Group’s internal organization management requirements and internal reporting system.Two or more operating segments may be aggregated into a single operating segment if the segments have

similar economic characteristics and are same or similar in respect of the nature of each product and

service the nature of production processes the type or class of customers for the products and services the

methods used to distribute the products or provide the services and the nature of the regulatory

environment.Inter-segment revenues are measured on the basis of actual transaction price for such transactions for

segment reporting. Segment accounting policies are consistent with those for the consolidated financial

statements.- 47 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

32. Other significant accounting policies and accounting estimates - (cont’d)

32.4 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.

33. Changes in significant accounting policies and accounting estimates

33.1 Changes in significant accounting policies

There are no significant changes in accounting policies in the reporting period.

33.2 Changes in significant accounting estimates

There are no significant changes in accounting estimates in the reporting period.

34. 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:

34.1 Expected credit loss of trade receivables

As described in Note III.12 trade receivables are reviewed at each balance sheet date to determine whether

credit risk on a receivable has increased significantly since initial recognition lifetime expected losses is

accrued for impairment provision. Evidence of impairment includes observable data that comes to the

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.- 48 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

34. Significant accounting estimates and judgments - (cont’d)

34.2 Provision for impairment of inventories

As described in Note III.15 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.

34.3 Impairment of assets other than inventories and financial assets

As described in Note III.23 if impairment indication exists assets other than inventories and financial

assets are assessed at balance sheet date to determine whether the carrying amount exceeds the recoverable

amount of the assets. If any such case exists an impairment loss is recognized.If it is not practical to estimate the recoverable amount of an individual asset the recoverable amount of

the asset group to which the asset belongs will be estimated. Impairment exists if the carrying amount of an

asset or asset group is higher than recoverable amount the higher of its fair value less costs of disposal and

the present value of the future cash flows expected to be derived from the asset or asset group. In assessing

the present value of estimated future cash flows significant judgements are exercised over the asset’s

production selling price related operating expenses and discount rate to calculate the present value. All

the parameters used for estimation of the recoverable amount are based on reasonable and supportable

assumptions.

34.4 Depreciation and amortisation of assets such as fixed assets and intangible assets

As described in Note III.18 and III.21 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.- 49 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

34. Significant accounting estimates and judgments - (cont’d)

34.5 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.

34.6 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.

34.7 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.- 50 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - (cont’d)

34. Significant accounting estimates and judgments - (cont’d)

34.8 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.- 51 -ADAMALtd.

(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% (2024: 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 largest subsidiaries of the Group in respect of

assets and operating income:

Name of subsidiary Location 2025

ADAMA agriculture solutions Ltd. Israel 23.0%

ADAMA Makhteshim Ltd. Israel 7.5%

ADAMA Agan Ltd. Israel 16.0%

ADAMA Brasil S/A Brazil 34.0%

Makhteshim Agan of North America Inc. U.S. 24.1%

ADAMA India Private Ltd India 25.2%

ADAMA Deutschland GmbH Germany 32.5%

Control Solutions Inc. U.S. 25.8%

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 2.6% to 27%.

(1) Benefits from High-Tech Certificate

The Company was jointly approved as new and high-tech enterprise by the Hubei Provincial Department

of Science and Technology Department of Finance of Hubei Province and Hubei Provincial Office of the

State Administration of Taxation. The applicable income tax rate for 2025 and 2024 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 theJiangsu Provincial Department of Science and Technology Department of Finance of Jiangsu Province

and Jiangsu Provincial Office of the State Administration of Taxation. The applicable income tax rate for

2025 and 2024 is 15%.

(2) Amendment to the Law for the Encouragement of Capital Investments 1959

Since 2013 the Israeli enterprises are taxed under the "Preferred Enterprise" regime. The benefits include a

grants track for enterprises located in Area A. Tax rates on preferred income as from 2017 tax year are as

follows: 7.5% for Development Area A and 16% for the rest of the country. The amendment further

determined that no tax shall apply to dividend distributed out of preferred income to Israel resident

company shareholder.- 52 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

IV. Taxation - (cont’d)

1. Main types of taxes and corresponding tax rates - (cont’d)

(3) Amendment to the Law for the Encouragement of Capital Investments 1959 - (cont’d)

As of January 1 2017 the law includes new tax benefit tracks for a “preferred technological enterprise”

and a “special preferred technological enterprise” which award reduced tax rates to a technological

industrial enterprise for the purpose of encouraging activity relating to the development of qualifying

intangible assets.The benefits will be awarded to a “preferred company” that has a “preferred technological enterprise” or a

“special preferred technological enterprise” with respect to taxable “preferred technological income” per

its definition in the Encouragement Law. Regulations that provide a nexus formula for allocating eligible

profits govern these regimes.Income of a Preferred Technological Enterprise a Special Preferred Technological Enterprise will be

subject to a reduced corporate tax rate of 6% regardless of the development area in which the enterprise is

located.- 53 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements

1. Cash at Bank and On Hand

December 31 December 31

20252024

Cash on hand 1107 1317

Deposits in banks 3352219 3582646

Other cash and bank balances 96974 46645

34503003630608

Including cash and bank balances placed outside China 2279489 2849640

As at December 31 2025 restricted cash and bank balances was 96974 thousand RMB (as at December 31

2024 46645 thousand RMB) mainly including deposits that guarantee bank acceptance drafts.

2. Financial assets held for trading

December 31 December 31

20252024

Bank deposits 1223 1035

12231035

3. Derivative financial assets

December 31 December 31

20252024

Economic hedge 401091 445465

Accounting hedge derivatives 48288 38357

449379483822

4. Bills Receivable

December 31 December 31

20252024

Post-dated checks receivable 358489 65565

35848965565

- 54 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

5. Accounts Receivable

a. By category

December 31 2025

Provision for expected

Book value credit losses

Percentage Carrying

Amount (%) Amount Percentage (%) amount

Account receivables assessed 617676 8 350083 57 267593

individually for impairment

Account receivables assessed 6968418 92 111275 2 6857143

collectively for impairment

758609410046135867124736

December 31 2024

Provision for expected

Book value credit losses

Carrying

Amount Percentage (%) Amount Percentage (%) amount

Account receivables assessed 497541 6 321410 65 176131

individually for impairment

Account receivables assessed 7911529 94 109830 1 7801699

collectively for impairment

840907010043124057977830

b. Aging analysis

December 31 2025

Within 1 year (inclusive) 7015671

Over 1 year but within 2 years 306667

Over 2 years but within 3 years 49131

Over 3 years but within 4 years 16609

Over 4 years but within 5 years 13109

Over 5 years 184907

7586094

- 55 -ADAMALtd.

(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:

December 31 2025

Provision for expected

Book value credit loss Percentage (%)

Credit group A 1214775 4040 0.3

Credit group B 578576 8932 1.5

Credit group C 437027 12277 2.8

Credit group D 69751 264 0.4

2300129255131.1

Geographical location B:

Account receivables in geographical location B are grouped based on aging analysis:

December 31 2025

Provision for expected

Book value credit loss Percentage (%)

Accounts receivable that are not overdue 571330 5646 1

Debts overdue less than 100 days 78380 2351 3

Debts overdue less than 190 days but 7316 732 10

more than 100 days.Debts overdue less than 360 days but 17873 7149 40

more than 190 days.Debts overdue above 360 days 18034 13338 74

Legal Debtors 45260 45260 100

7381937447610

Other geographical locations:

December 31 2025

Provision for expected

Book value credit loss Percentage (%)

Other account receivables assessed 3930096 11286 0.3

collectively for impairment

- 56 -ADAMALtd.

(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 Lifetime expected

loss (credit losses credit loss (credit

has not occurred) losses has occurred) Total

January 1 2025 55908 375332 431240

Addition (write back) during the period net (12641) 117980 105339

Write-off during the period - (31365) (31365)

Classification between long term and short - (45942) (45942)

term net

Exchange rate effect (839) 2925 2086

Balance as of December 31 2025 42428 418930 461358

d. Five largest accounts receivable at December 31 2025:

Allowance of expected

Proportion of Accounts credit losses (credit losses

Name Closing balance receivable (%) has occurred)

Customer 1 211212 2.8 -

Customer 2 121331 1.6 -

Customer 3 118864 1.6 -

Customer 4 102135 1.3 95261

Customer 5 94636 1.2 -

Total 648178 8.5 95261

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 SecuritizationTransaction”).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 31

December 2025 the Securitization agreement was approved up to October 24 2026.- 57 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

5. Accounts Receivable – (cont'd)

e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)

The maximum scope of the securitization is adjusted for the seasonal changes in the scope of the

Company’s activities as follows: during January - 350m$ (as of December -2025 2460 million RMB )

during the months of February through July – 400m$ ((as of December -2025 2812 million RMB ) during

the months of August through September – 300m$ (as of December -2025 2109 million RMB) during the

months of October through November- 275m$ (as of December -2025 1933 million RMB) and during the

month of December – 300m$ (as of December -2025 2109 million RMB). In addition the company has a

permanent uncommitted facility of 50$ million (as of December 30 2025- 351 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 December 31 2025 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.A subordinated note is recorded in respect of the portion of trade receivables included in the Securitization

Program with respect to outstanding cash proceeds however the Company has transferred the credit risk.The continuing involvement and subordinated note recorded in the balance sheet as part of the “otherreceivables” line item.- 58 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

5. Accounts Receivable – (cont'd)

e. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)

The loss from sale of the trade receivables is recorded at the time of sale in the statement of income in the

“financing expenses”.f. A subsidiary in Brazil (hereinafter - “the subsidiary”) entered into the following securitization

agreements:

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 June 17 2024 the FIDC-Donegal agreement was approved up to September 30 2027. The maximum

securitization scope as of December 31 2025 is BRL 386 million (498 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.In the agreement above the subsidiary does not control the entities and therefore the entities are not

consolidated in the Group's financial statements.The loss from the sale of the trade receivables is recorded at the time of sale in the statement of income in

the “financing expenses” category.- 59 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

5. Accounts Receivable – (cont'd)

f. Derecognition of accounts receivable due to transfer of financial assets - (cont'd)

December 31 December 31

20252024

Accounts receivables derecognized 3275491 3114041

Continuing involvement 148167 137471

Subordinated note in respect of trade receivables 777505 897443

Liability in respect of trade receivables 29191 21127

Year ended December 31

20252024

Loss in respect of sale of trade receivables 230243 219652

6. Receivables financing

December 31 December 31

20252024

Bank acceptance draft 30767 144763

30767144763

As at December 31 2025 bank acceptance endorsed but not yet due amounts to 422948 thousands RMB.

7. Prepayments

(1) The aging analysis of prepayments is as follows:

December 31 December 31

20252024

Amount Percentage (%) Amount Percentage (%)

Within 1 year (inclusive) 358321 98 306019 98

Over 1 year but within 2 years (inclusive) 8726 2 5138 2

Over 2 years but within 3 years (inclusive) 774 - 1711 -

Over 3 years 191 - 674 -

368012100313542100

(2) Total of five largest prepayments by debtor at the end of the period:

Percentage of prepayments

Amount (%)

December 31 2025 169817 46

- 60 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

8. Other Receivables

(1) Other receivables by nature

December 31 December 31

20252024

Dividend receivable 2325 -

Others 1073839 1147469

10761641147469

a. Others breakdown by categories

December 31 December 31

20252024

Subordinated note in respect of trade receivables 777505 897443

Trade receivables as part of securitization transactions

not yet eliminated 148167 137471

Other 162387 130385

Sub total 1088059 1165299

Provision for expected credit losses - other receivables (14220) (17830)

10738391147469

b. Other receivables by aging

December 31

2025

Within 1 year (inclusive) 1065262

Over 1 year but within 2 years 3901

Over 2 years but within 3 years 3564

Over 3 years but within 4 years 4238

Over 4 years but within 5 years 2474

Over 5 years 8620

1088059

(2) Additions recovery or reversal and written-off of provision for expected credit losses during the

period:

Year ended

December 31 2025

Balance as of January 1 2025 17830

Addition (written back) during the period (1031)

Write-off during the period (2430)

Exchange rate effect (149)

Balance as of December 31 2025 14220

- 61 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

8. Other Receivables – (cont'd)

(3) Five largest other receivables at December 31 2025:

Allowance of

Proportion of other expected credit

Name Closing balance receivables (%) losses

Party 1 777505 71 -

Party 2 7479 1 -

Party 3 4780 - -

Party 4 3125 - 3125

Party 5 1647 - 1647

Total 794536 72 4772

9. Inventories

(1) Inventories by category:

December 31 2025

Provision for

Book value impairment Carrying amount

Raw materials 2903909 32098 2871811

Work in progress 1806286 820 1805466

Finished goods 6729824 277285 6452539

Others 495793 17767 478026

1193581232797011607842

December 31 2024

Provision for

Book value impairment Carrying amount

Raw materials 2675281 24255 2651026

Work in progress 1831853 4151 1827702

Finished goods 6490899 280088 6210811

Others 487335 12211 475124

1148536832070511164663

- 62 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

9. Inventories - (cont'd)

(2) Provision for impairment of inventories:

For the year ended December 31 2025

December

January 1 Reversal or 31 2025

2025 Provision write-off Other 2025

Raw material 24255 20576 (12027) (706) 32098

Work in progress 4151 1039 (4363) (7) 820

Finished goods 280088 301382 (302202) (1983) 277285

Others 12211 6396 (1090) 250 17767

320705329393(319682)(2446)327970

10. Other Current Assets

December 31 December 31

20252024

Deductible VAT 528604 611737

Current tax assets 311227 261872

Short term investments 155154 72725

Others 99288 41759

1094273988093

11. Long-Term Receivables

December 31 December 31

20252024

Long term account receivables from sale of goods 180324 159813

Provision for expected credit losses (62121) -

118203159813

1) Additions recovery or reversal of provision for expected credit losses during the period:

Provision for

long term

receivables

Balance as of January 1 2025 -

Classification between long term and short term net 45942

Addition (write back) during the period net 11238

Exchange rate effect 4941

Balance as of December 31 2025 62121

- 63 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

12. Long-Term Equity Investments

(1) Long-term equity investments by category:

December 31 December 31

20252024

Joint venture 2129 1907

Associate 37183 28320

3931230227

(2) Movements of long-term equity investments for the period are as follows:

Other Declared

January 1 Investment Comprehensive distribution of Balance at the

2025 income gain (loss) cash dividend end of the period

Joint

venture

Investee A 1907 269 (47) - 2129

Sub-total 1907 269 (47) - 2129

Associate

Investee B 28320 9369 2817 (3323) 37183

Sub-total 28320 9369 2817 (3323) 37183

Sub-total 30227 9638 2770 (3323) 39312

13. Other equity investments

December 31 December 31 Dividend recognized

2025 2024 during 2025

Investment A 54299 54299 2325

Investment B 75497 77174 -

1297961314732325

Other equity investments are non-core businesses that are intended to be held in the foreseeable future.- 64 -ADAMALtd.

(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 2025 4555365 19377869 192853 513027 24639114

Purchases 111311 81426 32442 37344 262523

Transfer from construction in progress 97441 1380207 663 5709 1484020

Disposals (52408) (814947) (52934) (63259) (983548)

Currency translation adjustment (19237) (287641) (618) )5585( (313081)

Balance as at December 31 2025 4692472 19736914 172406 487236 25089028

Accumulated depreciation

Balance as at January 1 2025 (1931798) (11484429) (85812) (410178) (13912217)

Charge for the period (145564) (814360) (30772) (40847) (1031543)

Disposals 37927 759900 38219 61634 897680

Currency translation adjustment 19975 158590 322 5967 184854

Balance as at December 31 2025 (2019460) (11380299) (78043) (383424) (13861226)

Provision for impairment

Balance as at January 1 2025 (392586) (569765) (694) (957) (964002)

Charge for the period (191) (246817) - - (247008)

Transfer from construction in progress - (3897) - - (3897)

Disposals 7005 39990 13 5 47013

Currency translation adjustment 5192 8447 - 4 13643

Balance as at December 31 2025 (380580) (772042) (681) (948) (1154251)

Carrying amounts

As at December 31 2025 2292432 7584573 93682 102864 10073551

As at January 1 2025 2230981 7323675 106347 101892 9762895

The lands reported as fixed assets are owned by the group subsidiaries and are located outside of China.- 65 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

15. Construction in Progress

(1) Construction in progress

December 31 December 31

20252024

Provision for Provision for

Book value impairment Carrying amount Book value impairment Carrying amount

1213760(316585)8971752306480(309588)1996892

(2) Details and Movements of major construction projects in progress during period ended December 31 2025

Actual

Including: Currency Transfer cost to Project

January Interest translation to fixed December budget progress

Budget 1 2025 Additions capitalized differences assets Impairment 31 2025 (%) (%) Source of funds

Project A 1048741 123633 8889 - - (63282) (2932) 66308 77% 77% Bank loan and internal finance

Project B 941859 788927 66168 9336 (72198) (620521) - 162376 83% 83% Bank loan and internal finance

* As of December 31 2025 Project A and include impairment of RMB 17 million.- 66 -ADAMALtd.

(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 2025 733276 44712 287129 4773 1069890

Additions 218216 585 108726 - 327527

Decrease (110033) (2420) (109870) (447) (222770)

Currency translation adjustment 11484 (950) (3357) (102) 7075

Balance as at December 31 2025 852943 41927 282628 4224 1181722

Accumulated depreciation

Balance as at January 1 2025 (338365) (20471) (151141) (2754) (512731)

Charge for the period (96473) (5434) (84350) (819) (187076)

Decrease 75011 2420 95658 440 173529

Currency translation adjustment 3234 482 2201 82 5999

Balance as at December 31 2025 (356593) (23003) (137632) (3051) (520279)

Provision for impairment

Balance as at January 1 2025 - - - - -

Balance as at December 31 2025 - - - - -

Carrying amounts

As at December 31 2025 496350 18924 144996 1173 661443

As at January 1 2025 394911 24241 135988 2019 557159

- 67 -ADAMALTD.

(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 2025 13458047 4280000 1522254 851480 647905 507127 677222 21944035

Purchases 340558 - 130384 - - - 24449 495391

Disposals (251153) - (50442) (51321) - - (90088) (443004)

Currency translation adjustment (255558) (96803) (34021) (17031) (9783) (882) (6574) (420652)

Balance as at December 31 2025 13291894 4183197 1568175 783128 638122 506245 605009 21575770

Accumulated amortization

Balance as at January 1 2025 (10900925) (3541336) (943309) (591866) (410266) (119350) (306093) (16813145)

Charge for the period (560979) (111158) (115929) (21579) (42412) (10335) (21084) (883476)

Disposals 230152 - 50074 51321 - - 88449 419996

Currency translation adjustment 225193 80507 16910 11649 6647 (752) 3921 344075

Balance as at December 31 2025 (11006559) (3571987) (992254) (550475) (446031) (130437) (234807) (16932550)

Provision for impairment

Balance as at January 1 2025 (161347) (161782) (9488) - - - (1618) (334235)

Charge for the period (14431) (1436) - - - - - (15867)

Disposals 8765 - - - - - - 8765

Currency translation adjustment (3376) 3621 215 - - - - 460

Balance as at December 31 2025 (170389) (159597) (9273) - - - (1618) (340877)

Carrying amount

As at December 31 2025 2114946 451613 566648 232653 192091 375808 368584 4302343

As at January 1 2025 2395775 576882 569457 259614 237639 387777 369511 4796655

(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 exclusivity agreements.

- 68 -ADAMALtd.

(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 actual results of 2025 2026 workplan and the forecast results for the next 4 years. The key

assumptions contains projected revenue growth rate and gross margin.The discount rate (8.6% WAAC) based on the company's cost of equity and cost of debt taking into

account the comprehensive risk factors.The annual growth rate (1.5%) based on the management projections and market expectations.As of December 31 2025 the value in use of the cash generating units to which goodwill has been allocated to

exceeds its carrying amount.Change Currency Balance at

January 1 during the translation December 31

2025 year adjustment 2025

Book value 5074283 - (109833) 4964450

Impairment provision - - - -

Carrying amount 5074283 - (109833) 4964450

19. Deferred Tax Assets and Deferred Tax Liabilities

(1) Deferred tax assets without taking into consideration of the offsetting of balances within the same

tax jurisdiction

December 31 December 31

20252024

Deductible Deductible

temporary Deferred tax temporary Deferred tax

differences assets differences assets

Deferred tax assets

Deferred tax assets in respect of carry

forward losses 3217169 484298 3882406 572189

Deferred tax assets in respect of

inventories 2199271 585021 1717590 450346

Deferred tax assets in respect of

employee benefits 874432 142094 889110 143905

Other deferred tax asset 2508133 644334 2026968 545029

8799005185574785160741711469

- 69 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

19. Deferred Tax Assets and Deferred Tax Liabilities - (cont’d)

(2) Deferred tax liabilities without taking into consideration of the offsetting of balances within the

same tax jurisdiction

December 31 December 31

20252024

Taxable Taxable

temporary Deferred tax temporary Deferred tax

differences liabilities differences liabilities

Deferred tax liabilities

Deferred tax liabilities in respect of

fixed assets intangible assets and

right-of-use assets 4258988 785595 3982775 702896

42589887855953982775702896

(3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting

December 31 December 31

20252024

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 561571 1294176 419815 1291654

Deferred tax liabilities 561571 224024 419815 283081

(4) Details of unrecognized deferred tax assets

December 31 December 31

20252024

Deductible temporary differences 830630 790191

Deductible losses carry forward 5547431 4875741

63780615665932

(5) Expiration of deductible tax losses carry forward for unrecognized deferred tax assets

December 31 December 31

20252024

2026190326190008

20274058520920

2028238789215536

2029199050148322

After 2029 4878681 4295683

55474314875741

- 70 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

19. Deferred Tax Assets and Deferred Tax Liabilities - (cont'd)

(6) Unrecognized deferred tax liabilities

When calculating the deferred taxes taxes that would have applied in the event of realizing investments

in subsidiaries were not taken into account since it is the Company’s intention to hold these investments

and not realize them.

20. Other Non-Current Assets

December 31 December 31

20252024

Judicial deposits 152033 117624

Advances in respect of non-current assets 38745 16296

Assets related to securitization 27799 60296

Long term investments - 49837

Others 184882 76774

403459320827

21. Short-Term Loans

Short-term loans by category:

December 31 December 31

20252024

Unsecured loans 6673792 4748720

66737924748720

- 71 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements – (cont'd)

22. Derivative financial liabilities

December 31 December 31

20252024

Economic hedge 152525 268149

Accounting hedge derivatives 37056 10431

189581278580

23. Bills Payables

December 31 December 31

20252024

Post-dated checks payables 221808 202821

Note payables draft 400852 236674

622660439495

As at December 31 2025 none of the bills payable are overdue.

24. Accounts payable

December 31 December 31

20252024

Within 1 year (including 1 year) 5379999 4881335

1-2 years (including 2 years) 43276 14600

2-3 years (including 3 years) 4125 11061

Over 3 years 34349 27869

54617494934865

There are no significant accounts payables aging over one year.As at December 31 2025 the amount of the accounts payable included under the supplier financing

arrangements was 1040262 thousand RMB (as at December 31 2024: 1595824 thousand RMB).Accounts payables under financing arrangements have payment due dates ranging from 90 to 180

days from the invoice date. Comparable accounts payable that are not part of supplier financing

arrangements have similar payment terms.Under supplier finance arrangements participating suppliers may elect to receive early payment

from the financial institutions for invoices owed and the company makes a payment to the financial

institutions on the original invoice due date regardless of whether the supplier has elected to receive

early payment or not.- 72 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

24. Accounts payable - (cont'd)

The company may provide guarantees to the financial institutions (as may be provided to suppliers

directly as well) but incurs no interest or other charges payable to the financial institutions on the

payments made.The balance of the accounts payable is not derecognized from the balance sheet because the original

liability is not substantially modified on entering the arrangements as it continues to carry the

characteristic of accounts payable and represent liabilities to pay for goods and services.The settlements to the financial institutions are included within operating cash flows because they

continue to be part of the normal operating cycle.Supplier financing arrangements have no impact on the company's liquidity risk.

25. Contract liabilities

December 31 December 31

20252024

Discount for customers 813747 941955

Advances from customers 975743 868809

17894901810764

26. Employee Benefits Payable

December 31 December 31

20252024

Short-term employee benefits 643371 539144

Post-employment benefits 46389 53100

Share based payment (See note XIII) 110 14191

Other benefits within one year 197286 185565

887156792000

Current maturities 49568 59784

936724851784

- 73 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

27. Taxes Payable

December 31 December 31

20252024

Corporate income tax 322939 276343

VAT 187569 212957

Others 28660 27461

539168516761

28. Other Payables

December 31 December 31

20252024

Dividends payables 750 750

Other payables 1417343 1416569

14180931417319

(1) Other payables

December 31 December 31

20252024

Accrued expenses 762284 692046

Liability in respect of securitization transactions 29191 21127

Hold-back payment due to acquistions 100000 131000

Payables in respect of intangible assets 43944 100350

Financial institutions 886 6692

Others 481038 465354

14173431416569

29. Non-Current Liabilities Due Within One Year

Non-current liabilities due within one year by category are as follows:

December 31 December 31

20252024

Long term loans from related party due within one year 2359991 -

Long-term loans due within one year 819790 1493018

Debentures payable due within one year 489394 574562

Lease liabilities due within one year 156028 163133

38252032230713

- 74 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

30. Other Current Liabilities

December 31 December 31

20252024

Put options to holders of non-controlling interests 544725 488531

Provision in respect of returns 344273 284287

Provision in respect of claims 39846 11264

Others 415 374

929259784456

31. Long-Term Loans

Long-term loans by category

December 31 December 31

2025 Interest range 2024 Interest range

Long term loans

Guaranteed loans - 352017 3.20%-3.40%

Unsecured loans 2327304 1.65%-6.45% 3307626 1.73%-9.79%

Total Long term loans 2327304 3659643

Less:

Long term loans from banks due within 1 year (819790) (1493018)

Long term loans net 1507514 2166625

* 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

December 31 December 31

20252024

Debentures Series B 5383470 6894719

Current maturities (489394) (574562)

48940766320157

December 31

2025

First year (current maturities) 489394

Second year 489394

Third year 489394

Fourth year 489394

Fifth year and thereafter 3425894

5383470

- 75 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

32. Debentures Payable - (cont'd)

Movements of debentures payable:

For the year ended December 31 2025:

Original Original Balance at Amortization CPI and Repayment Currency Balance at

Maturity Face value Face value Issuance Maturity Issuance January 1 of discounts exchange during the translation December

period in RMB NIS date period amount 2025 or premium rate effect period adjustment 31 2025

Debentures November

Series B 2673640 1650000 4.12.2006 2020-2036 3043742 2890593 200 426854 (1005619) (74572) 2237456

Debentures November

Series B 843846 513527 16.1.2012 2020-2036 842579 876223 9170 131418 (301483) (22991) 692337

Debentures November

Series B 995516 600000 7.1.2013 2020-2036 1120339 1077469 3967 160781 (365644) (28197) 848376

Debentures November

Series B 832778 533330 1.2.2015 2020-2036 1047439 1002056 (2423) 149367 (336078) (26181) 786741

Debentures November

Series B 418172 266665 1-6.2015 2020-2036 556941 539058 (6490) 80170 (177507) (14058) 421173

Debentures November

Series B 497989 246499 5.5.2020 2020-2036 692893 509320 (7626) 75816 (166832) (13291) 397387

6894719(3202)1024406(2353163)(179290)5383470

Series B debentures in amount of NIS 3810 million par value (2958 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.

On August 5 2024 ADAMA Solutions Board of Directors approved a buyback plan for the Company's debentures (Series B) in the amount of up to USD 50 million (RMB

356 million). On September 1 2024 the Company purchased NIS 129081 thousand par value of Bonds for a total consideration of approximately USD 50 million (RMB

356 million) fully utilizing the buyback plan

On May 26 2025 ADAMA Solutions Board of Directors approved a buyback plan for the Company's debentures (Series B) in the amount of up to USD 300 million (RMB

2148 million). On May 29 2025 the Company purchased NIS 642448000 par value of Bonds for a total consideration of approximately USD 268 million (RMB 1927

million). The loss in respect of the debentures buyback was USD 9 million (RMB 68 million) and included in the financial expenses.- 76 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

33. Lease liabilities

December 31 December 31

2025 Interest range 2024 Interest range

Lease liabilities 907254 1.0%-14.1% 773548 1.5%-15.4%

Less: Lease liabilities due within one year (156028) (163133)

Long term lease liabilities net 751226 610415

34. Long-Term Employee Benefits Payable

Post-employment benefit plans – defined benefit plan and early retirement

December 31 December 31

20252024

Total present value of obligation 490562 453398

Less: fair value of plan's assets (63751) (54186)

Net liability related to Post-employment benefits 426811 399212

Termination benefits 67828 78054

Total recognized liability for defined benefit plan net (1) 494639 477266

Other long-term employee benefits 91824 126373

Total long-term employee benefits net 586463 603639

Including: Long-term employee benefits payable due within one year 49568 59784

536895543855

(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

202520242025202420252024

Balance as at January 1 531452 593169 54186 59884 477266 533285

Expense/income recognized

in profit and loss:

Current service cost 20261 26801 - - 20261 26801

Past service cost - (7200) - - - (7200)

Gain or loss on plan settlement - (7461) - - - (7461)

Interest costs 21659 20783 2722 2556 18937 18227

Losses on curtailments and settlements 6051 36819 - - 6051 36819

Changes in exchange rates 56115 (3889) 7465 (306) 48650 (3583)

Actuarial losses due to early retirement 953 (755) - - 953 (755)

Included in other comprehensive income:

Actuarial gain (losses) as a result of changes in

actuarial assumptions 7465 (31779) 4436 2542 3029 (34321)

Foreign currency translation differences in respect of

foreign operations (12808) 7675 (1664) 817 (11144) 6858

Additional movements:

Benefits paid (72758) (102711) (8216) (13507) (64542) (89204)

Contributions paid by the Group - - 4822 2200 (4822) (2200)

Balance as at December 31 558390 531452 63751 54186 494639 477266

- 77 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

34. Long-Term Employee Benefits Payable - (cont'd)

Post-employment benefit plans – defined benefit plan and early retirement - (cont'd)

(2) Actuarial assumptions and sensitivity analysis

The principal actuarial assumptions at the reporting date for defined benefit plan

December 31 December 31

20252024

Discount rate (%)* 1.8%-3.3% 1.8%-3.0%

* According to the demographic and the benefit components.The assumptions regarding the future mortality rate are based on published statistical data and acceptable

mortality rates.Possible reasonable changes as of the date of the report in the discount rate assuming the other

assumptions remain unchanged would have affected the defined benefit obligation as follows:

As of December 31 2025

Increase of 1% Decrease of 1%

Change in defined benefit obligation (36711) 43693

35. Provisions

December 31 December 31

20252024

Liabilities in respect of contingencies* 210045 164271

Provision in respect of site restoration 211997 147446

Other 2305 4773

424347316490

* Liabilities in respect of contingencies includes obligations of pending litigations where an outflow of

resources had been reliably estimated.- 78 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

36. Other Non-Current Liabilities

December 31 December 31

20252024

Long term loans from related party 2359991 2330911

Put options to holders of non- controlling interests - 292589

23599912623500

Current maturities (2359991) -

-2623500

37. Share Capital

Balance at

Balance at Issuance of new December 31

January 1 2025 shares Buyback of shares 2025

Share capital 2329812 - - 2329812

38. Capital Reserve

Balance at

Balance at Additions during Reductions during December 31

January 1 2025 the period the period 2025

Share premiums 12606562 - - 12606562

Other capital reserve 343902 - (83341) 260561

12950464-(83341)12867123

- 79 -ADAMALtd.

(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

2025 amount or loss expenses amount December 31 2025

Items that will not be

reclassified to profit or loss 116584 (3029) - (586) (2443) 114141

Re-measurement of changes

in liabilities under defined

benefit plans 87909 (3029) - (586) (2443) 85466

Changes in fair value of

other equity investment 28675 - - - - 28675

Items that may be

reclassified to profit or loss 1604444 (202534) (52344) (2353) (147837) 1456607

Effective portion of gain or

loss of cash flow hedge 23241 (69058) (52344) (2353) (14361) 8880

Translation difference of

foreign financial statements 1581203 (133476) - - (133476) 1447727

1721028(205563)(52344)(2939)(150280)1570748

40. Surplus reserve

Additions Reductions Balance at

Balance at during the during the December 31

January 1 2025 period period 2025

Statutory surplus reserve 294796 - - 294796

Discretional surplus reserve 3814 - - 3814

298610--298610

41. Retained Earnings

20252024

Retained earnings as at January 1 1680382 4678091

Net loss for the period attributable to shareholders of the Company (1045719) (2903204)

Dividends to non-controlling Interest (131686) (69512)

Appropriation to statutory surplus reserve - (24993)

Retained earnings as at December 31 502977 1680382

- 80 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

42. Operating Income and Cost of Sales

Year ended December 31 Year ended December 31

20252024

Income Cost of sales Income Cost of sales

Principal activities 28886199 21301378 29435604 22730889

Other businesses 58387 20475 52442 18036

28944586213218532948804622748925

43. Taxes and Surcharges

Year ended December 31

20252024

Tax on turnover 28162 29988

Others 74076 70339

102238100327

44. Selling and Distribution Expenses

Year ended December 31

20252024

Salaries and related expense 1810824 1921537

Depreciation and amortization 908544 955199

Advertising and sales promotion 288392 295674

Warehouse expenses 186124 154770

Registration 148339 138531

Travel expenses 134915 126026

Professional services 103380 114060

Insurance 76038 95313

Legal claims settlements 2682 267151

Others 326937 332509

39861754400770

- 81 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

45. General and Administrative Expenses

Year ended December 31

20252024

Salaries and related expenses 524908 492153

Professional services 450697 233964

IT systems 149922 139007

Depreciation and amortization 144099 118313

Cost contribution arrangement 49385 66506

Office rent maintenance and expenses 36326 38422

Other 118643 97078

14739801185443

46. Research and development expenses

Year ended December 31

20252024

Salaries and related expenses 222187 220061

Depreciation and amortization 66878 64743

Materials 28403 22232

Field trial 26957 24910

Professional services 20246 22306

Office rent maintenance and expenses 16828 14002

Other 43201 48073

424700416327

47. Financial expenses (incomes) net

Year ended December 31

20252024

Interest expenses on debentures and loans and other charges 1008800 1066778

Exchange rate differences net 710749 560080

CPI expenses in respect of debentures 165400 255618

Interest income from customers banks and others (192291) (242845)

Loss in respect of sale of trade receivables 230243 219652

Revaluation of put option net 107777 (259380)

Interest expense on lease liabilities 57212 40449

Interest expense in respect of post-employment benefits and early

retirement net 18925 19192

Others 125880 110286

22326951769830

- 82 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

48. Investment income net

Year ended December 31

20252024

Income from long-term equity investments accounted for using

the equity method 9638 8201

Other 2325 2324

1196310525

49. Gain (loss) from changes in fair value

Year ended December 31

20252024

Gain (loss) from changes in fair value of derivative financial

Instruments 177185 (8272)

Others 42301 (37802)

219486(46074)

50. Credit impairment reversal (losses)

Year ended December 31

20252024

Bills receivable and accounts receivable (116577) (103524)

Other receivables 1031 3811

(115546)(99713)

51. Asset impairment losses

Year ended December 31

20252024

Fixed assets (247008) (634114)

Inventories (159047) (162787)

Intangible asset (15867) (161126)

Construction in progress (11008) (3331)

(432930)(961358)

- 83 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

52. Gain from Disposal of Assets

Year ended December 31 Included in

non-recurring

2025 2024 items

Gain from disposal of fixed assets 16963 40985 16963

Gain (loss) from disposal of intangible assets (247) 7123 (247)

167164810816716

53. Income Tax Expenses (incomes)

Year ended December 31

20252024

Current year 426506 439848

Deferred tax expenses (income) (80284) 301259

Adjustments for previous years net (101) 37795

346121778902

(1) Reconciliation between income tax expense and accounting profit is as follows:

Year ended December 31

20252024

Loss before taxes (699598) (2124302)

Statutory tax in china 25% 25%

Tax calculated according to statutory tax in china (174900) (531076)

Tax benefits from Approved Enterprises (12715) (7232)

Difference between measurement basis of income for financial

statement and for tax purposes (66081) 165229

Taxable income (loss) and temporary differences at other tax rate (63117) 186598

Taxes in respect of prior years (101) 37795

Utilization of tax losses prior years for which deferred taxes were

not created (5356) (2954)

Temporary differences and losses in the report year for which

deferred taxes were not created 168576 417256

Non-deductible expenses non-taxable income and other difference

net 415525 47808

Neutralization of tax calculated in respect of the Company’s share

in results of equity accounted investees (3219) (2758)

Effect of change in tax rate in respect of deferred taxes (1322) 341041

Creation and reversal of deferred taxes for tax losses and temporary

differences from previous years net 88831 127195

Income tax expenses (incomes) 346121 778902

54. Other comprehensive income

Details of the Other comprehensive income are set out in Note V.39

- 84 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

55. Government grants

Amount recognized in the profit

and loss statements during the

year ended December 31

Category Presentation accounts 2025 2024

Government grants related to income Non-Operating income 16498 6268

Government grants related to assets Fixed assets Intangible assets 10372 12114

56. Notes to items in the cash flow statements

(1) Cash received relating to other operating activities

Year ended December 31

20252024

Derivatives transactions - 159217

Financial institutions 22552 83292

Interest income 63733 110267

Government subsidies 17501 6268

Compensation related to product liabilities 186867 -

Others 60818 189585

351471548629

(2) Cash paid relating to other operating activities

Year ended December 31

20252024

Derivatives transactions 632808 309927

Financial institutions 71112 41613

Professional services 590901 364417

Advertising and sales promotion 270237 286467

IT and Communication 234502 220619

Commissions and Warehouse 196490 197662

Registration and Field trials 145197 142700

Insurance 114736 132979

Travel 107042 87641

Legal claims settlements - 257201

Other 953206 959304

33162313000530

(3) Cash received relating to other investing activities

Year ended December 31

20252024

Dividend received from other equity investment - 2324

Other - -

-2324

- 85 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

56. Notes to items in the cash flow statements - (cont'd)

(4) Cash paid relating to other investing activities

Year ended December 31

20252024

Increase in short and long term investments 124725 125641

124725125641

(5) Cash received from other financing activities

Year ended December 31

20252024

Borrowing from related party * 789364 569822

Proceeds in respect of hedging transactions on debentures 845416 403236

Deposit for issuing bills payables 226131 46568

Other - 10072

18609111029698

* 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

Year ended December 31

20252024

Payment in respect of hedging transactions on debentures 165934 270667

Repayment of lease liability 181873 183208

Deposit for issuing bills payable 276460 69243

Realization of Call option 423114 -

Others 441 460

1047822523578

- 86 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

57. Supplementary Information on Cash Flow Statement

(1) Supplementary information on Cash Flow Statement

a. Reconciliation of net profit to cash flows from operating activities:

Year ended December 31

20252024

Net loss (1045719) (2903204)

Add: Impairment provisions for assets 432930 961358

Credit impairment losses 115546 99713

Depreciation of fixed assets and investment property 1033181 1081821

Depreciation of right-of-use asset 187076 194390

Amortization of intangible asset 883476 889460

Gains on disposal of fixed assets intangible assets and other long-

term assets net (16716) (48108)

Gain (losses) from changes in fair value (219486) 46074

Financial expenses 2229841 908791

Investment income net (11963) (10525)

Decrease (increase) in deferred tax assets net (34983) 315167

Decrease in deferred tax liabilities net (45301) (13908)

Decrease (increase) in inventories net (640792) 1801866

Increase in operating receivables net (592368) (213492)

Increase in operating payables net 1773971 669167

Others - (17939)

Net cash flow provided by operating activities 4048693 3760631

b. Net Decrease in cash and cash equivalents

Year ended December 31

20252024

Closing balance of cash and cash equivalents 3353326 3583963

Less: Opening balance of cash and cash equivalents 3583963 4857358

Decrease in cash and cash equivalents (230637) (1273395)

- 87 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

57. Supplementary Information on Cash Flow Statement - (cont'd)

(2) Details of cash and cash equivalents

December 31 December 31

20252024

Cash on hand 1107 1317

Bank deposits available on demand without restrictions 3352219 3582646

33533263583963

58. Assets with Restricted Ownership or Right of Use

December 31

2025 Reason

Cash 96974 Pledged

Other non-current assets 152033 Guarantees

249007

- 88 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

V. Notes to the consolidated financial statements - (cont'd)

59. Foreign currencies denominated items - (cont'd)

(1) Foreign currencies denominated items - (cont'd)

As at December 31 2025

RMB at the

Exchange end of the

Foreign currency at the end of the period rate period

Cash and bank balances

EUR 31639 8.253 261120

USD 29416 7.029 206768

ILS 72202 2.203 159062

BRL 112329 1.277 143444

ARS 7921458 0.005 39607

RUB 404859 0.090 36437

RON 21086 1.619 34139

PLN 15336 1.952 29936

Other 288673

Total 1199186

Bills and Accounts receivable

BRL 988710 1.277 1262583

EUR 67666 8.253 558444

ZAR 541882 0.423 229216

RON 111158 1.619 179965

USD 20633 7.029 145026

GBP 8874 9.453 83887

CAD 12535 5.128 64278

ILS 17382 2.203 38293

HUF 1614616 0.021 33907

CZK 88491 0.3407 30147

TRY 175206 0.164 28734

Other 242057

Total 2896537

Other receivables

EUR 22715 8.253 187466

ILS 27005 2.203 59491

GBP 5621 9.453 53133

BRL 29711 1.277 37941

Other 43743

Total 381774

- 89 -ADAMALtd.

(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) Foreign currencies denominated items - (cont'd)

As at December 31 2025

RMB at the

Exchange end of the

Foreign currency at the end of the period rate period

Other current assets

BRL 91903 1.277 117360

ILS 52213 2.203 115026

EUR 8106 8.253 66900

ARS 7880691 0.005 39403

UAH 233221 0.166 38715

CLP 3191075 0.008 25529

CAD 2854 5.128 14634

TRY 80617 0.164 13221

GBP 1353 9.453 12792

Other 73662

Total 517242

Long-term receivables

BRL 92563 1.277 118203

Total 118203

Long-term investments loans

and other

BRL 215850 1.277 275641

Other 9208

Total 284849

Short-term loans

UAH 169919 0.166 28207

ARS 2676567 0.005 13537

Total 41744

Bills and Accounts payable

ILS 489081 2.203 1077445

EUR 60555 8.253 499763

BRL 160182 1.277 204552

USD 3471 7.029 24397

Other 81520

Total 1887677

- 90 -ADAMALtd.

(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)

(3) Foreign currencies denominated items - (cont'd)

As at December 31 2025

Foreign currency

at the end of the RMB at the end of

period Exchange rate the period

Other payables

ILS 102793 2.203 226454

BRL 86911 1.277 110985

EUR 8654 8.253 71419

Other 139409

Total 548267

Contract liabilities

EUR 26322 8.253 217232

BRL 54034 1.277 69002

CAD 8046 5.128 41259

TRY 81088 0.164 13298

Other 42068

Total 382859

Non-current liabilities due within one year

CNH 2000000 1.004 2008550

ILS CPI 246665 2.203 543403

EUR 1637 8.253 13509

Other 33935

Total 2599397

Other current liabilities

EUR 6536 8.253 53939

Other 3767

Total 57706

Debentures payable

ILS CPI 2221551 2.203 4894076

Total 4894076

Provision and Long-term payables

BRL 152289 1.277 194473

ILS 54367 2.203 119771

Total 314244

Lease liabilities

ILS CPI 34065 2.203 75046

EUR 5530 8.253 45638

ILS 5820 2.203 12821

Other 38342

Total 171847

- 91 -ADAMALtd.

(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)

(4) 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

ADAMAMakhteshim Ltd. Israel Manufacturing; Distribution; USD

Registration

ADAMA Australia Pty Australia Distribution AUD

Limited

ADAMA Italia SRL Italy Distribution USD

ADAMA Northern Netherlands Distribution USD

Europe B.V.Alligare LLC United States Manufacturing; Distribution; USD

Registration

The functional currency of the subsidiaries above is the main currency that represent the principal

economic environment.VI. Change in consolidation Scope

There is no change of consolidation scope during the period.- 92 -ADAMALtd.

(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; 100% 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

Alligare LLC United States Manufacturing; Distribution; PurchasedRegistration 100%

Adama Anpon (Jiangsu) Ltd. China Manufacturing; Distribution 100% Purchased

Adama Huifeng (Jiangsu) Co. Ltd. China Manufacturing; Distribution 51% Purchased

2. Interests in joint ventures or associates

December 31 December 31

20252024

Joint venture 2129 1907

Associate 37183 28320

3931230227

3. Summarized financial information of joint ventures and associates

December 31 2025 December 31 2024

and twelve months and twelve months

then ended then ended

Joint venture:

Total carrying amount 2129 1907

The Group's share of the following items:

Net profit 269 444

Other comprehensive income (47) 26

Total comprehensive income 222 470

Associate:

Total carrying amount 37183 28320

The Group's share of the following items:

Net profit 9369 7757

Other comprehensive income 2817 (6788)

Total comprehensive income 12186 969

- 93 -ADAMALtd.

(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 September 2025 a two-years agreement with an international insurance company was renewed. The

amount of the insurance coverage was fixed at $150 million cumulative per year. The indemnification is

limited to 90% of the debt.The Group’s exposure to credit risk is influenced mainly by the personal characterization of each customer

and by the demographic characterization of the customer’s base including the risk of insolvency of the

industry and geographic region in which the customer operates.- 94 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

VIII. Risk Related to Financial Instruments - (cont’d)

B. Credit risk - (cont’d)

The Company management has prescribed a credit policy whereby the Company performs current ongoing

credit evaluations of existing and new customers and every new customer is examined thoroughly regarding

the quality of his credit before offering him the Group’s customary shipping and payment terms. The

examination made by the Group includes an outside credit rating if any and in many cases receipt of

documents from an insurance company. A credit limit is prescribed for each customer outstanding amount

of the accounts receivable balance. These limits are examined annually. Customers that do not meet the

Group’s criteria for credit quality may do business with the Group on the basis of a prepayment or against

furnishing of appropriate collateral.Most of the Group’s customers have been doing business with it for many years. In monitoring customer

credit risk the customers were grouped according to a characterization of their credit based on geographical

location industry aging of receivables maturity and existence of past financial difficulties. Customers

defined as “high risk” are classified to the restricted customer list and are supervised by management. In

certain countries mainly Brazil customers are required to provide property collaterals (such as agricultural

lands and equipment) against execution of the sales the value of which is examined on a current ongoing

basis by the Company. In these countries in a case of expected credit risk the Company records a provision

for the amount of the debt less the value of the collaterals provided and acts to realize the collaterals.The Group closely monitors the economic situation in Eastern Europe and 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

notesⅢ.11 – Financial instrumentsⅢ.12 – Accounts receivables andⅢ.14 – Other receivables.Cash and deposits in banks

The Company holds cash and deposits in banks with a high credit rating. These banks are also required to

comply with capital adequacy or maintain a level of security based on different situations.Guarantees

The Company’s policy is to provide financial guarantees only to investee companies.Aging of receivables and expected credit risk

Presented below is the aging of the past due trade receivables:

December 31 2025

Past due by less than 90 days 533262

Past due by more than 90 days 657545

1190807

- 95 -ADAMALtd.

(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 6801553 thousand relate to

category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 784538

thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has a

provision for other receivables amounted to RMB 14220 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.- 96 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

VIII. Risk Related to Financial Instruments - (cont’d)

C. Liquidity risk - (cont’d)

(1) Presented below are the contractual maturities of the financial liabilities at undiscounted amounts

including estimated interest payments:

As at December 31 2025

Third- Fifth year Contractual Carrying

First year Second year Fourth year and above Cash flow amount

Non-derivative financial

liabilities

Short-term loans 6833357 - - - 6833357 6673792

Bills payables 622660 - - - 622660 622660

Accounts payables 5461749 - - - 5461749 5461749

Other payables 1418093 - - - 1418093 1418093

Other current liabilities 544725 - - - 544725 544725

Debentures payable 741883 740224 1404959 4124732 7011798 5383470

Long-term loans 881049 789203 774328 - 2444580 2327304

Long-term payables 9343 23021 42066 151968 226398 164735

Lease Liabilities 216672 175467 216666 1068131 1676936 907254

Other non-current liabilities 2398650 - - - 2398650 2359991

Derivative financial liabilities

Foreign currency derivatives 177605 - - - 177605 177605

CPI/shekel forward transactions 11976 - - - 11976 11976

193177621727915243801953448312882852726053354

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 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.- 97 -ADAMALtd.

(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 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 impact with respect to the subsidiary functional

currency – the U.S. dollar. As of the approval date of the financial statements the subsidiary had hedged

most of its exposure deriving from issuance of the debentures in options and forward contracts.

(A) The Group’s exposure to NIS-CPI and foreign currency risk is as follows:

December 31 2025

Total assets Total liabilities

In US Dollar 3353204 2456826

In Euro 1134491 924350

In Brazilian real 1955172 384539

CPI-linked NIS 3683 5522590

In New Israeli Shekel 372547 1331923

Denominated in or linked to other foreign currency 1821470 2432203

864056713052431

(B) The exposure to CPI and foreign currency risk in respect of derivatives is as follows:

December 31 2025

Currency/ Currency/ Average USD RMB

linkage linkage expiration thousands thousands

receivable payable date Par value Par value Fair value

Forward foreign currency USD EUR 10/05/2026 403454 2835800 (5197)

Contracts and call options USD PLN 18/03/2026 16367 115042 (141)

USD BRL 22/01/2026 171035 1202174 2431

USD GBP 15/02/2026 20045 140892 (168)

USD ZAR 09/02/2026 31549 221752 (7574)

ILS USD 09/02/2026 1064933 7485200 315350

USD OTHER 839368 5899750 (33463)

CPI forward contracts CPI ILS 28/08/2026 501567 3525417 (11440)

- 98 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

VIII. Risk Related to Financial Instruments - (cont’d)

D. Market risks - (cont’d)

(1) CPI and foreign currency risks - (cont’d)

(C) Sensitivity analysis

The appreciation or depreciation of the Dollar against the following currencies as of December 31

2025 and the increase or decrease in the CPI would increase (decrease) the equity and profit or loss by

the amounts presented below. This analysis assumes that all the remaining variables among others

interest rates remains constant.December 31 2025

Decrease of 5% Increase of 5%

Equity Profit (loss) Equity Profit (loss)

New Israeli shekel 62366 28861 (16505) 4738

British pound (424) (424) 424 424

Euro (99539) 6120 98027 (6120)

Brazilian real 16012 16012 (21933) (21933)

Polish zloty 8007 8007 (7436) (7436)

South African Rand (1547) (1547) 408 408

Chinese Yuan Renminbi 165421 165421 (146966) (146966)

CPI-linked NIS 122697 122697 (122697) (122697)

(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 SOFR and Euro ESTER interest. As a

result most of the variable interest exposure of those loans is to the SOFR interest.The Company prepares a quarterly summary of exposure to a change in the SOFR interest rate. As at the

approval date of the financial statements the Company had not hedged this exposure.- 99 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

VIII. Risk Related to Financial Instruments - (cont’d)

D. Market risks - (cont’d)

(2) Interest rate risks - (cont’d)

(A) Type of interest

The interest rate profile of the Group’s interest-bearing financial instruments was as follows:

December 31

2025

Fixed-rate instruments – unlinked to the CPI

Financial assets

Other non-current assets 1567

Financial liabilities

Long-term loans (1) 2221304

Long-term payables 23089

Other non-current liabilities (1) 351441

(2594267)

Fixed-rate instruments – linked to the CPI

Financial liabilities

Debentures payable (1) 5383470

Variable-rate instruments

Financial assets

Cash at banks 694509

Financial assets at fair value through profit or loss 1223

Other current assets 155154

Financial liabilities

Short-term loans and credit from banks 6673792

Long-term loans (1) 106000

Long-term payables 129492

Other non-current liabilities (1) 2008550

(8066948)

(1) Including current maturities.

100ADAMALtd.

(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 short-term loans bills and accounts payable and

other payable are the same or proximate to their fair value.The following table details the carrying amount in the books and the fair value of groups of non- current

financial instruments presented in the financial statements not in accordance with their fair values:

December 31 2025

Carrying amount Fair value

Financial assets

Other non-current assets (a – Level 2) 15252 11910

Financial liabilities

Long-term loans and others (b – Level 2) 5761468 5670850

Debentures (c – Level 1) 5383470 5901859

a) The fair value of the other non-current assets is based on a discounted future cash flows using the acceptable

interest rate for similar investment having similar characteristics (Level 2).b) The fair value of the long-term loans and others is based on a discounted future cash flows using the acceptable

interest rate for similar loans having similar characteristics (Level 2).c) The fair value of the debentures is based on stock exchange quotes (Level 1).

2. The interest rates used in determining fair value

The interest rates used to discount the estimate of anticipated cash flows are:

December 31 2025

%

U.S. dollar interest 6.01 -7.80

Chinese Yuan Renminbi 1.66 -3.30

101ADAMALtd.

(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.December 31

2025

Forward contracts and options used for hedging the cash flow (Level 2) 11232

Forward contracts and options used for economic hedging (Level 2) 248566

Other equity investment (Level 2) 129796

Receivables financing (Level 2) 30767

Other non-current assets (Level 2) 27799

Other (Level 2) 1223

Financial Instrument Fair value

Fair value measured on the basis of discounting the difference between the

Forward contracts stated forward price in the contract and the current forward price for theresidual 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.- 102 -ADAMALtd.

(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 11182127 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

- 103 -ADAMALtd.

(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

Agro Jangada Ltda Common control

Beijing Guangyuan Yinnong Chemical Co. LTD Common control

Bluestar (Beijing) Chemical Machinery Co. Ltd. Common control

Bluestar Engineering Co. Ltd. Common control

Dipagro LTDA Common control

Elkem Silicones Brasil Ltd. Common control

Hangzhou (Torch) Xidoumen Membrane Industry Co. LTD Common control

Huaxia Hanhua Chemical Equipment Co. LTD Common control

Jiangsu Huaihe 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

Liaocheng Luxi Polyol New Material Technology Co. Ltd. Common control

Sino MAP Common control

Ningxia Ruitai Technology Co. Ltd. Common control

P.T. Syngenta Indonesia Common control

Produtécnica Nordeste Comércio de Insumos Agrícolas Ltda. Common control

Shandong Dacheng Agrochemical Company Limited Common control

Shenyang Sciencreat Chemicals Co. Ltd. Common control

Shenyang Shenhua Institute Testing Technology Co. Ltd. Common control

Shenyang SinochemAgrochemicals R&D Co. Ltd. Common control

Sinochem (Hainan) Agroecology Co. Common control

Sinochem (Linyi) Crop Nutrition Co. Ltd Common control

SinochemAgro Co. Ltd. Common control

Sinochem International Crop Care (Overseas) Pte. Ltd. Common control

Sinochem Information Technology Co. Ltd. Common control

Sinochem Fertilizer Company Limited and its branches Common control

Sinochem Finance Co. Ltd. Common control

Sinochem Hebei Co. Ltd. Common control

Sinochem Modern Agriculture (Hunan) Co. LTD Common control

Sinochem Modern Agriculture (Inner Mongolia) Co. LTD Common control

Sinochem Modern Agriculture (Xinjiang) Co. LTD Common control

Sinochem Modern Agriculture Anhui Co. LTD Common control

Sinochem Modern Agriculture Co. LTD. Common control

Sinochem Oil (Hainan) Co.Ltd. Common control

Sinochem Petrochemical Sales Co. Ltd. Common control

Sinochem Shared Financial Services (Shanghai) Co. LTD Common control

Sinochem Zhoushan Hazardous Chemicals Emergency Rescue Common control

Base Co. Ltd.Syngenta (Shanghai) Crop Protection Technology Co. Ltd. Common control

Syngenta Agro (Argentina) S.A. Common control

Syngenta Agro AG 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 A/S Common control

- 104 -ADAMALtd.

(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 Crop Protection AG Common control

Syngenta Crop Protection BV Common control

Syngenta Crop Protection Lda Common control

Syngenta Crop Protection LLC Common control

Syngenta Crop Protection SA Common control

Syngenta Czech s.r.o. Common control

Syngenta Espa?a S.A. Common control

Syngenta France SAS Common control

Syngenta Group Co. Ltd 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 Korea Ltd Common control

Syngenta Nantong Crop Protection Co Ltd Common control

Syngenta Protecao de Cultivos Ltda Common control

Syngenta Slovakia s.r.o. Common control

Syngenta Tarim Sanay ve Ticaret AS Common control

Taicang Zhonglan Environmental Protection Common control

Technology Service Co. LTD

China Bluestar Chengrand Research Institute Common control

Chemical Industry

Zhonglan International Chemical Co. Ltd. Common control

Zhonglan Lianhai Design Institute Co. Ltd. Common control

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

- 105 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

X. Related parties and related party transactions - (cont’d)

4. Transactions and balances with related parties

(1) Transactions with related parties

Year ended December

31

Type of purchase Related Party Relationship 2025 2024

Summary of purchase of goods/services:

Purchase of goods/services received Common control under

Sinochem Holdings 1252090 1404596

Minority shareholder and 17359 27400

its subsidiary

Purchase of fixed assets and other assets Common control under 49 -

Sinochem Holdings

Lease expenses Common control under - 285

Sinochem Holdings

Minority shareholder and 1849 1849

its subsidiary

Summary of Sales of goods:

Sale of goods/ Service rendered Common control under

Sinochem Holdings 988686 1212588

Joint venture 93908 82375

Minority shareholder and

its subsidiary 26061 51403

Lease income Minority shareholder 1088 1132

(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 263000 21/04/2021 20/04/2028 Y

67971 01/06/2021 31/05/2028 Y

* During the reporting period the Company paid a guarantee fee amounting to 343 thousand RMB

(Year ended December 31 2024: 414 thousand RMB) to the parent company.- 106 -ADAMALtd.

(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)

(3) Remuneration of key management personnel and directors

Periods ended December 31

20252024

Remuneration of key management personnel and directors 35005 24251

(4) Receivables from and payables to related parties (including loans)

Receivable Items

December 31 December 31

20252024

Expected Expected

Related Party Book credit Book credit

Items Relationship Balance losses Balance losses

Trade receivables Common control under 214960 - 243093 -

Sinochem Holdings

Joint venture 15063 - 13198 -

Minority shareholder and 5201 - 8163 -

its subsidiary

Prepayments Common control under 1629 - 617 -

Sinochem Holdings

Minority shareholder and - - 547 -

its subsidiary

Payable Items

December 31 December 31

Items Related Party Relationship 2025 2024

Trade payables Common control under Sinochem 328410 235899

Holdings

Minority shareholder and its subsidiary 63 256

Other payables Common control under Sinochem 66612 35450

Holdings

Minority shareholder and its subsidiary 517 1641

Contractual liability Common control under Sinochem 22912 38676

Holdings

Short-term loans * Common control under Sinochem 3444112 2731591

Holdings

Other non-current Common control under Sinochem 2359991 2330911

liabilities (including Holdings

current maturities). *

* Include liabilities are loans from a related party the interest expenses for the Year ended December 31

2025 is 278062 thousand RMB (Year ended December 31 2024: 238966 thousand RMB ).

- 107 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

X. Related parties and related party transactions - (cont’d)

5. Transactions and balances with related parties - (cont'd)

(4) Receivables from and payables to related parties (including loans) (cont'd)

On October 27 2021 the Board of Directors first approved (following the pre-approval of the Company’s

independent directors 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 715 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 2863 million). As of December 31 2025 a total of $400

million (RMB 2863 million) was utilized.On August 28 2023 the Board of Directors approved (following the pre-approval of the Company’s

independent directors dated August 22 2023) the Company through one of its subsidiaries entering into

an additional committed credit facility agreement in the amount of RMB 2000 million with Syngenta

Group or any of its subsidiaries. As of December 31 2025 a total of RMB 2000 million was utilized.On April 25 2024 the Board of Directors approved (following the pre-approval of the Company’s

independent directors dated April 24 2024) the Company through one of its subsidiaries entering into an

committed credit facility agreement (“the Previous Credit Facility”) in the amount of $200 million (RMB

1432 million) with one subsidiary of Syngenta Group.

On November 6 2024 the Board of Directors approved (following the pre-approval of the Company’s

independent directors dated November 5 2024) the Company to apply on top of the previous credit

facitiliy a new credit line with an estimated amount of no more than $200 million (RMB 1432 million)

and to sign a new facility agreement. As of December 31 2025 $140 million (RMB 1002 million) was

utilized under this agreement.

(5) Other related party transactions

The closing balance of bank deposit in Sinochem Finance Corporation was 912869 thousand RMB

(31.12.24: 627434) Interest income of bank deposit for the current period was 6727 thousand RMB

(amount for Year ended December 31 2024 was 6626 thousand RMB).The closing balance of a loan received from Sinochem Finance Corporation was 209641 thousand RMB

(31.12.24: 20000). Interest expenses in the current period was 2168 thousand RMB (amount for Year

ended December 31 2024 was 228 thousand RMB).- 108 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XI. Commitments and contingencies

1. Significant commitments

December 31 December 31

20252024

Investment in Fixed assets

125136195204

2. Commitments and Contingent Liabilities

On June 12 2024 the 3rd meeting of the 10th session of the Board of Directors of the Company approved the

engagement on the purchase of joint liability insurance policy for Directors Supervisors and Senior Executives

of the Company and its PRC subsidiaries by way of adding the Company to the Directors and Officers liability

insurance policy of Syngenta Group which shall provide shared coverage. On June 28 2024，the Company’s

2nd Interim Shareholders Meeting in 2024 approved the above engagement. The insurance period is from July

1 2024 to June 30 2025.

Based on the Shareholders meeting approval the Company's management renewed the Directors and Officers

liability insurance policy and the insurance period was extended to April 30 2026.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.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.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 argued that the product allegedly poses a risk to users or those who have been exposed to it.On August 7 2025 the court rendered a first-instance judgment dismissing the Motion. On November 9

2025 an appeal was submitted to the Supreme Court.

According to the Solutions' external counsels given the preliminary stages of the appeal it is too early to

assess the chances of the appeal and the Motion to be accepted.As Solutions is an authorized distributor of the Manufactures the Manufacturers 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.- 109 -ADAMALtd.

(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)

Therefore and based on the opinion of Solutions’ external counsels as of the date of the financial statements

it is the Company's estimation that this proceeding is not expected to have any non-negligible effect on the

Company’s financial results.In June 2021 a lawsuit was filed against a subsidiary of the Company alleging two patents owned by a large

competitor of the Company have been infringed by such subsidiary. Among the claims the plaintiff seeks

preliminary and permanent injunctions to prevent the subsidiary from manufacturing using or

commercializing 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 the subsidiary

filed lawsuits seeking declarations that the said patents are invalid and not infringed. These proceedings

remain pending. In May 2023 the same competitor filed an additional lawsuit alleging infringement of the

same two patents by a different product and sought a preliminary injunction. The injunction was rejected at

first instance upheld on appeal and finally dismissed by the superior court - a decision that is now final and

unappealable. 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.Performance commitments

When the Company acquired the equity interest in Adama Huifeng (shanghai) Agricultural Technology Co.Ltd (“Adama Huifeng (Shanghai)”) and Adama Hiufeng (Jiangsu) Co. Ltd.(“Adama Huifeng (Jiangsu)") fromJiangsu Huifeng Biological Agriculture Co. Ltd (“Jiangsu Huifeng”) during 2020 and 2021 there were

performance commitments made by Jiangsu Huifeng regarding specific business operations of the acquired

subsidiaries. If the performance commitments is not met Jiangsu Huifeng shall make a price adjustment

payment calculated based on a method as agreed. By the end of 2023 when the commitment period ended the

performance commitments has not been fulfilled. There were disputes between the Company and Jiangsu

Huifeng regarding the price adjustment payment and the arbitration application filed by the Company as the

Applicant to the Shanghai International Economic and Trade Arbitration Commission against Jiangsu Huifeng

as the claimant was accepted in May 2024. The arbitration case was heard by the arbitration tribunal in

September 2024.On April 1 2025 Shanghai International Economic and Trade Arbitration Commission rendered an award in

respect of the arbitration according to which Jiangsu Huifeng shall pay the Company the price adjustment

payment of RMB45000000 yuan the damage compensation for failure to pay the price adjustment amount

on time and a certain proportion of fees for the attorney and the arbitration as well as other expenses incurred

by the Company for initiating the case.- 110 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XI. Commitments and contingencies - (cont’d)

2. Commitments and Contingent Liabilities - (cont’d)

Performance commitments - (cont’d)

On June 30 2025 the Company signed an agreement with Jiangsu Huifeng stipulating that the mutual

payments in the price adjustment payment case and the case of payment for equity transfer between the

Company and Jiangsu Huifeng shall be offset.According to the above agreement after calculation Jiangsu Huifeng shall pay the offset balance of RMB

34669 to the Company. On July 9 2025 Jiangsu Huifeng has paid the balance to the Company. The above-

mentioned performance commitments of Jiangsu Huifeng have been fulfilled.XII. Events subsequent to the balance sheet date

ADAMA is headquartered and has three manufacturing sites in Israel. Regional tensions escalated on October

7 2023 and more recently widened on February 28 2026. The Company’s Israeli production sites and supply

chain including ports continue to operate without significant delays. As of this publication date the events

have not had nor are expected to have material impact on the Company's ability to support its markets its

ongoing activities or its consolidated financial results.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 77864910 phantom warrants to officers and employees in accordance with the long-term

phantom compensation plan (hereinafter - "the 2019 Plan") out of which 75814897 phantom warrants were

granted at the grant date of February 21 2019. During 2019 1206081 additional Phantom warrants were

granted.The warrants were vested in four equal portions where the first and second quarters were exercisabled after

two years the third quarter after three years and the fourth quarter after four years from January 1 2019. The

warrants were be exercisabled 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 were exercisable until the end of 2025

at which time they expired.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 20290025

Total number of Phantom warrants granted in current period -

Total number of Phantom warrants exercised in current period -

Total number of Phantom warrants forfeited in current period (20290025)

Total number of Phantom warrants at the end of the period -

RMB 9.87 – 10.85

- 111 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

The exercise prices and the remainder of the contractual period for Phantom 0 year

Warrants outstanding at the end of period

XIII. Share-based Payments - (cont’d)

1. (cont’d)

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) 186206

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) -

Expenses (income) arising from cash-settled share-based payments in current

period (in thousands RMB) (9490)

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 28258248 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 90130 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.- 112 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XIII. Share-based Payments - (cont’d)

2. (cont’d)

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 7404561

Total number of Phantom warrants granted in current period -

Total number of Phantom warrants exercised in current period -

Total number of Phantom warrants forfeited in current period (3715017)

Total number of Phantom warrants at the end of the period 3689544

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 0.75 year

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) 68836

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) 110

Expenses (income) arising from cash-settled share-based payments in

current period related to the alternative plan (in thousands RMB) (4502)

- 113 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

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.- 114 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XIV. Other significant items - (cont'd)

1. Segment reporting - (cont’d)

Information regarding the results and assets and liabilities of each reportable segment is included below:

Crop Protection Intermediates and ingredients Elimination among segments Total

Year ended Year ended Year ended Year ended

December 31 December 31 December 31 December 31

20252024202520242025202420252024

Operating income from external

customers 26652467 26802036 2292119 2686010 - - 28944586 29488046

Inter-segment operating income - - 1452 1336 (1452) (1336)

Interest in the profit or loss of

associates and joint ventures - - 9638 8201 - - 9638 8201

Segment's results 1146924 (363092) 164362 52370 - - 1311286 (310722)

Financial expenses 2232695 1769830

Gain (loss) from changes in fair

value 219486 (46074)

Investment income 2325 2324

loss before tax (699598) (2124302)

Income tax expenses 346121 778902

Net Loss (1045719) (2903204)

Crop Protection Intermediates and ingredients Unallocated assets and liabilities Total

December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31

20252024202520242025202420252024

Total assets 39011654 40394519 2092328 2371148 7359980 7294110 48463962 50059777

Total liabilities 7904219 6878372 240167 291201 22744150 23899110 30888536 31068683

- 115 -ADAMALtd.

(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

Year ended December 31

20252024

Europe Africa and Middle East 8124365 8310285

North America 6727577 6059617

Latin America 7177085 7375759

Asia Pacific 6915559 7742385

2894458629488046

Specified non-current assets

December 31 December 31

20252024

Europe Africa and Middle East 13319926 14249233

North America 1232186 1252352

Latin America 1905677 1730472

Asia Pacific 4606298 5044172

2106408722276229

? As of 2025 South Africa is included in the Europe Africa and Middle East region . The information for 2024 was

re- classified accordingly.

2. The dependency on major customers

No single customer's proportion of the total amount of sales is over 10%.- 116 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XIV. Other significant items - (cont'd)

3. Calculation of losses per share and Diluted earnings per share

Amount for the Amount for the

current period prior period

Net loss from continuing operations attributable to ordinary

shareholders (1045719) (2903204)

Amount for the Amount for the

Shares current period prior period

Number of ordinary shares outstanding at the beginning of the

year 2329811766 2329811766

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 2329811766 2329811766

Amount for Amount for

the current the prior

period period

Calculated based on net loss attributable to ordinary shareholders

Basic losses per share (0.45) (1.25)

Diluted losses per share N/A N/A

Calculated based on net loss from continuing operations attributable

to ordinary shareholders:

Basic losses per share (0.45) (1.25)

Diluted losses per share N/A N/A

Calculated based on net loss from discontinued operations

attributable to ordinary shareholders:

Basic losses per share N/A N/A

Diluted losses per share N/A N/A

- 117 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements

1. Cash at bank and on hand

December 31 December 31

20252024

Deposits in banks 58950 39173

Other cash and bank balances 6014 1858

6496441031

As at December 31 2025 restricted cash and bank balances was 6014 thousand RMB (as at December 31

2024: 1858 thousand RMB).

2. Accounts receivable

a. By category

December 31 2025

Provision for expected

Book value credit losses

Carrying

Amount Percentage (%) Amount Percentage (%) amount

Account receivables assessed

individually for impairment 13893 1 13893 100 -

Account receivables assessed

collectively for impairment 1637510 99 902 - 1636608

16514031001479511636608

December 31 2024

Provision for expected credit

Book value losses

Carrying

Amount Percentage (%) Amount Percentage (%) amount

Account receivables assessed

individually for impairment 13893 1 13893 100 -

Account receivables assessed

collectively for impairment 1182104 99 - - 1182104

11959971001389311182104

b. Aging analysis

December 31 2025

Within 1 year (inclusive) 1130403

Over 1 year but within 2 years 507107

Over 2 years but within 3 years -

Over 3 years but within 4 years -

Over 4 years but within 5 years -

Over 5 years 13893

1651403

- 118 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements - (cont'd)

2. Accounts receivable - (cont'd)

c. Addition written-back and written-off of provision for expected credit losses during the period

Year ended December 31 2025

Balance as of January 1 13893

Addition during the period net 902

Balance as of December 31 14795

d. Five largest accounts receivable at December 31 2025:

Proportion of Allowance of

Accounts expected

Name Closing balance receivable (%) credit losses

Party 1* 1561634 94 -

Party 2 25093 2 -

Party 3 20329 1 902

Party 4 14400 1 -

Party 5 3004 - -

162446098902

* Include intergroup balance with ADAMA Solutions.

3. Receivable financing

December 31 December 31

20252024

Bank acceptance draft 10490 34350

1049034350

As at December 31 2025 bank acceptance endorsed but not yet due amounts to 224677 thousand RMB.

4. Other Receivables

December 31 December 31

2024

Dividends receivable 2325 -

Other receivables 24109 24393

2643424393

- 119 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements - (cont'd)

4. Other Receivables - (cont'd)

(1) Other receivables

a. Other receivables by categories

December 31 December 31

20252024

Other 29485 29769

Provision for expected credit losses (5376) (5376)

2410924393

b. Other receivables by aging

December 31 2025

Within 1 year (inclusive) -

Over 1 year but within 2 years 12498

Over 2 years but within 3 years

Over 3 years but within 4 years 113

Over 4 years but within 5 years 91

Over 5 years 16783

29485

c. Additions recovery or reversal and written-off of provision for expected credit losses during the

period:

Year ended December 31 2025

Balance as of January 1 2025 5376

Addition during the period -

Balance as of December 31 2025 5376

d. Five largest other receivables at December 31 2025:

Proportion of other

Name Closing balance receivables (%) Credit loss provision

Party 1* 24109 82 -

Party 2 3125 11 3125

Party 3 548 2 548

Party 4 237 1 237

Party 5 221 1 221

28240974131

* Include intergroup balance with Anpon

- 120 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements - (cont'd)

5. Long-term equity investments

December 31 2025 December 31 2024

Impairment Impairment

Amount balance loss Book value Amount balance loss Book value

Invest in

subsidiaries 17511352 80636 17430716 17511352 80636 17430716

175113528063617430716175113528063617430716

Investments in subsidiaries

Provision of Balance of

Opening impairment Closing Impairment

Invested unit balance Increase Decrease loss balance loss

ADAMA Agricultural Solutions Ltd. 15890213 - - - 15890213 -

Adama Anpon (Jiangsu) Ltd. 450449 - - - 450449 -

ADAMA Hiufeng (Jiangsu) Co. Ltd. 789116 - - - 789116 (59024)

Hubei Sanonda Foreign Trade Co.Ltd. 11993 - - - 11993 -

Adama Huifeng (shanghai)

Agricultural Technology Co. Ltd 288945 - - - 288945 (21612)

17430716---17430716(80636)

6. Operating Income and operating costs

Year ended December 31 2025 Year ended December 31 2024

Operating Operating

Revenue costs Revenue costs

Main operations 1960398 1651258 1756578 1551341

Other operations 51135 19732 45215 15005

2011533167099018017931566346

- 121 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements - (cont'd)

7. Notes to items in the cash flow statements

(1) Other cash received relevant to operating activities

Year ended Year ended

December 31 2025 December 31 2024

Interest income 1727 6109

Government subsidies 6760 4657

Other 12064 6406

2055117172

(2) Other cash paid relevant to operating activities

Year ended Year ended

December 31 2025 December 31 2024

Professional services 108111 33553

Other 20995 22122

12910655675

(3) Other cash received relevant to investing activities

Year ended Year ended

December 31 2025 December 31 2024

Loans 70000 180000

Other 1599 4147

71599184147

(4) Other cash paid relevant to investing activities

Year ended Year ended

December 31 2025 December 31 2024

Loans 50000 -

50000-

(5) Other cash paid relevant to investing activities

Year ended Year ended

December 31 2025 December 31 2024

Deposit for issuing bills payables 16105 9884

161059884

- 122 -ADAMALtd.

(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

(6) Other cash paid relevant to financing activities:

Year ended Year ended

December 31 2025 December 31 2024

Deposit for issuing bills payable 20261 5282

Other 438 460

206995742

8. Supplementary information to cash flow statement

(1) Reconciliation of net profit to net cash flows generated from operating activities:

Year ended December 31

20252024

Net profit (loss) (69182) 249928

Add: Asset Impairment reversal (losses) 10258 160041

Credit impairment reversal (losses) 902 -

Depreciation of fixed assets and investment property 193048 235036

Depreciation of-right-of use assets 774 1136

Amortization of intangible assets 13229 12116

Gain (losses) on disposal of fixed assets intangible assets and other

long-term assets (3486) (481)

Losses (gains) from changes in fair value 130730 (326340)

Financial expenses 49809 12223

Investment income (34769) (34070)

Decrease in deferred income tax assets 5281 28601

Decrease (increase) in inventory 38069 (38120)

Increase in accounts receivable from operating activities (594557) (117885)

Increase in payables from operating activities 450081 62395

Net cash flows generated from operating activities 190187 244580

(2) Net increase in cash and cash equivalents

Year ended December 31

20252024

Closing balance of cash 58950 39173

Less: Opening balance of cash 39173 157186

Net increase in cash and cash equivalents 19777 (118013)

- 123 -ADAMALtd.

(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 11182127 78.47% 78.47%

The ultimate controlling shareholder is Sinochem Holdings .

(2) Information on the subsidiaries of the Company

For information about the subsidiaries of the Company refer to Note VII.1.

(3) Transactions with related parties

a. Transactions of goods and services

Year ended December 31

20252024

Summary of Purchase of goods/services Related Party Relationship

received:

Purchase of goods/services received Common control

under Sinochem

Holdings 54553 67599

Subsidiary 110609 67852

Summary of Sales of goods:

Sale of goods Common control under 750 737

Sinochem Holdings

Subsidiary 1145848 1010141

- 124 -ADAMALtd.

(Expressed in RMB '000)

Notes to the Financial Statements

XV. Notes to major items in the Company's financial statements - (cont'd)

9. Transactions and balances with related parties - (cont'd)

(3) Transactions with related parties - (cont'd)

b. Guarantees

The Company as the guarantor

Amount of Inception Maturity Guaranty

guaranteed date of date of completed

loan guaranty guaranty (Y/ N)

Subsidiary 72595 01.12.2021 28.11.2027 N

27000 17.11.2022 16.11.2027 N

50000 10.04.2024 09.04.2027 N

29000 25.03.2025 24.03.2028 N

66000 23.06.2022 22.06.2028 N

10000 26.04.2023 05.05.2028 N

4473 15.08.2025 16.02.2026 N

8774 25.07.2025 21.01.2026 N

16545 12.09.2025 11.03.2026 N

5840 12.09.2025 11.03.2026 N

11000 05.09.2025 04.03.2026 N

10632 24.12.2025 24.06.2026 N

5000 26.12.2025 24.06.2026 N

22623 26.12.2025 24.06.2026 N

- 125 -ADAMALtd.

(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 263000 21.04.2021 20.04.2028 Y

Parent company 67971 01.06.2021 31.05.2028 Y

During the year the Company paid a guarantee fee amounting to 343 thousand RMB (2024: 414)

to the parent company.c. Intercompany borrowings/lending

Related Borrowing/ Commencement Termination Balance at

party Lending amount date date year end Interest rate

Lending

Subsidiary 70000 2023.12 2025.12 - 2.4%

Subsidiary 50000 2025.12 2028.11 50000 2.4%

d. Receivables from and payables to related parties (including loans)

Receivable Items

December 31 December 31

20252024

Expected Expected

Related Party Book credit Book credit

Items Relationship Balance losses Balance losses

Trade receivables Subsidiary 1563401 - 1102274 -

Non-current

assets within one

year Subsidiary - - 70000 -

Other non-current

assets Subsidiary 50000 - - -

Other receivables Subsidiary 24109 - 24393 -

Prepayments Common control under

Sinochem Holding 83 - 617 -

- 126 -ADAMALtd.

(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) - (cont'd)

Payable Items

December 31 December 31

Items Related Party Relationship 2025 2024

Trade payables Subsidiary - 10

Trade payables Common control under Sinochem

Holdings 4665 4023

Other payables Subsidiary 587644 525071

Common control under Sinochem

Holdings 471 522

e. Other related party transactions

As at December 31 2025 the closing balance of bank deposit in SinoChem Finance Corporation was

41343 thousand RMB (31.12.24: 28470 thousand RMB) Interest income of bank deposit for the year

was 1569 thousand RMB (2024: 1768 thousand RMB).- 127 -Supplementary information

(Expressed in RMB '000)

1. Extraordinary Gain and Loss

Year ended

December 31 2025

Disposal of non-current assets 16716

Government grants recognized through profit or loss 16498

Changes in fair value of financial assets and liabilities held for trading 30714

Custodian fees earned from entrusted operation 4266

Recovery or reversal of expected credit losses which is assessed individually during

the years 76059

Post vesting fair value revaluation of cash-settled share based payment 13992

Other non-operating income or expenses other than the above 176288

Tax effect (44491)

290042

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 loss attributable to ordinary

shareholders of the Company (5.71%) (0.45) N/A

Net loss after deduction of extraordinary

gains/losses attributable to ordinary

shareholders of the Company (7.35%) (0.57) N/A