ADAMA Ltd.Feasibility Analysis Report on Derivatives Hedging

Transactions

I. Background of Derivatives Hedging

ADAMA Ltd. and its subsidiaries (hereinafter combined as “the Company”) conduct crop protection

business in dozens of countries. In many countries the business is settled in local currencies while the

relevant local subsidiaries are nominated in USD. In addition one of the Company’s major

subsidiaries issued corporate bonds denominated in Israeli Shekel and linked to Israeli Consumer

Price Index (CPI). Given the global nature of its operational activities and the composition of its

assets and liabilities the Company in the ordinary course of its business is expected to use

derivatives to hedge exposures related to foreign exchange rates and CPI.II. Overview of Derivatives Hedging

The derivatives transactions of the Company are for the purpose of hedging only and will match the

size and term of the accounting exposure and economic exposure of the Company. All the Company’s

hedging transactions are expected to be through banks in certain countries where the Company is

present. The hedging tools include (inter alia) Forwards Swaps Loans and Deposits Options Exotic

Options and Options Strategies (including sell and buys). The Company expects that the maximum

outstanding contract value of derivatives transactions on any single trading day in the next twelve

months since the approval by Shareholders’ Meeting (validity duration) should not exceed USD 5

billion. The transaction limits shall be valid and can be recycled within the validity duration.III. Necessity and Feasibility of Derivatives Hedging

As the Company’s business covers dozens of countries and is settled in local currencies in many

countries volatility of foreign exchange rates and CPI being affected by international political and

economic environments can have big impacts on the Company's business performance. The hedging

business is expected to effectively offset the risks caused by exchange rate and CPI fluctuations and

thus help to strengthen the Company’s financial stableness. Therefore it is necessary to conduct

derivative hedging transactions.The hedging transactions are based on the Company’s ordinary course of business and match the size

1and term of the accounting exposure and economic exposure of the Company. The Company has

formulated the Derivatives Hedging Management Policy as the internal control system. The Policy

specified decision-making authority and procedures operative organizations reporting mechanisms

and monitoring measures. The Company has professional teams for conducting the transactions and

monitoring risks. The Company has the funding and risk resistance capabilities aligned with hedging

transactions.IV. Risk Analysis for Derivatives Hedging Transactions

1. Market risks: The current domestic and international political and economic situation which has

been complicated and volatile with ongoing geopolitical conflicts escalating may cause drastic

fluctuations in exchange rates and consumer price index and result in significant increase in the

Company's hedging costs and consequently potential losses.

2. Credit risks of default by customers: the Company’s sales to customers worldwide usually

involve customer credit as is customary in each market. A portion of these credit lines is insured

while the remainder are exposed to risk particularly during economic slowdowns in the relevant

markets. Any overdue accounts receivable from customers or failure of money collection within the

forecasted payback period may affect the Company's cash flow and result in the actual cash flow

incurred not being able to fully match the term or amount of the foreign exchange derivatives

business that has been operated.

3. Liquidity risks: as the derivatives transactions are carried out with banks based on the Company

and its relevant subsidiaries’ collection and payment in foreign currency as well as assets and

liabilities in local and foreign currencies. Such transactions do not take up the available funds but

there is the risk of having to pay spreads to the banks due to losses on closing out and chopping down

positions for various reasons.

4. Risks of contract fulfillment: The counterparties of the Company's futures and derivatives

trading are banks with good credit and long-term business relationship so the occurrence of such risk

is relatively low.

5. Legal risks: Changes to relevant laws or violation of relevant laws by the counterparties may

result in improper execution of contracts and bring losses to the Company.V. Risk Control Measures

1. The Company has formulated the Derivatives Hedging Management Policy as the internal

control system for managing foreign exchange and index risk hedging which clearly stipulates the

2principles approval authority operating institutions and processes as well as risk control procedures

of the derivatives trading to ensure a comprehensive supervision over each link from pre-emptive

prevention in-process monitoring to post-processing.

2. The Company conducts derivatives trading with large domestic and overseas commercial banks

with compliant qualifications and good credibility strictly follows the laws and regulations in the

relevant fields in each country to avoid possible legal risks and fully takes into account settlement

liquidity and FX volatility related to the transactions.

3. The Company and its relevant subsidiaries follow up and evaluate their derivatives portfolio and

transactions in a timely manner through weekly monthly and quarterly meetings; any significant

change in the market or significant floating losses whenever it occurs will be timely reported to the

Company's management team and the Board of Directors as appropriate so as to activate a

contingency mechanism to respond and handle the situation appropriately.

4. Conducting transactions shall be based among other things on an external expert (or other

system) theoretical pricing and/or banks/brokers quotes as the case may be.

5. The financial department shall keep the records and documentation with respect to the process

and transactions.

6. The internal audit department of the Company is the supervisory institution for its derivatives

transactions and is responsible for monitoring and checking the compliance of both the Company and

its subsidiaries in the decision-making management and execution of relevant transactions.VI. Conclusion of the Feasibility Study of Derivatives Hedging Transactions

The Company has formulated the Derivatives Hedging Management Policy as the internal control

system for managing foreign exchange and index risk hedging. The hedging transactions are closely

related to the Company’s ordinary course of business and will match the size and term of the

accounting exposure and economic exposure of the Company. They are expected to enhance the

Company's financial soundness and reduce the adverse impact of foreign exchange rate and index

fluctuations on the Company's operating results. Therefore the expected derivatives hedging

transactions are necessary and feasible.ADAMA Ltd.December 22 2025

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