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安道麦B:2021年第一季度报告全文(英文版) 下载公告
公告日期:2021-04-29

ADAMA LTD.FIRST QUARTER REPORT 2021

ADAMA Ltd. (hereinafter referred to as “the Company”) is a global leader in crop protection,providing solutions to farmers across the world to combat weeds, insects and disease.ADAMA has one of the widest and most diverse portfolios of active ingredients in the world,state-of-the art R&D, manufacturing and formulation facilities, together with a culture thatempowers our people in markets around the world to listen to farmers and ideate from thefield. This uniquely positions ADAMA to offer a vast array of distinctive mixtures, formulationsand high-quality differentiated products, delivering solutions that meet local farmer andcustomer needs in over 100 countries globally.Please see important additional information and further details included in the Annex.

April 2021

Section I - Important NoticeThe Company’s Board of Directors, Board of Supervisors, directors, supervisors andsenior managers confirm that the content of the Report is true, accurate and completeand contains no false statements, misleading presentations or material omissions,and assume joint and several legal liability arising therefrom.Ignacio Dominguez, the person leading the Company (President and Chief ExecutiveOfficer) as well as its legal representative, and Aviram Lahav, the person leading theaccounting function (Chief Financial Officer & Deputy Chief Executive Officer), herebyassert and confirm the truthfulness, accuracy and completeness of the FinancialReport.All of the Company’s directors attended the board meeting for the review of thisReport.This Report and its abstract have been prepared in both Chinese and English. Shouldthere be any discrepancy between the two versions, the Chinese version shall prevail.

Section II - Financial Highlights & Shareholder Changes

I. Main accounting and financial resultsWhether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year due tochange in accounting policies or correction of accounting errors

□ Yes √ No

January - March 2021January - March 2020YoY +/- (%)
Operating revenues (RMB’000)7,187,1646,782,2435.97%
Net profit attributable to shareholders of the Company (RMB’000)148,784(16,707)990.55%
Net profit attributable to shareholders of the Company excluding non-recurring profit and loss (RMB’000)121,67816,813623.71%
Net cash flow from operating activities (RMB’000)(837,773)(384,708)117.77%
Basic EPS (RMB/share)0.064(0.007)1,012.30%
Diluted EPS (RMB/share)NANANA
Weighted average return on net assets0.69%-0.07%0.76%
End of Reporting PeriodEnd of last year+/- (%)
Total assets (RMB’000)48,431,37046,801,0343.48%
Net assets attributable to shareholders (RMB’000)21,728,69221,353,7521.76%
ItemJanuary-March 2021Note
Gains/losses on the disposal of non-current assets (including the write-off of asset impairment provisions accrued during the period)6,774-
Government grants recognized through profit or loss (excluding government grants closely related to business of the Company and given at a fixed quota or amount in accordance with government’s uniform standard)15,086-
Reversal of provision for receivables and contract assets, that are subject to specific provision6,079-
Other non-operating income and expenses other than the above4,375-
Other profit or loss that meets the definition of non-recurring profit or loss--
Less: Income tax effects5,208-
Total27,106-

II. Total number of shareholders and shareholdings of top 10 shareholders at the

period-end

1. Total number of ordinary shareholders and preference shareholders who had resumed their voting

right and shareholdings of top 10 shareholders at the period-end

Unit: share

Total number of ordinary shareholders at the end of the Reporting Period46,241 (the number of ordinary A share shareholders is 32,057; the number of B share shareholders is 14,184)Total number of preference shareholders who had resumed their voting right at the end of the Reporting Period (if any)0
Shareholdings of top 10 shareholders
Name of shareholderNature of shareholderShareholding percentageNumber of shares heldNumber of restricted shares heldPledged or frozen shares
StatusNumber
Syngenta Group Co., Ltd.State-owned legal person72.88%1,708,450,759------
Jingzhou Sanonda Holding Co., Ltd.State-owned legal person5.11%119,687,202------
China Cinda Asset Management Co., Ltd.State-owned legal person1.33%31,115,916------
Portfolio No.503 of National Social Security FundOthers0.98%23,000,052------
Huarong Ruitong Equity Investment Management Co., Ltd.State-owned legal person0.55%12,885,906------
Hong Kong Securities Clearing Company Ltd. (HKSCC)Overseas legal person0.41%9,527,106------
Bosera Funds Xincheng No.2 Collective Asset Management PlanOthers0.28%6,500,000------
Bosera Funds Xincheng No.3 Collective Asset Management PlanOthers0.26%6,000,000------
China Universal-Strategic Enhancement No.3 Collective Asset Management PlanOthers0.19%4,400,000------
State-owned Assets Administration Bureau of Qichun CountyState-owned legal person0.18%4,169,266------
Shareholdings of top 10 non-restricted shareholders
Name of shareholderNumber of non-restricted shares held at the period-endType of shares
TypeNumber
Syngenta Group Co., Ltd.1,708,450,759RMB ordinary share1,708,450,759
Jingzhou Sanonda Holding Co., Ltd.119,687,202RMB ordinary share119,687,202
China Cinda Asset Management Co., Ltd.31,115,916RMB ordinary share31,115,916
Portfolio No.503 of National Social Security Fund23,000,052RMB ordinary share23,000,052
Huarong Ruitong Equity Investment Management Co., Ltd.12,885,906RMB ordinary share12,885,906
Hong Kong Securities Clearing Company Ltd. (HKSCC)9,527,106RMB ordinary share9,527,106
Bosera Funds Xincheng No.2 Collective Asset Management Plan6,500,000RMB ordinary share6,500,000
Bosera Funds Xincheng No.3 Collective Asset Management Plan6,000,000RMB ordinary share6,000,000
China Universal-Strategic Enhancement No.3 Collective4,400,000RMB ordinary share4,400,000
Asset Management Plan
State-owned Assets Administration Bureau of Qichun County4,169,266RMB ordinary share4,169,266
Related or act-in-concert parties among the shareholders aboveJingzhou Sanonda Holdings Co., Ltd. and Syngenta Group are related parties, and are acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. Both Jingzhou Sanonda Holdings Co., Ltd. and Syngenta Group are controlled by ChemChina. It is unknown to the Company whether the other shareholders are related parties or acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies.
Top 10 ordinary shareholders conducting securities margin trading (if any)No such issue.

Section III - Significant EventsI. Changes in main accounting statement items and financial indicators in the Reporting

Period, as well as reasons for the changes

√ Applicable □ Not applicable

In the first quarter of 2021, commodity crop prices continued to increase as global demand remained strong, fueled bypandemic-related food security concerns, a recovery in biofuel demand and higher feed demand, especially from China.Weather-related agricultural supply challenges also contributed to the high crop prices, which are expected to remainelevated throughout the rest of the year. The positive crop price environment, along with associated expectations of higherplanted areas, are combining to drive global demand for crop protection products.During the quarter, prices of intermediates and active ingredients sourced from China increased compared to the sameperiod last year, due in part to the recovery of oil prices alongside higher raw material costs and stronger demand.As global economies start to reopen following pandemic-related shutdowns over the past year, global trade markets areexperiencing scarcity of transportation resources leading to higher freight costs, a situation that has been exacerbated bythe recent Suez Canal incident and other port congestions all over the globe.The Company actively manages its procurement and supply chain activities in order to mitigate these higher procurementand logistics costs, and endeavors to adjust its pricing wherever possible to compensate.

* Total operating expenses includes Sales and Marketing, General and Administrative and Research and DevelopmentexpensesNote: Since the functional currency of main overseas subsidiaries is the USD, and the Company’s management review ofthe Company’s performance is based on the USD results, following explanations and analysis are based on USD-denominated numbers.Analysis of Financial Highlights

(1) Revenues

Revenues grew 14% (+6% in RMB terms) to hit a first quarter record-high of $1,109 million, driven by a robust 15%increase in volumes. This strong volume-driven growth was somewhat mitigated by a softer pricing environment ina number of key regions.ADAMA delivered particularly strong performances in the Asia Pacific and India, Middle-East & Africa regions,benefiting from strong demand and favorable seasonal conditions. The Company also grew strongly in NorthAmerica, driven by its Consumer and Professional business, as well as in Latin America. Sales in Europe weresomewhat lower due to a slow start to the season in the northern and eastern parts of the region.

Q1 2021 (000’RMB)Q1 2020 (000’RMB)+/-%Q1 2021 (000’USD)Q1 2020 (000’USD)+/-%
Operating income (Revenues)7,187,1646,782,2435.97%1,108,904972,53114.02%
Cost of goods sold5,127,3904,757,4137.78%791,102682,18115.97%
*Total Operating Expenses1,618,5051,674,108-3.32%249,713240,0554.02%
Financial Expenses184,932411,620-55.07%28,55159,022-51.63%
Gain (loss) from Changes in Fair Value-59,738323,813-118.45%-9,21746,433-119.85%
Investment Income (loss)8,627-129,323-106.67%1,331-18,544-107.18%
Total Net Financial Expenses and Investment Income236,043217,1308.71%36,43731,13317.04%
Total profits186,899136,63236.79%28,82519,60147.06%
% of Sales2.60%2.02%2.60%2.02%
Income tax expenses36,055153,339-76.49%5,56221,988-74.70%
Net income attributable to shareholders of the Company148,784-16,707-990.55%22,945-2,387-1,061.25%
% of Sales2.07%-0.25%2.07%-0.25%
EBITDA892,232927,888-3.84%137,669133,0583.47%
% of Sales12.41%13.68%12.41%13.68%

Regional Sales Performance

Europe: Sales were lower by 4.1% in the first quarter, in CER terms, compared with the corresponding period last year.Growth in the southern part of the region, where favorable market conditions drove good demand, was outweighed by aslow start to the season in the northern and eastern parts of the region, especially when compared to Q1 2020 which thensaw strong orders from distribution in anticipation of the COVID-related shutdowns that soon followed.In US dollar terms, sales in Europe were lower by 3.5% in the quarter, compared to the corresponding period last year.North America: Sales grew by 11.8% in the quarter, in CER terms, compared with the corresponding period last year.Growth in the region was driven by a strong performance from the Company’s Consumer and Professional business,benefiting from the reopening of the economy after COVID-19 related restrictions in 2020. This more than offset asomewhat softer performance in the US crop protection business.In US dollar terms, sales in North America grew by 12.4% in the quarter, compared to the corresponding period last year,reflecting a moderate strengthening of the Canadian Dollar in the quarter.Latin America: Sales grew by a robust 22.1% in the quarter, in CER terms, compared to the corresponding period lastyear.The Company continues its growth trajectory in Latin America, driven by solid volume growth and good performance fromrecent product launches in the region.In US dollar terms, sales in Latin America grew by 11.3% in the quarter, compared to the corresponding period last year,as the robust business growth was partially offset by weaker currencies in the region, in particular the Brazilian Real.Asia Pacific: Sales grew by 39.3% in the quarter, in CER terms, compared to the corresponding period last year.The strong growth in the Asia-Pacific region was seen both in China and beyond. In China, ADAMA saw significant growthin the quarter both from its branded, formulated portfolio, which was driven by higher cereal demand due to an increase infield crop planted areas and an early start to the Q2 season, as well as from its sales of raw materials and intermediates.Sales in the country were further bolstered by the inclusion of the Company’s recent acquisition of Jiangsu Huifeng’sdomestic commercial crop protection business.In the rest of Asia-Pacific, the Company benefited from favorable seasonal conditions and delivered strong growth, despitea slower recovery from COVID-19 challenges in Asia.In US dollar terms, sales in Asia-Pacific grew by 52.7% in the quarter, compared to the corresponding period last year,reflecting mainly the strengthening of the Chinese Renminbi and the Australian dollar against the US dollar.India, Middle East and Africa: Sales grew by 23.0% in the quarter, in CER terms, compared to the corresponding periodlast year, driven by strong volume growth alongside price increases amid continued positive weather conditions.During the quarter, ADAMA launched a new pilot formulation R&D facility in India, complementing the Company’s leading

Q1 2021 $mQ1 2020 $mChange USD
Europe344357-3.5%
North America18916812.4%
Latin America17715911.3%
Asia Pacific24115852.7%
Of which China1246881.6%
India, Middle East & Africa15813120.4%
Total1,10997314.0%

formulation development capabilities in its main R&D hubs in Israel, China and India. The new facility, equipped with state-of-the-art technologies, will bridge the path from the R&D lab to commercial stage production, developing processes forthe scale-up of liquid and solid formulation.In US dollar terms, sales in the India, Middle East & Africa region grew by 20.4% in the quarter, compared to thecorresponding period last year, reflecting mainly the weaker level of the Turkish Lira, partially offset by a stronger IsraeliShekel.

(2) Cost of Goods Sold and Gross Profit

The Company achieved higher gross profit in the quarter compared to the corresponding period last year, driven by thestrong volume growth alongside positive seasonal changes in its product offering, more than offsetting the impacts of thegenerally softer pricing and higher cost of goods sold. The higher cost of goods sold in the quarter was largely driven byhigher procurement and logistics costs incurred as the Company continued to fulfill demand for its products.The Company recorded certain extraordinary charges within its reported cost of goods sold, totaling approximately $11million in the first quarter (Q1 2020: $9 million) largely related to its Relocation & Upgrade program. These charges mainlyreflect excess procurement costs incurred as the Company continued to fulfill demand for its products in order to protectits market position, through replacement sourcing at significantly higher costs from third-party suppliers.

(3) Operating Expenses

Operating expenses include Sales and Marketing, General and Administration and R&D.Operating expenses in the first quarter were $250 million (22.5% of sales), compared to $240 million (24.7% of sales)reported in the corresponding period last year.

The Company recorded certain non-operational, mostly non-cash, charges within its reported operating expenses, mainlyas follows:

(i) $8 million (RMB 51 million) in Q1 2021 (Q1 2020: $8 million (RMB 55 million)) in non-cash amortization

charges in respect of Transfer assets received and written-up related to the 2017 ChemChina-Syngentaacquisition. The proceeds from the Divestment of crop protection products in connection with the approvalby the EU Commission of the acquisition of Syngenta by ChemChina, net of taxes and transaction expenses,were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature andeconomic value. Since the products acquired from Syngenta are of the same nature, and with the same neteconomic value as those divested, the Divestment and Transfer transactions had no net impact on theunderlying economic performance of the Company. These additional amortization charges will continue until2032 but at a reducing rate, yet will still be at a meaningful level until 2028;(ii) $6 million (RMB 41 million) in Q1 2021 (Q1 2020: $10 million (RMB 70 million) in idleness charges largely

related to suspensions at the facilities being relocated as well as to the temporary suspension of the Jingzhousite in Q1 2020 (at the outbreak of COVID-19 in Hubei Province); and(iii) $4 million (RMB 24 million) in Q1 2021 (Q1 2020: $3 million (RMB 18 million)) in charges related mainly to

the non-cash amortization of intangible assets created as part of the Purchase Price Allocation (PPA) onacquisitions, with no impact on the ongoing performance of the companies acquired, as well as other M&A-related costs.

The higher aggregate amount of non-operational charges in Q1 2020 also included $11 million in non-cash amortizationcharges related to the legacy PPA of the 2011 acquisition of Adama Agricultural Solutions Ltd., which have now largelyfinished, and $9 million in respect of early retirement expenses.

Excluding the impact of the abovementioned non-operational charges, the higher operating expenses reflect primarily anincrease in sales and marketing teams in growing geographies to drive and support the strong sales growth, highertransportation and logistics costs driven by both an increase in freight costs and the increased volumes being moved, aswell as the inclusion of recent acquisitions in Greece, Paraguay and China. Despite the higher operating expenses inabsolute terms, the Company continued to improve its expense-to-sales ratio.

(4) Financial Expenses

“Financial Expenses” mainly reflect interest payments on corporate bonds and bank loans as well as foreign exchangegains/losses on the bonds and other monetary assets and liabilities before the Company carries out any hedging. Theimpact of Financial Expenses (before hedging) is RMB 185 million (USD 29 million) for the first quarter of 2021 comparedwith RMB 412 million (USD 59 million) for the corresponding period in 2020.Given the global nature of its operational activities and the composition of its assets and liabilities, the Company, in theordinary course of its business, uses foreign currency derivatives (forwards and options) to hedge the cash flow risksassociated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations. Net gains/lossesfrom hedging of those positions, are recorded in “Gains/Losses from Changes in Fair Value”, and are then transferredto “Investment Income” upon realization. The combined impact of Gains/Losses from Changes in Fair Value andInvestment Income related to derivatives transactions, is a net loss of RMB 53 million (USD 8 million) in the first quarterof 2021 compared with net gain of RMB 185 million (USD 27 million) in the corresponding period in 2020.The aggregate of Financial Expenses, Gains/Losses from Changes in Fair Value and Investment Income (hereinafteras “Total Net Financial Expenses and Investment Income”), which more comprehensively reflects the financialexpenses of the Company in supporting its main business and protecting its monetary assets/liabilities, amounts to RMB238 million (USD 37 million) in the first quarter of 2021 compared with RMB 227 million (USD 32 million) in thecorresponding period in 2020.The higher financial expenses were mainly due to an increase in financing costs on the NIS-denominated, CPI-linkedbonds due to a higher CPI in Israel.

(5) Tax Expenses

The first quarter is generally characterized by a low effective tax rate compared to the effective tax rate of the Companyover the full year. This is mainly due to the generation of profits by subsidiary companies within ADAMA whose tax ratesare lower relative to the Company’s aggregate effective tax rate, as well as to the method of calculation of tax assetsrelated to unrealized profits. However, in Q1 2020, the Company recorded higher tax expenses largely due to the impactof the significant weakening of currencies in that quarter against the US dollar, most notably that of the Brazilian Real,driving higher non-cash tax expenses due to differences between the functional (US dollar) and tax (local) currenciesregarding the value of non-monetary assets.

Changes in main assets and liabilities

Unit: RMB’000

Assets and liabilitiesMarch 31, 2021December 31, 2020% changeExplanation for any major change
Derivative financial assets*937,1401,560,788-39.96%Realization and revaluation of derivatives
Accounts receivable9,772,0738,766,86911.47%Seasonality increase
Derivative financial liabilities656,7891,463,614-55.13%Realization and revaluation of derivatives
Taxes payable562,928358,98856.81%Seasonality increase mainly due to VAT
Deferred tax liability386,547331,94216.45%Increase mainly due to tax basis revaluation of non-monetary assets in Brazil
Short term loans2,844,9481,205,498136.00%Increase mainly to support increase in working capital

will make corresponding amendments to the relevant provisions in the Articles of Association of the Company, and file theindustrial and commercial registration.

Whether the Company sold out shares which were bought back by means of centralized price bidding

□ Applicable √ Not applicable

III. None completion of Commitments that should have been completed in the reporting

period by the Company, actual controller, shareholders, related parties, acquirer, andother committed parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

IV. Investment on financial assets

(1) Securities investment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Investment in derivative financial instruments

√ Applicable □ Not applicable

Unit: RMB’000

The party that operates the investmentRelation with the CompanyRelated party transaction or not?TypeInitial investment amountStarting dateExpiring dateInvestment amount at beginning of the periodAmount purchased during the reporting periodAmount sold during the reporting periodImpairment accrued (if any)Investment amount at end of the periodPercentage of investment amount divided by net asset at end of the periodGain/loss during the reporting period
BanksNoNoOption1,994,23828/01/202122/07/20211,994,2386,713,258-4,465,149No4,242,34719.31%-42,533
BanksNoNoForward20,796,92427/10/202019/05/202120,796,92426,320,565-30,833,920No16,283,56974.14%-99,245
Total22,791,162----22,791,16233,033,823-35,299,06920,525,91693.45%-141,778
Source of fund for the investmentInternal
litigation-related situations (if applicable)N/A
Date of disclosure of Board approval (if any)December 30, 2017
Date of disclosure of Shareholders’ approval (if any)N/A
Risk and control analysis for the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.)The aforesaid refers to short term hedging currency transactions made with banks. The Group’s transactions are not traded in the market. The Transactions are between the applicable company in the Group and the applicable bank until the expiration date of the transaction, therefore no market risk is involved. Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA agreements. As to operational risk, the Group is working with relevant software, which is its back office for all transactions. No legal risk is involved. The actions taken in order to further reduce risks are: ? The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' financial statements committee of the board, which specifies, inter alia, the hedging policy, the persons that have the authorization to deal with hedging, the tools, ranges etc. The only subsidiary that has hedging positions in the Group in the period was Solutions and its subsidiaries. ? The relevant subsidiaries apply management designed procedures and controls, which among other things, monitor the working process and the controls of the hedging transactions and are quarterly reviewed and annually audited. ? The controllers of the relevant subsidiaries are involved in the process and are monitoring the hedging accounting treatment. Every 2-3 years the internal audit of the relevant subsidiaries’ department is auditing the entire procedure.
Market price or fair value change of investments during the reporting period. Specific methodology and assumptions should be disclosed in the analysis of fair value of the investmentsThe aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks. Segregation of duties as follows: For the fair value evaluation, the relevant subsidiary is usually using external experts. The relevant subsidiary hedges currencies only; the relevant transactions are simple (Options and forwards) for short terms. For fair value methodology see section XII of the annual report, note IX. Fair Value. The exchange rates are provided by the accounting department of the relevant subsidiary and all other parameters are provided by the experts.
Explanation for any significant changes in accounting policies and principles, compared with last reporting periodN/A
Independent Directors’ opinion on the investment in derivative financial instruments and related risk controlsThe derivative investments carried by the Company are for hedging and narrowing down the risk of market fluctuations. The investments respond to the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against market risk. The derivative investments do not harm the interests of the Company and its shareholders.

V. Progress on the designated projects used the raised funds

√ Applicable □ Not applicable

After receiving the approval of China Securities Regulatory Commission for the issuance of shares to China NationalAgrochemical Co., Ltd. acquire assets and raise supporting funds (CSRC Permits [2017] No.1096), the Companyissued 104,697,982 ordinary A shares in December 2017, at the price of RMB14.90 per share, raising a total amountof RMB 1,559,999,931.80. After deducting the underwriting fees of RMB 28,079,998.78, the net amount actuallyreceived was RMB 1,531,919,933.02. The net amount was received on 27 December 2017 and was verified byDeloitte Touche Tohmatsu Certified Public Accountant LLP which issued a capital verification report (De Shi Bao(Yan) Zi (17) No.00540).As at 31 March 2021, the Company has utilized a cumulative amount of RMB 1,047,929,415.06 of the raised funds,including RMB 993,372,647.40 used in previous years, and RMB 54,556,767.66 during this reporting period whichwere used for the remainder purchase price of the 51% Equity Stake in Shanghai Dibai Plant Protection Co., Ltdand the advanced payment of the partial purchase price of the 51% Equity Stake in ADAMA Huifeng (Jiangsu) Ltd.(the former name Jiangsu Kelinong Agrochemical Co., Ltd.). The balance that has not yet been used was RMB566,302,702.64, including RMB 51,141,555.30 of net interest income (after deduction of bank charges).For details, please refer to the Announcement on the Use of the Raised Funds for the Acquisition of the 51% EquityStake in Jiangsu Kelinong Agrochemical Co., Ltd. as well as that of in Shanghai Dibai Plant Protection Co., Ltd.(announcement no. 2020-61), Announcement on the Termination of the Use of Raised Funds for Certain DesignatedProjects(announcement no. 2020-26), Announcement on the Change of Certain Designated Projects(announcement no. 2019-17) separately published by the Company on October 29, 2020, April 28, 2020, and March21, 2019.

VI. Performance forecast for January-June 2021

Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end of the next reporting period, as well as the reasons thereto:

□ Applicable √ Not applicable

VII. Significant contract in the routine business

□ Applicable √ Not applicable

VIII. Wealth management entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

IX. Illegal provision of guarantees for external parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.X. Inadequate use of Company’s capital by the controlling shareholder or by its related

parties for non-operating purposes

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XI. Information regarding communication with investors

√ Applicable □ Not applicable

DatePlaceReception modeType of visitorName of the visitorAboutIndex
March 30, 2021Not applicablePhone callOthers (Sell-side analysts)CICC, Industrial Securities, TF Securities, Haitong Securities, Dongxing Securities, BOC International, Nanjing Securities, HSBC Qianhai Securities, Guolian Securities, SWHY Securities, CITIC Securities, Everbright Securities, North East Securities and Citi, etc.Introduction on 2020 Q4 and FY performance. Corresponding presentation was published on the website of the Company.Record of the Communications between the Company and the Investors (No. 2021-01) was published by the Company on April 1, 2021 at www.cninfo.com.cn.
March 31, 2021Not applicableWebcastingInstitutional and individual investorsNot applicableIntroduction on the 2020 Q4 and FY performance. Corresponding presentation was published on the website of the Company.Record of the Communications between the Company and the Investors (No. 2021-02) was published by the Company on April 2, 2021 at www.cninfo.com.cn.

Section IV Financial Statements

I. Financial statements

1. Consolidated balance sheet

Prepared by ADAMA Ltd.

31 March 2021

Unit: RMB’000

ItemMarch 31, 2021December 31, 2020ItemMarch 31, 2021December 31, 2020
Current assets:Current liabilities:
Cash at bank and on hand3,914,9453,863,886Short-term loans2,844,9481,205,498
Financial assets held for trading80,8201,253Derivative financial liabilities656,7891,463,614
Derivative financial assets937,1401,560,788Bills payable186,718369,791
Bills receivable77,101102,082Accounts payable4,944,4504,557,006
Accounts receivable9,772,0738,766,869Contract liabilities1,146,6781,092,253
Receivables financing99,269109,483Employee benefits payable1,166,8181,208,834
Prepayments423,597406,008Taxes payable562,928358,988
Other receivables1,493,2391,310,029Other payables1,178,3481,075,721
Inventories10,930,70710,338,273Non-current liabilities due within one year1,218,0611,272,581
Other current assets853,516769,641Other current liabilities283,835315,597
Total current assets28,582,40727,228,312Total current liabilities14,189,57312,919,883
Non-current assets:Non-current liabilities:
Long-term receivables93,01095,329Long-term loans2,415,8002,387,628
Long-term equity investments13,35314,081Debentures payable7,851,2718,078,113
Other equity investments152,672152,200Lease liabilities411,974379,190
Investment properties4,2464,364Long-term accounts payable104,03127,327
Fixed assets6,551,4496,576,116Long-term employee benefits payables656,931645,755
Construction in progress1,563,9641,405,328Provisions160,664163,251
Right-of-use assets528,171483,618Deferred tax liabilities386,547331,942
Intangible assets5,182,7715,226,455Other non-current liabilities443,664434,030
Goodwill4,606,8654,584,226Total non-current liabilities12,430,88212,447,236
Deferred tax assets873,515773,673Total liabilities26,620,45525,367,119
Other non-current assets278,947257,332Shareholders’ equity:
Total non-current assets19,848,96319,572,722Share capital2,344,1212,344,121
Total assets48,431,37046,801,034Capital reserves13,023,21913,023,219
Less: Treasury shares60,35760,357
Other comprehensive income152,749(72,055)
Special reserves17,33715,960
Surplus reserves240,162240,162
Retained earnings6,011,4615,862,702
Total equity attributed to the shareholders of the company21,728,69221,353,752
Non-controlling interests82,22380,163
Total equity21,810,91521,433,915
Total liabilities and equity48,431,37046,801,034
Ignacio Dominguez Legal representativeAviram Lahav Chief of the accounting workAviram Lahav Chief of the accounting organ

2. Balance sheet of the Company

Unit: RMB’000

ItemMarch 31, 2021December 31, 2020ItemMarch 31, 2021December 31, 2020
Current assets:Current liabilities:
Cash at bank and on hand1,027,0911,034,812Short-term loans80,000100,000
Accounts receivable235,016387,117Bills payable-19,600
Receivables financing29,78225,060Accounts payable191,627324,047
Prepayments18,2375,973Contract liabilities5,63117,480
Other receivables27,00627,138Employee benefits payable54,37899,808
Inventories103,360141,235Taxes payable3,0573,143
Other current assets32,50542,243Other payables200,366240,939
Total current assets1,472,9971,663,578Non-current liabilities due within one year39,30239,302
Non-current assets:Total current liabilities574,361844,319
Long-term equity investments16,663,21216,663,212Non-current liabilities:
Other equity investments85,49585,495Long-term loans1,083,430941,430
Investment properties4,2464,364Long-term employee benefits payables88,60489,658
Fixed assets757,379784,218Provisions42,85044,743
Construction in progress1,030,036992,863Other non-current liabilities143,770143,770
Right-of-use assets2337Total non-current liabilities1,358,6541,219,601
Intangible assets258,330220,963Total liabilities1,933,0152,063,920
Deferred tax assets66,26466,036Shareholders’ equity:
Other non-current assets262,627238,750Share capital2,344,1212,344,121
Total non-current assets19,127,61219,055,938Capital reserves15,569,92915,569,929
Total assets20,600,60920,719,516Less: Treasury shares60,35760,357
Other comprehensive income47,39047,390
Special reserves18,02916,651
Surplus reserves240,162240,162
Retained earnings508,320497,700
Total shareholders’ equity18,667,59418,655,596
Total liabilities and shareholders’ equity20,600,60920,719,516

3. Consolidated income statement

Unit: RMB’000

ItemJanuary-March, 2021January-March, 2020
1. Total operating Income7,187,1646,782,243
Less: Cost of sales5,127,3904,757,413
Taxes and surcharges34,50118,943
Selling and Distribution expenses1,241,3101,256,871
General and Administrative expenses266,713325,229
Research and Development expenses110,48292,008
Financial expenses184,932411,620
Including: Interest expense169,365165,243
Interest income12,77510,530
Add: Investment income, net8,627(129,323)
Including: Income from investment in associates and joint ventures2,0489,128
Gain (loss) from changes in fair value(59,738)323,813
Credit impairment reversal (losses)4,28813,886
Asset Impairment reversal (losses)(9,449)(1,923)
Gain (loss) from disposal of assets6,7737,692
2. Operating profit172,337134,304
Add: Non-operating income20,06517,390
Less: Non-operating expense5,50315,062
3. Total profit186,899136,632
Less: income tax expense36,055153,339
4. Net profit150,844(16,707)
4.1 Classified by nature of operations
4.1.1 Continuing operations150,844(16,707)
4.2 Classified by ownership
4.2.1 Shareholders of the Company148,784(16,707)
4.2.2 Non-controlling interests2,060-
5. Other comprehensive income net of tax
Other comprehensive income net of tax attributable to shareholders of the Company224,804144,207
5.1 Items that will not be reclassified into profit/loss(8,411)34,218
5.1.1 Re-measurement of defined benefit plan liability(8,411)34,218
5.2 Items that were or will be reclassified to profit or loss233,215109,989
5.2.1 Effective portion of gains or loss of cash flow hedge198,66545,885
5.2.2 Translation differences of foreign financial statements34,55064,104
Other comprehensive income net of tax attributable to Non-controlling interests--
6. Total comprehensive income for the period375,648127,500
Total comprehensive income attributable to shareholders of the Company373,588127,500
Total comprehensive income attributable to Non-controlling interests2,060-
7. Earnings per share
7.1 Basic earnings per share (RMB/ share)0.064(0.007)
7.2 Diluted earnings per share (RMB/ share)N/AN/A
Ignacio Dominguez Legal representativeAviram Lahav Chief of the accounting workAviram Lahav Chief of the accounting organ

4. Income statement of the Company

Unit: RMB’000

ItemJanuary-March, 2021January-March, 2020
1. Operating income359,193170,951
Less: Cost of sales273,581149,890
Taxes and surcharges1,7411,695
Selling and Distribution expenses11,6412,938
General and Administrative expenses66,15598,878
Research and Development expenses9,9521,961
Financial expenses (income)1,971(3,725)
Including: Interest expense4,0991,415
Interest income2,4664,033
Add: Credit impairment loss49(1,266)
Asset Impairment loss(143)(1,587)
Gain from disposal of assets7,411-
2. Operating profit1,469(83,539)
Add: Non-operating income9,4124,100
Less: Non-operating expense489363
3. Total profit10,392(79,802)
Less: Income tax expense(228)(1,404)
4. Net profit10,620(78,398)
4.1 Continuing operations10,620(78,398)
5. Other comprehensive income net of tax--
6. Total comprehensive income for the period10,620(78,398)

5. Consolidated cash flow statement

Unit: RMB’000

ItemJanuary-March, 2021January-March, 2020
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services5,246,6055,144,846
Refund of taxes and surcharges40,84326,579
Cash received relating to other operating activities297,970167,605
Sub-total of cash inflows from operating activities5,585,4185,339,030
Cash paid for goods and services4,681,3824,028,009
Cash paid to and on behalf of employees887,515905,294
Payments of taxes and surcharges75,17275,043
Cash paid relating to other operating activities779,122715,392
Sub-total of cash outflows from operating activities6,423,1915,723,738
Net cash flows from operating activities(837,773)(384,708)
2. Cash flows from investing activities:
Cash received from disposal of investments8562,218
Net cash received from disposal of fixed assets, intangible assets and other long-term assets9,1499,429
Cash received for other investing activities6,754-
Sub-total of cash inflows from investing activities16,75911,647
Cash paid to acquire fixed assets, intangible assets and other long-term assets588,183357,353
Net cash paid to acquire subsidiaries or other business units54,557-
Cash paid for other investing activities78,50227,393
Sub-total of cash outflows from investing activities721,242384,746
Net cash flows from investing activities(704,483)(373,099)
3. Cash flows from financing activities:
Cash received from borrowings1,861,6231,194,240
Cash received relating to other financing activities26,334-
Sub-total of cash inflows from financing activities1,887,9571,194,240
Cash repayment of borrowings244,391428,544
Cash payment for dividends, profit distributions or interest62,84746,210
Including: dividends paid to non-controlling interest--
Cash paid relating to other financing activities-90,259
Sub-total of cash outflows from financing activities307,238565,013
Net cash flows from financing activities1,580,719629,227
4. Effect of foreign exchange rate changes on cash and cash equivalents18,91546,592
5. Net increase (decrease) in cash and cash equivalents57,378(81,988)
Add: Cash and cash equivalents at the beginning of the period3,835,0714,319,907
6. Cash and cash equivalents at the end of the period3,892,4494,237,919

6. Cash flow statement of the Company

Unit: RMB’000

ItemJanuary-March, 2021January-March, 2020
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services427,465309,170
Refund of taxes and surcharges15,21317,306
Cash received relating to other operating activities12,3478,199
Sub-total of cash inflows from operating activities455,025334,675
Cash paid for goods and services222,307169,917
Cash paid to and on behalf of employees78,41959,625
Payments of taxes and surcharges4,2742,723
Cash paid relating to other operating activities42,69543,067
Sub-total of cash outflows from operating activities347,695275,332
Net cash flows from operating activities107,33059,343
2. Cash flows from investing activities:
Net cash received from disposal of fixed assets, intangible assets and other long-term assets8,021-
Sub-total of cash inflows from investing activities8,021-
Cash paid to acquire fixed assets, intangible assets and other long-term assets180,14332,861
Cash paid for investment54,557-
Sub-total of cash outflows from investing activities234,70032,861
Net cash flows from investing activities(226,679)(32,861)
3. Cash flows from financing activities:
Cash received from borrowings142,000114,500
Cash received relating to other financing activities5,8802,151
Sub-total of cash inflows from financing activities147,880116,651
Cash repayment of borrowings20,000100,000
Cash payment for dividends, profit distributions or interest10,1783,381
Sub-total of cash outflows from financing activities30,178103,381
Net cash flows from financing activities117,70213,270
4. Effect of foreign exchange rate changes on cash and cash equivalents(194)3,596
5. Net increase (decrease) in cash and cash equivalents(1,841)43,348
Add: cash and cash equivalents at the beginning of the period1,022,7581,395,994
6. Cash and cash equivalents at the end of the period1,020,9171,439,342

II. Adjustments of the financial statements

1. Opening balance adjustments due to initial adoption of new accounting standards for leases in 2021

□ Applicable √ Not applicable

2. Retrospective adjustments due to initial adoption of new accounting standards for leases in 2021

□ Applicable √ Not applicable

III. Auditor’s report

Is this Report audited?

□ Yes √ No

This Report is unaudited.

ADAMA Ltd.

April 28, 2021


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