ADAMA Ltd.

ENGLISH TRANSLATION OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026

ADAMA Ltd.

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026

CONTENTS PAGES

THE CONSOLIDATED AND COMPANY'S BALANCE SHEETS 1 - 3

THE CONSOLIDATED AND COMPANY'S INCOME STATEMENTS 4 - 5

THE CONSOLIDATED AND COMPANY'S CASH FLOW STATEMENTS 6 - 7

THE CONSOLIDATED AND COMPANY'S STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 8 - 10

NOTES TO THE FINANCIAL STATEMENTS 11 – 116

Consolidated Balance Sheet

June 30 December 31 Notes 2026 2025

Current assets

Cash at bank and on hand V.1 2,906,052 3,450,300 Financial assets held for trading V.2 2,711 1,223 Derivative financial assets V.3 228,492 449,379 Bills receivable V.4 256,325 358,489 Accounts receivable V.5 7,781,302 7,124,736 Receivables financing V.6 78,314 30,767 Prepayments V.7 309,064 368,012 Other receivables V.8 776,266 1,076,164 Inventories V.9 11,280,787 11,607,842 Other current assets V.10 965,692 1,094,273 Total current assets 24,585,005 25,561,185

Non-current assets

Long-term receivables V.11 203,183 118,203 Long-term equity investments V.12 42,820 39,312 Other equity investments V.13 127,475 129,796 Investment properties 18,053 18,869 Fixed assets V.14 9,635,349 10,073,551 Construction in progress V.15 713,670 897,175 Right-of-use assets V.16 562,738 661,443 Intangible assets V.17 3,981,086 4,302,343 Goodwill V.18 4,814,486 4,964,450 Deferred tax assets V.19 1,526,168 1,294,176 Other non-current assets V.20 439,056 403,459 Total non-current assets 22,064,084 22,902,777

Total assets 46,649,089 48,463,962

Consolidated Balance Sheet (continued)

June 30 December 31 Notes 2026 2025

Current liabilities

Short-term loans V.21 5,763,384 6,673,792 Derivative financial liabilities V.22 249,837 189,581 Bills payable V.23 605,314 622,660 Accounts payable V.24 5,048,131 5,461,749 Contract liabilities V.25 1,515,640 1,789,490 Employee benefits payable V.26 734,607 936,724 Taxes payable V.27 571,720 539,168 Other payables V.28 1,523,019 1,418,093 Non-current liabilities due within one year V.29 3,794,710 3,825,203 Other current liabilities V.30 898,096 929,259 Total current liabilities 20,704,458 22,385,719

Non-current liabilities

Long-term loans V.31 1,152,479 1,507,514 Debentures payable V.32 5,138,114 4,894,076 Lease liabilities V.33 652,730 751,226 Long-term payables 153,307 164,735 Long-term employee benefits payable V.34 559,208 536,895 Provisions V.35 421,488 424,347 Deferred tax liabilities V.19 231,286 224,024 Other non-current liabilities V.36 - Total non-current liabilities 8,308,612 8,502,817

Total liabilities 29,013,070 30,888,536

Shareholders' equity Share capital V.37 2,329,812 2,329,812 Capital reserve V.38 12,867,123 12,867,123 Other comprehensive income V.39 1,218,425 1,570,748 Special reserves 8,705 6,156 Surplus reserve V.40 298,610 298,610 Retained earnings V.41 913,344 502,977 Total equity attributed to the shareholders of the company

17,636,019 17,575,426

Non-controlling interests - -

Total Equity 17,636,019 17,575,426

Total liabilities and equity 46,649,089 48,463,962

Gael Hili Legal representative

Efrat Nagar Chief Financial Officer

These financial statements were approved by the Board of Directors of the Company on August 17, 2026. The notes form part of these financial statements.

Company's Balance Sheet

June 30 December 31 Notes 2026 2025

Current assets

Cash at bank and on hand XV.1 152,578 64,964 Bills receivable 74,268 112,369 Accounts receivable XV.2 2,005,930 1,636,608 Receivables financing XV.3 26,915 10,490 Prepayments 24,350 92,227 Other receivables XV.4 23,722 26,434 Inventories 169,629 210,072 Other current assets 53,046 14,923 Total current assets 2,530,438 2,168,087

Non-current assets

Long-term equity investments XV.5 17,430,716 17,430,716 Other equity investments 54,299 54,299 Investment properties 1,248 1,522 Fixed assets 1,181,097 1,252,804 Construction in progress 25,474 10,184 Right-of-use assets 790 1,354 Intangible assets 221,238 227,391 Deferred tax assets 34,870 46,359 Other non-current assets 242,671 230,156 Total non-current assets 19,192,403 19,254,785

Total assets 21,722,841 21,422,872 Current liabilities

Short-term loans 626,532 418,692 Bills payables 213,636 155,220 Accounts payables 258,330 280,455 Contract liabilities 10,458 21,420 Employee benefits payable 5,678 9,800 Taxes payable 2,677 3,171 Other payables 770,039 778,254 Non-current liabilities due within one year 19,631 13,930 Other current liabilities 116,585 116,585 Total current liabilities 2,023,566 1,797,527

Non-current liabilities

Long-term loans 631,000 642,000 Lease liabilities 162 443 Long-term employee benefits payable 61,320 63,175 Provisions 24,615 24,871 Total non-current liabilities 717,097 730,489

Total liabilities 2,740,663 2,528,016 Shareholders’ equity

Share capital V.37 2,329,812 2,329,812 Capital reserve 15,523,881 15,523,881 Other comprehensive income 24,916 24,916 Special reserves 9,396 6,847 Surplus reserve V.40 298,610 298,610 Retained earnings 795,563 710,790 Total shareholders’ equity 18,982,178 18,894,856 Total liabilities and shareholders’ equity 21,722,841 21,422,872

Consolidated Income Statement

Six months ended June 30 Notes 2026 2025

• I. Operating income V.42 14,476,540 15,024,200 Less: Cost of sales V.42 10,523,330 11,030,173

Taxes and surcharges V.43 46,920 57,128 Selling and Distribution expenses V.44 2,038,063 1,975,668 General and administrative expenses V.45 602,039 734,867 Research and Development expenses V.46 211,350 216,793 Financial expenses V.47 1,023,706 1,024,340

Including: Interest expense 462,779 527,096 Interest income 76,612 101,281 Add: Investment income, net V.48 6,593 5,261

Including: Income from investment

in associates and joint ventures 6,593 5,261 Gain (loss) from changes in fair value V.49 213,451 (6,493) Credit impairment losses V.50 (28,205) (93,679) Asset impairment losses V.51 (152,029) (27,617) Gain from disposal of assets V.52 306,349 5,054

• II. Operating income (loss) 377,291 (132,243)

Add: Non-operating income 94,399 19,219 Less: Non-operating expenses 79,305 12,555

• III. Total income (loss) 392,385 (125,579)

Less: Income tax expenses (income) V.53 (40,182) (45,227) IV. Net income (loss) 432,567 (80,352)

• (1). Classified by nature of operations

• (1.1). Continuing operations 432,567 (80,352)

(2). Classified by ownership

• (2.1). Shareholders of the Company 432,567 (80,352) (2.2). Non-controlling interests - -

• V. Other comprehensive income (loss), net of tax V. 39 (352,323) 71,116 Other comprehensive income (loss) (net of tax)

attributable to shareholders of the Company (352,323) 71,116

• (1) Items that will not be reclassified to profit or loss: (2,167) 979

• (1.1) Re-measurement of defined benefit plan liability (2,167) 979
• (1.2) Fair Value changes in other equity investment - -

• (2) Items that were or will be reclassified to profit or loss (350,156) 70,137

• (2.1) Effective portion of gains or loss of cash flow hedge 45,686 (48,355)
• (2.2) Translation differences of foreign financial statements (395,842) 118,492

• VI. Total comprehensive income (loss) for the period attributable to Shareholders of the Company

80,244 (9,236) Total comprehensive (loss) for the period

attributable to shareholders of the Company

80,244 (9,236) Total comprehensive income for the period

attributable to Non-controlling interests

• -

• VII. Earnings per share XIV.3

• (1) Basic earnings (loss) per share (Yuan/share) 0.19 (0.03)
• (2) Diluted earnings per share (Yuan/share) N/A N/A

Company's Income Statement

Six months ended June 30 Notes 2026 2025

• I. Operating income XV.6 1,179,597 1,094,572 Less: Operating costs XV.6 963,743 879,975

Taxes and surcharges 4,595 7,663 Selling and Distribution expenses 5,009 2,185 General and administrative expenses 60,247 105,840 Research and Development expenses 10,956 664 Financial expenses 58,952 13,170

Including: Interest expense 13,058 14,052 Interest income 1,939 1,019

Add: Investment income, net 20,301 32,445 Gain from changes in fair value (“-” means loss) - 30,714 Credit impairment losses (90) (1,084) Asset Impairment losses (2,099) (3,362) Gain from disposal of assets - 3,607

• II. Operating Profit 94,207 147,395

Add: Non-operating income 2,083 4,225 Less: Non-operating expenses 28 20

• III. Total profit 96,262 151,600 Less: Income tax expense 11,489 21,449

• IV. Net profit 84,773 130,151

• V. Other comprehensive income, net of tax - -

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

• (1.1) Re-measurement of defined benefit plan liability - -
• (1.2) FV changes in other equity investment - -

• VI. Total comprehensive income for the period 84,773 130,151

Consolidated Cash Flow Statement

Six months ended June 30 Notes 2026 2025

• I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 13,018,653 14,968,968 Refund of taxes and surcharges 69,659 90,510 Cash received relating to other operating activities V.56(1) 234,064 75,142 Sub-total of cash inflows from operating activities 13,322,376 15,134,620

Cash paid for goods and services 8,920,011 9,451,146 Cash paid to and on behalf of employees 2,212,852 1,999,080 Payments of taxes and surcharges 270,755 289,600 Cash paid relating to other operating activities V.56(2) 1,248,849 1,656,216 Sub-total of cash outflows from operating activities 12,652,467 13,396,042

Net cash flows provided by operating activities V.57(1)a 669,909 1,738,578

• II. Cash flows from investing activities: Cash received from disposal of investments 150,917 41,370 Cash received from returns of investments 2,325 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 464,112 17,493 Sub-total of cash inflows from investing activities 617,354 58,863

Cash paid to acquire fixed assets, intangible assets and other long-term assets 479,402 589,861 Net cash paid to acquire subsidiaries or other business units - 56,272 Cash paid relating to other investing activities V.56(3) 631 47,825 Sub-total of cash outflows from investing activities 480,033 693,958

Net cash flows provided by (used in) investing activities 137,321 (635,095)

• III. Cash flows from financing activities: Cash received from borrowings 959,512 1,625,222 Cash received from other financing activities V.56(4) 778,828 1,082,504 Sub-total of cash inflows from financing activities 1,738,340 2,707,726

Cash repayments of borrowings 2,311,558 3,107,377 Cash payment for dividends, profit distributions and interest 475,346 527,153

Including: Dividends paid to non-controlling interest 22,200 74,170 Cash paid relating to other financing activities V.56(5) 202,602 440,257 Sub-total of cash outflows from financing activities 2,989,506 4,074,787

Net cash flow used in financing activities (1,251,166) (1,367,061)

• IV. Effects of foreign exchange rate changes on cash and cash equivalent equivalent (90,358) (4,700)
• V. Net decrease in cash and cash equivalents V.57(1)b (534,294) (268,278) Add: Cash and cash equivalents at the beginning of the year 3,353,326 3,583,963

I. VI. Cash and cash equivalents at the end of the period V.57(2) 2,819,032 3,315,685

Company's Cash Flow Statement

Six months ended June 30 Notes 2026 2025

• I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 481,456 650,459 Refund of taxes and surcharges 9,757 32,238 Cash received relating to other operating activities XV.7(1) 5,034 15,324 Sub-total of cash inflows from operating activities 496,247 698,021

Cash paid for goods and services 236,511 413,963 Cash paid to and on behalf of employees 61,073 64,712 Payments of taxes and surcharges 11,480 9,317 Cash paid relating to other operating activities XV.7(2) 112,893 23,927 Sub-total of cash outflows from operating activities 421,957 511,919

Net cash flows provided by operating activities XV.8 74,290 186,102

• II. Cash flows from investing activities: Cash received from returns of investments 22,626 32,445 Net cash received from disposal of fixed assets, intangible assets and other long-term assets - 11,210 Cash received relating to other investing activities XV.7.(3) 757 803 Sub-total of cash inflows from investing activities 23,383 44,458

Cash paid to acquire fixed assets, intangible assets and other long-term assets 21,109 9,369 Cash paid for other investing activities XV.7.(4) 20,000 Sub-total of cash outflows from investing activities 41,109 9,369

Net cash flows provided by (used in) investing activities (17,726) 35,089

• III. Cash flows from financing activities: Cash received from borrowings 201,000 300,000 Cash received relating to other financing activities XV.7.(5) 4,500 1,858 Sub-total of cash inflows from financing activities 205,500 301,858

Cash repayments of borrowings 155,000 473,046 Cash payment for dividends, profit distributions or interest 13,073 14,395 Cash paid relating to other financing activities XV.7.(6) 12,172 14,246 Sub-total of cash outflows from financing activities 180,245 501,687

Net cash flow provided (used in) financing activities 25,255 (199,829)

• IV. Effects of foreign exchange rate changes on cash and cash equivalents (1,877) 4,965
• V. Net increase in cash and cash equivalents 79,942 26,327 Add: Cash and cash equivalents at the beginning of the year XV.8(2) 58,950 39,173

• VI. Cash and cash equivalents at the end of the period XV.8(2) 138,892 65,500

Consolidated Statement of Changes in Shareholders’ Equity For the Six months ended June 30, 2026

Share capital

Capital reserve

Other comprehensive income

Special reserves

Surplus reserve

Retained earnings Total

Non-controlling interests Total equity

• I. Balance at December 31, 2025 2,329,812 12,867,123 1,570,748 6,156 298,610 502,977 17,575,426 - 17,575,426

• II. Changes in equity for the period - - (352,323) 2,549 - 410,367 60,593 - 60,593

• 1. Total comprehensive income - - (352,323) - - 432,567 80,244 - 80,244
• 2. Appropriation of profits - - - - - (22,200) (22,200) - (22,200) 2.1 Distribution to non-controlling interest

• - - - - (22,200) (22,200) - (22,200)

• 3. Special reserve - - - 2,549 - - 2,549 - 2,549

• 3.1 Transfer to special reserve - - - 4,724 - - 4,724 - 4,724
• 3.2 Amount utilized - - - (2,175) - - (2,175) - (2,175)

• III. Balance at June 30, 2026 2,329,812 12,867,123 1,218,425 8,705 298,610 913,344 17,636,019 - 17,636,019

Statement of Changes in Shareholders’ Equity

For the Six months ended June 30, 2025

Share capital

Capital reserve

Other comprehensive income

Special reserves

Surplus reserve

Retained earnings Total

Non-controlling interests Total equity

• I. Balance at December 31, 2024 2,329,812 12,950,464 1,721,028 10,798 298,610 1,680,382 18,991,094 - 18,991,094

• II. Changes in equity for the period - - 71,116 (2,644) - (154,522) (86,050) - (86,050)

• 1. Total comprehensive loss - - 71,116 - - (80,352) (9,236) - (9,236)
• 2. Appropriation of profits - - - - - (74,170) (74,170) - (74,170) 2.1 Distribution to non-controlling interest

• - - - - (74,170) (74,170) - (74,170)

• 3. Special reserve - - - (2,644) - - (2,644) - (2,644)

• 3.1 Transfer to special reserve - - - 4,514 - - 4,514 - 4,514
• 3.2 Amount utilized - - - (7,158) - - (7,158) - (7,158)

• III. Balance at June 30, 2025 2,329,812 12,950,464 1,792,144 8,154 298,610 1,525,860 18,905,044 - 18,905,044

ADAMA Ltd.

(Expressed in RMB '000)

Company's Statement of Changes in Shareholders’ Equity For the Six months ended June 30, 2026

Share capital

Capital reserve

Other comprehensive income

Special reserves

Surplus reserve

Retained earnings Total

• I. Balance at December 31, 2025 2,329,812 15,523,881 24,916 6,847 298,610 710,790 18,894,856

• II. Changes in equity for the period - - - 2,549 - 84,773 87,322

• 1. Total comprehensive income - - - - - 84,773 84,773
• 2. Special reserve - - - 2,549 - - 2,549 2.1 Transfer to special reserve - - - 4,724 - - 4,724

2.2 Amount utilized - - - (2,175) - - (2,175) Ⅲ. Balance at June 30, 2026 2,329,812 15,523,881 24,916 9,396 298,610 795,563 18,982,178

For the Six months ended June 30, 2025

Share capital

Capital reserve

Other comprehensive income

Special reserves

Surplus reserve

Retained earnings Total

• I. Balance at December 31, 2024 2,329,812 15,523,881 23,894 11,489 298,610 779,972 18,967,658

• II. Changes in equity for the period - - - (2,644) - 130,151 127,507

• 1. Total comprehensive income - - - - - 130,151 130,151
• 2. Special reserve - - - (2,644) - - (2,644) 2.1 Transfer to special reserve - - - 4,514 - - 4,514

2.2 Amount utilized - - - (7,158) - - (7,158) Ⅲ. Balance at June 30, 2025 2,329,812 15,523,881 23,894 8,845 298,610 910,123 19,095,165

• I BASIC CORPORATE INFORMATION

ADAMA Ltd. (hereinafter the “Company” or the “Group”) is a company limited by shares established in China with its head office located in Hubei Jingzhou.

In June 2020, the controlling shareholder of the Company changed from China National Agrochemical Co,. Ltd. (hereinafter – “CNAC") to Syngenta Group Co., Ltd. (hereinafter “Syngenta Group”). As of August 2021, following the combination between China National Chemical Co., Ltd. (hereinafter - “ChemChina”) and Sinochem Holdings Corporation Ltd. (hereinafter - “Sinochem Holdings”), Syngenta Group, and subsequently the Company, are ultimately controlled by Sinochem Holdings - parent of both ChemChina and Sinochem Group Co., Ltd. (hereinafter “Sinochem Holdings”), subordinated to SASAC.

The principal activities of the Company and its subsidiaries (together referred to as the “Group”) are engaged in development, manufacturing and marketing of agrochemicals, intermediate materials for other industries, food additives and synthetic aromatic products, mainly for export. For information about the largest subsidiaries of the Company, refer to Note VII.

The Company’s consolidated financial statements had been approved by the Board of Directors of the Company on August 17, 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 Securities Regulatory 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.

• II BASIS OF PREPARATION - (cont’d)

• 2. Accrual basis and measurement principle - (cont’d)

The following table provides an analysis, grouped into Levels 1 to 3 based on the degree to which the fair value input is observable and significant to the fair value measurement as a whole:

• Level 1 - based on quoted prices (unadjusted) in active markets;
• Level 2 - based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable (other than quoted prices included within Level 1), either directly or indirectly;
• Level 3 - based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

• 3. Going concern The financial statements have been prepared on the going concern basis.

The Group has performed going concern assessment for the following 12 months from June 30, 2026 and have not identified any significant doubtful matter or event on the going concern, as such the financial statement have been prepared on the going concern basis.

• III SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

• 1. Statement of compliance

These financial statements are in compliance with the Accounting Standards for Business Enterprises to truly and completely reflect the Company's consolidated financial position as at June 30, 2026 and the Company's consolidated operating results, changes in shareholders' equity and cash flows for the six months then ended.

• 2. Accounting period The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
• 3. Business cycle

The company takes the period from the acquisition of assets for processing to their realisation in cash or cash equivalents as a normal operating cycle. The operating cycle for the company is 12 months.

• 4. Reporting currency

The Company and its domestic subsidiaries choose Renminbi (hereinafter "RMB") as their functional currency. Functional currencies of overseas subsidiaries are determined on the basis of the principal economic environment in which the overseas subsidiaries operate. The functional currency of the overseas subsidiaries is mainly the United States Dollar (hereinafter "USD"). The presentation currency of these financial statements is Renminbi.

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 RMB 100 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.

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.

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.

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 regarded as a reconciling item and present separately in the statement “effect of foreign exchange rate changes on the cash and cash equivalents".

The opening balances and the comparative figures of prior year are presented at the translated amounts in the prior year's financial statements.

On disposal of the Group's entire equity interest in a foreign operation, or upon a loss of control over a foreign operation due to disposal of certain equity interest in it or other reasons, the Group transfers the accumulated translation differences, which are attributable to the owners' equity of the Company and presented under other comprehensive income to profit or loss in the period in which the disposal occurs.

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 noncontrolling 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.

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.

• 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.

• 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 thirdparty 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.

• 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 creditimpaired 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.

• 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.

• 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 selfissued 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.

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.

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.

• 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.

• 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.

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:

Annual depreciation rate (%) 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

Residual value (%)

Useful life (years)

Category Depreciation

Overseas Land owned by the Group is not depreciated.

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.

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).

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.

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.

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.

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 highlyrated 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.

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

• 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.

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.

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.

• 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.

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.

• 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.

• 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.

• 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.

• 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.

• 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.

IV. Taxation

1. Main types of taxes and corresponding tax rates

The income tax rate in China is 25% (2025: 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 2026 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. 24.3% ADAMA India Private Ltd India 25.2% ADAMA Deutschland GmbH Germany 32.5% Control Solutions Inc. U.S. 26.0% 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 2026 and 2025 is 15%.

Adama Anpon (Jiangsu) Ltd. (Formally know as Jiangsu Anpon Electrochemical Co. Ltd, hereinafter “Anpon"), a subsidiary of the Company, was jointly approved as new and high-tech enterprise, by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province and Jiangsu Provincial Office of the State Administration of Taxation. The applicable income tax rate for 2026 and 2025 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.

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.

V. Notes to the consolidated financial statements

• 1. Cash at Bank and On Hand June 30 December 31

2026 2025

Cash on hand 1,091 1,107 Deposits in banks 2,817,941 3,352,219 Other cash and bank balances 87,020 96,974

2,906,052 3,450,300

Including cash and bank balances placed outside China 1,905,710 2,279,489

As at June 30, 2026 restricted cash and bank balances was 87,020 thousand RMB (as at December 31, 2025 96,974 thousand RMB) mainly including deposits that guarantee bank acceptance drafts.

• 2. Financial assets held for trading June 30 December 31

2026 2025

Bank deposits 2,711 1,223 2,711 1,223

• 3. Derivative financial assets June 30 December 31

2026 2025

Economic hedge 164,551 401,091 Accounting hedge derivatives 63,941 48,288

228,492 449,379

• 4. Bills Receivable

June 30 December 31 2026 2025

Post-dated checks receivable 256,325 358,489 256,325 358,489

• 5. Accounts Receivable

• a. By category June 30, 2026

Book value

Provision for expected credit losses

Amount

Percentage (%) Amount Percentage (%)

Carrying amount

Account receivables assessed individually for impairment

676,529 8 353,127 52 323,402

Account receivables assessed collectively for impairment

• 7,573,420 92 115,520 2 7,457,900

• 8,249,949 100 468,647 6 7,781,302

December 31, 2025 Book value

Provision for expected credit losses

Amount Percentage (%) Amount Percentage (%)

Carrying amount

Account receivables assessed individually for impairment

617,676 8 350,083 57 267,593

Account receivables assessed collectively for impairment

• 6,968,418 92 111,275 2 6,857,143

• 7,586,094 100 461,358 6 7,124,736

• b. Aging analysis

June 30, 2026

Within 1 year (inclusive) 7,684,583

• Over 1 year but within 2 years 307,110
• Over 2 years but within 3 years 51,960
• Over 3 years but within 4 years 19,636
• Over 4 years but within 5 years 25,446
• Over 5 years 161,214 8,249,949

Main groups of account receivables assessed collectively for impairment based on geographical location:

• Geographical location A:

• Account receivables in geographical location A are grouped based on similar credit risk: June 30, 2026

Book value

Provision for expected credit loss Percentage (%)

• Credit group A 1,340,303 5,097 0.4
• Credit group B 481,517 7,434 1.5
• Credit group C 367,692 10,329 2.8
• Credit group D 66,135 250 0.4 2,255,647 23,110 1.0

Geographical location B:

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

June 30, 2026

Provision for expected credit loss Percentage (%)

Book value

Accounts receivable that are not overdue 529,483 7,486 1.4 Debts overdue less than 90 days 39,072 1,141 2.9 Debts overdue less than 180 days but more than 90 days.

18,372 1,862 10.1

Debts overdue less than 360 days but more than 180 days.

15,055 3,909 26.0

Debts overdue above 360 days 14,580 11,210 76.9 Legal Debtors 54,638 54,638 100.0

671,200 80,246 12.0

Other geographical locations:

Other account receivables assessed collectively for impairment

June 30, 2026

Provision for expected credit loss Percentage (%)

Book value

4,646,573 12,164 0.3

c. Addition, written-back and written-off of provision for expected credit losses during the period

Lifetime expected credit loss (credit losses has not occurred)

Lifetime expected credit loss (credit losses has occurred) Total

January 1, 2026 42,428 418,930 461,358 Addition (write back) during the period, net (641) 29,081 28,440 Write-off during the period - (7,435) (7,435) Classification between long term and short term, net

• (16,808) (16,808)

Exchange rate effect (1,149) 4,241 3,092 Balance as of June 30, 2026 40,638 428,009 468,647

d. Five largest accounts receivable at June 30, 2026:

Allowance of expected credit losses (credit losses has occurred)

Proportion of Accounts receivable (%)

Name Closing balance

• Customer 1 238,106 3 -
• Customer 2 96,081 1 (89,727)

• Customer 3 88,426 1 -
• Customer 4 69,968 1 -
• Customer 5 66,481 1 Total 559,062 7 (89,727)

e. Derecognition of accounts receivable due to transfer of financial assets

Certain subsidiaries of the group entered into a securitization transaction with Rabobank International for sale of trade receivables (hereinafter – “the Securitization Program” and/or “the Securitization Transaction”).

Pursuant to the Securitization Program, the companies will sell their trade receivables debts, in various different currencies, to a foreign company that was set up for this purpose and that is not owned by the Adama Ltd. (hereinafter – “the Acquiring Company”). Acquisition of the trade receivables by the Acquiring Company is financed by Cooperative Rabobank U.A..

The trade receivables included as part of the Securitization Transaction are trade receivables that meet the criteria provided in the agreement.

Every year the credit facility is re-approved in accordance with the Securitization Program. As at 30 June 2026, the Securitization agreement was approved up to October 24, 2026.

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 June-2026 2,384 million RMB ), during the months of February through July – 400m$ (as of June-2026 2,724 million RMB ), during the months of August through September – 300m$ (as of June-2026 2,043 million RMB), during the months of October through November- 275m$ (as of June-2026 1,873 million RMB) and during the month of December – 300m$ (as of June-2026 2,043 million RMB). In addition the company has a permanent uncommitted facility of 50$ million (as of June-2026 - 341 million RMB) which will be applicable each period. The proceeds received from those customers whose debts were sold are used for acquisition of new trade receivables.

The price at which the trade receivables debts are sold is the amount of the debt sold less a discount calculated based on, among other things, the expected length of the period between the date of sale of the trade receivable and its anticipated repayment date. In the month following acquisition of the debt, the Acquiring Company pays in cash most of the debt while the remainder is recorded as a subordinated note and as continuing involvement that is paid after collection of the debt sold. If the customer does not pay its debt on the anticipated repayment date, the Company bears interest up to the earlier of the date on which the debt is actually repaid or the date on which debt collection is transferred to the insurance company (the actual costs are not significant and are not expected to be significant).

The Acquiring Company bears 95% of the credit risk in respect of the customers whose debts were sold and will not have a right of recourse to the Company in respect of the amounts paid in cash, except regarding debts with respect to which a commercial dispute arises between the companies and their customers, that is, a dispute the source of which is a claim of non-fulfillment of an obligation of the seller in the supply agreement covering the product, such as: a failure to supply the correct product, a defect in the product, delinquency in the supply date, and the like.

The Acquiring Company appointed a policy manager who will manage for it the credit risk involved with the trade receivables sold, including an undertaking with an insurance company.

Pursuant to the Receivables Servicing Agreement, the Group subsidiaries handle collection of the trade receivables as part of the Securitization Transaction for the benefit of the Acquiring Company.

As part of the agreement, Solutions is committed to comply with certain financial covenants, mainly the ratio of the liabilities to equity and profit ratios. As of June 30 2026, 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 “other receivables” line item.

• 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 June, 2026 is BRL 350 million (460 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.

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

June 30 December 31 2026 2025

Accounts receivables derecognized 3,812,231 3,275,491 Continuing involvement 168,951 148,167 Subordinated note in respect of trade receivables 521,388 777,505 Liability in respect of trade receivables 58,376 29,191

Six months ended June 30

2026 2025 Loss in respect of sale of trade receivables 87,785 87,344

• 6. Receivables financing June 30 December 31

2026 2025

Bank acceptance draft 78,314 30,767 78,314 30,767

As at June 30, 2026, bank acceptance endorsed but not yet due amounts to 297,560 thousands RMB.

• 7. Prepayments

• (1) The aging analysis of prepayments is as follows: June 30 December 31

2026 2025

Amount Percentage (%) Amount Percentage (%)

Within 1 year (inclusive) 289,497 94 358,321 98

• Over 1 year but within 2 years (inclusive) 18,451 6 8,726 2
• Over 2 years but within 3 years (inclusive) 753 - 774 -
• Over 3 years 363 - 191 309,064 100 368,012 100

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

Amount

Percentage of prepayments (%)

June 30, 2026 75,240 24

• 8. Other Receivables

• (1) Other receivables by nature June 30 December 31

2026 2025

Dividend receivable 4,340 2,325 Others 771,926 1,073,839

776,266 1,076,164

a. Others breakdown by categories

June 30 December 31

2026 2025 Subordinated note in respect of trade receivables 521,388 777,505 Trade receivables as part of securitization transactions not yet eliminated 168,951 148,167 Other 94,010 162,387 Sub total 784,349 1,088,059

Provision for expected credit losses - other receivables (12,423) (14,220) 771,926 1,073,839

b. Other receivables by aging

June 30 2026

Within 1 year (inclusive) 764,254

• Over 1 year but within 2 years 4,488
• Over 2 years but within 3 years 1,498
• Over 3 years but within 4 years 48
• Over 4 years but within 5 years 6,151
• Over 5 years 7,910 784,349

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

Six months ended June 30, 2026

Balance as of January 1 2026, 14,220 Addition (written back) during the period (235) Write-off during the period (1,508) Exchange rate effect (54) Balance as of June 30, 2026 12,423

• 8. Other Receivables – (cont'd)

(3) Five largest other receivables at June 30, 2026:

Name Closing balance

Proportion of other receivables (%)

Allowance of expected credit losses

• Party 1 521,388 66 -
• Party 2 17,885 2 -
• Party 3 5,572 1 5,572
• Party 4 1,595 - 1,595
• Party 5 1,280 - 1,280 Total 547,720 70 8,447

• 9. Inventories

(1) Inventories by category:

June 30, 2026 Book value

Provision for impairment Carrying amount

Raw materials 3,126,338 25,769 3,100,569 Work in progress 1,334,872 851 1,334,021 Finished goods 6,627,347 277,792 6,349,555 Others 513,244 16,602 496,642

11,601,801 321,014 11,280,787

December 31, 2025 Book value

Provision for impairment Carrying amount

Raw materials 2,903,909 32,098 2,871,811 Work in progress 1,806,286 820 1,805,466 Finished goods 6,729,824 277,285 6,452,539 Others 495,793 17,767 478,026

11,935,812 327,970 11,607,842

• 9. Inventories - (cont'd)

(2) Provision for impairment of inventories: For the Six months ended June 30, 2026

January 1, 2026 Provision

Reversal or write-off Other June 30, 2026

Raw material 32,098 5,975 (11,177) (1,127) 25,769 Work in progress 820 341 (310) - 851 Finished goods 277,285 100,458 (92,767) (7,184) 277,792 Others 17,767 2,920 (3,865) (220) 16,602

327,970 109,694 (108,119) (8,531) 321,014

• 10. Other Current Assets

June 30 December 31 2026 2025

Deductible VAT 570,110 528,604 Current tax assets 308,233 311,227 Short term investments - 155,154 Others 87,349 99,288

965,692 1,094,273

• 11. Long-Term Receivables

June 30 December 31 2026 2025

Long term account receivables from sale of goods 281,583 180,324 Provision for expected credit losses (78,400) (62,121)

203,183 118,203

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

Provision for long term receivables

Balance as of January 1, 2026 62,121 Classification between long term and short term, net 16,808 Addition (write back) during the period, net Exchange rate effect (529) Balance as of June 30, 2026 78,400

• 12. Long-Term Equity Investments

• (1) Long-term equity investments by category:

June 30 December 31 2026 2025

Joint venture 1,956 2,129 Associate 40,864 37,183

42,820 39,312

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

January 1, 2026

Investment income

Other Comprehensive gain (loss)

Declared distribution of cash dividend

Balance at the end of the period

Joint venture

• Investee A 2,129 )110( (63) - 1,956 Sub-total 2,129 )110( (63) - 1,956 Associate

• Investee B 37,183 6,703 1,134 (4,156) 40,864 Sub-total 37,183 6,703 1,134 (4,156) 40,864 Sub-total 39,312 6,593 1,071 (4,156) 42,820

• 13. Other equity investments

Dividend recognized June 30, 2026 during 2026

December 31, 2025

• Investment A 54,299 54,299 -
• Investment B 73,176 75,497 127,475 129,796 -

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

14. Fixed assets

Land & Buildings

Machinery & equipment Motor vehicles

Office & other equipment Total

Cost

Balance as at January 1, 2026 4,692,472 19,736,914 172,406 487,236 25,089,028 Purchases 13,181 37,195 19,933 14,354 84,663 Transfer from construction in progress 13,717 354,388 - 553 368,658 Disposals (180,005) (543,528) (22,666) (3,601) (749,800) Currency translation adjustment (72,705) (470,143) (3,626) (14,863) (561,337) Balance as at June 30, 2026 4,466,660 19,114,826 166,047 483,679 24,231,212

Accumulated depreciation

Balance as at January 1, 2026 (2,019,460) (11,380,299) (78,043) (383,424) (13,861,226) Charge for the period (69,463) (417,366) (13,087) (18,605) (518,521) Disposals 108,227 483,505 15,934 3,305 610,971 Currency translation adjustment 40,612 275,804 1,128 13,292 330,836 Balance as at June 30, 2026 (1,940,084) (11,038,356) (74,068) (385,432) (13,437,940)

Provision for impairment

Balance as at January 1, 2026 (380,580) (772,042) (681) (948) (1,154,251) Charge for the period - (74,229) - - (74,229) Transfer from construction in progress - (298) - - (298) Disposals 20,353 31,789 75 18 52,235 Currency translation adjustment 7,090 11,524 - 6 18,620 Balance as at June 30, 2026 (353,137) (803,256) (606) (924) (1,157,923)

Carrying amounts As at June 30, 2026 2,173,439 7,273,214 91,373 97,323 9,635,349 As at January 1, 2026 2,292,432 7,584,573 93,682 102,864 10,073,551

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

ADAMA Ltd. (Expressed in RMB '000)

Notes to the Financial Statements

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

1. Construction in Progress

• (1) Construction in progress June 30 December 31

2026 2025

Book value

Provision for impairment Carrying amount Book value

Provision for impairment Carrying amount

1,038,405 (324,735) 713,670 1,213,760 (316,585) 897,175

• (2) Details and Movements of major construction projects in progress during period ended June 30, 2026

Budget

January 1, 2026 Additions

Including: Interest capitalized

Currency translation differences

Transfer to fixed

assets Impairment

June 30, 2026

Actual cost to budget (%)

Project progress

(%) Source of funds

• Project A 874,889 66,308 3,196 - - (2,032) - 67,472 94% 94% Bank loan and internal finance
• Project B 912,661 162,376 7,034 - (5,121) - - 164,289 86% 86% Bank loan and internal finance

* As of June 30, 2026 Project A include impairment of RMB 17 million.

• 59 -

16. Right-of-use assets

Land & Buildings

Machinery & equipment Motor vehicles

Office & other equipment Total

Cost

Balance as at January 1, 2026 852,943 41,927 282,628 4,224 1,181,722 Additions 16,154 733 55,634 (13) 72,508 Decrease (76,984) (3,845) (51,596) (739) (133,164) Currency translation adjustment (13,094) (1,273) (9,271) (154) (23,792) Balance as at June 30, 2026 779,019 37,542 277,395 3,318 1,097,274

Accumulated depreciation

Balance as at January 1, 2026 (356,593) (23,003) (137,632) (3,051) (520,279) Charge for the period (44,226) (1,366) (41,194) (442) (87,228) Decrease 5,928 3,845 47,004 2,012 58,789 Currency translation adjustment 8,757 693 4,648 84 14,182 Balance as at June 30, 2026 (386,134) (19,831) (127,174) (1,397) (534,536)

Provision for impairment

Balance as at January 1, 2026 - - - - Balance as at June 30, 2026 - - - - -

Carrying amounts As at June 30, 2026 392,885 17,711 150,221 1,921 562,738 As at January 1, 2026 496,350 18,924 144,996 1,173 661,443

ADAMA LTD. (Expressed in RMB '000)

Notes to the Financial Statements

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

17. Intangible Assets

Product registration

Intangible assets on Purchase of

Products Software

Marketing rights, tradename and trademarks

Customers relations Land use rights (1) Others(2) Total

Costs

Balance as at January 1, 2026 13,291,894 4,183,197 1,568,175 783,128 638,122 506,245 605,009 21,575,770 Purchases 121,513 - 57,790 - - - 6,928 186,231 Disposals (452,428) - (6,308) (9,748) - - (8,996) (477,480) Currency translation adjustment (404,322) (129,684) (43,928) (24,377) (16,573) (1,212) (12,679) (632,775) Balance as at June 30, 2026 12,556,657 4,053,513 1,575,729 749,003 621,549 505,033 590,262 20,651,746

Accumulated amortization

Balance as at January 1, 2026 (11,006,559) (3,571,987) (992,254) (550,475) (446,031) (130,437) (234,807) (16,932,550) Charge for the period (241,116) (53,168) (57,910) (9,875) (20,608) (4,968) (10,631) (398,276) Disposals 451,762 - 6,281 9,748 - - 8,996 476,787 Currency translation adjustment 341,594 111,392 27,711 17,272 12,806 (248) 5,200 515,727 Balance as at June 30, 2026 (10,454,319) (3,513,763) (1,016,172) (533,330) (453,833) (135,653) (231,242) (16,338,312)

Provision for impairment

Balance as at January 1, 2026 (170,389) (159,597) (9,273) - - - (1,618) (340,877) Charge for the period - - - - - - - Disposals 348 - - - - - - 348 Currency translation adjustment 2,964 4,948 269 - - - - 8,181 Balance as at June 30, 2026 (167,077) (154,649) (9,004) - - - (1,618) (332,348)

Carrying amount As at June 30, 2026 1,935,261 385,101 550,553 215,673 167,716 369,380 357,402 3,981,086 As at January 1, 2026 2,114,946 451,613 566,648 232,653 192,091 375,808 368,584 4,302,343

• (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.

• 61 -

• 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. As of June 30, 2026 no indicators of impairment existed. The 2025 DCF model was 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% WACC) 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.

January 1, 2026

Change during the year

Currency translation adjustment

Balance at June 30, 2026

Book value 4,964,450 - (149,964) 4,814,486 Impairment provision - - - Carrying amount 4,964,450 - (149,964) 4,814,486

• 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

Deferred tax assets

June 30 December 31 2026 2025

Deductible temporary differences

Deductible temporary differences

Deferred tax assets

Deferred tax assets

Deferred tax assets in respect of carry forward losses 2,727,787 503,850 3,217,169 484,298 Deferred tax assets in respect of inventories 2,760,879 750,488 2,199,271 585,021 Deferred tax assets in respect of employee benefits 900,396 135,489 874,432 142,094 Other deferred tax asset 2,601,400 634,354 2,508,133 644,334

8,990,462 2,024,181 8,799,005 1,855,747

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

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

June 30 December 31 2026 2025

Taxable temporary differences

Deferred tax liabilities

Taxable temporary differences

Deferred tax liabilities

Deferred tax liabilities Deferred tax liabilities in respect of fixed assets, intangible assets and right-of-use assets 3,937,397 729,299 4,258,988 785,595

3,937,397 729,299 4,258,988 785,595

• (3) Deferred tax assets and deferred tax liabilities presented on a net basis after offsetting June 30 December 31

2026 2025

The offset amount of

deferred tax assets and liabilities

Deferred tax assets or liabilities after offset

The offset amount of

deferred tax assets and liabilities

Deferred tax assets or liabilities after offset

Presented as:

Deferred tax assets 498,013 1,526,168 561,571 1,294,176 Deferred tax liabilities 498,013 231,286 561,571 224,024

• (4) Details of unrecognized deferred tax assets June 30 December 31

2026 2025

Deductible temporary differences 756,471 830,630 Deductible losses carry forward 4,857,241 5,547,431

5,613,712 6,378,061

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

June 30 December 31 2026 2025

• 2026 189,779 190,326
• 2027 33,730 40,585
• 2028 227,919 238,789
• 2029 154,015 199,050
• 2030 48,486 39,474 After 2030 4,203,312 4,839,207

4,857,241 5,547,431

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

(6) Unrecognized deferred tax liabilities

When calculating the deferred taxes, taxes that would have applied in the event of realizing investments in subsidiaries were not taken into account, since it is the Company’s intention to hold these investments and not realize them.

• 20. Other Non-Current Assets June 30 December 31

2026 2025

Judicial deposits 171,328 152,033 Advances in respect of non-current assets 34,418 38,745 Assets related to securitization 29,171 27,799 Others 204,139 184,882

439,056 403,459

• 21. Short-Term Loans Short-term loans by category:

June 30 December 31 2026 2025

Unsecured loans 5,763,384 6,673,792 5,763,384 6,673,792

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

• 22. Derivative financial liabilities June 30 December 31

2026 2025

Economic hedge 246,105 152,525 Accounting hedge derivatives 3,732 37,056

249,837 189,581

• 23. Bills Payables

June 30 December 31 2026 2025

Post-dated checks payables 127,309 221,808 Note payables draft 478,005 400,852

605,314 622,660

As at June 30, 2026, none of the bills payable are overdue.

• 24. Accounts payable

June 30 December 31 2026 2025

Within 1 year (including 1 year) 4,974,877 5,379,999

• 1-2 years (including 2 years) 35,295 43,276
• 2-3 years (including 3 years) 7,009 4,125 Over 3 years 30,950 34,349

5,048,131 5,461,749

There are no significant accounts payables aging over one year.

As at June 30, 2026, the amount of the accounts payable included under the supplier financing arrangements was 892,228 thousand RMB (as at December 31,2025: 1,040,262). 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.

• 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 June 30 December 31

2026 2025

Discount for customers 1,394,296 813,747 Advances from customers 121,344 975,743

1,515,640 1,789,490

• 26. Employee Benefits Payable

June 30 December 31 2026 2025

Short-term employee benefits 446,626 643,371 Post-employment benefits 25,038 46,389 Share based payment (See note XIII) - 110 Other benefits within one year 215,342 197,286

687,006 887,156 Current maturities 47,601 49,568 734,607 936,724

• 27. Taxes Payable June 30 December 31

2026 2025

Corporate income tax 348,041 322,939 VAT 196,985 187,569 Others 26,694 28,660

571,720 539,168

• 28. Other Payables June 30 December 31

2026 2025 Dividends payables 750 750 Other payables 1,522,269 1,417,343

1,523,019 1,418,093

(1) Other payables

June 30 December 31 2026 2025

Accrued expenses 789,954 762,284 Hold-back payment due to acquistions 100,000 100,000 Liability in respect of securitization transactions 58,376 29,191 Payables in respect of intangible assets 18,097 43,944 Financial institutions 9,753 886 Others 546,089 481,038

1,522,269 1,417,343

• 29. Non-Current Liabilities Due Within One Year Non-current liabilities due within one year by category are as follows:

June 30 December 31 2026 2025

Long term loans from related party due within one year 2,350,850 2,359,991 Long-term loans due within one year 760,991 819,790 Debentures payable due within one year 513,807 489,394 Lease liabilities due within one year 169,062 156,028

3,794,710 3,825,203

• 30. Other Current Liabilities June 30 December 31

2026 2025

Put options to holders of non-controlling interests 549,492 544,725 Provision in respect of returns 311,873 344,273 Provision in respect of claims 36,343 39,846 Others 388 415

898,096 929,259

• 31. Long-Term Loans Long-term loans by category

June 30 December 31

2026 Interest range 2025 Interest range Long term loans

Unsecured loans 1,913,470 2.25%-6.45% 2,327,304 1.65%-6.45% Less: Long term loans from banks due within 1 year (760,991) (819,790) Long term loans, net 1,152,479 1,507,514

• 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.

1. Debentures Payable

June 30 December 31 2026 2025

Debentures Series B 5,651,921 5,383,470 Current maturities (513,807) (489,394)

5,138,114 4,894,076

June 30 2026

First year (current maturities) 513,807 Second year 513,807 Third year 513,807 Fourth year 513,807

Fifth year and thereafter 3,636,693 5,691,921

ADAMA Ltd. (Expressed in RMB '000)

Notes to the Financial Statements

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

• 32. Debentures Payable - (cont'd) Movements of debentures payable: For the Six months ended June 30, 2026:

Maturity period

Original Face value in RMB

Original Face value NIS

Issuance date

Maturity period

Issuance amount

Balance at January 1,

2026

Amortization of discounts or premium

CPI and exchange rate effect

Repayment during the period

Currency translation adjustment

Balance at June 30, 2026

Debentures Series B 2,673,640 1,650,000 4.12.2006

Debentures Series B 843,846 513,527 16.1.2012

Debentures Series B 995,516 600,000 7.1.2013

Debentures Series B 832,778 533,330 1.2.2015

Debentures Series B 418,172 266,665 1-6.2015

Debentures Series B 497,989 246,499 5.5.2020

November 2020-2036 3,043,742 2,237,456 48 186,753 - (74,852) 2,349,405

November 2020-2036 842,579 692,337 4,129 58,056 - (23,195) 731,327

November 2020-2036 1,120,339 848,376 1,778 70,908 - (28,392) 892,670

November 2020-2036 1,047,439 786,741 (1,096) 65,766 - (26,305) 825,106

November 2020-2036 556,941 421,173 (2,868) 35,152 - (14,038) 439,419

November 2020-2036 692,893 397,387 (3,412) 33,251 - (13,232) 413,994

5,383,470 (1,421) 449,886 - (180,014) 5,651,921

Series B debentures, in amount of NIS 3,810 million par value (2,958 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 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 2,148 million). On May 29, 2025, the Company purchased NIS 642,448thousand par value of Bonds for a total consideration of approximately USD 268 million (RMB 1,927 million). The loss in respect of the debentures buyback was USD 9 million (RMB 68 million), and included in the financial expenses.

• 69 -

• 33. Lease liabilities June 30 December 31

2026 Interest range 2025 Interest range

Lease liabilities 821,792 1.9%-14.1% 907,254 1.0%-14.1% Less: Lease liabilities due within one year (169,062) (156,028) Long term lease liabilities, net 652,730 751,226

• 34. Long-Term Employee Benefits Payable

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

June 30 December 31 2026 2025

Total present value of obligation 497,317 490,562 Less: fair value of plan's assets (64,649) (63,751) Net liability related to Post-employment benefits 432,668 426,811

Termination benefits 71,004 67,828 Total recognized liability for defined benefit plan, net (1) 503,672 494,639

Other long-term employee benefits 103,137 91,824 Total long-term employee benefits, net 606,809 586,463

Including: Long-term employee benefits payable due within one year 47,601 49,568 559,208 536,895

(1) Movement in the net liability and assets in respect of defined benefit plans, early retirement and their components

Defined benefit obligation and early retirement

Fair value of plan's assets Total

2026 2025 2026 2025 2026 2025 Balance as at January 1, 558,390 531,452 63,751 54,186 494,639 477,266 Expense/income recognized

in profit and loss:

Current service cost 7,423 8,400 - - 7,423 8,400 Past service cost 1,855 (309) 579 - 1,276 (309) Interest costs 10,251 10,360 1,400 1,315 8,851 9,045 Losses on curtailments and settlements 13,260 3,374 - - 13,260 3,374 Changes in exchange rates 28,029 32,895 4,268 4,260 23,761 28,635 Actuarial gain (losses) due to early retirement (301) 1,033 - - (301) 1,033

Included in other comprehensive income: Actuarial gain (losses) as a result of changes in actuarial assumptions 2,787 (1,555) 1,317 (302) 1,470 (1,252) Foreign currency translation differences in respect of foreign operations (20,274) (2,324) (2,142) (285) (18,132) (2,040)

Additional movements:

Benefits paid (33,099) (34,220) (5,227) (3,161) (27,872) (31,059) Contributions paid by the Group - - 703 690 (703) (690) Balance as at June 30, 568,321 549,106 64,649 56,703 503,672 492,403

• 34. Long-Term Employee Benefits Payable - (cont'd) Post-employment benefit plans – defined benefit plan and early retirement - (cont'd)

(2) Actuarial assumptions and sensitivity analysis

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

June 30 December 31 2026 2025

Discount rate (%)* 1.8%-2.7% 1.8%-3.3%

• According to the demographic and the benefit components.

The assumptions regarding the future mortality rate are based on published statistical data and acceptable mortality rates.

Possible reasonable changes as of the date of the report in the discount rate, assuming the other assumptions remain unchanged, would have affected the defined benefit obligation as follows:

As of June 30, 2026 Increase of 1% Decrease of 1%

Change in defined benefit obligation (36,231) 47,336

• 35. Provisions

June 30 December 31 2026 2025

Liabilities in respect of contingencies* 231,874 210,045 Provision in respect of site restoration 188,592 211,997 Other 1,022 2,305

421,488 424,347

• Liabilities in respect of contingencies includes obligations of pending litigations, where an outflow of resources had been reliably estimated.

• 36. Other Non-Current Liabilities June 30 December 31

2026 2025

Long term loans from related party 2,350,850 2,359,991 2,350,850 2,359,991

Current maturities (2,350,850) (2,359,991) - -

• 37. Share Capital Balance at January 1, 2026

Issuance of new shares Buyback of shares

Balance at June 30, 2026

Share capital 2,329,812 - - 2,329,812

• 38. Capital Reserve

Balance at January 1, 2026

Additions during the period

Reductions during the period

Balance at June 30, 2026

Share premiums 12,606,562 - - 12,606,562 Other capital reserve 260,561 - - 260,561

12,867,123 - - 12,867,123

39. Other Comprehensive Income, net of tax

Attributable to shareholders of the company

Less: transfer to profit or loss

Balance at January 1, 2026

Less: Income tax expenses

Before tax amount

Net-of-tax amount

Balance at June 30, 2026

Items that will not be reclassified to profit or loss 114,141 (1,470) - 697 (2,167) 111,974 Re-measurement of changes in liabilities under defined benefit plans 85,466 (1,470) - 697 (2,167) 83,299 Changes in fair value of other equity investment 28,675 - - - - 28,675 Items that may be reclassified to profit or loss 1,456,607 (305,939) 40,827 3,390 (350,156) 1,106,451 Effective portion of gain or loss of cash flow hedge 8,880 89,903 40,827 3,390 45,686 54,566 Translation difference of foreign financial statements 1,447,727 (395,842) - - (395,842) 1,051,885

1,570,748 (307,409) 40,827 4,087 (352,323) 1,218,425

40. Surplus reserve

Balance at January 1, 2026

Additions during the period

Reductions during the period

Balance at June 30, 2026

Statutory surplus reserve 294,796 - - 294,796 Discretional surplus reserve 3,814 - - 3,814

298,610 - - 298,610

41. Retained Earnings 2026 2025

Retained earnings as at January 1 502,977 1,680,382 Net income (loss) for the period attributable to shareholders of the Company 432,567 (80,352) Dividends to non-controlling Interest (22,200) (74,170)

Retained earnings as at June 30 913,344 1,525,860

• 42. Operating Income and Cost of Sales

Six months ended June 30 Six months ended June 30

2026 2025 Income Cost of sales Income Cost of sales

Principal activities 14,442,307 10,511,602 14,991,514 11,019,714 Other businesses 34,233 11,728 32,686 10,459

14,476,540 10,523,330 15,024,200 11,030,173

• 43. Taxes and Surcharges

Six months ended June 30

2026 2025

Tax on turnover 11,648 10,953 Others 35,272 46,175

46,920 57,128

• 44. Selling and Distribution Expenses

Six months ended June 30

2026 2025

Salaries and related expense 962,780 912,703 Depreciation and amortization 410,537 465,967 Advertising and sales promotion 165,134 132,972 Warehouse expenses 103,994 85,581 Travel expenses 69,539 67,740 Registration 67,653 70,147 Professional services 57,746 51,287 Insurance 45,360 39,707 Others 155,320 149,564

2,038,063 1,975,668

• 45. General and Administrative Expenses

Six months ended June 30

2026 2025

Salaries and related expenses 311,785 238,606 IT systems 75,682 76,570 Professional services 67,609 225,996 Depreciation and amortization 64,956 71,596 Cost contribution arrangement 22,226 36,281 Office rent, maintenance and expenses 18,710 17,901 Other 41,071 67,917

602,039 734,867

• 46. Research and development expenses Six months ended June 30

2026 2025

Salaries and related expenses 119,301 110,779 Depreciation and amortization 33,275 32,164 Materials 16,100 19,589 Office rent, maintenance and expenses 8,351 8,101 Field trial 7,834 13,186 Professional services 7,076 8,839 Other 19,413 24,135

211,350 216,793

• 47. Financial expenses (incomes), net

Six months ended June 30

2026 2025

Interest expenses on debentures and loans and other charges 454,511 522,664 Exchange rate differences, net 421,845 230,008 CPI expenses in respect of debentures 65,049 117,480 Interest income from customers, banks and others (76,612) (101,281) Loss in respect of sale of trade receivables 87,785 87,344 Revaluation of put option, net 10,677 43,890 Interest expense on lease liabilities 28,689 24,084 Interest expense in respect of post-employment benefits and early retirement, net 10,417 8,992 Others 21,345 91,159

1,023,706 1,024,340

• 48. Investment income, net Six months ended June 30

2026 2025

Income from long-term equity investments accounted for using

the equity method 6,593 5,261 6,593 5,261

• 49. Gain (loss) from changes in fair value Six months ended June 30

2026 2025

Gain (loss) from changes in fair value of derivative financial Instruments 213,451 (36,189) Others - 29,696

213,451 (6,493)

• 50. Credit impairment reversal (losses) Six months ended June 30

2026 2025

Bills receivable and accounts receivable (28,440) (93,532) Other receivables 235 (147)

(28,205) (93,679)

• 51. Asset impairment losses

Six months ended June 30

2026 2025

Fixed assets (74,229) Inventories (76,256) (26,081) Construction in progress (1,544) (101) Intangible asset - (1,435)

(152,029) (27,617)

52. Gain from Disposal of Assets Six months ended June 30 Included in

non-recurring 2026 2025 items

Gain from disposal of fixed assets 304,273 5,160 304,273 Gain (loss) from disposal of intangible assets 2,076 (106) 2,076

306,349 5,054 306,349

53. Income Tax Expenses (incomes) Six months ended June 30

2026 2025

Current year 231,081 192,126 Deferred tax expenses (income) (268,411) (245,081) Adjustments for previous years, net (2,852) 7,728

(40,182) (45,227)

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

Six months ended June 30

2026 2025

Loss before taxes 392,385 (125,579) Statutory tax in china 25% 25% Tax calculated according to statutory tax in china 98,096 (31,395) Tax benefits from Approved Enterprises (17,203) (19,282) Difference between measurement basis of income for financial statement and for tax purposes (18,164) (82,453) Taxable income (loss) and temporary differences at other tax rate (142,908) (197,928) Taxes in respect of prior years (2,852) 7,728 Utilization of tax losses prior years for which deferred taxes were not created (103,537) (14,177) Temporary differences and losses in the report year for which deferred taxes were not created 130,936 180,931 Non-deductible expenses, non-taxable income and other difference, net 49,617 48,007 Neutralization of tax calculated in respect of the Company’s share in results of equity accounted investees (2,392) (1,744) Effect of change in tax rate in respect of deferred taxes (32,028) 12,056 Creation and reversal of deferred taxes for tax losses and temporary differences from previous years, net 253 53,030 Income tax expenses (incomes) (40,182) (45,227)

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

• 55. Government grants

Amount recognized in the profit and loss statements during the Six months ended June 30

Category Presentation accounts 2026 2025 Government grants related to income Non-Operating income 3,940 5,111 Government grants related to assets Fixed assets, Intangible assets 5,352 5,334

• 56. Notes to items in the cash flow statements

• (1) Cash received relating to other operating activities Six months ended June 30

2026 2025

Financial institutions 70,735 Interest income 24,555 39,574 Government subsidies 2,970 12,854 Others 135,804 22,714

234,064 75,142

• (2) Cash paid relating to other operating activities Six months ended June 30

2026 2025

Derivatives transactions 100,589 402,853 Professional services 186,982 256,694 Advertising and sales promotion 173,576 141,629 IT and Communication 132,238 106,662 Commissions and Warehouse 108,548 99,741 Registration and Field trials 81,734 76,972 Financial institutions 20,214 71,112 Travel 52,967 45,237 Insurance 35,064 35,887 Other 356,937 419,429

1,248,849 1,656,216

• (3) Cash paid relating to other investing activities

Six months ended June 30 2026 2025

Increase in short and long term investments 631 47,825 631 47,825

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

• (4) Cash received from other financing activities Six months ended June 30

2026 2025

Proceeds in respect of hedging transactions on debentures 683,858 246,992 Deposit for issuing bills payables 94,970 46,148 Borrowing from related party * - 789,364

778,828 1,082,504

• For more detailes regarding the borrowing from related party – see note X. related parties and related parties transactions.

• (5) Cash paid relating to other financing activities

Six months ended June 30 2026 2025

Repayment of lease liability 117,586 93,276 Deposit for issuing bills payable 85,016 181,047 Payment in respect of hedging transactions on debentures - 165,934

202,602 440,257

• 57. Supplementary Information on Cash Flow Statement

(1) Supplementary information on Cash Flow Statement

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

Six months ended June 30

2026 2025

Net income (loss) 432,567 (80,352) Add: Impairment provisions for assets 152,029 27,617 Credit impairment losses 28,205 93,679 Depreciation of fixed assets and investment property 519,339 520,896 Depreciation of right-of-use asset 87,228 94,218 Amortization of intangible asset 398,276 447,594 Gains on disposal of fixed assets, intangible assets, and other longterm assets, net (306,349) (5,054) Losses (gain) from changes in fair value (213,451) 6,493 Financial expenses 1,040,649 1,214,335 Investment income, net (6,593) (5,261) Increase in deferred tax assets, net (280,584) (226,093) Increase (decrease) in deferred tax liabilities, net 12,173 (18,988) Increase in inventories, net (32,067) (365,063) Increase in operating receivables, net (2,375,183) (1,431,729) Increase in operating payables, net 1,213,670 1,466,286 Net cash flow provided by operating activities 669,909 1,738,578

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

(1) Supplementary information on Cash Flow Statement - - (cont'd)

b. Net Decrease in cash and cash equivalents

Six months ended June 30

2026 2025

Closing balance of cash and cash equivalents 2,819,032 3,315,685 Less: Opening balance of cash and cash equivalents 3,353,326 3,583,963 Decrease in cash and cash equivalents (534,294) (268,278)

(2) Details of cash and cash equivalents

June 30 December 31 2026 2025

Cash on hand 1,091 1,107 Bank deposits available on demand without restrictions 2,817,941 3,352,219

2,819,032 3,353,326

58. Assets with Restricted Ownership or Right of Use June 30

2026 Reason

Cash 87,020 Pledged Other non-current assets 171,328 Guarantees

258,348

Cash and bank balances

EUR 41,519 7.76 322,312 USD 20,261 6.81 137,999 BRL 90,379 1.32 118,939 ILS 51,444 2.29 117,653 ZAR 117,935 0.42 48,943 RUB 388,144 0.09 34,157 GBP 3,693 9.01 33,271 Other 193,170

• Total 1,006,444

Bills and Accounts receivable

BRL 783,036 1.316 1,030,476 EUR 49,157 7.763 381,606 RON 214,723 1.48 317,790 HUF 8,977,385 0.022 197,502

• ILS 69,910 2.287 159,884

• CAD 19,754 4.784 94,501 CZK 294,910 0.320 94,358 GBP 10,464 9.009 94,270 Other 369,255

Total 2,739,642

Other receivables EUR 73,131 7.763 567,716

• CAD 20,660 4.784 98,836 PLN 34,753 1.806 62,764 BRL 26,121 1.316 34,375 Other 64,197 Total 827,888

Other current assets

• ILS 70,584 2.287 161,425 EUR 11,642 7.763 90,374 BRL 61,417 1.316 80,825 UAH 238,830 0.152 36,302 CAD 2,679 4.784 12,818 Other 40,334 Total 422,078

Other current assets Long-term receivables

BRL 154,394 1.316 203,183 Total 203,183

Long-term investments, loans and other

BRL 228,647 1.316 300,899 Other 7,396 Total 308,295

Short-term loans

UAH 703,345 0.152 106,909 ARS 679,728 0.005 3,399 Total 110,308

Bills and Accounts payable

ILS 344,244 2.287 787,286 EUR 51,079 7.763 396,524 BRL 146,476 1.316 192,762 USD 7,570 6.811 51,557 Other 62,888

• Total 1,491,017

Other payables

ILS 94,432 2.287 215,966 BRL 120,102 1.316 158,054 UAH 173,768 0.152 26,413 ILS CPI 10,793 2.287 24,683 ZAR 31,281 0.415 12,982 CNH 11,880 1.005 11,940 Other 35,976 Total 486,014

Foreign currency at the end of the

RMB at the end of the period

period Exchange rate

Contract liabilities

EUR 57,223 7.763 444,221 CAD 56,142 4.784 268,581 BRL 46,616 1.316 61,346 THB 98,675 0.205 20,228 TRY 72,821 0.146 10,632 Other 67,346 Total 872,354

Non-current liabilities due within one year

CNH 2,000,000 1.005 2,010,305 ILS CPI 257,974 2.287 589,986 EUR 1,650 7.763 12,811 Other 27,966

• Total 2,641,068

Other current liabilities

EUR 6,950 7.763 53,956 RON 17,253 1.48 25,534 Other 82 Total 79,572

Debentures payable

ILS CPI 2,246,662 2.287 5,138,114 Total 5,138,114

Provision and Long-term payables

BRL 165,169 1.316 217,363 ILS 56,575 2.287 129,387 Total 346,750

Lease liabilities

ILS CPI 33,200 2.287 75,928 EUR 4,940 7.763 38,352 ILS 11,529 2.287 26,366 Other 33,292 Total 173,938

(4) Major foreign operations

Name of the Subsidiary

Registration & Principal place of

business Business nature

Functional 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 America Inc.

USD Control Solutions Inc. United States Manufacturing; Distribution;

United States Manufacturing; Distribution; Registration

USD ADAMA Agan Ltd. Israel Manufacturing; Distribution;

Registration

USD ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution;

Registration

USD

Registration

ADAMA Australia Pty Limited

Australia Distribution AUD

ADAMA Italia SRL Italy Distribution USD ADAMA Northern Europe B.V.

Netherlands Distribution USD 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.

• VII. Interest in Other Entities

• 1. Interests in subsidiaries Composition of the largest subsidiaries of the Group in respect of assets and operating income

Name of the Subsidiary

Registration & Principal place of business Business nature Direct Indirect

Method of obtaining the subsidiary

ADAMA France S.A.S France Distribution 100% Established ADAMA Brasil S/A Brazil Manufacturing; Distribution;

Registration

100% Purchased

ADAMA Deutschland GmbH Germany Distribution; Registration; 100% Established ADAMA India Private Ltd. India Manufacturing;

Distribution; Registration

100% Established

Makhteshim Agan of North America Inc.

United States Manufacturing; Distribution; Registration

100% Established Control Solutions Inc. United States Manufacturing; Distribution;

Registration

100% Purchased ADAMA Agan Ltd. Israel Manufacturing; Distribution;

Registration

100% Restructure ADAMA Makhteshim Ltd. Israel Manufacturing; Distribution;

Registration

100% Restructure

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; Registration

100%

Purchased

Adama Anpon (Jiangsu) Ltd. China Manufacturing; Distribution 100% Purchased Adama Huifeng (Jiangsu) Co. Ltd. China Manufacturing; Distribution 51% Purchased

• 2. Interests in joint ventures or associates June 30 December 31

2026 2025

Joint venture 1,956 2,129 Associate 40,864 37,183

42,820 39,312

• 3. Summarized financial information of joint ventures and associates

December 31, 2025 and six months ended June 30, 2025

June 30, 2026 and six months then ended

Joint venture: Total carrying amount 1,956 2,129 The Group's share of the following items:

Net profit (110) 137 Other comprehensive income (63) (9) Total comprehensive income (173) 128

Associate: Total carrying amount 40,864 37,183 The Group's share of the following items:

Net profit 6,703 5,124 Other comprehensive income 1,134 3,802 Total comprehensive income 7,837 8,926

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.

• 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 notes Ⅲ.11 – Financial instruments, Ⅲ.12 – Accounts receivables and Ⅲ.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:

June 30, 2026

Past due by less than 90 days 631,086 Past due by more than 90 days 533,389

1,184,475

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 7,431,703 thousand relate to category of "Lifetime expected credit losses (credit losses has not occurred)" and amounted to RMB 818,246 thousand related to category of "Lifetime expected credit losses (credit losses occurred)". The Group has a provision for other receivables amounted to RMB 12,423 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.

C. Liquidity risk - (cont’d)

(1) Presented below are the contractual maturities of the financial liabilities at undiscounted amounts, including estimated interest payments:

As at June 30, 2026

Third- Fifth year Contractual Carrying First year Second year Fourth year and above Cash flow amount

Non-derivative financial liabilities

Short-term loans 5,774,429 - - - 5,774,429 5,763,384 Accounts payables 5,048,131 - - - 5,048,131 5,048,131 Bills payables 605,314 - - - 605,314 605,314 Other payables 1,523,019 - - - 1,523,019 1,523,019 Other current liabilities 549,492 - - - 549,492 549,492 Debentures payable 786,026 783,608 1,485,927 4,347,152 7,402,713 5,651,921 Long-term loans 806,005 588,729 607,307 - 2,002,041 1,913,470 Long-term payables 8,118 21,372 38,281 137,581 205,352 153,307 Lease Liabilities 226,496 188,066 193,334 869,046 1,476,942 821,792 Other non-current liabilities 2,361,330 - - - 2,361,330 2,350,850

Derivative financial liabilities

Foreign currency derivatives 237,588 - - - 237,588 237,588 CPI/shekel forward transactions 12,249 - - - 12,249 12,249

17,938,197 1,581,775 2,324,849 5,353,779 27,198,600 24,630,517

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.

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:

June 30, 2026

Total assets Total liabilities

In US Dollar 3,069,647 1,842,486 In Euro 1,466,936 752,152 In Brazilian real 1,768,697 412,162 CPI-linked NIS - 5,799,298 In New Israeli Shekel 439,237 1,059,033 Denominated in or linked to other foreign currency 2,813,192 3,371,619

9,557,709 13,236,750

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

June 30, 2026

Currency/ linkage receivable

Currency/ linkage payable

Average expiration date

USD thousands Par value

RMB thousands

Par value Fair value

Forward foreign currency USD EUR 24/10/2026 209,984 1,430,181 13,925 Contracts and call options USD PLN 22/09/2026 8,043 54,777 (1,180)

USD BRL 05/08/2026 173,675 1,182,885 3,374 USD GBP 28/07/2026 21,047 143,351 3,288 USD ZAR 04/09/2026 32,145 218,936 (913)

ILS USD 15/08/2026 1,081,236 7,364,188 (33,470) USD OTHER 1,034,366 7,044,962 5,341 CPI forward contracts CPI ILS 07/28/2026 537,280 3,659,360 (11,710)

(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.

June 30, 2026

Decrease of 5% Increase of 5% Equity Profit (loss) Equity Profit (loss)

New Israeli shekel 57,222 26,256 (15,586) 6,848 British pound 469 469 (469) (469) Euro (6,988) 23,407 23,320 (23,407) Brazilian real 10,040 10,040 (15,501) (15,501) Polish zloty 5,040 5,040 (4,774) (4,774) South African Rand (1,073) (1,073) 523 523 Chinese Yuan Renminbi 217,880 217,880 (196,112) (196,112) CPI-linked NIS 130,795 130,795 (130,795) (130,795)

(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.

(2) Interest rate risks - (cont’d)

(A) Type of interest

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

June 30, 2026

Fixed-rate instruments – unlinked to the CPI Financial assets Other non-current assets 6,634

Financial liabilities

Long-term loans (1) 1,813,470 Long-term payables 20,835 Other non-current liabilities (1) 340,545

(2,168,216)

Fixed-rate instruments – linked to the CPI Financial liabilities Debentures payable (1) 5,651,921

Variable-rate instruments Financial assets

Cash at banks 491,863 Financial assets at fair value through profit or loss 2,711

Financial liabilities

Short-term loans and credit from banks 5,763,384 Long-term loans (1) 100,000 Long-term payables 119,596 Other non-current liabilities (1) 2,010,305

(7,498,711)

(1) Including current maturities.

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:

June 30, 2026 Carrying amount Fair value

Financial assets Other non-current assets (a – Level 2) 30,520 23,987

Financial liabilities

Long-term loans and others (b – Level 2) 5,240,319 5,211,018 Debentures (c – Level 1) 5,651,921 6,248,795

• a) The fair value of the other non-current assets is based on a discounted future cash flows, using the acceptable interest rate for similar investment having similar characteristics (Level 2).
• b) The fair value of the long-term loans and others is based on a discounted future cash flows, using the acceptable interest rate for similar loans having similar characteristics (Level 2).
• c) The fair value of the debentures is based on stock exchange quotes (Level 1).

2. The interest rates used in determining fair value ֶ

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

June 30, 2026 %

U.S. dollar interest 5.83 - 7.24 Chinese Yuan Renminbi 1.26 - 2.50

IX. Fair Value - (cont’d)

3. Fair value hierarchy of financial instruments measured at fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The table below presents an analysis of financial instruments measured at fair value. The various levels have been defined as follows:

•  Level 1: quoted prices (unadjusted) in active market for identical instrument.
•  Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
•  Level 3: inputs that are not based on observable market data (unobservable inputs).

The Company’s forward contracts and options are carried at fair value and are evaluated by observable inputs and therefore are concurrent with the definition of level 2.

June 30 2026

Forward contracts and options used for hedging the cash flow (Level 2) 60,209 Forward contracts and options used for economic hedging (Level 2) (81,554) Other equity investment (Level 2) 127,475 Receivables financing (Level 2) 78,314 Other non-current assets (Level 2) 29,171 Other (Level 2) 2,711

Financial Instrument Fair value

Fair value measured on the basis of discounting the difference between the stated forward price in the contract and the current forward price for the residual period until redemption using an appropriate interest rates.

Forward contracts

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.

• X. Related parties and related party transactions

• 1. Information on parent Company

Company name

Registered place Business nature

Registered capital (Thousand RMB)

Shareholding percentage

Percentage of voting rights

Syngenta Group

Shanghai, China

Production and sales of agrochemicals, fertilizers and GM

seeds 11,182,127 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

Agro Jangada Ltda Common control Anhui Chemical Research Institute Common control Anhui Kelihua Chemistry Co., Ltd. Common control Beijing Guangyuan Yinong 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 Sinochem Hebei Fuding Chemical Technology Co., Ltd. Common control Huaxia Hanhua Chemical Equipment Co., Ltd. Common control Jiangsu Huaihe Chemical Co., Ltd. Common control Jiangsu Ruiheng New Material Technology CO., LTD. Common control Jiangsu Youjia Plant Protection Co., Ltd. Common control Jiangsu Youshi Chemical Co., Ltd. Common control YANGNONG SINGAPORE PTE. LTD. Common control Jiangsu Yangnong 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 Chemical Research Institute Co., Ltd Common control Shenyang Shenhua Institute Testing Technology Co., Ltd. Common control Sinochem (Hainan) Agroecology Co. Common control Sinochem (Linyi) Crop Nutrition Co. Ltd Common control Sinochem International Crop Care (Overseas) Pte.Ltd. Common control Sinochem Agro Co. Ltd. Common control Sinochem Digital Intelligence 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 (Liaoning) Co. LTD Common control Sinochem Modern Agriculture (Anhui) Co. LTD Common control Sinochem Petrochemical Sales Co. Ltd. Common control Sinochem India Company Private Limited Common control Syngenta (Shanghai) Crop Protection Technology Company Limit Common control

Syngenta Nantong Crop Protection Co.,Ltd. Common control Syngenta Agro (Argentina) S.A. 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 Crop Protection A/S Common control 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 Ltd. Common control Syngenta Crop Protection NV Common control Syngenta Czech s.r.o. Common control Syngenta España S.A. Common control Syngenta France SAS Common control Syngenta Group Co. Ltd Common control Syngenta Hellas AEBE Common control Syngenta Italia SpA Common control Syngenta Nantong Crop Protection Co Ltd Common control Syngenta Protecao de Cultivos Ltda Common control Syngenta SA. Common control Taicang Zhonglan Environmental Protection Technology Service Co., Ltd.

Common control

China Bluestar Chengrand Research Institute Chemical Industry

Common control

Zhonglan Lianhai Design & Research Institute Co. Ltd. Common control Jiangsu Huifeng Agrochemical 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 Huifeng Biology (Shanghai) Co., Ltd Minority shareholder and its subsidiary

• 4. Transactions and balances with related parties

• (1) Transactions with related parties Six months ended

June 30 Type of purchase Related Party Relationship 2026 2025

Summary of purchase of goods/services: Purchase of goods/services received Common control under

Sinochem Holdings 539,227 651,803 Minority shareholder and its subsidiary

510 14,228 Purchase of fixed assets and other assets Common control under

Sinochem Holdings

15,042 49 Lease expenses Minority shareholder and

its subsidiary

924 924

Summary of Sales of goods: Sale of goods/ Service rendered Common control under

Sinochem Holdings

396,910 554,642

Joint venture 35,747 49,323 Minority shareholder and its subsidiary 5,391 8,948

Lease income Minority shareholder and its subsidiary

544 544

• (2) Guarantees The Group as the guarantee receiver

Amount of guaranteed loan

Inception date of guaranty

Maturity date of guaranty

Guaranty completed (Y / N)

Guarantee provider

Parent company 263,000 21/04/2021 20/04/2028 Y 67,971 01/06/2021 31/05/2028 Y

As at 30 June 2026, all guarantees provided by the parent company of the Group to the Group have been fully discharged. No guarantee fees were incurred for the six months ended 30 June 2026 (six months ended 30 June 2025: guarantee fees paid by the Group to its parent company amounted to RMB 197 thousand).

• (3) Remuneration of key management personnel and directors Periods ended June 30

2026 2025

Remuneration of key management personnel and directors 28,856 16,533

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

Receivable Items

Items

Related Party Relationship

June 30 December 31 2026 2025

Expected credit losses

Expected credit losses

Book Balance

Book Balance

Trade receivables Common control under Sinochem Holdings

248,189 - 214,960 -

Joint venture 17,286 - 15,063 Minority shareholder and its subsidiary

3,735 - 5,201 Prepayments Common control under

2,263 - 1,629 -

Sinochem Holdings

Payable Items

June 30 December 31 Items Related Party Relationship 2026 2025 Trade payables Common control under Sinochem Holdings

296,190 328,410 Minority shareholder and its subsidiary 320 63

Other payables Common control under Sinochem Holdings

53,643 66,612 Minority shareholder and its subsidiary 517 517

Contractual liability Common control under Sinochem Holdings

12,079 22,912

Short-term loans * Common control under Sinochem Holdings

Other non-current liabilities (including current maturities). *

Common control under Sinochem Holdings

3,337,340 3,444,112

2,350,850 2,359,991

• Include liabilities are loans from a related party, the interest expenses for the Six months ended June 30, 2026 is 108,601 thousand RMB (six months ended June 30, 2025: 134,799 thousand RMB).

(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 USD 100 million on market terms with Syngenta Group, or any of its subsidiaries, including a long-term loan for 5 years of USD 50 million. As of June 30, 2026, the balance of this loan amounted to approximately RMB 341 million.

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 2,000 million with Syngenta Group, or any of its subsidiaries. As of June 30, 2026, a total of RMB 2,000 million was utilized.

On March 26, 2026, the Board of Directors approved (following the pre-approval of the Company’s independent directors dated March 24, 2026) the Proposal on Consolidation of Credit Facilities from the Related Party, to consolidate the existing short- term annual revolving credit facilities of USD 350 million and USD 400 million originally provided by Syngenta Group subsidiaries to the Group’s subsidiaries into a single short- term annual revolving credit facility with an aggregate amount of USD 750 million. As of June 30, 2026, the Group’s cumulative utilisation of this credit facility amounted to USD 490 million (equivalent to approximately RMB 3,337 million).

(5) Other related party transactions

The closing balance of bank deposit in Sinochem Finance Corporation was 768,225 thousand RMB (31.12.25: 912,869) Interest income of bank deposit for the current period was 8,391 thousand RMB (amount for six months ended June , 2025 was 3,197 thousand RMB).

The closing balance of a loan received from Sinochem Finance Corporation was 249,641 thousand RMB (31.12.25: 209,641) Interest expenses in the current period was 2,852 thousand RMB (amount for six months ended June , 2025 was 398 thousand RMB).

• XI. Commitments and contingencies

• 1. Significant commitments June 30 December 31

2026 2025 Investment in Fixed assets

105,773 125,136

• 2. Commitments and Contingent Liabilities On April 30, 2026, 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 initial insurance period was from July 1, 2024, to June 30, 2025. Based on the Shareholders meeting approval and authorization, the Company's management renewed and extended the Directors and Officers liability insurance policy, such that the current insurance period ends on April 30, 2027.

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 whollyowned 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.

• XI. Commitments and contingencies - (cont’d)

1. 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.

• XII. Events subsequent to the balance sheet date The Company is not aware of any events subsequent to the balance sheet date.
• XIII. Share-based Payments

In September 2019, the remuneration committee and Solutions Board of Directors (and the General Meeting with respect to the CEO and Vice President who also serves as a director) approved the cancellation of 2017 Plan against the allocation of 28,258,248 warrants in accordance with the long-term phantom compensation plan (hereinafter - "The Alternative Warrants" and "The Alternative Plan"). The cancellation and allocation date is September 26, 2019. During 2019, an additional 90,130 Alternative Phantom Warrants were granted.

XIII. Share-based Payments - (cont’d)

The alternative warrants will vest in four equal portions, where the first quarter is exercisable after one year, the second quarter after two years, the third quarter after three years and the fourth quarter after four years from October 1, 2019. The warrants will be exercisable, in whole or in part, in accordance with the terms of the Alternative Plan, and subject to achieving financial targets as determined in the plan. The warrants will be exercisable until October 1, 2026.

Upon exercise of each warrant, the offeree will be entitled to receive cash payment equal to the difference between the base price as determined at the time of the grant and the closing price of one share of the parent company on the Shenzhen Stock Exchange, as it will be on the exercise date up to the ceiling that was determined under the plan.

The fair value of the total granted alternative warrants at the allocated date is equal to the fair value of the total warrants canceled from the 2017 plan.

The cost of the benefit embodied in the warrants that were allocated as aforesaid, based on the fair value at the cancellation and allocation date, amounted to a total of approximately 69 million RMB. The liability in the financial statements at the end of the reporting period was recorded at the fair value estimated using the binomial option pricing model and by the vesting period from the original grant date of the 2017 plan to the end of the service period determined by the alternative plan, taking into account the extent of the service that the employees provided until that date and the stock price at the reporting date.

Statement of share based payments in the period

Phantom warrants Changes in the number of 2017 Plan:

Total number of Phantom warrants at the beginning of the period 3,689,544 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 (1,255,300) Total number of Phantom warrants at the end of the period 2,434,244

The range of the exercise prices and the remainder of the contractual period for Phantom warrants outstanding at the end of period

RMB 9.37 – 9.43 0.25 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) 68,836

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.

ADAMA Ltd. (Expressed in RMB '000)

Notes to the Financial Statements

• XIV. Other significant items - (cont'd)

• 1. Segment reporting - (cont’d) Information regarding the results and assets and liabilities of each reportable segment is included below:

Crop Protection Intermediates and ingredients Elimination among segments Total

Six months ended June 30

Six months ended June 30

Six months ended June 30

Six months ended June 30

2026 2025 2026 2025 2026 2025 2026 2025

Operating income from external customers 13,497,197 13,656,589 979,343 1,367,611 - - 14,476,540 15,024,200 Inter-segment operating income - - 655 962 (655) (962) - Interest in the profit or loss of associates and joint ventures - - 6,593 5,261 - - 6,593 5,261 Segment's results 1,117,325 776,250 85,315 129,004 - - 1,202,640 905,254 Financial expenses 1,023,706 1,024,340 Gain (loss) from changes in fair value 213,451 (6,493) Income (loss) before tax 392,385 (125,579) Income tax expenses (40,182) (45,227) Net (income) Loss 432,567 (80,352)

Crop Protection Intermediates and ingredients Unallocated assets and liabilities Total

June 30 December 31 June 30 December 31 June 30 December 31 June 30 December 31 2026 2025 2026 2025 2026 2025 2026 2025

Total assets 37,997,140 39,011,654 2,043,258 2,092,328 6,608,691 7,359,980 46,649,089 48,463,962 Total liabilities 7,360,638 7,904,219 208,693 240,167 21,443,739 22,744,150 29,013,070 30,888,536

• 105 -

1. Segment reporting - (cont’d) Geographic information

The following tables sets out information about the geographical segments of the Group’s operating income based on the location of customers (sales target) and the Group's non-current assets (including mainly fixed assets, right-of-use assets, construction in progress, investment properties intangible assets and goodwill). In the case of investment property, fixed assets, right of used assets and construction in progress, the geographical location of the assets is based on its physical location. In case of intangible assets and goodwill, the geographical location of the company which owns the assets.

Operating income from external customers

Six months ended June 30 2026 2025

Europe, Africa and Middle Eas 5,041,810 4,811,339 North America 3,570,492 3,554,544 Latin America 2,431,950 2,609,695

• Asia Pacific 3,432,288 4,048,622 14,476,540 15,024,200

Specified non-current assets June 30 December 31 2026 2025

Europe, Africa and Middle East 12,548,065 13,319,926 North America 1,201,899 1,232,186 Latin America 1,760,934 1,905,677

• Asia Pacific 4,372,305 4,606,298 19,883,203 21,064,087

2. The dependency on major customers No single customer's proportion of the total amount of sales is over 10%.

3. Calculation of losses per share and Diluted earnings per share

Amount for the current period

Amount for the prior period

Net loss from continuing operations attributable to ordinary shareholders 432,567 (80,352)

Shares

Amount for the current period

Amount for the prior period

Number of ordinary shares outstanding at the beginning of the year 2,329,811,766 2,329,811,766 Add: weighted average number of ordinary shares issued during the year - Less: weighted average number of ordinary shares repurchased during the year - Weighted average number of ordinary shares outstanding at the end of the year 2,329,811,766 2,329,811,766

Amount for the current period

Amount for the prior period

Calculated based on net profit (loss) attributable to ordinary shareholders

Basic losses per share 0.19 (0.03) Diluted losses per share N/A N/A Calculated based on net profit (loss) from continuing operations attributable to ordinary shareholders:

Basic losses per share 0.19 (0.03) Diluted losses per share N/A N/A Calculated based on net profit (loss) from discontinued operations attributable to ordinary shareholders:

Basic losses per share N/A N/A Diluted losses per share N/A N/A

• XV. Notes to major items in the Company's financial statements

1. Cash at bank and on hand

June 30 December 31 2026 2025

Deposits in banks 138,892 58,950 Other cash and bank balances 13,686 6,014

152,578 64,964

As at June 30, 2026, restricted cash and bank balances was 13,686 thousand RMB (as at December 31, 2025: 6,014 thousand RMB).

1. Accounts receivable

• a. By category June 30, 2026

Book value

Provision for expected credit losses

Amount Percentage (%) Amount Percentage (%)

Carrying amount

Account receivables assessed individually for impairment 13,893 1 13,893 100 Account receivables assessed collectively for impairment 2,006,832 99 902 - 2,005,930

2,020,725 100 14,795 1 2,005,930

December 31, 2025 Book value

Provision for expected credit losses

Amount Percentage (%) Amount Percentage (%)

Carrying amount

Account receivables assessed individually for impairment 13,893 1 13,893 100 Account receivables assessed collectively for impairment 1,637,510 99 902 - 1,636,608

1,651,403 100 14,795 1 1,636,608

• b. Aging analysis June 30, 2026

Within 1 year (inclusive) 1,254,429

• Over 1 year but within 2 years 733,188
• Over 2 years but within 3 years 19,215
• Over 3 years but within 4 years -
• Over 4 years but within 5 years -
• Over 5 years 13,893 2,020,725

• 2. Accounts receivable - (cont'd) c. Addition, written-back and written-off of provision for expected credit losses during the period

Six months ended June 30, 2026

Balance as of January 1 14,795 Addition during the period, net Balance as of June 30.2026 14,795

d. Five largest accounts receivable at June 30, 2026:

Name Closing balance

Proportion of Accounts receivable (%)

Allowance of expected credit losses

• Party 1* 1,877,059 93 -
• Party 2 66,481 3 -
• Party 3 19,965 1 902
• Party 4 8,140 0.5 -
• Party 5 8,000 0.5 1,979,645 98 902

• Include intergroup balance with ADAMA Solutions.

• 3. Receivable financing June 30 December 31

2026 2025

Bank acceptance draft 26,915 10,490 26,915 10,490

As at June 30, 2026, bank acceptance endorsed but not yet due amounts to 221,975 thousand RMB.

• 4. Other Receivables

June 30 December 31 2026 2025

Dividends receivable - 2,325 Other receivables 23,722 24,109

23,722 26,434

• 4. Other Receivables - (cont'd)

(1) Other receivables

• a. Other receivables by categories June 30 December 31

2026 2025

Other 29,188 29,485 Provision for expected credit losses (5,466) (5,376)

23,722 24,109

• b. Other receivables by aging June 30, 2026

Within 1 year (inclusive) 90

• Over 1 year but within 2 years 12,111
• 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 16,783 29,188

• c. Additions, recovery or reversal and written-off of provision for expected credit losses during the period:

Six months ended June 30, 2026

Balance as of January 1, 2026 5,376 Addition during the period 90 Balance as of June 30, 2026 5,466

d. Five largest other receivables at June 30 2026:

Proportion of other receivables (%) Credit loss provision

Name Closing balance

• Party 1* 23,722 81 -
• Party 2 3,125 11 3,125
• Party 3 548 2 548
• Party 4 237 1 237
• Party 5 221 1 221 27,853 96 4,131

* Include intergroup balance with Anpon

• 5. Long-term equity investments June 30, 2026 December 31, 2025

Amount balance

Impairment loss Book value Amount balance

Impairment loss Book value

Invest in subsidiaries 17,511,352 80,636 17,430,716 17,511,352 80,636 17,430,716

17,511,352 80,636 17,430,716 17,511,352 80,636 17,430,716

Investments in subsidiaries

Invested unit

Opening balance Increase Decrease

Provision of impairment loss

Closing balance

Balance of Impairment loss

ADAMA Agricultural Solutions Ltd. 15,890,213 - - - 15,890,213 Adama Anpon (Jiangsu) Ltd. 450,449 - - - 450,449 ADAMA Hiufeng (Jiangsu) Co. Ltd. 789,116 - - - 789,116 (59,024) Hubei Sanonda Foreign Trade Co.

Ltd.

11,993 - - - 11,993 -

Adama Huifeng (shanghai) Agricultural Technology Co., Ltd

288,945 - - - 288,945 (21,612) 17,430,716 - - - 17,430,716 (80,636)

• 6. Operating Income and operating costs Six months ended June 30, 2026 Six months ended June 30, 2025

Operating costs Revenue

Operating costs

Revenue

Main operations 1,150,645 953,163 1,068,970 870,381 Other operations 28,952 10,580 25,602 9,594

1,179,597 963,743 1,094,572 879,975

• 7. Notes to items in the cash flow statements

• (1) Other cash received relevant to operating activities

Six months ended June 30, 2026

Six months ended June 30, 2025

Interest income 1,181 216 Government subsidies 2,064 4,201 Other 1,789 10,907

5,034 15,324

• (2) Other cash paid relevant to operating activities

Six months ended June 30, 2026

Six months ended June 30, 2025

Professional services 103,854 11,037 Other 9,039 12,890

112,893 23,927

• (3) Other cash received relevant to investing activities Six months ended

June 30,2026

Six months ended June 30,2025

Other 757 803 757 803

• (4) Other cash paid relevant to investing activities Six months ended

June 30,2026

Six months ended June 30, 2025

Loans 20,000 20,000 -

• (5) Other cash received relevant to financing activities

Six months ended June 30, 2026

Six months ended June 30, 2025

Deposit for issuing bills payables 4,500 1,858 4,500 1,858

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

)6( Other cash paid relevant to financing activities

Six months ended June 30, 2026

Six months ended June 30, 2025

Deposit for issuing bills payables 12,172 14,246 12,172 14,246

XV. Notes to major items in the Company's financial statements - (cont'd)

• 8. Supplementary information to cash flow statement

• (1) Reconciliation of net profit to net cash flows generated from operating activities:

Six months ended June 30 2026 2025

Net profit 84,773 130,151 Add: Asset Impairment losses 2,099 3,362 Credit impairment losses 90 1,084 Depreciation of fixed assets and investment property 87,847 98,116 Depreciation of-right-of use assets 565 395 Amortization of intangible assets 6,153 6,067 Gain (losses) on disposal of fixed assets, intangible assets and other long-term assets

28 (3,587)

Gains from changes in fair value - (30,714) Financial expenses 60,000 13,298 Investment income (20,301) (32,445) Decrease in deferred income tax assets 11,489 21,449 Decrease in inventory 39,881 43,633 Increase in accounts receivable from operating activities (317,594) (212,970) Increase in payables from operating activities 119,260 148,263 Net cash flows generated from operating activities 74,290 186,102

• (2) Net increase in cash and cash equivalents

Six months ended June 30 2026 2025

Closing balance of cash 138,892 65,500 Less: Opening balance of cash 58,950 39,173 Net increase in cash and cash equivalents 79,942 26,327

• 9. Related parties and related parties transactions

• (1) Information on parent Company

Company name

Registered place Business nature

Registered capital (Thousand RMB)

Shareholding percentage

Percentage of voting rights

Syngenta Group

Shanghai, China

Production and sales of agrochemicals, fertilizers and GM

seeds 11,182,127 78.47% 78.47%

The ultimate controlling shareholder is Sinochem Holdings .

• (2) Information on the subsidiaries of the Company

For information about the subsidiaries of the Company, refer to Note VII.1.

• (3) Transactions with related parties

• a. Transactions of goods and services

Six months ended June 30 2026 2025

Related Party Relationship

Summary of Purchase of goods/services received:

Purchase of goods/services received Common control under Sinochem Holdings 19,205 37,764 Subsidiary 50,175 45,789

Purchase of fixed assets and other assets Common control under Sinochem Holdings

15,042 Subsidiary 1,327 -

Summary of Sales of goods: Sale of goods Common control under

Sinochem Holdings 177 347 Subsidiary 721,560 645,933

• b. Guarantees

The Company as the guarantor

Amount of guaranteed loan

Inception date of guaranty

Maturity date of guaranty

Guaranty completed (Y/ N)

57,705 01.12.2021 28.11.2027 N

Subsidiary 23,951 01.01.2026 31.12.2026 N 20,000 20.05.2026 19.05.2027 N 10,885 28.01.2026 28.07.2026 N

• 9,000 03.04.2023 10.11.2027 N
• 10,000 12.01.2022 10.11.2027 N 3,000 28.07.2023 10.11.2027 N

50,000 10.04.2024 26.04.2027 N 28,000 25.03.2025 24.03.2028 N

7,000 11.08.2022 22.06.2028 N 25,000 23.11.2022 22.06.2028 N

• 11,000 28.10.2022 22.06.2027 N 3,000 04.04.2023 22.06.2028 N

• 10,000 31.08.2022 22.06.2028 N 1,500 26.04.2023 05.05.2028 N 8,500 30.01.2024 05.05.2028 N

27,623 26.12.2025 14.07.2026 N 4,894 27.01.2026 27.07.2026 N 13,385 10.02.2026 10.08.2026 N

• 11,699 16.03.2026 15.09.2026 N 9,507 29.06.2026 29.12.2026 N

19,685 15.03.2026 16.09.2026 N

• b. Guarantees - (cont'd) The Company as the guarantee receiver

Guarantee provider

Amount of guaranteed loan

Inception date of guaranty

Maturity date of guaranty

Guaranty

completed (Y / N) Parent company 263,000 21.04.2021 20/04/2028 Y Parent company 67,971 01.06.2021 31/05/2028 Y

As at 30 June 2026, all guarantees provided by the parent company of the Group to the Group have been fully discharged. No guarantee fees were incurred for the six months ended 30 June 2026 (six months ended 30 June 2025: guarantee fees paid by the Group to its parent company amounted to RMB 197 thousand).

• c. Intercompany borrowings/lending

Related party

Borrowing/ Lending amount

Commencement date

Termination date

Balance at year end Interest rate

Lending

Subsidiary 50,000 2025.12 2028.11 50,000 2.4% Subsidiary 20,000 2026.2 2028.11 20,000 2.4%

• d. Receivables from and payables to related parties (including loans) Receivable Items

June 30 December 31 2026 2025

Expected credit losses

Expected credit losses

Related Party Relationship

Book Balance

Book Balance

Items

Trade receivables Subsidiary 1,882,791 - 1,563,401 Other non-current assets Subsidiary 70,000 - 50,000 Other receivables Subsidiary 23,722 - 24,109 Prepayments Subsidiary 1,500 - - Prepayments Common control under

Sinochem Holding 2,146 - 83 -

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

Payable Items

June 30 December 31 Items Related Party Relationship 2026 2025 Trade payables Common control under Sinochem

Holdings 195 4,665

Other payables Subsidiary 546,251 587,644 Common control under Sinochem Holdings 471 471

e. Other related party transactions

As at June 30,2026 , the closing balance of bank deposit in SinoChem Finance Corporation was 117,976 thousand RMB (31.12.25: 41,343 thousand RMB) Interest income of bank deposit for the year was 1,204 thousand RMB (amount for six months ended June , 2025 was 157 thousand RMB).

ADAMA Ltd. Semi-Annual Report 2026

Supplementary information (Expressed in RMB '000)

1. Extraordinary Gain and Loss

Six months ended June 30, 2026

Disposal of non-current assets 306,349 Government grants recognized through profit or loss 3,940 Custodian fees earned from entrusted operation 1,746 Recovery or reversal of expected credit losses which is assessed individually during the years 27,827 Other profit or loss that meets the definition of non-recurring profit or loss 17,102 Other non-operating income or expenses other than the above 5,533 Tax effect (10,567)

351,930

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 assets

Basic EPS (RMB/share)

Diluted EPS (RMB/share)

Profit during the reporting period

Net loss attributable to ordinary

shareholders of the Company 2.46% 0.19 N/A

Net loss after deduction of extraordinary gains/losses attributable to ordinary shareholders of the Company 0.46% 0.03 N/A