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ANNU
AL REPOR
T
2021
07
CEO Letter
10
Global strategy review
24
How we create value
35
Sustainability strategy
44 Environmental
68 Social
80 Governance
83
Enterprise Risk Management
and Internal Control
85
Risk Management
92
Compliance
125
Consolidated ﬁnancial statements
132
Notes to the consolidated
ﬁnancial statements
179
Parent Company ﬁnancial
statements
185
Notes to the Parent Company
ﬁnancial statements
199
Independent auditor's report
209
Alternative
performance
measures (APMs)
211
GRI Index
215
TCFD Index
216
SASB Index
218
ESG performance summary
221
Glossary of abbreviations and
key terms
222
Shareholder information
95 Co-Chair's introduction
96 Board pr
oﬁle
100 Board r
eport
110 Remuneration report
123 Declarations
25
Business performance
32
Management
discussion
and analysis
6.
FINANCIAL
ST
A
TEMENTS
5.
CORPORA
TE
GO
VERNANCE
3.
SUST
AINABILITY
REPOR
T
4.
RISK MANA
GEMENT
& COMPLIANCE
2.
BUSINESS
PERFORMANCE
1.
STRA
TEG
Y AND
V
ALUE CREA
TION
7.
O
THER
INFORMA
TION
European single electr
onic reporting format (ESEF) and PDF version
This is the PDF/printed version of OCI N.V
.’
s 2021 Annual Report. This version has been prepar
ed for ease
of use and does not contain ESEF information as speciﬁed in the Regulatory T
echnical Standards on ESEF
(Delegated Regulation (EU) 2019/815). The ofﬁcial ESEF r
eporting package is available on our website at
https://www
.oci.nl/investor-centr
e/results-and-pr
esentations/
In case of any discrepancies between this PDF version and the ESEF r
eporting package, the latter prevails.
OCI N.V
.
Annual Report 2021
2
P
U
R
P
O
S
E
C
u
l
t
i
v
a
t
i
n
g
a
s
u
s
t
a
i
n
a
b
l
e
w
o
r
l
d
b
y
d
e
c
a
r
b
o
n
i
z
i
n
g
f
o
o
d
,
f
u
e
l
,
a
n
d
f
e
e
d
s
t
o
c
k
COLLABORA
TION
Working acr
oss our diverse
cultures with mutual
respect, inclusion, drive,
and innovation
AGILITY
Working dynamically and
swiftly to capitalize on
opportunities and adapt
to change
EXCELLENCE
Working with an
emphasis on safety
,
ownership, and integrity
W
e promote
a culture of
CARE
V
ALUES
RESOURCEFULNESS
Working diligently
and proactively to cr
eate
exceptional value for all
our stakeholders
OCI N.
V
. is a leading global
producer and distributor
of hy
drogen products
providing low carbon
f
er
tilizers, fuels, and
f
eedstock to agricultur
al,
transportation, and
industrial customers
around the world.
OCI’
s production capacity spans four continents and comprises approximately 16.2 million
metric tons per year of hydrogen pr
oducts including nitrogen fertilizers, industrial ammonia,
methanol, biofuels, diesel exhaust ﬂuid, melamine, and other products. OCI has mor
e
than 3,850 employees, is headquartered in the Netherlands and listed on Eur
onext in
Amsterdam.
OCI N.V
.
Annual Report 2021
3
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
2021 PERFORMANCE HIGHLIGHTS
T
otal equity
2020: $2,672M
Earnings/(loss)
per share
2020: $(0.847)
Gross debt
2020: $4,417M
Net debt
2020: $3,730M
Free cash ﬂow
2020: $305M
Adjusted EBITDA
2020: $870M
Adjusted net
income/(loss)
2020: $(213)M
T
otal assets
2020: $9,097M
$3,508M
$2
.
7
19
$3,801M
$2
,
221M
$1,594M
$2
,527M
$732M
$9
,812M
Lost time
injury rate
2020: 0.09
T
otal r
ecordable
injury rate
2020: 0.23
Women at OCI
2020: 10.5%
Compliance
training enrollment
2020: 100%
Occupational
illness rate
2020: 1.9%
GHG intensity*
MT CO
2
e/ton produced
2020: 2.31
Energy intensity
GJ/ton of ammonia
produced
2020: 36.36
W
ater Intensity
m
3
consumed/ton
produced
2020: 2.50
Employee
turnover rate
2020: 2.2%
0.
2
0
0.
3
5
11.4%
100%
1.
7%
2
.3
4
36.
05
2
.7
9
2
.7
%
Revenue
2020: $3,474M
$6,319M
DRIVING BUSINESS V
AL
UE
FINANCIAL
ESG
* Please refer to page 48 for a description of how we calculate GHG intensity
.
OCI N.V
.
Annual Report 2021
4
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
S
u
s
t
a
i
n
a
b
i
l
i
t
y
p
r
o
g
r
a
m
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p
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t
a
t
e
-
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a
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,
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g
i
c
a
l
l
y
l
o
c
a
t
e
d
a
s
s
e
t
s
Sales by product
Hydrogen fuels and feedstocks
3.3MT
Grey and gr
een methanol, DEF
, and
green ammonia sold in 2021
•
Other
77%
•
Hydrogen fuels
and feedstock
23%
Our customers
•
Fertilizer use
74%
•
Industrial use
26%
Our employees
3,853
Employees in 2021
•
MENA
70%
•
Europe
19%
•
North
America
11%
•
Ammonia
16%
•
Urea
39%
•
CAN
8%
•
UAN
10%
•
AS
3%
•
Melamine
1%
•
DEF
7%
•
Methanol
16%
14.4MT
Sold in 2021
Our business
Our production facilities ar
e located in the United States, the Netherlands, the United
Arab Emirates, Egypt, and Algeria. We ar
e able to produce and distribute appr
oximately
16.2 million metric tons per year of merchant ammonia, granular ur
ea, calcium
ammonium nitrate (CAN), urea ammonium nitrate (UAN), ammonium sulphate (AS),
methanol, biofuels, diesel exhaust ﬂuid, melamine, and other nitrogen pr
oducts, serving
agricultural, transportation, and industrial customers around the world.
Our position in the value chain
Raw
material
input
End-
consumer
Production
Storage
Wholesale
distribution
Our business model
2021 PERFORMANCE HIGHLIGHTS
Production
assets
War
ehousing ca
paci
ty
Distribution / JVs
Revenue by segment
$6,319M
Revenue in 2021
•
Nitrogen
80%
•
Methanol
20%
Adjusted EBITDA by
segment
$2,527M
Adjusted EBITDA in 2021
•
Nitrogen
80%
•
Methanol
20%
OCI N.V
.
Annual Report 2021
5
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
1.
S
TR
A
TEG
Y AND
V
AL
UE CREA
TION
OCI N.V
.
Annual Report 2021
7
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CEO LETTER
Dear stakeholders
2021 has been a transformational year
I am pleased with our excellent results in 2021, as we begin
reaping the r
ewards of our gr
owth strategy and competitive
business model. We deliver
ed recor
d adjusted EBITDA
of $2.5 billion and, importantly
, our free cash ﬂow from
operations was $1.6 billion. We met leverage goals earlier
than we had targeted and are appr
oaching our objective of
an Investment Grade credit rating.
We achieved this with a safety performance well below
industry averages, but our goal remains to prioritize pr
ocess
safety and to reduce occupational safety incidents to zer
o
at all our production facilities acr
oss the globe.
I am particularly pleased that this performance, together
with a newly designed capital allocation policy gives us the
opportunity to start returning capital to shareholders. At the
same time, we are positioned well for futur
e growth as we
strategically deploy capital for decarbonizing and growing
our asset base in a value-accretive way for the futur
e
hydrogen economy
.
We have been very active with a number of corporate
initiatives in the past twelve months. We successfully listed
a 13.8% share in Fertiglobe, our partnership with ADNOC
in the Middle East and North Africa, on the Abu Dhabi
Securities Exchange (ADX) in October
. We also created a
new strategic alliance for our methanol business with two
leading investors through the sale of a 15% stake in that
group. On the ESG fr
ont, we announced several blue and
green hydr
ogen activities across our platform.
I would like to thank all our employees for an excellent year
and for their strong commitment to impr
oving and growing
our business. A lot of hard work has gone into bringing us
to this point and I am excited about what our dynamic team
and state-of-the art asset base can accomplish with this
balance sheet and market backdrop.
Health and safety ﬁrst
After a recor
d safety performance in 2020, we experienced
more incidents year
-on-year in 2021 resulting in a lost-
time injury rate (L
TIR) of 0.20 and a total recordable injury
rate (TRIR) of 0.35. These numbers are below our internal
targets but reﬂect a deterioration over 2020.
We ar
e committed to a zero-incident cultur
e and take every
safety in incident seriously
. While we are proud that our
safety performance continued to be best-in-class despite
the prevalence and challenges of COVID-19, we r
egretfully
suffer
ed the ﬁrst fatality in our history due to a contractor
fall at a jetty
. We are deeply saddened by this loss, which is
a very signiﬁcant example of the importance of preventive
maintenance and of constant vigilance from all employees,
and a full investigation was launched with learnings
implemented across our sites.
While we are pr
oud of every employee’
s and contractor’
s
diligence and attention to safety
, which has brought our
total recor
dable injury rate down by 58% since 2014, we
do not take a decline in safety performance lightly
.
Accordingly
, we maintain an awareness pr
ogram and
refr
esher sessions for all employees and contractors as
part of our training program. W
e also reinfor
ce our HSE
standards among contractors, which have historically
consistently suffer
ed more incidents than our employees.
We will continue to pr
omote a strong safety cultur
e and
focus on targeting zero injuries acr
oss our organization,
both with our own employees and with contractors. In this
we are supported by ongoing support and oversight fr
om
the Board and in the HSE & Sustainability Committee.
Our purpose:
Cultivating a sustainable
world by decarbonizing food,
fuel, and feedstock
A robust capital structur
e and
new capital allocation policy
During 2021, we redeemed bonds at OCI NV and IFCo for a
total of $1.8 billion and have reduced net debt by $1.5 billion to
c.$2.2 billion, lowered our weighted average cost of debt fr
om
c.4.3% at end 2020 to c.3.2% at end 2021 and, reduced cash
interest by mor
e than $60 million per year from 2022 onwar
ds.
Looking ahead, we will continue to evaluate opportunities to
optimize our capital structure and enhance our r
ecurring free
cash ﬂow conversion.
The Fertiglobe listing was a major event for our capital structure.
It generated gross pr
oceeds to OCI of approximately $461
million. In addition, before the IPO, Fertiglobe paid dividends
of $1,165 million, including an $850 million special dividend,
to its two shareholders. Following the IPO, OCI continues to
own a majority of Fertiglobe’
s share capital and will continue to
consolidate it in our results.
The continued improvement in our leverage pr
oﬁle has
translated in upgrades by S&P
, Moody’
s, and Fitch, resulting in
all ratings are now equalized at BB+ / Ba1 (stable outlook).
Following the transformation in our capital structure during 2021
and the healthy free cash ﬂow generated, we ar
e approaching
our objective to reach an Investment Grade cr
edit rating.
As a result, we ar
e well-positioned to start returning capital to
shareholders, as well as invest in gr
owth opportunities in the
hydrogen energy transition and other opportunities to enhance
and de-risk our future fr
ee cash ﬂows.
T
o that end, OCI’
s Board has approved a new dividend / capital
allocation policy
, which combines a consistent base return of
capital of $400 million per year
, subject to our leverage targets
and policy
, with an additional variable component linked to FCF
generated. Distributions will be made twice per year
.
Going forward, this new policy is supported by healthy
fundamentals of our core markets, our focus on operational
excellence, our robust balance sheet, and healthy fr
ee cash
ﬂows.
OCI advances decarbonization initiatives
As part of the accelerated global shift to clean energy
, hydrogen
will play a vital role in the energy transition. Ammonia and
methanol are the most ef
fective carriers of green hydr
ogen
essential to decarbonizing industry
, food, and transport.
I am pleased that we have numerous key initiatives underway
to capture this energy transition potential. Within the past
twelve months we have announced blue and green ammonia
and methanol initiatives across our global asset base. All these
initiatives are at various stages of development and r
epresent
the advantaged locations and characteristics of our asset base
that position us well for the energy transition.
We ar
e also well positioned as a strategic partner with industry
leaders as we are one of the largest pr
oducers and traders of
ammonia and methanol globally with a strategically located
asset base, infrastructure, and logistics in place. Mor
eover
, our
facilities are located in ar
eas that are expected to have abundant
low-cost renewable energy sour
ces. These partnerships can
provide entry with r
elatively low capital expenditure for us
and without taking any major supply or technology risks as
compared to gr
eenﬁeld projects.
CEO LETTER
CONTINUED
INVESTMENT HIGHLIGHT
S
Global leader in nitrogen and methanol
with excellent diversication
•
Net Ammonia 15%
•
Urea 34%
•
CAN 10%
•
UAN 16%
•
Methanol 18%
•
Melamine 1%
•
DEF 6%
16.2 million metric tons per year
of production capacity
Favourable position on the cost curve with
state-of-the-art asset base
17%
>40yrs
30-40yrs
20-30yrs
0-10yrs
10-20yrs
8%
14%
9%
52%
Y
oungest asset
base relative
to global peers
with 33% of
production
capacity under
5 years old
Asset base by vintage
Highly strategic locations allow for enhanced
netback pricing through a coor
dinated global
commercial strategy
•
North America 35%
•
Europe 24%
•
MENA 41%
Capacity by region
OCI N.V
.
Annual Report 2021
8
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Looking ahead
Looking ahead into 2022, we are highly concerned and
saddened by the humanitarian crisis currently unfolding fr
om
the Russia – Ukraine conﬂict. As a leading producer and
distributor of essential nitrogen fertilizers, our global team is
working to run our world-scale assets and utilize global supply
chain to the fullest to ensure the availability of our nitr
ogen
fertilizers to support crop yields and help addr
ess critical grain
shortfalls.
We ar
e not today directly impacted by the conﬂict or r
elated
sanctions yet future ef
fects are uncertain and we ar
e closely
monitoring the extreme volatility
, uncertainty and indirect impacts
as they arise. We believe our diversiﬁed pr
oduct mix, low-cost
global platform, world-scale young assets, strong logistics and
our unique ammonia infrastructure can help us mitigate volatile
feedstock and product prices, as demonstrated during the high
gas price environment in Eur
ope in the second half of 2021.
Demand for our industrial nitrogen pr
oducts is strong. The
ammonia market is structurally tightening over the medium term
with limited net capacity additions and higher industrial demand.
Melamine markets have continued to tighten driven by strong
demand from home r
enovation and construction markets, tight
supply
, and low global inventories across the supply chain.
The recovery in truck sales and fr
eight activity has continued,
supporting an improving tr
end for OCI’
s Diesel Exhaust Fluid
sales in the US for 2022.
Methanol market fundamentals remain positive. Prices have
been supported by a continued recovery in demand, low global
inventories, and higher oil and derivatives prices whereas ther
e
is no new supply expected to come onstream in 2022.
We see large upside fr
om additional demand for our products
emerging in a range of new applications and sectors as a result
of the hydrogen transition, wher
e ammonia and methanol are
ideally positioned. We continue to make good pr
ogress in our
efforts to captur
e value creative opportunities fr
om emerging
demand for clean ammonia and methanol as we aim to become
one of the largest producers of hydr
ogen fuel and feedstock in
the world.
We can leverage our competitive global platform, world-scale
young assets and strong logistics platform and harmonize our
hydrogen strategy with our r
elentless focus on shareholder value.
This all will continue to support FCF generation together
with our focus on operational excellence and further gross
debt reduction.
Ahmed El-Hoshy
Chief Executive Ofﬁcer
CEO LETTER
CONTINUED
OCI N.V
.
Annual Report 2021
9
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
9
.
7BN
Global population
by 2050
+70%
Required gr
owth
in food production levels
by 2050
-55%
Reduction in arable land
per capita by 2050
+50%
Increase in meat
production by 2050
-55%
Required r
eduction in
GHG emissions by 2030
+300X
Required incr
ease
in transport biofuel
consumption by 2030
Global long-term fundamentals support expected
sustained growth in our industries
Sources: UN F
AOST
A
T
, World Economic Forum, IEA, IPCC
OUR S
TRA
TEGIC PRIORITIES
Our commitment to drive the decarbonization of food, fuel, and feedstock is steered by a dif
ferentiated strategy
focused on capital discipline and value creation, coupled with a unique gr
een portfolio that enables the
hydrogen economy
. Our strategy is underpinned by
str
ong governance with long-term incentives tied to ESG
and operational excellence metrics and dedicated attention from our Boar
d of Directors thr
ough the HSE
& Sustainability Committee.
OPERA
TIONAL
EX
CELLENCE
BUSINESS
OPTIMIZA
TION
GL
OBAL
COMMERCIAL STRA
TEG
Y
SUST
AINABILITY
MAXIMIZING
FREE CASH FL
OW
We ar
e committed to excellence in
every aspect of our organization.
We continuously look for ways
to maximize our production
efﬁciencies, minimize our emissions
and waste, and improve upon our
industry leading health and safety
recor
ds.
We believe operational excellence
does not stop at the gates of our
plants and we hold all suppliers and
business partners to the standards
set out in our Business Partner
Code of Conduct.
We ar
e committed to optimizing
our global presence and enhance
our position as a global leader in
our industries. We will continue
to explore strategic opportunities
that are in line with our strategic
goals and ﬁnancial return
expectations, including acquisitions,
partnerships, joint ventures,
business combination transactions,
disposals, spin-offs or other
transactions.
We maintain a global appr
oach to
our commercial strategy
.
We align our gr
oup-wide sales and
marketing activities to optimize
our production mix thr
ough our
ﬂexible assets and to maximize the
production of pr
emium products,
leverage logistical advantages
through our global distribution
network, and cultivate customer
relationships to deliver str
ong
netback prices.
We ar
e committed to being an
environmental stewar
d and will
drive the hydrogen economy
and signiﬁcantly contribute to
the decarbonization of three of
the largest contributors to global
greenhouse gas emissions: food,
fuel, and feedstock.
We ar
e committed to our ﬁnancial
policy aimed at maximizing our free
cash ﬂow generation.
We believe our diversiﬁed pr
oduct
portfolio, advantageous geographic
presence, and coor
dinated global
commercial strategy enable us to
maximize netback prices, which
coupled with our ramped-up
production capacity
, will allow us
to achieve strong fr
ee cash ﬂow
conversion.
W
e are building a
sustainable company for
the futur
e with a clear
purpose of cultivating
a sustainable world by
decarbonizing food, fuel,
and feedstock.
Our end-markets cover food, fuel, and feedstock, repr
esenting an
opportunity to decarbonize approximately 90% of today’
s global
greenhouse gas emissions:
•
Our nitr
ogen fertilizers allow farmers to increase cr
op yields and
improve food quality
.
•
Our fuel solutions pr
ovide clean alternatives to signiﬁcantly reduce
greenhouse gas emissions by 60% versus conventional fuels.
•
Our industrial feedstocks ar
e excellent hydrogen carriers and
decarbonized input for downstream industrial pr
ocesses.
$75M
1
Additional EBITDA from
operational excellence expected
in the next 3-5 years
-20%
GHG intensity reduction
by 2030
25%
Women in senior
leadership by 2025
<2X
Maintain net leverage
through the cycle
OUR STRA
TEGIC PRIORITIES
OUR
T
A
RGETS
1
The $75 million estimated additional EBITDA was based on selling price levels of early 2021, and would be substantially higher when applying March 2022 prices.
OCI N.V
.
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information
CAPIT
AL ALL
OCA
TION PRIORITIES
Committed to a consistent base
distribution and a variable component
linked to fr
ee cash ﬂow to shareholders
Having achieved our net leverage goals in 2021, we are now in a position
to balance the availability of funds and excess free cash ﬂows to r
eturn
capital to shareholders while pursuing value accr
etive ESG and other growth
opportunities.
The Board of Dir
ectors has therefor
e approved a new capital r
eturns policy
(see page 222) that combines consistent base dividend of $400 million per
year distributed on a semi-annual basis, with a variable component linked to
the generation of free cash ﬂow
.
The variable component can be in the form of repayments of capital,
dividends or share buybacks and is based on surplus fr
ee cash ﬂows after
providing for gr
owth capex and base dividends with the aim to provide
investors with cyclical upside.
Going forward, the policy is subject to maintaining an investment grade cr
edit
proﬁle with a target of net leverage below 2x thr
ough the cycle, and balance
availability of funds and excess FCF for proﬁt distribution to shar
eholders
while pursuing value accretive ESG and other gr
owth opportunities.
2017
2018
2019
2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Leverage targets achieved
Deleveraging despite trough pricing conditions
Accelerated deleveraging in 2021
7.0x
4.4x
5.4x
4.3x
3.0x
2.1x
1.7x
0.87x
Net debt
Net debt / adj. EBITDA
Net Debt
1
(US$ m)
Free Cash Flow (FCF) deﬁned as cash fr
om operations less maintenance capex less lease payments less dividends to minorities
1
Net Debt calculated based on reported loans and borrowings less cash and cash equivalents
Capital returns to shareholders
Invest in growth
Base dividend of $400 million
(paid semi-annually)
Invest in value accretive ESG
and other growth opportunities
variable component linked to FCF generation
T
o grow future FCF potential
Strong balance sheet
Maintain as priority
, target of
<2x net leverage
through the cycle

Supporting strong FCF and an investment grade pr
oﬁle
Balanced deployment of capital
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.
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information
CAPIT
ALIZING ON THE
HYDROGEN OPPOR
TUNIT
Y
OCI is building a sustainable company
for the futur
e that drives the global
transition to a hydr
ogen economy
.
In a decarbonized world by 2030, hydrogen demand could
grow up to tenfold, supported by dr
op in production costs and
regulatory push to addr
ess climate change.
Production cost of hydr
ogen expected to come down rapidly
0
6
4
2
2020
2030
2040
2050
-25%
-25%
-10%
1
Renewable energy electricity cost declines
2
Electrolyzer capital cost declines
3
Other: efﬁciency and O&M impr
ovements
Green
Blue
Optimal green
2
$/kg H
2
NextGenerationEU (EU’
s €808bn post-COVID recovery
fund)
aims to make EU economy greener and mor
e resilient.
EU has committed €37bn of funding
to promote Gr
een H
2
in
Southern Mediterranean (including Egypt and Algeria) between
2021- 2027.
US passed $1.2tn Infrastructure Bill
which includes incentives
for hydrogen and CCS pr
ojects, and is considering the
Build
Back Better Bill
, which includes additional GHG reduction and
hydrogen incentives (e.g., $3/kg gr
een hydrogen tax cr
edit).
Japan aims
to build a “hydrogen society” by 2030 and achieve
carbon neutrality by 2050.
India's government to require
r
eﬁners and fertilizers to use
green hydr
ogen from 2023, paving the way for a major
acceleration in the nation's hydrogen economy
.
Several governments announced hydrogen subsidies and
grant programs
, such as
Germany’
s H2Global initiative
for green hydr
ogen imports
, consisting of a €2bn strategy to
support electrolyzer pr
ojects abroad.
Supportive regulatory envir
onment
1
Subject to supportive regulatory envir
onment, subsidies, technology advancements and national environmental targets.
2
Optimal green r
efers to green ammonia produced using wind/solar energy in the Middle East.
Growth in hydr
ogen demand driven key OCI sectors
1
2020
2030
2040
2050
Existing feedstock uses
New feedstock (CCU, DRI)
Industry energy
Building heating and power
T
ransportation
Power generation,
buffering
10x green H
2
2015
EJ
8
10
14
28
78
9
22
11
16
9
10
OCI’
s hydrogen strategy
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CAPIT
ALIZING ON THE
HYDROGEN OPPOR
TUNITY
CONTINUED
Our two core pr
oducts – ammonia and methanol – repr
esent more than 50% of gr
ey hydrogen use today and are key
products to accelerate the transition to a hydr
ogen economy
.
Although most countries are working towar
ds developing a hydrogen economy
, it is not feasible to produce suf
ﬁcient
hydrogen to meet expected demand given limitations on r
enewable energy power in many regions, including Eur
ope.
This means that hydrogen will need to be transported over long distances, but as hydr
ogen needs to be cooled down to
-252 degrees Celsius, this r
esults in a huge loss of scarce gr
een energy and the cooled hydrogen has a very low energy
density
. However
, ammonia and methanol are the ideal energy carriers for several r
easons:
•
Their respective energy densities ar
e higher than hydrogen’
s,
•
They are widely used pr
oducts, and
•
They are easier to stor
e with extensive global distribution and storage infrastructure in place.
Our end-markets cover food, fuel, and feedstock, repr
esenting an opportunity to decarbonize approximately 90% of today’
s
global greenhouse gas emissions acr
oss agriculture, industry and transportation.
Our entrepr
eneurial track recor
d means we have the relationships and global r
each to drive change without having to
choose between sustainability and value creation.
OCI opportunities:
ammonia and methanol are the leading hydrogen carriers capable of decarbonizing our k
ey sectors
As hydr
ogen carriers, ammonia and
methanol can decarbonize appr
oximately
90% of today’
s greenhouse gas emissions
acr
oss our end markets of agriculture,
fuel, and feedstock, in addition to indir
ect
markets in power and and waste.
Global GHG
emissions
Blue / Green ammonia
Bio / Green methanol
Agriculture
20%
• Enabler for low carbon farming
Fuel
10%
• No CO
2
, SOx, or particulate emissions upon combustion
• Needs less refrigeration (-33°C NH
3
vs -253°C H
2
)
• Effective and easier to handle than H
2
• Cleaner burning low-carbon fuel in marine transport
• Widely used in road transport
•
V
ersatile base chemicals with established routes to gasoline and aviation
fuels
Feedstock or
energy carrier
30%
•
Gr
een feedstock for chemicals and low-cost solution to transport H
2
• 70% higher energy density than H
2
•
Ef
ﬁcient and promising gr
een feedstock for chemicals in many end-markets
• 84% higher energy density than H
2
OCI’
s hydrogen strategy
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information
Shipping currently accounts for appr
oximately 3% of global CO
2
emissions but is one of
the hardest sectors to decarbonize due to the curr
ent economic cost effectiveness of heavy
fuel oil (HFO).
The International Maritime Organization (IMO) has set emissions targets that can only be
achieved through the adoption of low-carbon fuels on new and existing vessels, and the
EU is pushing to include shipping in the emissions trading system (EU ETS) with binding
requir
ements to reduce CO
2
by more than 40% by 2030. This push to decarbonize shipping
is driven throughout the industry’
s value chain,
with major consumer facing companies,
including Amazon, Ikea, Inditex and Unilever
, pledging to decarbonize their freight
by moving cargo on ships using zero-carbon fuels by 2040
.
Of the various alternative low carbon fuels available, ammonia and methanol, OCI’
s
core pr
oducts, are the only practical alternatives for long-distance shipping. Both fuels,
even without the implementation of decarbonization technologies, already have a lower
environmental footprint compar
ed to conventional fuels.
Green ammonia is particularly pr
omising as it can be produced fr
om water electrolysis and
air separation that can both be powered by energy pr
oduced from solar and wind without
emitting any carbon This makes a green ammonia fueled ship a zer
o-emission ship. Similarly
,
as blue and green methanol ar
e derived from r
enewable sources and utilize biogenic CO
2
in its makeup, a vessel powered by methanol, or a methanol derived fuel is net-zer
o-
emissions ship.
OCI is working with a variety of partners to encourage the growth low carbon fuels in
shipping, from developing a network of supply points, pr
ocedures for safe operations, and
industry certiﬁcation; to fostering partnerships with players, such as MAN Energy Solutions,
Eastern Paciﬁc Shipping and Hartmann Group, to build and operate methanol and ammonia
fueled vessels.
The maritime fuel market in HFO could grow to appr
oximately 430 million metric tons by
2050, translating in ammonia and methanol equivalents of 650 - 900 million metric tons while
the current combined global gr
oss ammonia and methanol production is ~290 million metric
tons, indicating a large opportunity for OCI.
MARINE FUEL REPRESENTS A SUBS
T
ANTIAL
MARKET OPPOR
TUNIT
Y FOR OCI
1
HFO refers to heavy fuel oil.
2
Lower end when burned in more ef
ﬁcient fuel cells, higher end of the range when burned in
internal combustion engines.
Ammonia and methanol ar
e
the only practical alter
natives
for long-distance shipping.
Sorfert is ~1 day sailing
from Gibraltar
, a major
bunkering hub
OCI production plants
Major bunkering hubs (Houston,
Rotterdam, Fujairah, Singapor
e)
Container ship capacity deployed (width
relative to size
EBIC and EFC are
next to the Suez Canal
which repr
esents ~12%
of global trade
OCI’
s network located at key bunkering hubs on major shipping lanes
2050 outlook potential for ammonia and methanol in marine fuels industry as a substitute for HFO
1,2
2020 ammonia
production
2050 HFO ammonia
equivalent
2020 methanol
production
2050 HFO
methanol equivalent
Merchant trade
Captive use
4 – 5x
750 - 900
22
>35x
merchant
ammonia traded
volumes
6 – 7x
750 - 900
103
182
OCI’
s hydrogen strategy
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OCI’
s unique advantages
We ar
e a global leader in the production of ammonia and methanol
and are one of the largest traders in these pr
oducts.
We also beneﬁt fr
om several strategic geographic advantages,
including:
•
W
e are the only pr
oducer with facilities and extensive distribution
and storage capabilities in the United States, Europe and the
MENA region.
•
Our coastal assets ar
e all located on major global shipping
lanes next to key bunkering hubs for the transportation of
renewable fuels.
•
Almost all our assets have access to abundant solar and wind
energy
, meaning we can shift to a renewable production pr
ocess.
As such, we can play a key role in supplying major hydr
ogen-
deﬁcit markets such as Europe and Asia.
•
Our Eur
opean assets, including an ammonia import terminal in
Rotterdam, ar
e strategically positioned to play a major role in
fulﬁlling hydrogen import needs as demand ramps up.
These advantages are particularly ef
fective in positioning us to
decarbonize our asset base through a pipeline of opportunities, in
partnership with key private sector and government stakeholders in
the hydrogen transition.
OCI’S S
TRA
TEGIC FOO
TPRINT WILL
CAPTURE THE HYDROGEN PO
TENTIAL
W
e are uniquely positioned to
drive the hydr
ogen economy
thr
ough our geographic
pr
esence and product mix
Nitrogen and methanol assets
with direct access to hydr
ogen
pipeline infrastructure coupled
with strategic European import
terminal at Rotterdam.
Strategically located East and
West of the Suez Canal allowing
exports from MENA to Eur
ope
as green ammonia or as an
energy carrier
.
Nitrogen and methanol assets
located inland and on US
Gulf with direct access to key
infrastructure allowing us to
capitalize on abundant wind and
solar power
.
Optimal solar/wind resour
ces
Least
Most
OCI production assets
OCI’
s hydrogen strategy
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Key Highlights:
OCI FUELS PL
A
TFORM EXECUTING ON
GRO
W
TH AMBITIONS IN HYDROGEN FUELS
OCI Fuels is executing on gr
owth
ambitions to become the pr
emier
hydr
ogen-based clean fuel
pr
ovider globally
OCI’
s hydrogen strategy
OCI production plants
OCI future gr
een bunker location
Major container trade routes
Singapore
Singapore and other Asian
positions being monitored closely
to round out bunker network
Suez and Port Said
•
Ideal proximity of production facilities
•
Competitive production and supply costs
•
Highest density of cargo and trade ﬂow,
with 12% of global trade passing through
Suez canal
•
Idle time conversion
•
Egypt positioned as the global leader in
green fuels supply
Port of Rotterdam
•
Production facilities in The Netherlands
•
Largest methanol storage position in ARA
with positions at two terminals
•
Biofuels blending operation to service our
EU Fuels markets
Houston and Port of Los Angeles
•
Production facilities in T
exas and largest bunker
market in USA
•
Fed by large-scale low carbon methanol
production and complimented by gr
een gasoline
facility
•
Growing support for establishing port on West
Coast
•
Local biofuels market catching up to Europe and
California to support local demand
Gibraltar
Sorfert is located at
1 day of sailing from
Gibraltar
Established in 2015, OCI Fuels is the ﬁrst commercial
platform to provide customers with no and low-carbon
hydrogen-based fuel pr
oducts.
It produces a variety of no and low-carbon methanol pr
oducts
to help customers lower emissions and comply with regulatory
targets. It can produce gr
een methanol, Bio-MTBE, blue
ammonia, green ammonia and an alcohol mix consisting of
green methanol and ethanol blends.
As one of the largest buyers of renewable natural gas, OCI
Fuels can scale up production as needed with mor
e than 3.3m
tons of capacity for green methanol.
OCI Fuels currently supplies 3% of the UK vehicle fuels market
and is a major supplier to several key EU markets through
various partnerships with with some of the world's largest
brands and oil majors.
OCI’
s global network beneﬁts from on-site or nearby bunkering
1
#1 green methanol
producer in the US
and in Europe
All green methanol meets the
highest sustainability standards,
certiﬁed by ISCC EU
and ISCC Plus.
Global scale with logistics,
distribution and storage infrastructure
in place through
OCI’
s bunkering platform.
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SUCCESSFUL FER
TIGL
OBE IPO
MARK
S ANO
THER MILES
T
ONE
Established in 2019 as a strategic partnership between OCI and ADNOC, Fertiglobe is the world’
s largest
seaborne exporter of urea and ammonia combined, the largest producer of nitr
ogen fertilizers by product
capacity in the MENA region and an early mover in clean ammonia. The company has four world class assets
in strategic locations which beneﬁt from an advantaged, ﬁxed low-cost feedstock position and r
epresent one
of the youngest asset bases in the industry
.
Our strategy in action
50%
36.2%
13.8%
Free ﬂoat on
Headquartered
in Abu Dhabi
4 world-class
strategically located
production facilities
50%
of assets younger
than 10 years
In-house global
distribut
ion capabilities
including ~1Mt storage
capacity
6.7mtpa sellable volume capacity
• 5.1mtpa
urea pr
oduction capacity
• 4.5mtpa
gross ammonia pr
oduction capacity
• 0.5mtpa
DEF production capacity
1
Early mover in
clean ammonia
Logistics allowing for excellent freight and
transport advantaged, duty-free delivery
to East and West
OCI, ADNOC and Fertiglobe
announced their intention to
proceed with an initial public
offering (IPO) of Fertiglobe and
to list its shares for trading
on the Abu Dhabi Securities
Exchange (ADX).
5 October
13 October
Announced the price range of AED
2.45-2.65 per share and cornerstone
investment agreements with Inclusive
Capital Partners, Abu Dhabi Pension Fund
and GIC (c. $231m combined investment).
20 October
Successfully completed the bookbuilding process at the price
of AED 2.55 per share, with str
ong interest fr
om international,
regional and local investors r
esulting in the offering being 22x
oversubscribed with demand exceeding $17.4bn. The ﬁnal offering
size was conﬁrmed at 13.8% of Fertiglobe’
s total issued share
capital, leaving OCI with 50% + 1 share and ADNOC with 36.2%
ownership. OCI will continue therefor
e to consolidate Fertiglobe.
27 October
Fertiglobe started trading on ADX at a market
capitalization of $5.8bn, thus becoming
the third largest IPO ever on the Abu Dhabi
Securities Exchange and the ﬁrst free zone
company to list onshore in the UAE.
IPO timeline
Fertiglobe’
s listing is another milestone in the company’
s
journey to unlock its potential, providing the right visibility
and positioning to grow as a pur
e play low-cost nitrogen
fertilizer and clean ammonia export platform, as well as a
regional ESG champion.
Fertiglobe’
s strategic approach as an enabler of global food
security and the hydrogen economy thr
ough its growing
clean ammonia platform focuses on three key ar
eas:
•
Delivering high returns from optimizing the curr
ent
platform to generate more volumes at a low cost thr
ough
the operational excellence program.
•
Increasing r
evenues and netbacks by organic
commercial gr
owth and looking at opportunistic external
opportunities in a fragmented fertilizer market.
•
Being an early mover in the clean ammonia space to
leverage our unique advantages, scaling up incrementally
and through partnerships as demand develops.
1
Maximum downstream capacities cannot be achieved at the same time. DEF pr
oduction
capacity not included in the 6.7mtpa sellable volume capacity
.
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Fertiglobe has a signiﬁcant competitive advantage when it comes to building low
carbon ammonia capacity in comparison to other greenﬁeld pr
ojects.
The company is ready to beneﬁt fr
om the blue ammonia opportunity with practically
all critical necessary pieces in place. ADNOC and OCI offer complimentary platforms
and will facilitate Fertiglobe in its transition: for example, ADNOC will help with carbon
sequestration, while OCI contributes with its downstream infrastructur
e globally
.
Fertiglobe is also well-positioned to produce gr
een ammonia with access to abundant
low-cost solar and wind energy at its locations and existing ammonia infrastructure.
Unlike greenﬁeld pr
ojects, Fertiglobe can access blue / green market opportunities with
limited capital expenditures, with an electr
olyzer as the only major element missing in its
current value chain.
SUCCESSFUL FER
TIGL
OBE IPO MARKS
ANO
THER MILES
T
ONE
CONTINUED




Our strategy in action
Blue Ammonia
Green Ammonia
Abundant low cost solar
and wind energy in
Egypt, UAE and Algeria
CO2
sequestration
network
Fertiglobe competitive advantage,
accessed through low CAPEX
Electrolyzer
Only missing piece for
Fertiglobe’
s value chain
Ammonia
plant
Merchant
Ammonia
position
+
Ammonia
storage
+
Loading
+
V
essels
Ammonia
import
infrastructure
Strategic export
and bunkering
locations
Potential offtake
agreement
Access to OCI
Rotterdam and
Beaumont, TX



✔
✔
✔
✔
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S
TRA
TEGIC METHANOL ALLIANCE
T
O CREA
TE A GL
OBAL HYDROGEN
FUEL PO
WERHOUSE
85%
15%
OCI Methanol
~3.3Mt
1
of total current
owned capacity
#2
in US
#1
in Europe
Global production
sole producer with facilities in
both the USA and EU leading
to enhanced netbacks
Global distribution,
with extensive import /
export infra with network to reach the EU, US
and Asia and
centralized commercial,
with
experienced senior traders in methanol and
petrochemicals
Leader in
Hydrogen Fuels
Hydrogen advantage
with methanol ideally positioned to capitalize
on the H
2
economy as a H
2
liquid carrier
On 22 November
, we announced that the OCI Methanol Group, which comprises OCI Beaumont, BioMCN, our 50%
stake in Natgasoline, OCI Methanol Marketing, and OCI Fuels, will be incorporated in the Abu Dhabi General Markets
(ADGM) as a uniﬁed platform. From ther
e, it will be uniquely positioned to cater to demand growth for methanol as a
fuel and other low-carbon applications, as well as serve as the launchpad for new ESG-focused growth opportunities.
The incorporation in Abu Dhabi is key to provide dir
ect access to our established Western markets and it further
enables us to focus on high growth markets for methanol applications in Asia.
Moreover
, it allowed two leading Abu Dhabi strategic investors, Alpha Dhabi Holding and ADQ, to invest in a 15% stake
in the OCI Methanol Group for a total consideration of $375 million. The transaction closed in Q1 2022.
Alpha Dhabi Holding and ADQ are valued partners who will bring signiﬁcant strategic opportunities and ar
e fully
aligned with our ambitions to develop the OCI Methanol Group into a leading hydr
ogen fuels producer and distributor
,
building on our current strategic advantages as the only pr
oducer with facilities and extensive distribution and storage
capabilities in the United States and Europe, which ar
e located near major inland demand centers or on major global
shipping lanes next to key bunkering hubs.
The strategic platform will focus on low-carbon methanol as a fuel for the future with hydr
ogen as the primary
feedstock. OCI Methanol Group has been a pioneer in developing low-carbon methanol, supplying it to blue chip
customers. Methanol is a key enabler of the hydrogen economy and one of the most logical hydr
ogen fuels. It will be
key to decarbonizing the marine industry
, and the strategic alliance enables OCI Methanol to drive and accelerate the
transition to a hydrogen economy
.
W
ith methanol as the leading low-carbon fuel for the
shipping industry and other applications, we believe
we ar
e best positioned to capitalize on the growing
demand for hydr
ogen in downstream markets
1
Includes 50% of Natgasoline capacity and 365ktpa of ammonia capacity at OCI Beaumont.
Our strategy in action
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Strategic investment projects
NUMEROUS KEY INITIA
TIVES UNDERW
A
Y
T
O CAPTURE THE TRANSITION PO
TENTIAL
Strategic partnerships with industry leaders on announced
pr
ojects in all key regions and lower carbon pr
ojects being
evaluated or developed acr
oss our global asset base.
•
Fertiglobe joined T
A
’ZIZ as partner in a new 1 mtpa world-
scale blue ammonia project in Abu Dhabi. FID expected in
2022, targeted start-up in 2025.
•
Fertiglobe partnered with Scatec, the Sover
eign Fund of
Egypt, Plug Power and Orascom Construction for a 100 MW
electrolyzer to pr
oduce ~90 ktpa of green ammonia at our
Egyptian site, targeting start-up in 2022.
•
In 2021, Fertiglobe piloted blue ammonia production at
Fertil with ﬁrst shipments to Japan at a premium price in
partnership with ADNOC. Debottlenecking is underway to
produce up to 70 ktpa blue ammonia by 2024.
•
Fertiglobe is considering a green ammonia pr
oject at Fertil
with 100 MW electrolyzer in partnership with Masdar/Engie.
Selected case studies:
•
Blue ammonia project in Abu Dhabi, UAE
•
At OCI Nitrogen, CO
2
emissions from the ammonia
production pr
ocess to be captured and stor
ed under the
North Sea through CCS pr
oject at OCIN with ~485 ktpa CO
2
abatement potential.
•
In partnership with RWE, OCI Nitrogen is a strategic of
f-
taker of green and cir
cular hydrogen fr
om FUREC W
aste-
to-Hydrogen pr
oject based on gasiﬁcation of mixed waste,
resulting in 90 ktpa of low-carbon ammonia pr
oduction and
~150ktpa net CO
2
abatement.
•
BioMCN has become strategic off-taker of multiple gr
een
hydrogen pr
ojects in the Netherlands including Nouryon
(20MW to be scaled to 60 MW) and RWE (50 MW
electrolyzer with dir
ect connection to RWE's Westereems
wind farm).
•
Development of ammonia bunkering opportunity
, partnering
with the Port of Rotterdam and with MAGPIE consortium.
Selected case studies:
•
Project FUREC
•
OCI Beaumont began producing blue ammonia using low
carbon hydrogen in 2021, scalable up to its full ammonia
production capacity of 365 ktpa.
•
CCS project at IFCo to captur
e and store CO
2
produced
on-site, backed by BlackRock’
s GEPIF III and commercially
anchored by V
alero. In November 2021 we announced
a partnership with Navigator
, which will provide CO
2
transportation and storage services.
Selected case studies:
•
IFCo CCS
•
OCIB Blue Ammonia
MENA
Europe
US
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Strategic investment projects
CA
SE S
TUDIES:
SELEC
TED MENA AND EU PRO
JEC
TS






Key Highlights:
•
Fertiglobe is partnering with ADNOC and ADQ to build the ﬁrst world-scale blue
ammonia facility in the MENA region, with a capacity of up to 1 mtpa.
•
The project will be in T
A
’ZIZ, a new industrial ecosystem that is part of a planned
$45bn investment in the Ruwais Industrial Complex in Abu Dhabi.
•
Ruwais Industrial Complex will supply attractive hydrogen and nitr
ogen
feedstock.
•
Limited upfront capex r
equirement given over
-the-fence feedstock and utilities
and given strategic partnership with ADNOC and ADQ.
•
Preliminary analysis indicates mid-double digit annual capex investment.
•
Shareholders ar
e considering several funding options, including non-recourse
project ﬁnancing to r
educe shareholders’ equity contribution.
•
Final investment decision is expected in 2022, while start is expected in 2025.
Blue Ammonia
(NH
3
)
ADNOC
industrial gases
Nitrogen (N
2
)
Polyethylene
Ethylene
(C
2
H
4
)
Methane (CH
4
)
CCS/CCU
Haber
Bosch
Cracker
Potential Applications:
• CO
2
for ADNOC (EOR)
•
Storage in ground
Ethane (C
2
H
6
)
ADNOC
Scope
Blue H2
CO
2
Key Highlights:
•
RWE is developing project FUREC, which aims to pr
oduce circular hydrogen
by gasifying residual waste str
eams, such as municipal waste, at the Chemelot
chemical complex in The Netherlands, where OCI Nitr
ogen is located.
•
OCI Nitrogen curr
ently produces gr
ey ammonia using natural gas as feedstock.
The facility can introduce cir
cular hydrogen fr
om FUREC in its processes to
replace 20% of curr
ent natural gas consumption.
•
FUREC is sustainable:
–
Net
CO
2
reduction of ~150KTP
A by reducing natural gas consumption at
Chemelot by more than 200 million m
3
per year (scope 1 emission).
–
High-quality chemical r
ecycling of waste reduces the demand for primary raw
materials (circularity).
•
Minimal capital expenditures r
equired for OCI
•
RWE aims to make a ﬁnal investment decision in late 2022/early 2023, with a
target date to be operational late 2025


Circular hydr
ogen
production
Manufacturing
Consumption
Residues
Recycling and
pellet production
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CA
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TUDIES:
SELEC
TED US PRO
JEC
TS
Strategic investment projects
Key Highlights:
•
The project allows IFCo to captur
e and store CO
2
produced on-site, generating
signiﬁcant beneﬁts through government tax credits, envir
onmental attributes and
premiums for lower
-carbon downstream pr
oducts (e.g., blue ammonia).
•
The project is backed by BlackRock’
s Global Energy & Power Infrastructure
Fund III, which invests in essential, long-term infrastructure assets, and is
commercially anchor
ed by V
alero.
•
IFCo would only be responsible for installing the carbon captur
e equipment on
its site, while a third party would collect the CO
2
from a custody transfer point
and deliver it via pipeline to a central sequestration hub.
•
IFCo entered into an agr
eement with Navigator CO
2
V
entures LLC to provide
CO
2
transportation and storage services on its CCS system, the Heartland
Greenway
, for up to 1,130,000 metric tons of CO
2
per year
, equivalent to the
carbon emissions of ~245,000 vehicles driven annually
.
•
The project will have two phases: a ﬁrst phase focused on pr
ocess gas,
repr
esenting c. 500,000 metric tons of CO
2
per year
, and a second phase for
the balance, subject to regulatory enhancements of the 45Q pr
ogram to make
installation of the requir
ed post-combustion capture equipment economically
feasible.
•
Start of operations for the ﬁrst phase is expected at the end of 2024.
IFCo carbon capture and storag
e (CCS)
OCIB blue ammonia
Key Highlights:
•
At OCI Beaumont we have developed a path to produce low-CI (Blue) Ammonia
through our partnerships with upstr
eam suppliers which established an end-to-end
program to sequester carbon emissions fr
om hydrogen pr
oduction.
•
OCI agreed to pur
chase this low-CI hydrogen which is then used in our facility as
feedstock for ammonia production.
•
OCI developed its own proprietary Blue Ammonia (BlueAm) standar
d, with the
support of SCS Consulting, that targets a 60% GHG reduction to curr
ent industry
benchmark of GHG emissions for ammonia production.
•
The BlueAm standard is ﬁrst of its kind and is annually audited, pr
oviding a reliable
and transparent standar
d certiﬁcation of the lower production emission footprint of
the Blue Ammonia molecules.
•
The blue ammonia produced at OCI’
s Beaumont facility has the potential to prevent
up to 550,000 metric tons of CO
2
from being emitted into the atmospher
e, which will
play a vital role in de-carbonizing the world and speciﬁcally in har
d-to-abate sectors.
IFCo
Navigator’
s
heartland
greenway
Independent Auditor – Annual Certiﬁcation Process
Low Carbon (Blue) Hydrogen
•
Carbon capture/utilization in
hydrogen pr
oduction process.
•
Mass balance of low-CI
hydrogen r
ecived from thrid-
party H
2
suppliers.
Low Carbon (Blue) Ammonia
•
Utilizes low-CI hydrogen
feedstock.
•
State-of-the-art,
low
emissions prodction pr
ocess.
Certifed Blue Ammonia
•
60% GHG emission
reduction.
•
Pr
oduct
certiﬁcate
delivered upon sale.
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OPERA
TIONAL
EX
CELLENCE
Optimizing our asset reliability
and energy efﬁciency
•
W
e have a young asset base that, on
average, can achieve better (1) gas-
conversion (2) higher on-stream times, and
(3) needs lower maintenance capex versus
older plants
•
Going forwar
d, we will optimize our energy
efﬁciency and utilization rates to impr
ove
energy intensity and operating rates
for organic volume growth, as well as
improve r
eliability and reduce planned and
unplanned downtime
BENEFIT FROM COMPETITIVE
COST POSITIONS
Cash conversion metrics
•
W
e beneﬁt from a globally competitive
position with access to cheap feedstock
and a young asset base:
–
W
e are competitively positioned in the
ﬁrst quartile of the global cost curve, with
sustainably low levels of capex
–
As the industry cost curve moves up, our
cost advantage is increasing
WELL POSITIONED FOR
MARKET UPSIDES
Attractive market fundamentals
•
The outlook for our end markets is
positive and we believe our industries will
beneﬁt from attractive supply-demand
fundamentals and steepening cost curve
Strong commer
cial position
•
Our integrated and centralized commer
cial
platform will continue to capitalize on our
strategic global reach, implement our
disciplined commercial model, and gr
ow
our trading activities to deepen our market
penetration and enhance our netback
pricing globally
CR
YS
T
ALIZING OUR
DECARBONIZA
TION P
A
THW
A
Y
Growing fr
om grey to gr
een
•
Focus on gr
owing our green pr
oduct
portfolio, including decarbonized ammonia
and methanol
•
Continue to pursue low/smart capex
projects and opportunities to achieve
our GHG reduction targets by 2030,
while balancing with our commitment to
deleverage
•
For mor
e information on our sustainability
strategy
, please refer to the sustainability
section beginning page 35
DRIVING OUR
S
TRA
TEG
Y FORW
ARD
W
e are focused on delivering our nancial, operational, commer
cial,
and decarbonization strategies
Driver of improving
FCF gener
ation
Driver of improving
FCF gener
ation
Strong supply
/
demand
fundamentals



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HO
W WE
CREA
TE V
AL
UE
As a global producer and distributor of nitr
ogen and methanol products, we aim to cr
eate sustainable value for all stakeholders and
are committed to delivering sustainable solutions to our customers. W
e take a holistic approach to our business model to optimize all
resour
ces available to us, thereby maximizing our positive ﬁnancial, social and envir
onmental impacts for a greener futur
e.
INPUT
Financials
People
Operations
IMP
A
CT
OUTPUT
SUST
AINABLE BUSINESS MODEL
$9
.8BN
Assets
$3.5BN
Equity
$6.32BN
Revenue
$2.53M
Adj. EBITDA
9
production sites
16.2mt
production capacity
1
,74
1
rail tank cars
11
direct access to
major waterways
2.
2mt
storage capacity
57
countries reached
For our communities:
Educational and social programs speciﬁcally
tailored to meet each community’
s needs
(p 73-75)
For our customers:
Efﬁcient nitr
ogen products optimizing
agricultural productivity (p 64)
Hydrogen fuels that signiﬁcantly r
educe GHG
emissions versus conventional fuels
(p 57-60)
For our employees:
T
op quartile compensation in all of our
locations, with average annual compensation
of $100 thousand per employee
Improving diversity with 24% of senior
leadership positions held by women in 2021
For our investors:
Competitive returns with a consistent dividend
policy
, and a proven track r
ecord of value
creation
For the world:
Helping optimize crop yields to feed the world
(p 70-71)
Improving energy ef
ﬁciency and reducing GHG
intensity through our operational excellence
program and a dif
ferentiated decarbonization
strategy that enables the hydrogen transition
(p 12-26, p 51-64)
284T
J
Energy consumed
88M m
3
W
ater withdrawn
2.34 GHG
Intensity
4.83mt CO
2
e
Recycled
42M m
3
W
ater discharged
0
.20 L
TIR
0
.35 TRIR
3,853
Employees
100%
Compliance training
enrollment
11.4% women at OCI
2.7% turnover rate
Natural gas or hydrogen
Hydrogen fuels
and feedstock
Production
Storage
Sustainable agriculture
Providing hydr
ogen fuels and feedstocks for
our transportation and industrial customers
Providing key nutrients for optimized yields to
meet the world’
s food production needs
Wholesale distribution
Retail distribution
Our position in the value chain
Our suppliers: Natural gas is our primary raw material. Each facility is supplied with natural gas by pipeline purchased
through a mix of long-term contracts with national oil and gas companies in MENA, and spot pur
chases off national
grids in the Netherlands and the USA. The total annual cost of our natural gas procur
ement depends on the volume
of gas procur
ed and ﬂuctuations in market prices, and totaled $1.3 billion in 2021. In addition to natural gas providers,
our supply chain includes (but is not limited to) providers of transportation and logistics services, utilities, other
production materials, maintenance and engineering services, advisory and pr
ofessional services, facilities management,
contracting, information technology including hardwar
e and software services, and other needs as the business
requir
es. The number of suppliers ﬂuctuates depending on the projects and business activities but exceed 4,800
suppliers each year
.
a b c
a b c
4
ammonia
vessels
4
barges
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2.
BUSINESS
PERFORMANCE
40
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BUSINESS PERFORMANCE
Industry leading safety performance
0.35
1.20
IF
A (2020)
OCI
OCI’
s capacity growth 2008 – 2021 (mtpa)
2008
2010
2012
2015
2021
16.2
Strategic
priorities
Delivering our strategy
Our priorities
Contribution
to SDGs
1
OPERA
TIONAL
EXCELLENCE
•
Completed major turnarounds
at Natgasoline and IFCo, and minor maintenance turnarounds
at Fertil and Sorfert, following which we achieved high and steady utilization rates.
•
Focus on enhancing asset r
eliability and energy efficiency
thr
ough our global operational
excellence program, achieving c. 2.8% and 0.8% average impr
ovement year
-on-year
,
respectively
.
–
With all the initiatives taken in 2021, including changes in the leadership of 6 Sites and the
recruitment of senior specialists for the Global Manufacturing T
eam, management is conﬁdent
that signiﬁcant improvements will be achieved in the next two years
•
Str
engthened our HSE leadership team
by hiring experienced HSE directors for both OCI and
Fertiglobe.
•
Operational
excellence:
continue to implement
our groupwide operational excellence pr
ogram as
described on pages 52-53.
•
HSE:
we will continue to build on our HSE
processes, focusing on pr
ocess and occupational
safety KPIs, as well as environmental emissions
performance and enhanced KPIs.
8.4
7.6
4.0
1.3
Capex program complete
Nitrogen
Methanol
T
otal Recordable Injury Rate
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BUSINESS PERFO
RMANCE
CONTINUED
Strategic
priorities
Delivering our strategy
Our priorities
Contribution
to SDGs
2
BUSINESS
OPTIMIZA
TION
•
Building our low/no carbon methanol platform
-
Enter
ed into agreements with MAN Energy Solutions, Hartmann Gr
oup and Eastern Pacific Shipping
to create
marine value chain and start commercialization by 2023/2024 of ammonia and methanol as shipping fuels.
OCI intends to charter ammonia vessels built, owned and operated by Hartmann with ammonia engines
designed by MAN. Additionally
, OCI plans to charter the first retrofitted methanol fueled vessel operated by
EPS using already-in-service MAN engines and technology in the next two years.
-
Strategic methanol alliance to cr
eate a global hydrogen fuel powerhouse,
with incorporation of OCI’
s methanol
platform in the Abu Dhabi General Markets (ADGM) and 15% stake investment from two leading Abu Dhabi
strategic investors, Alpha Dhabi Holding and ADQ. The strategic platform will focus on low-carbon methanol
as a fuel for the future with hydr
ogen as the primary feedstock.
•
Developing lower carbon pr
ojects globally to drive the hydrogen economy
-
Fertiglobe is partnering with ADNOC and ADQ to build the first world-scale blue ammonia facility in the MENA
region,
with a capacity of up to 1 mtpa.
-
Fertiglobe is partnering with Scatec, the Sover
eign Fund of Egypt and Orascom Construction for a 100 MW
electrolyzer
to pr
oduce 90,000 metric tons of green ammonia at EBIC in Egypt.
-
CCS pr
oject at OCIN
with ~485 ktpa CO
2
abatement potential.
-
FUREC W
aste-to-Hydrogen project at OCIN
in partnership with RWE to pur
chase green and cir
cular hydrogen
from mixed waste gasification.
-
Pr
oject at OCIB
to produce blue ammonia up to 365 ktpa capacity
.
-
CCS pr
oject at IFCo
to capture and stor
e CO
2
produced on-site, backed by BlackRock’
s GEPIF III and
commercially anchor
ed by V
alero.
•
Listing of Fertiglobe on ADX in October 2021
as another milestone in the company’
s journey to unlock its
potential, providing the right visibility and positioning to gr
ow as a pure play low-cost nitr
ogen fertilizer and clean
ammonia export platform, as well as a regional ESG champion.
•
Continue to capitalize on the
hydrogen opportunity by gr
owing
our low/no carbon ammonia and
methanol platforms,
leveraging our
unique positioning in terms of geographic
presence and pr
oduct mix, with strategic
partnerships and development projects.
•
Continue to evaluate strategic
opportunities
to deliver value to
stakeholders.
40
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BUSINESS PERFO
RMANCE
CONTINUED
Sorfert to USA:
~18 days at sea
China to USA:
~35 days
at sea
Centralized commercial strategy has environmental advantag
es
OCI’
s urea
trade ﬂows
OCI’
s geographic
end markets
49%
reduction
in
CO
2
emissions
per shipment
delivered to the
USA
from Sorfert instead of China
Our centralized commercial and
strategically location logistics and
distribution allows us to optimize our
shipments to minimize time at sea,
which helps reduce CO
2
emissions
wherever possible.
Strategic
priorities
Delivering our strategy
Our priorities
Contribution
to SDGs
3
GL
OBAL
COMMERCIAL
STRA
TEG
Y
•
Further strengthened our commercial organization to help ensur
e progress on commer
cial
excellence
with the appointment of a VP − Commercial Nitr
ogen, and aligned key regional positions to optimize
product sales and coor
dination across the gr
oup.
•
Continued to increase our downstream market engagement to enhance supply chain value captur
e
through:
-
Initiatives to impr
ove customer experience and increase our pr
oduct offering.
-
Incr
eased logistics investments to expand our presence in the Port of Rotter
dam, add ammonia vessels, and
optimize our global storage capacity
.
-
Gr
ew our platform’
s physical presence by establishing new strategically positioned offices and distribution
partnerships in Latin America and Asia.
-
Continued to gr
ow our third-party trading capabilities in key markets and pr
oducts both directly and thr
ough
downstream marketing partnerships and swaps in Australia, South Africa, Eur
ope, and the United States.
This allows us to increase market shar
e and negotiating power with freight pr
oviders, with a view to ultimately
deliver better netbacks.
•
Implemented several low-carbon initiatives
to gr
ow our product of
fering while mitigating our scope 3 proﬁle
and driving the energy transition through ammonia and methanol.
-
Investigating ur
ease and nitrification inhibitors through multiple partnerships and studies.
-
Developed pr
oprietary
market first, low carbon BlueAm (blue ammonia) certification standard
at OCI Beaumont
that targets a 60% GHG reduction to curr
ent industry benchmark of GHG emissions for ammonia production.
•
Gr
ew our methanol platform’
s market reach in hydr
ogen fuels
to become a major supplier of methanol
fuel blends to several key EU markets, and in particular the UK where we supply 3% of the UK vehicle fuels
market.
•
Continue to build our global
capabilities
through strategic
partnerships, customer partnerships, and
organically growing our team. W
e will also
invest in logistical positioning through
storage terminals and logistics assets
and push further downstream to the
end customer
, evaluating supply chain
margins versus costs to determine our
optimal commercial appr
oach.
OCI N.V
.
Annual Report 2021
28
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Strategic
priorities
Delivering our strategy
Our priorities
Contribution
to SDGs
4
SUST
AINABILIT
Y
•
Announced several initiatives and partnerships to drive the decarbonization of food, fuel and
feedstock.
As described on pages 10-24, we are working acr
oss our locations to develop no/low carbon
ammonia and methanol, which are the key pr
oducts to enable the transition of a hydrogen economy
.
•
Conducted a thor
ough review of the calculation methodologies per operating company for our
historical environmental data
in pr
eparation for the launch of a limited assurance process with our
external auditor in the near future. Some discrepancies wer
e corrected r
esulting in revised 2019 and 2020
and environmental data, which have accor
dingly been restated in this annual r
eport. Please refer to page 48
for details.
•
Str
engthened our sustainability function
by hiring a VP of Sustainability
.
•
Focus on pursuing our announced
decarbonization strategy through:
-
Monitoring the achievement of inter
nal
decarbonization KPIs for each asset.
-
Continue evaluating pipeline of carbon
reduction pr
ojects balancing between
capex needs, investment returns, and
decarbonization potential.
-
Identify and pursue key new
partnerships that would enable
decarbonizing without major capex.
-
Focus on growing our green pr
oducts
portfolio to accelerate our non-project
based decarbonization.
-
For more information, please refer to
the Sustainability section beginning
page 35.
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•
Hydrogen fuels and
feedstocks: 23%
•
Other products: 77%
3.3 MT of methanol, bio-methanol, DEF
, and green
ammonia sold in 2021
1.3% reduction in GHG intensity vs.
baseline
2019
2020
2.37
2.34
BUSINESS PERFO
RMANCE
CONTINUED
2.31
2021
OCI N.V
.
Annual Report 2021
29
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Strategic
priorities
Delivering our strategy
Our priorities
Contribution
to SDGs
5
FREE CASH
FL
OWS
•
Demonstrated commitment to ﬁnancial discipline and deleveraging:
-
Redemption of 5.875% c. $147.2m IFCo bonds.
-
Partial redemption of 10% of OCI NV 5.25% Senior Secured Notes due 2024 and 10% of OCI NV 4.625%
Senior Secured Notes due 2025,
or a total r
edemption of $60m and $40m respectively of the aggr
egate
principal amounts of the Notes.
-
Conditional notice of redemption of $540m 5.25% Senior Secured Notes due 2024.
-
Conditional notice of redemption of €400m of OCI NV 3.125% €700m Senior Secured Notes due 2024.
-
Conditional notice of redemption of €300m 3.125% Senior Secured Notes due 2024, of 10% of 3.625%
Senior Secured Notes due 2025 and 10% of 4.625% Senior Secur
ed Notes due 2025. Separately
, IFCo
exercised the option to r
edeem the remaining balance of $40m on IFCo bonds.
•
Announced semi-annual interim distribution for H2 2021 of €1.45 per share, or c. $350 million.
•
New capital structure and dividend policy for Fertiglobe,
with a $1.1bn bridge financing, of which $250m
was used to refinance existing debt at Fertiglobe and EFC, and the r
emaining $850m to pay a special dividend
to its two shareholders. Additionally
, a new 5-year $300m RCF has been put in place.
-
This structure helps OCI to optimize its balance sheet further
, cash interest and supports future gr
owth
opportunities in clean ammonia and other decarbonization initiatives for OCI as a whole and Fertiglobe.
-
Fertiglobe has adopted a semi-annual dividend distribution policy
,
with H1 dividend of the financial year paid
out in October of that year and the H2 dividend paid out in April of the following calendar year
.
•
Achieved free cash flows of $1.6 billion in FY 2021
on improved EBITDA, working capital, and lower
financing costs.
•
As a result, deleveraged by $1.5 billion
to end the year with net debt of $2.22 billion compared to $3.73
billion on 31 December 2020.
•
New dividend
and capital allocation
policy
.
•
Continue to optimize and simplify our
capital structure
thr
ough opportunistic
financing at both the parent and
subsidiary levels should it achieve further
reduction of our weighted average cost
of debt and the extension of our debt
maturity profile.
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BUSINESS PERFO
RMANCE
CONTINUED
2020
2021
2021
2022
2023
2024
2025
2026-2037
Weighted aver
age group debt maturity extended
6 months from 4.7 y
ears to 5.2 years
1,726
1,308
168
613
540
195
215
1,169
1,030
608
461
OCI N.V
.
Annual Report 2021
30
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
BUSINESS PERFO
RMANCE
CONTINUED
CA
SE S
TUD
Y
:

As a result of high natural gas prices in Eur
ope, we made the strategic decision to temporarily
shut down an ammonia line at OCI Nitrogen and instead use our ammonia import terminal in
Rotterdam, OTE, to import ammonia fr
om Fertiglobe, OCI Beaumont and third parties.
This was more economical and allowed us to continue to operate the r
emaining plants at OCI
Nitrogen to maximize our downstr
eam production and netbacks. By doing so, we wer
e able
to weather volatility in natural gas pricing and help agricultural markets by addressing pr
oduct
shortages and food security concerns as many competitors do not have the infrastructure
and global reach that we have to incr
ease ammonia imports and continue to supply both our
industrial and agricultural customers.
We also continued to enhance our ammonia logistics with the addition of a dedicated fourth
charter vessel, and increased our thr
oughput capabilities at OTE by an annualized rate of
c. 300kt, further strengthening our world leading ammonia pr
oduction and trading platform.
OTE ammonia import
terminal in Rotterdam
Cooperation by entire
OCI ammonia team
across Eur
ope, the USA, and Fertiglobe, our
chartering team
,
the
OTE team, BioMCN
team
and
legal team
.
Able to weather volatility in natural gas pricing
and continue to operate the remaining plants at
OCI Nitrogen to
maximize our downstr
eam
production and netbacks
− we have the ﬂexibility
to redir
ect tons from the East to the W
est to capture
higher pricing and optimize on netbacks.
Achieved
recor
d ammonia imports at OTE of
128KT in Q4 ‘21
(vs. average of 58KT for Q4 ‘18-
20) and strong sales volumes out of OCI Nitr
ogen.
Able to
maintain OCI Nitrogen’
s supply
obligations to customers
and helped agricultural
markets by
addressing pr
oduct shortages and
food security concerns.
Implemented further improvements to our ammonia
logistics: (1)
Chartered a fourth vessel,
utilizing global
relationships; (2)
Expanding OTE’
s throughput.
OCI N.V
.
Annual Report 2021
31
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
MANA
GEMENT DISCUSSION
AND ANAL
Y
SIS
$ million
2020
2021
Revenue
3,474.1
6,318.7
Adjusted EBITDA
869.8
2,526.5
Adjusted EBITDA margin
25.0%
40.0%
Adj. net proﬁt / (loss) attributable to owners
of the Company
(213.4)
731.8
Net proﬁt / (loss) attributable to owners
of the Company
(177.7)
570.5
Basic earnings per share
(0.847)
2.719
Operating proﬁt as r
eported
187.0
1,562.8
Depreciation, amortization and impairment
(592.2)
(891.6)
EBITDA
779.2
2,454.4
EBITDA margin
22.4%
38.8%
2021 performance drivers
Revenue
•
Sales volumes:
own product sales volumes wer
e lower at 11.4 million metric tons for FY 2021, compared to 12.2
million metric tons in 2020. Lower own-produced nitr
ogen product volumes (-6%) wer
e largely due to turnarounds
at Fertiglobe and the shutdown of one ammonia line at OCI Nitrogen, partially of
fset by growth in ammonia volumes
at Fertiglobe, and DEF volumes in the US. Own-produced methanol sales volumes declined (-9%) due to a planned
turnaround at Natgasoline and no production fr
om BioMCN, which has been shutdown due to the high gas price
environment in Eur
ope. T
raded third party volumes incr
eased instead by 21% compared to 2020.
•
Selling prices:
selling prices improved year
-on-year for all products, which helped of
fsetting the negative impact
of signiﬁcantly higher gas prices. In Europe, higher gas prices r
esulted in a negative impact of c. $147 million in Q4
2021 versus Q4 2020; in the US the net negative impact of gas prices amounted to c. $37 million.
Adjusted
EBITDA
1
•
Adjusted EBITDA increased by 190% versus 2020, while r
eported EBITDA increased by 215%.
•
The nitrogen and methanol segments beneﬁted fr
om higher selling prices, offsetting lower sales volumes and higher
gas prices in Europe and the US.
Operating
proﬁt
Operating proﬁt incr
eased by 736% to $1,562.8 million in FY 2021 versus FY 2020, primarily as a result of:
•
Gross pr
oﬁt increased by $1,416.9 million due to a $2,844.6 million incr
ease in revenue, partially of
fset by a
$1,427.7 million increase in cost of good sold (mainly driven by incr
eased gas prices).
•
Selling, general and administrative expenses increased by $47.1 million compar
ed to 2020, as well as depreciation,
amortization and impairment which increased by $299.4 million (mainly due to the full impairment of BioMCN).
Financing
costs
•
Finance income decreased by $177.9 million compar
ed to the previous year
.
•
Finance cost decreased by $103.6 million to $308.8 million versus 2020, due to a $77.1 million decr
ease in foreign
exchange loss and a $26.5 million decrease in inter
est expense on ﬁnancial liabilities following the Company's
deleveraging and reﬁnancing ef
forts.
•
The foreign exchange gains and losses mainly r
elate to external ﬁnancing and to the revaluation of intercompany
balances in foreign curr
encies.
Adjusted
net proﬁt /
(loss)
•
Adjusted Net pr
oﬁt / (loss) attributable to the owners of the Company was a proﬁt of $731.8 million in 2021,
compared to a loss of $213.4 million in 2020.
1
OCI N.V
. uses Alter
native Performance Measures (APM) to provide a better understanding of the underlying developments of the performance of the
business. The APMs are not deﬁned in IFRS and should be used as supplementary information in conjunction with the most dir
ectly comparable IFRS
measures. The deﬁnition of the APM and a detailed r
econciliation between the APM and the most directly comparable IFRS measure can be found on
pages 209 - 210 of this report.
•
Methanol US: 12%
•
Methanol Europe: 8%
•
Nitrogen US: 12%
•
Nitrogen Europe: 19%
• Fertiglobe: 49%
Revenue
by segment:
•
Methanol US: 14%
•
Methanol Europe: 6%
•
Nitrogen US: 13%
•
Nitrogen Europe: 8%
•
Fertiglobe: 59%
Adj. EBITDA
by segment:
OCI N.V
.
Annual Report 2021
32
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
MANA
GEMENT DISCUSSION
AND ANAL
Y
SIS
CONTINUED
Condensed consolidated statement of cash ﬂows
for the years ended 31 December
$ million
2020
2021
Cash and cash equivalents at 1 January
600.5
686.3
Cash ﬂows from operating activities
617.8
2,264.1
Cash ﬂows used in investing activities
(260.2)
(243.5)
Cash ﬂows used in ﬁnancing activities
(244.9)
(1,495.0)
Net cash ﬂows
112.7
525.6
Currency translation adjustments
(26.9)
(14.6)
Cash and cash equivalents in statement
of ﬁnancial position
686.3
1,580.3
Bank overdraft r
epayable on demand
-
(383.0)
Cash and cash equivalents in statement of
cash ﬂows
686.3
1,197.3
Net debt as at 31 December
$ million
2020
2021
Long-term interest-bearing debt
4,226.9
3,290.2
Short-term interest-bearing debt
189.7
510.6
Gross inter
est-bearing debt
4,416.6
3,800.8
Cash and cash equivalents
(686.3)
(1,580.3)
Net debt
3,730.3
2,220.5
Outlook
The outlook for our end markets is positive for 2022, supported by attractive
farm economics for nitrogen fertilizers, str
ong demand in our industrial end
markets for ammonia, methanol, melamine and DEF and our advantaged
feedstock costs in MENA and the US. OCI generated signiﬁcant free cash
ﬂow from operations (befor
e IPO proceeds) of $1.6 billion during the full year
2021 and we achieved our net leverage goals. Going forward, our focus is on
returning capital to shareholders and gr
owing our future cash ﬂows thr
ough
targeted investments in hydrogen and other gr
owth opportunities.
Recent market events resulting fr
om the Russia-Ukraine conﬂict have
tightened nitrogen markets further
. Russia and Ukraine supply 18% of global
corn and 28% of global wheat exports, and reductions in grain exports from
the regions mean that it could take at least until 2024 to r
eplenish grain stocks
to ease food security concerns. Farmer affordability has impr
oved in grain
exporting regions and farmers ar
e incentivized to apply nitrogen to maximize
yields. Both countries also contributed to 25% of global ammonia trade,
15% of global urea trade and 6% of global methanol trade in 2021 tightening
supply and demand dynamics further
.
2021 performance drivers
Cash
ﬂows from
operating
activities
•
Cash ﬂows from operations primarily r
eﬂect the change in net proﬁt in 2021 compar
ed to 2020, and changes in
working capital.
•
Net proﬁt was $1,158.8 million in 2021 compar
ed to a net loss of $94.1 million in 2020, an improvement of
$1,252.9 million.
•
Working capital inﬂows of $70.9 million compar
ed to $139.6 million in 2020, an improvement of $68.7 million.
Cash
ﬂows from
investing
activities
•
Cash ﬂows used in investing activities were $16.7 million lower than 2020, primarily due to a decr
ease in
capital expenditures.
•
T
otal cash capital expenditures were $247.8 million in 2021 compared to $262.6 million in 2020, of which
maintenance capital expenditure was $225.4 million and $239.4 million, r
espectively
.
Cash
ﬂows from
ﬁnancing
activities
•
Proceeds fr
om borrowings in 2021 totaled $2,248.3 million, which consisted of the pr
oceeds of new ﬁnancing
arrangements at Fertiglobe and changes in the outstanding amounts of revolving cr
edit facilities.
•
During 2021, we redeemed bonds at OCI NV and IFCo for a total of $1.8 billion and have r
educed net debt by
$1.5 billion to $2.2 billion, lowered our weighted average cost of debt fr
om c.4.3% at end 2020 to c.3.2% at end
2021 and reduced cash inter
est by more than $60 million per year fr
om 2022 onwards.
•
Repayments of borrowings wer
e $3,186.1 million in 2021, mainly related to the above r
eﬁnancing and
amortization of debt and changes in the outstanding amounts of revolving cr
edit facilities.
Free cash
ﬂow
1
•
Free cash ﬂow befor
e growth capital expenditur
e amounted to $1,593.9 million in 2021 reﬂecting the r
eported
EBITDA for the year
, working capital inﬂows, maintenance capital expenditure, and cash interest paid of $204.9
million. An increase of $ 1,289.2 compar
ed to 2020 mainly driven by the increased EBITDA during 2021.
Gross debt
•
Gr
oss interest-bearing debt decr
eased by $615.8 million due to the debt repayments, r
eﬁnancing, and positive
impact of exchange differ
ences on Euro denominated debt.
Cash
& cash
equivalents
•
As a r
esult of a positive free cash ﬂow
, cash and cash equivalents increased to $1,580.3 million.
Net debt
•
Net debt stood at $2,220.5 million as of 31 December 2021, from $3,730.3 million as of 31 December 2020.
•
The trailing net debt / adjusted EBITDA was 0.9x as of 31 December 2021 (0.7x pro-forma for Methanol
transaction) compared to 4.3x at the same time last year
.
1
OCI N.V
. uses Alter
native Performance Measures (APM) to pr
ovide a better understanding of the underlying developments of the performance of the business.
The APMs are not deﬁned in IFRS and should be used as supplementary information in conjunction with the most dir
ectly comparable IFRS measures. The
deﬁnition of the APM and a detailed reconciliation between the APM and the most dir
ectly comparable IFRS measure can be found on
pages 209 - 210 of this report.
OCI N.V
.
Annual Report 2021
33
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
'000 metric tons
2020
2021
% Δ
Own product

Ammonia
1,656.8
2,090.3
26%
Urea
4,763.2
4,327.6
(9%)
Calcium
Ammonium
Nitrate (CAN)
1,371.8
1,176.4
(14%)
Urea Ammonium
Nitrate (UAN)
1,749.9
1,354.8
(23%)
T
otal fertilizer
9,541.7
8,949.0
(6%)
Melamine
144.6
131.9
(9%)
DEF
636.2
612.1
(4%)
T
otal Nitrogen
products
10,322.5
9,692.9
(6%)
Methanol
1
1,926.5
1,747.2
(9%)
T
otal own
product sold
12,249.0
11,440.1
(7%)
T
raded
third party

Ammonia
284.3
255.5
(10%)
Urea
910.5
1,295.2
42%
UAN
41.3
48.5
18%
Methanol
258.8
524.4
103%
Ammonium
Sulphate (AS)
712.8
467.8
(34%)
DEF
227.0
362.2
60%
T
otal traded
third party
2,434.7
2,953.6
21%
T
otal own
product and
traded third
party
14,683.7
14,393.7
2%
$ million
2021 market review
Market outlook
Nitrogen
•
Nitrogen prices r
ecovered signiﬁcantly in 2021
compared to 2020 on the back of a structural shift
to a multi-year demand driven environment for
nitrogen pr
oducts over the medium term.
•
Ammonia prices in 2021 were supported by
recovery in global industrial consumption, higher
feedstock prices and a structural tightening of
markets as no new supply came online in the
market. A strong US fall ammonia season lowering
inventories ahead of the spring season, higher
demand from downstr
eam phosphates production
and a number of planned and unplanned outages
also provided additional support for pricing in 2021.
•
Global nitrogen market fundamentals ar
e supportive in 2022 given robust demand for
nitrogen in all our key markets on impr
oved farm economics and high grain prices, with
strong support for corn above $5/bushel to the end of 2024. This is supported by low
grain inventory levels and stocks-to-use ratios globally
, which need at least two years
to replenish, amplifying the need for nitr
ogen fertilizers application to ease food security
concerns.
•
Urea export bans by the Chinese government are limiting their participation in the global
market at least until H2 2022, with China implementing mandatory requir
ements for
summer stocking and tighter environmental r
estrictions.
•
Over the medium-term, the nitrogen market is expected to r
emain tight with projected
new urea capacities below the level seen over the past ﬁve years, below pr
ojected
demand growth and ar
e slow to ramp up.
•
The ammonia market is structurally tightening over the medium term with incremental
demand expected to exceed new supply by 3 Mtpa, without accounting for the
medium-term low-carbon ammonia demand in new applications we expect towards
middle of the decade.
Methanol
•
Methanol prices in 2021 recover
ed signiﬁcantly
following trough market conditions in 2020 on
the back of a strong r
ebound in global industrial
activity as economies eased Covid restrictions. A
recovery in oil prices was supportive of traditional
demand for methanol derivatives and demand in
every major sector grew in 2021. Prices also saw
support from poor global operating rates in the
form of above-average planned and unplanned
outages as well as delayed startups of new supply
.
•
2022 has started off with str
ong methanol prices on high energy pricing and seasonal
supply curtailments.
•
Operating rates are expected to impr
ove in 2022 as new supply reaches stable
operations, but no signiﬁcant new supply will start up in 2022, and demand growth is
expected to outpace capacity growth.
•
Long-term industry fundamentals remain positive, with incr
emental demand expected
to exceed new supply by ~8mtpa through 2026, without accounting for the additional
upside from hydr
ogen fuel demand, notably marine fuels.
Natural
Gas
•
In 2021, global gas prices increased due to cold
weather directly impacting demand especially
across Asia and Eur
ope and creating str
ong
competition for LNG supply
. Additionally
, the drop
in Russian gas ﬂows to Europe accentuated the
tightness with TTF reaching new highs.
•
This drove up our marginal costs of production in
Europe but also supported selling prices for all our
products. This str
engthened Fertiglobe’
s signiﬁcant
competitive advantage as a result of its attractive
gas supply agreements but also our US assets
given the widening gas differ
entials between the US
and Europe and Asia.
•
Globally
, feedstock prices are expected to reset at higher levels, with natural gas futur
es
in Europe pointing to c.$26 / mmBtu for 2022 and c.$15/mmBtu for 2023-2024 on the
back of tighter fundamentals and higher demand for gas.
•
Higher marginal feedstock costs are pr
oviding support to markets and selling prices
over the medium-term.
MANA
GEMENT DISCUSSION
AND ANAL
Y
SIS
CONTINUED
1
Including OCI’
s 50% share of Natgasoline volumes
OCI N.V
.
Annual Report 2021
34
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUS
T
AINABILIT
Y
REPOR
T
OCI 2021 ESG A
T A GL
ANCE
W
e are committed to envir
onmental, social, and gover
nance (ESG)
principles, with envir
onmental, social and gover
nance matters fully
integrated into our strategic objectives and executive compensation. Our
Boar
d of Directors ar
e collectively responsible for ESG and have mandated
our Executive Dir
ectors with direct day-to-day oversight on ESG matters
As a leader in our industries, we are cognizant of our r
esponsibility to
encourage sustainable practices in our policies, operations, supply
chains, and communities. We ar
e committed to our purpose of cultivating
a sustainable world and believe our products ar
e essential to achieving
cleaner transportation, lower carbon industrial processes, and global food
security
. We have aligned our strategic priorities to create sustainable value
for all our stakeholders—our customers, our employees, our communities,
and our shareholders—and develop a gr
eener future for the world.
60%
GHG savings when
green methanol is used
as fuel vs gasoline
89%
•
Leading player in sustainable agricultural and fuel solutions
•
Uniquely positioned to enable the energy transition for
transport, feedstock, and industrial applications
•
Delivering rapidly thr
ough operational excellence while
leveraging strategic partnerships for long-term projects
Driving
sustainable
performance
ENVIRONMENT
AL
Lower N
2
O emissions
than global average
72%
Seawater intake
in high water
stress r
egions
55%
Lower NOx emissions
than global average
25%
Female
Executive Directors
19%
Diversity &
Inclusion (D&I)
SOCIAL
Female employees in
US & EU segments
23%
Female
Board Members
24%
Female repr
esentation
in senior leadership
in 2021
100%
Employees enrolled in our
compliance framework
training program
100%
Robust
go
vernance
and reporting
framew
ork
encourag
es best
practices across

GOVERNANCE
Whistleblowing reports
investigated
37%
Employees covered
by collective bargaining
or unions
C
-Suite
Executive Directors
are r
esponsible for
compliance
Committed
to 20% GHG
intensity
reduction by
2030 and carbon
neutrality by
2050
Committed
to 25%
female senior

2025
Committed
to 100%
compliance
training annually
•
Committed to fostering an inclusive cultur
e with a diverse
workforce, wher
e every person is recognized, valued, and thrives
•
Gr
oupwide multi-year D&I program aims to translate our
commitment into action, allowing us to ﬁrmly anchor an inclusive
culture in every aspect of our business
•
Robust governance structure with ESG oversight at the Boar
d level and
focus in the HSE & Sustainability Committee
•
Executive Dir
ectors’ compensation tied to a basket of ESG metrics and
operational excellence
•
All employees ar
e trained on our compliance policies, Code of Conduct,
and D&I Policy
•
All suppliers are r
equired to adher
e to our Business Partner Code of Conduct
•
Other ethics policies include Human Rights Policy
, Anti-Bribery and
Corruption Policy
, Sanctions Policy
, Insider T
rading Code, Whistleblower
Policy
OCI N.V
.
Annual Report 2021
36
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Our sustainability reporting is designed to pr
ovide transparency on our ESG practices, policies,
and performance, along with an assessment of the material trends, topics, and interactions
inﬂuencing our ESG strategy
.
How we r
eport on ESG
Our ESG reporting takes the following into account:
Review of the key global and industry trends, challenges, and risks
We conduct a compr
ehensive review of the key risks, challenges, and megatr
ends impacting both
the industries in which we operate and the world. These elements inform our strategic objectives,
our risk management strategy
, and allow us to identify opportunities to develop our business.
Stakeholder engagement and identiﬁcation of material topics
We engage with stakeholders on a r
egular basis both directly and thr
ough industry associations
where we work with our peers to sustainably impr
ove global standards in our industries
and engage in dialogue on key global challenges related to our industries. Our stakeholder
interactions provide us with insights into their key topics of inter
est and areas of concern, which
is incorporated into our identiﬁcation and monitoring of material topics.
In addition to engaging with stakeholders, we determine material topics and boundaries by
benchmarking against industry peers and considering disclosure r
equirements and guidelines
issues by various institutions and regulatory bodies.
Implementation of reporting frameworks
Our ESG reporting aims to comply with global best practices. W
e follow the recommendations
from the Global Reporting Initiative (GRI), the Sustainability Accounting Standar
ds Board (SASB),
the T
ask Force on Climate-Related Financial Disclosures (TCFD), the EU Directive for Non-
Financial Reporting (NFRD), and the EU T
axonomy
. We also strive to report on how our businesses
contribute to the United Nations Sustainable Development Goals (SDGs). Relevant disclosures ar
e
marked throughout this r
eport, and the corresponding index pages begin on page 214.
Report boundaries
This report covers the ﬁscal year ended 31 December 2021, focusing on the material topics for
OCI and its subsidiaries as listed in note 34 of our ﬁnancial statements (unless otherwise noted).
OUR APPRO
A
CH T
O
SUS
T
AINABILIT
Y REPOR
TING
W
e ar
e committed
to r
eporting on
our envir
onmental,
social, and
gover
nance (ESG)
performance.
OCI N.V
.
Annual Report 2021
37
Strategy and
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
We engage with stakeholders on a r
egular basis through customer and investor meetings and
calls, industry and investor conferences, customer service, employee meetings, surveys, portals
and hotlines, community outreach pr
ograms, and governmental or regulatory interactions.
Our Executive Directors engage with key stakeholders on ESG and sustainability topics, r
eﬂecting
our commitment at all levels of the organization.
During the year
, key topics and questions raised by stakeholders included:
S
T
AKEHOLDER
ENGA
GEMENT
W
e strive to maintain good
r
elations with our stakeholders
and engage r
egularly to cooperate
on addr
essing the key challenges,
topics, and opportunities r
elated
to our industries.
Stakeholders
T
opics
Addressed thr
ough
Employees
Compensation and beneﬁts, training
and development, HSE and particularly
COVID-19 safety
T
ownhalls, inter
nal communication,
employee surveys, training
programs, COVID-19 HSE
protocols, employee r
epresentation
bodies
Customers
Relationship management, product
information and distribution, supply chain,
general feedback
Customer letters, direct
communication by commercial
leadership team, proactive supply
chain management, product
information and safety sheets
published on our website
Investors
Market trends, operational excellence,
overall business performance, risks related
to COVID-19, ESG
Annual General Meeting, quarterly
conference calls, investor meetings
and conferences
Communities
Community safety and envir
onmental
impact, local socio-economic
development programs, job opportunities
Engagement with community
leaders, non-proﬁts, dir
ect
donations, local recruitment
RT
-CH-210a.1
OCI N.V
.
Annual Report 2021
38
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
In addition to our direct stakeholder interactions, we ar
e an active member of several industry
associations where we work with our peers to sustainably impr
ove global standards in our
industries and engage in dialogue on key global challenges related to our industries.
We play an active r
ole in leadership positions in key associations, such as holding board seats
or steering memberships. This allows us to have a meaningful role in pr
omoting sustainable
practices, steering the strategic priorities of our industries, and driving decarbonization objectives.
We also support several other organizations to pr
omote sustainable practices across our
industries and value chains.
Our dedicated global public affairs team supports OCI’
s businesses in Europe and North America,
monitoring evolving regulatory landscapes.
INDUS
TR
Y AND SUS
T
AINABILIT
Y
P
AR
TNERSHIPS
RT
-CH-210a.1
OCI is an active member of IF
A
with Ahmed El-Hoshy
, CEO of OCI
and Fertiglobe, on the IF
A Board
of Directors. We participate in and
contribute to the agendas of multiple
committees such as Sustainability
,
Science and Agronomy
, and
Communications. Through IF
A, we
supported the development of the
Ammonia T
echnology Roadmap, in
collaboration with the International
Energy Agency in 2021, and are
supporting the development of
roadmaps to reducing emissions of
fertilizer use in 2022.
OCI is an active member of VNCI (the
Dutch Chemical Association) Advocacy
T
eam and speciﬁc working groups on
advocacy
, sustainability
, climate and
energy
. In 2021, we contributed to a
comprehensive study “From Roadmap
to Reality”, describing the necessary
steps and required conditions that
are needed to realize a circular and
climate neutral chemical industry in the
Netherlands by 2050.
We engage with Fertilizer Europe on a wide range
of advocacy efforts related to the EU’
s Fit for 55,
T
axonomy
, and Common Agriculture Policy
.
We are working with Fertilizer Europe, Ammonia
Energy Association, and the Methanol Institute
to develop the ﬁrst global standards for low-
carbon ammonia and methanol, as standardized
certiﬁcation is critical to support the uptake of
these sustainable products downstream.
We also hold Board positions at several
organizations, such as Fertilizers Europe and the
Methanol Institute.
In 2021, we became a member of
the Cool Farm Alliance to promote
the adoption of sustainable farming
practices and products.
In January 2022, we joined the
Hydrogen Council as a Steering
Member to play an active role in the
development of the global hydrogen
economy and promote hydrogen as
the fuel and feedstock of the future.
OCI N.V
.
Annual Report 2021
39
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
We deﬁne our material topics by assessing the topics raised by our various interactions with
stakeholders, considering both ﬁnancial and sustainability materiality in line with “double
materiality” considerations as recommended by the EU Non-Financial Reporting Dir
ective and its
supplements. We also consider the global megatr
ends, challenges, and industry-speciﬁc risks that
affect us, peer and industry r
eports, and recommendations made by global r
eporting frameworks.
We annually evaluate the impact these material topics have on our global value chain, our
local operations and our stakeholders to report a holistic view of how we strive to sustainably
manage our business. Our assessment criteria also considered the GRI’
s materiality principles of
sustainability context, materiality
, completeness, and stakeholder inclusiveness, as well as SASB’
s
criteria for materiality
.
After assessing a signiﬁcant number of topics of interest, we have identiﬁed the below topics as
being most material to our stakeholders and OCI.
Number
Material T
opic
1
Occupational health and safety
2
Climate change action
3
Energy ef
ﬁciency and asset reliability
4
Local economic development
5
Food security
6
Human capital and D&I
7
Ethics and integrity
8
W
ater stewardship and
waste management
9
Sustainable technology
OUR MA
TERIAL T
OPICS
W
e take a holistic double
materiality appr
oach to identifying
and deﬁning our material topics
Financial Materiality
10
9
8
7
6
5
4
3
2
1
0
1 2 3 4 5 6 7 8 9 1
0
8
4
3
1
2
5
6
7
Sustainable Materiality
High
High
•
Stakeholder
engagement with:
•
Investors
•
Customers
•
Employees
•
Communities
•
Global megatrends
•
Industry challenges
•
Inter
nal risk
management
•
Research reports
•
Peer reports
9
OCI N.V
.
Annual Report 2021
40
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OUR COMMITMENT T
O A
SUS
T
AINABLE WORLD
What we do
Quantifying our contribution
Feeding the
world and
providing global
employment
opportunities
•
Our nitrogen fertilizers allow farmers to increase cr
op yields and improve food quality
,
resulting in impr
oved food availability and improved diets.
•
Providing direct and indir
ect employment opportunities with commitment to
maximize local employment and developing their skills. ~70% of our employees
are employed in MENA, and we consistently rank in the top quartile of annual
compensation across our locations.
•
Good workplace practices as described in our Code of Conduct and other policies
promotes a safe and encouraging workplace, diversity
, and equal opportunity
.
Producing gr
een
fuel solutions to
drive the energy
transition
•
Our fuel solutions provide clean alternatives to signicantly reduce GHG emissions
by 60% versus conventional fuels.
•
Strong midstr
eam and downstream contribution to decarbonization thr
ough
promoting the use of gr
een/blue ammonia and methanol as a hydrogen carrier
,
clean fuel, and decarbonized input for downstream industrial pr
ocesses.
Minimizing
environmental
impact through
nutrient and
product
stewardship
•
Maintain safe, environmentally r
esponsible production sites that aim to pr
otect local
environments and ensur
e safe communities.
•
Commitment to educate farmers on nutrient stewardship allows them to maximize
yields through optimal fertilizer application. This r
educes soil nutrient loss, protects
from defor
estation, and minimizes runoff to gr
oundwater
.
Continuously
invest in
best-in-class
technologies
and operational
excellence
•
Maintaining state-of-the-art production facilities, coupled with the positive impact of
our sustainable fuels portfolio, allows us to minimize our emissions and consequently
reduce our impact on climate change.
•
Our water management processes implement best available technologies wher
ever
possible to reduce our water use and maximize r
euse and recycling of water in our
production pr
ocesses to minimize our water discharge and our need for fr
esh water
.
100%
T
op quartile
compensation at all
locations
3,853
Employees in 2021
14.
4MT
Nitrogen fertilizers
sold in 2021
0.
3
5
TRIR performance
is 71% better than
peers per IF
A
#1
Global green
methanol producer
3MT
Hydrogen fuels and
feedstock sold in 2021
(grey and gr
een methanol,
DEF
, green ammonia)
105K
Our digital resour
ces
reached over 105
thousand users in 2021
44%
Lower CAN CO
2
footprint than the
European average
2
.34
GHG intensity
in 2021
2
.7
9
W
ater consumption
intensity in 2021
Driving decarbonization with a focus on sustainable
value cr
eation and contributing to the UN Sustainable
Development Goals (SDGs)
OCI N.V
.
Annual Report 2021
41
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
ESG RA
TINGS
W
e aim to provide stakeholders with compr
ehensive,
accurate, and transpar
ent ESG disclosures. W
e have
been rated by various ESG ratings agencies based on the
extent of our ESG disclosur
es, and where possible work
to addr
ess perceived r
eporting gaps.
Ratings agency
Rating scale
(worst to best)
2021 rating
2020 rating
MSCI ESG Ratings
CCC to AAA
BBB
B
Sustainalytics
100 (sever
e risk) to 0
(low risk)
26.7
42.1
CDP Climate
D- to A
B
N/A
CDP W
ater
D- to A
B
N/A
Vigeo Eiris
0 to 100
52
37
ISS ESG
Corporate Rating
D- to A+
C-
D
OCI N.V
.
Annual Report 2021
42
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
EU T
AX
ONOMY
The European Commission has established the EU T
axonomy as an enabler to scale up
sustainable investments and make the EU carbon neutral by 2050. T
o deﬁne what is ‘sustainable’,
the European Commission has developed a catalog of economic activities, each with criteria
to determine if they substantially contribute towards a sustainable economy – known as the
EU T
axonomy
. Companies across diverse sectors, supply chains, and asset classes must
use this classiﬁcation system to assess if their business activities are sustainable accor
ding to
the T
axonomy
. In June 2021, the Commission formally adopted the Climate Delegated Act,
establishing the criteria deﬁning which activities substantially contribute to the ﬁrst two, out of
six, environmental objectives of the T
axonomy regulation, namely climate change mitigation and
climate change adaptation. The remaining four have been planned to be added in 2022.
For FY2021, we have disclosed eligibility on the ﬁrst two environmental objectives (climate
change mitigation and climate change adaptation), being the proportion of T
axonomy eligible
and T
axonomy non-eligible economic activities in our total tur
nover
, capital expenditures (capex)
and operating expenditures (opex). The next step will be to ensur
e that we meet the technical
screening criteria associated with each T
axonomy-eligible activity
, the ‘do no signiﬁcant harm’
(DNSH) criteria and the minimum social safeguards. As the EU r
equirements for r
eporting on
T
axonomy-aligned activities come into force in January 2023, we will disclose this in our 2022
Annual Report.
The current available deﬁnitions as included in the EU T
axonomy are broadly formulated which
leads to companies having to interpret how this applies to its business activities and the impact
thereof on eligibility
. T
o our knowledge and understanding, we applied judgment, interpretations
and assumptions based on current available information to date. Futur
e guidance could result in
more accurate deﬁnitions and other decision-making in meeting r
eporting obligations that may
come into force, which could impact futur
e EU T
axonomy reporting.
T
axonomy Eligibility
T
o determine taxonomy eligibility
, we ﬁrst identiﬁed the activities relevant to OCI as deﬁned by the
T
axonomy delegated acts by conducting a review of all products, facilities, and investments. We
determined that our activities are categorized under activity 3.15 – Manufactur
e of anhydrous
ammonia.
The manufacture of methanol, blends, and melamine was assessed and does not fall under the
EU T
axonomy’
s description of activities and has therefore been deemed taxonomy non-eligible.
We assessed the taxonomy eligibility of our turnover based on total revenue as deﬁned and
reported in the Consolidated Financial Statements, note 27. T
axonomy-eligible revenue accounted
for 20% of total revenue in 2021 ($ 6,318.7 million).
T
axonomy eligible capital expenditures is deﬁned as additions to property
, plant and equipment,
intangible assets and right-of-use assets. This accounted for 19% of the total capital expenditures
reported in the Consolidated Financial Statements, note 7 ($ 268.5 million).
T
axonomy-eligible operating expenses is deﬁned as direct non-capitalised costs that relate to
resear
ch and development, building renovation measur
es, short-term leases, maintenance and
repair
, and any other direct expenditur
es relating to day-to-day servicing of assets of pr
operty
,
plant and equipment. This accounted for 19% of total operating expenses, reported
as maintenance and repair expenses and short-term leases in the Consolidated Financial
Statements. As our current ﬁnancial r
eporting system set-up does not accommodate reporting
against the speciﬁc OPEX categories of the EU T
axonomy
, the information required to r
eport
is currently not r
eadily available. Therefor
e, please note that for 2021 we have only included
maintenance and repair and short-term leases OPEX for the purposes of this EU T
axonomy
disclosure, as only these categories curr
ently are r
eadily extractable from our ﬁnancial
reporting system.
2021 turnover
, capital expenditures
and operating expenses
T
urnover
Capex
Opex
T
axonomy-Eligible Activities (%)
20%
19%
19%
T
axonomy-Non-Eligible Activities (%)
80%
81%
81%
OCI N.V
.
Annual Report 2021
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Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUS
T
AINABILIT
Y




GL
OBAL INDUS
TR
Y MEGA
TRENDS
Key megatrends
Key risks and challenges
Key opportunities
Food security
•
Risk of current agricultural systems not pr
oducing enough
food by 2050, while minimizing potential of deforestation and
protecting ecosystems.
•
Finite availability of arable land coupled with soil degradation
increases risk of defor
estation and biodiversity loss.
•
Global shifts in dietary prefer
ences may result in changes to cr
op
production and agricultural patterns.
•
As a leading nitr
ogen fertilizer producer pr
esent across the
globe, we are well positioned to pr
omote the efficient use of
nitrogen fertilizers and best practices.
•
This ensur
es soil health, high yields, re-for
estation, and proper
irrigation to minimize water stress, maximize Nutrient Use
Efficiency
, and minimize nutrient losses to the environment (air
,
groundwater
, surface water).
Climate change
•
Impact of changing weather patterns, and extreme weather
events on supply chain and farming seasons.
•
Global push to decarbonize to mitigate climate change.
•
W
ater stress both as a r
esult of climate change and demand
growth fr
om human and industrial consumption.
•
W
e are focused on developing our renewable ener
gy use to
reduce our dependence on carbon-emitting fossil fuels in our
production pr
ocesses.
•
W
e are growing our r
enewable and clean ener
gy product
solutions for our non-agricultural products, with a particular
focus on the ener
gy transition.
•
W
e are developing more ef
ficient nitrogen fertilizers
(e.g.: low- carbon variants) and promoting nutrient stewar
dship.
Circular economy
and changing farming
practices
•
Changing farmer economics and farmer proles, such as:
aging farmers, changing technology pushing for digitization in
agriculture, and a gr
owing focus on resour
ce scarcity
.
•
Sustainability drive to recycle/r
educe nutrient loss and reuse
existing nutrients reduces demand for conventional fertilizers,
and improves food value chain integration.
•
Adapting farm economics to be more sustainable by
developing low-carbon fertilizers, digital solutions, and micro-
financing opportunities. W
e are participating in projects that
support farmer education, and provide several digital tools.
•
W
e are integrating circular economy concepts in our
manufacturing processes.
W
e monitor the global megatrends af
fecting
our industries and our stakeholders
These megatrends and their associated risks, challenges and opportunities inform our strategy
, better serve our
customers, and develop the tools, products, and services that pr
omote sustainable farm and fuel practices to
holistically improve our global envir
onmental and social impact.
Key Global Decarbonization
Challenges...
•
Food
•
Fuel
•
Feedstock
… Have Common Solutions….
Ammonia and methanol as hydrogen
carriers, green fuels, and gr
een
decarbonization feedstock
… That are Gr
owth
Opportunities for OCI
Uniquely positioned to enable the energy
transition through our geographic pr
esence
and product mix
OCI N.V
.
Annual Report 2021
45
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information









RISK
S AND OPPOR
TUNITIES
Climate change pr
esents physical and
transitional risks for our businesses,
industries, supply chains, customers,
and communities.
Our Enterprise Risk Management (ERM) framework equips us with the policies and procedur
es to facilitate the evaluation and
management of risks across our organization. W
e assess and monitor the physical and transitional risks presented by climate
change as one of our primary risks, and believe we have adequate mitigation and sustainability strategies to maximize the
opportunities to develop our business and help combat climate change. Accordingly
, the effect of climate-r
elated risks do not have
a material impact on accounts and disclosures, including judgments and estimates in the ﬁnancial statements. W
e also consider
SASB Chemicals Sustainability Accounting Standards along with TCFD r
ecommendations when assessing our climate-related
risks. Please refer to pages 82-93 for a detailed explanation of our ERM framework, executive and boar
d responsibilities, and
descriptions of our other primary risks and mitigation strategies.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
RT
-CH-530a.1
Physical risks
caused by rising global temperatures include extr
eme weather events
(hurricanes, oods), changing weather patterns, increased water stress, and rising sea
levels. These events and changes can impact our supply chain, disrupt planting cycles and
growing conditions, and impede farmers’ ability to apply cr
op nutrients.
T
ransitional risks
associated with transitioning to a lower
-carbon economy are primarily
related to (i) changes in carbon-linked r
egulations and policies, such as the ETS system,
the proposed Eur
opean carbon border adjustment mechanism, and other potential carbon
taxation mechanisms, (ii) costs associated with transitioning to lower emissions technology
and resour
ce efciency
, and (iii) dietary shifts to more plant-based nutrition.
Potential impact
•
Rising insurance costs and lower pay-outs
•
Unplanned downtime
•
Interruption to supply chain, such as power outages caused by hurricanes
•
Changing weather patterns impacting availability of water and reducing predictability
of planting seasons
•
Commodity price volatility
Potential impact
•
Higher capital expenditures and technology development risk to transition to lower
emissions technologies
•
Risk of strategic projects not r
eceiving adequate regulatory support or not capturing
operational and nancial benets and syner
gies
•
Higher or new taxation measures on carbon-related pr
oducts
•
Changes to crop demand to accommodate dietary shifts to more plant-based nutrition
PHYSICAL RISKS
•
Decarbonization pathway:
we are pursuing a decarbonization strategy with long-term
tar
gets, as described on pages 47-49.
•
Green pr
oducts:
we are gr
owing our hydrogen fuel and feedstock solutions portfolio to
accelerate our path to decarbonization, as described on pages 54-59.
•
Water
efﬁciency:
we are focused on continuously impr
oving our water efciency
,
particularly in water stressed r
egions where we primarily use seawater
, as described on
pages 62-65.
•
Low carbon nutrients:
our low-carbon nitrates and de-carbonizing efforts for our nitr
ogen
fertilizers help reduce farming emissions, and our nitr
ogen fertilizer product of
fering is key
to maximize soil health and feeding the crops that ar
e the favoured by global dietary shifts,
described on pages 60 and 66.
•
Digital
solutions:
our digital applications help farmers monitor weather patterns to
optimize their activity planning and calculate optimal nutrition application, as described on
page 67.
W
ater
stress
Changing
weather patterns
Rising global
temperatures
Rising sea
levels
Extreme
weather events
Regulatory
changes
Cost to transition to lower
emissions technology
Dietary shifts
TRANSITIONAL RISKS
OCI’
s resilience: mitigants and opportunities
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.
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performance
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Financial
statements
Other
information
OUR APPRO
A
CH T
O CLIMA
TE CHANGE
As a producer of nitr
ogen-based products, we generate gr
eenhouse gases along our value chain.
However
, our products are essential to meet the global challenges of food security
, decarbonized
industrial processes, and hydr
ogen fuel solutions by playing a key role to achieving climate neutral
food, fuel, and feedstock for production pr
ocesses.
Our nitrogen fertilizers ar
e essential to achieving the crop yields necessary to meet global food
demand. Ammonia and methanol are the most pr
omising products to enable the energy transition,
with their application as shipping fuels being particularly promising as these pr
oducts can help this
sector decarbonize in a cost-effective way
. Other products in our portfolio such as gr
ey and green
methanol, and DEF are important contributors to the development of hydr
ogen fuels.
Accordingly
, through their r
espective cycles, our end products all contribute positively to the
ﬁght against climate change by aiding the sequestration of carbon in farming, land reclamation,
the elimination of transport emissions, and the potential to decarbonize nearly 90% of global
emissions in the future as we shift towar
ds blue and green ammonia and methanol pr
oduction.
With production facilities in ﬁve countries around the world, our operations ar
e subject to different
environmental r
egulations, but we are unequivocal in our goal to r
educe our environmental impact
wherever possible. This has been our policy since we ﬁrst enter
ed the nitrogen space in 2008.
We have invested heavily in achieving this by both minimizing our envir
onmental footprint through
continuous investment in state-of-the-art technologies to maintain one of the world’
s youngest
and most efﬁcient asset ﬂeets, and maximizing our development of gr
eener products, including
our hydrogen fuels portfolio.
Our environmental targets to r
educe our scope 1 and 2 greenhouse gas emissions
intensity by 20% by 2030 underscores our commitment to r
educe our climate impact
throughout our value chain. W
e aim to achieve our targets through a comprehensive
climate strategy that includes investing in cleaner technologies and projects, r
ecycling
and reusing r
esources, and cooperating with all our stakeholders, industry peers,
governments, and other institutions in the ﬁght against climate change.
W
e are committed to being an envir
onmental steward
and have aligned our strategy to the world’
s goal of
combating climate change, as established thr
ough the
2015 Paris Climate Agr
eement.
TCFD Strategy (a) (b)
TCFD Metrics & T
argets (a) (c)
-30% Industry
-10% T
ransport
-20% Agriculture
-20% Power
-10% W
aste
1.5
o
C pathway
2
o
C pathway
Continued growth
‘business-as-usual’
Global CO
2
emissions
Gt CO
2
/year
2010
2020
2030
2040
2050
20
40
60
80
OCI focus markets
OCI’
s focus markets account for
~60% of emission reduction potential
OCI indirect markets
OCI also indirectly inﬂuences ~30% of
further emission reduction potential
T
o limit global warming, the world needs to rapidly r
educe
annual emissions. OCI’
s focus markets need to contribute
to these emission reductions
OCI N.V
.
Annual Report 2021
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statements
Other
information
Scope 3
Scope 1
Scope 2
Scope 3
2019 Baseline
4.7 M metric tons of CO
2
e
9.5 M tonnes
of CO
2
e
0.6 M tonnes
of CO
2
e
23.3 M metric tons of CO
2
e
Emissions
category
Production and
transportation of
purchased thir
d
party products
Purchase and
transportation
of natural gas,
other fuels, and
raw materials
Production
Purchased fuel
and electricity
use
Use of products sold,
primarily nitrogen fertilizers
OCI
activities
Upstream/downstream activities
not in OCI’
s control
SUS
T
AINABILIT
Y S
TRA
TEG
Y
OCI’
s Baseline 2019 GHG emissions
Our groupwide target is to r
educe our Scope 1 and 2 greenhouse gas (GHG) emissions by 20%
by 2030 and aim to achieve carbon neutrality by 2050. This target brings us close to aligning to
the 2°C pathway
, and we exploring joining the Science Based T
arget Initiative (SBT
i) in the next
few years to move to a science-based target in the future.
2019 was chosen as the base year in line with the Science Based T
arget Initiative’
s (SBT
i)
recommendations, and as it was the ﬁrst year following completion of our expansion pr
ogram and
includes a full year of emissions from Fertil and 50% of Natgasoline. Base year GHG emissions will
be recalculated with any signiﬁcant change in business operations (for example, acquisitions or
divestments, or a change in product portfolio), corr
ections to historical data based on availability of
more accurate information, or changes to r
eporting methodology
.
During the year
, we conducted a comprehensive review of the calculation methodologies for our
environmental data per operating company
. This review was in pr
eparation for the launch of a
limited assurance process with our external auditor in the near future. Some discr
epancies were
corrected r
esulting in revised 2019 and 2020 envir
onmental data, which have accordingly been
restated in this annual r
eport.
How we calculate GHG intensity:
•
Emissions boundaries:
Gross Scope 1 and 2 greenhouse gas emissions, stated in carbon
dioxide equivalent terms, calculated using the EU ETS methodology
. This means that the CO
2
used in the production of ur
ea and other downstream pr
ocesses, which is deﬁned as Scope 3
as per the GHG Protocol and part of scope 3 in the table above, is included. By including the
CO
2
that goes into downstream pr
ocesses, we eliminate the ﬂuctuations that may occur when
we make any changes or experience downtime in our downstream pr
oduct mix and present a
transparent view of the CO
2
produced when making ammonia. This also better aligns us to the
SBTi’
s methodology
.
•
Production boundaries:
Gross ammonia pr
oduction on a nutrient-ton basis, and our total
methanol production on a pr
oduct ton basis. We believe this most accurately r
eﬂects the
nitrogen content of our pr
oduction portfolio, eliminates the possibility of double counting
downstream pr
oducts (i.e.: produced using ammonia, such as ur
ea, CAN, UAN, etc.) and
normalizes for annual ﬂuctuations in our product mix.
TCFD Metrics & T
argets (a) (c)
~61%
of total
emissions
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SUST
AINABILIT
Y S
TRA
TEG
Y
CONTINUED
We have spent considerable time developing a r
oadmap to achieve these targets, consisting of both short-to-medium
term and long-term value-enhancing initiatives offering sustained envir
onmental and operational beneﬁts.
Our operational excellence program is expected to deliver appr
oximately 5-7.5% of our target through a str
ong focus on
energy efﬁciency and asset r
eliability
, which will be achieved through short-to-medium term quick wins at no or low capital
expenditure r
equirements while simultaneously generating mor
e than $75 million
1
of annual incremental EBITDA. This is
further described on pages 52-53.
We believe we can deliver appr
oximately 12.5-15% of our target through new strategic, lower carbon initiatives that follow
the transition pathway of grey to blue to gr
een, capitalizing on both new and established technologies such as waste
gasiﬁcation, CCS, purchased blue and gr
een hydrogen, and switching our facilities to r
enewable energy sources (RES),
which will contribute approximately 4% of our target at no or low economic cost.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
TCFD Metrics & T
argets (a) (c)
RT
-CH-110a.2
Driving decarbonization thr
ough
value enhancing operational and
envir
onmental initiatives
•
CCS/U
•
Pur
chased
blue
hydrogen
T
ransition pathway
•
Biofuels
•
Gr
een
hydrogen,
ammonia, and
methanol from
RES
2
•
W
aste
gasiﬁcation
•
Gr
een
methanol
•
RES to substitute
current power
(Scope 2)
Blue
Green
Other solutions
2019 GHG intensity baseline
Operational excellence
Lower carbon initiatives
2030 GHG intensity target
2050 carbon neutrality
1
T
he $75 million estimated additional EBITDA was based on selling price levels of early 2021, and would be substantially higher when applying March 2022 prices.
2
Consolidated scope 1+2 calculated on EU ETS methodology on total ammonia and methanol production on a nutrient ton basis. Ability to achieve these targets is subject to supportive r
egulatory
environment, subsidies, technology advancements, and national envir
onmental targets. Base year GHG emissions will be recalculated with any signiﬁcant change in business operations (for example,
acquisitions or divestments, or a change in product portfolio), corr
ections to historical data based on availability of more accurate information, or changes to reporting methodology
.
2.37
1.89
-20%
5-7.5% emission reduction
through operational excellence
•
~5% expected at
no/low costs
in the short-
to-medium term,
~$75 million p.a. EBITDA
to be delivered over 3 - 5 years.
•
~0-2.5% with capital in the medium-to-long
term with focus on economic payback
2
.
Accelerated focus on
reliability
, capital
performance and energy efﬁciency
.
12.5-15% emission reduction thr
ough
new strategic, lower carbon initiatives
Ongoing activities in lower carbon
products and switch to RES at
low/no economic cost
account
for ~4% emission reduction.
Partnerships and lower carbon
technologies
ensure optimal
value creation.
OCI N.V
.
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Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information






T
O A
CHIEVING OUR T
ARGE
TS
While there is no single or straightforwar
d solution to reducing GHG emissions in our value chain,
we have identiﬁed several short, medium, and long-term opportunities to transition from fossil fuels
to a low-to-no carbon mix, which will help meet the ambitious targets set by the Paris Agreement.
We believe we ar
e uniquely positioned both in terms of our product mix and global geographic
presence to enable the energy transition and the decarbonization of
food, fuel, and feedstock
,
with ammonia and methanol emerging as the most promising pr
oducts to achieve this.
While we are fully committed to pursuing our r
eduction strategy
, we cannot do this alone, and
are dependent on the timing, scale and ar
ea of focus of regulatory and ﬁscal support, such as
US environmental policies, the EU carbon bor
der tax mechanism, and governmental support and
subsidies for green initiatives.
TCFD Strategy (a) (b)
TCFD Risk Management (a) (b)
RT
-CH-110a.2
Our strategy to achieve our long-term
GHG r
eduction targets is multi-disciplinary
and multi-pr
onged, ensuring that all
aspects of our business ar
e fully aligned
to achieve these targets.
Ammonia and methanol have a pivotal
r
ole in these sustainability transitions
F
ood
Agriculture,
including crop
production,
accounts for
~20% of global
GHG emissions.
Fuel
Continuously
growing transport
sector emits
~10% of global
GHG emissions.
F
eedstock
Industry emits
~30% of global
GHG emissions,
of which 90% are
CO
2
emissions.
Sustainability transitions ar
e requir
ed
to decarbonize the global economy
Fuel
F
eedstock or
energy carrier
Blue/
Green
ammonia
Of the future potential fuels,
blue or green ammonia
is one of the few fuels to
address all emissions.
Blue or green ammonia is
a lower cost alternative to
transport hydrogen.
Bio/
Green

Bio or green methanol is
the only low carbon fuel
that can be used effectively
in road transport with an
84% higher density than
hydrogen.
Bio or green methanol is
considered an ef
ﬁcient
and promising gr
een
hydrogen carrier with a
70% higher density than
hydrogen.
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.
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and compliance
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statements
Other
information









A
CHIEVING OUR T
ARGETS
C
ONTINUED
TCFD Strategy (a) (b)
SCOPE
1
SCOPE
2
SCOPE
3
Decarbonizing production pr
ocesses through:
•
Blue
Hydrogen
(CCUS)
•
Cir
cular
Hydrogen
(Waste-to-Syngas)
•
Gr
een Hydrogen (Renewable Electrolysis)
•
Biobased
Feedstock
(2
nd
& 3
rd
generation)
And maximizing our energy efﬁciency to
reduce our emissions
Decarbonizing our utilities through:
•
Renewable Energy Power Pur
chasing
Agreements
Minimizing our upstream emissions thr
ough:
•
W
orking with our supply chain partners to
decarbonize the transport of raw materials to
our assets
Producing enhanced fertilizers:
•
W
orking on incorporating inhibitors and
coatings into our fertilizer products
Decarbonizing our value chain
OCI’
s upstream and onsite decarbonization
Sustainable farming
Green chemicals
Green fuels
Decarbonized production
processes leads to:
•
Low
carbon
nitrogen
fertilizers
•
Organic nitrogen fertilizers
when using green, cir
cular
and biobased Hydrogen,
Nitrogen and CO
2
as
feedstock
Decarbonized production
processes leads to:
•
Low carbon and zer
o
carbon industrial chemicals
allowing customers to
decarbonize a wide range
of products in the chemical
value chain
•
Gr
een/Bio-methanol
and ammonia for
industrial use
Decarbonized production
processes leads to:
•
Low and no carbon gr
een
fuels which help our
downstream value chain
minimize emissions
Minimizing downstream
emissions through:
•
Supporting
farmer
education
programs (e.g.: 4Rs)
•
Driving the adoptions of more
sustainable practices and
products (OCI’
s Nutramon,
green ammonia, Exacote,
inhibitors and slow release
fertilizers)
Minimizing downstream
emissions through:
•
Recycling
ﬁnished
products
at end-of-life in a waste-to-
syngas process to be used as
a perpetual feedstock in OCI’
s
plants and contributes to the
circular economy
Minimizing downstream
emissions through:
•
Green Ammonia as the
fuel of the future
•
DEF to abate NOx
emissions from diesel
•
Gr
een/Bio-Methanol
for
various transportation
modes
-20% GHG intensity reduction by 2030
Downstream decarbonization
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








A
CHIEVING OUR T
ARGETS
C
ONTINUED
The program is founded on thr
ee key pillars that are tightly interlinked: Pr
ocess Safety
, Reliability
and Energy Efﬁciency
. The program is expected to yield signiﬁcant r
eductions in GHG intensity and
contribute approximately $75 million per year in incr
emental EBITDA over the next three to ﬁve years.
Maximising pr
oduction
ef
ﬁciencies while minimizing
emissions and waste
The Global Operational Excellence Pr
ogram is
being executed acr
oss all our sites.
Process safety enables r
eliability
, which in turn enables energy efﬁciency to achieve lower GHG emissions
Process safety
Reliability
•
Leading process safety design elements
featur
ed
by OCI’
s young asset base.
•
Site led improvement pr
ograms
reﬂecting the site-
speciﬁc process safety priorities.
•
Groupwide leading performance KPI’
s
and best
practices for Process Safety Fundamentals.
•
Site-led improvement programs
r
eﬂecting site-
speciﬁc priorities and the “Focus & Follow Through”
approach.
•
Global reliability pr
ogram
focused on the
identiﬁcation and elimination of repeat issues.
•
Structured r
eadiness reviews
for major turnarounds
to improve completion times, competitiveness and
predictability
.
Energy efﬁciency
•
Energy-efﬁcient
designs
featured by OCI’
s young
asset base.
•
Immediate focus on operational excellence
,
supported by industry leading monitoring tools.
•
Reviewing our energy and feedstock purchases
with the aim to increase our use of gr
een or renewable
sources, including incr
easing our purchase of r
enewable
power (such as solar and wind energy) and increasing
our consumption of bio-fuels and alternative green
feedstocks.
•
Identify and pursue further efﬁciency through
select value accretive investments.
>40 years
30-40 years
20-30 years
10-20 years
0-10 years
52%
9%
14%
8%
17%
Y
oungest asset base relative to global peers with approximately
34% of OCI production capacity under 5 years old
Contribution to SDGs
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We ar
e committed to excellence in every aspect of our organization. We continuously look for
ways to maximize our production ef
ﬁciencies, minimize our emissions and waste, and maintain
our industry leading health and safety recor
ds. Operational excellence is integral to optimizing
energy efﬁciency
, which in turn is necessary to minimizing our scope 1 GHG emissions as the bulk
of our scope 1 GHG emissions are emitted when we consume natural gas to pr
oduce ammonia
and methanol. Our assets hold global certiﬁcations recognizing the quality of our envir
onmental
management processes, such as ISO 14001 Envir
onmental Management System, ISO 50001
Energy Management System, and RC 14001 Responsible Care Management System, on which
employees are also trained. Other certiﬁcations include REACH, International Sustainability and
Carbon Certiﬁcation (ISCC), and Fertilizers Europe Pr
oduct Stewardship. W
e are compliant with
the applicable environmental r
egulations at each of our locations.
N
2
O and NOx abatement
Nitrous oxide (N
2
O) is 298 times more potent than carbon dioxide (CO
2
) as a greenhouse gas
and is primarily produced by our nitric acid plants. W
e have invested heavily in our nitric acid
plants to bring our nitrogen oxide (NOx) and N
2
O emissions down to nearly zero by installing best
available abatement technology such as de-NOx or selective catalytic reduction units and catalyst
replacements thr
ough our responsible catalyst management pr
ocesses.
As a result of these investments, our global N
2
O emissions are 89% lower than the global average
for nitric acids plants, and our overall NOx emissions are 55% lower than the global average for
nitric acid plants. We continue to evaluate ways to achieve further r
eductions of our NOx and N
2
O
emissions.
Continuous reliability and pr
ocess improvements
We continuously assess and make impr
ovements to our plant processes, turnarounds and
maintenance stops. This both helps maximize asset reliability and r
educe planned and unplanned
downtime, which can result in higher GHG emissions than normal during plant start-ups.
Best Available Contr
ol T
echnology
All of our facilities in the United States implement Best Available Contr
ol T
echnology (BACT),
a pollution control standar
d mandated by the United States Clean Air Act, to minimize our
environmental impact.
W
aste heat capture and r
ecovery
The waste heat and steam systems in all our plants are highly integrated and we endeavor to use
all heat within our processes to make use of energy in the most ef
ﬁcient way possible.
Renewable energy
The primary feedstock at all our production facilities is natural gas, which r
epresents appr
oximately
95% of our total energy use, and is predominantly used to pr
oduce ammonia and methanol. We
are r
eviewing our energy and feedstock purchases with the aim to incr
ease our use of green or
renewable sour
ces, including increasing our pur
chase of renewable power (such as solar and wind
energy) and increasing our consumption of bio-fuels and alternative green feedstocks. W
e believe
we are well positioned to capitalize on global low and no-carbon hydr
ogen opportunities given
our unique geographic positioning, which we believe will allow us to signiﬁcantly decarbonize our
production pr
ocesses in the future.
CO
2
capture, r
ecycling, and sale
Our production facilities emit gr
eenhouse gases directly fr
om the conversion of natural gas into our
products, and indir
ectly through the generation of pur
chased electricity and steam. We diligently
work to minimize our CO
2
emissions by investing in reduction technologies, r
ecycling CO
2
within
our downstream pr
ocesses, and selling CO
2
to third parties. W
e are also exploring carbon captur
e
and storage (CCS) opportunities as described on page 22.
In 2021 we:









A
CHIEVING OUR T
ARGETS
C
ONTINUED
Operational excellence
Sold 0.3 million tons of CO
2
to other industrial users
Captured 4.3 million tons of CO
2
by
using it in our production pr
ocesses
Purchased 0.2 million tons of
CO
2
to produce methanol
Maximising pr
oduction
ef
ﬁciencies while minimizing
emissions and waste
Contribution to SDGs
OCI N.V
.
Annual Report 2021
53
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
We ar
e committed to developing products and initiatives to pr
ovide cleaner and more sustainable
solutions to our customers. We aim to gr
ow the share of low carbon pr
oducts in our portfolio,
which include green methanol, blue and gr
een ammonia, and diesel exhaust ﬂuid.
Green methanol
We ar
e a leading green methanol (also r
eferred to as bio-methanol) pr
oducer
, using biogas
rather than natural gas at our Dutch and US methanol plants. Green methanol is an advanced
second-generation biofuel that is produced using bio-waste, meaning it not only r
educes our
own consumption of natural gas, but also provides an outlet for waste that would otherwise emit
methane, which repr
esents 16% of global GHG emissions and traps ~36 times more heat in the
atmosphere than CO
2
over 100 years.
When used as a fuel, green methanol pr
ovides a 60% reduction in gr
eenhouse gas emissions
versus petrol or diesel, which means it is an excellent hydr
ogen fuel to meet renewable fuel
standards.
Green methanol is a fast-gr
owing product with our sales volumes incr
easing at over 75% CAGR
since 2018. However
, we believe this remains an underpenetrated market that will grow rapidly over
the medium term, particularly if regulations such as the EU Renewable Energy Dir
ective, the UK
Renewable T
ransport Fuel Obligation, and the US Renewable Fuel Standards continue to requir
e
vehicles to shift away from conventional fossil fuels. W
e estimate that EU regulations will r
equire a
17% annual increase in advanced bio-fuels by 2030.









A
CHIEVING OUR T
ARGETS
C
ONTINUED
Decarbonizing thr
ough
low-carbon pr
oduct innovation
Pr
oduct innovation
Our fuel products
•
Bio-Methanol
•
Bio-MTBE
(tolling)
arrangements
•
Bio-Methanol
/
Ethanol Mix
Our fuel products have 4 key
advantages
1
Advanced
second
generation
bio-fuels
2
Lower consumption of fossil fuels
3
Provide an outlet for biowaste to
reduce methane emissions fr
om
waste sources
4
Provide up to a 60% reduction
in GHG emissions
Cars
T
ankers
Biodiesel
Key transport markets
Contribution to SDGs
Leading methanol platform
#1
Producer
Largest producer of
green methanol globally
6
Y
ears
Leading market presence
in green methanol since 2015
ISCC
Certified
Green methanol certified
by ISCC EU and ISCC Plus
60% GHG
Reduction
In emissions vs. petrol/gasoline
Exclusive
Supply
Exclusive supply agreements with
ExxonMobil, Essar and Greenergy in the UK
Current Gr
een Methanol Customers
OCI N.V
.
Annual Report 2021
54
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CA
SE S
TUD
Y
:
OCI fuels win races
OCI is proud to be the of
ﬁcial sponsor of the FIA World Rally Championship’
s new
sustainable, fossil-free hydr
ogen fuel.
Partnering with P1 Fuels, OCI’
s green methanol is used to make 100% sustainable
hydrogen fuel.
Running on our fuel, P1 Fuels achieved their ﬁrst ever win at the WRC Rallye
Monte-Carlo 2022.
Put to the test in the French Alps during the peak of winter and navigating grueling
weather including ice and snow
, it is vital the teams use a fuel that can power high-
performance engines under extreme conditions.
As part of the championship’
s commitment to use hydrogen fuel from 2022, our
fuel is the ﬁrst of its kind to be used in a FIA World Championship series and the
start of a new era for racing.
Contribution to SDGs
P1 Fuels achieved their
ﬁrst ever win at the WRC
Rallye Monte-Carlo 2022









A
CHIEVING OUR T
ARGETS
C
ONTINUED
OCI N.V
.
Annual Report 2021
55
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Diesel Exhaust Fluid (DEF)
DEF
, which is also known as AdBlue in Europe and marketed as AdGreen by Fertil, is a non-
hazardous aqueous ur
ea solution consisting of approximately 67.5% deionized water and
approximately 32.5% ur
ea. DEF is used in Selective Catalytic Reduction (SCR) systems to lower
harmful vehicle exhaust emissions from diesel engines, with the added advantage of impr
oving
vehicle fuel economy by approximately 5% and using diesel fuel mor
e efﬁciently
. DEF breaks down
nitrogen oxides emissions into nitr
ogen gas and water vapor
, thereby eliminating environmentally
harmful emissions from cars, trucks, buses and other heavy-duty vehicles.
We ar
e seeing strong r
egulatory-driven growth DEF
, often our highest margin product out of
IFCo. We ar
e one of the largest producers and distributors of DEF in the US, with IFCo capable
of producing a million tons, and our US distribution arm, N-7, also marketing DEF pr
oduced by
Dakota Gasiﬁcation and Dyno Nobel. We also have DEF pr
oduction capabilities of approximately
450 thousand metric tons at Fertiglobe.
Regulations in the US, EU and China are driving demand gr
owth by requiring the r
eplacement of
older vehicles, particularly heavy-duty trucks, coupled with higher dosing rates in newer generation
diesel engines.
We see this as being the only viable option for emissions abatement for truck and rail in the
foreseeable futur
e as the switch to electric vehicles has proven to be unsuccessful to date for
heavy duty trucks or farm vehicles due to poor power
-to-weight ratios, leaving few near
-term
alternatives to DEF for emissions abatement in truck and rail.









A
CHIEVING OUR T
ARGETS
C
ONTINUED
Pr
oduct innovation
continued
Contribution to SDGs
Available DEF capacity (ktpa)
450
1,019
179
Fertiglobe
IFCo
N-7
1,648
Historic and forecast global DEF consumption
Million Metric T
ons
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Europe
North America
China
India
Middel East and Africa
Other
DEF demand is expected
to grow by mor
e than 11%
over the medium-term
W
ell positioned to serve gr
owing DEF demand
OCI N.V
.
Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Blue and Green ammonia
If global ammonia production switches to gr
een feedstocks, green ammonia could r
educe
global GHG emissions by more than 1%, and would pr
ovide signiﬁcant further decarbonization
opportunities for multiple industries. Green ammonia has multiple carbon-fr
ee uses, including as
fertilizer
, fuel, chemical feedstock or source of energy storage.
We ar
e pursuing several low/no carbon ammonia projects and initiatives acr
oss our platform,
as described on pages 10-24.
ISCC+ Certiﬁed Green ammonia
We ar
e the ﬁrst ammonia producer in Eur
ope to use bio-methane to produce and sell gr
een
ammonia. The sustainable product and mass balance system is ISCC+ certiﬁed and can be used
to produce gr
een downstream pr
oducts. The GHG footprint is at least 50% lower compared to
grey ammonia and can be decarbonized further depending on customer r
equirements.
Proprietary Blue ammonia (BlueAm) standar
d
We have developed our own pr
oprietary Blue Ammonia (BlueAm) standard, with the support
of SCS Consulting, that targets a 60% GHG reduction to curr
ent industry benchmark of GHG
emissions for ammonia production. The BlueAm standar
d is ﬁrst of its kind and is annually audited,
providing a r
eliable and transparent standar
d certiﬁcation of lower product emissions fr
om a Blue
Ammonia molecule.
Pr
oduct innovation
continued
Contribution to SDGs









A
CHIEVING OUR T
ARGETS
C
ONTINUED
Decarbonizing our ammonia production
We ar
e evaluating green ammonia initiatives acr
oss
our ammonia production portfolio.
By using water electrolysis and
renewable electricity
, ammonia
production can be made
completely carbon-free.
Green ammonia has multiple carbon-fr
ee uses, including
as a fertilizer
, fuel, or source of energy storage.
Fertilizer
T
ransportation
Fuel cell vehicle
Ammonia power plant
T
extiles and
pharmaceuticals
Refrigeration
Solar power
Biogas
Wind power
W
ater electrolysis
How green ammonia is made
What green ammonia can be used for
Developing our green ammonia capabilities
W
ater or biogas for hydrogen
Clean Energy
Merchant ammonia
capacity
2.4MT
Gross ammonia
capacity
6.9MT
N
H
H
H
NH
3
Energy storage
Understanding blue and green:
Blue
: produced using hydr
ogen from fossil fuels (e.g.: natural gas) and capturing and sequestering the carbon dioxide produced rather than
releasing it into the atmospher
e, such as CCS.
Green
: pr
oduced using hydrogen from pr
ocesses that use renewable and carbon-fr
ee feedstock, such as electrolysis using renewable energy
.
OCI N.V
.
Annual Report 2021
57
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value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OCI FULFILLS CUS
T
OMER DEMANDS T
O
REDUCE EMISSIONS IN THE V
AL
UE CHAIN
Example industries and end markets
Fertilizers
T
extiles
Animal
Nutrition
Automotive
Cosmetics
Electr
onics
OCI gr
owth opportunities
Sustainability push is a major catalyst for
demand for OCI’
s decarbonized products
•
Zero carbon ammonia and methanol as
industrial feedstocks
•
Zero carbon ammonia and methanol as
shipping fuel
•
Biofuels
•
Low-carbon ammonia for use in consumer
products
•
Zero carbon ammonia feedstocks for fertilizer
•
Controlled-release and stabilized fertilizers
(inhibitors)
•
V
ariable rate fertilizers
We incr
easingly see that markets realize the importance of
Scope 3 emissions. In many cases, to signiﬁcantly reduce
embedded emissions in an end product, it is key that
decarbonization starts at the beginning of a value chain,
and then is carried onward thr
oughout the chain.
OCI crucially sits at the beginning of a variety of value
chains, and we are seeing a str
ong push from the br
oader
market and our customers to decarbonize, which gives
us the opportunity to intensify collaborations across the
value chain.
By smartly sourcing r
enewable and low-carbon raw
materials, or by reducing carbon intensity our pr
oduction
processes for ammonia and methanol thr
ough operational
excellence and CCUS, we can make a material impact on
the carbon footprint of our customers. For instance, one
of our longstanding customers, W
acker in Germany
, uses
our green methanol to pr
oduce fossil free silicones, which
further decarbonize a variety of products.
In addition, with speciﬁc additives or bio-based coatings,
we can also reduce the envir
onmental impact during the
use of fertilizers on farmland by our end customers. T
o
that end, we can both decarbonize our own assets and
products, and help our customers abate their emissions
while using our products.
This will potentially reap signiﬁcant multiple value chain
emission reductions in the futur
e. As such we are excited to
increasingly expand and gr
ow our green pr
oduct offering to
the market.
W
acker procures bio-methanol fr
om
BioMCN to produce a fossil fr
ee silicone,
BELSIL®eco & ELASTOSIL®eco, which
further decarbonizes a variety of products.
Fertilizer
Green fertilizer
Melamine
Green Melamine
Ammonia, ACN, Caprolactam, etc
Green Ammonia, ACN, Capr
olactam, etc
Methanol, Formaldehyde, Acetic Acid
Green Methanol, Formaldehyde,
Acetic Acid
Silicone, other
Green Silicone, other
End customer
Downstream pr
oduction
at OCI and end customers
Natural gas
Green gas,
biogas, H
2
by
electriﬁcation
or other
Durable
Consumer
Goods
Healthcare
Plastics &
Resins
Contribution to SDGs
OCI N.V
.
Annual Report 2021
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performance
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and compliance
Financial
statements
Other
information
Acrylonitrile is a product that is widely used in a br
oad
range of applications.
With OCI’
s low carbon ammonia, combined with
low carbon propylene sour
ced separately
, AnQore
decarbonizes acrylonitrile by 60%.
In turn, AnQore is helping its wide range of customers
to decarbonize important consumer goods and equipment
suppliers to the wind power generation industry
.
The relative cost price incr
ease of decarbonizing a
product thr
oughout a value chain is often quite high for
OCI. However
, as the cost increase of a decarbonized
component in an end-product is often minimal, it is
promising that customers ar
e increasingly awar
e of their
environmental footprint and incr
easingly willing to spare a
small premium for a mor
e environmentally friendly pr
oduct.
This helps the participants in a value chain cover
their costs and investments involved in decarbonizing
their products.
Contribution to SDGs
Scope 1 reduction of 50%
over grey ammonia
Lower carbon end products
•
Windmill
blades
•
Mobile
phones
•
Surgical
gloves
•
Mattresses and furniture
•
Rubber
products
•
Automotive
parts
•
Carbon Fiber sports gear
(e.g.: golf clubs)
•
Small kitchen appliances
•
Electrical
connectors
•
Pr
otective
headgear
•
Medical
equipment
-35%
Scope 3 reduction of 60%
over grey Acrylonitrile
1
Signiﬁcant scope 3
reduction for OCI
and AnQore
-12%
< 0.5-2%
2
OCI produces
ISCC+ certiﬁed
low carbon ammonia
made
from biogas.
Strong potential to ramp up
green ammonia volumes thr
ough
expected customer demand pull.
AnQore pr
oduces
Econitrile
, theworld’
s
ﬁrst ever sustainableand
circularacrylonitrilepr
oduced
from non-fossil ammonia and
propylene feedstock in an
existing acrylonitrile plant.
1
AnQore sour
ces a mix of renewable feedstock
2
Cost price increase in end-consumer pr
oduct (e.g. car
, mobile phone)
%
Relative price increase of low carbon ammonia in pr
oduct.
CA
SE S
TUD
Y
:



OCI FULFILLS CUS
T
OMER DEMANDS T
O REDUCE
EMISSIONS IN THE V
ALUE CHAIN
C
ONTINUED
OCI N.V
.
Annual Report 2021
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statements
Other
information
In addition to our work on farmer education on nutrient application best practices, we have
invested in developing innovative products that impr
ove crop yields while having a lower
environmental impact.
Our conventional nitrogen fertilizer pr
oducts provide optimal cr
op nutrition due to their quality
,
resulting in lower nitr
ogen loss and increased cr
op yields.
ISO 14040/14044 life cycle assessment
As part of our ongoing assessment of the potential impact of our products on the envir
onment,
last year we conducted a life cycle analysis (LCA) with external veriﬁcation of our CAN and
UAN in accordance with ISO 14040/14044 Life Cycle Assessment Standar
ds. Based on these
externally veriﬁed assessments conducted by SGS, our CAN’
s CO
2
footprint is amongst the
lowest in the world. Compared to Eur
opean peers as benchmarked by Fertilizers Europe, our
CAN CO
2
footprint is approximately 33% lower than peers implementing best available emissions
technology
. Our UAN CO
2
footprint is similarly best-in-class as it is produced in the same
downstream pr
ocess of nitric acid as CAN.
Inhibitors and controlled r
elease fertilizers
Farming activities account for over 50% of GHG emissions in the nitrogen fertilizer value chain.
In addition to the farmer education programs in place to impr
ove fertilizer use efﬁciency
, we are
working with partners to evaluate the best suited urease and nitriﬁcation inhibition technologies as
well as other controlled r
elease coatings to implement in our production pr
ocesses. We work with
credible experimental stations in key markets to conduct pr
oduct trials and evaluating them on
efﬁcacy
, nutrient use efﬁciency and scope 3 GHG impacts.
CAN+S
The importance of sulfur has become increasingly r
ecognized by farmers, especially in Europe,
where demand for CAN+S is gr
owing. We ar
e evaluating the introduction of CAN+S for early
season application in Europe, as adding sulfur may have added beneﬁts for better nutrient use
efﬁciency
, which we are conﬁrming in pr
oduct trials.






T
O A
CHIEVING OUR T
ARGE
TS
Decarbonizing thr
ough
low-carbon pr
oduct innovation
Developing mor
e effective fertilizers
Contribution to SDGs
According to Fertilizers Eur
ope Care for Gr
owth benchmark.
* Best available technology designed for production of CAN in EU
OCI CAN
CAN (best
tech.*)
CAN (EU av
.)
CAN
(Russian)
350%
180%
150%
100%
OCI CAN CO
2
production footprint
is lowest in Europe
OCI N.V
.
Annual Report 2021
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statements
Other
information
GHG EMISSIONS AND ENERG
Y USE
Unit
2019
2020
2021
Energy (Ammonia*)
Energy consumption
TJ
211,541
206,033
200,556
Energy intensity
GJ / metric ton gross pr
oduction
36.64
36.36
36.05
Energy (Consolidated)
Energy consumption
TJ
288,817
293,846
283,605
Energy intensity
GJ / ton product
18.98
18.86
19.22
Emissions to Air*
GHG emissions (Scope 1)
million tons of CO
2
e
9.50
9.20
9.55
GHG emissions (Scope 1 - CO2 to Downstream)
million tons of CO
2
e
4.93
5.32
4.65
GHG emissions (Scope 2)
million tons of CO
2
e
0.62
0.66
0.65
T
otal GHG emissions (Scope 1 + 2 EU ETS)
million tons of CO
2
e
15.06
15.18
14.85
GHG intensity (Scope 1 and 2)
ton CO
2
e / N-ton
2.37
2.31
2.34
Scope 1 emissions covered under emissions limiting
regulations
% (Scope 1 – Direct)
17.7%
16.0%
14.0%
NOx
metric tons
3,018
3,485
3,120
N
2
O
metric tons
132
151
151
SO
2
metric tons
158
163
137
VOCs
metric tons
134
143
114
*
Data has been restated to account for corr
ections following a comprehensive r
eview
.
2021 energy and air emissions scor
ecard
Contribution to SDGs
Greenhouse gas intensity
2.37
2019
Metric ton CO
2
e / nutrient ton
product
2.31
2020
2.34
2021
NOx intensity
Metric ton NOx / thousand
nutrient ton product
0.47
2019
0.53
2020
0.49
2021
SO
2
intensity
Metric ton SO
2
/ thousand
nutrient ton product
0.02
2019
0.02
2020
0.02
2021
N
2
O intensity
Metric ton N
2
O/ thousand nutrient
ton product
0.02
2019
0.02
2020
0.02
2021
We have worked diligently to r
educe our greenhouse gas emissions at all sites
through our operational excellence pr
ograms and initiatives to develop lower
carbon products.
During the year
, we achieved a 0.8% improvement in ammonia energy
intensity as compared to 2020, and a 1.6% impr
ovement against our 2019
baseline.
This contributed to absolute Scope 1 and 2 emissions decreasing by 2.2%
year
-on-year and 1.4% against our 2019 baseline, with total production
remaining r
elatively stable at approximately 6.4 million tons on a nutrient-ton
basis for ammonia and product ton basis for methanol.
Our GHG intensity has remained r
elatively constant from our baseline,
increasing 1.3% year
-on-year and decreasing 1.3% fr
om our baseline as a
result of typical variations in pr
oduction and maintenance activities at our
facilities, and ﬂuctuations in the production denominator in nutrient versus
metric tons. We believe we ar
e on track to achieve our 2030 GHG intensity
reduction target, as the implementation of our operational excellence
accelerates, and the execution of our lower carbon projects completes in
the latter part of our target horizon.
Our other emissions to air
, such as NOx, N
2
O, SOx, and VOCs remain
amongst the lowest in the industry
, and have all decreased year
-on-year
.
We will continue to look for incr
emental room for impr
ovement at these low
emissions levels.
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.
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Corporate
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performance
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and compliance
Financial
statements
Other
information











W
ater Management approach
As water is an essential but ﬁnite resour
ce, we work diligently to maximize our water efﬁciency
and are focused on r
educing our water use wherever possible at all our sites.
We primarily use water in our pr
oduction processes for cooling, steam generation, or in our
downstream aqueous pr
oducts.
Our water management processes implement best available technologies wher
ever possible to
reduce our water use and maximize r
euse and recycling of water in our pr
oduction processes
to minimize our water discharge and our need for fresh water
. Most of our water consumption
is recycled several times in closed loop systems to r
educe our intake of freshwater wher
ever
possible and use non-potable water sources such as tr
eated water from industrial sour
ces and
seawater to reduce our impact. W
e have made signiﬁcant investments to reduce our use of
freshwater wher
ever possible, and particularly at our sites in water stressed r
egions such as the
Middle East and North Africa where we have installed desalination units to use seawater instead
of freshwater
.
Withdrawal and discharge
We closely monitor our water withdrawals and discharges at every facility and ensur
e any
discharged water is treated to meet applicable envir
onmental requir
ements and safely discharged.
At several facilities, including those in Egypt and Iowa, we have invested in on-site pools to safely
evaporate discharged water
, or treat the collected water for irrigation. Some of our facilities beneﬁt
from inter
connections with neighboring plants, allowing them to safely recycle water for use in
other facilities’ production pr
ocesses.
We meet or exceed all water quality r
egulations and permits through our water management
and treatment pr
ocesses to ensure we do not impact local water sour
ces. W
ater management
− including water quality − is a key element of our overall HSE and resour
ce use management
systems and is monitored by the Boar
d of Directors’ HSE & Sustainability Committee.
We continuously r
eview our water management processes, our water use, and evaluate ways in
which we can improve our water stewar
dship at every facility
.
W
aste, efﬂuents, and spills
Our production pr
ocesses for nitrogen and methanol pr
oducts produce limited by-pr
oducts and
are not waste intensive. Our distribution pr
ocesses are primarily bulk shipments with minimal
packaging requir
ed. Almost all the waste we produce is non-hazar
dous and primarily result fr
om
maintenance activities. Each facility monitors and minimizes its hazardous and non-hazar
dous
waste through active waste management pr
ograms. The primary source of hazar
dous waste is
spent catalyst, which is disposed of safely as per local regulations. W
e minimize potential waste
leakage, efﬂuents, or spills thr
ough primary and secondary containment systems that are r
egularly
inspected. All processes undergo r
egular reviews by our HSE teams to identify and implement
waste reduction opportunities wher
e possible.
In 2021, our facilities reported 21 envir
onmental incidents (EI), repr
esenting an environmental
incident rate (EIR) of 0.35. None of these incidents were classiﬁed as major and ﬁve r
elated to
a stringent waste-water iron content permit at IFCo, for which we successfully commissioned
pipeline in 2021 to permanently resolve the issue. Excluding this r
epetitive permit exceedance,
our EI's totaled 16 with an EIR of 0.27.
Contribution to SDGs
RT
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statements
Other
information
Each plant
works to
maximize water
efﬁciency
W
ater is sourced fr
om
seawater
, municipal sources,
wells, and surface water
.
W
ater is used in the production pr
ocess
in several ways, such as cooling
water
, as steam, or as a raw material
for our downstream pr
oducts. W
ater
is circulated and r
e-used many times
throughout our pr
oduction cycles
Following several cycles through our plants,
water is recycled by neighbouring plants wher
e
interconnections exist or is safely r
eleased as
unpolluted water vapour
.
W
ater is treated at water
treatment facilities to
ensure it is safe and clean.
W
ater is safely discharged as per local
regulations, or further r
ecycled as
irrigation water
.
1
5
1
4
2
3
RT
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Contribution to SDGs












CONTINUED
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performance
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and compliance
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statements
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information










Contribution to SDGs
Unit
2019
2020
2021
Efﬂuents and waste*
Hazardous waste r
eused, recycled or r
ecovered
Thousand metric tons
1.98
1.60
2.37
Hazardous waste tr
eated or disposed of
Thousand metric tons
1.27
1.50
1.62
Non-hazardous waste r
eused, recycled or r
ecovered
Thousand metric tons
1.80
1.86
2.75
Non-hazardous waste tr
eated or disposed of
Thousand metric tons
18.90
27.33
14.16
W
ater**
T
otal intake by source
Million cubic meters
91.13
92.52
87.78
Groundwater
Million cubic meters
17.34
17.89
16.22
Seawater
Million cubic meters
49.43
48.00
46.21
Surface water
Million cubic meters
20.71
20.74
19.71
Third party water
Million cubic meters
3.65
5.89
5.64
T
otal water discharge by destination
Million cubic meters
52.21
49.12
42.27
Groundwater
Million cubic meters
4.77
4.62
2.35
Seawater
Million cubic meters
41.17
37.88
31.05
Surface water
Million cubic meters
1.25
1.43
2.38
Third party water
Million cubic meters
5.02
5.19
6.49
W
ater Stress



W
ater withdrawn in regions with High or Extr
emely High
Baseline W
ater Stress
%
73%
71%
72%
W
ater consumed in regions with High or Extr
emely High
Baseline W
ater Stress
%
58%
57%
62%
Environmental incidents
Environmental incidents
#
36
37
21
Environmental Incident Rate (EIR)
Per 200,000 hours worked
0.59
0.66
0.35
2021 water and waste scor
ecard
•
Surface water 22%
•
Groundwater 19%
•
Seawater 53%
•
Third party 6%
2021 water
intake by source
T
otal water intake
87.78 million cubic meters
•
Surface water 10%
•
Groundwater 6%
•
Seawater 73%
•
Third party 11%
2021 water
discharge by destination
T
otal water discharge
42.27 million cubic meters
*
Restated to account for 50% share in Natgasoline in historical years.
**
Excludes seawater used for cooling at FERTIL in a ‘once-through’ system, where seawater intake volumes ﬂow through heat exchangers and
are safely discharged uncontaminated back to the sea.
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Other
information
Our Middle East and North African (MENA) operations work diligently to minimize their use of
freshwater given the high str
ess on water resour
ces in the region. W
e have invested in reverse
osmosis and seawater desalination units on-site at all our MENA locations.
Our assets in Egypt source appr
oximately 58% their water intake by using reverse osmosis units
to desalinate non-potable water and our production facilities in Algeria and the UAE sour
ce 100%
of their water intake from the sea.
Our goal is to become fully self-reliant on sustainable water sour
ces and reduce our r
eliance on
fresh water sour
ces at all our MENA assets. Actions being taken to address water sustainability in
Egypt include:
•
Increasing our access to sustainable groundwater wells thr
ough local investments.
•
Investing in increasing capacity and efﬁciency of our on-site r
everse osmosis units, treating and
upgrading groundwater
.
•
Investing in wastewater plants to re-use/r
e-cycle more water fr
om the production pr
ocess.
•
Continuing to make use of any water discharge to grow our land r
eclamation project.
Zero ef
ﬂuent discharge
Both Fertil and EFC have implemented a novel solution to the large quantity of water produced
as a by-product of the ur
ea manufacturing process. The facilities invested in the construction of
irrigation and evaporation ponds to avoid discharging efﬂuents into the envir
onment. EFC is the
only plant in Egypt to do this, with three ponds capable of holding a total of 15,000 cubic meters
of water
. Fertil has two ponds capable of holding a total of 24,800 cubic meters of water
.
W
ater recycling and r
euse
Both EFC and EBIC have implemented a wastewater treatment and r
e-use closed loop system
for cooling water that reduces water intake by appr
oximately 5%.
Land reclamation in the Egyptian desert
The water collected at EFC’
s irrigation ponds is used to irrigate 50 acres of forestry that was
planted by EFC in the nearby desert, contributing to essential land reclamation in the Egyptian
desert and creating an additional sour
ce of carbon sequestration. The 50 acres of for
estry
sequester an estimated 39 metric tons of carbon dioxide a year
.
RT
-CH-140a.3
Contribution to SDGs
CA
SE S
TUD
Y
:
W
A
TER AND W
AS
TE
CONTINUED


2
.1
3
Million cubic meters of water
re-used for irrigation in the
Egyptian desert
50
Acres of land r
eclaimed in the
Egyptian desert through our
water recycling ef
forts
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.
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statements
Other
information
FEED THE W
ORLD
The world continues to face a signiﬁcant challenge in ensuring a
sustainable supply of food for our burgeoning global population,
which is expected to reach nearly 10 billion people by 2050. This is
expected to requir
e a doubling of food production levels, all while
arable land per capita is projected to decline by 55% by 2050. With
growing populations and declining r
esources, cr
op yield optimization
is imperative to meet our global food needs, while also minimizing the
environmental impact of agricultur
e and fertilizer use.
Fertilizer use is essential to maximize yields, minimize soil
degradation, and sequester carbon dioxide
Nitrogen fertilizers ar
e the key nutrient for crop gr
owth and
development. High quality soil maximizes farm yields and ensures
healthy crops, which in turn naturally sequester carbon dioxide to help
ﬁght climate change.
Efﬁcient farming thr
ough correct fertilizer application helps farmers
maximize the use of existing farmland and reduces land sequestration.
OCI’
s fertilizer products help achieve sustainable agriculture by
providing an ef
fective and environmentally sound sour
ce of nitrogen. By
using nitrogen fertilizers ef
fectively
, farmers can:
•
grow mor
e food on their land,
•
reduce soil nutrient loss and impr
ove soil quality
, and
•
reduce the need for new farmland to be sequestered, which
therefor
e reduces GHG emissions by limiting defor
estation.
Without annual application of nitrogen fertilizers to replenish soil
nutrients, soil health is eroded r
esulting in lower yields and biodiversity
loss amongst many issues.
Promoting nutrient stewar
dship
Incorrect or inef
ﬁcient fertilizer application can result in nitr
ogen release
into the atmosphere as well as leaching or run-of
f into groundwater or
surface water
, which can negatively impact water quality and aquatic
biodiversity
.
We work with industry associations to
educate farmers on fertilizer
application
, storage,
provide digital r
esources
, and to encourage
sustainable farming
. In the US, we support the 4R Nutrient
Stewardship pr
ogram through our membership in The Fertilizer
Institute (TFI).
Other environmental impacts
Biodiversity
None of our production facilities ar
e located near protected ar
eas
or areas of high biodiversity
, and we are not r
equired to maintain a
biodiversity management plan for any of our sites. We comply with
all relevant r
egulatory requir
ements and environmental policies when
assessing new projects, which would include envir
onmental and
biodiversity impact assessments wherever r
elevant.
Nitrogen fertilizer use helps impr
ove agricultural efﬁciency
, which
protects biodiversity by maximizing yields of existing farmland ther
eby
reducing the need to sequester new land for farming.
Other emissions to air
We have installed the necessary equipment - such as de-NOx units,
methanol removal units, and Selective Catalytic Reduction (SCR) units
– at our facilities in line with our policy to implement Best Available
Control T
echnology (BACT) to minimize our environmental impact.
Accordingly
, we emit minimal amounts of nitrous oxide (N
2
O), nitrogen
oxides (NOx), sulfur oxides (SOx), particulates, and volatile organic
compounds (VOCs), as reported on page 61.
W
e are committed to working
towar
ds global food security
.
Thr
ough various programs,
we work with our customers
ar
ound the world to maximize
yields, str
engthen crops,
pr
event soil degradation,
pr
omote sustainable
agricultural practices, and
accelerate gr
owth to meet the
world’
s rising food demands.
W
e also work to ensure our
pr
oducts are used in a way
which safeguar
ds health,
occupational and public safety
and security
, biodiversity
, and
the envir
onment.
Contribution to SDGs
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Contribution to SDGs
While nitr
ogen fertilizers
of
fer a sustainable means
of maximizing yields, farmer
education is essential to ensur
e
nitr
ogen fertilizer application is
optimized for both pr
oduction
and envir
onmental protection.
W
e work with farmers around
the world thr
ough various
initiatives to achieve this goal.
Our digital offerings include the
Nutrinorm
agr
onomy website, and
two applications
developed speciﬁcally for farmers:
•
OCI Agro W
eather app
to optimize farmers' activity planning.
•
OCI Nutri-N app
for an optimal nutrition application.
Using these resour
ces, our customers can ensure fertilizer quality is
maintained through corr
ect storage, blend products corr
ectly
, ensure
spreading settings ar
e correct to maximize even fertilization, calculate
optimal fertilizer release, accurately track the weather
, and receive
24/7 access to the support they need.
>105,
000 USERS
Our digital resour
ces reached over 105,000
users in 2021
CA
SE S
TUD
Y
:
Digital farming
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statements
Other
information
3.
SUS
T
AINABILIT
Y




HO
W WE CREA
TE V
AL
UE
FOR OUR COMMUNITIES
RT
-CH-210a.1
Our operations directly and indir
ectly create
signiﬁcant economic opportunities for our
communities in both developed and developing
countries through payments for goods and
services, job creation, impr
oved farmer
productivity
, taxes, resear
ch and development,
and donations to develop the communities in
which we operate.
We have invested mor
e than $5 billion in
growth and impr
ovement projects in under
a decade, which has created thousands of
ancillary businesses and job opportunities.
In 2021, we created $6.3 billion in value, of
which 63.7% was redistributed. The balance
was reinvested in OCI and $350 million will be
distributed as a dividend.
$6.3BN
$4.0BN
ECONOMIC V
ALUE
GENERA
TED
IN 2021
ECONOMIC V
ALUE
DISTRIBUTED
IN 2021
Payments
to suppliers
52.3%
4.9%
Employee wages
and benets
6.5%
Payments to providers of capital, governments,
and donations to communities, excluding
announced dividend payment
V
alue retained in OCI
through capex and other
investments
36.3%
Contribution to SDGs
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statements
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information
We endow time and r
esources into the entir
e
education value chain, from donating school supplies
to children in need and r
ewarding high achievers by
funding university scholarships and providing on-site
training opportunities.
Our local operations have worked hard to encourage
students of all ages to pursue an education in ﬁelds
of science, technology
, engineering and mathematics
(STEM) through various initiatives. W
e also participate
in programs speciﬁcally designed to encourage girls to
pursue STEM, such as Girlsday
.
In 2021, despite the lack of in-person programs due
to COVID-19 restrictions, 511 students and young
professionals beneﬁted fr
om the training or education
opportunities availed through the pr
ograms we
participated in or sponsored in Eur
ope, the United
States, and North Africa.
Our plants pay close attention to the social causes
that matter to each community to effectively
participate in local development. Such causes include
sponsoring or donating time to local sports teams,
music and arts festivals, food banks, toy runs, youth
programs, and animal rights causes.
In addition, we have strong ties to local healthcar
e
initiatives that provide necessary physical, mental, and
emotional support to our communities. Our plants
work with trusted partners focusing on the issues that
signiﬁcantly impact their communities, including elderly
care centers, cancer tr
eatment and support, essential
supplies for the underprivileged, and programs that
encourage healthy living.
HOW WE CREA
TE V
ALUE
FOR OUR COMMUNITIES
CONTINUED
A tailored appr
oach to each community
As a local employer in each of our communities, we are pr
oud to have strong stakeholder engagement pr
ograms
in place that allow us to identify and participate in the social development causes that matter most locally
.
Accordingly
, we have cultivated local social development programs tailor
ed to the speciﬁc needs of each of our
communities to maximize the impact of our donations. In addition to our sponsorships and ﬁnancial contributions
to various causes, our employees personally invest their time in our local communities by participating in
fundraisers and volunteering at events.
EDUCA
TION
SOCIAL CAUSES
>385
,
000
Meals provided in
South East T
exas since 2015
12
,
595
Students reached since 2015
Contribution to SDGs
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information
Partnership with JINC
OCI is proud to support JINC, aDutch organization
that provides underprivileged8–16-year
-olds with
mentorship opportunities in various professions, helping
them ﬁnd out what kind of work suits their talents and
how to apply for a job. JINC reaches mor
e than 65,000
children each year
.
Beginning in 2021, OCI has partnered with JINC to
provide support both thr
ough ﬁnancial contributions
and by availing employee volunteers for training and
coachingacross our Dutch operations.
We ar
e proud to work with JINC, as their goal ﬁts
perfectly with our mission to enthuse young, diverse and
local talent to pursue careers in the chemical industry
.
By collaborating with JINC, we not only help young
people to create a better futur
e, but we also offer our
employees the opportunity to actively contribute to this.
Despite limitations imposed by COVID-19, during the
year we both hosted students and went to them as
volunteers. 22 employees volunteered in the following
programs, r
eaching 171 students:
•
OCI Nitrogen hosted three intern days
(‘Bliksemstage’) for primary and secondary school
students, allowing them to discover the world of
work. Questions covered included: What kind of jobs
do we have at OCI Nitrogen? What kind of industry
do we work in? The internships were conducted
partly in the ofﬁce/partly on location.
•
Job application training: students lear
n how to
effectively interview and apply for jobs.
•
Digital skills training: students lear
n the importance of
digital skills in education and the labor market.
•
Career coach: volunteers act as a role model to guide
and mentor 4 students each during the school year
on their future education.
HOW WE CREA
TE V
ALUE
FOR OUR COMMUNITIES
CONTINUED
Our 2021 outreach
In 2021, we continued to focus on investing on the social causes that matter to each of our communities. Our tailored appr
oach allows us to
create a meaningful and sustained impact thr
ough longstanding partnerships with charities and non-proﬁts serving our communities, such
as Southeastern Iowa Community College’
s Building the Dream program, the Girlsday science and technology pr
ogram in Geleen, and the
Southeast T
exas Food Bank. Please refer to
Our Stories
for more examples of how we create value for our communities.
RT
-CH-210a.1
Contribution to SDGs
Encouraging
local talent
OCI Beaumont’
s cooperative
education (co-op) program invites
Engineering, Accounting, and
Operations students from Lamar
University to participate in paid
on-the-job training related to their
ﬁelds of study
.
During the year
, OCI Beaumont
hosted 11 students as semester
-
long interns in the plant’
s
accounting, operator
, and
engineering functions.
OCI Beaumont also encouraged
female engineering students by
donating to Lamar University’
s
Society of Women Engineers for a
project for the Senior Design T
eam
of Engineers and hosting a virtual
company information session to
introduce the company to female
engineering students looking to
participate in co-ops or apply for
full-time positions after graduation.
Fertil’
s College Students Inter
nship
Program serves the community
by providing experiential learning
opportunity for college students
through practical applications and
skills development.
During the year 23 university and
college students participated
in a virtual 6–12-week program
with an assigned Fertil employee
coaching them for the duration of
their internship. Students inter
ned
various functions, including
operations, electrical, HSE, IT
,
ﬁnance, communications, and HR.
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OUR EMPL
O
YEES
Our approach
Our people are fundamental to our success. W
e strive to create a
safe and encouraging workplace where ther
e is mutual trust and
respect towar
ds and amongst employees. We pr
omote excellence
in every aspect of our operations by investing in our people to foster
their development and encourage their passion to excel.
A local employer
, globally
We ar
e proud to have cultivated a str
ong community focused
identity as a local employer with 3,853 employees around the
world. We have a commitment to maximize the use of local
resour
ces whenever possible by drawing local people into our
company and developing their skills, and by choosing local
partners where possible to supply materials and other services.
Living wage
We ar
e mindful of the importance of ensuring that all employees
are compensated and have crafted our local compensation
frameworks using each country’
s living wage as the baseline.
We believe that when an employee can af
ford their family’
s
needs including discretionary income, they ar
e more motivated
to succeed. We consistently rank amongst the top quartile of
employers by annual compensation in each of our communities.
In addition to top quartile compensation, we offer all employees,
including part-time employees, a range of beneﬁts, including but
not limited to health insurance, retir
ement plans, parental leave, and
other non-ﬁnancial beneﬁts in line with local employment laws.
Diversity and inclusion
Our employment strategy has resulted in a diverse global
workforce encompassing 46 nationalities located in ten countries,
with multiple ethnicities, religious beliefs, cultur
es, ages,
orientations, and other traits working together respectfully and
with a shared sense of purpose.
Our Code of Conduct requir
es all employees to act with honesty
and integrity to foster a business environment that pr
otects the
rights and interests of all stakeholders. Our Code of Conduct also
highlights our zero-tolerance policy for any form of harassment
or bullying. Employees are r
equired to tr
eat all individuals with
respect, tolerance, dignity
, and without prejudice to cr
eate
a mutually respectful, collaborative, and positive working
environment. W
e do our utmost to provide employees with a safe
environment to addr
ess any issue directly with management, and
through our Whistleblowing Policy we also pr
ovide a conﬁdential
procedur
e to raise any concerns, instances of discrimination, and
other breaches to our Code of Conduct.
We ar
e committed to fostering an inclusive culture that allows
every voice in our organization to be protected, hear
d, and
valued. We have translated this commitment into action thr
ough
our group-wide D&I pr
ogram, which aims to ensure fairness,
equality
, and diversity in recruiting, compensating, motivating,
retaining, and pr
omoting employees. Though we operate in
traditionally male dominated industries, we are working to
improve our gender diversity in both technical and non-technical
roles and at all levels of our organization. W
e have set internal
benchmarks and targets to improve our r
ecruitment processes,
conduct de-biasing training, provide sponsorship and mentorship
opportunities, and develop employee networks that help them
succeed.
During the year
, we continued to focus on D&I education and
training, with the balance of our workforce completing the de-
biasing training program that was launched in 2020. W
e also
launched a pilot mentoring program – W
omen in Leadership
Roles – the learnings from which will be translated into a
groupwide mentoring pr
ogram in the near future.
At the Board level, in line with the Boar
d D&I, we continue to
prioritize the recruitment of female candidates should a boar
d
vacancy arise, with the percentage of female boar
d members
currently at 23%. W
omen as a percentage of total employees
increased to 11.37% in 2021 fr
om 10.51% in 2020, with the
ratio of female-to-male hires doubling year
-on-year resulting in
30% of group hir
es being women in 2021. Approximately 24%
of leadership positions across the organization wer
e held by
women, indicating we are making excellent pr
ogress to achieve
our 25% by 2025 target. We will continue to work towar
ds
increasing gender diversity while continuing to hir
e or promote
based on merit.
Employee Engagement
We strive to encourage open dialogue acr
oss all levels of the
organization, including with senior management. The OneOCI
platform provides employees with r
egular updates on a variety
of corporate, operational, and industry matters, enhance
communication across the gr
oup, create opportunities for
employees to connect across countries and functions, and
provide an additional means to r
each senior management. We
also conduct surveys at the group and local levels to gather
feedback on various topics.
We value the feedback fr
om these engagement channels and are
continuously making improvements to enhance all employees’
experiences at OCI. As part of our wider engagement efforts
under the OneOCI program, we plan to conduct a gr
oupwide
employee engagement survey in 2022 to identify our internal
baseline and develop targeted engagement actions per site and
function.
T
alent development and retention
We ar
e committed to fostering an environment that encourages
individuals to seek opportunities for professional gr
owth and
enrichment. We r
ecognize the importance of training and
development of new employees, improving the performance of
experienced employees, and building future leaders. W
e invest
in our employees through training and development pr
ograms
focused on professional gr
owth and enrichment. Opportunities
are tailor
ed to the needs of each employee, and can include on-
the-job practical training programs, sponsoring higher education,
mentorships and leadership programs for succession planning,
and online courses.
W
e are committed to
fostering an inclusive
cultur
e with a diverse
workfor
ce, where every
person is r
ecognized,
valued, and thrives
Contribution to SDGs
OCI N.V
.
Annual Report 2021
72
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OUR EMPL
O
YEES
CONTINUED
T
alent development and retention
continued
We have a succession planning pr
ocess in place for critical roles
across the organization, both at the corporate and the operating
company levels. This is key to talent retention and development,
and to mitigating potential human capital risks by building internal
bench strength acr
oss our organization. We continuously monitor and
stimulate the development of our employees with the aim of building
a robust leadership pipeline and aim to ﬁll a meaningful per
centage of
key vacancies with internal candidates wherever possible.
Unions and W
orks Councils
Our employees can join a union, works council, employee association,
trade union, or similar labour organizations in line with local regulations.
As such, approximately 37% of our total workfor
ce is covered by
Collective bargaining or unions. We strive to maintain pr
oductive
relationships with the labour organizations r
epresenting our employees
and engage with them regularly
.
Human rights and working conditions
We ar
e committed to respecting and pr
omoting human rights and safe
working conditions.
We conduct all business activities r
esponsibly
, efﬁciently
, transparently
,
and with integrity and respect towar
ds all stakeholders. This
expectation extends to our suppliers and business partners, who are
requir
ed to conduct their business according to the principles included
in our Business Partner Code of Conduct.
These principles are based on global human rights standar
ds, including
the International Bill of Human Rights, the Inter
national Labour
Organization’
s declaration on Fundamental Principles and Rights at
Work, and the United Nations International Children’
s Emergency Fund
(UNICEF). Accordingly
, our suppliers cannot use forced or child labor
,
or engage in slavery or human trafﬁcking.
These principles also form part of our Human Rights Policy
, which
falls within our Compliance Framework and aims to ensure that salient
human rights issues potentially arising through our supply chain ar
e
tackled effectively
. We perform customary due diligence to ensur
e
our suppliers and business partners are compliant and have an
anonymous reporting hotline wher
e employees can report suspected
violations throughout our supply chain.
Gender
Location
Age proﬁle
New hires
Y
ears of service
Contract type
•
Female
11%
•
Male
89%
•
Europe
19%
•
USA
11%
•
MENA
70%
•
under 25
2%
•
25-34
21%
•
35-44
42%
•
45-54
23%
•
55-64
11%
•
65+
1%
•
Female
30%
•
Male
70%
•
0-5 years
25%
•
6-10 years
25%
•
11-20 years
40%
•
21+ years
10%
•
Full-time
98%
•
Part-time
2%
Our employee
engagement priorities
•
Diversity: increase gender diversity and
inclusion across the group
•
Development: increase training and
development opportunities for all employees
•
Dedication: maintain our low voluntary
turnover rates at under 3%
•
Drive: provide employees with the
resources they need to feel engaged,
empowered, and driven to deliver

policy principles
•
No forced or child labor
•
No harassment or discrimination
•
Safe and healthy workplace
•
Fair compensation and living wage
•
Equal employment
•
Freedom of association and
collective bargaining
Links to policies
Code of Conduct
Diversity & Inclusion (D&I)
Board D&I
Whistleblower Policy
Human Rights Policy
Contribution to SDGs
OCI N.V
.
Annual Report 2021
73
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OUR EMPL
O
YEES
CONTINUED
3,853
Direct employees
in 2021
100%
Improvement in female-to-male
hiring ratio in 2021
2
.7
%
V
oluntary tur
nover rates
46
Nationalities in our
global workforce
130%
Increase in female employees
in technical roles
37
%
Employees covered by
collective bar
gaining or unions
$100K
Average employee
annual compensation
24
%
Percentage of women in
leadership positions
W
orking at OCI
Unit
2019
2020
2021
Employees*
T
otal employees
#
3,715
3,682
3,853
Full-time
#
3,622
3,602
3,779
Part-time
#
93
80
74
Engagement and development
V
oluntary tur
nover rate
%
2.0%
2.2%
2.7%
Employee absenteeism
%
3.0%
1.9%
1.7%
Employees covered by Collective Bargaining orUnions
%
37.7%
38.7%
37.2%
Average spending on training and development
$ / employee
1,442
218
321
Compliance & Governance
Incident notiﬁcations
#
12
9
12
Incidents investigated
#
12
9
12
Substantial cases
#
0
0
1
Anonymous notiﬁcations via hotline
#
3
1
4
Cybersecurity training (various topics)**
# employees reached
 1,938
1,921
 1,064
Compliance training (various topics)*
# employees reached
 973
2,002
1,865
Gender



Women
%
10.3%
10.5%
11.4%
Women in technical r
oles
%
1.1%
1.5%
3.3%
Women non-technical r
oles
%
9.2%
9.0%
8.1%
Women on the Boar
d of Directors
%
16.7%
23.1%
23.1%
Women in leadership positions
%
18.2%
20.2%
24.0%
Age proﬁle



under 25
%
1.7%
1.9%
1.9%
25-34
%
21.3%
18.1%
20.8%
35-44
%
41.8%
42.1%
42.6%
45-54
%
22.3%
25.1%
23.0%
55-64
%
12.1%
11.9%
10.8%
65+
%
0.8%
0.9%
0.9%
Y
ears of service



0-5 years
%
27.3%
21.7%
25.2%
6-10 years
%
25.3%
25.1%
25.0%
11-20 years
%
36.8%
42.8%
39.7%
21+ years
%
10.6%
10.4%
10.2%
Contribution to SDGs
OCI N.V
.
Annual Report 2021
74
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Our approach focuses on the following HSE priorities:
1. Commitment to zero injuries
2. Focus on operational excellence
3. Continuous improvement of our pr
ocesses
4. Health and wellness of all employees
5. Product stewar
dship & chemical safety
We believe that the health and safety of our employees is
essential to the successful conduct and future gr
owth of our
business and are in the best inter
ests of our stakeholders.
HSE policies and standards
Our HSE Policy is approved by the Boar
d HSE & Sustainability
Committee, which is also responsible for supervising the gr
oup’
s
overall HSE performance and receives quarterly updates. The
HSE function is led by the Corporate HSE Director
, who reports
to the Vice President of Manufacturing. The HSE organization
comprises corporate and local teams who are r
esponsible for
HSE compliance, monitoring, and reporting.
The HSE Policy provides our sites, employees, and contractors
with a set of standards and pr
ocedures based on industry
standards and global best practices. Our HSE policies and
standards apply to all employees and contractors, r
egardless
of employment type.
Each facility additionally implements tailored initiatives and
supplemental procedur
es to enhance their HSE standards
depending on their speciﬁc needs and technologies, which are
reviewed and appr
oved by the Corporate HSE team. Examples
of locally tailored pr
ograms include:
•
IFCo’
s SafeStart program, a safety program that addr
esses
unintentional human error and critical safety habits; ther
eby
reducing risk and the pr
obability of injury
.
•
OCI Nitrogen’
s Project ViS, a coordinated cluster of activities
aimed to deliver a safer facility through person, pr
ocess, and
environmental safety
.
HSE performance monitoring
The Corporate HSE team reviews and monitors all facilities’
site-speciﬁc programs and performance metrics, which ar
e
implemented, maintained, and reported by each facility’
s
management team in compliance with the HSE Policy
. The
Corporate HSE team also assists the sites in implementing
the OCI HSE policy when requir
ed and reports each site’
s
performance to the HSE Committee on a quarterly basis. The
HSE & Sustainability Committee sets groupwide targets that ar
e
cascaded to site-speciﬁc HSE targets annually
.
The Executive Directors r
eview each site’
s monthly HSE
performance and trends with local site leadership during the
monthly business review
. In addition, HSE audits at each site
periodically assess the implementation of OCI’
s HSE policy
.
1. Commitment to zero injuries
Safety is a core focus in every aspect of our operations. Our
goal is to achieve leadership in safety and occupational health
standards acr
oss our operations by fostering a culture of zer
o
injuries at all our production facilities, and continuously impr
oving
health, safety and environmental monitoring, pr
evention and
reporting acr
oss our plants.
We have integrated this goal into our corporate values, and into
the programs and policies of each of our pr
oduction facilities.
Safety is considered an integral part of plant operation, quality
control, cost r
eduction and efﬁciency
, and we are committed to
providing r
esources to enable this.
Occupational safety
After a recor
d safety performance in 2020, we experienced
more incidents year
-on-year in 2021 resulting in a lost-time
injury rate (L
TIR) of 0.2 and a total recordable injury rate (TRIR) of
0.35. We take every incident seriously and have conducted full
investigations and incident reports for each, sharing learning and
best practices across the gr
oup after each incident in an effort
to avoid repetition.
We also tragically suf
fered a contractor fatality during the year
,
the ﬁrst fatality in the history of OCI. We ar
e deeply saddened
by this loss, which occurred when a contractor fell fr
om the top
of a conveyor at a loading jetty
. We are committed to enfor
cing
a culture of zer
o injuries, where every person is safe at all times,
and a full investigation was launched with learnings implemented
across our sites. During the year
, two of our sites achieved zero
injuries, and ﬁve of our sites achieved zero employee lost-time
injuries.
While we are pr
oud of every employee’
s and contractor’
s
diligence and attention to safety
, which has brought our total
recor
dable injury rate down by 58% since 2014, we do not
take a decline in safety performance lightly
. Accordingly
, we
maintain an awareness pr
ogram and refr
esher sessions for all
employees and contractors as part of our training program. W
e
also reinfor
ce our HSE standards among contractors, which
have historically consistently suffer
ed more incidents than our
employees.
We will continue to pr
omote a strong safety cultur
e and focus
on targeting zero injuries acr
oss our organization, both with our
own employees and with contractors.
Emergency prepar
edness
Every facility has emergency prepar
edness plans in place
with emergency response teams on-site. The emergency
prepar
edness plans and response teams ar
e tested and trained
regularly
. All sites also align closely with local police, ﬁre, and
other emergency response pr
oviders to ensure the best possible
response pr
otocols are implemented. Facilities located on
shared industrial sites also coor
dinate closely with the industrial
site facilities management teams.
During the year
, more than 200 Emergency Response training
sessions were conducted, and each site conducted Emergency
Response drills and tabletop exercises as r
equired by their local
regulatory agencies.
RT
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HEAL
TH & SAFE
T
Y
OCI N.V
.
Annual Report 2021
75
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
2. Focus on operational excellence
We pr
omote excellence in every aspect of our operations
to ensure a safe and healthy work envir
onment, protect our
communities, and optimize operational costs. We continuously
train all employees to implement the best sustainable practices
and maintain our focus on operational excellence.
Process safety
We implement a pr
ocess safety management (PSM) framework
across our sites, which was developed based on international
industry best practices and standards including the U.S. OSHA
Process Safety Management r
egulations and AIChE T
echnology
Alliance – Center for Chemical Process Safety (CCPS)
information. Our PSM is further enhanced by case studies on
industry incidents and lessons learned.
We track pr
ocess safety incidents (PSI’
s) in three categories of
severity and take all incidents very seriously
. We achieved a PSI
rate (PSIR) of 0.55 in 2021, well below our internal target of 0.7
but above our 2020 PSIR of 0.38.
None of the incidents were categorized as major and most
incidents were r
elated to minor leaks or releases of substances
as a result of an equipment failur
e or operator error
, all of which
were immediately contained with no further impact. All PSIs ar
e
reviewed with a r
oot-cause-analysis with lessons learned shared
across all sites. W
e continue to work diligently to reduce the
number of PSIs at all our sites every year
.
Global management and quality assurance standards
Our assets hold global certiﬁcations recognizing the quality of
our products and management pr
ocesses, including ISO9001
Quality Management Systems, ISO 14001 Environmental
Management Systems, and OHSAS 18001 Occupational Health
and Safety Management Systems. Other certiﬁcations include
REACH, International Sustainability and Carbon Certiﬁcation
(ISCC), Fertilizers Europe Pr
oduct Stewardship, and OCI
Beaumont is an OSHA VPP Star Site.
3. Continuous improvement of our pr
ocesses
We r
egularly assess our HSE management systems to ensure
our processes enable operational excellence. W
e do so
through internal and external HSE audits, insurance reviews,
performance reviews, incident analysis, and gr
oupwide
knowledge sharing. We r
eward HSE excellence, encourage
best practice sharing across our sites, and pr
ovide additional
support wherever needed to ensur
e all sites meet or exceed our
standards.
Groupwide knowledge sharing
We have set up several avenues to enhance and facilitate
communication and knowledge sharing across our global HSE
community
. Examples include:
•
Weekly publication of a one-page HSE awareness article
called the Gazette addressing various HSE subjects on a
general level.
•
Monthly groupwide safety calls to share learnings of
occupational and process safety incidents and to initiative
companywide improvement initiatives.
•
All sites generate one-page ﬂyers of incidents and near
misses that are shar
ed, and lessons learned with fellow
colleagues during the monthly Process Safety Sharing
Incident T
eleconferences.
•
Annual inter
nal global OCI Process Safety confer
ence, where
various safety and risk assessment topics are discussed by
our process safety experts fr
om across our sites. The main
topics in 2021 were leak pr
evention rules, best practices
sharing from the sites’ Pr
ocess Safety Management program,
and learning from sites’ key safety incidents.
In addition, we rewar
d excellent HSE performance through an
annual awards cer
emony called the OCI HSE Awar
d, which is
presented by the VP of Manufacturing.
HEAL
TH AND SAFETY
CONTINUED
RT
-CH-320a.2
Plant certiﬁcations
Plant
ISO
9001
ISO
14001
ISO
45001 /
OHSAS
18001
REACH
Others
OCI Nitrogen
✔
✔
•
Fertilizers Europe - Pr
oduct Stewardship certiﬁcate
•
ISCC (International Sustainability and Carbon Certiﬁcation) Green Ammonia
BioMCN
✔
✔
✔
• ISCC
OCI Beaumont
✔
✔
•
OSHA VPP ST
AR
• ISCC
•
BlueAm Standard
EFC
✔
✔
✔
✔
•
DEF added to ISO 9001
EBIC
✔
✔
✔
✔
Fertil
✔
✔
✔
•
ISO 50001 – Energy Management System
•
RC 14001 – Responsible Care Management System
Sorfert
✔
IFCo
Natgasoline
OCI N.V
.
Annual Report 2021
76
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
HEAL
TH AND SAFETY
CONTINUED
4. Health and wellness of all employees
Occupational health and general well-being are part of our
overall HSE management, and we implement wellness programs
across the organization to ensur
e that everyone working at OCI
remains healthy
.
A Fitness for Duty Process is set up to ensur
e that each
employee can safely perform the essential physical and mental
requir
ements of the job. A Health Risk Assessment Process is
in place to estimate the nature and pr
obability of adverse health
effects to people by identifying the adverse health ef
fects that
can be caused by any exposure to any hazar
dous agent or the
work environment.
5. Product stewar
dship & chemical safety
Product stewar
dship ensures that our pr
oducts and their raw
materials, additives and intermediate products ar
e processed
and manufactured, handled, stor
ed, distributed, and used in a
way which safeguards health, occupational and public safety
,
the environment, and which ensur
es security
.
Approach
Product stewar
dship and chemical safety
is supervised by
the Board HSE & Sustainability Committee and subject experts
from each facility contribute to risks assessments and internal
audits of the HSE impact of our product portfolio.
We use the best available technologies to minimize our carbon
footprint and implement the Product Stewar
dship guidelines
developed by Fertilizers Europe and International Fertilizer
Association (IF
A) throughout our production pr
ocesses to
monitor and minimize our environmental, health and safety
impact from feedstock to farmer
.
We comply with international standards as members of IF
A,
Fertilizers Europe, The Fertilizer Institute (TFI), the International
Methanol Producers & Consumers Association (IMPCA),
the European Melamine Pr
oducers Association (EMP
A), the
Ammonia Energy Association, and the Melamine REACH
consortium, among others.
We ar
e committed to our obligations regar
ding any
environmental and health r
egulatory aspects of the chemicals
we handle, and we closely monitor regulatory and safety
developments for all our chemicals. Our products do not include
ozone depleting substances, persistent organic pollutants
(POPs), polyaromatic hydr
ocarbons (P
AHs), or polychlorinated
biphenyls (PCBs) and do not contain any chemical classiﬁed
by REACH, or equivalent regulation, as substances of very
high concern (SVHC). We strive to substitute any identiﬁed
SVHC as raw material or intermediate where possible and if a
product cannot be substituted, we compr
ehensively assess the
risk potential of the substance by weighing the degree of HSE
risk and regulatory r
estrictions or classiﬁcation, technical and
ﬁnancial feasibility of developing a substitute, and stakeholder
concerns, amongst other considerations. We fulﬁl our
obligations by enforcing strict pr
ocess and occupational safety
and product handling measur
es to minimize risks of exposure to
health and to the environment. W
e have identiﬁed ﬁve chemical
substances of concern, which we monitor and manage
carefully in line with r
egulatory processes and our HSE, pr
oduct
stewardship, and chemical compliance policies and pr
ocedures.
We ar
e also assessing alternative substances and regulatory
actions for these chemicals.
In line with our commitment to leadership in product and HSE
stewardship, during 2020 the Boar
d formally ratiﬁed our policy
to not produce, sell or trade solid ammonium nitrate (AN)
given the product’
s public safety concerns. This also allows
us to ensure that our business trajectory is in line with global
insurance and directors’ liability advice, which is incr
easingly
stringent around AN. With ever
-incr
easing concer
ns surrounding
AN, the product could be substituted by much safer ur
ea or
other nitrates going forward.
Safe product handling
We publish Safety Data Sheets (SDS) on our website for all
our products and substances. W
e monitor and evaluate the
environmental, health and safety data continuously and update
the information published in the
SDS section
of our website
regularly
. SDSs provide safe handling, storage, disposal, and
personal protection equipment (PPE) information and disclosur
e
on potential health and safety effects due to exposur
e or
mishandling. All SDSs and product labels comply with applicable
laws and regulations, including but not limited to REACH, US
EP
A, CEP
A, and CLP
. The safety data sheets are translated into
several languages to make them more accessible for our global
customers.
Stem cell technology
, nanotechnology, genetic engineering,
and other emerging technologies
We do not make use of stem cell technology
, nanotechnology
,
genetic engineering, or any other emerging technologies.
Genetically Modiﬁed Organisms (GMOs) and neonicotinoids
We do not pr
oduce GMOs or neonicotinoids (pesticides), nor
do we make use of the technology
. Through our participation in
farmer education programs, we pr
omote the safe use of such
products in our supply chain.
Animal testing
We do not conduct animal testing.
RT
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RT
-CH-410b.2
RT
-CH-530a.1
W
e are committed to pr
oviding a safe and healthy
workplace for all employees. W
e implement the highest
inter
national safety standar
ds to avoid any potential risks
to people, communities, assets, or the envir
onment.
OCI N.V
.
Annual Report 2021
77
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
HEAL
TH AND SAFETY
CONTINUED
Unit
2020
2021
Safety
Lost Time Injury Rate - total
Per 200,000 hours worked
0.09
0.20
Lost Time Injury Rate - employees
Per 200,000 hours worked
0.06
0.20
Lost Time Injury Rate - contractors
Per 200,000 hours worked
0.14
0.21
T
otal Recordable Injury Rate - total
Per 200,000 hours worked
0.23
0.35
T
otal Recordable Injury Rate - employees
Per 200,000 hours worked
0.12
0.36
T
otal Recordable Injury Rate - contractors
Per 200,000 hours worked
0.42
0.33
Fatalities
#
0
1
Process Safety Incidents
#
21
33
Process Safety T
otal Incident Rate
Per 200,000 hours worked
0.38
0.55
Signiﬁcant Process Safety Incidents
count
21
33
Major Process Safety Incidents
count
0
0
Signiﬁcant Process Safety T
otal Incident Rate
cases per 200,000 hours worked
0.38
0.55
Major Process Safety T
otal Incident Rate
cases per 200,000 hours worked
0
0
2021 SAFETY SCORECARD
11.99
Million man hours worked
2
Smoking
free sites
ZERO
OCI Beaumont achieved 0 TRIRs
for the fth consecutive year
1.
7%
Occupational illness rate
Lost Time Injury Rate
0.09
0.06
0.14
2020
0.20
0.20
0.21
2021
T
otal Recordable Injury Rate
0.23
0.12
0.42
2020
0.35
0.36
0.33
2021
T
otal
Employees
Contractors
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.
Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
In March 2020, we implemented our emergency r
esponse protocol and established a dedicated
COVID-19 T
askforce to ensure the safety of our employees and business continuity
. The taskforce
is dedicated to closely monitoring developments and coordinating ef
forts across gr
oup to align
plans and policies to appropriate r
esponse measures, ensur
e contingency plans are in place,
conduct ongoing risk assessment and planning, provide corporate support, and keep employees
updated with facts and company actions.
Since the onset of the pandemic, our business operations have continued without interruption, as
our industries and our products have been designated as critical infrastructur
e by the respective
governments of each of our markets to ensure the uninterrupted supply of goods and other
essential products. W
e have applied strict protective measur
es, including sanitation, personal
protection equipment, social distancing and thermal testing prior to accessing any gr
oup
locations. As our plants are heavily automated, essential on-site operating and logistics personnel
can be limited and administrative and operational support personnel have worked remotely in
order to maintain social distancing following governmental guidelines.
Although the long-term effects of COVID-19 ar
e still unclear
, our current outlook is that our
ﬁnancial and operating performance remains solid. W
e have operated our business in a remote
working environment and could continue to do so for an extended period of time, if necessary
.
Developments in each jurisdiction are being closely monitor
ed and protocols ar
e ﬂexible to allow
for rapid adjustments as needed. The impressive r
esilience of our staff thr
oughout the period gives
all local management teams conﬁdence to revert to a work-fr
om-home policy again if needed,
without interruptions to our operations and supply chain.
RT
-CH-210a.1
HEAL
TH AND SAFETY
CONTINUED
CA
SE S
TUD
Y
:



OCI N.V
.
Annual Report 2021
79
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
3.
SUS
T
AINABILIT
Y





OUR APPRO
A
CH
T
O SUS
T
AINABILIT
Y GO
VERNANCE
TCFD Governance (a) (b)
TCFD Risk Management (a) (c)
Our corporate governance structure is designed in compliance with the requir
ements of the Dutch
Civil Code, the Dutch Corporate Governance Code (Code), applicable securities laws, our articles
of association, by-laws, and the rules and regulations of the Eur
onext in Amsterdam.
All governance policies and procedures ar
e published on our
website
, and a full description
of our corporate governance framework, Board composition, oversight and responsibilities,
shareholders’ rights, executive compensation and other governance topics can be found on in
the Corporate Governance section beginning on page 94.
Our ERM framework is described on pages 82-93 and our approach to climate risk is described
on page 46. Our Compliance framework, including our ethics and anti-corruption processes, is
described on page 92.
ESG and Sustainability Governance
ESG and sustainability are imbedded into all aspects of our organization, including our strategic
objectives, risk management, capital allocation and ﬁnancial planning, operational and commercial
activities, and other medium and long-term decision-making.
Dedicated Board oversight
The Board of Dir
ectors has overall responsibility for OCI’
s strategy
, business objectives, and
risk management, including ESG and sustainability
. The Board Health, Safety and Environment
(HSE) Committee evolved in 2021 to formally include sustainability and was renamed the HSE
& Sustainability Committee. The Committee’
s responsibilities include overseeing our approach
to managing the risks and opportunities related to sustainability
, climate change, and our
environmental impact. The Committee met ﬁve times in 2021 and its activities and ar
eas of focus
during the year are described on page 102.
Management of ESG
The Board has tasked the Executive Dir
ectors with the management of ESG and sustainability
,
including the development and implementation of our ESG targets and strategy
, supported by
the Sustainability Vice President, who joined OCI in 2021. Executive compensation is tied to
ESG performance.
Each production facility’
s leadership team is responsible for identifying and evaluating sustainability
projects and opportunities, and r
eport on their progr
ess to the Executive Directors during the
site’
s monthly business review
. The Capex Committee reviews and appr
oves sustainability-related
capex with a view to balance our sustainability goals with our other commitments and investment
returns thresholds.
The Sustainability Vice President oversees the gr
oup’
s sustainability function and execution of
our groupwide sustainability strategy in close cooperation with other gr
oup functions and local
leadership.
The Group Corporate Af
fairs Director and Investor Relations Dir
ector are r
esponsible for internal
and external communications, including reporting of our ESG and sustainability performance,
strategy
, and targets. This is closely aligned with ﬁnancial and non-ﬁnancial functions including our
internal audit and risk functions, legal and public affairs, business planning, and operations.
Risk Management of Sustainability
We perform a compr
ehensive assessment of our climate change, environmental and sustainability
risks and opportunities both at the operating company level and at the corporate level, assessing
relevance at each level accor
ding to extent and likelihood of impact. We incorporate sustainability
considerations into our assessment and management of all other risks relevant to the topic, such
as operations, ﬁnance, and regulatory risks.
OCI N.V
.
Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
4.
RISK MANA
GEMENT
& COMPLIANCE
ENTERPRISE RISK MANA
GEMENT
AND INTERNAL CONTROL
TCFD Risk Management (b) (c)
OCI N.V
.
Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Our approach
Our businesses inherently involve risks. Our management is cognizant of these risks and takes
a measured mitigation appr
oach. Our Board and management foster a transpar
ent company-
wide approach to risk management and internal controls, driven by our conviction that risk
management is most effective when it is aligned with our strategy
, is integrated at all management
levels, and is as dynamic as the industry and environments wher
e we operate, allowing us to
quickly act on value creation opportunities.
Enterprise risk management (ERM) framework
Risk management is a company-wide activity with roles and r
esponsibilities allocated across all
levels of the group to secur
e our in-control position. Equipped with updated insights fr
om the
market, industry
, and geopolitics, we follow a bottom-up approach to ensure that all r
elevant
business risks are identiﬁed, managed, and r
eported in a timely and comprehensive manner
. The
Internal Audit & Risk team is tasked with providing reasonable assurance to the Boar
d of Directors
and to the Audit Committee that this risk management approach is adequate.
The Board has the overall r
esponsibility of maintaining a sound and effective risk management
and internal control program. The Audit Committee supports the Boar
d in monitoring our risk
exposure, including the design and ef
fectiveness of our internal control program. While every OCI
employee is responsible for managing risk within his or her own ar
ea of activity
, the Executive
Directors – and particularly the CFO − own the Gr
oup-wide risk landscape and leads the effort in
mitigating all types of risks.
The Internal Audit & Risk team assists the Audit Committee, Executive management, and
local management by facilitating the identiﬁcation of risks and the promotion of risk awar
eness
and ownership across our organization. The team is centrally managed at the gr
oup level and
operates across the operating companies. This ensur
es our Internal Control Framework (ICF) is
properly institutionalized and applied, that we have ef
fective and up-to-date internal control and
internal audit systems in place, and that we are aligned with our external auditors.
Each quarter
, executive management monitors and assesses the consolidated group risk proﬁle
comprising of strategic, operational, ﬁnancial and compliance risks with the involvement of key
stakeholders.
Our ICF is aligned with the Enterprise Risk Management Integrated Framework of the Committee
of Sponsoring Organizations of the T
readway Commission (COSO) and the Dutch Corporate
Governance Code. It is designed to provide reasonable assurance that the risks we face ar
e
properly evaluated and mitigated, and that management is pr
ovided with all information necessary
to make informed decisions. Our Internal Audit function is certiﬁed by the Institute of Inter
nal
Auditors (IIA).
OCI actively assesses the impact of climate-related, sustainability
, and environmental risks
as described on pages 45-46. We also consider SASB Chemicals Sustainability Accounting
Standards along with TCFD r
ecommendations when assessing our climate-related risks, as
described on page 37.
ENTERPRISE RISK MANA
GEMENT
AND INTERNAL CONTROL
CONTINUED
Our ERM and ICF systems are designed to pr
oactively identify
, monitor
, mitigate, and manage risks:
TCFD Risk Management (c)
OCI N.V
.
Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OPERA
TING COMP
ANIES
•
First line of defense responsibility for
the establishment of an effective contr
ol
environment based on corporate
directives and policies
•
Operational management reporting,
risk assessment and mitigation
•
Internal controls implementation and
self-assessment
•
W
eekly business updates to Corporate
ofﬁce functions
•
Detailed monthly r
eview of performance,
ﬁnancials, operating issues, and key risks
•
Semi-annual risk self-assessments and
quarterly updates of their business risk
proﬁles and r
eport to relevant corporate
functions and executive directors
•
Local Internal Control Of
ﬁcer is
responsible for supporting local
management on the effective
implementation of internal controls
and the compliance framework, and
assists in monitoring and investigating
Whistleblower reports
•
Detailed annual budgeting with monthly
updates allowing management to make
real-time assessments
•
Local management signs the Non-
Financial Letter of Representation to
annually certify the in-control position
in relation to the Code of Conduct,
Corporate policies, and other non-
ﬁnancial requir
ements
•
Operational, health, safety
, environmental,
quality
, security and emergency
prepar
edness systems are in place at
each subsidiary
CORPORA
TE MANAGEMENT
•
Risk reporting, assessment, and mitigation
•
Steering and supervision of the
Compliance Framework
•
Identiﬁcation of and capitalization on key
opportunities
•
Assessment of key market, ﬁnancial,
regulatory
, and technological
developments against strategy execution
•
Consolidated budget and for
ecasts are
used by management to evaluate KPIs,
investment strategy
, and operations
•
Each quarter
, Corporate management
monitors and assesses the consolidated
group risk pr
oﬁle comprising of strategic,
operational, ﬁnancial, sustainability
, and
compliance risks with the involvement of
key executives and corporate function
heads
•
Internal Audit & Risk facilitates and
supervises the risk management process,
compliance with OCI’
s policies and
controls, and pr
oactively advises on
further optimization of the internal control
system
•
Additional contr
ol leadership from other
corporate functions including Corporate
T
echnical and HSE, Compliance, Internal
Control, Legal, T
ax, Strategic Planning,
and Group Contr
oller
INTERNAL AUDIT & RISK
•
Independent and objective assurance
about the effectiveness of governance,
risk management, compliance, and
internal controls
•
Quarterly r
eporting by the Internal Audit &
Risk department to the Audit Committee
of the results fr
om internal audits, status
of internal controls implementations,
OpCo risk assessments and Group
consolidated risk dashboard, highlighting
effectiveness of actions taken to mitigate
the risks, risk trends and the status of
risks and issues
•
Internal Audit & Risk maintains a central
repository for the monitoring of mitigating
actions and trends in r
elation to each
risk, and aides the Board in maintaining
objectivity in its risk assessments
•
Internal Audit & Risk performs periodic
independent internal audits of operating
and holding companies. Management is
consulted on performance developments
and gaps and remediation plans
•
The pr
ogress of audit action plans is
monitored by the Internal Audit & Risk
department, local internal control ofﬁcers
and by local as well as Corporate senior
management
•
Internal Audit & Risk assists the
compliance function in monitoring the
Whistleblower Hotline and in carrying out
investigations as deemed necessary
BOARD OVERSIGHT
•
Deﬁnes risk appetite and oversees risk
management strategies and activities
•
Delegates responsibility to the Executive
Directors and pr
ovides resour
ces to
achieve the objectives of the organization
•
Oversees an independent Internal Audit
function
•
Boar
d of Directors is given a full ﬁnancial
and operational update by the Executive
Directors at each Boar
d meeting
•
Audit Committee (on behalf of the Boar
d)
monitors and reviews the internal control
and risk management system and
provides guidance or investigates speciﬁc
topics as needed
•
The Boar
d oversees the performance of
both the Internal Audit & Risk team and
the external auditor
, and receives regular
updates and reports fr
om both functions
Entity
Key responsibilities
Review and reporting pr
ocesses
RISK MANA
GEMENT
OCI N.V
.
Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
STRA
TEGIC
Description
Risks that may impede our ability to achieve
strategic objectives that we believe are critical
to our performance and growth. These ar
e
risks that are consider
ed strategic matters for
the Board and Executive Dir
ectors, and may
impact the company as a whole.
Risk appetite
As a leading player in our markets, we are able
to take certain calculated strategic risks that
create opportunities to maximize our ability to
deliver outstanding value to our stakeholders.
We take a measur
ed approach to strategic risk
management with clear thresholds set by our
Board for r
equired investment r
eturns, market
risk appetite, growth capital expenditur
es, and
corporate actions.
OPERA
TIONAL
Description
Risks that may impede our ability to achieve
operational objectives and performance
These risks can be internal or exter
nal, and
are typically dir
ectly managed and monitored
by the local management teams of each
operating company and supervised by our
Executive Directors.
Risk appetite
We aim to minimize operational risks while
maximizing our ability to capitalize on our
leadership positions in our markets. We strive
to maximize operational excellence at all
facilities while fostering a ‘safety ﬁrst’ culture
across the organization with a zer
o-tolerance
approach to HSE risks.
FINANCIAL
Description
Risks related to ﬁnancial, accounting, and
reporting contr
ols and processes that
may impede our ability to meet ﬁnancial
commitments, obligations, and daily operating
needs.
Risk appetite
We implement a ﬁnancial strategy to maintain
an efﬁcient balance sheet whilst securing
good access to ﬁnancing with a view space
a leverage ratio of less than 2x net debt
through the cycle while balancing our capital
expenditure needs. Our risk appetite and key
policies are described thr
oughout the annual
report.
REGULA
TOR
Y
Description
Risks related to non-compliance with or
changes in laws and regulations that may
requir
e changes in the way we do business.
Risk appetite
We comply with applicable laws and
regulations everywher
e we do business. All
employees are bound by our Compliance
Framework, which we are continuously
embedding throughout our organization. It is
in our core values to act with honesty
, integrity
and fairness to foster a business climate that
maintains such standards.
Our key business risks with management’
s assessment of each risk’
s potential development
Our risk appetite is ﬂexible to account for our diversiﬁed market presence and pr
oduct portfolio and is tailored to four main categories. These categories tie into
our strategic priorities and aim to support our ability to mitigate against risks and protect OCI's ability to cr
eate long-term value.
Risk
Risk Rating
Description

POLITICAL AND
GEOPOLITICAL RISK,
RISK OF UNILA
TERAL
SOVEREIGN A
CTIONS
,
AND MA
CROECONOMIC
CHANGES
OCI does business in both developed and emerging markets,
which means that we are exposed to some countries wher
e there
is a risk of political or socioeconomic instability
, including the risk
of adverse sovereign actions.
Accordingly
, developments in any of the countries in which we
operate can create an uncertain envir
onment for investment and
business activity and may adversely impact our business. This
includes certain partnerships and joint ventures that involve
various economic, operational, and legal risks that are dif
ferent
from the risks involved in owning facilities and operations
independently
.
In addition, as our products and key inputs ar
e global
commodities, we are exposed to the impacts of global geopolitical
ins
tabi
lity
, such as the macroeconomic and geopolitical volatility
cau
sed
by the recent Russian military action in Ukraine and r
esulting
economic and political responses by multiple governments. Our
businesses may also be affected by potential unilateral actions by
governments to control socioeconomic impacts.
We mitigate the impact of potential risks in any single market by diversifying our
presence, both in terms of sales destinations and the geographic locations of our
production facilities, which ar
e in emerging and developed markets. Our run-rate
production capacity of 16.2 million metric tons is evenly split geographically
, with
35% in the USA, 24% in Europe, and 41% in the Middle East and North Africa. In
addition, we sell our products ar
ound the world, reaching 57 countries in 2021.
We actively monitor economic, political, and r
egulatory developments and
maintain positive relationships with various governmental bodies in the countries
where we operate as part of our ef
fort to be a ‘local’ player in each of our
markets and have strategically partnered with sover
eign-backed entities. Our
legal team also works diligently to monitor and review our practices and any
changes in laws or regulations in the countries wher
e we operate to provide
reasonable assurances that we r
emain in line with all relevant laws. Management
has also drafted contingency plans for various unforeseen events and adverse
scenarios.
ABILITY TO EXECUTE
STRA
TEGIC PROJECTS
AND INVESTMENTS
RELA
TED TO OUR
DECARBONIZA
TION
STRA
TEG
Y
We have announced several pr
ojects, investments and initiatives
related to our hydr
ogen strategy and development of our no/low
carbon portfolio, the success of which is dependent on several
exogenous factors such as regulatory support and government
decarbonization policies, the timely development of sustainable
technologies, supply and demand dynamics for blue and green
ammonia and methanol, and the timing of the global transition to
a hydrogen economy
.
Accordingly
, our strategic projects, expansion of existing assets,
and construction of new assets may not be as profitable as
anticipated, and may be subject to integration, regulatory
,
environmental, political, legal and economic risks, which could
adversely affect our business, r
esults of operations, financial
condition and cash flows. Please refer to page 46 for a description
of the risks and opportunities related to climate change.
We have developed a compr
ehensive decarbonization strategy and believe
we have adequate mitigation and sustainability strategies to maximize the
opportunities to develop our business and help combat climate change, including
capitalizing on the substantial hydrogen economy opportunities af
forded to us by
our primary products – ammonia and methanol.
We have developed a str
ong value creation logic to evaluate our sustainability
projects, with clear capital allocation targets, a focus on strategic partnerships
and low-capex solutions, and conservative pricing assumptions for emerging
products. W
e are committed to maintaining a r
obust and disciplined capital
allocation policy designed to balance the availability of funds and excess free
cash flow for dividend distribution while pursuing value accretive ESG and other
growth opportunities, all within a target to maintain less than 2x net leverage
through the cycle and an investment grade debt pr
ofile.
RISK MANA
GEMENT
Strategic Risks
ASSOCIA
TED STRA
TEGIC PRIORITIES
Commercial Strategy
Business Optimization
Risk Rating
Risk decreasing
Risk stable
Risk increasing
OCI N.V
.
Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk
Risk Rating
Description

CLIMA
TE
, ADVERSE
WEA
THER CONDITIONS,
AND NA
TURAL
DISASTERS
Climate change and adverse weather conditions can negatively
impact field work and fertilizer application seasons, which may
affect the demand for our pr
oducts. Climate change also poses
a global transition risk which may result in changes to market
dynamics, legislation, and technology
. Please refer to page 46 for
a description of the risks and opportunities presented by climate
change.
Adverse weather conditions and natural disasters, health
epidemics or pandemics (including the current COVID-19
outbreak), and other extraor
dinary events could result in pr
operty
damage, loss of life, production interruptions, price volatility
, and
supply chain disruptions.
We have a balanced pr
oduct split with no single product r
epresenting mor
e
than approximately 34% of our capacity
. Our products have inher
ently differ
ent
industrial dynamics, including differ
ent supply/demand drivers, seasonal
cycles, customers, competitors, and other factors that may affect prices
and demand patterns. This mitigates the risk of the impact of an individual
product’
s fluctuations and results in a more stable r
evenue stream. W
e are
also geographically diversified, reducing the risk of local or r
egional weather
events. Please refer to the Sustainability Report for a description of how we
intend to reduce our envir
onmental impact and contribute to achieving global
decarbonization goals.
In terms of natural disasters and pandemics, we have comprehensive emergency
prepar
edness systems in place that allow us to quickly react to extraor
dinary
events, and our assets have business interruption insurance policies in place that
cover natural disasters. For a description of how we are managing COVID-19,
please refer to page 79.
RISK MANA
GEMENT
Strategic Risks
c
ontinued
ASSOCIA
TED STRA
TEGIC PRIORITIES
Sustainability
Operational Excellence
Risk Rating
Risk decreasing
Risk stable
Risk increasing
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Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk
Risk Rating
Description

CHANGES TO
CONDITIONS
AFFECTING OUR
MARKETS AND
COMMODITIES
Our products ar
e global commodities with little or no product
differ
entiation, and supply-demand dynamics can be affected
by global trends such as dietary patterns and population growth
affecting demand for food, swings in cr
op and agricultural prices,
global production capacity for our pr
oducts, and the availability
and pricing of the raw materials requir
ed to produce our pr
oducts
– particularly natural gas.
Our diversified product mix is exposed to a variety of cyclical and seasonal
patterns which mitigates the impact of an individual product’
s fluctuations and
results in a mor
e stable revenue str
eam. We continuously evaluate our price
exposure and have hedged both our pr
oducts and our feedstock positions where
appropriate based on our risk appetite and our understanding of market factors.
We also occupy a leading market position in many of our pr
oducts.
We have policies in place to r
espond to competitive factors and maintain mutually
beneficial relationships with our key customers to ef
fectively compete and
achieve our business plans. We have global sales, marketing, distribution, and
logistics teams that work diligently to expand our sales channels, develop new
and repeat customer r
elationships, negotiate favorable contracts, and create
market contacts by attending various industry and trade conferences.
Our production and manufacturing teams also work diligently to ensur
e our
plants operate efficiently to pr
oduce high quality products that meet or exceed
international standards. Our products and pr
ocesses are certified by global
quality control institutions.
In terms of the availability and cost of our key feedstock – natural gas – we
have hedged our global exposure to natural gas price fluctuations thr
ough a
mix of long-term contracts in the United Arab Emirates, Egypt and Algeria, and
spot prices in the United States and the Netherlands, where we also maintain
hedge positions based on a risk management strategy approved by executive
management.
We continuously identify
, implement, and sustain cost improvement plans,
including our outsourcing pr
ojects and those related to general overhead and
workforce rationalization.
RISK MANA
GEMENT
Operational Risks
ASSOCIA
TED STRA
TEGIC PRIORITIES
Commercial Strategy
Operational Excellence
Risk Rating
Risk decreasing
Risk stable
Risk increasing
OCI N.V
.
Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk
Risk Rating
Description

BUSINESS
INTERRUPTION
AND PRODUCTION
Our production facilities may experience unplanned shutdowns
or utilization rate reductions, which may r
esult in lost volumes and
unplanned costs.
We have consistently invested in best-in-class technologies at all our facilities,
which maximizes reliability and ef
ficiency
. Our facilities are on average the
youngest in the industry with approximately 56% of our pr
oduction capacity
under ten years old, which supports above average utilization rates and low
maintenance costs. We have also invested heavily in our older facilities to
refurbish, debottleneck, and impr
ove efficiency and r
eliability
.
We have a well-developed pr
eventative maintenance system, including
scheduled maintenance turnarounds, frequent follow ups on action items fr
om
previous shutdowns, and r
egular knowledge- sharing amongst all sites including
comprehensive training pr
ograms for our plant employees. We maintain adequate
spare parts positions and winterization pr
ocedures (wher
e appropriate) as well as
reliability initiatives wher
e requir
ed. We perform thir
d-party expert audits on plant
reliability and pr
e turnaround audits. Our plants have Business Continuity plans
to respond to adverse events, and for large and extended shutdowns, our plants
have business interruption insurance.
HUMAN CAPIT
AL
We face risks to our ability to employ
, develop, and retain talented
employees, which is is essential to our objective of maintaining
high-quality operations and management.
We have been able to attract, motivate and r
etain knowledgeable and
experienced employees thanks to our reputation and market position, our in-
house training and talent development programs, our Employee Incentive Plans
(as described in note 22 of the financial statements), as well as our strategic
partnerships with industry leaders, which offer employees exposur
e to high profile
projects and advanced technologies.
We continue to institute employee succession pr
ograms for key positions across
the group to ensur
e effective knowledge transfer in support of the continuity of
our business operations.
RISK MANA
GEMENT
Operational Risks
c
ontinued
ASSOCIA
TED STRA
TEGIC PRIORITIES
Maximizing free cash ﬂow
Operational Excellence
Risk Rating
Risk decreasing
Risk stable
Risk increasing
OCI N.V
.
Annual Report 2021
89
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Risk
Risk Rating
Description

CAPIT
AL STRUCTURE,
ALL
OCA
TION, AND
CURRENCY
FLUC
TUA
TIONS
Our ability to deploy and raise capital effectively can impact our
ability to achieve our strategic priorities or capitalize on business
opportunities. Although we strive to ensure that adequate levels of
working capital and liquidity are maintained, unfavorable financial
market conditions may adversely affect our financing costs, hinder
our ability to achieve additional financing, and/or hinder our ability
to refinance existing debt. This could ther
efore have an adverse
impact on our business prospects, earnings and/ or our financial
position.
In addition, a substantial portion of our consolidated revenue,
operating expenses and long-term debt is denominated in foreign
currencies. Significant changes in the exchange rates of certain
operational currencies, such as the US Dollar
, the Euro, and
the Algerian Dinar
, can have a material effect on our financial
performance.
We have a r
obust capital allocation strategy that aligns to our strategic priorities,
with the governance and decision-making measures in place to balance
opportunities and risks. We strive to maintain a str
ong financial position and
creditworthiness with our cr
editors, and have achieved significant deleveraging to
further enhance our credit risk pr
ofile. We closely monitor our cash position and
credit lines to ensur
e our financial flexibility
.
We have also diversified our funding sour
ces to avoid dependence on a single
market, staggered our debt maturity pr
ofile to reduce r
epayment burdens and
have implemented other working capital improvement pr
ograms. OCI has robust
in-house financing expertise and a proven track r
ecord in both r
efinancing debt
and accessing new funding.
We hedge our for
eign exchange cash flow risk on a consolidated basis by
matching our foreign curr
ency- denominated liabilities with continuing sources
of foreign curr
encies (for FX translation risk) and where appr
opriate, by hedging
transactional exposures that exist at our operating companies. W
e also hedge
our interest rate risks by maintaining a debt portfolio which pr
edominantly carries
fixed-rates.
CYBERSECURITY
Despite our IT security measures, our information technology
and infrastructure may be vulnerable to cyber
- attacks or
breaches. Any such br
each could result in business disruption
or compromise our systems and r
esult in downtime or leak of
personal and/or business sensitive data adversely affecting our
reputation.
We continuously assess and update our security contr
ols and defense strategies
to strengthen our security postur
e and minimize our vulnerabilities to cyber
-
attacks. We believe these measur
es and procedur
es are appr
opriate.
Our IT team is focused on the monitoring and enhancement of our IT security
capabilities across the gr
oup for both our IT infrastructures and plant pr
ocess
control systems. In addition, we invest in internal resour
ces, training, and engage
with external security experts to support the implementation of various action
plans that are part of our compr
ehensive cyber security management system.
Throughout the year
, we run several internal and exter
nal security assessments
across the gr
oup to ensure that our risk levels ar
e acceptable. We also maintain
a group wide cyber insurance pr
ogram as last line of defense in case of adverse
incidents. Additionally
, we regularly run IT audits and security assessments to
ensure the continuous ef
fectiveness of our security measures.
RISK MANA
GEMENT
Financial Risks
ASSOCIA
TED STRA
TEGIC PRIORITIES
Maximizing free cash ﬂow
Business Optimization
Risk Rating
Risk decreasing
Risk stable
Risk increasing
OCI N.V
.
Annual Report 2021
90
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
ASSOCIA
TED STRA
TEGIC PRIORITIES
Sustainability
Operational Excellence
Risk
Risk Rating
Description

CHANGES IN
REGULA
TOR
Y
CONDITIONS IN THE
MARKETS IN WHICH
WE OPERA
TE
Changes in laws, regulations and the r
elated interpretations may
alter the environment in which we do business. This includes
changes in governance, health and safety
, competition and
product-r
elated laws and regulations, as well as changes in
accounting standards and taxation r
equirements. This also
includes the impact of proposed climate change r
elated
regulations at both the international and national levels, such as
the EU’
s proposed carbon dioxide reduction targets, and more
intensified or burdensome tax r
egulation and tax controversy
challenges to curb budget shortfalls resulting fr
om the negative
economic impact of the COVID-19 pandemic.
Failure to comply with these laws may r
esult in substantial fines,
penalties, or other sanctions such as the obligation to invest
in newer equipment, permit revocations or facility shutdowns.
Consequently
, we may experience delays in obtaining or be
unable to obtain requir
ed permits, which may delay or interrupt our
operations. In addition, global geopolitics have created uncertainty
around tarif
f implementation in key markets, which may affect
product or feedstock pricing.
Our ability to manage regulatory
, tax and legal matters and to
resolve pending matters within curr
ent estimates may impact our
results.
We actively monitor r
egulatory developments to ensure we comply with the laws
and regulations of the countries wher
e we operate, including climate and HSE
legislation to maintain our licenses to operate. Additionally
, we actively provide
comments and feedback regar
ding proposed or draft rules when given the
opportunity
, specifically when draft rules are open for public comments.
As a result of the Paris Climate Agr
eement and the European Union’
s announced
carbon dioxide emissions reductions targets, our Dutch operations ar
e part of a
group of companies engaged in the ongoing dialogue with Dutch government
regar
ding proposed new carbon dioxide emissions r
egulations and additional
taxes. We ar
e also engaged in ongoing lobbying on the national and European
Union levels to enhance cooperation and transparency between r
egulators and
our industries.
We have also committed to r
educing our greenhouse gas emissions to r
educe
our environmental impact and contribute to achieving the decarbonization goals
set by the Paris Agreement. Please r
efer to the Sustainability Report for more
information.
We continue to monitor closely and maintain flexibility to change trade flows
and accommodate tariffs and continue to monitor r
egulatory developments and
develop targeted action plans as part of our Group Compliance Framework.
ABILITY TO MAINT
AIN
OUR HEAL
TH, SAFETY
AND ENVIRONMENT


HSE is a vital aspect across the gr
oup. We have a deep
commitment to maintaining our strong HSE track r
ecord. Despite
the nature of our businesses, we aim to pr
event every accident
through stringent HSE rules, standar
ds, and training programs.
We implement strict HSE training and operating discipline at every plant
to minimize HSE risks, and we closely monitor our plants through r
egular
management site visits and HSE audits, in addition to comprehensive knowledge
sharing across the gr
oup. Our safety and emissions recor
ds meet or exceed
international standards, underscoring our commitment to providing our
employees with a safe, secure, and envir
onmentally conscious workplace.
In addition, the HSE & Sustainability Committee supervises our HSE activities,
as described in the HSE Committee report.
Risk Rating
Risk decreasing
Risk stable
Risk increasing
RISK MANA
GEMENT
Regulatory Risks
OCI N.V
.
Annual Report 2021
91
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
COMPLIANCE
OCI strives to conduct all business activities responsibly
, transparently
, and with integrity
and respect towar
ds all stakeholders. These values underpin everything we do and form the
framework which deﬁnes the day-to-day attitudes and behaviour of our employees.
Our approach
T
o make those values clear and provide clear ground rules for how we do business, our
Compliance Framework
consists of policies that describe in speciﬁc terms what we stand for as
a company and the conduct requir
ed in the workplace, in how we deal with business partners,
serve our customers, and the broader r
esponsibilities we have to the communities in which we
work and live. The Compliance Framework also sets out rules on important topics such as the
prohibition of bribery
, dealing with conﬁdential information and conﬂicts of interest, competition
law
, third-party due diligence, the importance of accurate recor
d keeping and reporting, and
explains the possibility of disciplinary measures when in br
each of the framework.
All employees are trained on the key principles and applications of the Compliance Framework
through a gr
oup-wide e-learning platform and can raise any concer
ns and breaches thr
ough a
safe and conﬁdential whistleblowing and incident reporting pr
ocedure. An anonymous r
eporting
procedur
e is also available, through which employees can r
eport to a whistleblower hotline hosted
by a third-party hotline pr
ovider
. All reports are handled with the utmost car
e and conﬁdentiality
,
regar
dless of if reported internally or via the anonymous reporting hotline.
The majority of employees eligible or included in the various programs successfully completed
their training. Moving forward, we will continue to raise awar
eness of compliance and train
employees in relevant policies and pr
ocedures.
Our compliance program
The Chief Legal and Human Capital Ofﬁcer (CLHCO) is the Executive Dir
ector responsible for
ethics and compliance. The Group Compliance Of
ﬁcer
, in close collaboration with the CLHCO and
the rest of the Boar
d of Directors, implements our gr
oup Compliance Program and ensur
es that
our Compliance Framework remains in line with applicable r
egulations and is properly applied.
The Integrity Committee, comprising of the CFO, the CLHCO, and the Group Compliance Of
ﬁcer
,
handles incidents of a severe natur
e. The Integrity Committee did not meet in 2021, as no incident
of a (potential) severe natur
e was reported.
Management of Operating Companies and staff departments ar
e responsible and accountable
for raising compliance awareness within their r
espective businesses and departments and are
supported by a Local Compliance Ofﬁcer who r
eports on alleged breaches and compliance
incidents to both operating company management and to corporate leadership. Additionally
, the
Audit Committee receives a Quarterly Compliance Report.
At the start of every year the Group Compliance Of
ﬁcer
, in collaboration with operating company
management, sets the annual compliance agenda. The agenda consists of continuous and new
compliance activities and requir
ements, to ensure gr
owth in maturity of the Compliance Program.
These activities and requir
ements are concr
ete and measurable, and are r
eported internally on a
quarterly basis, and can be tested on their effectiveness. Thr
ough this annual agenda, compliance
controls ar
e continuously developed and enhanced for effectiveness.
In 2021, amongst others, the following compliance requir
ements and activities were achieved:
•
T
raining and awareness sessions on various compliance topics, among which on the Code of
Conduct, Whistleblowing policy
, conﬂicts of interest and competition law
.
•
Development and implementation of a process and training for commodity trading.
•
Enhanced the third-party screening appr
oach amongst others by fully implementing our
Business Partner Code of Conduct.
•
Development and implementation of a tailor
-made compliance framework for Fertiglobe and its
operational companies.
At the end of the year
, the CEO and CFO of each operating company sign the Non-Financial
Letter of Representation (NF LoR) to conﬁrm compliance with the Code of Conduct and other
corporate non-ﬁnancial requir
ements. The outcome is reviewed by the CFO, CLHCO, the Gr
oup
Compliance Ofﬁcer and the Dir
ector Internal Audit & Risk and the results are r
eported to the
Audit Committee and the Board of Dir
ectors. Reported outstanding actions are followed up on
by the Internal Audit department and monitored in quarterly reviews. The outcome of the NF
LoR process, in combination with the internal control self- assessments, the HSE r
eports, the
Compliance reports, the risk assessments and the performed internal audits, establishes the basis
for the In Control Statement of the Boar
d of Directors in this Report.
During 2021, we received 12 incident notiﬁcations. All incidents wer
e investigated, with no
substantial cases found.
Privacy
and data
policy
Code of
Conduct
Whistle-blower
policy
Insider T
rading
& Market
Abuse policy
Sanctions
Policy
Human
Rights
Policy
Applicable
laws and
regulations
Anti-bribery
and Corruption
policy
Competition
policy
Business
Partner Code of
Conduct
COMPLIANCE
FRAMEWORK
OCI N.V
.
Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
W
e promote sustainable agricultur
e and nutrient stewardship thr
ough our supply chain,
which begins with sourcing natural gas and ends at our agricultural and industrial
customers. W
e work diligently to ensure every aspect of our business operates optimally
and promote best practices thr
ough our
Business Partner Code of Conduct
.
Our governance and compliance policies and expectations of ethical business practices
extend beyond our operations throughout our supply chain thr
ough our Business Partner Code
of Conduct.
We seek to awar
d business to suppliers and business partners with whom OCI has a supplier
relationship (collectively
, Business Partners) who are committed to act fairly and with integrity
towards their stakeholders, who have adopted and pr
omote the implementation of strong
business principles, and who observe the applicable laws of the country in which they operate.
We hold every Business Partner to the same level of accountability
, transparency
, and
respectability as we do ourselves to ensur
e our entire value chain secur
es the salient rights
of every individual.
Business Partner Code of Conduct
Our Business Partner Code of Conduct summarizes the values and expectations we requir
e all
Business Partners to adhere to and aligns to international laws and standards on ethics, labor
, and
human rights such as those set out by the International Labor Organization (ILO) and the United
Nations International Children's Emergency Fund (UNICEF), the United Nations Guiding Principles
on Business and Human Rights, and others.
Screening and due diligence
Based on the company’
s Sanctions Policy
, all prospective third-party Business Partners ar
e
screened prior to engagement. Via a compliance softwar
e tool, we conduct customary due
diligence including a screening of the Business Partner against sanction lists and compliance
databases, on environmental performance, labour practices, and human rights performance. W
e
also check if any adverse media coverage in relation to the Business Partner exists, including if
the future Business Partner has been involved in other unethical or illegal conduct. In addition,
all existing Business Partners are continuously monitor
ed via this software tool. It is the Business
Partner's responsibility to maintain and enfor
ce compliance within its supply chain. Key Business
Partners undergo more in-depth scr
eening as part of our due diligence process.
The effectiveness of our Business Partner scr
eening processes is evaluated by the compliance
team and the local internal control ofﬁcer of each site as part of their r
egular compliance and audit
cycles, which also includes Business Partner audits as part of contractual arrangements.
Reporting Business Partner misconduct
We pr
ovide a clear reporting mechanism for suspected Business Partner misconduct thr
ough our
whistleblowing platform, which includes an anonymous reporting pr
ocedure via a hotline hosted
by a third-party hotline pr
ovider
. More information is available in the Business Partner Code of
Conduct and on our website.
COMPLIANCE
Our Code of Conduct






Business Partners
across our business
partner chain
Business Partner audits
conducted as part of
contractual arrangements
of Business Partners
are r
equired to adher
e
to Business Partner
Code of Conduct
>4,800
REGUL
AR
100%
OCI N.V
.
Annual Report 2021
93
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
5.
CORPORA
TE
GO
VERNANCE
OCI achieved considerable commercial, operational,
organizational, and strategic milestones during 2021, resulting
in a recor
d year for the Company and the ﬁrst dividend to
shareholders of $ 350 million (€1.45 per shar
e).
The Board of Dir
ectors (Board) oversaw and appr
oved the
successful initial public offering of Fertiglobe, which was a
landmark listing on the Abu Dhabi Securities Exchange (ADX) as
the third largest IPO and the ﬁrst ADGM fr
ee zone company to
list on the ADX. The Board also appr
oved a strategic alliance for
the OCI Methanol Group with two leading global investors, ADQ
and Alpha Dhabi Holding, through which the investors have
acquired a 15% stake for a total consideration of $375 million
and positions the methanol group to pursue futur
e growth
initiatives in hydrogen-based applications, including fuel.
We also achieved our net leverage goals during 2021, as our
growth strategy and competitive business model started to
pay off, and as a r
esult we are now quickly appr
oaching our
objective to reach an Investment Grade cr
edit proﬁle and our
credit ratings wer
e upgraded by all agencies. The Board has
approved a new dividend / capital allocation policy
, which
combines a consistent base return of capital of $400 million
per year with an additional variable component linked to FCF
generated, balancing with the pursuit of value accretive ESG
and other growth opportunities.
The Company has made good progr
ess on developing
pathways to achieve its decarbonization ambitions, with multiple
blue and green ammonia and methanol pr
ojects progr
essing
well as described throughout this annual r
eport. As one of
the largest producers and traders of ammonia and methanol
globally
, with a strategically located asset base and access to
abundant low-cost renewable energy sour
ces, we are a pioneer
in helping the decarbonisation of sectors that make up around
90% of global greenhouse gas emissions and will continue to
work diligently to deliver green hydr
ogen all over the world to fuel
the clean economy and meet growing demand for r
enewable
sources of clean energy
.
Finally
, we have made progress in impr
oving our diversity and
inclusion (D&I), with female repr
esentation in senior leadership
positions now at 24%. Our D&I program focused on education
and training during the year
, and developed a three-year
diversity and inclusion roadmap that aims to translate our
commitment into action, allowing us to ﬁrmly anchor an inclusive
culture in every aspect of our business.
For the year ended 31 December 2021, the Board r
eports the
following:
•
The Board has reviewed and discussed the audited ﬁnancial
statements for the year 2021.
•
The Board discussed with the external auditor the outcome
of their performed audits in accordance with International
Standards on Auditing.
•
The Board has received written conﬁrmation of the external
auditor’
s independence.
•
Based on the review and discussions referr
ed to above, the
Board has appr
oved that the audited consolidated and parent
company ﬁnancial statements be included in the 2021 Annual
Report (Annual Report).
The Board r
ecommends that the General Meeting of
Shareholders (GM) adopts the 2021 ﬁnancial statements
included in this Annual Report and looks forward to overseeing
continued excellence in every aspect in 2022.
MICHAEL BENNETT
CO-CHAIR



INTRODUC
TION
OCI N.V
.
Annual Report 2021
95
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de Vries
Co-Chair and Senior Independent
Non-Executive Director
Executive Chair
Chief Executive Ofﬁcer (CEO)
Chief Financial Ofﬁcer (CFO)
Chief Legal and Human
Capital Ofﬁcer (CLHCO)
Y
ear of birth
1953
1961
1984
1976
1972
Gender
Male
Male
Male
Male
Female
Nationality
American
Egyptian/Belgian
Egyptian/American
Egyptian/British
Dutch
Initial
appointment date
January 2013
January 2013
June 2020
May 2018
June 2019
Date of last
re-appointment
June 2020
June 2020
-
June 2020
June 2020
End of current term
2023
2024
2024
2024
2024
Ordinary shar
es
owned
3
28,500
81,564,223
84,287
130,370
18,258
Committee
membership
1
-
-
-
-
Attendance
at Board and
Committee
meetings
2
BoD (5/5)
BoD (5/5)
BoD (5/5)
BoD (5/5)
BoD (5/5)
Current external
appointments
•
Director Morningside College
•
Please see the summary of skills
and experience on page 99
•
Supervisory Director Adidas AG
•
Chairman and CEO of Avanti
Acquisition Corp.
•
Executive chairman of Aston Villa
FC
Member of the:
•
J.P
. Morgan Inter
national Council
•
Cleveland Clinic’
s Inter
national
Leadership Board Executive
Committee
•
University of Chicago’
s Board of
T
rustee
•
Exor N.V
. Partners Council
•
Please see the summary of skills
and experience on page 99
Please see the summary of skills and
experience on page 99
Risk management and for further
experience please see the summary
of skills and experience on page 99
•
EVP HR NNS Luxembourg S.à r
.l.
•
Please see the summary of skills
and experience on page 99
BO
ARD PROFILE
OCI N.V
.
Annual Report 2021
96
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
N&RC
N&RC (5/5)
1
Board and Committees: BoD: Boar
d of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Envir
onment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Boar
d participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
Sipko Schat
Jérôme Guiraud
Robert Jan van de Kraats
Gregory Heckman
Vice-Chair and Independent
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Y
ear of birth
1960
1961
1960
1962
Gender
Male
Male
Male
Male
Nationality
Dutch
French
Dutch
American
Initial
appointment date
December 2013
June 2014
June 2014
June 2015
Date of last
re-appointment
June 2020
June 2020
June 2020
June 2020
End of current term
2024
2024
2024
2024
Ordinary shar
es
owned
3
5,000
70,190
3,725
40,000
Committee
membership
1
Attendance
at Board and
Committee
meetings
2
BoD (5/5)
AC (4/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
Current external
appointments
•
Member Supervisory Board:
•
Rothschild & Co.
•
Rothschild Bank A.G.
•
T
raﬁgura Group Pte Ltd
•
Drienim B.V
.
•
Director Randstad Beheer B.V
.
•
Please see the summary of skills and
experience on page 99
•
CEO NNS Luxembourg S.à r
.l.
•
Co-CEO NNS Advisers Ltd
•
Non-Executive Director and Chairman
Orascom Construction Plc
•
Non-Executive Director BESIX Gr
oup
•
Director various NNS Group entities and
OS Luxembourg S.à r
.l.
•
Member Advisory Committee Avanti
Acquisition Corporation
•
Please see the summary of skills and
experience on page 99
•
Non-Executive Chairman TMF Group
•
Supervisory Board Member Royal Schiphol
Group N.V
.
•
Director Randstad Beheer B.V
.
•
Member advisory board SUITSUPPL
Y
•
Vice-Chair Supervisory Board
Goldschmeding Foundation
•
Non-Executive Director VEON Ltd.
(Chairman of the Audit and Risk Committee)
4
•
Risk management and for further experience
please see the summary of skills and
experience on page 99
•
Member of the board and CEO Bunge Ltd
•
Member Rabobank North America
Agribusiness Advisory Board
•
Member NYSE Board Advisory Council
•
Member Board of Governors for the
AKSARBEN Foundation
•
Member of University of Illinois Division of
Intercollegiate Athletics Campaign Steering
Committee
•
Please see the summary of skills and
experience on page 99
BOARD PROFILE
CONTINUED
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.
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governance
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performance
Risk management
and compliance
Financial
statements
Other
information
AC, N&RC (chair)
AC, N&RC
AC (chair), N&RC
HSE&SC
HSE&SC (4/5)
N&RC (5/5)
N&RC (5/5)
N&RC (5/5)
1
Board and Committees: BoD: Boar
d of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Envir
onment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Boar
d participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
4
Resigned 7 March 2022
Anja Montijn-Groenewoud
David Welch
Dod Fraser
Heike van de Kerkhof
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Directo
r
Y
ear of birth
1962
1953
1950
1962
Gender
Female
Male
Male
Female
Nationality
Dutch
American
American
German
Initial
appointment date
June 2016
May 2019
May 2019
October 2020
Date of (last)
re-appointment
June 2020
June 2020
June 2020
-
End of current term
2024
2024
2024
2024
Ordinary shar
es
owned
3
-
4,131
4,000
-
Committee
membership
1
AC
Attendance
at Board and
Committee
meetings
2
BoD (5/5)
HSE&SC (5/5)
BoD (5/5)
HSE&SC (5/5)
BoD (5/5)
AC (5/5)
BoD (5/5)
HSE&SC (5/5)
Current external
appointments
•
Member of the Supervisory Board of
Fugro N.V
.
•
Member of the Board VEUO (a
repr
esentative organization of listed
companies which looks after the interest of
companies listed
at Euronext Amster
dam)
•
Please see the summary of skills and
experience on page 99
•
Member of the Council on Foreign Relations
and the American Academy of Diplomacy
•
Please see the summary of skills and
experience on page 99
•
Independent
Director
Subsea 7 S.A.
•
Non-Executive Chairman Rayonier Inc.
•
Member of the Board of Fleet T
opco
Limited, the private holding company of
Argus Media Ltd.
•
Please see the summary of skills and
experience on page 99
•
Chief Executive Ofﬁcer and Member
of the Board of Dir
ectors at Archr
oma
•
Non-Executive Director at V
enator
Materials PLC
•
Please see the summary of skills and
experience on page 99
BOARD PROFILE
CONTINUED
OCI N.V
.
Annual Report 2021
98
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
HSE&SC (chair), N&RC
HSE&SC
HSE&SC
N&RC (4/5)
1
Board and Committees: BoD: Boar
d of Directors, AC: Audit Committee, HSE&SC: Health, Safety and Envir
onment & Sustainability Committee and N&RC: Nomination and Remuneration Committee
2
In addition to 5 Board meetings the Boar
d participated in an ESG training and virtually visited EBIC/EFC
3
As at publication date of the 2021 Annual Report
M. Bennett
N. Sawiris
A. El-Hoshy
H. Badrawi
M. de Vries
S. Schat
J. Guiraud
R.J. van
de Kraats
G. Heckman
A. Montijn
D. Welch
D. Fraser
H. van de
Kerkhof
Independent
•
•
•
•
•
•
•
•
International business
experience
•
•
•
•
•
•
•
•
•
•
•
•
•
Commercial/Marketing
•
•
•
•
•
•
•
HSE
•
•
•
•
•
•
•
Strategic management
•
•
•
•
•
•
•
•
•
•
•
•
•
Financial expertise: banking
•
•
•
•
•
•
•
Financial expertise:
accounting
•
•
•
•
•
Nitrogen/Methanol
experience
•
•
•
•
•
•
Emerging Markets
experience
•
•
•
•
•
•
•
•
•
•
•
•
T
ax/Legal/Compliance
•
•
•
•
•
•
HR & executive
compensation
•
•
•
•
•
•
•
•
Risk management / Internal
Control & Audit
•
•
•
•
•
•
•
•
•
Government/Regulatory
knowledge
•
•
•
•
•
•
•
•
Sustainability
•
•
•
•
•
•
•
•
•
•
Change management /
Business consolidation
•
•
•
•
•
•
•
•
•
•
•
•
•
T
echnology / IT
•
•
•
•
•
BOARD SUMMAR
Y OF
SKILLS AND EXPERIENCE
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.
Annual Report 2021
99
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OCI is a public limited liability company (
naamloze vennootschap
) established under the laws of
the Netherlands, with its ofﬁcial seat in Amster
dam, the Netherlands.
Governance framework
Introduction
OCI is committed to the principles of good corporate governance. The Board believes that good
corporate governance practices align the interests of all stakeholders by having structures in
place that ensure the business is managed with integrity and ef
ﬁciency
, thereby maximizing the
proﬁtability and long-term value cr
eation of the Company
.
OCI's strategic priorities aim to deliver long-term value creation for the Company and its
stakeholders. These priorities are supported by the Boar
d and are underpinned by OCI’
s
commitment to invest in products that help achieve OCI's purpose of cultivating a sustainable
world through cleaner fuel solutions, lower carbon feedstocks, and global food security
. Please
refer to the Strategy and V
alue Creation section of this Annual Report for the Boar
d’
s view on
OCI’
s strategy and its implementation.
Organizational and corporate structure
OCI is organized by its two primary functional segments, nitrogen and methanol.
The Board sets the strategic mandate with operational, ﬁnancial, and sustainability goals r
elayed
to management.
The Executive Directors manage the achievement of these goals and the day-to-day operations.
In executing the goals, the Executive Directors ar
e supported by several corporate functions and
local management and their teams. Each principal subsidiary is led by a general manager and a
ﬁnance director who r
eport to the Executive Directors.
Governance structure
OCI has designed its corporate governance structure in compliance with its articles of association,
by-laws, the requir
ements of the Dutch civil code, the Dutch corporate governance code (Code),
the applicable securities laws, rules and regulations of the Amster
dam stock exchange and
international best practices. All gover
nance and compliance policies and procedur
es are available
on our website under
Corporate Governance
.
Shareholders
Articles of Association – By-laws
Board (one-tier)
Articles of Association – By-laws –
Board pr
oﬁle – Board Rotation Schedule –
Board D&I Policy – Reserved Matters – Code
of Conduct – Related Party T
ransactions
Policy – Insider T
rading Code
Audit Committee
HSE & Sustainability
Committee
Nomination and
Remuneration
Committee
T
erms of reference
T
erms of reference
T
erms of refer
ence
Executive Directors
Operating company management
Local laws and regulations
Code of Conduct
Insider T
rading Code
Business Partner Code of Conduct
Diversity and Inclusion Policy
Anti Bribery and Corruption Policy
Human Rights Policy
Whistleblower Policy
Sanctions Policy
Shareholder Communications Policy
Privacy and Data Protection Policy
DCS Policy
BO
ARD REPOR
T
OCI N.V
.
Annual Report 2021
100
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
BOARD REPORT
CONTINUED
The Board of Dir
ectors
OCI is managed by a one-tier Board comprised of Executive Dir
ectors and Non-Executive
Directors. The Boar
d maintains three committees as part of its supervisory r
ole: the Audit
Committee, the Nomination and Remuneration Committee and the Health, Safety and
Environment & Sustainability Committee (Committees).
The Board is collectively r
esponsible for OCI’
s management and strategy
. The Board promotes a
culture of openness and accountability within the Boar
d and throughout the entir
e organization.
The tasks, responsibilities and pr
ocedures of the Boar
d are set out in OCI’
s by-laws, which are
available on OCI’
s website.
The Board has delegated the operational management of the business to the Executive Dir
ectors,
apart from certain r
eserved matters as set out in such Board r
esolution, OCI’
s articles of
association and by-laws.
The Board is authorized to r
epresent OCI. In addition, the Co-Chair of the Boar
d and each
Executive Director ar
e authorized to solely repr
esent OCI.
OCI has a Group Delegation of Internal Authority Policy in place in which the Executive Directors
delegate the authority to management to internally approve commitments that relate to daily
management and operations of the Company
. It gover
ns which internal approvals are r
equired
for which actions leading to an efﬁcient yet contr
olled process. Checks and balances have been
set by implementing 3 authorizing steps for entering into external commitments; consisting of
consultation, internal approval and a dual signing authority of two individuals that commit in the
name of OCI group entities.
Executive Directors
The Executive Directors ar
e charged with the day-to-day management of OCI. They are
responsible for the continuity of OCI, to pursue the strategies set by the Boar
d, the optimization
of its business, and creating a cultur
e that contributes to long-term sustainable value creation
for stakeholders. Each Executive Director has an individual r
esponsibility for certain business
segments, functional areas, pr
ojects and tasks.
Our commitment to drive the decarbonization of food, fuel, and feedstock is steered by a
differ
entiated strategy focused on capital discipline and value creation, coupled with a unique
green portfolio that enables the hydr
ogen economy
, underpinned by strong governance. T
o deliver
on this, our strategic priorities are organized in ﬁve key pillars: operational excellence, business
optimization, commercial excellence, sustainability
, and free cash ﬂow maximization, as described
in the Strategy and V
alue Creation section of this annual report.
During 2021, the Board was composed of the following four Executive Dir
ectors: Mr
. Nassef
Sawiris (Executive Chair), Mr
. Ahmed El-Hoshy (CEO), Mr
. Hassan Badrawi (CFO) and Ms. Maud
de V
ries (CLHCO). The Executive Chair is, amongst others, responsible for determining the
strategy of the Group and pr
oviding guidance to the other Executive Directors.
Non-Executive Directors
The role of the Non-Executive Dir
ectors is essentially supervisory in nature. The Non-Executive
Directors supervise the general course of af
fairs of the Company and its business, including, the
interests of all stakeholders, fostering a cultur
e aimed at long-term value creation, the operational,
ﬁnancial and sustainability goals, the establishment and maintenance of internal procedures to
ensure that all r
elevant information is known to the Board in a timely fashion, and stakeholder
engagement.
During 2021, the Board was composed of nine Non-Executive Dir
ectors: Mr
. Michael Bennett,
Mr
. Sipko Schat, Mr
. Jérôme Guiraud, Mr
. Robert Jan van de Kraats, Mr
. Gregory Heckman, Ms.
Anja Montijn-Groenewoud, Mr
. David Welch, Mr
. Dod Fraser and Ms. Heike van de Kerkhof. Mr
.
Michael Bennett is the Co-Chair and Senior Independent Non-Executive Director and Mr
. Sipko
Schat is the Vice-Chair and Independent Non-Executive Director
.
The Co-Chair is primarily responsible for the functioning of the Boar
d and its Committees.
T
ogether with the Company Secretary
, the Co-Chair sets the agenda for Board meetings and
leads an induction program for new Dir
ectors tailored to their r
espective needs. The Vice-Chair
acts as the contact for shareholders and other stakeholders of the Company with r
espect to
concerns which have not been resolved through the normal channels of the Co-Chair
, the
Executive Chair or the other Executive Directors.
Appointment of Directors
The General Meeting of Shareholders (GM) can appoint, suspend or dismiss an Executive
Director or a Non-Executive Dir
ector by an absolute majority of the votes cast upon a proposal
of the Board.
OCI N.V
.
Annual Report 2021
101
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
BOARD REPORT
CONTINUED
2021 Board and Committee meetings
The table below summarizes how the duties of the Board and the Committees wer
e carried out during 2021, including the focus topics that were r
eviewed, discussed and advised on.
Board
Audit Committee
Nomination and Remuneration Committee
HSE & Sustainability Committee
General
The Board focused on matters contributing to medium
and long-term value creation and continues to be involved
in shaping the strategy through r
egular discussions and
focus on supervising medium to long term strategic targets
aligned with OCI’
s vision. The Board’
s strategic targets
are focused on guiding and supervising the company’
s
journey to achieving its commitment to sustainable value
creation by focusing on its strategic priorities of operational
excellence, business optimization, a global commercial
strategy
, sustainability
, and maximizing free cash ﬂow to
achieve 2.0x net leverage through the cycle. The Boar
d
maintains three committees as part of its supervisory r
ole,
these committees are Non-Executive committees.
The Chair met with the internal and external auditor in
advance of every Audit Committee meeting to secure that
all relevant issues wer
e sufﬁciently addressed. The external
auditor attended all Audit Committee meetings in 2021 and
was able to meet with the Audit Committee without the
presence of management in each meeting.
More information on the r
emuneration policy and the 2021
remuneration r
eview can be found in the Remuneration
Report beginning on page 110.
More information on HSE and sustainability can be found
in the sustainability section beginning page 35.
T
asks,
responsibilities
and procedures
Set out in the
by-laws
Set out in the
T
erms of Reference of the
Audit Committee
Set out in the
T
erms of Reference of the
Nomination and Remuneration Committee
Set out in the
T
erms of Reference of the
HSE & Sustainability Committee
Number of
Members
13 Directors
Four Non-Executive Directors.
Mr
. Robert Jan van de Kraats is the Chair given his
competence in accounting and auditing as per section 2(3)
of the Audit Committee Decree 2016.
Five Non-Executive Directors.
Mr
. Sipko Schat is the Chair
.
Four Non-Executive Directors.
Ms. Anja Montijn-Groenewoud is the Chair
.
Number of
Meetings held
Five meetings and several interim updates, training and site
visit throughout the year
.
Five
Five
Five
Focus topics
•
Medium and long term strategy
•
HSE
•
ESG strategy
, sustainability and regulatory developments
and decarbonization targets, strategy and projects
including the commitment to reduce scope 1 and 2 CO
2
emission intensity by 20% by 2030 and achieve carbon
neutrality by 2050
•
Fertiglobe IPO
•
COVID-19
•
People and culture
•
Diversity and inclusion
•
Net debt reduction
•
Reﬁnancing strategy
•
Debt capital structure optimization
•
Dividend strategy
•
Hedging strategy
•
Commercial strategy
, sales and inventories strategy /
market developments
•
Operational performance and cost optimization
•
Succession planning and organization design
•
EBIC/EFC (Egypt) virtual site visit
•
Internal controls
•
Cybersecurity
•
Related party transactions
•
Evaluation Risk Management and Internal Controls
including the key risks facing the Group
•
IT and IT (cyber) security
•
Fertiglobe governance and in-control (pre and post IPO)
•
Auditor tender process
•
In-control statement and underlying in-contr
ol situation
•
Evaluation Related Party T
ransactions
•
T
ax review
•
Dividend strategy
•
Reﬁnancing
•
Evaluation Group’
s Compliance Framework and
effectiveness
•
Financial hedging control framework
•
Monitoring of material claims and litigation
•
Assessment of the functioning of the external auditor
,
its appointment, including scope, risk assessment and
materiality
•
Internal Audit Plan and Internal Audit ﬁndings
• Remuneration cycle and policy review
•
HR roadmap: succession planning and talent
management and development
• Strengthening key positions in the internal organization
•
Evaluation Board pr
oﬁle and composition including
diversity and inclusion
• Fertiglobe CEO appointment
• Evaluation of the 2020 targets for the Executive Directors
• Setting 2021 targets for the Executives
• Amendment of the L
TIP by including ESG measures
• Reviewed and advised on the executive compensation
•
Diversity legislation and Group-wide diversity and
inclusion program
• 2021 HSE strategy and performance
•
2022 HSE plan and 2022 target setting
• Material safety incidents
• Incident reporting pr
otocol
•
HSE audit schedule and quality and outcome of the HSE
audits
•
Safety performance and process safety initiatives
initiatives, including a deep dive on BioMCN
• ESG investor day
•
OCI Group annual process safety confer
ence and safety
award
•
Sustainability strategy and journey linked to OCI’
s overall
strategy including the commitment to reduce scope
1 and 2 CO
2
emission intensity by 20% by 2030 and
achieve carbon neutrality by 2050
•
GHG intensity methodology and performance
•
Safeguarding sustainability duties in the committee terms
of refer
ence
•
EBIC/EFC(Egypt) virtual site visit
•
Monitor and periodically discuss the Company’
s
sustainability goals, targets, risk management and
objectives and the progr
ess made in these areas
•
Sustainability reporting r
equirements and r
eview of the
Company’
s disclosures in the annual report, as well as
any periodic disclosures on sustainability
OCI N.V
.
Annual Report 2021
102
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Board r
otation schedule
OCI has implemented the standard appointment terms under the Code (four years for Executive
Directors and two times four years with possible extensions of two times two years for Non-
Executive Directors pr
ovided that in the event of a reappointment after an eight-year period,
reasons will be given in the boar
d report) to facilitate that the Dir
ectors can focus on long-term
value creation in the performance of their work, ther
eby taking into account the bill on gender
diversity that entered into for
ce on 1 January 2022. It furthermore enables the Executive Dir
ectors
to ensure continuity in the Company’
s management and strategy and enables the Non-Executive
Directors to further ensur
e continuity in their supervision of the Company’
s strategy
.
OCI’
s rotation schedule as included in the table below aims to avoid, as far as possible, a situation
in which Directors r
etire at the same time.
Name
Date of ﬁrst
appointment
End of
current term
Final retir
ement
(max. 8 (12) years)
Nassef Sawiris
16 Jan 2013
2024
None
Ahmed El-Hoshy
17 June 2020
2024
None
Hassan Badrawi
24 May 2018
2024
None
Maud de V
ries
1 Jun 2019
2024
None
Michael Bennett
25 Jan 2013
2023
2021(25)
Sipko Schat
9 Dec 2013
2024
2022(26)
Jérôme Guiraud
26 Jun 2014
2024
2022(26)
Robert Jan van de Kraats
26 Jun 2014
2024
2022(26)
Gregory Heckman
10 Jun 2015
2024
2023(27)
Anja Montijn-Groenewoud
28 Jun 2016
2024
2024(28)
David Welch
29 May 2019
2024
2027(31)
Dod Fraser
29 May 2019
2024
2027(31)
Heike van de Kerkhof
20 October 2020
2024
2028(32)
Board composition and independence
The composition of the Board strives to arm OCI with leadership that is diverse in skills,
experience, gender and background, ther
eby maximizing the Board’
s ability to independently
and critically act without emphasis on particular interests. The Boar
d maintains independence by
ensuring the majority of the Non-Executive Directors including the Co-Chair ar
e independent. Mr
.
Jérôme Guiraud is not consider
ed independent within the meaning of the Code.
The Board’
s composition, independence, competencies, and qualiﬁcations are detailed in the
Board Pr
oﬁle and the D&I Policy
. The Board Proﬁle is assessed annually
, taking into account
the requir
ed competencies and expertise requir
ed for OCI’
s mission and strategic priorities,
opportunities and threats, and its aim of long-term value cr
eation. Appointments of new Board
members are made based on objective selection criteria highlighting the speciﬁc skills and
experience needed to ensure a balanced Boar
d composition and to match the overall Board
proﬁle.
The Board undertakes necessary measur
es to ensure diversity in education, pr
ofessional
experience, nationality
, age and gender in the selection of new candidates for the Board. In
addition, the Board tries to maintain a balance between experience and af
ﬁnity with the nature
and culture of the Gr
oup. In this regar
d, the Board will follow the development of female talent
in the organization closely
. Succession planning and building bench strength for key positions
is important topic of our global HR agenda 2022. New appointments are based on objective
selection criteria highlighting the speciﬁc skills and experience needed to ensure a r
ounded Board.
With regard to vacancies, the Boar
d prepares a pr
oﬁle based on the requir
ed education and
professional experience.
Strategy and long-term value creation
OCI's strategic priorities as described in this Annual Report aim to deliver long-term value creation
for the Company and its stakeholders. These priorities are supported by the Boar
d and are
underpinned by OCI’
s commitment to invest in plant’
s technology and products that help achieve
OCI's purpose of cultivating a sustainable world through cleaner fuel solutions, lower carbon
feedstocks, and global food security
.
The Board focuses on matters contributing to long-term value cr
eation and continues to be
involved in shaping the strategy
, for example through continuous engagement with all its
stakeholders, including shareholders and other investors, employees, customers and suppliers,
regulators and governmental bodies, and extensive and recurring Boar
d discussions on strategy
.
Our Board car
efully weighs the interests of stakeholders in developing the vision for this long-term
value creation, and r
egularly monitors and evaluates the progr
ess and realization of our long-term
value creation. T
opics our Board paid special attention to in 2021 were, amongst others, ESG in
general and in particular sustainability projects to decarbonize, health and safety within our global
organization, commercial strategy and operational excellence, the people & cultur
e and IT cyber
security
. The Executive Directors present the Company’
s progress and r
ealization of key strategic
objectives and initiatives at every Board meeting.
BOARD REPORT
CONTINUED
OCI N.V
.
Annual Report 2021
103
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Our stakeholder engagement program is described on page 38 of this Annual Report. W
e
maintain an ongoing dialogue with our stakeholders. In order to ensur
e our Board is fully apprised
of shareholders’ ar
eas of focus, concerns, and feedback, an investor relations update is provided
at each Board meeting. W
e can use feedback from our key customers, suppliers and other
business in developing a vision for long-term value creation. Our uniﬁed cultur
e, values, and
communications platform OneOCI promotes transpar
ency
, alignment, and feedback. We can
provide comments and feedback on pr
oposed legislation that may impact our long-term strategy
to regulatory bodies such as the AFM and governments in our countries of operation, as well as
multinational regulatory bodies such as the Eur
opean Commission. Via participation in various
industry groups we keep apprised of the latest within our industry and we actively participate in
the discussions on industrywide long-term strategy
. W
ith other stakeholders such as our joint
venture partners we agr
ee on long-term strategy regar
ding our joint ventures.
ESG
ESG is embedded into all aspects of our organization, including our strategic objectives (as
described above), risk management, capital allocation and ﬁnancial planning, operational and
commercial activities, and other medium and long-term decision-making.The Boar
d has overall
responsibility for OCI’
s strategy
, business objectives, and risk management, including ESG.
With the continuous increase of the Board’
s dedicated time and focus on sustainability
, the
Board’
s the Health, Safety and Environment Committee evolved in 2021 to formally include
sustainability in its mandate and was therefor
e renamed the Health, Safety
, Environment &
Sustainability Committee. The Committee’
s responsibilities include overseeing the Company’
s
strategy
, policies and initiatives relating to sustainability matters linked to OCI’
s overall strategy;
monitoring the Company’
s sustainability goals, targets, risk management and objectives and the
progr
ess made in these areas; monitoring curr
ent and emerging topics, technologies and trends
relating to Sustainability
, including new or emerging opportunities and projects that may af
fect the
business, operations, performance or public image of the Company or are otherwise pertinent
to the Company and its stakeholders; reviewing and evaluating the sustainability performance
metrics and KPIs with a longer term view towards achieving announced Company targets; and
reviewing the Company’
s Sustainability disclosures.
The Board has mandated the Company to communicate its ESG strategy and has appr
oved
OCI’
s long-term environmental targets. In addition to dedicated focus by the HSE & Sustainability
Committee, Board sessions will continue to spend time on ESG topics, including the social and
governance aspects. The Board has tasked the Executive Directors with the management of ESG
and decarbonization objectives, including the development and implementation of our ESG targets
and strategy
, supported by the newly recruited VP Sustainability
. New performance measures
relating to ESG have been added to the long-term incentive plan of the Executive Dir
ectors that
will apply from 2021 onwar
ds, thereby aligning r
emuneration more closely to performance of our
strategic priorities and long-term interests.
Each production facility’
s leadership team is responsible for identifying and evaluating ESG
projects and opportunities, including decarbonization pr
ojects, and report on their pr
ogress
to the Executive Directors during the site’
s monthly business reviews. The Capex Committee
reviews and appr
oves decarbonization-related capex with a view to balance our sustainability
goals with our other commitments and investment returns thresholds. W
e appointed a Vice
President of Sustainability in 2021 who oversees the gr
oup’
s sustainability function and execution
of our groupwide sustainability strategy in close cooperation with other gr
oup functions and local
leadership.
During the year
, we also centralized our advocacy efforts in a new global corporate Government
& Public Affairs team that is tasked with tracking r
egulatory and political developments, cultivating
strong r
elationships with key governmental bodies, and maximizing our ability to beneﬁt from
policy instruments and spending plans to ensure accelerated achievement of climate goals.
Diversity & Inclusion
The Board acknowledges the importance of diversity within its Boar
d and the organization
generally
. As to diversity within the Board itself, the Board is considering its overall size and
composition to look for opportunities to increase the female r
epresentation in the Boar
d. OCI’
s
target is to improve gender diversity and to maintain diversity within the Boar
d taking into
account nationality
, age, gender and background of education and professional experience of
the Directors. Despite the male-dominated natur
e of the industries OCI is active in, in case of a
vacancy in the Board, OCI will continue to use all ef
forts in the coming years to ﬁnd a suitable
female candidate, thereby taking into account the bill on gender diversity that enter
ed into force on
1 January 2022.
Following the launch of the Board Diversity pr
ogram in 2019, we further reinfor
ced our
commitment to fostering an inclusive culture with a diverse workfor
ce, where every person is
recognized, valued, and thrives, by launching a gr
oup-wide Diversity and Inclusion program in
2020. The program aims to ensur
e fairness, equality and diversity in recruiting, compensating,
motivating, retaining, and pr
omoting employees. We ar
e fortunate to have a diverse global
workforce encompassing 46 nationalities located in ten countries, but we lag in gender diversity
.
Though we operate in traditionally male dominated industries, we are working to impr
ove our
gender diversity in both technical and non-technical roles and at all levels of our organization.
We have set internal benchmarks and targets to improve our r
ecruitment processes, pr
ovide
sponsorship and mentorship opportunities, and develop employee networks that help them
succeed. During the year
, we continued to focus on D&I education and training, with the balance
of our workforce completing the de-biasing training pr
ogram that was launched in 2020. We also
launched a pilot mentoring program – W
omen in Leadership Roles – the learnings from which will
be translated into a groupwide mentoring pr
ogram in the near future.
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Strategy and
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
On a group level, we publicly announced a target to incr
ease female repr
esentation in senior
leadership to 25% by 2025. We also set an internal target of ﬁlling at least 20% of all vacancies
with female candidates. Women as a per
centage of total employees increased to 11.37% in 2021
from 10.51% in 2020, with the ratio of female-to-male hir
es doubling year
-on-year resulting in
30% of group hir
es being women in 2021. Approximately 24% of leadership positions acr
oss the
organization were held by women, indicating we ar
e making excellent progr
ess to achieve our
25% by 2025 target. Going forward, we will continue to focus on female turnover analysis and
initiatives to retain female talent as part of our diversity pr
ogram.
A new performance measure r
elating to diversity and inclusion was added to the long-term
incentive plan of the Executive Directors that will apply fr
om 2021, thereby aligning r
emuneration
more closely to performance of our strategic priorities and long-term inter
ests.
Board involvement
Members of the Board r
egularly visit one or more of OCI’
s plants, headquarters and corporate
ofﬁces to gain gr
eater familiarity with the workforce and senior management and to develop
deeper knowledge of local operations, local customs, operational opportunities and challenges,
and the business in general.
In 2021 due to COVID-19 restricting international travel, the Board virtually visited EBIC/
EFC in Egypt and spoke with EBIC/EFC management. The virtual visit deepened the Board’
s
understanding of the history
, legacy set-up, vision, values, ﬁnancial performance and cost
optimization initiatives, and operational safety performance. Great focus was given to the cultur
e
of health, safety and environment, in line with focus of our Boar
d and senior management. The
products and pr
oduction processes wer
e further explained during the virtual tour of the site.
In May 2021 the HSE&S Committee virtually visited BioMCN in the Netherlands. The HSE&S
Committee met with the new site director and the management team members via video
conference and deepened their understanding of BioMCN’
s process safety journey
. The HSE&S
Committee went on a virtual tour through the plant guided by comments of the management team
members.
The Board interacts with senior management thr
oughout the entire organization on various
occasions and in various settings. The Board is r
egularly informed about relevant topics by OCI’
s
senior leaders and experts during Board and Committee meetings, annual site visits, and also as
part of their ongoing professional education.
In 2021, the Board was trained on the EU decarbonization pathways, socioeconomic implications,
sustainability and sustainability initiatives that reduce OCI’
s environmental impact, grow OCI’
s
green portfolio and innovate mor
e effective ways of r
eaching the world's carbon neutral goals.
As part of the Company's drive to create a cohesive gr
oup culture, OCI established the OneOCI
platform encouraging a dialogue across all locations. The Executive Dir
ectors host townhall
meetings during which the latest group developments and initiatives ar
e elaborated on and include
a Q&A session for all employees. The culture of CARE – collaboration, agility
, resour
cefulness, and
excellence – is also promoted thr
ough the OneOCI platform.
The Board also closely monitor
ed the developments and Company response to COVID-19,
including receiving r
egular updates from the COVID-19 taskfor
ce.
Culture
As a leading global producer and distributor of hydr
ogen-based products, OCI is privileged to
employ the best and brightest around the world. W
e continue to grow rapidly and acknowledge
the importance of strengthening our gr
oup culture to become a cohesive and united global
organization. We launched the OneOCI platform last year to bring together the best of OCI under
one uniﬁed culture, a shar
ed set of values, and a platform to encourage dialogue across our
locations. OneOCI provides a central hub for employee dialogue acr
oss all locations and functions,
facilitates information sharing and collaboration, recognizes employee development by highlighting
personal and professional achievements, and cr
eates opportunities for greater transpar
ency and
alignment on the Group’
s strategy through regular newsletters and townhalls led by the Executive
Directors. The OneOCI cultur
e is furthermore supported by the organizational r
e-design of certain
key staff functions such as Manufacturing, Commer
cial and HR. Where possible we build centers
of excellence, without losing sight of our ﬂexibility and agile nature. W
e are also working on further
strengthening the pr
oject organization and focus on best-in-class project management and
execution.
Our values promote our cultur
e of CARE – Collaboration, Agility
, Resourcefulness, Excellence –
through which we strive to contribute positively to our world, our communities, our customers,
and each other at OCI. OCI’
s cultural values of CARE are incorporated throughout the organization
and employees are encouraged to uphold these values both at work and in their day-to-day
lives. The Board and Executive Dir
ectors focus on advertising these values, including through
the townhall meetings, in the performance reviews of employees and thr
ough their day-to-day
management of the company
. These values ﬁt within OCI as a leading global producer and
distributor of hydrogen-based pr
oducts providing low carbon fertilizers, fuels, and feedstock to
agricultural, transportation, and industrial customers around the world.
BOARD REPORT
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Annual Report 2021
105
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OCI’
s culture is underpinned by its Code of Conduct, which requires all employees to act with
honesty and integrity to foster a business environment that pr
otects the rights and interests of
all stakeholders. Our Code of Conduct also highlights our zero-tolerance policy for any form of
harassment or bullying. Employees are r
equired to tr
eat all individuals with respect, tolerance,
dignity
, and without prejudice to create a mutually r
espectful, collaborative, and positive working
environment. W
e do our utmost to provide employees with a safe envir
onment to address
any issue directly with management, and thr
ough our Whistleblower Policy we also provide a
conﬁdential procedur
e to raise any concerns, instances of discrimination, and other breaches
to our Code of Conduct. Employees can report a concern to their immediate or next higher
level manager and if the reporting employee is uncomfortable or unable to r
eport to his or her
immediate or the next higher
-level manager
, the reporting employee may dir
ectly report to the
person that is appointed to manage whistleblower cases conﬁdentially or use the independent
outside Helpline, Ethicspoint which can be reached 24/7 on anonymous basis. Reporting
employees in The Netherlands can also make a report to an external body
, The House for
Whistleblowers (Huis voor Klokkenluiders).
Compliance
We strive to conduct all business activities r
esponsibly
, transparently
, and with integrity and
respect towar
ds all stakeholders. These values underpin everything we do and form the
framework which deﬁnes the day-to-day attitudes and behaviours of our employees.
T
o make those values clear and provide ground rules for how we do business, our Compliance
Framework consists of policies that describe in speciﬁc terms what we stand for as a company
and the conduct requir
ed in the workplace, in how we deal with business partners, serve our
customers, and the broader r
esponsibilities we have to the communities in which we work
and live.
The Compliance Framework also sets out rules on important topics such as the prohibition of
bribery
, dealing with conﬁdential information and conﬂicts of interest, competition law
, third-party
due diligence, human rights and safe working conditions, the importance of accurate recor
d
keeping and reporting, and explains the possibility of disciplinary measur
es when in breach of
the framework.
All employees are trained on the key principles and applications of the Compliance Framework
through a gr
oup-wide e-learning platform and can raise any concer
ns and breaches thr
ough a
safe and conﬁdential whistleblowing and incident reporting pr
ocedure. An anonymous r
eporting
procedur
e is also available, through which employees can r
eport to a whistleblower hotline hosted
by a third-party hotline pr
ovider
. All reports are handled with the utmost car
e and conﬁdentiality
,
regar
dless of if reported internally or via the anonymous reporting hotline.
Although ethics and compliance are per
ceived as a joint responsibility of the Executive Dir
ectors,
the Chief Legal and Human Capital Ofﬁcer (CLHCO) has ethics and compliance included in
her portfolio. The Compliance Director
, in close collaboration with the CLHCO and the rest
of the Executive Directors, implements our gr
oup Compliance Program and ensur
es that our
Compliance Framework remains in line with applicable r
egulations and is properly applied. The
Integrity Committee, comprising of the CLHCO, the CFO and the Compliance Director
, handles
incidents of a severe natur
e.
We r
efer to the Compliance section on page 92 for further details on OCI’
s Compliance
Framework, including compliance with the Code of Conduct and the Business Partner Code
of Conduct. OCI places great value on its Compliance Framework, which is fundamental to its
reputation and continued success.
Human rights
OCI has a Human Rights Policy though which OCI is committed to respecting and pr
omoting
human rights and safe working conditions. We conduct all business activities r
esponsibly
,
efﬁciently
, transparently
, and with integrity and respect towar
ds all stakeholders, as codiﬁed in our
Code of Conduct as part of our OCI NV Compliance Framework. This expectation extends to
our suppliers and business partners, who are r
equired to conduct their business accor
ding to the
principles in our Business Partner Code of Conduct.
Our Human Rights Policy aims to ensure the salient human rights issues potentially arising thr
ough
our supply chain are tackled ef
fectively and contain the following human rights principles: no
forced and child labor
, non-discrimination and harassment, equal employment and development,
safe and healthy workplace, fair compensation and living wage and freedom of association and
collective bargaining. These human right principles are informed by global human rights standar
ds,
including the International Bill of Human Rights, the Inter
national Labor Organization’
s Declaration
on Fundamental Principles and Rights at Work, the United Nations Guiding Principle’
s on Business
and Human Rights, and the United Nations International Children's Emergency Fund (UNICEF).
For more information on how OCI r
espects human rights, refer
ence is made to page 73 and the
Human Rights policy on the website.
BOARD REPORT
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Annual Report 2021
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value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
IPO Fertiglobe
On 27 October 2021 Fertiglobe, the partnership between OCI and ADNOC, listed on the Abu
Dhabi Securities Exchange (ADX), becoming the ﬁrst Abu Dhabi Global Market free zone company
to be traded on an onshore stock exchange in the UAE and the thir
d largest ever listing on the
ADX.
OCI continued to hold a majority of the shares in Fertiglobe and as such OCI continues to
consolidate the results and exer
cise control of Fertiglobe.
OCI ensured that the appr
opriate governance and in-control framework was established to allow
it to maintain the right levels of control as a majority shar
eholder following the IPO. This reﬂected in
the Board- and committees composition, the applicable governance (including a clear framework
on related party transactions and conﬂicts of inter
est), the Internal Audit, Inter
nal Control and
Risk Management set-up and the ﬁnancial reporting and disclosur
e policies and procedur
es in
place. The disclosure policies and pr
ocedures pr
ovide guidance on the two regulatory frameworks
and are helpful in ensuring compliance with two dif
ferent applicable r
egulatory regimes post the
Fertiglobe IPO.
The Board of Dir
ectors of Fertiglobe (Fertiglobe Board) is r
esponsible for the management and
strategy
. They supervise the interests of stakeholders, the creation of a cultur
e aimed at long-term
value creation, the internal audit function, and the effectiveness of internal risk management and
control systems.
As per the IPO date, the Fertiglobe Board consists of 11 Dir
ectors of which two Executive
Directors and nine Non-Executive Dir
ectors, seven of whom are independent Dir
ectors. OCI
has the right to appoint 6 Directors. His Excellency Dr
. Sultan Ahmed Al Jaber
, Group CEO and
managing director of ADNOC, is the Chairperson of the Fertiglobe Boar
d, Mr
. Nassef Sawiris
(OCI’
s Executive Chair) is the Executive V
ice-Chairperson and OCI CEO Ahmed El-Hoshy is also
the CEO of Fertiglobe. The Board of Fertiglobe has established 3 committees, an Executive
Committee, and Audit Committee and a Nomination and Remuneration Committee and each
committee has its own set of committee terms of refer
ence.
The Fertiglobe Board is committed to standar
ds of corporate governance that are in line with
international best practice. Fertiglobe complies with the corporate gover
nance requir
ements of the
ADX listing rules and of governing body the Emirates Securities & Commodities Authority (SCA),
the ADGM regime and Fertiglobe articles of association and r
eserved matters.
The Fertiglobe Board has also adopted a governance and board composition policy which
includes various principles applicable to the composition of the Fertiglobe Board, including that
there must be at least one female dir
ector
. Fertiglobe’
s articles of association further require that
the Fertiglobe Board meet at least four times each year
.
The Fertiglobe executive management team, composed of the CEO, COO and CFO, is
responsible for the day-to-day management of Fertiglobe’
s operations. Fertiglobe’
s senior
management team has extensive experience in the fertilizers, chemicals, and petrochemical
industries. The team has a track recor
d of boosting revenues and pr
oﬁtability and implementing
initiatives to improve operating ef
ﬁciency and proﬁt margins.
Fertiglobe’
s compliance framework is comprised of policies and principles that outline in speciﬁc
terms what Fertiglobe stands for as a company and the conduct requir
ed in the workplace, in how
Fertiglobe deals with business partners, serves its customers, and the broader r
esponsibilities
Fertiglobe has to the communities in which we work and live (such as the Fertiglobe Code of
Conduct).
Assessment and evaluation of the Board
An evaluation of the Board is performed every year by an external advisor
. OCI engaged the
services of Lintstock to assist with the 2021 review of the Boar
d’
s performance. Lintstock is
a corporate governance advisory ﬁrm that specializes in facilitating Board reviews and has no
connection with OCI.
The ﬁrst stage of the review involved Lintstock engaging with the Co-Chair and Company
Secretary to set the context for the evaluation and to tailor the survey content to the speciﬁc
circumstances of OCI. All Boar
d members were then invited to complete an online survey
addressing the performance of the Boar
d and its Committees. The anonymity of the respondents
was ensured thr
oughout the process in or
der to promote an open exchange of views.
The exercise was weighted to ensur
e that core ar
eas of Board and Committee performance wer
e
addressed, with a particular focus on the following topics:
•
The evolvement of the overall Board proﬁle and composition of the Committees over the
coming years to match OCI’
s strategic goals, taking into account Board rotation and diversity
law;
•
The development, clarity and achievability of OCI’
s strategic plan and the integration of ESG
into OCI’
s business strategy and operations;
•
The oversight of various aspects of risk, including the risks associated with COVID-19;
•
The effectiveness of OCI’
s approach to HSE and monitoring compliance with relevant
regulations and legislation;
•
The culture and behaviour throughout OCI including diversity and inclusion and the level of
employee engagement;
•
The auditor tender process;
•
The effectiveness of Board meetings and site visit held r
emotely using video-conferencing
technology;
•
The effectiveness of monitoring opportunities and treats to the business of new technologies
and digitalization and OCI’
s strengths and weaknesses relative to competitors;
BOARD REPORT
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Annual Report 2021
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
•
The effectiveness of monitoring developments in the market environment, and any likely impacts
on the business;
•
The oversight of the process of listing of Fertiglobe;
•
The organizational structure of OCI at senior levels, and the Board’
s oversight of the succession
plans for the Board and the layer of management below the Boar
d to manage and develop
talent;
•
The understanding amongst Board members of the views and requir
ements of investors,
customers, suppliers and employees, and the development of the mechanisms by which the
Board engages with key stakeholder gr
oups;
•
The quality of information and support available to the Board, including speciﬁc areas in which
Directors would beneﬁt fr
om greater training or support in futur
e; and
•
The individual performance and personal development of each of the Board members.
The overall feedback from the evaluation in 2021 was that the Boar
d members feel the Board
generally functions well. The above topics have the constant attention of the Board thr
oughout
the year
, with a particular focus on strategy
, operational excellence, sustainability
, culture and
behaviour
, Board composition and succession planning.
Shareholders’ rights and meetings
OCI’
s shareholders exercise their rights through the GM. An AGM is held no later than six months
after the end of OCI’
s ﬁnancial year (which equals a calendar year). The 2021 AGM was held on 25
May 2021.
The GM has the authority to discuss and decide on inter alia the following main items:
•
The adoption of the annual accounts;
•
The release of the Directors fr
om liability for their respective duties, insofar as the exer
cise of
such duties is reﬂected in the annual accounts and/or otherwise disclosed to the GM prior to
the adoption of the annual accounts;
•
The appointment of the external auditor;
•
The (re)appointment, dismissal and suspension of the Dir
ectors;
•
Amendments to the remuneration policy applicable to the Boar
d;
•
An advisory vote regar
ding the remuneration r
eport applicable to the Board;
•
The issue of shares and the restriction or exclusion of pr
e-emptive rights of shareholders (both
insofar not delegated to the Board);
•
The reduction of shar
e capital; and
•
The approval of those decisions of the Board that entail a signiﬁcant change in the identity or
character of OCI or its business.
The agenda for each GM is published on OCI’
s website in advance of the GM. After a GM the
minutes are made available on OCI’
s website as well.
Shareholders r
epresenting mor
e than 3% of the issued share capital may submit pr
oposals for the
agenda, if substantiated and submitted in writing at least 60 calendar days in advance of the GM.
Additional EGMs may be convened at any time by the Board or by one or mor
e shareholders
repr
esenting more than 10% of the issued shar
e capital. During 2021, no EGM was held.
V
otes representing shar
es can usually be cast at the GM either personally or by proxy
. No
restrictions ar
e imposed on these proxies, which can be granted electr
onically or in writing to OCI
or independent third parties. OCI’
s shareholders may cast one vote for each share. All r
esolutions
adopted by the GM are passed by an absolute majority of the votes cast, unless Dutch law or
OCI’
s articles of association prescribe a larger majority
.
In 2021, the AGM was held virtually per the T
emporary Dutch COVID-19 Justice and Security
Act (Tijdelijke wet COVID-19 Justitie en V
eiligheid). Shareholders wer
e invited to follow the AGM
remotely thr
ough a live webcast. Prior to the GM, shareholders wer
e invited to vote via a proxy
and submit written questions about the items on the agenda which were answer
ed during the
GM.
The following proposals wer
e voted on during the 2021 GM’
s:
•
The adoption of the Annual Accounts 2020 and allocation of proﬁts;
•
The discharge of the Executive Directors and Non-Executive Dir
ectors from liability;
•
The approval of the fee for the Chair of the HSE&SC;
•
T
o advise on the 2020 Remuneration Report;
•
The extension of the designation of the Board as the authorised body to issue shares in the
share capital of OCI, to r
estrict or exclude pre-emptive rights upon the issuance of shar
es and
to repur
chase shares in the shar
e capital of OCI; and
•
The appointment of KPMG Accountants N.V
. as auditor charged with the auditing of the annual
accounts for the ﬁnancial year 2021.
External auditor
OCI’
s exter
nal auditor is appointed by the AGM. The Audit Committee evaluates the functioning
of the external auditor and recommends to the Board the external auditor to be proposed for (r
e)
appointment by the AGM. At the 2021 AGM, KPMG Accountants N.V
. was appointed as external
auditor for OCI for that same year
.
The external auditor attends all Audit Committee meetings. During these meetings, the exter
nal
auditor discusses the outcomes of the audit procedur
es. Key audit topics are discussed. The
external auditor receives the ﬁnancial information per quarter and can comment on and respond
to such information, which is also included in OCI’
s quarterly condensed ﬁnancial statements.
BOARD REPORT
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Annual Report 2021
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value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
The external auditor is also present at the AGM and may be questioned on its statement of the
fairness of the ﬁnancial statements.
As part of the mandatory audit ﬁrm rotation r
equirements in the Netherlands, KPMG can continue
as external auditor of OCI through the ﬁnancial year 2022 audit. In 2021, OCI completed an audit
tender process to r
eplace KPMG as external auditor as from the start of ﬁnancial year 2023. The
selected auditor will be put up for appointment during the upcoming AGM.
Independence of the auditor is a continued area of focus. In accor
dance with OCI’
s external audit
independence policy
, the Audit Committee reviews the independence of the auditor annually
.
Internal auditor
The internal Audit & Risk team assists the Audit Committee, Executive Directors, and local
management by facilitating the identiﬁcation of risks and the promotion or risk awar
eness and
ownership across our organization. The internal Audit & Risk department reports the r
esults
from internal audits, risk assessments from operating companies and gr
oup consolidated risk
dashboards to the Audit Committee quarterly and performs periodic independent internal audits to
review any speciﬁc issues at the subsidiary and holding company levels. Mor
e information on risk
management can be found in the risk management and compliance section on pages 82-93.
Decree Article 10 EU T
akeover Directive
OCI conﬁrms that it has no anti-takeover instruments, i.e.: of measures that ar
e primarily intended
to block future hostile public of
fers for its shares. Although the members of the Sawiris family have
not entered into any formal shar
eholders agreement, they have historically coor
dinated their voting
on the OCI shares and should ther
efore be r
egarded as parties acting in concert (personen die in
onderling overleg handelen) as deﬁned in section 1:1 of the Dutch Financial Supervision Act (Wet
op het ﬁnancieel toezicht). Their collective voting rights of 53.12% as at 31 December 2021 act as
an implicit anti-takeover element.
Compliance with the Code
OCI is compliant with the Code.
Potential conﬂicts of interest
Potential or actual conﬂicts of interest ar
e governed by OCI’
s articles of association and by-laws
which regulations ar
e in line with the relevant principles of the Code and Dutch law
. A Director
shall immediately report any conﬂict of inter
est or potential conﬂict of interest that is of material
signiﬁcance to the other Directors and may not take part in any discussion or decision-making
that involves a subject or transaction in relation to which he/she has a potential conﬂict of inter
est
with OCI.
During 2021, no transactions occurred in r
espect of which a Director had a conﬂict of inter
est.
Related party transactions
OCI has a Related Party T
ransactions Policy in place, providing adequate protection for the
interests of OCI and its stakeholders which has been pr
epared with due observance of the
requir
ements of Dutch law
, the Code, OCI’
s articles of association and by-laws.
The overview of related party transactions in 2021 is disclosed in the Financial Statements in
note 30.
BOARD REPORT
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OCI N.V
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Annual Report 2021
109
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
REMUNERA
TION REPOR
T
Introduction by the Chair of the Nomination and Remuneration Committee,
On behalf of the Board, I am pleased to pr
esent our 2021 Remuneration Report in which
we comment on OCI’
s performance and the way in which 2021 events have impacted the
remuneration paid to our Executive and Non-Executive Dir
ectors.
During the year
, OCI was able to deliver on its strategy
. The Executive Directors ef
fectively
navigated the Company through multiple challenges while maintaining focus on strategic
opportunities, resulting in the initial public of
fering on the Abu Dhabi Securities Exchange of
Fertiglobe and the strategic alliance with investors ADQ and Alpha Dhabi Holding taking a 15%
stake in OCI’
s methanol business. In addition, the Executive Directors continued to lead OCI’
s
progr
ess on its ESG roadmap, as evidenced by the pr
ojects and partnerships to develop blue and
green capabilities acr
oss the group’
s portfolio.
The Nomination and Remuneration Committee is satisﬁed by the strong ﬁnancial performance
generating an impressive incr
ease of free cash ﬂow r
esulting in an unparalleled reduction of the
Company’
s net debt.
Moreover
, the Nomination and Remuneration Committee is appreciative of the company's
strategic change in recent years as a r
esult of strong management focus on operational and
commercial excellence and the futur
e strategic direction with OCI being best positioned amongst
its peers to capitalize on the hydrogen opportunity
. During the year
, OCI’
s ESG ratings were
double upgraded by Sustainalytics and MSCI to Medium and BBB, respectively
, to be amongst
the best performers in the wider nitrogen sector
. On top of the strong performance in 2021
the Executive Directors successfully managed the execution of the IPO of Fertiglobe and the
strategic Methanol alliance with investors ADQ and Alpha Dhabi Holding. In recognition for this
extraordinary performance, the Nomination and Remuneration Committee pr
oposes to grant
the Executive Director in 2022, subject to appr
oval by our shareholders at the Annual General
Meeting, an Extraordinary Shar
e Awar
d. The proposed structur
e of this Extraordinary Share A
ward
is detailed in the last section of the Remuneration Report - 'Implementation of our Remuneration
Policy in 2022'.
This Remuneration Report explains the application of the 2020 Remuneration Policy
(Remuneration Policy) and is prepar
ed in the spirit of the draft, non-binding guidelines of the
European Commission for disclosur
e. Mindful of the advisory vote on our 2020 Remuneration
Report, which was approved by 96.77% of the votes in favour
, this Remuneration Report is
prepar
ed in a similar format.
Our strategy integrates our ﬁnancial, operational, commercial, and sustainability objectives to
create long-term, sustainable value for all our stakeholders as described thr
oughout this annual
report. This focus on sustainable value cr
eation is reinfor
ced by our Remuneration Policy
, wherein
both our short-term and long-term incentives include not just ﬁnancial targets, but environmental
and social goals as well. These targets are designed to be inter
dependent to ensure equitable
focus on each of our strategic priorities, which include operational excellence, a commitment
to health and safety
, business optimization, a global commercial strategy
, sustainable solutions,
decarbonization, and maximizing free cash ﬂow
.
Accordingly
, we believe our Remuneration Policy provides good alignment between the
remuneration of the Executive Dir
ectors and shareholders’ long-term inter
ests. The Executive
Directors ar
e incentivized through both short-term and long-term compensation schemes that
align to the group’
s long-term value creation as well as short- and medium-term Company targets,
individual objectives and focus areas, and strategic non-ﬁnancial metrics that ar
e fundamental to
the group’
s long-term success.
The Remuneration Report will be subject to an advisory vote at our 2022 AGM.
In 2021, the rewar
d practice and particularly the sustainability targets in the incentive schemes
of the Executive Directors have been discussed with various stakeholders, starting with the ESG
investor day in March to the engagement with banks and partners on gr
een ammonia and the
hydrogen strategy ar
ound the IPO of Fertiglobe. We actively participated in r
esearch on the topic
of Sustainability embedding practices in Dutch listed companies and the International Fertilizer
Association (IF
A) as endorsed by the appointment of our CEO as IF
A Board Member
. Moreover
,
we maintain an open dialogue across the organization thr
ough our uniﬁed culture, values and
communications platform One OCI that promotes transpar
ency
, alignment and feedback which
we can use in developing our vision for long-term value creation whilst balancing the inter
ests of all
stakeholders. Based on on-going conversations with our shareholders and the positive feedback
from other stakeholders on the performance of our Executive Dir
ectors and the Company’
s results,
I am conﬁdent the Remuneration Policy supports OCI’
s strategic and operational objectives, also
on the long-term.
On behalf of the Nomination and Remuneration Committee,
Sipko Schat
Chair
OCI N.V
.
Annual Report 2021
110
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
This section of the Remuneration Report details how the Remuneration Policy was applied
in 2021 for the Non-Executive Directors.
Non-Executive Directors
The remuneration of the Non-Executive Dir
ectors consists of ﬁxed fees for their Board
membership and for services on OCI’
s Committees. T
o ensure their independence, the
Non-Executive Directors ar
e not entitled to any variable remuneration linked to the performance
of the Company
. The remuneration is set at the level requir
ed to attract qualiﬁed Non-Executive
Directors with the (diversity in) personal skills, competencies and international experience
requir
ed to oversee the Company’
s strategy and contribute to its performance and the long-term
value creation.
The Non-Executive Directors do not r
eceive any beneﬁts. They are r
eimbursed for OCI-related
expenses for travel, accommodation and repr
esentation.
The table below summarizes the details of the individual remuneration of the Non-Executive
Directors.
Non-Executive
Director
Y
ear
Annual
Board fee
Audit
Committee
Nomination and
Remuneration
Committee
Health, Safety
,
Environment and
Sustainability
Committee
Extraordinary
Items
T
otal
Proportion
of Fixed
Remuneration
M. Bennett
2021
300,000
-
7,500
-
-
307,500
100%
2020
300,000
-
7,500
-
-
307,500
100%
S. Schat
2021
150,000
20,000
20,000
-
-
190,000
100%
2020
150,000
20,000
20,000
-
-
190,000
100%
A. Montijn-
Groenewoud
2021
150,000
-
7,500
15,833
1
-
173,333
100%
2020
150,000
-
7,500
10,000
-
167,500
100%
R.J. van
de Kraats
2021
150,000
25,000
7,500
-
-
182,500
100%
2020
150,000
25,000
7,500
-
-
182,500
100%
G.
Heckman
2021
150,000
-
-
7,500
-
157,500
100%
2020
150,000
-
-
7,500
-
157,500
100%
J. Guiraud
2021
150,000
20,000
7,500
-
-
177,500
100%
2020
150,000
20,000
7,500
-
-
177,500
100%
D. W
elch
2021
150,000
-
-
7,500
73,859
2
231,359
100%
2020
150,000
-
-
7,500
90,000
3
247,500
100%
D. Fraser
2021
150,000
20,000
-
-
-
170,000
100%
2020
150,000
20,000
-
-
-
170,000
100%
H. van de
Kerkhof
4
2021
150,000
-
-
7,500
-
157,500
100%
2020
29,348
-
-
1,467
-
30,815
100%
J. T
er Wisch
5
2021
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2020
69,643
9,286
3,482
-
-
82,411
100%
1
At the 2021 AGM, the annual fee for the Chair of the Health, Safety
, Environment and Sustainability Committee is increased
from US$10,000 to US$20,000 because of the incr
ease of the responsibility of this Committee with Sustainability matters.
2
The amount reported as extraor
dinary item for Mr Welch in 2021 is the fee for services on the Boar
d of Fertiglobe Holding
Ltd for the period 1 January - 26 October 2021
3
The amount reported as extraor
dinary item for Mr Welch in 2020 is the fee for services on the Boar
d of Fertiglobe Holding
Ltd for the period 1 January - 31 December 2020
4
Appointed on 20 October 2020
5
Appointment ended on 17 June 2020
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
This section of the Remuneration Report explains how the Remuneration Policy was applied in
2021 for the Executive Directors.
Executive Directors
The Executive Directors r
eferred to in this Remuneration Report ar
e the Executive Chair
, CEO,
CFO and CLHCO. The details of their appointment terms are as follows:
Name
Title
Date of appointment
Current time
commitment
N. Sawiris
Executive Chair
16 January 2013
Full time
A. El-Hoshy
CEO
17 June 2020
Full time
H. Badrawi
CFO
1 October 2017
Full time
M. de V
ries
CLHCO
1 June 2019
80% contract
Summary of pay in the year
The details of the individual remuneration of the Executive Dir
ectors and its costs to the Company
are as follows:
Fixed remuneration
V
ariable remuneration
Proportion of
ﬁxed and variable
remuneration
Executive
Director
Y
ear
Annual Base
Salary incl.
25% beneﬁts
allowance
1
Additional
base salary
payment
Annual bonus
Long-term
Incentives
cost-to-
company
2
T
otal
Remuneration
Fixed
V
ariable
N. Sawiris
Executive
Chair
2021
1,000,000
n/a
3
2,086,600
3,086,600
32%
68%
2020
1,583,334
n/a
4
2,393,191
3,976,525
40%
60%
A. El-Hoshy
CEO
2021
1,250,000
57,692
5
1,714,688
1,533,043
4,555,423
29%
71%
2020
1,091,667
921,032
1,420,277
3,432,976
6
32%
68%
H. Badrawi
CFO
2021
1,150,000
1,262,010
1,385,030
3,797,040
30%
70%
2020
1,150,000
878,715
1,193,956
3,222,671
36%
64%
M. de V
ries
CLHCO
2021
560,000
7
614,544
509,197
1,683,741
33%
67%
2020
526,667
7
402,426
356,049
1,285,142
41%
59%
1
These ﬁgures exclude employer’
s social security payments (impact $1.0 mio).
2
The amounts mentioned in this column are based on accounting standar
ds (IFRS).
3
As Executive Chair
, Mr Sawiris is not entitled to an annual bonus.
4
Mr Sawiris served as CEO until 1 August 2020. He requested the Nomination and Remuneration Committee to waive his
annual bonus entitlement.
5
Following the listing of Fertiglobe per 27 October 2021, Mr El-Hoshy receives an additional base salary payment for the
period he will serve as CEO of Fertiglobe in addition to his role as CEO of OCI.
6
Though the CEO (former COO) was appointed to the Board on 17 June 2020, with ef
fective date 1 August 2020 in his role
as CEO, the remuneration is r
eported as if he was an Executive Director for the full year 2020.
7
Based on 80% contract.
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Corporate
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Business
performance
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and compliance
Financial
statements
Other
information
Annual base salary (including 25% beneﬁts allowance)
Salary is ﬁxed cash compensation which enables the recruitment and r
etention of individuals of
the caliber requir
ed to drive business performance and execute OCI group’
s strategy
.
Salaries are set in line with individual performance and contribution to Company goals with
refer
ence to external market data.
The Executive Directors’ base salaries include a ﬁxed cash allowance of 25% of the total which is
designed to compensate for the personal provision of key beneﬁts such as pension, car
, life and
disability insurance and other key beneﬁts. OCI does not provide for a pension fund nor contribute
to a pension plan for its Executive Directors.
The Executive Directors do not r
eceive housing allowances or other expatriate-style beneﬁts. They
are r
eimbursed for OCI-related business expenses. In 2021 no extra-or
dinary items or one-off
payments were paid.
Annual bonus
The annual bonus plan supports our strategic priorities in both the short and long term, with
challenging ﬁnancial and non-ﬁnancial targets. The Executive Chair is not entitled to an annual
bonus. For the CEO the on-target annual bonus opportunity is 75% of annual base salary
. For the
other Executive Directors the on-target opportunity is 60% of annual base salary
. The maximum
opportunity is 200% of target (i.e. 150% of annual base salary for the CEO and 120% of annual
base salary for the other Executive Directors).
The structure can be summarized as follows:
For 2021, the performance measures for the annual bonus can be summarized as follows:
2021 performance
2021 Bonus Pay-out
Executive
Director
Performance Measure and
weighting
T
arget
achievement
%
Bonus pay-
out as % of
base salary
Base salary
in USD
2021 Bonus
outcome in
USD
A. El-Hoshy
Cash ﬂow (40%)
200%
60%
Sales volume (20%)
200%
30%
1
st
Strategic and non-ﬁnancial
(12.5%)
200%
18,75%
2
nd
Strategic and non-ﬁnancial
(12.5%)
200%
18.75%
HSE (15%)
86%
9.675%
T
otal
137.175%
1,250,000
1,714,688
H. Badrawi
Cash ﬂow (40%)
200%
48%
Sales volume (20%)
200%
24%
1
st
Strategic and non-ﬁnancial
(12.5%)
200%
15%
2
nd
Strategic and non-ﬁnancial
(12.5%)
200%
15%
HSE (15%)
86%
7.74%
T
otal
109.74%
1,150,000
1,262,010
M. de V
ries
Cash ﬂow (40%)
200%
48%
Sales volume (20%)
200%
24%
1
st
Strategic and non-ﬁnancial
(12.5%)
200%
15%
2
nd
Strategic and non-ﬁnancial
(12.5%)
200%
15%
HSE (15%)
86%
7,74%
T
otal
109.74%
560,000
614,544
+
60% corporate ﬁnancial
performance measures
Cash Flow
Sales V
olumes
25% strategic
and non-ﬁnancial
performance
measures
15% health, safety
and environmental
performance
measures
Annual
Bonus
+
=
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113
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value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
The following table summarizes performance against the 2021 strategic and non-ﬁnancial performance measures. The combined weight of these performance measur
es is 25% of the total annual
bonus. The strategic and non-ﬁnancial performance measures link dir
ectly to the strategic priorities of operational excellence, business optimization, global commercial strategy and sustainable
solutions thus contributing to maximizing cash ﬂow
. Based on the assessment of all targets by the Nomination and Remuneration Committee as approved by the Board, the target achievement is
determined as per the table below
.
Executive
Director
Strategic and personal performance measures and weighting
2021 performance
Outcome
A. El-Hoshy
•
Strategic target (12.5%): Focusing on successful execution of the potential strategic opportunities
During the year
, OCI was able to deliver on its strategy despite the continued global
circumstances due to the COVID-19 pandemic and the exceptionally high gas prices
in Europe. The Executive Dir
ectors effectively navigated the company through these
challenges, reshaped the organization and hir
ed many senior managers to lead the
global functions. They also kept focus on strategic opportunities, resulting in Fertiglobe’
s
IPO on the ADX and the strategic alliance with ADQ and Alpha Dhabi Holding for the
Methanol Group. This all r
esulted in a large dividend recap ahead of Fertiglobe’
s IPO and
a restructur
ed commercial team with more focus on better r
eporting, with strong r
esults
achieved in ammonia trading. In addition, the targets for ESG and strategy were set and
communicated to internal and exter
nal stakeholders, followed by strong performance on
the decarbonization ambitions, including multiple projects and partnerships in pr
ogress
to develop our blue and green pr
oduction capacity
. Moreover
, the team realized large
natural gas gains from the hedging pr
ogram and the group navigation on the volatility in
February
, creating signiﬁcant value net of pr
oduction losses.
200%
•
Developing Corporate Excellence and Improvement Plans via Changes to Organizational Design (12.5%)
200%
H. Badrawi
•
Strategic target (12.5%): Focusing on successful execution of the potential strategic opportunities
200%
•
IT and Cybersecurity (6,25%): Ensure a coherent and centrally managed IT organization at the Group
level that is able to effectively support the business r
equirements
200%
•
T
rade and Overall Risk Management (6.25%)
200%
M. de V
ries
•
Organizational design, Performance management and Leadership development (12.5%): Enabling the
development of OCI’
s Operating model by changing organizational design in combination with direction
clarity facilitating a high performing culture
200%
•
Legal and Compliance (12.5%): Optimization of legal dispute management and enhance ethics and
compliance awareness to maintain the highest standar
ds across the complete workforce
200%
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
The following table summarizes performance against the 2021 HSE performance measures. The
combined weight of the HSE performance measures is 15%. The 2021 HSE-performance as
assessed by the HSE&S Committee and approved by the Boar
d is summarized in the table below
.
Please refer to pages 75-77 for mor
e information on OCI’
s HSE performance.
HSE Performance Measure
2021 target
2021
Performance
outcome
Performance
score
Lost Time Injury Rate (L
TIR)
0.10
0.20
0%
T
otal Recordable Incidents Rate (TRIR)
0.36
0.35
25%
Process Safety Incidents Rate (PSIR)
0.70
0.55
40%
Environmental Stewar
dship / EIR
0.40
0.27
20%
Safety Culture and A
wareness
qualitative target focussing on
a wide range of initiatives to
promote a str
ong safety culture
13.75%
50% deduction on the score of the thr
ee occupational safety elements in view
of the fatal injury of a contractor at the Fertil Site in Ruwais in April 2021
-/- 13.125%
Full year corporate HSE score
85.625%
Long-term variable remuneration
Bonus / Share Matching Plan (legacy arrangement)
The Bonus / Share Matching Plan was discontinued ef
fective 1 January 2019. The 2018 Bonus /
Share Matching A
ward was the last A
ward made under this Plan and vested in 2021.
As at 31 December 2021, the Executive Directors had no mor
e Bonus / Share Matching rights
under this Plan.
Restricted stock unit plan (legacy arrangement)
As at 31 December 2021, the current CEO and CLHCO had been granted Restricted Stock Units
from pr
evious years, as follows:
Executive
Director
Awar
d
cycle
Outstanding
year
-end 2021
V
alue at grant
date in USD
V
esting date
End of
lock-up period
A. El-Hoshy
2019
1
19,472
354,900
1/3
rd
: 15-02-2022
07-02-2024
2/3
rd
: 07-02-2023
07-02-2025
2018
1
18,231
390,000
2/3
rd
: 18-04-2022
18-04-2024
M. de V
ries
2018
1
9,509
203,423
2/3
rd
: 18-04-2022
18-04-2024
1
These repr
esent awards granted before the appointment to the Boar
d.
V
esting of the Restricted Stock Units is contingent on continued employment with OCI.
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115
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Performance Share Units Plan
As at 31 December 2021, the Executive Directors have been granted 777,899 Performance Shar
e Units at target. The table below summarizes the Performance Share Unit awar
ds
outstanding at year
-end 2020 and year
-end 2021 with the details on the performance measures to be met for vesting.
Awar
d
cycle
Executive
Director
Outstanding
year
-end 2020
Granted
conditional in
2021
Outstanding
year
-end 2021
V
alue at grant
date in USD
1
Performance conditions
V
esting date
End of
lock-up
period
2018
N. Sawiris
84,873
-
expired
2,181,674
The vesting of the 2018 PSU awards is solely based on the r
elative TSR ranking against
the selected peer group of 11 international fertilizer/chemicals/gas companies (Celanese,
CF Industries, DSM, Intrepid Potash, Lanxess, Methanex, Mosaic, Nutrien (after merger of
Agrium and Potash Corporation), Solvay
, Westlake Chemical, Y
ara International)
25-02-2021
n/a
2
A. El-Hoshy
3
41,376
-
expired
1,063,577
Level of
performance
Threshold
T
arget
Maximum
25-02-2021
n/a
2
Peer group
ranking
40
th
percentile
67
th
percentile
90
th
percentile
H. Badrawi
3
40,315
-
expired
1,036,304
% of award
vesting
25%
100%
150%
25-02-2021
n/a
2
The percentage of vesting for peer gr
oup ranking between threshold, target and maximum is
interpolated on a straight-line basis.
2019
N. Sawiris
116,002
-
116,002
2,500,000
Same as 2018
15-02-2022
07-02-2024
A. El-Hoshy
3
47,855
-
47,855
1,031,340
15-02-2022
07-02-2024
H. Badrawi
3
66,701
-
66,701
1,437,500
15-02-2022
07-02-2024
2020
N. Sawiris
135,354
-
135,354
2,500,000
The vesting of the 2020 PSU awards is solely based on the r
elative TSR ranking against
the selected peer group of 9 international fertilizer/ chemicals/gas companies: Celanese,
CF Industries*, Lanxess, Methanex*, Mosaic*, Nutrien*, Solvay
, Westlake Chemical, Y
ara
International* (* denotes companies with a double weighting).
The percentage of vesting for peer gr
oup ranking is the same as for the 2018 and 2019
Awar
ds.
07-02-2023
07-02-2025
A. El-Hoshy
3
71,061
-
71,061
1,312,500
07-02-2023
07-02-2025
H. Badrawi
3
77,829
-
77,829
1,437,500
07-02-2023
07-02-2025
M. de V
ries
32,485
-
32,485
600,000
07-02-2023
07-02-2025
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Corporate
governance
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performance
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and compliance
Financial
statements
Other
information
Performance Share Units Plan
continued
Awar
d
cycle
Executive
Director
Outstanding
year
-end 2020
Granted
conditional in
2021
Outstanding
year
-end 2021
V
alue at grant
date in USD
1
Performance conditions
V
esting date
End of
lock-up
period
N. Sawiris
-
58,235
58,235
1,250,000
Following the amendment of the L
TI Plan per 1 January 2021, the vesting of the 2021 PSU
awards is based on the following performance measur
es:
07-02-2024
07-02-2026
2021
Measure
W
eight
T
arget deﬁnition
A. El-Hoshy
-
72,794
72,794
1,562,500
Relative TSR
60%
Same as for 2020 PSU award
07-02-2024
07-02-2026
Operational
Excellence –
Plant reliability
15%
Improvement of Asset Utilization =
Onstream Ef
ﬁciency x Capacity Efﬁciency
1% improvement per year on 3-year weighted r
eliability
average (based on Maximum Proven Capacity (MPC)
and % economic ownership) of plants.
H. Badrawi
-
66,971
66,971
1,437,500
ESG –
Decarbonization
15%
Development, implementation and execution of
decarbonization plan. The decarbonization target is built
on OCI’
s commitment to conﬁrm the GHG reduction
targets and the development of the strategy to achieve
these targets. The aim is to have a clear decarbonization
plan including the requir
ed organizational structure and
implementation plan in place with projects underway
,
decarbonization project investment criteria deﬁned,
and quick wins achieved. V
esting will be dependent
on the achievement of key milestones. Assessment of
the target achievements will be at the discretion of the
Board.
07-02-2024
07-02-2026
M. de V
ries
-
32,612
32,612
700,000
ESG – Diversity
& Inclusion
10%
Increase per
centage of women’
s representation in
senior positions and initiatives to increase r
epresentation
of minorities.
For the 2021 PSU award, the target is set at an incr
ease
of 5%. This 5% increase will be measur
ed against the
2019 baseline, to result in a r
epresentation of women in
senior positions of 25.5% at the end of the performance
period.
07-02-2024
07-02-2026
1
The grant value is a percentage of the annual base salary
. For the Executive Directors this percentage is currently ﬁxed at 125% as laid down in the Remuneration Policy
.
2
The 2018 PSU awards vested at 0% on 25 February 2021.
3
Granted before appointment as Executive Dir
ector
.
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statements
Other
information
V
esting of 2018 performance shares award
Based on the Performance Share Unit awar
ds of 7 February 2018, conditional shares wer
e
granted to the Executive Chair
, CEO and CFO. The vesting of these shares was conditional
on OCI’
s TSR performance in the three-year performance period ending 7 February 2021 and
continued employment. The vesting of these awards could not take place on the original vesting
date, 7 February 2021 as OCI was in a closed trading period. Hence, the awards vested at
the ﬁrst trading day after the closed trading period, being 25 February 2021. Over the 3-year
performance period OCI’
s TSR performance ranked 10th in the TSR peer group at the 25th
percentile. As a r
esult, the award vested at 0% of target. The Nomination and Remuneration
Committee reviewed this achievement in light of the br
oader ﬁnancial as well as non-ﬁnancial
performance of the Group in the r
espective performance period (7 February 2018 – 7 February
2021) and decided to make no adjustments.
Share ownership guidelines
Subject to the Share Ownership Guidelines for the Executive Dir
ectors of the Board, all Executive
Directors ar
e requir
ed to own a percentage of OCI shar
es of their salary
. These percentages are a
holding of 300% for the CEO and Executive Chair and 150% for the other Executive Directors.
The table below summarizes the number of shares curr
ently held by the Executive Directors
(which have no further performance conditions attached). Their holding as a percentage of salary
is based on a share price of € 23.02 ($26.17) (the closing shar
e price on 31 December 2021).
Executive Directors ar
e expected to build up share ownership over a period of ﬁve years of the
date of appointment. Until this requir
ement has been met, Executive Directors must r
etain at least
50% of any vested shares fr
om the PSU Plan. The Executive Chair and CFO already meet the
share ownership guidelines.
Executive Director
Shares held
Shareholding
1
(% of salary)
N. Sawiris
81,564,223
Majority shareholder in OCI
N.V
.
A. El-Hoshy
80,848
169.29%
H. Badrawi
130,370
296.72%
M. de V
ries
18,258
85.34%
1
Based on a share price of €23.02 on 31 December 2021.
Internal pay ratio
The global internal pay ratio is calculated on the basis of the following parameters:
•
Average total direct compensation of a r
eference gr
oup consisting of all our employees globally
(on an FTE basis).
•
T
otal remuneration of our CEO, including the value of the long-term incentive based on
accounting standards (IFRS).
The global internal pay ratio as measured per 31 December 2021 is 44.50 for the CEO and on
average 32.8 for the Executive Directors. In 2020, these global internal pay ratios were 39.2
for the CEO and on average 32.8 for the Executive Directors. The incr
ease of the internal pay
ratio compared to 2020 is mainly arising fr
om the higher annual bonus, resulting fr
om the strong
ﬁnancial results and the extraor
dinary performance.
The next section of the Remuneration Report explains how the remuneration of the Dir
ectors
develops over time and for the relevant periods it includes r
emuneration details for current and
former Directors.
REMUNERA
TION REPOR
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.
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Development of directors’ r
emuneration, company performance and employee remuneration
The table below sets out the change in remuneration for each individual Dir
ector
, the change in OCI’
s performance and the average change in remuneration for the employees at OCI (excluding
Directors) over the past 5 years.
For the Non-Executive Directors, ther
e is no link to OCI’
s performance to ensure their independence.
We have disclosed TSR performance at OCI as the main metric for company performance sustained over the long-term. This is in line with our Performance Shar
e Unit Plan which has historically only
been measured on r
elative TSR performance.
For the average employee remuneration, we used the same data as for the calculation of the internal pay ratio.
2021
2020
2019
2018
2017
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
Executive Director’
s Remuneration in USD
N. Sawiris,
Executive Chair
3,086,600
-22.4%
3,976,525
-31.9%
5,841,951
-7.1%
6,290,697
+29.9%
4,842,242
-7.7%
A. El-Hoshy
,
CEO
4,555,423
+32.7%
3,432,976
1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
H. Badrawi,
CFO
3,797,040
+17.8%
3,222,671
+25.6%
2,565,471
+7.0%
2,397,640
n/a
351,500
2
n/a
M. de V
ries,
CLHCO
1,683,741
+31.0%
1,285,142
n/a
522,460
3
n/a
n/a
n/a
n/a
n/a
S. Butt,
former CFO
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
5,600,665
+81.8%
Non-Executive Director’
s Remuneration in USD
M. Bennett,
USA, Co-Chair
307,500
-
307,500
+2.1%
301,250
-15.5%
356,575
-16.8%
428,750
-34.4%
S. Schat,
NED, Vice-Chair
190,000
-
190,000
+4.1%
182,500
+14.1%
160,000
-
160,000
-
A. Montijn-Groenewoud,
NED
173,333
+3.5%
167,500
+8.9%
153,750
+11.8%
137,500
-2.7%
141,250
n/a
R.J. van de Kraats,
NED
182,500
-
182,500
+2.8%
177,500
+9.2%
162,500
-
162,500
-
G. Heckman,
USA
157,500
-
157,500
+2.4%
153,750
+9.8%
140,000
-
140,000
+1.4%
J. Guiraud,
FR
177,500
-
177,500
+2.9%
172,500
+9.5%
157,500
-
157,500
-
D. W
elch,
USA
231,359
5
-6.5%
247,500
n/a
92,460
4
n/a
n/a
n/a
n/a
n/a
D. Fraser
,
USA
170,000
-
170,000
n/a
98,710
6
n/a
n/a
n/a
n/a
n/a
H. van de Kerkhof,
GER
157,500
n/a
30,815
7
n/a
n/a
n/a
n/a
n/a
n/a
n/a
J. T
er Wisch,
NED
n/a
n/a
82,411
8
n/a
172,500
+9.5%
157,500
-3.1%
162,500
-3.0%
REMUNERA
TION REPOR
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
2021
2020
2019
2018
2017
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
T
otal Remuneration
(cost-to-company)
%
change
Performance at OCI
TSR performance
96.38
+46.4%
65.82
-16.2%
78.50
+5.3%
74.57
-15.3%
88.05
+26.8%
Average Employee Remuneration and Internal pay ratio’
s
Average employee r
emuneration
global employee refer
ence group
(FTE, T
otal Remuneration Costs)
99,927
7.3%
93,170
-2.2%
95,287
9,10
n/a
n/a
n/a
n/a
n/a
Internal pay ratio –
global employee r
eference gr
oup
44.5
13.5%
39.2
11
n/a
12
33.2
9,10
n/a
n/a
n/a
n/a
n/a
Average employee r
emuneration –
EU+USA employee refer
ence group
(FTE, T
otal Remuneration Costs)
n/a
n/a
n/a
n/a
n/a
n/a
112,040
-0.7%
122,843
n/a
Internal pay ratio –
EU+USA employee
refer
ence group
n/a
n/a
n/a
n/a
n/a
n/a
29.6
+19.4%
24.8
n/a
1
A. El-Hoshy was appointed COO on 25 November 2019 and appointed member of the Board at the 2020 AGM on 17 June 2020; the amount r
epresents his remuneration for the full year 2020.
2
H. Badrawi was appointed CFO on 1 October 2017 and appointed member of the Board at the 2018 AGM; the amount r
epresents his remuneration for the part of 2017 ﬁnancial year he was a Dir
ector
.
3
M. de V
ries was appointed Executive Director and member of the Board per 1 June 2019; the amount is based on her 80% contract and r
epresents her remuneration for the part of 2019 ﬁnancial year she was a Dir
ector
.
4
D. Welch was appointed as Non-Executive Dir
ector per May 2019.
5
D. Welch served on the Boar
d of Fertiglobe plc (previously Fertiglobe Holding Ltd) as a delegate of OCI until 26 October 2021 and as of 27 October 2021 as independent Non-Executive Director
.
6
D. Fraser was appointed as Non-Executive Director per May 2019.
7
H. van de Kerkhof was appointed as Non-Executive Director per October 2020.
8
The appointment of J.T
er W
isch ended in June 2020.
9
Per 2019 we changed the employee refer
ence group for calculating our internal pay ratio from regional to global.
10
The 2019 numbers are r
estated compared to our 2019 Remuneration Report as the numbers reported in 2019 wer
e erroneously based on the consolidated, Q4 compensation for the employees of Fertil instead of the full year
.
11
In line with market practice, the calculation of the internal pay ratio is changed per 2020 to include the value of the long-term incentives (Performance Share Units).
12
Due to the change in calculation methodology per 2020, the % of change between 2019 and 2020 would not correctly r
eﬂect the actual change in the internal pay ratio.
REMUNERA
TION REPOR
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CONTINUED
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Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Implementation of our Remuneration Policy in 2022
The implementation of our Remuneration Policy as it currently stands, will r
esult in the following
remuneration packages for our Executive Dir
ectors in 2022.
Role
Executive Chair
CEO
CFO
CLHCO
Remuneration in 2022
Annual base salary
$1,000,000
$1,250,000
$1,150,000
$560,000
1
2022 T
arget Bonus
opportunity (as a % of
annual base salary)
n/a
75%-150%
60%-120%
60%-120%
2022 T
arget
PSU award (as a % of
annual base salary)
125%
125%
125%
125%
Share ownership
guidelines (as a % of
annual base salary)
300%
300%
150%
150%
1
Based on current 80% contract; the full-time equivalent is $700,000.
2022 annual bonus performance measures
Performance measure and weighting
Financial
Metrics
Adjusted EBITDA (40%)
T
argets will be disclosed in the
2022 Annual Report
Sales V
olumes (20%)
T
argets will be disclosed in the
2022 Annual Report
HSE (15)%
T
argets will be disclosed in the
2022 Annual Report
Strategic
and non-
ﬁnancial
(25%)
HR-T
aking People along
Ensure an engaged and inspir
ed workforce, which is
essential to achieve maximal business performance. This
will be measured against objectives in thr
ee areas.
Engagement
Career Development
Onboarding
Securing execution of the strategic OCI Fuse project
OCI Fuse is the consolidation and replacement of the
underlying OCI T
echnology Landscape along with the
harmonization of key business practices across the wholly
owned OCI subsidiaries (excluding Fertiglobe). Given the
signiﬁcant impact of this project, the Executive Dir
ectors will
be charged with securing the execution of this project. This
will be measured against objectives in four ar
eas.
Operational
Financial
Security risk
Change management
Performance measures for 2022 PSU awar
ds
For each performance period, the Nomination and Remuneration Committee has discretion to
select the performance measures for the PSU awar
ds from a set of strategic initiatives. In doing
so, the Nomination and Remuneration Committee selects performance measures that ar
e best
aligned to the company’
s strategic priorities and long-term interests whilst ensuring that the
selected long-term performance measures do not overlap the performance measur
es for the
annual bonus. The performance measures selected for the 2022 PSU awar
ds, as granted on 7
February 2022 are fully aligned to our strategic priorities, which include operational excellence,
business optimization, sustainable solutions and decarbonization and diversity & inclusion. Please
ﬁnd further details on these performance measures in the table below:
Measure
W
eight
T
arget deﬁnition
Relative TSR
60%
Operational Excellence:
Plant reliability
15%
Improvement of Asset Utilization =
Onstream Ef
ﬁciency x Capacity Efﬁciency
ESG: Decarbonization
15%
Development, implementation and execution of
decarbonization plan
ESG: Diversity
& Inclusion
10%
Increase per
centage of women’
s representation in senior
positions and initiatives to increase r
epresentation of minorities
The target levels for OCI’
s relative TSR performance are set out in the Remuneration Policy
. The
target levels for plant reliability
, decarbonization and diversity & inclusion will be disclosed in the
2022 Remuneration Report.
REMUNERA
TION REPOR
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CONTINUED
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.
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121
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Extraordinary shar
e award
T
o recognize and reward extraor
dinary performance, like the performance in 2021 and to promote
the share ownership of the Executive Dir
ectors, the Nomination and Remuneration Committee
proposes to amend the Remuneration Policy and intr
oduce an Extraordinary Shar
e Awar
d.
Granting an Extraordinary Shar
e Awar
d will be at the discretion of the Boar
d and will be reserved
to rewar
d extraordinary performance outside targets set for the annual bonus and performance
share units plan. Extraor
dinary Share A
wards can be made to the CEO, CFO and the CLHCO.
The Executive Chair is not eligible for the Extraordinary Shar
e Awar
d. Subject to approval by
the AGM, the proposed 2022 Extraor
dinary Share A
ward will be granted at the ﬁrst trading day
after the AGM. The Shares will be granted against the price of the OCI Shar
es at the end of this
trading day
. The Extraordinary Share A
wards will consist of conditional OCI shar
es that will vest
after 3 years. There will be no performance conditions attached, though vesting will be subject
to continued engagement of the Executive Director
. After vesting a two-year holding period will
apply
. In as much as possible the other terms and conditions of the Extraordinary Share A
ward,
like the Change of Control clause, Good leaver tr
eatment, Dividend Equivalents, Clawback and
Malus clause and the Sell-to-Cover provision, will be copied fr
om the approved Executive Dir
ector
Performance Share Units Plan. The pr
oposed 2022 Extraordinary Shar
e Awar
ds rewarding the
extraordinary performance of the Executive Dir
ectors in the year 2021 amounts to $700,000
for the CEO and CFO and $450,000 for the CLHCO. The Executive Chair is not eligible for an
Extraordinary Shar
e Awar
d.
Amendment of the Remuneration Policy
Next to the proposal to grant a 2022 Extraor
dinary Share A
ward, the Non-Executive Dir
ectors
– upon recommendation by the Nomination and Remuneration Committee – pr
oposes to the
AGM to approve an amendment of the Remuneration Policy
. It is proposed to intr
oduce the
Extraordinary Shar
e Awar
d Plan to be included in the Remuneration Policy as a new long-term
compensation scheme, aligned to OCI's long-term value creation and pr
omoting the share
ownership of the Executive Directors. All terms and conditions of the Extraor
dinary Share A
ward
are deﬁned in the Extraor
dinary Share A
ward Plan. Granting an Extraor
dinary Share Awar
d will
be reserved to r
eward extraor
dinary performance beyond and/or outside the targets set for the
annual bonus and Performance Share Units Plan. It will be at the discr
etion of the Board to grant
an Extraordinary Shar
e Awar
d and to determine the size of the Awar
d following the Board's
assessment of the extraordinary performance.
2022 remuneration scenarios
The Nomination and Remuneration Committee conducts pay scenario modelling on an annual
basis which investigates pay-out quantum for Executive Directors under dif
ferent performance
scenarios. This modelling is undertaken to ensure that the Remuneration Policy links dir
ectly
with the performance of OCI and therefor
e, is in the interests of shar
eholders.
In the event that speciﬁc short-term and long-term threshold performance targets ar
e not
achieved, there will be no variable pay vesting or payout for Executive Dir
ectors for the
relevant period.
The charts below illustrate how much the current Executive Dir
ectors could receive under
differ
ent scenarios in 2022, assuming a constant share price (i.e. no appr
eciation) and no
dividend payments.
Element of
Remuneration
Details of assumptions
Fixed
remuneration
This comprises base salary with effect fr
om 1 January 2022. The base salary is inclusive
of the 25% beneﬁts allowance. The Executive Chair’
s salary amounts to $1,000,000. The
CEO’
s salary amounts to $1,250,000 plus an additional 25% payment for the period he
serves as CEO of Fertiglobe next to his role as CEO of OCI. The CFO’
s salary amounts to
$1,150,000 and the salary of the CLHCO $560,000 pro-rated on an 80% contract).
Annual bonus
Assumes maximum opportunity of 150% of salary for the CEO and 120% of salary for the
CFO and CLHCO.
For target, the scenario assumes 75% of annual base salary for the CEO and 60% of annual
base salary for the CFO and CLHCO.
For threshold, the scenario assumes 30% of salary for the CEO and 24% of salary for the
CFO and CLHCO.
For minimum, the scenario assumes no pay-out of the bonus.
Performance
Share
Unit Plan
Assumptions apply to all Executive Directors. Ther
e is a maximum opportunity of 150% of
target (187.5% of annual base salary) in conditional shares.
For target, the scenario assumes 125% of annual base salary for all Executive Directors.
For threshold, the scenario assumes 25% of target for all Executive Dir
ectors.
For minimum, the scenario assumes 0% of target for all Executive Directors.
2022 pay scenario analysis
Further to the pay scenario modelling conducted, the Nomination and Remuneration Committee
concluded that the relationship between the ﬁnancial and strategic priorities of the company and
the performance measures set for the annual bonus as well as the Performance Shar
e Units Plan
are adequate. The Nomination and Remuneration Committee also concluded that the objectives
of the Remuneration Policy and the underlying objectives of the Company are well served by the
ratio between ﬁxed and variable pay
, which is for the CEO 67:33 in the threshold scenario and
27:73 in the maximum scenario.
REMUNERA
TION REPOR
T
CONTINUED
CFO
560
Minimum
Threshold
Maximum
T
arget
1,000
1,312
2,250
2,875
1,150
1,785
3,277
Salary
Benets allowance
PSU
All gures $'000
Executive Chair
STI
CLHCO (80%)
869
1,596
2,282
Minimum
Threshold
Maximum
T
arget
Minimum
Threshold
Maximum
T
arget
4,686
CEO
1,562
2,328
5,781
4,062
Minimum
Threshold
Maximum
T
arget
Fertiglobe salary
OCI N.V
.
Annual Report 2021
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Strategy and
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Introduction
This 2021 Annual Report comprises regulated information within the meaning of sections 1:1 and
5:25c of the Dutch Financial Supervision Act (Wet op het ﬁnancieel toezicht).
For the consolidated and OCI 2021 ﬁnancial statements (jaarrekening) within the meaning of
section 2:361 of the Dutch Civil Code, refer
ence is made to the ﬁnancial statements. OCI’
s
Directors have signed the 2021 ﬁnancial statements in line with section 2:101 paragraph 2 of the
Dutch Civil Code.
Corporate governance statement
As referr
ed to in article 2a of the Decree laying down additional r
equirements for annual r
eports
(Besluit inhoud bestuursverslag) effective 1 January 2018 (the AR Decr
ee), OCI is requir
ed to make
a statement on corporate governance.
Information requir
ed to be included in the corporate governance statement as described in articles
3, 3a and 3b of the AR Decree can be found in the following sections of this Annual Report:
•
Information concer
ning compliance with the Code, as requir
ed by article 3 of the AR Decree,
can be found in the section Compliance with the Code on page 109;
•
information concer
ning OCI’
s risk management and control frameworks relating to the ﬁnancial
reporting pr
ocess, as requir
ed by article 3a(a) of the AR Decree, can be found in the section
Enterprise Risk Management beginning on page 82;
•
information regarding the functioning of the GM, and the authority and rights of OCI’
s
shareholders, as r
equired by article 3a(b) of the AR Decr
ee, can be found in the section
Shareholders’ rights and meetings on page 108;
•
information regarding the composition and functioning of OCI's Boar
d and its Committees, as
requir
ed by article 3a(c) of the AR Decree, can be found beginning on page 102;
•
information regarding the diversity policy concerning the composition of the Board, as r
equired
by article 3a(d) of the AR Decree, can be found in the sections Boar
d composition and
independence and Diversity & Inclusion on pages 103 and 104; and
•
information concer
ning the inclusion of the information requir
ed by the Decree Article 10
T
akeover Directive (Besluit artikel 10 overnamerichtlijn), as required by article 3b of the AR
Decree, can be found in the section Decr
ee Article 10 T
akeover Directive on page 109.
The Code was last amended with effect fr
om 1 January 2017 and is available at the website of the
Corporate Governance Monitoring Committee (http://www
.mccg.nl).
In control statement
The Board is r
esponsible for the design, implementation and operation of OCI’
s internal risk
management and control systems. In discharging this r
esponsibility
, the Board has made an
assessment of the effectiveness of OCI’
s internal control and risk management systems.
Based on this assessment and to the best of its knowledge and belief, the Board states that:
•
There are no material failur
es in the effectiveness of OCI’
s internal risk management and control
systems;
•
OCI’
s inter
nal risk management and control systems pr
ovide reasonable assurance that the
Annual Report does not contain any errors of material importance;
•
based on the current state of affairs, it is justiﬁed that the ﬁnancial r
eporting is prepar
ed on a
going concern basis; and
•
there are no material risks or uncertainties that could r
easonably be expected to have a material
adverse effect on the continuity of OCI’
s enterprise in the coming twelve months.
The above statements do not imply that our systems and procedur
es provide absolute assurance
as to the realization of our operational and strategic business objectives, or that they can pr
event
all misstatements, inaccuracies, errors, fraud and non-compliances with legislation, rules and
regulations.
Directors’ statement pursuant to article 5:25c of the Dutch Financial Supervision Act
In accordance with Article 5:25c of the Dutch Financial Supervision Act (W
et op het ﬁnancieel
toezicht), the Directors declar
e that to the best of their knowledge:
•
The 2021 ﬁnancial statements (jaarrekening) provide a true and fair view of the assets,
liabilities, ﬁnancial position and results of OCI and its subsidiaries included in the consolidated
statements; and
•
the Board Report (bestuursverslag) provides a true and fair view of the situation as at 31
December 2021, and of OCI’
s and its group companies’ state of affairs for the ﬁnancial year
2021, as well as the principal risks and uncertainties that OCI faces.
DECL
ARA
TIONS
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.
Annual Report 2021
123
Strategy and
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Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Non-Financial Statement pursuant to Directive 2014/95/EU
Directive 2014/95/EU r
equires large companies to disclose non-ﬁnancial information. This Dir
ective
has been implemented into Dutch law through the Decr
ee disclosure of non-ﬁnancial information
(Besluit bekendmaking niet-ﬁnanciële informatie) (the NF Disclosure Decr
ee).
Pursuant to article 2 of the NF Disclosure Decr
ee, OCI has included the information included in
article 3 of the NF Disclosure Decr
ee in the following sections of this Annual Report:
•
A description of OCI’
s business model is included on page 24.
•
A description, including applied procedur
es and the results of its policy in r
elation to:
– Environmental, social and employee matters is included on pages 35-81, and
– respect for human rights is described on page 73 and in our Human Rights Policy; and
–
anti-corruption and bribery matters are described in the section Risk Management &
Compliance on page 92; and
–
the principal risks related to the policy and how the risks are managed as described
throughout the sustainability and ERM sections of this Annual Report; and
–
the non-ﬁnancial performance indicators which are relevant for OCI’
s business activities are
described on pages 35-81.
Amsterdam, the Netherlands,18 Mar
ch 2022
The Board
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de V
ries
Sipko Schat
Jérôme Guiraud
Gregory Heckman
Robert Jan van de Kraats
Anja Montijn-Groenewoud
David Welch
Dod Fraser
Heike van de Kerkhof
DECL
ARA
TIONS
CONTINUED
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.
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Business
performance
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and compliance
Financial
statements
Other
information
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.
Annual Report 2021
125
6.
Financial
statements
OCI N.V
.
Annual Report 2021
125
Consolidated Financial Statements
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.
Annual Report 2021
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Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
$ millions
Note
31 December
2021
31 December
2020
Assets
Non-current assets
Property
, plant and equipment
(7)
5,543.5
6,244.3
Right-of-use assets
(7)
248.2
279.4
Goodwill and other intangible assets
(8)
485.7
486.5
T
rade and other receivables
(9)
33.6
3.5
Equity-accounted investees
(10)
494.9
468.7
Financial assets at fair value through other compr
ehensive income
(11)
19.2
30.0
Deferred tax assets
(12)
207.7
0.8
T
otal non-current assets
7,032.8
7,513.2
Current assets
Inventories
(13)
343.5
293.8
T
rade and other receivables
(9)
851.6
600.9
Income tax receivables
(12)
3.4
2.8
Cash and cash equivalents
(14)
1,580.3
686.3
T
otal current assets
2,778.8
1,583.8
T
otal assets
9,811.6
9,097.0
The notes on pages 132 to 178 are an integral part of these consolidated ﬁnancial statements.
CONSOLIDA
TED ST
A
TEMENT OF FINANCIAL POSITION
A
S
AT
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
127
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CONSOLIDA
TED ST
A
TEMENT OF FINANCIAL POSITION
CONTINUED
A
S
AT
$ millions
Note
31 December
2021
31 December
2020
Equity
Share capital
(15)
5.6
5.6
Share pr
emium
(15)
6,316.3
6,316.3
Reserves
(16)
(384.0)
(338.4)
Retained earnings
(3,938.9)
(4,851.8)
Equity attributable to owners of the Company
1,999.0
1,131.7
Non-controlling inter
ests
(17)
1,509.2
1,540.1
T
otal equity
3,508.2
2,671.8
Liabilities
Non-current liabilities
Loans and borrowings
(18)
3,290.2
4,226.9
Lease obligations
(19)
237.5
248.6
T
rade and other payables
(20)
23.7
25.7
Provisions
(21)
12.8
3.0
Deferred tax liabilities
(12)
614.4
515.5
T
otal non-current liabilities
4,178.6
5,019.7
Current liabilities
Loans and borrowings
(18)
510.6
189.7
Lease obligations
(19)
39.7
43.6
T
rade and other payables
(20)
1,357.5
1,003.6
Provisions
(21)
144.7
158.3
Income tax payables
(12)
72.3
10.3
T
otal current liabilities
2,124.8
1,405.5
T
otal liabilities
6,303.4
6,425.2
T
otal equity and liabilities
9,811.6
9,097.0
The notes on pages 132 to 178 are an integral part of these consolidated ﬁnancial statements.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
128
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CONSOLIDA
TED ST
A
TEMENT OF PROFIT OR L
OSS AND O
THER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Revenue
(27)
6,318.7
3,474.1
Cost of sales
(22)
(4,489.7)
(3,062.0)
Gross pr
oﬁt
1,829.0
412.1
Other income
(23)
1.4
17.6
Selling, general and administrative expenses
(22)
(266.4)
(219.3)
Other expenses
(24)
(1.2)
(23.4)
Operating proﬁt
1,562.8
187.0
Finance income
(25)
34.6
212.5
Finance cost
(25)
(308.8)
(412.4)
Net ﬁnance cost
(25)
(274.2)
(199.9)
Income from equity-accounted investees (net of tax)
(10)
7.3
(36.7)
Proﬁt / (loss) befor
e income tax
1,295.9
(49.6)
Income tax
(12)
(137.1)
(44.5)
Net proﬁt / (loss)
1,158.8
(94.1)
Other comprehensive income:
Items that are or may be r
eclassiﬁed subsequently to proﬁt or loss
Movement in hedge reserve
(16)
(16.9)
5.9
Currency translation dif
ferences
(16)
(51.8)
(146.9)
Currency translation dif
ferences from equity-accounted investees
(10)
(2.2)
1.6
Items that will not be reclassiﬁed to pr
oﬁt or loss
Changes in the fair value of ﬁnancial assets at fair value through other compr
ehensive income
(16)
(10.8)
(3.7)
Other comprehensive income, net of tax
(81.7)
(143.1)
T
otal comprehensive income
1,077.1
(237.2)
Proﬁt / (loss) attributable to:
Owners of the Company
570.5
(177.7)
Non-controlling inter
ests
(17)
588.3
83.6
Net proﬁt / (loss)
1,158.8
(94.1)
T
otal comprehensive income attributable to:
Owners of the Company
521.1
(282.1)
Non-controlling inter
ests
(17)
556.0
44.9
T
otal comprehensive income
1,077.1
(237.2)
Earnings / (loss) per share (in USD)
Basic earnings / (loss) per share
(26)
2.719
(0.847)
Diluted earnings / (loss) per share
(26)
2.703
(0.847)
The notes on pages 132 to 178 are an integral part of these consolidated ﬁnancial statements.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
129
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CONSOLIDA
TED ST
A
TEMENT OF CHANGES IN EQUIT
Y
$ millions
Note
Share capital
(15)
Share pr
emium
(15)
Reserves
(16)
Retained
earnings
(15)
Equity attributable
to owners of the
Company (15)
Non-controlling
interests
(17)
T
otal
equity
Balance at 1 January 2020
5.6
6,316.3
(237.8)
(4,726.6)
1,357.5
1,461.2
2,818.7
Net proﬁt / (loss)
-
-
-
(177.7)
(177.7)
83.6
(94.1)
Other comprehensive income
-
-
(104.4)
-
(104.4)
(38.7)
(143.1)
T
otal comprehensive income
-
-
(104.4)
(177.7)
(282.1)
44.9
(237.2)
Impact differ
ence in proﬁt sharing non-controlling inter
ests
(17)
-
-
-
-
-
17.4
17.4
Dividend to non-controlling inter
ests
(17)
-
-
-
-
-
(49.2)
(49.2)
Reversal of dividend to non-controlling inter
ests
(17)
-
-
-
-
-
125.4
125.4
T
reasury shar
es sold / delivered
(16)
-
-
3.8
(3.8)
-
-
-
Business combination Fertiglobe
(17)
-
-
-
48.3
48.3
(59.6)
(11.3)
Share-based payments
(15)
-
-
-
8.0
8.0
-
8.0
Balance at 31 December 2020
5.6
6,316.3
(338.4)
(4,851.8)
1,131.7
1,540.1
2,671.8
Net proﬁt
-
-
-
570.5
570.5
588.3
1,158.8
Other comprehensive income
-
-
(49.4)
-
(49.4)
(32.3)
(81.7)
T
otal comprehensive income
-
-
(49.4)
570.5
521.1
556.0
1,077.1
Impact differ
ence in proﬁt sharing non-controlling inter
ests
(17)
-
-
-
-
-
104.6
104.6
Dividend to non-controlling inter
ests
(17)
-
-
-
-
-
(788.1)
(788.1)
T
reasury shar
es sold / delivered
(16)
-
-
4.8
(4.8)
-
-
-
T
reasury shar
es acquired
(16)
-
-
(1.0)
-
(1.0)
-
(1.0)
Acquisition of additional shares in EBIC
(17)
-
-
-
6.0
6.0
(44.4)
(38.4)
Sale of shares in Fertiglobe plc
(17)
-
-
-
332.7
332.7
141.0
473.7
Share-based payments
(15)
-
-
-
8.5
8.5
-
8.5
Balance at 31 December 2021
5.6
6,316.3
(384.0)
(3,938.9)
1,999.0
1,509.2
3,508.2
The notes on pages 132 to 178 are an integral part of these consolidated ﬁnancial statements.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
130
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CONSOLIDA
TED ST
A
TEMENT OF CASH FL
OWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Net proﬁt / (loss)
1,158.8
(94.1)
Adjustments for:
Depreciation, amortization and impairment
(7), (8)
891.6
592.2
Interest income
(25)
(4.3)
(4.4)
Interest expense
(25)
281.0
307.5
Net foreign exchange gain and others
(25)
(2.5)
(103.2)
Fertiglobe business combination
(2.2.1)
-
(13.3)
Share in income of equity-accounted investees
(10)
(7.3)
36.7
Equity-settled share-based payment transactions
(15)
8.5
8.0
Impact differ
ence in proﬁt-sharing non-controlling inter
ests
(17)
104.6
17.4
Income tax expense
(12)
137.1
44.5
Changes in:
Inventories
(13)
(41.7)
18.2
T
rade and other receivables
(9)
(277.3)
(120.4)
T
rade and other payables
(20)
391.7
214.2
Provisions
(21)
(1.8)
27.6
Cash ﬂows:
Interest paid
(209.2)
(283.5)
Lease interest paid
(19)
(8.5)
(8.6)
Interest r
eceived
4.3
4.4
Income taxes paid
(12)
(160.9)
(25.4)
Cash ﬂow from operating activities
2,264.1
617.8
Investments in property
, plant and equipment
(7)
(247.8)
(262.6)
Investments in intangible ﬁxed assets
(1.1)
(0.6)
Proceeds fr
om sale of property
, plant and equipment
2.7
-
Dividends from equity-accounted investees
(10)
2.7
3.0
Cash ﬂow used in investing activities
(243.5)
(260.2)
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
131
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
CONSOLIDA
TED ST
A
TEMENT OF CASH FL
OWS
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Proceeds fr
om borrowings
(18)
2,248.3
2,070.4
Repayment of borrowings
(18)
(3,186.1)
(2,396.0)
Payment of lease obligations
(19)
(38.8)
(37.3)
Newly incurred transaction costs / call pr
emium
(18)
(48.9)
(51.2)
Purchase of tr
easury shares
(16)
(1.0)
-
Dividends paid to non-controlling inter
ests
(15), (17)
(799.7)
(43.2)
Acquisition of additional shares in EBIC
(17)
(43.0)
-
Proceeds fr
om sale of shares in Fertiglobe plc
(17)
461.1
-
Fees related to sale of shar
es in Fertiglobe plc
(17)
(14.1)
-
Settlement FX derivatives
(25)
(72.8)
45.6
Net debt settlement business combination Fertiglobe
(2.2.1)
-
166.8
Cash ﬂows used in ﬁnancing activities
(1,495.0)
(244.9)
Net cash ﬂow
525.6
112.7
Net increase in cash and cash equivalents
525.6
112.7
Cash and cash equivalents at 1 January
686.3
600.5
Effect of exchange rate ﬂuctuations on cash held
(14.6)
(26.9)
Cash and cash equivalents at 31 December
1,197.3
686.3
Cash and cash equivalents in statement of ﬁnancial position
1,580.3
686.3
Bank overdraft r
epayable on demand
(383.0)
-
Cash and cash equivalents in statement of cash ﬂows
1,197.3
686.3
For non-cash movements in loans and borrowings and lease obligations, r
eference is made to notes 18 and 19, r
espectively
.
The notes on pages 132 to 178 are an integral part of these consolidated ﬁnancial statements.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
132
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER
1. General
OCI N.V
. (‘OCI’ or ‘Company’) was established on 2 January 2013 as a public limited liability company
incorporated under Dutch law
, with its head ofﬁce located at Honthorststraat 19, Amsterdam, the
Netherlands. OCI is register
ed in the Dutch commercial r
egister under no. 56821166 dated 2 January
2013. The consolidated ﬁnancial statements comprise the ﬁnancial statements of the Company
, its
subsidiaries (together referr
ed to as the ‘Group’) and the Gr
oup’
s interests in associates and joint
ventures.
The Group is primarily involved in the pr
oduction of natural gas-based products.
2.
Basis of preparation
2.1 General
The consolidated ﬁnancial statements have been prepar
ed in accordance with International Financial
Reporting Standards as endorsed by the Eur
opean Union (IFRS-EU).
The consolidated ﬁnancial statements have been prepar
ed on the historical cost convention, except
when otherwise indicated.
The ﬁnancial year of the Group commences on 1 January and ends on 31 December
.
The Company’
s functional currency is the Euro (‘EUR’). The gr
oup pr
esenta
tion curr
ency i
s the US do
llar
,
as the Group’
s major foreign operations have the US dollar as their functional currency
. All v
alues are
rounded to the near
est tenth of a million (in millions of USD), except when stated otherwise.
These ﬁnancial statements have been authorized for issue by the Company’
s Board of Dir
ectors on
18 March 2022. These consolidated ﬁnancial statements ar
e subject to adoption by the Annual General
Meeting of Shareholders.
2.2
Business combinations
2.2.1 Fertiglobe business combination 2019
On 30 September 2019, the Group and Abu Dhabi National Oil Company (“ADNOC”) completed a
transaction to combine ADNOC’
s fertilizer business into OCI’
s Middle East and North Africa (“OCI
MENA”) nitrogen fertilizer platform.
As part of the transaction, Fertiglobe, a subsidiary of the Group obtained OCI MENA under common
control and 100% of the voting powers and economic r
eturns from Ruwais Fertilizer Industries Ltd.
(“Fertil”), a previously wholly owned subsidiary of ADNOC. Fertil has been consolidated by the Gr
oup
from 30 September 2019. Fertil is based out of the Emirate of Abu Dhabi, United Arab Emirates and is
engaged in processing feedstock gas to pr
oduce nitrogen fertilizers. In exchange, the Gr
oup transferred
42% of the total share capital of Fertiglobe to ADNOC. With the acquisition of Fertil, Fertiglobe will
become the largest producer of nitr
ogen fertilizers in the MENA region.
The accounting for this business combination has been disclosed in our 2019 consolidated ﬁnancial
statements. As previously disclosed the accounting for this business combination at the end of 2019
was still provisional in r
espect of the accounting for the net debt settlement (‘post-closing adjustment’).
On 31 March 2020 the Company signed a ﬁnal settlement with ADNOC for the post-closing adjustment
which is considered to be an adjustment to the consideration transferr
ed in this transaction. In our
2019 consolidated ﬁnancial statements a settlement receivable was included of USD 49.7 million (which
repr
esented the uncontested amount at the time). In the ﬁnal settlement a compensation of USD 178.0
million has been agreed with ADNOC as post-closing adjustment (of which USD 166.8 million was
received in cash).
The measurement period adjustments r
ecognized, compared to the 2019 consolidated ﬁnancial
statements, resulted in a decr
ease of goodwill (USD 115.1 million), trade and other receivables (USD
49.7 million) and non-controlling inter
ests (USD 11.3 million) and an increase of cash (USD 166.8
million), which resulted in the identiﬁcation of a gain on this transaction of USD 13.3 million.
Goodwill arising from the business combination has been r
ecognized as follows:
$ millions
Consideration transferred
1,057.5
NCI, based on their proportionate inter
est in the recognized amounts of the assets and
liabilities
710.6
Fair value of identiﬁable net assets
(1,603.4)
Additional consideration received
(178.0)
Gain on transaction*
(13.3)
*
Due to the ﬁnal post-completion settlement between the Company and ADNOC, the total
consideration transferred (USD 1,590.1 million) is less than the fair value of the identiﬁable net assets
(USD 1,603.4 million), resulting in a gain on pur
chase of USD 13.3 million which is recor
ded in the
proﬁt or loss in 2020.
As per 30 September 2020, the Company ﬁnalized the Purchase Price Allocation (‘PP
A
’). The
ﬁnalization of the PP
A did not result in any changes to the previously r
eported numbers for this business
combination.
As part of the transaction, ADNOC and OCI agreed on several adjustments in the consideration for
indemnities related to potential tax and legal exposur
es for both parties. Such indemnities could lead
to a future settlement between both parties if such items materialize. The fair value of these contingent
consideration arrangements as per acquisition date was assessed based on the estimated impact and
likelihood (which are mostly supported by thir
d party opinions). During the remeasur
ement period, the
aggregate fair value of the contingent consideration assets and liabilities was assessed to be zer
o.
As a result of the Fertiglobe IPO on 27 October 2021, certain changes wer
e made to the indemnities as
initially agreed during the PP
A. Reference is made to note 17 and note 21.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
133
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
2.2.2 Completed Demerger of the Engineering & Construction Business in 2015
OCI demerged the Company’
s Engineering & Construction business in March 2015 (‘the Demerger’).
The ultimate parent company holding the demerged Engineering & Construction activities and that
became listed on the Cairo and Dubai stock exchanges dir
ectly after the demerger is Orascom
Construction PLC (’OC’). The Demerger was completed on 7 March 2015.
Ongoing relationship between OCI N.V
. and Orascom Construction PLC
After the Demerger
, OCI and OC each operate as separately listed companies.
Construction contracts
Subsidiaries of OC and OCI are still party to continuing commer
cial arrangements.
Conditional sale agreement
Orascom Construction Industries S.A.E (‘OCI S.A.E.’) was the former parent company of the OCI
Group, which was r
eplaced by OCI N.V
. in 2013 and was delisted from the Egyptian Stock Exchange in
2016. OCI S.A.E. acts as the sub holding of several operating fertilizer companies of OCI NV
. At the time
of the demerger
, OCI S.A.E. also held certain construction activities that could not be legally transferred
to Orascom Construction PLC as part of the Demerger due to legal, regulatory
, or other considerations.
In order to have the Engineering & Construction businesses der
ecognized from the OCI N.V
.
consolidated ﬁnancial statements, a conditional sale agreement was enter
ed into between the OCI
Group and the OC Gr
oup. The agreement stipulates that the management of construction activities, as
well as the economic effect of all r
elated risks and rewar
ds (including the right to any dividends), would
be passed from OCI SAE to OC ef
fective 30 September 2014 until OCI SAE’
s construction activities are
terminated, or until OCI SAE’
s construction activities are demerged into a separate construction entity
called ‘Construction Egypt’ that is then transferred to OC. Any new awar
ded projects will be sought
through a wholly-owned subsidiary of OC.
In addition to management, OC also received the right to vote on the boar
d of directors of OCI S.A.E. in
matters related to the construction business.
T
ax indemnity agreement
On 6 February 2015, OC and OCI S.A.E. entered into a tax indemnity agr
eement. The agreement sets
out each party’
s obligations in respect of the tax claim lodged by the tax authorities in Egypt r
elating to
the sale of the OCI S.A.E.’
s cement business to Lafarge SA in 2007 (further refer
ence is made to note
28). The parties have agreed to equally split any liability incurr
ed by OCI S.A.E. in relation to the T
ax
Claim (including the costs of dealing with the T
ax Claim). In addition, to the extent that any recoveries
are made in r
elation to the tax claim, including interest r
eceived on the funds, these will be shared
between the parties on a 50%/50% basis (excluding the amount of EGP 1.9 billion (refund r
eceived in
March 2015) for which it was announced that the rights will be transferr
ed to T
ahya Misr social fund in
Egypt). There have been no developments in the tax indemnity agr
eement during 2021.
2.2.3
Russia – Ukraine war
The recent conﬂict between Russia and Ukraine and the r
elated sanctions are expected to impact
the global economy and markets. Based on our current knowledge and available information, we do
not expect that the conﬂict has an overall signiﬁcant adverse impact on OCI’
s consolidated ﬁnancial
performance and we do not expect the conﬂict will have an impact on our ability to continue as a going
concern in the future.
3.
Summary of signiﬁcant accounting policies
The Group has applied the accounting policies set out in note 3 consistently over both periods
presented in these consolidated ﬁnancial statements.
3.1 Consolidation
The consolidated ﬁnancial statements include the ﬁnancial statements of OCI, its subsidiaries and the
Group’
s interests in associates and joint ventures.
Subsidiaries
Subsidiaries are all companies to which OCI is exposed or has rights to variable r
eturns from its
involvement with the investee and has the ability to affect those r
eturns through its control over the
investee, generally accompanying a shareholding of mor
e than half of the shares issued and r
elated
voting power
. Subsidiaries are fully consolidated from the date that control commences until the date
that control ceases. When the Gr
oup ceases to have control over a subsidiary
, it derecognizes the
assets and liabilities of the subsidiary
, and any related non-controlling interests and other components of
equity
. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be
regar
ded as the fair value on initial recognition of a ﬁnancial asset or
, when appropriate, the cost on initial
recognition of an investment in an associate or joint ventur
e. Any resulting gain or loss is r
ecognized in
proﬁt or loss including r
elated cumulative translation adjustments accumulated in other comprehensive
income. If it becomes an associate or joint venture, the inter
est retained is subsequently measur
ed in
accordance with the equity method. The principal subsidiaries ar
e listed in note 34.
T
ransactions eliminated in the consolidated ﬁnancial statements
Intra-group balances and transactions, and any unr
ealized income and expenses arising from intra-
group transactions, ar
e eliminated in preparing the consolidated ﬁnancial statements. Unr
ealized gains
arising from transactions with equity-accounted investees ar
e eliminated against the investment to the
extent of the Group’
s interest in the investees. Unrealized losses ar
e eliminated in the same way as
unrealized gains, but only to the extent that ther
e is no evidence of impairment.
Non-controlling inter
ests
Non-controlling inter
ests is presented as a separate component in equity
. ‘Proﬁt or loss’ and ‘T
otal
comprehensive income’ attributable to the non-contr
olling interests ar
e presented as a separate line
item in the consolidated statement of proﬁt or loss and other compr
ehensive income. Non-controlling
interests is measur
ed at its proportionate shar
e of the acquiree’
s identiﬁable net assets at the balance
sheet date. Changes in Group’
s ownership interest in a subsidiary that do not result in a loss of contr
ol
are accounted for as equity transactions.
Consolidated Financial Statements
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NO
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O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.2
Equity-accounted investees
Associates
Associates are those companies in which the Gr
oup exercises signiﬁcant inﬂuence, but does not have
control over the ﬁnancial and operating policies, and ar
e presumed to exist when the Gr
oup holds
20% to 50% of the shareholding and r
elated voting rights of the other entity
. Associates are accounted
for under the equity method. The Group’
s share of proﬁt or loss of an associate is r
ecognized in proﬁt
or loss from the date when signiﬁcant inﬂuence begins up to the date when that inﬂuence ceases.
Investments in associates with negative shareholder’
s equity are impaired and a pr
ovision for its losses
is recognized only if the Gr
oup has a legal or constructive obligation to cover the losses. Equity changes
in investees accounted for under the equity method that do not result fr
om proﬁt or loss ar
e recognized
in other comprehensive income. Unr
ealized gains on transactions between the Group and its associates
are eliminated to the extent of the Gr
oup’
s interest in associates. Unrealized losses ar
e also eliminated
unless the transaction provides evidence of an impairment of the asset transferr
ed. Unrealized gains on
transactions between two associates are not eliminated.
Joint ventures
Investments in joint arrangements are classiﬁed as either joint ventur
es or joint operations depending on
the contractual rights and obligations of each investor
. Those joint arrangements that are assessed as
joint ventures ar
e accounted for using the equity method. Joint operations are accounted for using line
by line accounting.
Joint ventures ar
e accounted for under the equity method. Under the equity method of accounting,
interests in joint ventur
es are initially r
ecognized at cost and adjusted subsequently for the Group’
s share
in the post-acquisition proﬁt or losses and movements in compr
ehensive income. When the Group’
s
share of losses in a joint ventur
e equals or exceeds its interest in the joint ventur
e (which includes any
long-term interest that, in substance, forms part of the Gr
oup’
s net investment in joint ventures), the
Group does not r
ecognize further losses, unless it has incurred obligations or made payments on behalf
of the joint venture.
3.3
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggr
egate of the consideration transferred, measur
ed at acquisition date, fair value of
the assets and liabilities assumed and the amount of any non-controlling inter
ests in the acquiree. For
each business combination, the Group elects whether to measur
e the non-controlling inter
ests in the
acquiree at fair value or at the pr
oportionate share of the acquir
ee’
s identiﬁable net assets. Acquisition-
related costs ar
e expensed as incurred and included in administrative expenses.
When the Group acquir
es a business, it assesses the classiﬁcation of particular ﬁnancial assets and
ﬁnancial liabilities assumed as, at fair value through pr
oﬁt or loss, or at amortized cost or as a ﬁnancial
asset measured at fair value thr
ough other comprehensive income. The Gr
oup makes an assessment of
whether embedded derivatives of the acquiree should be separated fr
om their host contracts.
If the business combination is achieved in stages, the previously held equity inter
est is remeasur
ed
at its acquisition date fair value and any resulting gain or loss is r
ecognized in proﬁt or loss or other
comprehensive income, as appr
opriate.
The consideration transferred in exchange for the acquir
ee includes any asset or liability resulting
from a contingent consideration arrangement. The Gr
oup recognizes the acquisition-date fair value of
contingent consideration as part of the consideration transferred in exchange for the acquir
ee.
Changes in the fair value of consideration that are not measur
ement period adjustments shall be
adjusted as follows:
• Contingent consideration classiﬁed as equity shall not be remeasur
ed.
•
Other contingent consideration shall be measured at fair value with changes recognized in pr
oﬁt or loss.
3.4
Foreign currency
Foreign curr
ency transactions
The ﬁnancial statements of subsidiaries and joint operations are pr
epared in the curr
encies which
are determined based on the primary economic envir
onment in which they operate (‘the functional
currency’). T
ransactions in currencies other than the functional currency ar
e recor
ded at the rates of
exchange prevailing on the transaction dates. At each balance sheet date, monetary items denominated
in foreign curr
encies are r
evalued into the entity’
s functional currency at the then prevailing closing-rates.
Exchange differ
ences arising on the settlement and translation of monetary items are included in pr
oﬁt
or loss for the period except when deferred to other compr
ehensive income for ﬁnancial assets at fair
value through other compr
ehensive income and the effective part of qualifying cash ﬂow hedges.
Foreign curr
ency translation
Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than
the US dollars are translated into US dollars using the exchange rates pr
evailing at the balance
sheet date. Income and expense items are translated using exchange rates pr
evailing at the date of
the transactions. Investments in joint ventures and associates with a functional curr
ency other than
the US dollars are translated into US dollars using exchange rates pr
evailing on the balance sheet
date. Exchange rate differ
ences arising during consolidation and on the translation of investments in
subsidiaries, joint arrangements and associates and monetary items that form part of net investments
are included in other compr
ehensive income, as ‘Currency translation dif
ferences’. When a foreign
operation is (partly) disposed of or sold, (the proportionate shar
e of) the related curr
ency translation
differ
ences that were r
ecorded in other comprehensive income ar
e recycled to pr
oﬁt or loss as part of
the gain or loss on disposal or sale. Goodwill and fair value adjustments arising on the acquisition of a
foreign subsidiary ar
e considered as assets and liabilities denominated in the functional curr
ency of the
foreign subsidiary
.
Consolidated Financial Statements
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NO
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O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.5
Financial instruments
Financial assets
IFRS 9 contains three principal classiﬁcation categories for ﬁnancial assets: measur
ed at amortized
cost, at fair value through pr
oﬁt or loss (‘FVTPL
’) and at fair value through other comprehensive income
(‘FVOCI’). The classiﬁcation of ﬁnancial assets under IFRS 9 is generally based on the business model in
which a ﬁnancial asset is managed and its contractual cash ﬂow characteristics.
Amortized cost
T
rade and other receivables are held to collect contractual cash ﬂows and are expected to give
rise to cash ﬂows repr
esenting solely payments of principal and interest. The Gr
oup analyzed the
contractual cash ﬂow characteristics of those instruments and concluded that they meet the ‘hold-to-
collect’ business model criteria for amortized cost measurement. Inter
est income from these assets is
included in ﬁnance income using the effective inter
est rate method. Any gain or loss on derecognition is
recognized dir
ectly in proﬁt or loss.
The Group sells certain trade r
eceivables under a securitization agreement to a thir
d party
. For these
selected debtors the Group will use the ‘hold-to-collect-and-sell business model’ as deﬁned under IFRS
9 and will measure these r
eceivables going forward at FVOCI.
Fair value through pr
oﬁt or loss (‘FVTPL
’)
Derivative ﬁnancial instruments held by the Group ar
e classiﬁed in the category FVTPL, unless the
instrument is designated in a hedge relationship and the hedge meets the r
equirements for hedge
accounting. Under IFRS 9, derivatives embedded in contracts where the host is a ﬁnancial asset in
the scope of the standard ar
e never separated. Instead, the hybrid ﬁnancial instrument as a whole is
assessed for classiﬁcation.
Fair value through other compr
ehensive income (‘FVOCI’)
Equity investments, previously r
ecognized as available-for
-sale assets, are measur
ed at FVOCI, based
on the irrevocable election made by the Gr
oup. The Group elected this appr
oach as these investments
are not held for trading. Movements in the carrying amount ar
e recognized in other compr
ehensive
income, except for the recognition of impairment gains and losses, inter
est income and foreign
exchange gains and losses which are r
ecognized in the proﬁt or loss. On der
ecognition the cumulative
gain or loss recognized in other compr
ehensive income is not reclassiﬁed fr
om equity to proﬁt or loss.
Dividend income is recognized in pr
oﬁt or loss when the Group’
s right to receive payment is established.
Gas purchase contracts
The Group has pur
chase contracts in place to procur
e natural gas for its production activities. These
contracts are not accounted for as ﬁnancial instruments as they ar
e excluded for the scope of IFRS 9
through the “own use exemption”. The own use exemption applies to contracts that ar
e entered into
and continue to be held for the receipt of a non-ﬁnancial item in accor
dance with the Group’
s expected
purchase, sale or usage r
equirements.
Net investment hedging
When a derivative instrument or a non-derivative ﬁnancial liability is designated as the hedging
instrument in a hedge of a net investment in a foreign operation, the ef
fective portion of changes in the
fair value of a derivative or foreign exchange gains and losses for a non-derivative is r
ecognised in other
comprehensive income and pr
esented in the translation reserve within equity
. Any ineffective portion of
the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative
is recognised immediately in pr
oﬁt or loss. The amount recognised in other compr
ehensive income is
fully or partially reclassiﬁed to pr
oﬁt or loss as a reclassiﬁcation adjustment on disposal or partial disposal
of the foreign operation, r
espectively
.
Cash ﬂow hedge accounting
When a derivative is designated as a cash ﬂow hedging instrument, the effective portion of changes
in the fair value of the derivative is recognised in other compr
ehensive income and accumulated in the
hedging reserve. The ef
fective portion of changes in the fair value of the derivative that is recognised
in other comprehensive income is limited to the cumulative change in fair value of the hedged item,
determined on a present value basis, fr
om inception of the hedge. Any ineffective portion of changes in
the fair value of the derivative is recognised immediately in pr
oﬁt or loss.
Financial liabilities
Financial liabilities, like loans and borrowings and trade and other payables, ar
e measured at amortized
cost, unless the ﬁnancial liability:
• is a derivative at FVTPL;
•
arose fr
om the transfer of a ﬁnancial assets that does not qualify for derecognition or if the continuing
involvement approach applies;
• is a ﬁnancial guarantee contract;
• is a commitment to provide a loan at a below-market inter
est rate; and
•
is a contingent consideration resulting fr
om a business combination to which IFRS 3 applies,
measured at FVTPL.
Impairment
The impairment model requir
es the recognition of impairment pr
ovisions based on expected credit
losses (ECL) rather than only incurred cr
edit losses as was the case under IAS 39. Based on the
assessment undertaken on historical data, there’
s limited impact from the expected credit loss model.
The Group will evaluate any possible impact going forwar
d. For the assessment of loss allowance
for expected credit losses, a simpliﬁed model for trade r
eceivables is applied. The loss allowance is
measured at initial r
ecognition and throughout the life of the r
eceivable at an amount equal to lifetime
ECL.
Consolidated Financial Statements
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NO
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O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.5
Financial instruments
(continued)
They are estimated based on the pr
esent value of all cash shortfalls over the remaining expected life of
the ﬁnancial asset, i.e., the differ
ence between:
•
the contractual cash ﬂows that are due to an entity under the contract; and
•
the cash ﬂows that the holder expects to receive.
In order to assess the lifetime ECLs for trade r
eceivables, both historic credit losses experience and
forward-looking information is assessed.
For other receivables (and other ﬁnancial assets) the Gr
oup measures the loss allowance at an amount
equal to the lifetime ECLs if the credit risk on that ﬁnancial instrument has incr
eased signiﬁcantly since
initial recognition.
If at the reporting date, the cr
edit risk of other receivables has not incr
eased signiﬁcantly since initial
recognition, the Gr
oup measures the loss allowance for that ﬁnancial instrument at an amount equal to
12-month ECL.
3.6
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of
three months or less fr
om the acquisition date (original maturity) that are subject to an insigniﬁcant
risk of changes in their fair value and are used by the Gr
oup in the management of its short-term
commitments. Restricted cash comprises cash balances where speciﬁc r
estrictions exist on the
Company’
s ability to use this cash. Restricted cash includes cash deposited as collateral for letters
of credit issued by the Company
. Restricted funds include bank balances reserved by the lending
institution for installments of loan payments to be made in the near future.
3.7
Equity attributable to owners of the Company
Ordinary shar
es are classiﬁed as equity
. Share premium is the excess amount r
eceived over the par
value of the shares. Incr
emental costs directly attributable to the issue of new shar
es are recognized
in equity as a deduction, net of tax, from the pr
oceeds. When ordinary shar
es are repur
chased, the
amount of the consideration paid, which includes directly attributable costs, net of tax ef
fects, is
recognized as a deduction fr
om ‘Reserves’. Repurchased shar
es are classiﬁed as treasury shar
es
and are pr
esented in ‘Reserves’. When treasury shar
es are sold or reissued subsequently
, the
amount received is r
ecognized as an increase in ‘Reserves’, and the r
esulting surplus or deﬁcit on the
transaction is presented in shar
e premium.
3.8
Property
, plant and equipment
Items of property
, plant and equipment are measured at cost less accumulated depr
eciation and any
impairment. Cost includes expenditure that is dir
ectly attributable to the acquisition of the asset. The
cost of self-constructed assets includes cost of material, direct labour
, other directly attributable cost
incurred to bring the asset r
eady to its intended use, cost of asset retir
ement obligations and any
capitalized borrowing cost.
Purchased softwar
e that is integral to the functionality of the related equipment is capitalized as part
of that equipment. When parts of property
, plant and equipment have different useful lives, they ar
e
accounted for as separate items (major components) of property
, plant and equipment.
Any gain or loss on disposal of an item of property
, plant and equipment (calculated as the difference
between the net proceeds fr
om disposal and the carrying amount of the item) is recognized in pr
oﬁt
or loss. Subsequent expenditures ar
e capitalized only when it is probable that the futur
e economic
beneﬁts associated with the expenditure will ﬂow to the Gr
oup. Ongoing repairs and maintenance
costs are expensed as incurr
ed. Spare parts of pr
operty
, plant and equipment are r
ecognized under
property
, plant and equipment if the average turn-over exceeds 12 months or more, otherwise they are
recognized within inventories.
Property
, plant and equipment under construction
Expenditures incurr
ed for purchasing and constructing pr
operty
, plant and equipment are initially
recor
ded as ‘under construction’ until the asset is completed and becomes ready for use. Upon
the completion of the assets, the recognized costs ar
e reclassiﬁed fr
om ‘under construction’ to its
ﬁnal category of property
, plant and equipment. Assets under construction are not depreciated and
measured at cost less any impairment losses.
Depreciation
Items of property
, plant and equipment are depreciated on a straight-line basis thr
ough proﬁt or loss
over the estimated useful lives of each component, taking into account any residual values. Land is not
depreciated.
Items of property
, plant and equipment are depreciated fr
om the date that they are installed and ar
e
ready for use, or in r
espect of internally constructed assets, from the date that the asset is completed
and ready for use.
The estimated useful lives for items of property
, plant and
equipment are as follows:
Y
ears
Buildings
10 - 50
Plant and equipment
5 - 25
Fixtures and ﬁttings
3 - 10
Depreciation methods, useful lives and r
esidual values are r
eviewed at each reporting date and adjusted
if necessary by the Group.
Borrowing costs
Borrowing costs attributable to the acquisition, construction or pr
oduction of assets that necessarily
take a substantial period of time to get ready for their intended use or sale, ar
e recognized as part of the
cost of those assets. All other borrowing costs ar
e recognized as ‘Finance cost’ in the period in which
they are incurr
ed.
Consolidated Financial Statements
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performance
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NO
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O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.9
Goodwill and other intangible assets
Goodwill
Goodwill repr
esents the excess of purchase price and r
elated costs over the value assigned to the
Groups’ shar
e of identiﬁable assets acquired and liabilities assumed of businesses acquir
ed that were
directly attributable to the legal entities comprising the Gr
oup. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferr
ed, the gain is recognized in pr
oﬁt or loss.
Goodwill on acquisition of entities that qualify as subsidiaries is presented under ‘Goodwill and intangible
assets’. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in
‘Equity-accounted investees’. Goodwill on acquisition of subsidiaries is allocated to cash-generating
units for the purpose of impairment testing. The allocation is made to those cash-generating units or
group of units that ar
e expected to beneﬁt from the business combination thr
ough which the goodwill
arose, based on past experience.
Goodwill is initially measured at cost. After initial r
ecognition, goodwill is measured at cost less any
impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for
the amount by which the cash-generating unit’
s carrying amount exceeds its recoverable amount. The
recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to
sell and its value in use. Impairment losses on goodwill are not r
eversed. Gains or losses on the disposal
of an entity include the carrying amount of goodwill related to the entity sold. All other expenditur
es on
internally generated goodwill and other intangible assets is recognized in proﬁt or loss as incurr
ed.
Other intangible assets
Other intangible assets with a ﬁnite useful life (licenses, customer relations, brand names and other
rights that are acquir
ed separately or through business combinations) ar
e amortized on a straight-
line basis in proﬁt or loss over their estimated useful lives taking into account any r
esidual value and
impairment losses, from the date that they ar
e available for use.
The estimated useful lives of intangible assets are as follows:
Y
ears
Licenses and trade names
3 - 10
Purchased rights and other
4 - 10
Software
1 - 5
Amortization methods, useful lives and residual values ar
e reviewed at each r
eporting date and adjusted
if necessary
.
3.10 Inventories
Inventories are measur
ed at the lower of cost and net realizable value. The cost of inventories of raw
materials, spare parts and supplies ar
e based on the weighted average principle or the ﬁrst-in-ﬁrst-
out method, and includes expenditure incurr
ed in acquiring the inventories and bringing them to their
existing location and condition. In case of manufactured inventories and work in pr
ogress, cost includes
an appropriate shar
e of production overheads based on normal operating capacity
. Net realizable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
3.11
Impairment of assets
Non-derivative ﬁnancial assets
The Group assesses at each balance sheet date whether ther
e is objective evidence that a non-
derivative ﬁnancial asset or a group of non-derivative ﬁnancial assets is impair
ed. A non-derivative
ﬁnancial asset is considered to be impair
ed if the counterparty does not meet the agreed payment terms
or when evidence exists that the counterpart will not be able to do so. The Group considers evidence of
impairment for these assets at both an individual asset and a collective level. All individually signiﬁcant
assets are individually assessed for impairment. Those found not to be impair
ed are then collectively
assessed for any impairment that has been incurred but not yet individually identiﬁed. Assets that ar
e
not individually signiﬁcant are collectively assessed for impairment. Collective assessment is carried
out by grouping together assets with similar risk characteristics. In assessing collective impairment,
the Group uses historical information on the timing of r
ecoveries and the amount of loss incurred, and
makes an adjustment if current economic and cr
edit conditions are such that the actual
losses ar
e
likely to be greater or lesser than suggested by historical tr
ends. An impairment loss is recognized for
the amount by which the carrying amount of a non-derivative ﬁnancial asset exceeds its estimated
discounted future cash ﬂows using the original inter
est rate. Impaired non-derivative ﬁnancial assets
are tested periodically to determine whether the estimated futur
e cash ﬂows have increased and the
impairment has to be reversed. Reversal of impairments is only permitted if in a subsequent period
after an impairment loss has been recognized, the amount of the impairment loss decr
eases and the
decrease can be r
elated objectively to an event after the impairment loss was recognized.
In the case of a ﬁnancial asset classiﬁed as ﬁnancial asset at fair value through other compr
ehensive
income, a signiﬁcant or prolonged decline in the fair value of the ﬁnancial asset at fair value thr
ough
other comprehensive income below its acquisition cost is consider
ed as an indicator that the ﬁnancial
asset at fair value through other compr
ehensive income is impaired. If any such evidence exists for a
ﬁnancial asset at fair value through other compr
ehensive income, the cumulative loss – measured as
the differ
ence between the acquisition cost and the current fair value, less any impairment loss on that
ﬁnancial asset previously r
ecognized in proﬁt or loss – is r
emoved from other comprehensive income
and recognized in pr
oﬁt or loss. Impairment losses recognized in pr
oﬁt or loss on equity instruments
classiﬁed as ﬁnancial asset at fair value through other compr
ehensive income are not r
eversed through
proﬁt or loss.
Consolidated Financial Statements
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performance
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NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.11
Impairment of assets
(continued)
Derivative ﬁnancial assets
Derivative ﬁnancial assets are measur
ed at fair value and the Group investigates whether the
counterparty’
s creditworthiness gives rise to an impairment. When determining the fair value, cr
edit
value and debit value adjustments are taken into account.
Non-ﬁnancial assets
Non-ﬁnancial assets that have an indeﬁnite useful life, for example goodwill, are not subject to
amortization but are tested annually for impairment or mor
e frequently when indicators arise. Assets
with a ﬁnite useful life are subject to depr
eciation or amortization and are r
eviewed at each reporting
date to determine whether there is an indication of impairment. If any such indication exists, then the
assets’ recoverable amount is estimated. An impairment loss is r
ecognized for the amount by which the
assets’ carrying amount exceeds its recoverable amount. The r
ecoverable amount is the higher of an
asset’
s fair value less costs of disposal and its value in use. The value in use is the present value of the
future cash ﬂows expected to be derived fr
om an asset or cash-generating unit by continued use. For
the purposes of assessing impairment, assets are gr
ouped based on the lowest level for which there ar
e
separately identiﬁable cash ﬂows (cash-generating units). Impairment losses are r
ecognized in proﬁt or
loss. They are allocated ﬁrst to r
educe the carrying amount of any goodwill allocated to the CGU, and
then to reduce the carrying amounts of the other assets in the CGU on a pr
o-rata basis. Non-ﬁnancial
assets, which are impair
ed, are tested periodically to determine whether the r
ecoverable amount has
increased and the impairment be (partially) r
eversed. Impairment losses on goodwill are not r
eversed.
For other assets, an impairment loss is reversed only to the extent that the asset’
s carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation or amortization,
if no impairment loss had been recognized. Reversal of impairments is only permitted if in a subsequent
period after an impairment loss has been recognized, the amount of the impairment loss decr
eases and
the decrease can be r
elated objectively to an event after the impairment loss was recognized.
3.12 Provisions
Provisions ar
e recognized when a pr
esent legal or constructive obligation based on past events exists,
and it is probable that an outﬂow of economic beneﬁts is r
equired to settle the obligation. If the outﬂow
is probable, but cannot be determined r
eliably
, the obligation is disclosed. The non-current part of
provisions is determined by discounting the expected futur
e cash ﬂows at a pre-tax rate that r
eﬂects
current market assessments of the time value of money and the risks speciﬁc to the liability
.
The unwinding of the discount is recognized as ﬁnance cost.
Asset retir
ement obligations
The Group r
ecognizes a provision if the Gr
oup has an obligation to restore a leased asset in its
original condition at the end of its lease term and in case of legal requir
ements with respect to clean-
up of contamination of land, and the estimate can be made reliable. Based on the land lease of their
production facilities, some entities have the obligation to r
estore their site upon decommissioning.
The Group has not r
ecorded a liability for this conditional asset r
etirement obligation, as it does not
believe there is curr
ently a reasonable basis for estimating a date or range of dates of cessation of the
operations, which is necessary to estimate the fair value of this liability
.
Claims and contingencies
The Group is subject to legal and r
egulatory proceedings in various jurisdictions. Such pr
oceedings may
result in criminal or civil sanctions, penalties or disgorgements against the Company
. If it is probable
that an obligation to the Group exists, which will r
esult in an outﬂow of resour
ces and the amount of the
outﬂow can be reliably estimated, a pr
ovision is recognized.
Donation provision
The donation provision is r
ecognized as a constructive obligation, the amount is undiscounted as the
Group does not know the exact settlement date, as such the pr
ovision is classiﬁed as current.
Onerous contracts
Onerous contracts ar
e contracts for which the unavoidable costs of meeting the obligations under
the contract exceed the economic beneﬁts expected to be received under it. A pr
ovision for onerous
contracts is measured at the pr
esent value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract, which is determined based on incremental
costs necessary to fulﬁl the obligation under the contract. Before a pr
ovision is established, the Group
recognises any impairment loss on the assets associated with that contract.
3.13
Revenue from contracts with customers
Revenues are r
ecognized to depict the transfer of goods or services to customers in the ordinary course
of the Group’
s activities, in the amounts that reﬂect the considerations to which the Group expects to
be entitled in exchange for those goods or services. Revenue is recognized when the Gr
oup satisﬁes
the performance obligations by transferring promised goods or services to customers. The main
performance obligation of the Group is the transfer of the Gr
oup’
s fertilizer and chemical products to
customers. Revenue from the sale of fertilizer and chemical pr
oducts are the two main r
evenue streams
of the Group.
Goods are transferr
ed when the customer obtains control of the asset. The timing of when contr
ol
transfers depends on the sales and shipping terms agreed. Depending on its natur
e and the agreed
sales terms, a performance obligation is either satisﬁed at certain point in time or over a certain period of
time.
Revenue is recognized net of expected discounts and r
ebates to customers. Accumulated experience
and management judgement is used to estimate and provide for the discounts and r
ebates and revenue
is only recognized to the extent that it is highly pr
obably that a signiﬁcant reversal will not occur
. The
Group does not have any contracts wher
e the period of time between the transfer of the promised
goods or services to the customer and payment by the customer exceeds one year
. Consequently
, no
adjustment is made to transaction prices for the time value of money
.
Consolidated Financial Statements
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.
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Corporate
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performance
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and compliance
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O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.14
Gover
nment grants
Government grants that compensate the Group for expenses incurred ar
e recognized in pr
oﬁt or loss
as ‘Other income’ on a systematic basis in the periods in which the expenses are r
ecognized. When
the grant relates to an asset, it is r
ecognized at the nominal amount of the grant and subsequently
recognized as income in equal amounts over the expected useful life of the r
elated asset, if applicable.
Other government grants are recognized initially as deferr
ed income at fair value when there is
reasonable assurance that they will be r
eceived and the Group will comply with the conditions
associated with the grant, and are then r
ecognized in proﬁt or loss as ‘Other income’ on a systematic
basis over the useful life of the asset.
European Emission Allowances
The Group r
eceives European Emission Allowances (“EUAs”) as a r
esult of its industrial activities in the
Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority
. The amount of
EUAs granted is based on an estimate of CO
2
emissions in the Netherlands and the effective Eur
opean
emission legislation. In arrears, the Gr
oup must refund allowances to the Dutch Emission Authority
based on actual CO
2
emissions during the year
.
The grant of these allowances is within the scope of IAS 20 Government Grants. EUAs are accounted
for slightly differ
ent than the above accounting policy
. Upon initial recognition, the EUA
’
s are recognized
as inventory at the nominal amount of the grant (nil). Concurrently
, a liability is recognized for the
obligation to refund the allowances for CO
2
emissions during the compliance period. When no excess or
deﬁcit is identiﬁed, no liability is recognized as the Gr
oup has sufﬁcient EUAs to settle the liability
.
The excess or deﬁcit is calculated and recor
ded separately for each production facility
. If a deﬁcit in
EUAs is identiﬁed, the Group has to pur
chase additional EUAs on the commodity markets to settle
its liability to the Dutch Emission Authority
. Purchased EUAs are recognized at cost and classiﬁed as
inventory
. The cost of the purchased EUAs to settle the liability for emission allowances during any given
compliance period are r
ecognized in cost of sales.
EUAs in excess of the liability to the Dutch Emission Authority that are contr
olled by OCI can be sold
for the beneﬁt of the Group. Sales of EUAs in excess of the liability for emission allowances during any
given compliance period are r
ecognized in cost of sales.
3.15
Lease accounting
Whether an arrangement is, or contains a lease is assessed at the commencement date of the lease. In
general, an arrangement is considered to be or to contain a lease when all of the following apply:
•
there is an identiﬁed asset;
•
OCI obtains substantially all economic beneﬁts from the use of the asset; and
•
OCI can direct the use of the identiﬁed asset.
Lease obligations are r
ecognized based on the present value of the futur
e minimum lease payments.
Right-of-use assets are valued equal to the lease liabilities. As leases do not easily pr
ovide for an implicit
rate, OCI uses the incremental borr
owing rate. The lease terms may include options to extend or
terminate the lease when it is reasonably certain that we will exer
cise that option.
For leases, each lease payment is allocated between the liability and ﬁnance cost. The ﬁnance cost is
charged to the consolidated statement of proﬁt or loss over the term of the lease so as to pr
oduce a
constant periodic rate of interest on the r
emaining balance of the liability for each period. The right-of-
use asset is depreciated over the shorter of the asset’
s useful life and the lease term on a straight-line
basis. OCI has lease agreements with lease and non-lease components, which ar
e generally accounted
for as a single lease component. For assets in the class leases of ofﬁces and buildings, we account
for the lease and non-lease components separately
. For these types of leases the allocation of the
consideration between lease and non-lease components is based on the relative stand-alone prices of
lease components included in the lease arrangements. Leases are pr
esented as ‘Right-of-use assets’
and ‘Lease obligations’. Short term leases (less than 12 months) or low value leases (less than USD
5,000) are expensed thr
ough the statement of proﬁt or loss as incurr
ed.
3.16
Finance income and cost
Finance income comprises:
•
interest income on funds invested (including on ﬁnancial assets at fair value thr
ough other
comprehensive income);
•
gains on the disposal of ﬁnancial assets at fair value through other comprehensive income;
•
dividend income;
•
fair value gains on ﬁnancial assets at fair value through proﬁt or loss;
•
gains on hedging instruments related to foreign curr
ency and interest rate derivatives that ar
e
recognized in pr
oﬁt or loss and reclassiﬁcations of amounts pr
eviously recognized in other
comprehensive income; and
•
interest income is r
ecognized as it accrues in proﬁt or loss, using the effective inter
est method.
Dividend income is recognized in pr
oﬁt or loss on the date that the Group’
s right to receive payment is
established, which in the case of quoted securities is normally the ex-dividend date.
Finance cost comprise:
•
interest expense on borrowings;
•
unwinding of the discount on provisions and contingent consideration;
•
interest expense related to lease obligations;
•
losses on disposal of ﬁnancial assets at fair value through other comprehensive income;
•
fair value losses on ﬁnancial assets at fair value through proﬁt or loss;
•
loss on hedging instruments related to foreign curr
ency and interest rate derivatives that ar
e
recognized in pr
oﬁt or loss and reclassiﬁcations of amounts pr
eviously recognized in other
comprehensive income; and
•
impairment losses recognized on ﬁnancial assets (other than trade receivables).
Borrowing costs that ar
e not directly attributable to the acquisition, construction or pr
oduction of a
qualifying asset are r
ecognized in proﬁt or loss and expensed as incurr
ed. Foreign currency gains and
losses are r
ecognized on a net basis as either ﬁnance income or ﬁnance cost depending on whether
foreign curr
ency movements are in a net gain or net loss position.
Consolidated Financial Statements
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.
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140
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value creation
Sustainability
Corporate
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performance
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and compliance
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statements
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information
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.17
Employee beneﬁts
Deﬁned contribution plan
Certain Group subsidiaries pr
ovide pension plans, end of service remuneration plans and long-term
service beneﬁts. These pension plans qualify as deﬁned contribution plans. Obligations for contributions
to deﬁned contribution plans are expensed as the r
elated service is provided. Pr
epaid contributions are
recognized as an asset to the extent that a cash r
efund or a reduction in futur
e payments is available.
Short-term employee beneﬁts
Short-term employee beneﬁts are expensed as the r
elated service is provided. A liability is r
ecognized
for the amount expected to be paid if the Group has a pr
esent legal or constructive obligation to pay
this amount as a result of past service pr
ovided by the employee and the obligation can be estimated
reliably
.
Long-term employee beneﬁts
The Group long-term employee beneﬁts ar
e recognized if the Gr
oup has a present legal or constructive
obligation to pay this amount as a result of past service pr
ovided by the employee and the obligation
can be estimated reliably to determine its pr
esent value. The discount rate is the yield at the balance
sheet date on triple-A (‘AAA
’) credit rated bonds that have maturity dates appr
oximating to the terms of
the Group’
s obligations. Re-measurements are r
ecognized in proﬁt or loss in the period in which they
arise.
T
ermination beneﬁts
Employee termination beneﬁts are payable when employment is terminated befor
e the normal retir
ement
date, or whenever an employee accepts voluntary redundancy in exchange for these beneﬁts. OCI
recognizes termination beneﬁts when OCI is demonstrably committed to either terminating the
employment of current employees accor
ding to a detailed formal plan without possibility of withdrawal,
or when OCI is providing termination beneﬁts as a r
esult of an offer made to encourage voluntary
redundancy
. Beneﬁts falling due more than 12 months after balance sheet date are discounted to
present value.
Share-based payments
Employees (including senior executives) of the Group r
eceive remuneration in the form of shar
e-based
payments, whereby employees r
ender services as consideration for equity instruments.
The grant date fair value of equity-settled share-based payment awar
ds granted to employees is
recognized as an employee expense, with a corr
esponding increase in equity
, over the period (the
vesting period) that the employees render service and becomes unconditionally entitled to the awar
ds.
The amount recognized as an expense is adjusted to r
eﬂect the number of awards for which the
related service and non-market performance conditions ar
e expected to be met, such that the amount
ultimately recognized as an expense is based on the number of awar
ds that meet the related service
and non-market performance conditions at the vesting date. At each reporting date, the pr
ogress of
non-market conditions is measured and the expenses ar
e recor
ded accordingly with true-ups recor
ded.
For cash-settled share-based compensation plans and shar
e-based compensation plans with cash
alternatives the liability is remeasured at each balance sheet date during the vesting period and for shar
e
option plans also during the exercise period.
3.18
Income tax
Current tax is the expected tax payable or r
eceivable on the taxable income or loss for the year
, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable
or receivable in r
espect of previous years. The amount of curr
ent tax payable or receivable is the best
estimate of the tax amount expected to be paid or received that r
eﬂects uncertainty related to income
taxes, if any
. Current tax also includes any tax arising from the declaration of dividends.
Current income tax r
eceivable and payable are of
fset when there is a legally enforceable right to of
fset
and when the current income tax r
elates to the same ﬁscal authority
.
Deferred tax liabilities ar
e recognized for all taxable temporary dif
ferences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated ﬁnancial statements (‘balance
sheet’ method). Deferred tax assets ar
e recognized for all deductible temporary dif
ferences, unused
carry forward losses and unused carry forwar
d tax credits, to the extent that it is pr
obable that future
taxable proﬁt will be available against which the deferr
ed income tax assets can be utilized. Deferred tax
assets are r
eviewed at each reporting date and ar
e reduced to the extent that it is no longer probable
that the related tax beneﬁt will be r
ealised; such reductions ar
e reversed when the probability of futur
e
taxable proﬁts impr
oves.
Deferred income tax is not r
ecognized if it arises from initial r
ecognition of an asset or liability in a
transaction that is not a business combination and at the time of the transaction affects neither
accounting nor taxable proﬁt or loss. Also, no deferr
ed income tax is recognized r
egarding the initial
recognition of goodwill and r
egarding investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to contr
ol the timing of the reversal of the temporary dif
ferences and it
is probable that they will not r
everse in the foreseeable futur
e.
Deferred income tax is measur
ed at the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date, and reﬂects uncertainty r
elated to income taxes, if any
.
Deferred income tax assets and liabilities ar
e offset when ther
e is a legally enforceable right to offset
current tax assets against curr
ent tax liabilities and when the deferred income tax r
elates to the same
ﬁscal authority
.
In cases where it is concluded it is not pr
obable that tax authorities will accept a tax treatment, the
effect of the uncertainty is r
eﬂected in the recognition and measur
ement of tax assets and liabilities
or
, alter
natively
, a provision is made for the amount that is expected to be settled, where this can be
reasonably estimated. This assessment r
elies on estimates and assumptions and may involve a series
of judgments about future events. New information may become available that causes the company to
change its judgment regar
ding the adequacy of existing tax assets and liabilities. Such changes to tax
assets and liabilities will impact the income tax expense in the period during which such a determination
is made.
Consolidated Financial Statements
OCI N.V
.
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141
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value creation
Sustainability
Corporate
governance
Business
performance
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and compliance
Financial
statements
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information
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
3.19
Segment reporting
An operating segment is a component of an entity that engages in business activities for which it may
earn revenues and incur expenses (including revenues and expenses r
elating to transactions with other
components of the same entity), whose operating results ar
e regularly r
eviewed by the entity’
s Chief
Operating Decision Maker (‘CODM’) to make decisions about resour
ce allocation to the segment and to
assess its performance and for which discrete ﬁnancial information is available. The Gr
oup determines
and presents operating segments on the basis of information that internally is provided to the CODM
during the period. Operating segments are gr
ouped into reporting segments based on similar economic
environments and similar pr
oducts.
3.20
Consolidated statement of cash ﬂows
The consolidated statement of cash ﬂows has been prepar
ed using the ‘indirect’ method. Cash ﬂows
in foreign curr
encies have been translated applying average exchange rates. Currency translation
differ
ences on cash are shown separately in the consolidated statement of cash ﬂows. Cash ﬂows fr
om
investing activities consist mostly of investments and divestments in property
, plant and equipment,
intangible assets, and acquisitions insofar as these are paid for in cash. Acquisitions or disposals of
subsidiaries are pr
esented as acquisition of subsidiary
, net of cash. Cash ﬂows relating to capitalized
borrowing cost ar
e presented as cash ﬂows fr
om operating activities. Cash ﬂows from discontinued
operations / assets held for demerger are pr
esented separately from the cash ﬂows fr
om continuing
operations.
3.21
Ear
nings per share
Earnings per ordinary share ar
e calculated by dividing the proﬁt or loss (net) attributable to holders of
ordinary shar
es by the weighted average number of ordinary shar
es outstanding during the year
. In
making this calculation the (ordinary) tr
easury shares ar
e deducted from the number of ordinary shar
es
outstanding. The calculation of the diluted earnings per share is based on the weighted average number
of ordinary shar
es outstanding plus the potential increase as a r
esult of the conversion of convertible
bonds and the settlement of share-based compensation plans (shar
e option plans). Anti-dilutive effects
are not included in the calculation. An adjustment is made to pr
oﬁt or loss (net) to eliminate interest
charges, whilst allowing for effect of taxation. Regar
ding equity-settled share option plans it is assumed
that all outstanding plans will vest. The potential increase arising fr
om share option plans is based on
a calculation of the value of the options outstanding. This is the number of options multiplied by the
exercise price, divided by the average shar
e price during the ﬁnancial year
. This potential increase is only
applied if the option has intrinsic value.
4.
New accounting standards and policies
On a regular basis, the IASB issues new accounting standar
ds, amendments and revisions to existing
standards and interpr
etations. These new accounting standards, amendments and r
evisions to existing
standards and interpr
etations are subject to endorsement by the Eur
opean Union.
4.1
Standards, amendments, revisions and interpr
etations that became effective to OCI
during 2021
The Group has applied the following amendments that became ef
fective during 2021:
Interest rate benchmark r
eform
A fundamental reform of major inter
est rate benchmarks is being undertaken globally
, including the
replacement of some interbank of
fered rates (IBOR), with alternative nearly risk-free rates. The Gr
oup’
s
main IBOR exposure at the r
eporting date is USD LIBOR on its loans. The alternative reference rate for
LIBOR is the secured overnight ﬁnancing rate (SOFR) which will be published in June 2023. The Group
plans to ﬁnish the process of amending contractual terms in r
esponse to IBOR reform by the end of
2022. Reference is made to note 6.3.
4.2
Standards, amendments, revisions and interpretations not yet ef
fective to OCI
IFRS standards and interpr
etations thereof not yet in for
ce which may apply to the future Group’
s
consolidated ﬁnancial statements are being assessed for their potential impact. The most important
upcoming changes are:
Amendments to IAS 37 - Onerous Contracts
On 14 May 2020, the IASB issued 'Onerous Contracts — Cost of Fulﬁlling a Contract (Amendments
to IAS 37)' amending the standard r
egarding costs a company should include as the cost of fulﬁlling
a contract when assessing whether a contract is onerous. The amendments ar
e effective for annual
reporting periods beginning on or after 1 January 2022.
The changes specify that the ‘cost of fulﬁlling’ a contract comprises the ‘costs that relate dir
ectly to the
contract’. Costs that relate dir
ectly to a contract can either be incremental costs of fulﬁlling that contract
(examples would be direct labour
, materials) or an allocation of other costs that relate directly to fulﬁlling
contracts (an example would be the allocation of the depreciation charge for an item of pr
operty
, plant
and equipment used in fulﬁlling the contract).
The Group applies the amendments to contracts for which it has not yet fulﬁlled all its obligations at the
beginning of the annual reporting period in which the amendments ar
e effective. Comparatives ar
e not
restated. This amendment is not expected to have a material impact.
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
142
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value creation
Sustainability
Corporate
governance
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performance
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statements
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NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
5.
Critical accounting judgment, estimates and assumptions
The preparation of the ﬁnancial statements in compliance with IFRS r
equires management to make
judgments, estimates and assumptions that affect amounts r
eported in the consolidated ﬁnancial
statements. The estimates and assumptions are based on experience and various other factors that
are believed to be r
easonable under the circumstances and ar
e used to judge the carrying amounts
of assets and liabilities that are not r
eadily apparent fr
om other sources. The estimates and underlying
assumptions are r
eviewed on an ongoing basis. Revisions to accounting estimates are r
ecognized in
the period in which the estimate is revised or in the r
evision period and future periods, if the changed
estimates affect both curr
ent and future periods.
The most critical accounting policies, involving a higher degree of judgment and complexity in applying
principles of valuation and for which changes in the assumptions and estimates could result in
signiﬁcantly differ
ent results than those r
ecorded in the ﬁnancial statements, are the following:
Goodwill and other intangible assets
Intangible assets with ﬁnite useful lives are carried at cost less cumulative amortization and any
impairment. Amortization is calculated using the ‘straight-line’ method based on the estimated useful
lives. Management makes estimates regar
ding the useful lives and residual values and assumes that
amortization takes place on a ‘straight-line’ basis. The assets’ useful lives are r
eviewed, and adjusted
if appropriate, at each balance sheet date. For intangible assets with ﬁnite useful lives, OCI assesses
annually or more fr
equently whether indicators exist that suggest the intangible asset might be impaired
by comparing the recoverable amounts with their carrying amounts. In determining the r
ecoverable
amounts of intangible assets, OCI makes estimates and assumptions about future cash ﬂows based on
the value in use.
In doing so, OCI also makes assumptions and estimates regar
ding the discount rates in order to
calculate the net present value of the futur
e cash ﬂows. OCI tests at least annually whether goodwill is
impaired by comparing the r
ecoverable amounts of cash-generating units with their carrying amounts.
The recoverable amount is the higher of the fair value less cost of disposal and the value in use.
In determining the recoverable amount, OCI makes estimates and assumptions concerning future
revenues, futur
e costs, future working capital, futur
e investments, Weighted Average Cost of Capital
(‘WACC’) and futur
e inﬂation rates.
Property
, plant and equipment
Depreciation is calculated using the ‘straight-line’ method based on the estimated useful lives, taking
into account any residual values. Management makes estimates r
egarding the useful lives and r
esidual
values and assumes that depreciation takes place on a ‘straight-line’ basis. The assets’ r
esidual values
and useful lives are r
eviewed, and adjusted if appropriate, at each balance sheet date. In the useful life
reassessment OCI also considers the impact of its ESG targets and of r
elevant climate risks, if identiﬁed
for a speciﬁc country or region. OCI assesses annually
, or more frequently
, whether indicators exist that
suggest that an item of property
, plant and equipment might be impaired by comparing the recoverable
amounts with their carrying amounts.
In determining the recoverable amounts of pr
operty
, plant and equipment, OCI makes estimates and
assumptions about future cash ﬂows based on the value in use. The discount rate to be used in or
der
to calculate the net present value of the futur
e cash ﬂows in the impairment analysis is based on the
WACC.
Financial instruments
The fair value of ﬁnancial instruments traded in active markets (ﬁnancial instruments in the fair value
hierarchy level 1) is based on quoted market prices at the balance sheet date. The fair value of ﬁnancial
instruments not traded in an active market with observable market prices (ﬁnancial instruments in the
fair value hierarchy level 2) is determined using generally accepted valuation techniques. These valuation
techniques include estimates and assumptions about forward rates, discount rates based on a single
interest rate, or on a yield-curve based on market conditions existing at the balance sheet date. The fair
value of borrowings and inter
est rate swaps is calculated based on the present value of the estimated
future cash ﬂows based on the yield-curve applicable at the balance sheet date. If the ﬁnancial
instrument contains a ﬂoating interest rate, the futur
e expected interest rates ar
e determined based on
forward rates. The fair value of forwar
d foreign exchange contracts is determined using quoted forwar
d
exchange rates at the balance sheet date. Gas price option and gas swap contracts are valued using
applicable market yield curves.
All inputs for the fair value calculations repr
esent observable market data that are obtained fr
om external
sources that ar
e deemed to be independent and reliable. The net carrying amount of trade r
eceivables
and trade payables is assumed to approximate the fair value due to the short-term natur
e. The fair value
of ﬁnancial instruments with no observable market prices (ﬁnancial instruments in the fair value hierarchy
level 3) is based on assumptions that market participants would use when pricing these assets or
liability
, including assumptions about risk. Assumptions about risk include the risk inherent in a particular
valuation technique used to measure fair value (such as a pricing model) and the risk inher
ent in the
inputs to the valuation technique, including a risk adjustment when there is signiﬁcant measur
ement
uncertainty
.
The fair value of non-current ﬁnancial liabilities is estimated by discounting the futur
e cash ﬂows using
original effective yield-curves. Unlisted equity securities in the ﬁnancial assets at fair value thr
ough other
comprehensive income category (ﬁnancial instruments in the fair value hierar
chy level 3) are measur
ed
at cost less impairments. A signiﬁcant and prolonged decline in the fair value of a ﬁnancial asset at fair
value through other compr
ehensive income below its acquisition cost is considered as an indicator that
the ﬁnancial asset at fair value through other compr
ehensive income is impaired. If any such evidence
exists for a ﬁnancial asset at fair value through other compr
ehensive income, the cumulative losses
previously r
ecognized in other comprehensive income is r
ecognized in the proﬁt or loss – measured as
the differ
ence between the acquisition cost and the current fair value, less any impairment loss on that
ﬁnancial asset previously r
ecognized in proﬁt or loss – is r
emoved from other comprehensive income
and recognized in pr
oﬁt or loss.
Consolidated Financial Statements
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.
Annual Report 2021
143
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Corporate
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performance
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statements
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information
5.
Critical accounting judgment, estimates and assumptions
(continued)
Impairment ﬁnancial instruments (including trade receivables)
Objective evidence may exist in circumstances in which a counterparty has been placed in bankruptcy
,
or has failed on the repayments of principal and inter
est. In other circumstances OCI uses judgment
to determine whether ﬁnancial assets may be impaired. OCI uses judgment to determine whether an
impairment can be reversed, an assumption in doing so might be an impr
ovement in the debtor’
s credit
rating or receipt of payments due. For listed equity securities in the ﬁnancial assets at fair value thr
ough
other comprehensive income category
, the Group uses the assumption that if the market value declined
by more than 25 per
cent and more than 6 months, the asset is assumed to be impair
ed.
For unlisted equity securities in the ﬁnancial assets at fair value through other compr
ehensive income
category
, an impairment test is performed if objective evidence becomes available to the Group that the
asset might be impaired. For debt-securities, an impairment trigger exists when the counterpart fails
to meet its contractual payment obligations or there is evidence that the counterpart has encounter
ed
ﬁnancial difﬁculties. The impairment is determined based on the carrying amount and the r
ecoverable
amount.
The recoverable amount is determined as the pr
esent value of estimated future cash ﬂows using the
original effective inter
est rate.
Inventories
In determining the net realizable value of inventories, OCI estimates the selling prices in the or
dinary
course of business, cost of completion and cost to sell. In doing so, OCI makes estimates and
assumptions based on current market prices, historical usage of various pr
oduct categories versus
current inventory levels and speciﬁc identiﬁed obsolescence risks (e.g. end of life of speciﬁc goods and
spare parts and the impact of new envir
onmental legislation).
Provisions
Recognition of provisions include signiﬁcant estimates, assumptions and judgments. IFRS r
equires
only those provisions to be r
ecognized if there is an expected outﬂow of r
esources and if the cost of
these outﬂows can be estimated reliably
. Accordingly
, management exercises considerable judgment in
determining whether it is more likely than not that ther
e is a present obligation as a r
esult of a past event
at the end of the reporting period, whether it is pr
obable that such a proceeding will r
esult in an outﬂow
of resour
ces and whether the amount of the obligation can be reliably estimated. These judgments ar
e
subject to change as new information becomes available.
The requir
ed amount of a provision may change in the futur
e due to new developments in the matter
.
Revisions to estimates may signiﬁcantly impact future pr
oﬁt or loss. Upon resolution, the Gr
oup may
incur charges in excess of the recor
ded provisions for such matters.
Provisions for asset r
etirement obligations, r
epresent estimated costs of decommissioning. Due to the
long time period over which future cash outﬂows ar
e expected to occur
, including the respective inter
est
accretion, assumptions ar
e requir
ed to be made. Amongst others, the estimated cash outﬂows could
alter signiﬁcantly if, and when, political developments affect futur
e laws and regulation with r
espect to
asset retir
ements. The Group has not r
ecognized any asset retirement obligations because a r
eliable
estimate of the amount of the obligations cannot be made.
With respect to legal cases, the Group has to estimate the outcome. Regulatory and legal pr
oceedings
as well as government investigations often involve complex legal issues and are subject to substantial
uncertainties. The Company periodically reviews the status of these pr
oceedings with both the internal
and external legal counsels.
Income taxes
OCI is subject to income taxes in several jurisdictions. Estimates are r
equired in determining the gr
oup-
wide provision for income taxes. Ther
e are some transactions and calculations for which the ultimate
tax position is uncertain during the ordinary course of business. The Gr
oup recognizes pr
ovisions for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the ﬁnal
tax outcome of these matters is differ
ent from amounts that wer
e initially recorded, such dif
ferences will
impact the current income tax and deferr
ed tax provisions in the period in which such determination
is made. OCI recognizes deferr
ed tax assets to the extent that it is probable that futur
e taxable proﬁts
will be available for the deferred tax asset to be r
ecovered. This is based on estimates of taxable fu
tur
e
income by jurisdiction in which OCI operates and the period over which deferred tax assets ar
e ex
pect
ed
to be recoverable. In the event that actual r
esults or new estimates differ fr
om previous estimates and
depending on the possible tax strategies that may be implemented, changes to the recognition of
deferred tax assets could be r
equired, which could impact the ﬁnancial position and pr
oﬁt or loss.
Leases
The assessment of whether a contract is or contains a lease requir
es judgment with respect to whether
the lessor has substantive substitution rights, who obtains economic beneﬁts from use of the asset and
who takes the ‘how and for what purpose’ decisions during the period of use. Judgment is also applied
in order to assess whether the entity will exer
cise any extension or cancelation options of a lease. The
group applies judgments in or
der to determine the incremental borr
owing rate in order to calculate the
lease liabilities.
Control assessment subsidiaries
Subsidiaries that OCI controls ar
e fully consolidated from the date that contr
ol commences until the
date that control ceases. T
o determine whether OCI has control over its subsidiaries, an assessment of
control is r
equired. This assessment is based on the r
equirements of IFRS 10 and evaluates whether
OCI is exposed or has rights to variable returns from its involvement with the investee and whether OCI
has the ability to affect those r
eturns through its control over the investee, generally accompanying a
shareholding of mor
e than half of the shares issued and r
elated voting power
. In certain circumstances,
the control assessment may r
equire OCI to evaluate the ef
fect of ownership structures, contractual
clauses and other arrangements that could have an impact on the assessment of control. The
signiﬁcance of this evaluation is inversely correlated with OCI’
s shareholding in the subsidiary
.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
144
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
5.
Critical accounting judgment, estimates and assumptions
(continued)
Control over investees
In determining whether OCI shall consolidate certain investments in joint arrangements, OCI makes
assumptions about whether certain decision rights are substantive or pr
otective in nature. In doing
so, OCI applies judgment regar
ding shareholder agr
eements it has with those other investees. If OCI
determines it holds the majority of the substantive decision rights, it assumes that it holds power over
the investee. OCI also makes assumptions whether it is exposed to variable returns and whether these
are linked to the power OCI holds. The linkage is tested by making assumptions whether OCI might be
acting as a principal rather than an agent. If OCI meets all three criteria, OCI assumes it contr
ols the
investee.
Liquidity risk
As part of the preparation of the ﬁnancial statements, the Company has assessed its liquidity risk and
going concern. Liquidity risk is the risk that the Group may encounter difﬁculty in meeting the obligations
associated with its ﬁnancial liabilities that are settled by delivering cash or another ﬁnancial asset. The
Company has made a number of assumptions in assessing its ability to meet its covenant requir
ements
and satisfy obligations as they become due. Determining these assumptions requir
es signiﬁcant
judgment about future r
esults and cash ﬂows. Key assumptions include product pricing, gas pricing,
utilization rates and the ability to arrange ﬁnancing and obtain waivers for potential covenant breaches.
6.
Financial risk and capital management
Overview
The Group has exposur
e to credit, liquidity and market risks fr
om ﬁnancial instruments. These risks
arise from exposur
es that occur in the normal course of business and are managed on a consolidated
company basis. This note presents information about the Gr
oup’
s exposure to each of the above risks,
the Group’
s objectives, policies and processes for measuring and managing these risks, additionally it
also includes the Group’
s management of capital.
Risk management framework
The Board of Dir
ectors has oversight responsibility on the establishment and monitoring of the Gr
oup’
s
risk management framework. Senior (local) management is responsible for the ef
fective operation
of the internal risk management and control systems. The Audit and Risk department is responsible
for the facilitation and supervision of the Risk Management function, compliance with OCI Internal
Control Framework and supports the Boar
d of Directors in the exer
cise of their aforementioned risk
management duties.
The Group’
s risk management policies and practices are established to identify and analyze the risks
faced by the Group, to set appr
opriate risk limits and controls, and to monitor risks and adher
ence
to limits. Risk management policies and systems are r
eviewed regularly to r
eﬂect changes in market
conditions and the Group’
s business activities. The Group, through its training and management
standards and pr
ocedures, aims to develop a disciplined and constructive contr
ol environment in which
all employees understand their roles and r
esponsibilities.
The Audit Committee oversees how management monitors compliance with the Group’
s risk
management policies and procedur
es, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Gr
oup. The Audit Committee is assisted in its oversight role by
the Audit and Risk Department. The Audit and Risk Department undertakes both regular and ad hoc
reviews of risk management contr
ols and procedur
es, the results of which are r
eported to the Audit
Committee.
6.1
Credit risk
Credit risk is the risk of ﬁnancial loss to the Gr
oup if a customer or counterparty to a ﬁnancial instrument
fails to meet its contractual obligations, and arises principally from the Gr
oup’
s receivables from
customers and investments in debt securities. The Company mitigates the exposure to cr
edit risk on
outstanding cash balances by placing funds at multiple ﬁnancial institutions with a sufﬁcient cr
edit rating.
The Group’
s exposure to customer credit risk is monitor
ed and mitigated by performing credit checks
before selling any goods. No collateral is r
eceived. The Group establishes an allowance, if needed, for
impairment that repr
esents its estimate of expected losses in respect of trade and other r
eceivables.
The main components of this allowance are a speciﬁc loss component that r
elates to individually
signiﬁcant exposures, and a collective loss component established for gr
oups of similar assets in
respect of losses that ar
e expected based on historical performance. IFRS 9 establishes a three-stage
impairment model, based on whether there has been a signiﬁcant incr
ease in the credit risk of a ﬁnancial
asset since its initial recognition. As at 31 December 2021, management assessed any signiﬁcant
increase in cr
edit risk based on internal and exter
nal factors related to the ﬁnancial instruments and
concluded no such signiﬁcant credit risk was pr
esent. Hence, no allowance related to cr
edit risk has
been recognized.
As of September 2018, the Group enter
ed into a securitization agreement to sell certain trade
receivables to an external ﬁnancial institution. The agreement permits securitization of trade r
eceivables
up to EUR 200.0 million (USD 224.9 million). As per 31 December 2021 an amount of EUR 200.0 million
(USD 224.9 million) of trade receivables wer
e transferred.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
145
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.1
Credit risk
(continued)
With respect to transactions with ﬁnancial institutions, the Group sets a minimum cr
edit rating for the
counterparties. The maximum exposure to cr
edit risk is the carrying amount of ﬁnancial instruments,
for an overview refer
ence is made to the tables ﬁnancial instruments by category
. There is no signiﬁcant
concentration by counterparty of credit risk in trade and other r
eceivables, ﬁnancial assets at fair value
through other compr
ehensive income or cash and cash equivalents. Concentrations of receivables by
region can be seen in the table below
.
The maximum exposure to cr
edit risk at the reporting date is as follows:
$ millions
Note
2021
2020
T
rade and other receivables
(9)
885.2
604.4
Financial assets at fair value through other compr
ehensive income
(11)
19.2
30.0
Cash and cash equivalents
(14)
1,580.3
686.3
T
otal
2,484.7
1,320.7
The maximum exposure to cr
edit risk for trade and other receivables by geographic r
egion is as follows:
$ millions
2021
2020
Middle East and Africa
175.0
192.0
Asia and Oceania
216.4
18.5
Europe
301.4
269.0
Americas
192.4
124.9
T
otal
885.2
604.4
The maximum exposure to cr
edit risk for cash and cash equivalents by geographic region is as follows:
$ millions
2021
2020
Middle East and Africa
899.1
535.0
Europe
462.2
17.6
Americas
219.0
133.7
T
otal
1,580.3
686.3
6.2
Liquidity risk
6.2.1 General
Liquidity risk is the risk that the Group will encounter dif
ﬁculty in meeting the obligations associated with
its ﬁnancial liabilities that are settled by delivering cash or another ﬁnancial asset.
The following are the contractual maturities of ﬁnancial liabilities, including estimated inter
est payments
and exclude the impact of netting agreements:
At 31 December 2021
$ millions
Note
Carrying
amount
Contractual
cash ﬂow
Less than
1 year
Between
1 and
5 years
More than
5 years
Financial liabilities
Cash outﬂows:
Loans and borrowings
(18)
3,800.8
4,311.1
597.6
3,112.6
600.9
Lease obligations
(19)
277.2
484.9
35.7
86.0
363.2
T
rade and other payables
(20)
1,368.4
1,368.4
1,345.5
22.5
0.4
Derivatives
(20)
12.8
12.8
12.0
0.8
-
T
otal
5,459.2
6,177.2
1,990.8
3,221.9
964.5
At 31 December 2020
$ millions
Note
Carrying
amount
Contractual
cash ﬂow
Less than
1 year
Between
1 and
5 years
More than
5 years
Financial liabilities
Cash outﬂows:
Loans and borrowings
(18)
4,416.6
5,557.0
479.9
4,258.6
818.5
Lease obligations
(19)
292.2
539.1
48.5
125.6
365.0
T
rade and other payables
(20)
1,020.6
1,020.6
999.1
17.5
4.0
Derivatives
(20)
8.7
8.7
4.5
4.2
-
T
otal
5,738.1
7,125.4
1,532.0
4,405.9
1,187.5
The interest on ﬂoating rate loans and borr
owings is based on forward inter
est rates at period-end. This
interest rate may change as the market inter
est rate changes. Callable loan amounts are classiﬁed as
‘Less than 1 year’. The future obligations will be managed by the futur
e incoming cash from operations,
currently available non-r
estricted cash and cash equivalents of USD 1,439.5
million and unused
amounts on credit facility agr
eements in the amount of USD 800.0 million, refer
ence is made to note 18
'Undrawn bank facilities'.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
146
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.2
Liquidity risk
(continued)
The Group’
s approach to managing liquidity risk is to ensure that it will always have suf
ﬁcient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’
s reputation. This is also safeguarded by using multiple ﬁnancial
institutions in order to mitigate any concentration of liquidity risk.
The Group’
s ﬁnancing strategy is to secure external ﬁnancing primarily at OCI N.V
. with debt at an
operating company level only if there is a compelling economic rationale. OCI N.V
. acts as the ﬁnancing
company thus limiting the number of cross r
elationships within the Company and maximizing ﬂexibility to
divest operating companies.
The liquidity risk is monitored internally at Group level. On an ongoing basis the Gr
oup prepar
es
liquidity forecasts to verify whether the Gr
oup is able to meet its future debt obligations. The Company
has also carefully evaluated the funding of its Business Plan for at least the next 12 months fr
om the
date of issuance of the ﬁnancial statements, taking into account the measures mentioned below and
has applied sensitivities to the forecast level of liquidity headr
oom available. Key assumptions include
product pricing, natural gas pricing and utilization rates. Management has applied these assumptions to
the forecasts, which would leave suf
ﬁcient liquidity headroom.
6.2.2
Reﬁnancing activity
The following reﬁnancing activities wer
e completed during 2021 to optimize the Group’
s ﬁnance cost
and enhance its cashﬂow up-streaming to OCI N.V
.
•
On 1 February 2021, Iowa Fertilizer Company LLC redeemed the outstanding principal amount of the
5.875% USD 147.2 million of Iowa Finance Authority Midwestern Disaster Area Revenue Refunding
Bonds (Iowa Fertilizer Company Project), Series 2016, due 2026 and 2027.
•
On 8 April 2021, OCI N.V
. redeemed 10% of the 5.25% Senior Secur
ed Notes due 2024 and 10% of
its 4.625% Senior Secured Notes due 2025, each at a r
edemption price of 103%. T
otal redemption
amounts to USD 60 million and USD 40 million, respectively
.
•
On 14 August 2021, Fertiglobe obtained a USD 1.4 billion ﬁnancing arrangement, consisting of a USD
900 million bridge loan at LIBOR +105 bps with an 18-month maturity (extendable for another 12
months) with an accordion facility of USD 200 million. Furthermor
e, Fertiglobe obtained a USD 300
million Revolving Credit Facility maturing in 2026 at an inter
est rate of LIBOR +175 bps.
The bridge loan and accordion facility wer
e draw down in full on 4 October 2021 and the proceeds
were used to r
epay EFC and Fertiglobe outstanding loans and to partially fund a dividend of USD 850
million to Fertiglobe shareholders (OCI’
s share is USD 493 million and USD 357 million was distributed
to ADNOC).
•
On 1 November 2021, OCI N.V
. redeemed all of the aggr
egate principal amount of the outstanding
USD 540 million 5.25% Notes, at a redemption price of 102.625%.
•
On 8 November 2021, OCI N.V
. partially redeemed EUR 400 million of the aggr
egate principal amount
of the outstanding EUR 700 million 3.125% Senior Secured Notes due 2024, at a r
edemption price of
101.5625%.
•
On 20 December 2021, OCI N.V
. redeemed all of the aggr
egate principal amount (EUR 300 million)
of the outstanding 2024 EUR Notes, at a redemption price of 101.5625%. Furthermor
e, OCI N.V
.
redeemed 10% of its 3.625% Senior Secur
ed Notes due 2025 ("2025 EUR Notes") and 10% of its
4.625% Senior Secured Notes due 2025 ("2025 USD Notes"), or a total r
edemption of USD 40 million
and USD 36 million of the aggregate principal outstanding amounts of the 2025 EUR Notes and 2025
USD Notes, respectively
, each at a redemption price of 103%.
•
On 29 December 2021, Iowa Fertilizer Company LLC redeemed the remaining balance of USD 40
million on the outstanding principal amount of the Iowa Finance Authority Midwestern Disaster Area
Revenue Refunding Bonds (Iowa Fertilizer Company Project), Series 2019 at a r
edemption price of
101.5%.
For an overview of all loans and borrowings, r
eference is made to note 18.
6.3
Market risk
Market risk is the risk of changes in market prices, such as foreign exchange rates, inter
est rates,
commodity prices and equity prices that will affect the Gr
oup’
s income or the value of its holdings of
ﬁnancial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the r
eturn.
The Group is exposed to for
eign currency risk arising in separate ways:
Foreign exchange transaction risk
The Group entities pr
edominantly execute their activities in their respective functional curr
encies.
The Group is however exposed to for
eign exchange transaction risk when Group entities enter into
foreign curr
ency denominated transactions. The Group monitors the exposur
e to foreign currency risk
arising from operating activities and enters selectively into for
eign exchange contracts to hedge foreign
currency exposur
es. The nominal amount of the foreign curr
ency derivatives outstanding used to hedge
transaction risk as per 31 December 2021 was USD 142.6 million (2020: USD 65.9 million) and relates
to the USD exposure of the Gr
oup (on Euro curr
encies).
The functional currencies of the Gr
oup entities are primarily the US dollar
, the Algerian dinar and the
Euro. EFC and EBIC have exposur
e to ﬂuctuations in the USD / EGP exchange rates and Fertil has
esposure to ﬂuctuations in the USD / AED echange rates.
Foreign exchange translation risk
The Group is exposed to the translation of for
eign currency denominated monetary assets and liabilities.
The currencies concerned are the Eur
o and the Algerian dinar
.
These exposures ar
e managed by the Group's tr
easury function, which may hedge a portion of the
foreign curr
ency exposures estimated to arise in the for
eseeable future. For the unhedged portion the
Group seeks to mitigate translation risk by matching the r
emaining currency of debt with available
cashﬂows in the respective curr
ency
. As per 31 December 2021 there wer
e no foreign curr
ency
derivatives outstanding (2020: USD 1,005.7 million) related to the exposur
e of foreign curr
ency
denominated monetary assets and liabilities.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
147
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3
Market risk
(continued)
The summary of balances of the Group’
s exposure to foreign exchange translations, wher
e there
is exposure for monetary items denominated in for
eign currencies which dif
fer from their functional
currencies, including inter
company balances, is as follows:
At 31 December 2021
$ millions
USD
EUR
EGP
T
rade and other receivables
20.6
6.3
93.1
T
rade and other receivables inter
company
1,980.6
67.6
0.3
T
rade and other payables
(10.5)
(11.4)
(8.0)
T
rade and other payables intercompany
(161.2)
(20.0)
(0.5)
Loans and borrowings
(1,107.0)
-
-
Loans and borrowings inter
company
(1,212.6)
(123.1)
-
Provisions
-
-
(120.8)
Cash and cash equivalents
411.6
13.9
24.0
At 31 December 2020
$ millions
USD
EUR
EGP
T
rade and other receivables
18.3
4.8
87.6
T
rade and other receivables inter
company
2,098.3
0.8
0.8
T
rade and other payables
(17.7)
(4.1)
(7.6)
T
rade and other payables intercompany
(11.7)
(6.4)
-
Loans and borrowings
(1,350.0)
-
-
Loans and borrowings inter
company
(1,133.2)
5.4
-
Provisions
-
-
(120.7)
Cash and cash equivalents
238.9
8.8
26.5
The Algerian dinar is not included in the above table of foreign exchange translation exposur
e, since
there ar
e no entities in the Group which have monetary items denominated in Algerian dinar
, except for
Sorfert, which has the Algerian dinar as its functional currency
.
Signiﬁcant rates
The following signiﬁcant exchange rates applied during the year against the US dollar:
Average
2021
Average
2020
Closing
2021
Closing
2020
Euro
1.1828
1.1418
1.1370
1.2225
Egyptian pound
0.0637
0.0632
0.0636
0.0635
Algerian dinar
0.0074
0.0079
0.0072
0.0076
The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate
to increase or (decr
ease) against the EUR, EGP and DZD, with all other variables held constant. The
Group’
s exposure to foreign curr
ency changes for all other currencies is not material.
31 December 2021
$ millions
Change in
FX rate
Effect on pr
oﬁt
before tax
Effect on
equity
EUR - USD
5 percent
1.9
31.0
(5) percent
(1.9)
(31.0)
EGP - USD
3 percent
(0.4)
-
(3) percent
0.4
-
DZD - USD
3 percent
21.9
-
(3) percent
(21.9)
-
31 December 2020
$ millions
Change in
FX rate
Effect on pr
oﬁt
before tax
Effect on
equity
EUR - USD
8 percent
(32.0)
-
(8) percent
32.0
-
EGP - USD
3 per
cent
(0.4)
-
(3) percent
0.4
-
DZD - USD
3 percent
7.2
-
(3) percent
(7.2)
-
The ﬁgures in the above overview ar
e determined based on the currency volatility of the r
espective
years. A signiﬁcant part of the Group’
s exposure to foreign curr
ency transaction risk relates to
intercompany balances.
Interest rate benchmark r
eform
A fundamental reform of major inter
est rate benchmarks is being undertaken globally
, including the
replacement of some interbank of
fered rates (IBOR), with alternative nearly risk-free rates. The Gr
oup’
s
main IBOR exposure at the r
eporting date is USD LIBOR on its loans. The alternative reference rate
for LIBOR is the secured overnight ﬁnancing rate (SOFR). The Group plans to ﬁnish the pr
ocess of
amending contractual terms in response to IBOR r
eform by early 2022.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
148
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3
Market risk
(continued)
Interest rate risk
The Group’
s cash ﬂow interest rate risks arise from the exposur
e to variability in future cash ﬂows of
ﬂoating rate ﬁnancial instruments and reﬁnancing ﬁxed rate borr
owings. The Group r
egularly reviews its
exposure to the global inter
est rate environment. The Gr
oup has entered into interest rate derivatives
with a notional amount of USD 125 million (2020: nil) to manage the interest rate risk on ﬂoating rate
instruments and the reﬁnancing of ﬁxed rate borr
owings.
The Group analyses its inter
est rate exposure on a dynamic basis. The Gr
oup calculates the impact on
proﬁt or loss of a deﬁned inter
est rate shift. The same interest rate shift is used for all curr
encies. The
following table demonstrates the sensitivity to a reasonably possible change in inter
est rates on that
portion of borrowings af
fected. W
ith all other variables held constant, the Group’
s proﬁt before tax is
affected thr
ough the impact on ﬂoating rate borrowings plus r
eﬁnancing of ﬁxed rate borrowings, as
follows:
$ millions
In basis points
2021
2020
Effect on pr
oﬁt before tax for the coming year
+100 bps
(17.9)
(6.6)
- 100 bps
17.9
6.6
The assumed movement in basis points for the interest rate sensitivity analysis is based on the curr
ently
observable market data, showing a higher volatility compared to prior years. The incr
ease is mainly
attributable to the Bridge Loan ﬁnancing obtained by Fertiglobe plc in 2021. The interest rate sensitivity
calculation is based on the interest-bearing liabilities excluding the r
estricted funds of IFCo, refer
ence is
made to note 14.
Commodity price risk
Natural gas is one of the primary raw materials used in the Group’
s production processes. The Gr
oup
is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices.
Management monitors the development of gas prices and products’ selling prices on a daily basis using
external historical and forecast market data provided by several data vendors. Management analyzes
the potential proﬁt margin per pr
oduct based on these data in order to make operational and hedging
decisions.
The Group enters into gas hedges in or
der to hedge future gas price levels over a certain period of time
(refer
ence is made to note 20). The Group uses derivatives (Basis swaps, Index swaps and options)
in order to do so and does not apply hedge accounting on these instruments, ther
efore all fair value
changes related to these ﬁnancial instruments ar
e recognized in pr
oﬁt or loss. Fixed price gas contracts
and month-ahead swaps are accounted for under the ‘own use’ exemption. The ﬁscal year 2022 gas
price risk is reduced by the Gr
oup to an extent of 25% (including both physical pricings and ﬁnancial
hedges).
The outstanding gas hedges in MMBtu as per 31 December 2021 for the years 2022-2024 are:
•
Flat priced contracts 15.8
million (2020: 18.4 million);
•
Options (delta equivalent) 14.6 million (2020: 19.9 million);
•
Basis Swaps 0.1 million (2020: 11.0 million)
For the entities that are impacted by changes in natural gas prices during FY 2022, a change in the
average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD
91.6 million, excluding the positive impact of our differ
ent hedges.
European Emission Allowance
During the year
, the Group has generated additional liquidity by selling EUAs to the market. This
generated total net proceeds of USD 116.5 million (2020: USD 82.8 million) r
esulting from the sale and
repur
chase of EUAs. Included in the net proceeds r
eceived, a gross amount of USD 133.8 million (2020:
nil) was recognized in cost of sales r
elated to the sale of excess EUAs.
When EUAs are sold for cash management purposes, a liability is r
ecognized for the obligation to refund
the allowances for CO
2
emissions during the compliance period. This liability is subsequently measured
at fair value. The total liability recor
ded as per 31 December 2021 amounts to USD 116.2 million (2020:
USD 99.0 million).
T
o manage the fair value risk of the EUA liability
, the Group enter
ed into ﬁnancial hedges to purchase
1.3 million EUAs in order to meet its commitment to the Dutch Emission Authority
. As per 31 December
2021, the fair value of these forward contracts amounts to USD 42.7 million (2020: USD 3.1 million).
The group does not apply hedge accounting to these contracts.
Categories of ﬁnancial instruments:
31 December 2021
$ millions
Note
Loans and
receivables /
payables at
amortized cost
Derivatives
at fair value
Financial assets
at fair value
through other
comprehensive
income
Assets
T
rade and other receivables
(9)
831.8
53.4
-
Financial assets at fair value through other
comprehensive income
(11)
-
-
19.2
Cash and cash equivalents
(14)
1,580.3
-
-
T
otal
2,412.1
53.4
19.2
Liabilities
Loans and borrowings
(18)
3,800.8
-
-
T
rade and other payables
(20)
1,252.2
129.0
-
T
otal
5,053.0
129.0
-
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
149
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.3
Market risk
(continued)
31 December 2020
$ millions
Note
Loans and
receivables /
payables at
amortized cost
Derivatives
at fair value
Financial assets
at fair value
through other
comprehensive
income
Assets
T
rade and other receivables
(9)
585.1
19.3
-
Financial assets at fair value through other
comprehensive income
(11)
-
-
30.0
Cash and cash equivalents
(14)
686.3
-
-
T
otal
1,271.4
19.3
30.0
Liabilities
Loans and borrowings
(18)
4,416.6
-
-
T
rade and other payables
(20)
921.6
107.7
-
T
otal
5,338.2
107.7
-
The Group has limited ﬁnancial instruments carried at fair value. For derivative ﬁnancial instruments,
the fair value is calculated within hierarchy category level 2. Financial assets at fair value thr
ough other
comprehensive income r
ecognized as level 1 is USD 2.8 million (2020: USD 2.9 million), the investment
in the Infrastructure and Gr
owth Capital Fund of USD 2.8 million
(2020: USD 6.3 million) was recognized
as level 2 as the valuation is partially derived from listed shar
es.
The investment in Notore Chemical of
USD 13.6
million (2020: USD 20.8 million) is recognized as level
3, refer
ence is made to note 11.
Notore is listed on the Nigerian Stock Exchange since 2018, however due to the lack in trading volumes
the investment is still valued within the hierarchy category level 3 based on audited ﬁnancial statements.
In 2021 and 2020, there wer
e no transfers between the fair value hierarchy categories. The fair value of
loans and borrowings and r
eceivables are disclosed in notes 18 and 9, r
espectively
.
6.4
Capital management
The Board’
s policy is to maintain a strong capital base so as to maintain investor
, creditor and market
conﬁdence and to sustain future development of the business. Capital consists of or
dinary shares,
retained earnings and non-controlling inter
ests of the Group. The Boar
d of Directors monitors the return
on capital as well as the level of dividends to ordinary shar
eholders. The Group is r
equired by external
ﬁnancial institutions to maintain certain capital requir
ements compared to its debt. Refer
ence is made to
note 18 for a description of ﬁnancial covenants.
The Group’
s net debt to equity ratio at the reporting date was as follows:
$ millions
Note
2021
2020
Loans and borrowings
(18)
3,800.8
4,416.6
Less:
cash and cash equivalents
(14)
1,580.3
686.3
Net debt
2,220.5
3,730.3
T
otal equity
3,508.2
2,671.8
Net debt to equity ratio at 31 December
0.63
1.40
Loans and borrowings include an amount of USD 383.1 million r
elated to the bank overdraft facility
of OCI N.V
. The amount drawn on this facility is also included in cash and cash equivalents and held
by other entities within the Group. These amounts cannot be of
fset as they do not comply with the
offsetting r
equirements for ﬁnancial instruments.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
150
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
7.
Property
, plant and equipment and right-of-use assets
Property
, plant and equipment:
$ millions
Land
and
buildings
Plant
and
equipment
Fixtures
and
ﬁttings
Under
construction
T
otal
Cost
749.9
9,209.3
58.8
155.5
10,173.5
Accumulated depreciation
(160.2)
(3,402.2)
(40.5)
-
(3,602.9)
At 1 January 2020
589.7
5,807.1
18.3
155.5
6,570.6
Movements in the carrying amount:
Additions
5.1
24.0
2.5
221.2
252.8
Disposals
-
-
(0.3)
-
(0.3)
Depreciation
(27.5)
(519.0)
(3.5)
-
(550.0)
T
ransfers
4.3
228.4
0.8
(233.5)
-
Effect of movement in exchange rates
(5.4)
(26.1)
(0.3)
3.0
(28.8)
At 31 December 2020
566.2
5,514.4
17.5
146.2
6,244.3
Cost
751.9
9,328.1
60.4
146.2
10,286.6
Accumulated depreciation
(185.7)
(3,813.7)
(42.9)
-
(4,042.3)
At 31 December 2020
566.2
5,514.4
17.5
146.2
6,244.3
Movements in the carrying amount:
Additions
2.0
25.1
4.8
203.3
235.2
Disposals
-
(2.4)
-
-
(2.4)
Depreciation
(24.8)
(531.8)
(3.5)
-
(560.1)
Impairment
(1.3)
(244.7)
(0.3)
(30.0)
(276.3)
T
ransfers
0.6
163.0
1.2
(164.8)
-
Reclassiﬁcation to inventory
-
(19.0)
-
-
(19.0)
Asset retir
ement obligation
-
-
8.7
-
8.7
Effect of movement in exchange rates
(3.2)
(76.1)
(0.7)
(6.9)
(86.9)
At 31 December 2021
539.5
4,828.5
27.7
147.8
5,543.5
Cost
748.6
9,208.8
73.8
147.8
10,179.0
Accumulated depreciation
(209.1)
(4,380.3)
(46.1)
-
(4,635.5)
At 31 December 2021
539.5
4,828.5
27.7
147.8
5,543.5
As at 31 December 2021, the Group has land with a carrying amount of USD 35.3 million (2020: USD
35.3 million).
The transfers of USD 164.8 million (2020: USD 233.5 million) are assets under construction that wer
e
put into use during the year
. T
ransfers mainly relate to Iowa Fertilizer Company for USD 48.3 million, OCI
Nitrogen for USD 21.4 million and Ruwais Fertilizer Industries for USD 77.5 million. The additions of USD
235.2 million mainly relate to OCI Nitr
ogen for USD 62.0 million, Iowa Fertilizer Company for USD 44.8
million and Ruwais Fertilizer Industries for USD 43.8 million. The effect of movement in exchange rates
in 2021 mainly relates to Sorfert, BioMCN and OCI Nitr
ogen, which have differ
ent functional currencies
(Algerian dinar and Euro r
espectively) compared to the Gr
oup’
s presentation currency
. The Algerian dinar
decreased by 5.3% and the Eur
o decreased by 7.0% against the US dollar in 2021. The capitalized
borrowing costs during the year ended 31 December 2021 amounts to zer
o (2020: USD 0.6 million).
The capitalized borrowing costs for 2020 fully r
elated to OCI Beaumont and were substantially paid.
The differ
ence between the additions in the above schedule and the investments in property
, plant
and equipment mentioned in the consolidated statement of cash ﬂows is mainly caused by changes in
capital expenditure cr
editors not yet paid and capitalized borrowing costs, which ar
e presented as part
of interest expenses under cash ﬂows fr
om operating activities in the consolidated statement of cash
ﬂows. For capital commitments refer
ence is made to note 29.
Property
, plant and equipment of USD 1,835.9 million (2020: USD 1,920.6 million) have been pledged
as security for external loans and borrowings of IFCo. Reference is made to note 18.
Impairment BioMCN
During 2021 an impairment loss of USD 264.5 million and USD 13.8 million was recognized in cost of
sales on the property
, plant and equipment and right of use assets, respectively
, of BioMCN, an entity
included in our Methanol EU segment. Over the course of Q3 and Q4 ‘21, European gas prices r
eached
historically high price levels, which has a signiﬁcantly negative impact on the ﬁnancial performance of
BioMCN. In response to the high gas price envir
onment, management decided to temporarily shut
down the production facilities at BioMCN fr
om June 2021 onwards. The shutdown of the pr
oduction
facilities was initiated to avoid signiﬁcant contribution losses caused by the historically high gas prices.
Operational plans are in place to quickly r
espond to changes in market prices.
T
o determine the impairment loss, the recoverable amount of BioMCN was estimated based on value
in use and was deemed to be zero. The pr
e-tax discount rate used in the estimate is 4.6% (2020:
9.0%). The discount rate in 2021 is favorably impacted by income tax beneﬁts caused by operating
losses in the valuation. The key assumptions included in the estimation of the recoverable amount ar
e
the forecasted methanol prices and the for
ecasted natural gas prices. These assumptions are derived
from analyst publications and / or published market prices available on 31 December 2021. Based
on the impairment test performed, the property
, plant and equipment of BioMCN was fully impaired.
The impairment is solely attributable to the unprecedented incr
ease in forecasted natural gas prices in
Europe, combined with a weak corr
elation to forecasted methanol sales prices and is not the r
esult of
operational decisions.
The impairment model is especially sensitive to changes to assumptions in the terminal value period of
the model. An increase or decr
ease of 1% in the forecasted gas price in the terminal value period r
esults
in USD 33.2 million respective change in the value in use and an incr
ease or decrease of 1% in the
forecasted price of methanol in the terminal value period r
esults in USD 45.6 million respective change
in the value in use.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
151
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
7.
Property
, plant and equipment and right-of-use assets
(continued)
Right-of-use assets:
$ millions
Note
Land
and
buildings
Plant
and
equipment
Fixtures and
ﬁttings
T
otal
At 1 January 2020
133.6
88.3
55.6
277.5
Movements in the carrying amount:
Additions
11.8
14.8
3.8
30.4
Modiﬁcations
3.7
1.3
-
5.0
Disposals
(0.6)
(1.1)
-
(1.7)
Depreciation
(7.4)
(24.4)
(9.5)
(41.3)
Effect of movement in exchange rates
6.7
2.9
(0.1)
9.5
At 31 December 2020
147.8
81.8
49.8
279.4
Movements in the carrying amount:
Additions
18.7
12.9
1.7
33.3
Modiﬁcations
1.0
3.3
-
4.3
Disposals
(2.4)
(2.7)
-
(5.1)
Depreciation
(9.2)
(22.4)
(9.8)
(41.4)
Impairment
(3.9)
(9.9)
-
(13.8)
Effect of movement in exchange rates
(6.2)
(2.3)
-
(8.5)
At 31 December 2021
145.8
60.7
41.7
248.2
The additions of USD 33.3 million mainly relate to OCI Nitr
ogen for USD 18.2 million and Sorfert for
USD 6.0 million. The effect of movement in exchange rates of USD 8.5 million in 2021 mainly r
elates to
Sorfert, BioMCN and OCI Nitrogen, which have dif
ferent functional curr
encies (Algerian dinar and Euro
respectively) compar
ed to the Group’
s presentation currency
.
8.
Goodwill and other intangible assets
$ millions
Goodwill
Licenses and
trademarks
Other
intangible
assets
T
otal
Cost
1,921.9
74.0
4.8
2,000.7
Accumulated amortization and impairment
(1,322.9)
(73.7)
(4.3)
(1,400.9)
At 1 January 2020
599.0
0.3
0.5
599.8
Movements in the carrying amount:
Additions
-
-
0.6
0.6
Amortization
-
(0.3)
(0.5)
(0.8)
Post completion settlement Fertiglobe
(115.1)
-
-
(115.1)
Effect of movement in exchange rates
2.0
-
-
2.0
At 31 December 2020
485.9
-
0.6
486.5
Cost
1,808.8
74.0
5.4
1,888.2
Accumulated amortization and impairment
(1,322.9)
(74.0)
(4.8)
(1,401.7)
At 31 December 2020
485.9
-
0.6
486.5
Movements in the carrying amount:
Additions
-
-
1.1
1.1
Amortization
-
-
(0.2)
(0.2)
Effect of movement in exchange rates
(1.7)
-
-
(1.7)
At 31 December 2021
484.2
-
1.5
485.7
Cost
1,807.1
74.0
6.5
1,887.6
Accumulated amortization and impairment
(1,322.9)
(74.0)
(5.0)
(1,401.9)
At 31 December 2021
484.2
-
1.5
485.7
Goodwill
Goodwill has been allocated to the cash generating units as follows:
Cash generating units
$ millions
Reporting segment
2021
2020
Egyptian Fertilizers Company (‘EFC’)
Fertiglobe
440.0
440.0
OCI Beaumont
Methanol US
23.0
23.0
OCI Nitrogen
Nitrogen Eur
ope
21.2
22.9
T
otal
484.2
485.9
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
152
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
8.
Goodwill and other intangible assets
(continued)
Licenses and trademarks
The licenses and trademarks mainly relate to the customer r
elationships, trademarks and technology
assets of OCI Nitrogen. These intangible assets wer
e identiﬁed during the acquisition of OCI Nitrogen in
2010. The useful life of the customer relationships, trademarks and technology assets ar
e respectively 5
to 10 years, 3 years and 5 years.
Goodwill impairment testing
The determination of the recoverable amounts for the cash generating units r
equires signiﬁcant
judgments and estimates, including projections of futur
e cash ﬂows from the businesses. The
recoverable amounts have been estimated based on value in use.
The tests were carried out by discounting futur
e cash ﬂows to be generated from the continuing use of
the cash-generating units to which the goodwill applies and on the assumption of an indeﬁnite life. Key
assumptions used in the calculation of recoverable amounts ar
e the discount rate, the terminal value
growth rate, selling price outlook per pr
oduct, natural gas prices and the number of expected operating
days per plant. Selling price and natural gas price assumptions are based on a published independent
price outlook prepar
ed by global experts. The other assumptions used are based on past experiences
and external sources, but that are unpr
edictable and inherently uncertain.
The impairment tests are based on speciﬁc estimates for cash ﬂow pr
ojections for the years 2022 to
2026 (this period captures the cyclical natur
e of the industry). For the subsequent years, the residual
values were calculated based on the average EBITDA margin of the last two years of the pr
ojection
period and whereby a perpetual gr
owth rate of 2.02% was used. The estimated cash ﬂows are
discounted using a present value technique.
The following rates were applied in performing the impairment test:
Percentage
2021
2020
EFC
OCI Beaumont
OCI Nitrogen
EFC
OCI Beaumont
OCI Nitrogen
Pre-tax discount rate
12.62%
7.23%
7.94%
11.54%
8.30%
8.74%
Perpetual growth rate
2.02%
2.02%
2.02%
1.45%
1.45%
1.45%
Result of the impairment test
For all cash generating units the recoverable values signiﬁcantly exceed their carrying amounts. No
reasonably possible change in a key assumption would cause the cash generating unit’
s carrying
amount to exceed the recoverable amount.
9.
T
rade and other receivables
$ millions
2021
2020
T
rade receivables (net)
577.2
271.3
271.3
Loans and trade receivables due fr
om related parties (note 30)
5.0
58.5
58.5
Prepayments
57.6
66.2
66.2
Other tax receivables
116.9
112.2
112.2
Supplier advanced payments
31.2
30.9
30.9
Commodity and natural gas derivatives
10.7
16.0
16.0
EUA derivatives (note 6.3)
42.7
-
-
Foreign curr
ency derivatives
-
3.3
3.3
Other receivables
43.9
46.0
46.0
T
otal
885.2
604.4
604.4
Non-current
33.6
3.5
3.5
Current
851.6
600.9
600.9
T
otal
885.2
604.4
604.4
In 2018, the Group enter
ed into a securitization agreement to sell certain trade r
eceivables to an
external ﬁnancial institution. By doing so, the Group is able to receive cash ﬂows fr
om selected debtors
sooner than would normally be the case. Upon transfer of the balances, OCI derecognizes the trade
receivables, since substantially all risks and r
ewards of ownership ar
e transferred. The agreement
permits securitization of trade receivables up to EUR 200.0 million (USD 224.9 million) (2020: EUR 180.0
million). As per 31 December 2021 an amount of EUR 200.0 million (2020: EUR 122.6 million) of trade
receivables had been transferr
ed. The transferred trade r
eceivables are pledged as security under the
securitization program.
The other tax receivable contains an amount of EGP 900 million (USD 57.2 million) r
elating to a payment
made to the Egyptian T
ax Authorities as part of the tax claim which will be refunded upon settlement of
the tax claim. Reference is made to note 28 ‘OCI S.A.E. tax dispute’. USD 53.1 million is r
elated to paid
V
A
T to be collected in various jurisdictions.
The carrying amount of ‘T
rade and other receivables’ as at 31 December 2021 approximates its fair
value.
The aging of current trade r
eceivables at the reporting date wer
e as follows:
$ millions
2021
2020
Neither past due nor impaired
559.7
223.2
Past due 1 - 30 days
14.2
42.4
Past due 31 - 90 days
1.8
3.4
Past due 91 - 360 days
1.2
1.5
More than 360 days
0.3
0.8
T
otal
577.2
271.3
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
153
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
9.
T
rade and other receivables
(continued)
Management believes that the unimpaired amounts that ar
e past due by more than 30 days (USD 3.3
million) are collectible in full, based on historic payment behavior and extensive analysis of customer
credit risk, including underlying customers’ cr
edit ratings if they are available. The Gr
oup has not
recognized any allowance for trade r
eceivables.
10.
Equity-accounted investees
(i)
The following table shows the movements in the carrying amount of the Group’
s associates
and joint ventures:
$ millions
2021
2020
At 1 January
468.7
506.9
Share in income
7.3
(36.7)
Investment Rainbow Holdco
1
23.6
-
Intercompany pr
oﬁt elimination on upstream transactions
-
(0.1)
Dividends
(2.5)
(3.0)
Effect of movement in exchange rates
(2.2)
1.6
At 31 December
494.9
468.7
Joint ventures
1.1
1.1
Associates
493.8
467.6
T
otal
494.9
468.7
1
Rainbow Holdco B.V
. was acquired on 26 June 2021. Rainbow Holdco B.V
. holds a 50%
shareholding in Utility Support Gr
oup ('USG') B.V
.
(ii) The Group has inter
ests in the following associates and joint ventures:
Name
T
ype
Participation
via
Country
Participation %
Firewater LLC (Natgasoline)
Associate
Fir
ewater B.V
.
United States
50.0
White Rock Insurance PCC Ltd.
Associate
OCI N.V
. Holding
The Netherlands
5.0
Sitech Manufacturing Services C.V
.
Associate
OCI Nitrogen B.V
.
The Netherlands
35.0
Sitech Services B.V
.
Associate
OCI Nitrogen B.V
.
The Netherlands
23.0
Rainbow Holdco B.V
.
Associate
OCI Nitrogen B.V
.
The Netherlands
43.0
Nitrogen Iberian Company SL.
Joint venture
OCI Nitrogen B.V
.
Spain
50.0
Shanxi Fenghe Melamine
Company Ltd.
Joint venture
OCI Nitrogen B.V
.
China
49.0
(iii)
The following table summarizes the ﬁnancial information of OCI’
s associates and joint ventures
(on a 100% basis):
$ millions
2021
2020
Associates
Joint
ventures
T
otal
Associates
Joint
ventures
T
otal
Non-current
assets
2,161.8
-
2,161.8
2,106.9
1.2
2,108.1
Current assets
315.0
15.5
330.5
312.5
2.8
315.3
Non-current
liabilities
(1,121.4)
(8.7)
(1,130.1)
(1,154.8)
-
(1,154.8)
Current liabilities
(323.1)
(4.5)
(327.6)
(291.4)
(1.9)
(293.3)
Net assets
1,032.3
2.3
1,034.6
973.2
2.1
975.3
Income
867.3
27.2
894.5
804.9
34.9
839.8
Expenses
(844.7)
(27.0)
(871.7)
(869.8)
(36.6)
(906.4)
Net (loss) / proﬁt
22.6
0.2
22.8
(64.9)
(1.7)
(66.6)
(iiii) The following chart summarizes the ﬁnancial information of signiﬁcant associates (on a 100% basis):
Firewater LLC
(Natgasoline)
Sitech
Services B.V
.
$ millions
2021
2020
2021
2020
Non-current assets
1,973.8
1,977.2
124.4
128.9
Current assets (excluding cash and cash equivalents)
108.7
122.6
30.0
31.1
Cash and cash equivalents
52.3
3.2
20.3
35.1
Non-current liabilities
(1,050.8)
(1,078.2)
(70.6)
(76.7)
Current liabilities
(178.4)
(119.1)
(44.6)
(55.9)
Net assets
905.6
905.7
59.5
62.5
Group’
s share of net assets
452.8
452.8
13.7
14.4
Revenues
319.5
256.2
222.3
204.3
Depreciation
(157.4)
(173.3)
(13.8)
(13.3)
Interest income
-
0.1
-
-
Interest expense
(56.1)
(62.9)
(1.3)
(1.4)
Proﬁt / (loss) befor
e taxes
(0.4)
(78.2)
17.4
19.4
T
ax expense
-
-
(5.0)
(6.1)
Proﬁt / (loss) after taxes
(0.4)
(78.2)
12.4
13.3
Other comprehensive income
-
-
-
-
T
otal comprehensive income
(0.4)
(78.2)
12.4
13.3
Group’
s share in total comprehensive income
(0.2)
(39.0)
2.8
3.1
Dividends
-
-
11.0
9.1
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
154
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
10.
Equity-accounted investees
(continued)
Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is
a methanol plant in T
exas USA, and Sitech, which operates at the Chemelot site in Geleen, the
Netherlands, where the factory of OCI Nitr
ogen is based. The Chemelot site is also used by other
companies.
11.
Financial assets at fair value through other comprehensive income
$ millions
2021
2020
Infrastructure and Gr
owth Capital Fund LP (UAE)
2.8
6.3
Notore Chemical Industries (Mauritius)
13.6
20.8
Orascom Construction PLC (UAE)
2.8
2.9
T
otal
19.2
30.0
Non-current
19.2
30.0
Current
-
-
T
otal
19.2
30.0
The Group holds an investment in the Infrastructur
e and Growth Capital Fund LP
, which is managed
by the Abraaj Group. Abraaj Holdings and Abraaj Investment Management ar
e in provisional liquidation
in the Cayman Islands and their court-appointed joint provisional liquidators, Deloitte and PwC, ar
e
overseeing the restructuring of Abraaj’
s debt.
The investment in Notore Chemical Industries r
epresents a 13.18 per
cent shareholding. Further
, OCI
N.V
. holds shares in Orascom Construction PLC.
12.
Income taxes
12.1
Income tax in the statement of proﬁt or loss
$ millions
2021
2020
Current tax
(242.5)
(18.3)
Deferred tax
105.4
(26.2)
T
otal income tax reported in proﬁt or loss
(137.1)
(44.5)
Current tax expense
$ millions
2021
2020
Current year
(222.5)
(27.1)
Minimum tax requir
ements
(9.6)
-
Dividend withholding tax
(10.6)
7.8
Changes in estimates relating to prior years
0.2
1.0
Income tax beneﬁt expense reported in pr
oﬁt or loss
(242.5)
(18.3)
Deferred tax expense
$ millions
2021
2020
Origination and reversal of temporary dif
ferences
(60.5)
74.3
Movement in uncertain tax positions (note 12.4)
(92.7)
(30.4)
Changes in tax rates
-
(4.2)
Recognition of previously unr
ecognized tax assets (note 12.4)
264.7
2.9
Unrecognized tax assets
(0.1)
(56.6)
Dividend withholding tax
(6.0)
(12.2)
Income tax beneﬁt / (expense) reported in pr
oﬁt or loss
105.4
(26.2)
12.2
Other comprehensive income
$ millions
2021
2020
Cash ﬂow hedges, effective portion of changes in fair value
4.8
(1.9)
Income tax beneﬁt / (expense) reported in OCI
4.8
(1.9)
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
155
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.3
Reconciliation of effective tax rate
OCI’
s operations are subject to income taxes in various for
eign jurisdictions. The statutory income tax
rates vary from 0.0% to 26.5%, which r
esults in a differ
ence between the effective income tax rate and
the Netherlands’ statutory income tax rate of 25.0%. Reconciliation of the statutory income tax rate in
the Netherlands with the effective income tax rate can be summarized as follows:
$ millions
2021
%
2020
%
Proﬁt / (loss) befor
e income tax
1,295.9
(49.6)
Enacted income tax rate in the
Netherlands
25%
25%
T
ax beneﬁt / (expense) calculated at
the enacted Dutch tax rate
(324.0)
(25.0)
12.4
25.0
Effect of tax rates in for
eign jurisdictions
40.1
3.1
9.8
19.8
Expenses non-deductible
(58.5)
(4.5)
(28.8)
(58.1)
Income not subject to tax
123.2
9.5
19.0
38.3
Adjustments prior years
0.2
-
1.0
2.0
Change in tax rates
-
-
(4.2)
(8.4)
Recognition of previously unr
ecognized
tax assets
264.7
20.4
2.9
5.8
Unrecognized tax assets
-
-
(56.6)
(114.1)
Unrecognized temporary dif
ferences
(65.6)
(5.1)
-
-
Dividend withholding tax
(16.6)
(1.3)
7.8
15.7
Minimum tax requir
ements
(9.6)
(0.7)
-
-
Uncertain tax positions
(92.7)
(7.1)
(7.5)
(15.1)
Other
1.7
0.1
(0.3)
(0.6)
T
otal income tax in proﬁt or loss
(137.1)
(10.6)
(44.5)
(89.7)
The Group’
s consolidated effective tax rate in respect of continuing operations for the period ended 31
December 2021 was 10.6% (2020: -89.7%). The change in effective tax rate was caused mainly by the
following factors:
•
In 2020, the Group reported a consolidated loss befor
e tax of USD 49.6 million whereas in certain
tax jurisdictions taxable proﬁts wer
e realized and tax expenses wer
e recognized accordingly
. As a
consequence, on a consolidated level, this resulted in a negative ef
fective tax rate. In 2021 proﬁtability
increased substantially r
esulting in taxable proﬁts for the majority of the tax jurisdictions in which the
Group operates. This is mainly driven by a r
ecovery in sales prices for Fertilizer products.
Compared to the statutory tax rate applicable in the Netherlands (25%) the following elements ar
e the
main drivers for the lower effective tax rate of 10.6%:
•
The recognition of a deferred tax asset r
elated to net operating losses at IFCo resulted in a signiﬁcant
deferred tax beneﬁt. Refer
ence is made to note 12.4 for a more detailed description of this event.
•
Higher proﬁts generated by the export activities of Sorfert and increased pr
oﬁtability of EBIC in 2021
resulted in a lower ef
fective tax rate compared to the same period in 2020.
•
As a result of the increased pr
oﬁtability noted in 2021, net operating losses that were pr
eviously
unrecognized could be utilized, r
esulting in a decrease of the ef
fective tax rate.
•
The before mentioned was partially offset by the Sorfert r
einvestment case and other uncertain
tax positions (refer to note 12.4), unr
ecognized temporary differ
ence resulting from the BioMCN
impairment, an increase in non-deductible expenses, an incr
ease in dividend withholding taxes and
higher minimum tax requir
ements.
12.4
Deferred income tax assets and liabilities
Changes in deferred tax asset and liabilities (net):
$ millions
2021
2020
At 1 January
(514.7)
(483.7)
(483.7)
Proﬁt or loss
105.4
(26.2)
(26.2)
Effect of movement in exchange rates
2.6
(4.8)
(4.8)
At 31 December
(406.7)
(514.7)
(514.7)
Recognized deferred tax assets and liabilities:
Assets
Liabilities
Net
$ millions
2021
2020
2021
2020
2021
2020
Intangible assets
82.9
81.6
(62.9)
(62.7)
20.0
18.9
Property
, plant and equipment
-
-
(587.1)
(610.7)
(587.1)
(610.7)
Inventory
0.4
1.9
(14.9)
(3.3)
(14.5)
(1.4)
Investment in partnership
-
-
(75.2)
(89.6)
(75.2)
(89.6)
T
rade and other receivables
0.2
-
(0.3)
(0.4)
(0.1)
(0.4)
Loans and borrowings
31.3
52.0
(0.6)
(1.1)
30.7
50.9
T
rade and other payables
12.9
12.4
-
-
12.9
12.4
Provisions
-
-
(3.0)
(6.3)
(3.0)
(6.3)
Uncertain tax positions
-
-
(148.6)
(57.6)
(148.6)
(57.6)
Undistributed earnings
-
-
(21.7)
(15.6)
(21.7)
(15.6)
Operating losses carry forward
and tax credits
379.9
184.7
-
-
379.9
184.7
T
otal
507.6
332.6
(914.3)
(847.3)
(406.7)
(514.7)
Netting of ﬁscal positions
(299.9)
(331.8)
299.9
331.8
-
-
Amounts recognized in
the Statement of Financial
Position
207.7
0.8
(614.4)
(515.5)
(406.7)
(514.7)
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
156
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.4
Deferred income tax assets and liabilities
(continued)
The deferred tax asset r
elating to intangible assets mainly related to capitalized start-up costs for IFCo
for USD 51.3 million. These costs are capitalized and amortized for tax purposes and wer
e expensed
for book purposes. Deferred tax liabilities r
elating to intangible assets mainly relates to goodwill of EFC
for USD 62.7 million. This deferred tax liability will be r
eversed in case the asset is impaired. Deferr
ed tax
liabilities recognized in r
elation to property
, plant and equipment will be realized over the depreciation
period of the related asset, and mainly r
elate to Fertil (USD 247.7 million), IFCo (USD 245.9 million), EFC
(USD 64.3 million) and OCI Nitrogen (USD 20.5 million). The uncertain tax position of USD 148.6 million
is disclosed below
. Furthermore, the deferred tax liability ‘investment in partnership’ (USD 72.5 million)
relates to a temporary dif
ference r
elated to OCI USA Inc’
s investment in OCI Beaumont. The deferred
tax liability ‘undistributed earnings’ relates to income tax consequences of undistributed earnings of
subsidiaries that will reverse in the for
eseeable future. The Company does not anticipate any other
income tax consequences resulting fr
om the undistributed earnings of subsidiaries.
Deferred tax assets r
elate to temporary differ
ences, tax credits and tax losses carry forward. The
Company has net tax losses carry forward and tax cr
edits totalling USD 496.6 million, for which an
amount of USD 188.9 million has not been recognized. The losses carry forwar
d mainly relate to the
US operations (USD 124.4 million) and Egyptian operations (USD 63.5 million). T
ax credits ar
e available
amounting to USD 72.2 million mainly relating to the US operations.
Recognition of previously unr
ecognized tax losses
Due to IFCo's improved pr
oﬁtability in the current year
, the realizability of the available deferred
tax beneﬁts was assessed. Both positive and negative evidence was considered in assessing the
realizability of the available deferr
ed tax beneﬁts, such as recent historical losses, impr
oved proﬁtability
in the current year
, higher forecasted taxable proﬁtability and the carryforwar
d period of the tax losses
available (which is for a signiﬁcant part of the losses indeﬁnitely). After assessing these factors, the
Company determined that convincing evidence is available that the deferred tax beneﬁt of the tax losses
will be realized in the for
eseeable future.
During 2021, a deferred tax asset r
elated to net operating losses was recognized at Iowa Fertilizer
Company (IFCo). The recognition r
esulted in a net deferred tax asset of USD 200.3 million and ther
efore
is a signiﬁcant component of the 2021 tax expense. All available net operating losses and tax credits
available for IFCo were r
ecognized in 2021.
In addition to the losses recognized for IFCo, the BioMCN tax gr
oup was able to utilize all available
tax losses in 2021 due to strong ﬁnancial performance of OCI Fuels and the sale of excess EUAs of
BioMCN.
Uncertain tax positions
The group is subject to the application of complex tax laws in multiple jurisdictions. Application of
these complex tax laws may lead to uncertainties in determining tax positions. We aim to r
esolve these
uncertainties in discussions with the tax authorities. The ﬁnancial effect of the existing uncertainties
per balance sheet date are determined in accor
dance with IAS 12 and IFRIC 23, which requir
es us
to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any
uncertain tax position is judgmental.
As of 31 December 2021, the Group r
ecorded uncertain tax positions to an amount of USD 148.6
million related to taxable pr
oﬁts, which is classiﬁed as a deferred tax liability
. These uncertain tax
positions are classiﬁed as deferr
ed tax since settlement is not expected within 12 months after the
reporting period. In addition to this, the Gr
oup recor
ded USD 40.4 million of current uncertain tax
positions. Expected interest and penalties r
elated to uncertain income tax liabilities have been accrued
for and are included in the uncertain tax positions and in the income tax expense. In addition to the
uncertain tax liability
, the Group also has a contingent tax asset that currently does not meet the
recognition criteria of IFRIC 23. For mor
e information we refer to note 28.
The Group believes that its accruals for tax liabilities ar
e adequate for all open tax years based on its
assessment of many factors, including interpretations of tax law and prior experience.
Unrecognized tax assets
Expiration scheme of gross unr
ecognized carry forward tax losses, tax cr
edits and deductible temporary
differ
ences:
2021
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years
Unlimited
T
otal
T
emporary differences
28.5
113.7
137.1
-
-
-
279.3
T
ax losses and tax
credit carry forwar
ds
46.8
204.5
7.3
-
-
592.5
851.1
T
ax assets –
unrecognized
75.3
318.2
144.4
-
-
592.5
1,130.4
2020
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years
Unlimited
T
otal
T
emporary differences
-
-
-
-
-
-
-
-
-
-
-
-
-
-
T
ax losses and tax
credit carry forwar
ds
67.2
67.2
309.7
309.7
128.9
128.9
-
-
359.2
359.2
532.1
532.1
1,397.1
1,397.1
T
ax assets –
unrecognized
67.2
67.2
309.7
309.7
128.9
128.9
-
-
359.2
359.2
532.1
532.1
1,397.1
1,397.1
The above unrecognized temporary dif
ferences, tax losses and tax cr
edit carry forwards relate to
tax jurisdictions in which OCI has suffer
ed a tax loss in the current or a pr
eceding period. Signiﬁcant
judgment is requir
ed in determining whether deferred tax assets can be utilized. OCI determines this
based on expected taxable proﬁts arising fr
om the reversal of r
ecognized deferred tax liabilities and
based on budget, cash ﬂow forecasts and impairment models and the r
ecent history of taxable results.
Where utilization is not consider
ed probable, deferr
ed tax assets are not recognized.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
157
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
12.4
Deferred income tax assets and liabilities
(continued)
Changes in income tax receivables and payables:
$ millions
2021
2020
At 1 January
(7.5)
(5.6)
Proﬁt or loss
(242.5)
(27.1)
Changes in estimates relating to prior years
0.2
1.0
Other comprehensive income
4.8
(1.9)
Payments
171.6
25.4
Reversal of uncertain tax position
1.1
-
Effect of movement in exchange rates
3.4
0.7
At 31 December
(68.9)
(7.5)
Income tax receivable
3.4
2.8
Income tax payables
(72.3)
(10.3)
T
otal
(68.9)
(7.5)
Sorfert reinvestment case
On 29 December 2020 the Large Multinationals Directorate of the Algerian T
ax Authorities (“DGE”)
issued a letter to Sorfert in which its initial claim of DZD 7,296 million (USD 53.3 million) was maintained
relating to the alleged non-compliance with the r
einvestment obligations under a tax exemption as
granted in 2014 by the Agency Nationale de Developpement de l’Investissement (“ANDI”). The DGE
is of the opinion that Sorfert did not timely carry out the reinvestment obligations as r
equired under
ANDI exemption. As a result, the DGE r
equired Sorfert to r
epay the full assumed tax beneﬁt it enjoyed
in relation her
ewith. On 1 February 2021, Sorfert appealed to this decision and as part of the appeal
process made an initial payment of DZD 2,189 million.
On 31 October 2021, the appeal of Sorfert to the initial claim was rejected by the Internal Appeals
Committee of the DGE (and the total exposure was incr
eased with a 25% penalty) and it had to pay
DZD 1,824 million (20% of the initial claim and penalties added with penalties on the amount already
paid in February 2021). Although Sorfert is of the opinion that it has complied with its reinvestment
obligations, the DGE applied a differ
ent interpretation of the r
einvestment law
. Since there is no detailed
guidance on the interpretation, the ability to ﬁrmly assess the technical merits of this case is limited. Due
to this lack of detailed guidance and negative outcome of the ﬁrst appeal, management is currently of
the opinion that when weighing all the current facts and cir
cumstances and application of interpretive
guidance of IFRIC 23, it has become probable that Sorfert will be r
equired to settle the r
emainder of the
disputed tax amount. As a result, the Company r
ecorded the full impact of the r
einvestment case as an
income tax expense amounting to USD 65.8 million, which results in a r
emaining uncertain tax position
of USD 32.8 million, included in income tax payables.
Supported by its external advisors, Sorfert management will pursue the next instance of appeal as it
continues to have the view that the grounds of the claim will be ruled as unfounded, as Sorfert has
satisﬁed the intent and purpose of the reinvestment obligations under the ANDI r
egime.
13. Inventories
$ millions
2021
2020
Finished goods
185.2
149.0
Raw materials and consumables
21.3
30.4
Spare parts, fuels and others
137.0
114.4
T
otal
343.5
293.8
During 2021, the total write-downs amount to USD 31.9 million (2020: USD 1.4 million) of which USD
31.1 million (2020: USD 1.0 million) relates to spar
e parts. During 2021 there wer
e no reversals of write
downs (2020: USD 5.2 million). Inventory amounting to USD 36.7 million (2020: USD 31.2 million) has
been pledged as security for external loans of IFCo. Reference is made to note 18.
14.
Cash and cash equivalents
$ millions
2021
2020
Cash on hand
0.2
0.2
Bank balances
1,439.3
632.0
Restricted cash
140.8
54.1
T
otal
1,580.3
686.3
Restricted cash
Restricted cash of USD 128.4 million (2020: USD 47.4 million) is held as part of IFCo’
s debt service
requir
ements for the outstanding bonds, of which USD 43.4 million (2020: USD 39.4 million) is held as a
requir
ed deposit in a major maintenance reserve account and is to be used to fund capital expenditur
e,
and USD 80.0 million (2020: nil) is held as requir
ed deposit in a project operating r
eserve account which
is to be used to fund operating expenses in three month incr
ements.
The remaining r
estricted balances are held as collateral against letters of cr
edit and letters of guarantees
issued.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
158
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
15.
Equity attributable to owners of the Company
The movements in the number of shares can be summarized as follows:
2021
2020
Number of shares at 1 January
210,306,101
210,306,101
Number of issued shares
-
-
On issue at 31 December – fully paid
210,306,101
210,306,101
Par value per share (in EUR)
0.02
0.02
At 31 December (in millions of USD)
5.6
5.6
The authorized capital of the Company amounts to EUR 12.0 million. The authorized capital is divided
into 600 million shares, with a nominal value of EUR 0.02 each.
Movements in equity attributable to owners of the Company in 2021:
•
The IPO of Fertiglobe resulted in an increase in r
etained earnings of USD 332.7 million and an
increase in non-contr
olling interests of USD 141.0 million. Refer
ence is made to note 17.
•
The acquisition of additional shares in EBIC resulted in an incr
ease in retained earnings of USD 6.0
million and a decrease in non-contr
olling interests of USD 44.4 million. Refer
ence is made to note 17.
•
•
An amount of USD 8.5 million related to shar
e-based compensation expense was recognized in
retained earnings.
Movements in equity attributable to owners of the Company in 2020:
•
The post-completion adjustment with ADNOC resulted in an increase in r
etained earnings of USD
48.3 million and a decrease in non-contr
olling interests of USD 59.6 million. Refer
ence is made to
note 2.2.1. and note 17.
•
•
An amount of USD 8.0 million related to shar
e-based compensation expense was recognized in
retained earnings.
16. Reserves
$ millions
Hedge
reserve
Financial
assets at fair value
through other
comprehensive
income
Currency
translation
T
reasury
shares
T
otal
At 1 January 2020
(0.2)
(3.3)
(215.8)
(18.5)
(237.8)
Increase in hedge r
eserve
5.9
-
-
-
5.9
Currency translation dif
ferences
-
-
(106.6)
-
(106.6)
Financial assets at fair value through
other comprehensive income
-
(3.7)
-
-
(3.7)
Other comprehensive income
5.9
(3.7)
(106.6)
-
(104.4)
T
reasury shar
es sold / delivered
-
-
-
3.8
3.8
T
reasury shar
es acquired
-
-
-
-
-
At 31 December 2020
5.7
(7.0)
(322.4)
(14.7)
(338.4)
Increase in hedge r
eserve
(16.9)
-
-
-
(16.9)
Currency translation dif
ferences
-
-
(21.7)
-
(21.7)
Financial assets at fair value through
other comprehensive income
-
(10.8)
-
-
(10.8)
Other comprehensive income
(16.9)
(10.8)
(21.7)
-
(49.4)
T
reasury shar
es sold / delivered
-
-
-
4.8
4.8
T
reasury shar
es acquired
-
-
-
(1.0)
(1.0)
At 31 December 2021
(11.2)
(17.8)
(344.1)
(10.9)
(384.0)
OCI is a company incorporated under Dutch law
. In accordance with the Dutch Civil Code, legal
reserves have to be established in certain cir
cumstances. The hedging reserve, the ﬁnancial assets
at fair value through other compr
ehensive income reserve, the curr
ency translation reserve and other
legal reserves ar
e legal reserves that limit distributions to shar
eholders to the extent that these reserves
individually have a credit balance.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
159
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
16. Reserves
(continued)
T
reasury shares
During the ﬁnancial year ended 31 December 2021 the company acquired 40,583
shares and sold and
delivered out of shar
e-based payment plans 195,512 shares.
2021
2020
Number of shares
406,997
561,926
Average carrying value per shar
e (USD)
23.43
25.13
T
otal (in millions USD)
9.5
14.1
Foreign exchange ef
fect
1.4
0.6
T
otal carrying value of treasury shares
(in millions of USD)
10.9
14.7
17.
Non-controlling interests
The non-controlling inter
ests in the respective entities can be summarized as follows:
2021
$ millions
Fertil*
EFC*
Egyptian
Basic
Industries
Corporation*
Sorfert
Algeria
Spa*
Other
T
otal
Non-controlling
interests
50.00%
50.06%
62.50%
74.51%
-
-
Non-current assets
843.8
820.0
176.2
516.7
19.9
2,376.6
Current assets
213.9
75.1
122.5
451.4
2,124.0
2,986.9
Non-current liabilities
(159.9)
(128.4)
(4.4)
(193.7)
(981.0)
(1,467.4)
Current liabilities
(112.8)
(97.2)
(40.9)
(60.0)
(2,076.0)
(2,386.9)
Net assets
785.0
669.5
253.4
714.4
(913.1)
1,509.2
Revenues
466.3
307.3
195.9
614.6
1,916.0
3,500.1
Proﬁt
151.6
83.9
84.4
280.4
(12.0)
588.3
Other comprehensive
income
-
-
-
(33.0)
0.7
(32.3)
T
otal comprehensive
income
151.6
83.9
84.4
247.4
(11.3)
556.0
Dividend cash ﬂows
-
-
(3.9)
(189.5)
(606.3)
(799.7)
*
Non-controlling inter
ests in all Fertiglobe entities increased due to the sale of shar
es by OCI as part of
the Fertiglobe IPO. OCI has sold 8% of the total shares in Fertiglobe plc.
2020
$ millions
Fertil
EFC
Egyptian
Basic
Industries
Corporation
Sorfert
Algeria
Spa
Other
T
otal
Non-controlling inter
ests
42.00%
42.06%
65.20%
70.43%
-
-
Non-current assets
753.3
678.7
193.9
551.7
23.0
2,200.6
Current assets
81.6
50.8
47.5
301.8
1,263.5
1,745.2
Non-current liabilities
(144.1)
(125.3)
(4.7)
(233.8)
(405.3)
(913.2)
Current liabilities
(41.0)
(119.5)
(60.5)
(61.2)
(1,210.3)
(1,492.5)
Net assets
649.8
484.7
176.2
558.5
(329.1)
1,540.1
Revenues
200.2
151.3
77.7
241.5
812.6
1,483.3
Proﬁt
1.2
21.8
(11.3)
77.6
(5.7)
83.6
Other comprehensive
income
-
-
-
(40.2)
1.5
(38.7)
T
otal comprehensive
income
1.2
21.8
(11.3)
37.4
(4.2)
44.9
Dividend cash ﬂows
-
-
-
-
(43.2)
(43.2)
Movements in equity attributable to non-controlling inter
ests:
•
The Fertiglobe IPO resulted in an increase in non-contr
olling interests of USD 141.0 million.
•
The acquisition of additional shares in EBIC resulted in a decr
ease in non-controlling inter
ests of USD
44.4 million.
•
T
otal dividends declared to non-controlling interests amounted to USD 788.1 million (2020: USD 49.2
million).
•
I
Impact differ
ence in proﬁt sharing non-contr
olling interests: In the partnership agr
eement of Sorfert
between OCI and the partner
, a proﬁt-sharing arrangement is agreed, where the other investor will
receive a r
elatively higher portion of dividends in compensation for lower natural gas prices arranged
for by the partner
, which is recognized in cost of sales. As a result of this agreement the non-
controlling inter
ests increased by USD 104.6 million (2020: USD 17.4 million) during 2021. The ef
fect
of the proﬁt sharing agr
eement repr
esents the gross amount allocated to the partner
. This amount is
subsequently diluted by other non-controlling inter
ests in Fertiglobe.
•
In 2020, the reduction of declared dividends to non-contr
olling interests in the amount of USD 125.4
million relates to the dividends declar
ed by Sorfert relating to the ﬁnancial year 2018, that wer
e
cancelled by a resolution of the general meeting of shar
eholders of Sorfert in December 2020.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
160
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
17.
Non-controlling interests
(continued)
Acquisition of additional shares in EBIC
In August 2021, Fertiglobe acquired an additional 25% stake in OCI MEPCO Cayman Limited fr
om
KBR. As a result of this transaction OCI's shar
e in Egypt Basic Industries Corporation (EBIC) increased
from 34.8% to 43.5% (prior to the Fertiglobe IPO). The consideration of USD 43.0 million includes
a transfer of KBR's receivable r
elated to unpaid dividends of USD 4.6 million, resulting in a net
consideration of USD 38.4 million. The following table summarises the effect of the transaction on the
Company's equity attributable to shareholders:
$ millions
Carrying amount of non-controlling inter
ests acquired
44.4
Consideration paid to non-controlling inter
ests in cash
(38.4)
Effect on equity attributable to owners of the Company
6.0
Fertiglobe IPO
On 27 October 2021, Fertiglobe listed on the Abu Dhabi Securities Exchange ("ADX") under the ticker
“FERTIGLB” and the International Securities Identiﬁcation Numbering (Isin) code “AEF000901015”.
OCI sold 8% of the total shares in Fertiglobe, in total 13.8% of the Fertiglobe’
s share capital was
listed. Following the IPO, OCI’
s shareholding per
centage in Fertiglobe is 50% plus one share (and OCI
will retain contr
ol over Fertiglobe). OCI’
s proceeds from the sale of its shar
es amount to USD 461.1
million and fees related to Fertiglobe IPO amount to USD 14.1 million, r
esulting in net proceeds of USD
447.0 million. The following table summarises the effect of the transaction on the Company's equity
attributable to shareholders:
$ millions
Proceeds fr
om sale of shares
461.1
Fees related to the sale of shar
es
(14.1)
Net proceeds fr
om the sale of shares
447.0
Indemnities
26.7
Effect on total equity
473.7
Non-controlling inter
ests
141.0
Effect on equity attributable to owners of the Company
332.7
As part of the equity offering indemniﬁcations wer
e agreed between shar
eholders. This resulted in a
change of the indemniﬁcations previously r
ecorded as part of the Fertiglobe PP
A. Reference is made to
note 21.
Fertiglobe 2019 business combination with ADNOC
As part of the business combination in 2019, OCI N.V
. acquired 58% shares in one of its subsidiaries,
Fertiglobe, which controls 100% of the voting powers and economic r
eturns from Fertil (and holds the
Group’
s share in OCI MENA). For purchase accounting purposes, the company has determined the
fair value of the shares in Fertil as described above. As OCI N.V
. retained contr
ol over shares that wer
e
already owned by Fertiglobe in OCI MENA, these assets and liabilities ar
e not revalued as part of the
purchase accounting. As a r
esult, the NCI in Fertiglobe was the sum of 42% of the fair value of Fertil
and 42% of the OCI MENA net assets as at 30 September 2019. OCI N.V
.’
s disposal of 42% ownership
in Fertiglobe, whilst retaining contr
ol in the subsidiary was treated as an equity transaction. NCI of USD
382.7 million was recognized as part of the disposal of 42% ownership in its former OCI MENA net
assets, while the differ
ence between 42% of the fair value of OCI MENA and the book value resulted in
an equity increase of USD 674.8 million.
The NCI recognized as part of the non-contr
olling interests held by ADNOC in Fertil amounted to
USD 710.6 million as per September 2019. The fair value of Fertil has been measured by applying
a discounted cashﬂow method, cash ﬂows beyond the forecasted period of ﬁve years have been
extrapolated using a 2% growth rate. The pr
e-tax WACC used to determine the expected discounted
future cash ﬂows is 9.0%. Refer
ence is made to note 2.2.1.
As a result of the Fertiglobe IPO, NCI incr
eased in all Fertiglobe entities, refer
ence is made to above.
18.
Loans and borrowings
$ millions
2021
2020
At 1 January
4,416.6
4,662.3
Proceeds fr
om loans
2,248.3
2,070.4
Proceeds fr
om bank overdraft facility
398.4
-
Repayment and redemption of loans and borr
owings
(3,186.1)
(2,396.0)
Newly incurred transaction costs
(10.0)
(14.6)
Amortization of transaction costs / (bond) premiums
39.3
34.1
Effect of movement in exchange rates
(105.7)
60.4
At 31 December
3,800.8
4,416.6
Non-current
3,290.2
4,226.9
Current
510.6
189.7
T
otal
3,800.8
4,416.6
The effect of movement in exchange rate mainly r
elates to EUR and DZD denominated loans, which
are dif
ferent fr
om the Group’
s presentation currency
. Information about the Group’
s exposure to
interest rate, for
eign currency and liquidity risk is disclosed in the ﬁnancial risk and capital management
paragraph in note 6.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
161
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18.
Loans and borrowings
(continued)
Borrowing company
T
ype of
loan
Principal amount
($ millions)
Interest rate
Date of maturity
Carrying
amount
1
($ millions)
Long-term
portion
($ millions)
Short-term
portion
($ millions)
Fair value
($ millions)
Collateral / Guarantee given (if applicable)
Sorfert Algeria SP
A
(‘Sorfert’)
Secured
USD 961.3
(DZD 114,440.0)
Algerian bank interest rate
plus rate of 1.95%
June 2026
294.0
228.6
65.4
N/a
Debt service reserve account, ban for any disposal or
decrease of the Company shar
e and assets
Iowa Fertilizer Company
(‘IFCo’)
Secured
USD 429.0
USD 425.4
Fixed: 5.25%
Fixed 5.25%
December 2025
December 2050
427.0
413.0
427.0
413.0
-
-
559.0
423.5
Certain bank accounts, property of IFCo, inventories,
all funds, including equity contributions of
USD 1,555.4 million by OCI
Fertiglobe Holding Ltd.
Secured
USD 1,100.0
LIBOR + 1.05%
April 2024
1,091.8
1,097.6
(5.8)
1,100.0
The loan is guaranteed, jointly and severally
, by Fertiglobe
Holding Ltd, Egyptian Fertilizers Company S.A.E., Ruwais
Fertilizer Industries LLC, OCI Fertilizer T
rading Ltd, Fertiglobe
Distribution Limited and OCI Fertilizer T
rade & Supply B.V
.
Fertiglobe Holding Ltd.
Secured
USD 300.0
LIBOR + 1.75%
October 2026
-
-
-
-
N/a
OCI N.V
. (‘OCI’)
Senior
Secured
Notes
USD 324.0
EUR 360.0
(USD
409.3)
Fixed: 4.625%
Fixed: 3.625%
October 2025
October 2025
321.3
405.7
321.3
405.7
-
-
336.6
423.4
The Notes are guaranteed, jointly and severally
, by OCI
Chemicals B.V
., OCI Fertilizers B.V
., OCI Fertilizer Inter
national
B.V
., OCI Intermediate B.V
., BioMethanol Chemie Nederland
B.V
. and BioMethanol Chemie Holding II B.V
., OCI Nitrogen
B.V
., OCI Chem 4 B.V
., OCI Partners LP
, OCI Beaumont LLC
OCI N.V
. (‘OCI’)
Secured
USD 850.0
LIBOR + 1.50%
April 2023
397.0
397.0
-
397.0
Guaranteed, jointly and severally
, by OCI Chemicals B.V
.,
OCI Fertilizers B.V
., OCI Fertilizer Inter
national B.V
., OCI
Intermediate B.V
., BioMethanol Chemie Nederland B.V
. and
BioMethanol Chemie Holding II B.V
.
OCI N.V
. ('OCI')
Bank
overdraft
N/a
N/a
No deﬁned
maturity
383.0
-
383.0
N/a
N/a
OCI Nitrogen
Inventory
ﬁnancing
USD 70.2
(EUR 57.4)
1.25%
No deﬁned
maturity
, facility
is uncommitted
with monthly roll
overs
68.0
-
68.0
68.0
Stand by letter of credit of EUR 6.0 million (USD 6.8 million)
and OCI N.V
. guarantee of EUR 60 million (USD 68.2 million)
T
otal 31 December 2021
3,800.8
3,290.2
510.6
N/a
1
As at 31 December 2021 the carrying amount of loans and borrowings exclude inter
est of USD 10.9 million (2020: USD 24.4 million).
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
162
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18.
Loans and borrowings
(continued)
Borrowing company
T
ype of
loan
Principal amount
($ millions)
Interest rate
Date of maturity
Carrying
amount
1
($ millions)
Long-term
portion
($ millions)
Short-term
portion
($ millions)
Fair value
($ millions)
Collateral / Guarantee given (if applicable)
Sorfert Algeria SP
A
(‘Sorfert’)
Secured
USD 961.3
(DZD 114,440.0)
Algerian bank interest rate
plus rate of 1.95%
June 2026
398.3
325.8
72.5
n/a
Debt service reserve account, ban for any disposal or
decrease of the Company shar
e and assets
Iowa Fertilizer Company
(‘IFCo’)
Secured
USD 120.0
USD 429.0
USD 147.2
USD 425.4
Fixed: 3.125%
Fixed: 5.25%
Fixed 5.875%
Fixed 5.25%
December 2022
December 2025
December 2027
December 2037
80.0
426.1
139.8
412.1
43.4
426.1
139.8
412.1
36.6
-
-
-
80.7
465.4
147.7
424.3
Certain bank accounts, property of IFCo, inventories,
all funds, including equity contributions of
USD 762.0 million by OCI
Egyptian Fertilizers
Company (‘EFC’)
Secured
USD 150.0
LIBOR + 2.00%
October 2025
134.2
108.4
25.8
136.7
The loan is guaranteed, jointly and severally
, by Fertiglobe
Holding Ltd, Egyptian Fertilizers Company S.A.E., Ruwais
Fertilizer Industries LLC, OCI Fertilizer T
rading Ltd, Fertiglobe
Distribution Limited and OCI Fertilizer T
rade & Supply B.V
.
Fertiglobe Holding Ltd.
Secured
USD 160.0
LIBOR + 2.00%
October 2025
138.1
110.6
27.5
140.7
The loan is guaranteed, jointly and severally
, by Fertiglobe
Holding Ltd, Egyptian Fertilizers Company S.A.E., Ruwais
Fertilizer Industries LLC, OCI Fertilizer T
rading Ltd, Fertiglobe
Distribution Limited and OCI Fertilizer T
rade & Supply B.V
.
Fertiglobe Holding Ltd.
Secured
USD 75.0
LIBOR + 2.00%
October 2025
-
-
-
-
N/a
OCI N.V
. (‘OCI’)
Senior
Secured
Notes
USD 400.0
USD 489.0
(EUR 400.0)
Fixed at 4.625%
Fixed at 3.625% for
EUR denominated notes
October 2025
October 2025
395.6
483.8
395.6
483.8
-
-
416.0
506.8
The Notes are guaranteed, jointly and severally
, by OCI
Chemicals B.V
., OCI Fertilizers B.V
., OCI Fertilizer Inter
national
B.V
., OCI Intermediate B.V
., BioMethanol Chemie Nederland
B.V
. and BioMethanol Chemie Holding II B.V
., OCI Nitrogen
B.V
., OCI Chem 4 B.V
., OCI Partners LP
, OCI Beaumont LLC
OCI N.V
. (‘OCI’)
Senior
Secured
Notes
USD 855.8
(EUR 700.0)
USD 600.0
Fixed: 3.125%
Fixed: 5.250%
November 2024
November 2024
845.1
591.6
845.1
591.6
-
-
878.9
623.3
The Notes are guaranteed, jointly and severally
, by OCI
Chemicals B.V
., OCI Fertilizers B.V
., OCI Fertilizer Inter
national
B.V
., OCI Intermediate B.V
., BioMethanol Chemie Nederland
B.V
. and BioMethanol Chemie Holding II B.V
., OCI Nitrogen
B.V
., OCI Chem 4 B.V
., OCI Partners LP
, OCI Beaumont LLC
OCI N.V
. (‘OCI’)
Secured
USD 850.0
LIBOR + 3.50%
April 2023
344.6
344.6
-
350.0
Guaranteed, jointly and severally
, by OCI Chemicals B.V
.,
OCI Fertilizers B.V
., OCI Fertilizer Inter
national B.V
., OCI
Intermediate B.V
., BioMethanol Chemie Nederland B.V
. and
BioMethanol Chemie Holding II B.V
.
OCI Fertilizer T
rading Ltd.
(‘OFT’)
Revolver
USD 75.0
LIBOR + 2.50%
Renewed
annually
-
-
-
-
n/a
OCI Nitrogen
Inventory
ﬁnancing
USD 70.2
(EUR 57.4)
1.25%
No deﬁned
maturity
, facility
is uncommitted
with monthly roll
overs
27.3
-
27.3
27.3
Stand by letter of credit of EUR 9.0 million (USD 10.1 million)
and OCI N.V
. guarantee of EUR 90 million (USD 100.9 million)
T
otal 31 December 2020
4,416.6
4,226.9
189.7
n/a
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
163
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
18.
Loans and borrowings
(continued)
Covenants
Certain loan agreements include ﬁnancial covenants. The deﬁnitions for calculating the ﬁnancial
covenants applicable to the facilities within the Group can be summarized as follows:
•
Debt Service Coverage Ratio: Income Available (r
evenue earned less operating expenses) to Debt
Service (net ﬁnance charges including the capital element of ﬁnance leases) or gross pr
oﬁt less change
in working capital to interest and principal payments.
•
Debt to Equity Ratio: Gross Debt (curr
ent and long-term debt obligations) to total Equity (the sole
capital of the borrower).
•
Net Leverage Ratio: the Group’
s Net Debt (meaning the aggregate amount of all obligations of the
Group, excluding intergr
oup loans and cash and cash equivalents, but including ﬁnance leases) to
adjusted EBITDA.
•
Interest Coverage Ratio: EBITDA, EBIT or Distribution Receipts (cash r
eceived by the borrower by way
of dividends or repayments of loans) to Finance Charges (meaning ﬁnance payments in r
espect of
borrowings including the inter
est element of ﬁnance leases).
As per 31 December 2021 all ﬁnancial covenants were met.
In the event the respective borr
owing companies would not comply with the covenant requir
ements,
in total an amount of USD 2,648.6 million of the loans would become immediately due. Refer to note
6.2 for additional discussion of the Company’
s liquidity risk. The external borrowings include change in
control clauses that enable the lenders to call the ﬁnancing pr
ovided.
Fair value measurement loans and borr
owings
Except for the IFCo bonds, the senior secured notes of OCI N.V
. and the loan of Sorfert, the fair value
of all other loans and facilities is calculated within hierarchy category level 2. The bonds of IFCo and
OCI N.V
. are measured following hierar
chy category 1. The fair value of the loan of Sorfert cannot be
determined as no observable market data is available.
New and amended ﬁnancing arrangements in 2021
Fertiglobe
In August 2021, Fertiglobe completed a USD 1,100.0 million reﬁnancing by means of a bridge loan
of USD 900.0 million with an accordion option of USD 200.0 million at an inter
est rate of US LIBOR +
1.05% in the ﬁrst year
, after which it increases with 0.025% every three months. This facility replaced the
remaining EFC facility of USD 150.0 million and the USD 160.0 million loan at Fertiglobe Holding. The
bridge loan matures in February 2023, with 2 x 6-month extensions at the company’
s option. Fertiglobe
also completed a USD 300.0 million revolving cr
edit facility maturing in August 2026 carrying an interest
rate of Libor +1.75%, which replaced the USD 75 million r
evolving credit facility at Fertiglobe Holdings.
Both facilities are guaranteed by certain of Fertiglobe Holdings subsidiaries.
Proceeds fr
om borrowings
Proceeds fr
om borrowings in 2021 totaled an amount of USD 2,248.3 million, which consisted of the
net proceeds of the new ﬁnancing arrangements of Fertiglobe Holding, new pr
oceeds from the r
evolving
credit facility at OCI N.V
. and changes in OCI Nitrogen's Inventory Financing.
Redemptions
Redemptions of borrowings in 2021 totaled an amount of USD 3,186.1
million, which consisted of the
partial or total repayment of bonds at OCI N.V
., repayment of borr
owings at EFC, repayment of some
IFCo bonds and regular installments for borr
owings and changes in the outstanding amounts of the
revolving cr
edit facilities at OCI Nitrogen, Sorfert and Fertiglobe Holding.
Undrawn bank facilities
As of 31 December 2021, the Group had not drawn external bank facilities in the amount of USD 800.0
million. This relates to a working capital facility of IFCo of USD 50.0 million and external bank facilities of
Fertiglobe Holding Ltd of USD 300.0 million and OCI N.V
. of USD 450.0 million.
Bank overdraft
As of 31 December 2021, the bank overdraft facility of OCI N.V
. totaled an amount of USD 383.0 million.
OCI N.V
. has drawn a net amount of USD 256.5 million under its Header Cash Pool Facility
. Reference is
made to note 6.4.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
164
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
19.
Lease obligations
The Group leases a number of of
ﬁce spaces, warehouses, land, employee accommodation, computers,
machinery and vehicles. Lease terms vary from 1 year to indeﬁnite r
enewal options. Calculations of the
lease obligation for leases with indeﬁnite renewal options ar
e done using a lease term based on the
expected renewal periods and can be mor
e than 100 years.
$ millions
Non-current
lease obligations
Current
lease obligations
T
otal
At 1 January 2020
244.3
41.0
285.3
Movements in the carrying amount:
Payments
-
(45.9)
(45.9)
Accretion of inter
est
8.2
0.4
8.6
Additions
24.7
6.1
30.8
Disposals
(0.6)
(0.7)
(1.3)
T
ransfers
(40.1)
40.1
-
Modiﬁcations
3.6
1.4
5.0
Effect of movement in exchange rates
8.5
1.2
9.7
At 31 December 2020
248.6
43.6
292.2
Movements in the carrying amount:
Payments
-
(47.3)
(47.3)
Accretion of inter
est
8.1
0.4
8.5
Additions
30.5
2.3
32.8
Disposals
(4.8)
-
(4.8)
T
ransfers
(40.6)
40.6
-
Modiﬁcations
3.3
1.0
4.3
Effect of movement in exchange rates
(7.6)
(0.9)
(8.5)
At 31 December 2021
237.5
39.7
277.2
20.
T
rade and other payables
$ millions
Note
2021
2020
T
rade payables
425.3
298.6
T
rade payables due to related parties
(30)
87.9
81.4
Amounts payable under the securitization agreement
149.7
113.6
Accrued dividend to non-controlling inter
ests
4.1
12.2
Other payables
66.9
52.0
EUA liabilities
(6.3)
116.2
99.0
Employee beneﬁt liabilities
14.5
12.9
Accrued expenses
264.9
235.8
Accrued interest
10.9
24.4
Customer advance payment / deferred r
evenue
222.7
77.7
Other tax payable
5.3
13.0
Commodity derivative ﬁnancial instruments
12.8
8.7
T
otal
1,381.2
1,029.3
Non-current
23.7
25.7
Current
1,357.5
1,003.6
T
otal
1,381.2
1,029.3
Information about the Group’
s exposure to currency and liquidity risk is included in note 6. The carrying
amount of ‘T
rade and other payables’ approximates its fair value.
Derivative ﬁnancial instruments
Derivative ﬁnancial instruments consist of commodity gas hedges contracts in order to hedge futur
e gas
price levels. The fair value of these contracts amounts to USD 12.8 million as per 31 December 2021
(2020: USD 8.7 million). All derivatives included in trade and other payables are classiﬁed in the fair value
hierarchy level 2.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
165
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
21. Provisions
$ millions
Claims and
other provisions,
onerous contracts
Donation
provision
T
otal
At 1 January 2021
40.4
120.9
161.3
Recorded during the year
36.3
-
36.3
Used during the year
(64.0)
-
(64.0)
Reversed
(1.2)
-
(1.2)
Reclassiﬁcation
26.7
-
26.7
Effect of movement in exchange rates
(1.8)
0.2
(1.6)
At 31 December 2021
36.4
121.1
157.5
Non-current
12.8
-
12.8
Current
23.6
121.1
144.7
T
otal
36.4
121.1
157.5
Provision for indemniﬁcations
As a consequence of the Fertiglobe IPO, all other shareholders of Fertiglobe plc will be indemniﬁed
for the outcome of certain legacy legal exposures. An indemniﬁcation asset of USD 26.7 million is
reclassiﬁed to other r
eceivables as the offsetting criteria ar
e no longer met. Reference is made to
note 17.
Claims and other provisions
The Group is involved in various litigations, arbitrations and commer
cial disputes. In cases where it is
probable that the outcome of the legal pr
oceedings and commercial disputes will be unfavorable, and
the ﬁnancial outcome can be measured r
eliably
, a provision has been r
ecognized. Reference is made
to note 28 for detailed information with respect to major ongoing litigations and claims for which no
provision has been r
ecognized.
Donation provision
On 13 November 2014, the Company announced that it had decided to transfer the rights to the
amounts receivable fr
om the ﬁrst installment already paid to the Egyptian T
ax Authority in 2013 of EGP
2,500 million (approximately USD 360.0 million at the 2014 exchange rate) to the T
ahya Misr (‘Long Live
Egypt’) Fund (refer
ence is made to note 28 for the claim in relation to the OCI S.A.E. tax dispute). No
formal agreement has been drafted with the T
ahya Misr Fund yet and no payments have been made to
the fund. The transfer of rights has been approved by OCI’
s Board of Directors on 12 November 2014.
Following the guidance under IAS 37 (constructive obligations), the Company has presented the transfer
of rights to the T
ahya Misr Fund as a donation provision. In Mar
ch 2015, the Company received a
cheque of EGP 1,904 million (approximately USD 266.2 million at the 2015 exchange rate) fr
om the
Egyptian Authorities. At year end 2021 the carrying amount in US dollars had reduced to USD 121.1
million, due to the devaluation of the EGP since March 2015.
Onerous contracts
Due to the signiﬁcant increase in the (TTF) gas prices, the pr
oduction costs for natural gas based
products incr
eased signiﬁcantly in Europe. The higher pr
oduction costs resulted in the identiﬁcation of
several onerous contracts, as the unavoidable costs of meeting these contract commitments exceeded
the economic beneﬁts that are expected to be r
eceived under them. Therefor
e, an onerous contract
provision amounting to USD 5.5 million was r
ecognized for these contracts. As the contracts mainly
relate to sales commitments for Q1 2022, the pr
ovision is classiﬁed as current.
22.
Development of cost of sales and selling, general and administrative expenses
a. Expenses by natur
e
$ millions
Note
2021
2020
Raw materials and consumables and ﬁnished goods
3,203.5
2,105.7
Maintenance and repair
150.2
128.4
Employee beneﬁt expenses
(22b)
408.9
364.5
Depreciation, amortization and impairment
(7)
891.6
592.2
Consultancy expenses
34.0
33.1
Other
67.9
57.4
T
otal
4,756.1
3,281.3
Cost of sales
4,489.7
3,062.0
Selling, general and administrative expenses
266.4
219.3
T
otal
4,756.1
3,281.3
The extreme cold weather and spike in gas prices in the US in February r
esulted in temporary downtime
at IFCo. Due to this downtime IFCo sold back its forward pur
chased gas to its supplier
, which resulted
in a gain from the r
esale of gas of USD 61 million. This ﬁgure does not include and is partly of
fset by
the lost margin due to the lower production volumes and additional expenses associated with the
downtime. The gain on the resale of gas is r
ecorded as part of raw materials and consumables and
ﬁnished goods.
b.
Employee beneﬁt expenses
$ millions
Note
2021
2020
W
ages and salaries
263.0
244.7
Social securities
8.2
7.8
Employee incentive plans
51.2
34.1
Pension cost
24.3
22.1
Share-based compensation expenses
(22c)
8.5
7.9
Other employee expenses
53.7
47.9
T
otal
408.9
364.5
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
166
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
22.
Development of cost of sales and selling, general and administrative expenses
(continued)
During the ﬁnancial year ended 31 December 2021, the number of key executives was 4 (2020: 4 key
executives), which repr
esents the Executive Board members; Nassef Sawiris (Executive Chair), Hassan
Badrawi (Chief Financial Ofﬁcer) Maud de V
ries (Chief Legal and Human Capital Ofﬁcer) and Ahmed El-
Hoshy (Chief Executive Ofﬁcer). During the ﬁnancial year ended 31 December 2021, the number of staf
f
employed in the Group amounted to 3,853 employees (2020: 3,682 employees).
c. Shar
e-based compensation arrangements
OCI has currently awar
d agreements outstanding under thr
ee different shar
e-based compensation
plans. In 2021 share based compensation A
wards wer
e granted under the existing Performance Share
Unit Plan for Executive Directors, the Restricted Stock Unit Plan and the new Employee Performance
Share Unit Plan.
Performance Share Plan
In 2014, a new performance share plan was intr
oduced for the Executive Board. The shar
e plan
comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts
in which the Company’
s performance is measured based on total shar
eholder return (‘TSR’) against
a peer group of companies. The fair value of these awar
ds has been calculated using Monte-Carlo
simulations. The number of conditional shares corr
esponds to a percentage (maximum of 150%) of the
ﬁxed refer
ence salary divided by the price of the share on the stock market on the ﬁrst day of the vesting
period. The relative ranking that OCI achieves in the peer gr
oup determines the deﬁnitive number of
shares that ar
e granted at the end of the vesting period. The remaining shar
es vested must be retained
by the members of the Executive Board for a period of 2 years.
Performance Share Plan
2018 Grant
2017 Grant
Conditional shares granted
166,564
190,600
Fair value at grant date (EUR)
3,459,534
3,375,526
Fair value at grant date (EUR per share)
20.77
17.71
V
esting period at issuance (years)
3
3
Risk free inter
est rate
(0.589)%
(0.7)%
Expected share price volatility
37.5%
39.3%
Dividend yield
0.0%
0.0%
V
ested
in 2017
-
87,013
V
ested
in
2020
-
103,587
Outstanding at 31 December 2020
166,564
-
Expired in 2021
(166,564)
-
Outstanding at 31 December 2021
-
-
The vesting of the 2018 shares was conditional on OCI’
s TSR performance in the three-year
performance period ending 7 February 2021 and continued employment. Over the 3-year performance
period OCI’
s TSR performance ranked 10th in the TSR peer group at the 25th per
centile. As a result,
the award vested at 0% of target and no shar
es were deliver
ed.
Bonus Matching Plan
In 2014, a new bonus matching plan was introduced for the members of the Executive Boar
d and
Senior Management. In this plan members of the Executive Board and Senior Management ar
e entitled
to buy shares fr
om their annual bonus. The shares will be withheld for a period of thr
ee years. After the
3-year period, the participants will receive a bonus shar
e for each share of the plan. For the members of
the Executive Board, the shar
es vested must be retained for a period of 2 years.
Bonus Matching Plan
2018 Grant
2017 Grant
Conditional shares granted
93,451
95,060
Fair value at grant date (EUR)
1,690,529
1,577,045
Fair value at grant date (EUR per share)
18.09
16.59
V
esting period at issuance (years)
3
3
Dividend yield
0.0%
0.0%
V
ested
in 2017
-
14,496
V
ested
in
2020
-
80,564
Outstanding at 31 December 2020
93,451
-
V
ested in 2021
93,451
-
Outstanding at 31 December 2021
-
-
In 2019 it was decided to discontinue the Bonus Matching Plan for all eligible employees. At 31
December 2021 there wer
e no Bonus Matching Rights outstanding.
Executive Director Performance Shar
e Units Plan
In 2019, a new performance share unit plan was intr
oduced for the Executive Board as r
eplacement
for the performance share plan. The performance shar
e unit plan comprises the conditional granting
of shares in OCI. Each year a plan with a 3-year vesting period starts. Up to 2021, T
otal Shareholder
Return (‘TSR’) was the only performance measure. In 2021 the Plan was amended and new
performance measures wer
e added. For each Awar
d, starting with the 2021 Award made on 8 February
2021 vesting will be dependent on relative TSR (60% weight) and additional performance measur
es
(40% weight), selected from two sets of strategic initiatives (operational excellence and ESG). The
relative TSR performance is measur
ed against a peer group of companies operating in a similar or
the same market. Between 0% and 150% of this award will vest at the end of 3-year performance
period based on the actual performance. The fair value of these awards has been calculated using a
Monte-Carlo simulations model. The number of performance stock units comprising Shares has been
calculated based on the average OCI N.V
. closing sales price of the Shares as quoted in Euronext
Amsterdam on the date of the grant.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
167
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
22.
Development of cost of sales and selling, general and administrative expenses
(continued)
The relative TSR ranking that OCI achieves in the peer gr
oup and the achievements on the other
performance measures determines the deﬁnitive number of shar
es that are granted at the end of the
vesting period. The remaining shar
es vested must be retained by the members of the Executive Boar
d
for a period of 2 years.
Performance Share Units Plan
2021 Grant
2020 Grant
2019 Grant
Conditional shares granted
230,612
316,729
230,558
Fair value at grant date (EUR)
4,065,690
4,336,020
4,486,659
Weighted average fair value at grant date (EUR per shar
e)
17.63
13.69
19.46
V
esting period at issuance (years)
3
3
3
Risk free inter
est rate
(0.728)%
(0.660)%
(0.659)%
Expected share price volatility
44.2%
34.5%
34.7%
Dividend yield
0.0%
0.0%
0.0%
Outstanding at 31 December 2020
-
316,729
230,558
V
ested in 2021
-
-
-
Outstanding at 31 December 2021
230,612
316,729
230,558
Restricted Stock Units Plan
For the level below the Board, a r
estricted stock unit plan was implemented to replace the Bonus
Matching Plan. First award granted under this plan was made in 2019. Executive Dir
ectors are not
eligible for RSU grants. The restricted stock unit plan comprises the conditional granting of shar
es in
OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan
will be paid out partly in cash in accordance with the short-term incentive plan and partly in awar
ds in
accordance with this RSU plan. Shar
es will vest for one third of the r
estricted stock units comprising
the award at the second anniversary of the date of grant and for two thir
ds of the restricted stock units
comprising the award on the thir
d anniversary of the date of grant subject to still being employed by
OCI. The RSU entitles the participants to dividend equivalents.
The fair value of the RSUs awarded is based on OCI’
s share price at the grant date. Furthermore, when
measuring the fair value of RSU share awar
ds, there may be an adjustment for any expected dividends.
In this case, there will be no adjustment for dividends since the participants ar
e entitled to dividend
equivalents during the vesting period.
Restricted Stock Units Plan
2021 Grant
2020 Grant
2019 Grant
Conditional shares granted
132,666
89,900
206,253
Fair value at grant date (EUR)
2,409,215
945,748
5,455,392
Fair value at grant date (EUR per share)
18.16
10.52
26.45
V
esting period at issuance (years)
3
3
3
Dividend yield
0.0%
0.0%
0.0%
Outstanding at 31 December 2020
-
89,900
206,253
Forfeited in 2021
1,958
-
-
V
ested in 2021
5,551
10,873
85,638
Outstanding at 31 December 2021
125,157
79,027
120,615
Employee Performance Share Units Plan
In 2021, the Employee Performance Share Unit Plan was intr
oduced for key Employees. The employee
performance share unit plan is similar to the executive dir
ector performance share unit plan. For
the 2021 Awar
d made on 8 February 2021 vesting will be dependent on relative TSR (60% weight)
and additional performance measures (40% weight), selected fr
om two sets of strategic initiatives
(operational excellence and ESG). The relative TSR performance is measur
ed against a peer group of
companies operating in a similar or the same market. Between 0% and 150% of this award will vest at
the end of 3-year performance period based on the actual performance. The fair value of these awards
has been calculated using a Monte-Carlo simulations model. The number of performance stock units
comprising Shares has been calculated based on the average OCI N.V
. closing sales price of the Shares
as quoted in Euronext Amster
dam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer gr
oup and the achievements on the other
performance measures determines the deﬁnitive number of shar
es that are granted at the end of the
vesting period. The remaining shar
es vested must be retained by the employees for a period of 2 years.
Employee Performance Share Units Plan
2021 Grant
Conditional shares granted
14,006
Fair value at grant date (EUR)
246,926
Weighted average fair value at grant date (EUR per shar
e)
17.63
V
esting period at issuance (years)
3
Risk free inter
est rate
(0.728)%
Expected share price volatility
44.2%
Dividend yield
0.0%
Outstanding at 31 December 2020
-
V
ested in 2021
-
Outstanding at 31 December 2021
14,006
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
168
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
23.
Other income
$ millions
2021
2020
Insurance proceeds
-
3.7
Fertiglobe business combination
-
13.3
Other
1.4
0.6
T
otal
1.4
17.6
Insurance proceeds in 2020 of USD 3.7 million r
elate to BioMCN. For the Fertiglobe business
combination refer
ence is made to note 2.2.1.
24.
Other expenses
$ millions
Note
2021
2020
Other
(21)
1.2
23.4
T
otal
1.2
23.4
The other expenses in 2020 are r
elated to a settlement agreement r
elated to a historical indemniﬁcation
provided.
25.
Net ﬁnance cost
$ millions
2021
2020
Interest income on loans and r
eceivables
4.0
4.4
Derivatives gain
0.3
-
Foreign exchange gain
30.3
208.1
Finance income
34.6
212.5
Interest expense and other ﬁnancing costs on ﬁnancial liabilities measur
ed
at amortized cost
(281.0)
(307.5)
Foreign exchange loss
(27.8)
(104.9)
Finance cost
(308.8)
(412.4)
Net ﬁnance cost recognized in pr
oﬁt or loss
(274.2)
(199.9)
Included in the interest expense and other ﬁnancing costs on ﬁnancial liabilities measur
ed at amortized
cost are debt modiﬁcation costs of USD 61.7 million (2020: USD 51.3 million). This consists of a
call premium of USD 37.4 million (2020: USD 33.3 million) r
elated to early redemption of bonds and
accelerated amortization of USD 24.3 million (2020: USD 18.0 million).
For the interest expense r
elated to lease obligations, refer
ence is made to note 19.
The foreign exchange gains and losses mainly r
elate to external ﬁnancing, FX derivatives and to the
revaluation of inter
company balances in foreign curr
encies. Compared to 2020, the foreign exchange
gains and losses are signiﬁcantly lower due to the application of net investment hedging and the
designation of certain intercompany loans as part of the net investment in for
eign operations. As a
result of the net investment hedge, an amount of USD 72.9 million of for
eign exchange gains and USD
137.4 million of foreign exchange losses wer
e recognized in other compr
ehensive income instead of
net ﬁnance cost. The foreign exchange losses r
ecognized in other comprehensive income includes the
settlement of FX derivatives of USD 72.8 million.
26.
Ear
nings per share
2021
2020
i. Basic
Net proﬁt / (loss) attributable to shar
eholders
570.5
(177.7)
Weighted average number of or
dinary share (basic)
209,852,247
209,709,296
Basic earnings per ordinary share
2.719
(0.847)
ii. Diluted
Net proﬁt / (loss) attributable to holders of or
dinary shareholders
570.5
(177.7)
Weighted average number of or
dinary shares (diluted)
211,032,092
209,709,296
Diluted earnings per ordinary share
2.703
(0.847)
Weighted average number of or
dinary shares calculation
Shares
2021
2020
Issued ordinary shar
es at 1 January
210,306,101
210,306,101
Effect of tr
easury shares held
(453,854)
(596,805)
W
eighted average number of ordinary shares outstanding as per
31 December
209,852,247
209,709,296
Adjustment for assumed equity-settled share-based compensation
1,179,845
-
W
eighted average number of ordinary shares outstanding (diluted)
as per 31 December
211,032,092
209,709,296
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
169
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
27.
Segment reporting
OCI’
s reportable segments ar
e consistent with how the Chief Operating Decision Maker (‘CODM‘)
manages the business operations and views the markets it serves. The reportable segments ar
e:
Methanol US, Methanol Europe, Nitr
ogen US, Nitrogen Eur
ope and Fertiglobe. The organizational
structure of the segments is based on a number of factors that the CODM uses to evaluate, view
, and
direct business operations.
Segment realignment
Beginning on 1 October 2021, the Company has realigned its segments for its Fertiglobe and Methanol
US segments. The primary driver for the realignment is a change in how the business operations
are r
eported to the CODM. As a result of this r
ealignment, the Company changed its organizational
structure and the composition of its operating segments, which r
esulted in a change in reportable
segments. The Fertiglobe segment now includes the holding entity Fertiglobe Holding plc, which is the
ultimate parent of the Fertiglobe Gr
oup and became an ADX registrant following the IPO of Fertiglobe on
27 October 2021.
Methanol US now includes OCI USA Inc., an entity that serves as the US corporate income taxpayer
for OCI Beaumont and OMM LLC. In anticipation of the sale of a 15% stake in the OCI Methanol Group
(refer
ence is made to note 32), all non-methanol related activities wer
e internally restructured to other
entities.
Nitrogen US now includes Iowa Intermediate Fertilizer Holding, an entity that serves as the US corporate
income taxpayer for Iowa Fertilizer Company
. Accordingly
, the Company restated the pr
eviously
reported segment information for the year ended 31 December 2020.
Segment policy
The Company derives the results of the business segments dir
ectly from its internal management
reporting system. All segments ar
e managed separately because they requir
e different operating
strategies and use their own assets and employees. The entities grouped together in each segment
have similar regulatory envir
onments, macroeconomic conditions, banking, insurance and public utilities.
The Group has two r
evenue streams fr
om contracts with customers that relate to the sale of goods,
namely
, Nitrogen and Methanol.
Segment revenues includes r
evenues from sales to external customers and intersegment revenues.
EBITDA, Adjusted EBITDA and Proﬁt / (loss) ar
e the primary performance measure used by our CODM
to evaluate operating results and allocate capital r
esources among segments. These ar
e also the
proﬁtability measur
es used to set management and executive incentive compensation goals. ‘Other’
consists of share-based compensation and certain corporate general and administrative expenses
that are not allocated to the segments. Segment r
esults, assets and liabilities include items directly
attributable to a segment as well as those that can be reasonably and consistently r
e-allocated.
A summary description of each reportable segment is as follows:
Methanol US
This segment consists of OCI Beaumont (OCIB), Natgasoline LLC, the trading entity OCI Methanol
Marketing LLC (OMM US) and OCI USA Inc.
OCI Beaumont is an integrated methanol and ammonia production facility that is strategically located on
the T
exas Gulf Coast near Beaumont. Natgasoline LLC is a world scale methanol production complex in
Beaumont, T
exas. OCI and its partner
, Consolidated Energy Limited (CEL)/G2X, each own 50% stakes.
Natgasoline LLC is an equity-accounted investee of the Group, r
eference is made to note 10.
Natgasoline commenced production in 2018 and due to the similarities in r
egulatory environment,
products and customer base, this equity accounted investee has been included in the ‘Methanol US’
segment as of 2018 on a proportionally consolidated basis. The elimination column is used to eliminate
the proportionally consolidated ﬁgur
es of Natgasoline that are included in the US Methanol segment
and to include the investment in, and results fr
om Natgasoline (associate) and thereby r
econcile to the
Group’
s reported ﬁgures.
OCIB and Natgasoline sell mainly domestically; primarily to industrial customers in and around the U.S.
Gulf Coast through pipeline connections to adjacent customers, port access with dedicated methanol
and ammonia import / export jetties, and truck loading facilities for both methanol and ammonia. OMM
US is a trading entity that sells products pr
oduced by OCIB and Natgasoline. OCI USA Inc. is the US
corporate taxpayer for OCIB and OMM US.
Methanol Europe
This segment consists of BioMCN, located at Delfzijl in the Netherlands, OCI Fuels Ltd, OCI Fuels B.V
.
and OCI Methanol Marketing B.V
. (OMM EU). BioMCN is one of Europe’
s largest methanol producers.
BioMCN produces two types of methanol: bio-methanol and r
egular (also known as grey) methanol.
OCI Fuels is a trading entity that supplies biogas, which is processed into bio-methanol and bio-fuel,
and sells the bio-methanol products pr
oduced by BioMCN. OMM EU is a trading entity that sells grey
methanol products pr
oduced by BioMCN.
Nitrogen US
This segment consists of Iowa Fertilizer Company (IFCo), a wholly owned nitrogen fertilizer complex in
Iowa and the trading entity
, N-7. IFCo products are sold via the trading entity
.
Nitrogen Eur
ope
This segment consists of OCI Nitrogen. OCI Nitr
ogen is Europe’
s second largest integrated nitrates
fertilizer producer and the world’
s largest melamine producer with production site in Geleen, the
Netherlands.
Fertiglobe
During 2019 OCI and ADNOC completed a transaction to combine ADNOC’
s fertilizer business
into OCI’
s Middle East and North Africa (MENA) nitrogen fertilizer platform, cr
eating Fertiglobe. The
Fertiglobe segment consists of the following entities: Egyptian Fertilizer Company (EFC), Egypt Basic
Industries Corporation (EBIC), Sorfert, Fertil, Fertiglobe Distribution (FD), OCI Fertilizer T
rading (OFT),
OCI Fertilizer T
rade and Supply (OFTS), Fertiglobe Holding plc and OCI S.A.E. EFC is a granular urea
producer in Egypt. EBIC is an ammonia plant in Egypt. Sorfert is a partnership with Algeria’
s state-
owned oil and gas authority and is one of the largest nitrogen fertilizer pr
oducers in North Africa. Fertil
is a producer of ur
ea fertilizer in Abu Dhabi. FD, OFT and OFTS are trading entities based in Abu Dhabi,
Dubai and the Netherlands.
Other
This segment consists of all remaining entities of the Gr
oup.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
170
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
27.
Segment reporting
(continued)
2021
$ millions
Methanol
US
1
Methanol
Europe
Nitrogen
US
Nitrogen
Europe
Fertiglobe
Other
Eliminations
T
otal
T
otal revenues
789.2
531.3
827.7
1,256.8
3,310.7
-
(397.0)
6,318.7
EBITDA
2
393.0
148.5
344.3
209.3
1,571.7
(75.1)
(137.3)
2,454.4
Adjusted EBITDA
2
370.8
151.4
344.3
207.6
1,550.5
(67.5)
(30.6)
2,526.5
Income from equity-
accounted investees
-
-
-
7.5
-
-
(0.2)
7.3
Depreciation,
amortization and
impairment
(151.0)
(303.7)
(152.4)
(92.1)
(267.1)
(4.0)
78.7
(891.6)
Finance income
58.0
1.1
0.4
6.9
19.6
76.9
(128.3)
34.6
Finance expense
(89.7)
(3.1)
(130.8)
(9.6)
(52.7)
(179.3)
156.4
(308.8)
Income tax
(expense) / income
(38.6)
2.6
197.9
(29.0)
(295.1)
25.1
-
(137.1)
Net proﬁt / (loss)
171.7
(154.6)
259.4
93.0
976.4
(156.4)
(30.7)
1,158.8
Equity-accounted
investees
-
-
-
42.0
-
0.2
452.7
494.9
Capital expenditures
PP&E
89.7
21.7
44.7
62.9
84.6
4.5
(72.9)
235.2
T
otal assets
1,882.2
87.8
2,417.9
801.8
4,921.1
318.2
(617.4)
9,811.6
2020
$ millions
Methanol
US
1
3
Methanol
Europe
Nitrogen
US
3
Nitrogen
Europe
Fertiglobe
3
Other
3
Eliminations
3
T
otal
T
otal revenues
466.3
339.1
547.9
752.9
1,550.8
-
(182.9)
3,474.1
EBITDA
2
142.7
23.0
181.0
125.1
449.9
(61.1)
(81.4)
779.2
Adjusted EBITDA
2
130.1
21.6
181.0
132.3
453.4
(46.4)
(2.2)
869.8
Income from equity-
accounted investees
-
-
-
2.3
-
-
(39.0)
(36.7)
Depreciation and
amortization
(154.4)
(28.5)
(142.7)
(82.9)
(268.1)
(2.4)
86.8
(592.2)
Finance income
62.0
0.1
0.3
7.2
33.5
237.6
(128.2)
212.5
Finance expense
(97.4)
(4.4)
(125.6)
(9.9)
(46.9)
(287.7)
159.5
(412.4)
Income tax
(expense) / income
6.2
0.8
(0.1)
(13.4)
(40.9)
2.9
-
(44.5)
Net proﬁt / (loss)
(40.9)
(9.0)
(87.1)
28.4
127.5
(110.7)
(2.3)
(94.1)
Equity-accounted
investees
-
-
-
15.6
-
0.2
452.9
468.7
Capital expenditures
PP&E
56.5
38.1
9.8
92.0
66.5
0.6
(10.7)
252.8
T
otal assets
1,613.0
436.6
2,192.4
743.9
4,642.9
68.1
(599.9)
9,097.0
1
Including ammonia at OCIB
2
OCI N.V
. uses Alternative Performance Measures (‘APM’) to provide a better understanding of the
underlying developments of the performance of the business. The APMs are not deﬁned in IFRS and
should be used as supplementary information in conjunction with the most directly comparable IFRS
measures. The deﬁnition of the APM and a detailed r
econciliation between the APM and the most
directly comparable IFRS measur
e can be found on pages 209-210 of this report.
3
The comparative numbers of 2020 are restated to r
eﬂect the realignment of the Fertiglobe, Methanol
US, Nitrogen US and Other segments.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
171
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
27.
Segment reporting
(continued)
Geographical information of continuing operations
The geographic information below analyses the Group’
s revenue (by destination of the goods) and non-
current assets (by the Company wher
e the activities are being operated). OCI has no single customer
that repr
esents 10 percent or mor
e of revenues and therefor
e information about major customers is not
provided.
Revenue
Non-current assets
$ millions
2021
2020
2021
2020
Europe
2,268.6
1,218.8
563.1
878.3
Americas
2,371.8
1,281.2
2,963.1
2,916.1
Africa & Middle East
362.5
302.0
3,492.3
3,697.2
Asia & Oceania
1,315.8
672.1
14.3
21.6
T
otal
6,318.7
3,474.1
7,032.8
7,513.2
The key performance obligation of the OCI group is always the supply of pr
oducts as speciﬁed in the
contracts with customers, possible additional performance obligations included are transportation
and related cost of insurance, depending on the incoterms. The Gr
oup has two revenue str
eams
from contracts with customers that r
elate to the supply of products i.e. Nitr
ogen and Methanol. No
impairment losses on receivables have been r
ecognized (refer
ence is made to note 6.1 and note 9).
Based on the IFRS 15 accounting policies adopted, the following modiﬁcations to the contracts are
allowed: discounts and rebates. They ar
e all taken into account when presenting the segment r
evenues.
Time value of money is not considered to be relevant for the amendment of the r
evenue amount,
as the payment terms are short. Also, ther
e are no non-cash considerations that would need to be
disclosed separately
. No information is provided about remaining performance obligations at current and
comparative year end date that have an original expected duration of one year or less, as allowed by
IFRS 15.
28. Contingencies
Contingent liabilities
Letters of guarantee / letters of credit
OCI has a committed guarantee facility with Rabobank for a maximum guarantee amount of EUR 200.0
million (USD 227.4 million). Under this guarantee facility
, EUR 7.4 million (USD 8.4 million) has been
utilized. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational
purposes.
OCI has an uncommitted surety facility with T
okio Marine Europe SA and Zürich Insurance PLC for a
maximum guarantee amount of EUR 100.0 million (USD 113.7 million). This facility is utilized for EUR
68.8 million (USD 78.2 million). The facility is used to issue a performance guarantee on behalf of OCI
Nitrogen B.V
. OCI also has an uncommitted facility for the issuance of payment undertakings with BNP
Paribas for an amount of USD 89.4 million, fully utilized. Outstanding letters of credit as at 31 December
2021 (uncovered portion) amounted to nil.
Litigations and claims
In the normal course of business, the Group entities and joint ventur
es are involved in some arbitration,
commercial disputes or court cases as defendants or claimants. These litigations and commer
cial
disputes are car
efully monitored by the entities’ and Gr
oup management and legal counsels, and are
regularly assessed with due consideration for possible insurance coverage and r
ecourse rights on third
parties. OCI does not expect these proceedings to r
esult in liabilities that have a material effect on the
Company’
s ﬁnancial position.
In cases where it is pr
obable that the outcome of the proceedings will be unfavorable, and the ﬁnancial
outcome can be measured r
eliably
, a provision has been r
ecognized in the ﬁnancial statements which is
disclosed in note 21 ‘Provisions’. It should be understood that, in light of possible futur
e developments,
such as (a) potential additional lawsuits, (b) possible future settlements, and (c) rulings or judgments in
pending lawsuits, certain cases may result in additional liabilities and r
elated costs. At this point in time,
OCI cannot estimate any additional amount of loss or range of loss in excess of the recor
ded amounts
with sufﬁcient certainty to allow such amount or range of amounts to be meaningful. Mor
eover
, if and
to the extent that the contingent liabilities materialize, they are typically paid over a number of years
and the timing of such payments cannot be predicted with conﬁdence. While the outcome of said
cases, claims and disputes cannot be predicted with certainty
, we believe, based upon legal advice and
information received, that the ﬁnal outcome will not materially af
fect our consolidated ﬁnancial position
but could be material to our results of operations or cash ﬂows in any one accounting period.
Sorfert legal case
On 5 March 2018, the lower criminal court of Oran (T
ribunal du pôle pénal spécialisé d’Oran) issued a
judgment against Sorfert regar
ding an alleged violation of exchange control r
egulations as well as the
regulation of public markets and public service delegations. The lower court or
dered Sorfert to pay a
ﬁne in the amount of 5.5 billion Algerian dinars (about USD 39.9 million) and an ofﬁcer of the company
received a ﬁne of DZD 2.8 billion (about USD 20.0 million). On 7 Mar
ch 2018, Sorfert lodged an
appeal with the Court of Appeal of Oran, Algeria who upheld the verdict against Sorfert in its judgment
render
ed on 28 November 2018. In January 2019, Sorfert lodged an appeal against this judgment with
the Supreme Court. Sorfert disputes the validity of the judgment and continues to vigor
ously defend
its case. T
o date, no Supreme Court hearing has been scheduled and during the appeal period the
enforcement of the judgment is suspended. V
arious renowned local and international law ﬁrms have
examined OCI’
s legal position. No provision has been r
ecorded by the Group r
elated to this matter
.
OCI S.A.E. tax dispute
In October 2012, the Egyptian T
ax Authority (‘ET
A
’) raised a tax evasion claim against our Egyptian
subsidiary
, OCI S.A.E. The tax dispute related to the sale of OCI S.A.E.’
s cement business to Lafarge
SA in 2007. This was ﬁled against OCI S.A.E. despite there being no of
ﬁcial investigation. Although OCI
S.A.E. and its legal and tax advisors believed that the aforementioned transaction was exempted of tax,
management entered into a settlement agr
eement whereby EGP 7.1 billion would be paid over a 5-year
period.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
172
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
28. Contingencies
(continued)
The agreement was followed by payment of a ﬁrst installment of EGP 2.5 billion in 2013. Following
the change in government, the company was exonerated from the tax claim by the Egyptian Public
Prosecutor on 18 February 2014 and subsequently by the ET
A
’
s Independent Appeals Committee on 4
November 2014. The ET
A appealed this decision without including new facts or documents. The appeal
is ongoing. OCI S.A.E. and its local counsel believe the likelihood of a judgment in favor of the ET
A is
not probable. On 13 November 2014 OCI S.A.E. announced that it would transfer its rights to EGP
1.9 billion undue paid tax amounts to the T
ahya Misr Fund and recor
ded a provision for this amount,
refer
ence is made to note 21 Provisions.
Despite the ET
A Independent Appeals Committee ruling in favor of OCI S.A.E., OCI S.A.E. was still held
to pay EGP 900 million. OCI S.A.E. has lodged a reimbursement claim for this amount. As this dispute
occurred prior to the demerger of the Engineering and Construction Gr
oup that formed Orascom
Construction PLC (‘OC’) in 2015, any liabilities and any recoveries ar
e shared on a 50:50 basis between
OCI N.V
. and OC. Should the ET
A win their appeal, OCI N.V
.’
s maximum share of the tax claim would be
EGP 2.3 billion, which equates to approximately USD 146.3 million. Ther
e have been no developments
in the tax dispute during 2021.
Asset retir
ement obligations
Sorfert has a contractual asset retir
ement obligation in connection with the lease of its land. This asset
retir
ement obligation is being disclosed as a contingent liability because it is not possible to determine a
reliable estimate in both timing and value of this obligation.
OCI Nitrogen enter
ed into agreements with DSM and associated company Sitech for r
espectively
the lease of the sites (land) on which it operates its plant and site services/usage. These agreements
have an indeﬁnite term and include an asset dismantling obligation and the obligation to clean up
environmental pollution occurr
ed after zero measur
ement. These obligations have not been accounted
for
, since the company has no plans to end its business activities in the foreseeable future as such the
ﬁnancial impact is assessed as not material by the company’
s management.
Fertil entered into an agr
eement with ADNOC for the lease of the land on which it operates its plant.
The agreement has an indeﬁnite term and includes an asset dismantling obligation and the obligation
to clean up environmental pollution occurr
ed after decommissioning. This obligation has not been
accounted for
, since the company has no plans to end its business activities in the foreseeable future as
such the ﬁnancial impact is assessed as not material by the company’
s management.
Contingent assets
A sequence of historical transactions resulted in (gr
oss) deductible temporary tax differ
ences of USD 1.4
billion. However
, due to a difference in interpretation of local tax r
egulations, the deductible temporary
differ
ences do currently not yet meet the r
ecognition criteria of IAS 12 / IFRIC 23. The group company
concerned is currently under examination of the tax authorities in the respective jurisdiction. A deﬁnitive
conclusion on the treatment is not expected within a short timeframe.
29. Commitments
29.1 Biogas purchase agr
eements
OCI Fuels B.V
. enters into biogas purchase agreements ar
ound the USA for the production of bio-
methanol in the methanol plant in Beaumont (T
exas, USA) and for sale to the USA transportation
market. Through these long-term agr
eements OCI purchases biogas for a ﬁxed price. Per 31 December
2021, an expected 16.6 million mmbtu biogas will be purchased over the coming years (2022 - 2028).
The total expected purchase commitment per 31 December 2021 amounts to USD 154.1 million (2020:
USD 158.2 million). T
otal contract volume is 41.8 million mmbtu and the total contract value is USD
371.3 million (2020: USD 260.1 million).
29.2 Capital commitments
Capital commitments relate to pur
chase commitments of property
, plant and equipment.
$ millions
2021
2020
OCI Beaumont
0.1
-
Sorfert
19.1
19.9
Fertil
19.8
8.5
BioMCN
5.5
7.6
OCI Nitrogen
9.8
7.9
OCI Fuels USA
0.9
-
EBIC
4.6
-
EFC
3.7
1.3
IFCo
2.4
4.6
T
otal
65.9
49.8
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
173
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
30.
Related party transactions
T
ransactions with related parties – normal course of business
T
ransactions with related parties occur when a relationship exists between the Company and their
directors and key management personnel. The Company engages in the following types of r
elated party
transactions:
•
Those with NNS Luxembourg Sarl for occasional consultancy services and Residencia Europe Ltd for
personnel recharges.
•
The Executive Chair’
s travel as per his right to expense the use of a private aircraft for OCI-related
business travel.
•
The Company’
s former construction arm which was divested on 7 March 2015 and incorporated as a
separate legal entity in the United Arab Emirates. The Sawiris Family
, the majority shareholders of OCI,
also owns the majority of the outstanding shares of OC, which qualiﬁes OC and its subsidiaries to be
classiﬁed as related parties.
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding
at year end
Purchase
transactions
during the
year
AP
outstanding
at year end
Loans
receivable
Interest
income
Orascom Construction Egypt
OC gr
oup
company
-
-
0.3
0.9
-
-
OCI Construction Holding
Cyprus
OC group
company
-
-
-
0.8
-
-
NNS Luxembourg Sarl
Related via
shareholder
-
-
0.2
-
-
-
Residencia Europe Ltd.
Related via
shareholder
0.6
0.2
-
-
-
-
Nassef Sawiris
Executive
Chair
-
-
0.7
0.4
-
-
T
otal
0.6
0.2
1.2
2.1
-
-
The following is an overview of the transactions and outstanding amounts as at 31 December 2020:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding
at year end
Purchase
transactions
during the
year
AP
outstanding
at year end
Loans
receivable
Interest
income
Orascom Construction Egypt
OC gr
oup
company
-
-
-
0.9
-
-
OCI Construction Holding
Cyprus
OC group
company
-
-
-
0.8
-
-
Orascom Construction PLC
OC group
company
-
-
-
0.2
-
-
NNS Luxembourg Sarl
Related via
shareholder
0.2
0.2
Nassef Sawiris
Executive
Chair
-
-
0.7
0.2
-
-
T
otal
-
-
0.9
2.3
-
-
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
174
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
30.
Related party transactions
(continued)
T
ransactions with associates and joint ventures
OCI conducts transactions with its associates and joint ventures (as deﬁned in note 3.2, together
“Equity-accounted investees”) in the ordinary course of business by buying and selling goods and
services from and to various Equity-accounted investees within the gr
oup.
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
Related party
Relation
Revenue
transactions
during the year
AR outstanding
at year end
Purchase
transactions
during the year
AP outstanding
at year end
Loans
receivable
Interest income
Natgasoline LLC
Related via
an associate
8.6
-
179.4
32.4
-
-
Sitech Manufacturing
Services C.V
.
Associate
-
-
124.5
36.0
-
-
Utility Support Group B.V
.
Related via
an associate
31.5
3.7
114.8
14.5
-
1.0
Sitech Services B.V
.
Associate
-
0.1
18.1
2.4
-
-
Nitrogen Iberian Company SL
Joint ventur
e
24.3
-
-
0.5
-
-
Shanxi Fenghe
Melamine Co Ltd.
Joint venture
0.1
1.0
31.8
-
-
-
T
otal
64.5
4.8
468.6
85.8
-
1.0
The following is an overview of the transactions and outstanding amounts as at 31 December 2020:
Related party
Relation
Revenue
transactions
during the year
AR outstanding
at year end
Purchase
transactions
during the year
AP outstanding
at year end
Loans
receivable
Interest income
Natgasoline LLC
Related via
an associate
6.4
-
130.8
20.8
-
-
Sitech Manufacturing
Services C.V
.
Associate
-
0.3
138.4
52.0
-
-
Utility Support Group B.V
.
Related via
an associate
13.3
1.2
53.3
4.5
56.8
1.8
Sitech Services B.V
.
Associate
-
-
17.4
2.2
-
-
Nitrogen Iberian Company SL
Joint ventur
e
17.8
-
-
-
-
-
Shanxi Fenghe
Melamine Co Ltd.
Joint venture
0.5
0.1
15.1
-
-
-
T
otal
38.0
1.6
355.0
79.5
56.8
1.8
T
ransactions and balances with equity-accounted investees and related parties
As these are transactions with Equity-accounted investees and r
elated parties, the terms and conditions
may not necessarily be the same as transactions negotiated between third parties. Management
believes that the terms and conditions of all transactions with our Equity-accounted investees and
related parties ar
e generally no less favorable to either party than those that could have been negotiated
with unafﬁliated parties with r
espect to similar services.
The loan receivable balance fr
om Utility Support Group as per 31 December 2020 consists of 2 loans:
•
A Credit Facility of EUR 44.0 million that bears interest at a rate of 6 month Euribor + 3% (ﬂoor of
3.5% all in rate) and is repayable on 30 September 2021. This Cr
edit Facility has been settled in July
2021.
•
A Loan of EUR 2.4 million that bears interest at a rate of 12 month Euribor + 1.7% (no ﬂoor) and is
repayable on 30 September 2021. This loan has been settled in July 2021.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
175
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
31.
Remuneration of the Board of Directors (key management personnel)
We consider
ed the members of the Board of Dir
ectors (Executive and Non-executive) to be the key
management personnel as deﬁned in IAS 24 ‘Related parties’. For transactions with key management
personnel refer
ence is made to note 30. No other beneﬁts or remuneration wer
e provided to or have
been entered into with above mentioned key management personnel except as disclosed below
.
Remuneration of the Directors
During the ﬁnancial year ended 31 December 2021, the total remuneration costs r
elating to the
Executive Directors amounted to USD 13.1 million (2020: USD 11.9 million) consisting of the elements
listed in the table below:
2021
Age
Base salary
1
Annual bonus
Share-based
compensation
T
otal
remuneration
1
N. Sawiris
60
1,000,000
-
2,086,600
3,086,600
H. Badrawi
45
1,150,000
1,262,010
1,385,030
3,797,040
M. de V
ries
49
560,000
614,544
509,197
1,683,741
A. El-Hoshy
37
1,307,692
2
1,714,688
1,533,043
4,555,423
T
otal
4,017,692
3,591,242
5,513,870
13,122,804
1
These ﬁgures exclude employer’
s social security payments (USD 1.0 million).
2
This ﬁgure includes base salary for the additional position as Chief Executive Ofﬁcer Fertiglobe since
27 October 2021.
2020
Age
Base salary
1
Annual bonus
Share-based
compensation
T
otal
remuneration
1
N. Sawiris
59
1,583,334
-
2,393,191
3,976,525
H. Badrawi
44
1,150,000
878,715
1,193,956
3,222,671
M. de V
ries
48
526,667
402,426
356,049
1,285,142
A. El-Hoshy
36
1,091,667
921,032
1,420,277
3,432,976
T
otal
4,351,668
2,202,173
5,363,473
11,917,314
1
These ﬁgures exclude employer’
s social security payments (USD 0.6 million).
At 31 December 2021, the Executive Directors held
777,899
conditional performance shares
(2020: 713,851 including the conditional performance shares granted to A. El-Hoshy prior to his
appointment to the Board).
Outstanding
year end
2020
Granted
conditional
Vested
Expired
Outstanding
year end
2021
V
esting date
N. Sawiris
84,873
-
-
(84,873)
-
25-02-2021
1
116,002
-
-
-
116,002
07-02-2022
135,354
-
-
-
135,354
07-02-2023
-
58,235
-
-
58,235
07-02-2024
N. Sawiris total
336,229
58,235
-
(84,873)
309,591
H. Badrawi
40,315
-
-
(40,315)
-
25-02-2021
1
66,701
-
-
-
66,701
07-02-2022
77,829
-
-
-
77,829
07-02-2023
-
66,971
-
-
66,971
07-02-2024
H. Badrawi total
184,845
66,971
-
(40,315)
211,501
M. de V
ries
32,485
-
-
-
32,485
07-02-2023
-
32,612
-
-
32,612
07-02-2024
M. de V
ries total
32,485
32,612
-
-
65,097
A. El-Hoshy
41,376
2
-
-
(41,376)
-
25-02-2021
1
47,855
2
-
-
-
47,855
07-02-2022
71,061
2
-
-
-
71,061
07-02-2023
-
72,794
-
-
72,794
07-02-2024
A. El-Hoshy total
160,292
72,794
-
(41,376)
191,710
T
otal
713,851
230,612
-
(166,564)
777,899
1
The 2018 Performance Shares granted to N. Sawiris, H. Badrawi and A. El-Hoshy could not vest on
7 February 2021, as OCI was in a Closed T
rading Period (share based transactions related to the
2018 Performance Share Plan wer
e not allowed for Executive Directors during this period under the
Insider T
rading / Market Abuse Regulations). Accordingly
, the 2018 Performance Shares vested on
25 February 2021 (the ﬁrst trading day after the Closed T
rading Period). Over the 3-year performance
period OCI’
s TSR performance ranked 10th in the TSR peer group at the 25th per
centile. As a result,
the awards vested at 0%.
2
These conditional performance shares were granted prior to appointment to the Board.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
176
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
31.
Remuneration of the Board of Directors (key management personnel)
(continued)
As at 31 December 2021, the Executive Directors held no bonus matching shar
es (2020: 38,196
including the bonus matching shares granted to A. El-Hoshy prior to his appointment to the Boar
d).
Outstanding
year end 2020
Granted
Vested
Outstanding
year end
2021
V
esting date
N. Sawiris
17,190
-
(17,190)
-
05-05-2021
1
N Sawiris total
17,190
-
(17,190)
-
H. Badrawi
1,398
-
(1,398)
-
05-05-2021
1
H. Badrawi total
1,398
-
(1,398)
-
M. de V
ries
4,975
-
(4,975)
-
09-04-2021
M. de V
ries total
4,975
-
(4,975)
-
A. El-Hoshy
14,633
-
(14,633)
-
09-04-2021
A. El-Hoshy total
14,633
-
(14,633)
-
T
otal
38,196
-
(38,196)
-
1
The Matching rights granted to N. Sawiris and H. Badrawi could not vest on 9 April 2021, as OCI
was in a Closed T
rading Period (share based transactions related to the 2018 Bonus Matching Plan
were not allowed for Executive Dir
ectors during this period under the Insider T
rading / Market Abuse
Regulations). Accordingly
, the 2018 Matching Award vested on 5 May 2021 (the ﬁrst trading day after
the Closed T
rading Period.
For M. de V
ries and A. El-Hoshy
, whose 2018 Matching rights were granted prior to their appointment
to the Board, vesting was allowed on 9 April 2021, in accor
dance with the plan rules.
As at 31 December 2021, the Executive Directors held 47,212 RSU shar
es (2020: 61,081 including
RSU shares granted to A. El-Hoshy prior to his appointment to the Boar
d).
Outstanding
year end
2020
Granted
Vested
Outstanding
year end
2021
V
esting date
M. de V
ries
4,754
-
(4,754)
-
05-05-2021
1
9,509
-
-
9,509
17-04-2022
M. de V
ries total
14,263
-
(4,754)
9,509
A. El-Hoshy
9,115
-
(9,115)
-
05-05-2021
1
18,231
-
-
18,231
17-04-2022
6,491
-
-
6,491
07-02-2022
12,981
-
-
12,981
07-02-2023
A. El-Hoshy total
46,818
-
(9,115)
37,703
T
otal
61,081
-
(13,869)
47,212
1
The Restricted Stock Units granted to M. de V
ries and A. El-Hoshy could not vest on 17 April 2021, as
this was a Saturday
. On the subsequent Monday
, 19 April 2021 OCI was in a Closed T
rading Period
(share based transactions r
elated to the 2019 RSU Plan Matching Plan were not allowed during this
period under the Insider T
rading / Market Abuse Regulations). Accordingly
, the ﬁrst tranche of the
2019 RSU Awar
ds vested on 5 May 2021 (the ﬁrst trading day after the Closed T
rading Period).
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
177
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
31.
Remuneration of the Board of Directors (key management personnel)
(continued)
In 2021, the total remuneration costs r
elating to the Non-Executive Directors amounted to USD 1.7
million (2020: USD 1.7 million) consisting of the elements in the table below:
2021
Annual ﬁxed
fee
Audit
committee
membership
Additional
fee
Nomination
governance
and
remuneration
committee
Health
safety
environment
committee
T
otal
M. Bennett
300,000
-
-
7,500
-
307,500
S. Schat
150,000
20,000
-
20,000
-
190,000
A. Montijn-
Groenewoud
150,000
-
-
7,500
15,833
173,333
R.J. van de Kraats
150,000
25,000
-
7,500
-
182,500
G. Heckman
150,000
-
-
-
7,500
157,500
J. Guiraud
150,000
20,000
-
7,500
-
177,500
D. Welch
150,000
-
73,859
1
-
7,500
231,359
D. Fraser
150,000
20,000
-
-
-
170,000
H. van de Kerkhof
150,000
-
-
-
7,500
157,500
T
otal
1,500,000
85,000
73,859
50,000
38,333
1,747,192
1
The amount reported as extraor
dinary item for D. Welch is the fee for services on the Boar
d of
Fertiglobe Holding Ltd for the period 1 January 2021 - 26 October 2021.
2020
Annual ﬁxed
fee
Audit
committee
membership
Additional
fee
Nomination
governance
and
remuneration
committee
Health
safety
environment
committee
T
otal
M. Bennett
300,000
-
-
7,500
-
307,500
J. T
er W
isch
1
69,643
9,286
-
3,482
-
82,411
S. Schat
150,000
20,000
-
20,000
-
190,000
A. Montijn-
Groenewoud
150,000
-
-
7,500
10,000
167,500
R.J. van de Kraats
150,000
25,000
-
7,500
-
182,500
G. Heckman
150,000
-
-
-
7,500
157,500
J. Guiraud
150,000
20,000
-
7,500
-
177,500
D. Welch
150,000
-
90,000
-
7,500
247,500
D. Fraser
150,000
20,000
-
-
-
170,000
H. van de Kerkhof
2
29,348
-
-
-
1,467
30,815
T
otal
1,448,991
94,286
90,000
53,482
26,467
1,713,226
1
Appointment ended on 17 June 2020.
2
Appointed on 20 October 2020.
32.
Subsequent events
OCI Methanol Group
On 7 February 2022 OCI N.V
. announced the signing of the strategic alliance with two investors, ADQ
and Alpha Dhabi Holding will acquire a 15% shar
e in OCI Methanol Group for a total consideration of
USD 375 million. Closing took place on 18 February 2021. This will be recor
ded as an equity transaction
in Q1 2022.
OCI proposed semi-annual dividend distribution
On 15 February 2022 OCI announced a proposed payment of an interim distribution for the period H2
2021 of EUR 1.45 per share (or c.USD 350 million including a USD 200 million base). OCI is convening
an extraordinary shar
eholders meeting (EGM) on 28 March 2022 to r
esolve on the distribution through
a repayment of capital with an option to shar
eholders to elect for a dividend distribution instead,
resulting in a distribution to shar
eholders scheduled for June, subject to a statutory two-month creditor
opposition period.
OCI Methanol Group dividend distribution
In February 2022, the OCI Methanol Group Boar
d of Directors appr
oved dividends of USD 420
million, which were paid out to OCI Methanol Gr
oup shareholders, OCI (USD 357 million) and minority
shareholders (USD 63 million), on 22 February 2022.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Consolidated Financial Statements
OCI N.V
.
Annual Report 2021
178
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
33.
Exter
nal auditors’ fee
The service fees recognized in the ﬁnancial statements 2021 for the service of KPMG amounted to USD
5.8 million (2020: USD 4.7 million). Other assurance services provided to the Gr
oup include services
related to bond of
ferings, voluntary audit of other ﬁnancial statements, agreed upon pr
ocedures related
to covenant reporting and other statutory r
equirements.
The amounts per service category are shown in the following table:
T
otal service fee
of which KPMG Accountants N.V
.
(The Netherlands)
$ millions
2021
2020
2021
2020
Audit of group ﬁnancial statements
4.6
3.8
2.6
2.2
Other assurance services
1.1
0.8
0.3
0.7
T
otal assurance services
5.7
4.6
2.9
2.9
T
ax services
0.1
0.1
-
-
Sundry services
-
-
-
-
T
otal
5.8
4.7
-
2.9
34.
List of principal subsidiaries as per 31 December 2021
Companies
Country
Percentage of
interest
Consolidation
method
Fertiglobe plc
UAE
50.00
Full
OCI Fuels B.V
.
The Netherlands
100.00
Full
OCI Methanol Marketing B.V
.
The Netherlands
100.00
Full
OCI Nitrogen B.V
.
The Netherlands
100.00
Full
BioMCN B.V
.
The Netherlands
100.00
Full
Iowa Fertilizer Company LLC
United States
100.00
Full
OCI USA Inc.
United States
100.00
Full
OCI Partners LP / OCI Beaumont
United States
100.00
Full
N-7 LLC
United States
50.00
Full
OCI Methanol Marketing LLC
United States
100.00
Full
Key subsidiaries held via Fertiglobe plc
Ruwais Fertilizers Industries Ltd (Fertil)
UAE
100.00
Full
Egypt Basic Industries Corporation
Egypt
75.00
Full
Egyptian Fertilizers Company
Egypt
99.96
Full
Sorfert Algérie Spa
Algeria
50.99
Full
Orascom Construction Industries S.A.E.
Egypt
99.96
Full
Fertiglobe Distribution Limited
UAE
100.00
Full
OCI Fertilizer T
rade and Supply
UAE
100.00
Full
OCI Fertilizer T
rading Limited
UAE
100.00
Full
A full list of afﬁliated companies will be available for public inspection at the Commer
cial Registry in
conformity with the provisions of Article 2:379 and 2:414 of the Dutch Civil Code.
NO
TES T
O THE CONSOLIDA
TED FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
6.
Financial
statements
P
arent Company
OCI N.V
.
Annual Report 2021
179
OCI N.V
.
Annual Report 2021
180
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
P
ARENT COMP
ANY ST
A
TEMENT OF FINANCIAL POSITION
A
S
AT
$ millions
Note
31 December
2021
31 December
2020
Assets
Non-current assets
Investment in subsidiaries
(41)
8,480.7
7,207.0
Property
, plant and equipment
1.9
0.8
Right-of-use assets
3.1
0.8
Other receivables
(42)
703.5
881.8
Financial assets at fair value through other compr
ehensive income
(43)
2.8
2.9
Deferred tax assets
(54)
5.5
-
T
otal non-current assets
9,197.5
8,093.3
Current assets
Inventory
(44)
21.9
-
Other receivables
(42)
220.4
128.6
Cash and cash equivalents
(45)
179.5
14.2
T
otal current assets
421.8
142.8
T
otal assets
9,619.3
8,236.1
Equity
Share capital
(46),(15)
5.6
5.6
Share pr
emium
(15)
6,316.3
6,316.3
Currency translation r
eserve
(1,705.8)
(1,242.2)
Fair value reserve
(1.4)
(1.5)
Other reserves
(113.2)
(117.0)
Retained earnings
2,773.4
269.6
Equity attributable to owners of the Company
7,274.9
5,230.8
Liabilities
Non-current liabilities
Loans and borrowings
(47)
1,124.1
2,660.7
Lease obligations
2.6
0.2
Deferred tax liabilities
(54)
-
1.2
T
otal non-current liabilities
1,126.7
2,662.1
Current liabilities
Loans and borrowings
(47)
995.3
277.2
Lease obligations
0.6
0.6
T
rade and other payables
(48)
221.8
65.4
T
otal current liabilities
1,217.7
343.2
T
otal liabilities
2,344.4
3,005.3
T
otal equity and liabilities
9,619.3
8,236.1
The notes on pages 185 to 196 are an integral part of these par
ent company ﬁnancial statements.
OCI N.V
.
Annual Report 2021
181
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
P
ARENT COMP
ANY ST
A
TEMENT OF PROFIT OR L
OSS AND O
THER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Revenue from dividend income
(49)
1,322.2
176.9
Other income
1
(51)
1,417.9
0.1
General and administrative expenses
(50)
(36.6)
(30.7)
Other expenses
(52)
(40.6)
(1,030.1)
Operating proﬁt / (loss)
2,662.9
(883.8)
Finance income
(53)
168.8
235.1
Finance cost
(53)
(363.5)
(284.7)
Net ﬁnance (cost)
(53)
(194.7)
(49.6)
Proﬁt / (loss) befor
e income tax
2,468.2
(933.4)
Income tax
(54)
31.9
3.3
Net proﬁt / (loss)
2,500.1
(930.1)
Other comprehensive income:
Items that are or may be r
eclassiﬁed subsequently to proﬁt or loss
Currency translation dif
ferences
(46)
(463.6)
449.8
Items that will not be reclassiﬁed to pr
oﬁt or loss
Changes in fair value of other ﬁnancial assets
0.1
(0.8)
Other comprehensive income, net of tax
(463.5)
449.0
T
otal comprehensive income
2,036.6
(481.1)
1
Other income in 2021 include a reversal of an impairment of investment in subsidiaries of USD 1,417.7 million (2020 impairment in other expenses: USD 1,008.6 million), r
eference is made to note 51.
The notes on pages 185 to 196 are an integral part of these par
ent company ﬁnancial statements.
OCI N.V
.
Annual Report 2021
182
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
P
ARENT COMP
ANY ST
A
TEMENT OF CHANGES IN EQUIT
Y
$ millions
Note
Share
capital
(15)
Share
premium
(15)
Fair value reserve
Currency
translation
1
Other
reserves
Retained
earnings
Equity
attributable
to owners
of the
Company
Balance at 1 January 2020
5.6
6,316.3
(0.7)
(1,692.0)
(120.8)
1,195.5
5,703.9
Net proﬁt / (loss)
(46.2)
-
-
-
-
-
(930.1)
(930.1)
Other comprehensive income
-
-
(0.8)
449.8
-
-
449.0
T
otal comprehensive income
-
-
(0.8)
449.8
-
(930.1)
(481.1)
T
reasury shar
es sold / delivered
(16)
-
-
-
-
3.8
(3.8)
-
Share-based payments
(15)
-
-
-
-
-
8.0
8.0
Balance at 31 December 2020
5.6
6,316.3
(1.5)
(1,242.2)
(117.0)
269.6
5,230.8
Net proﬁt / (loss)
(46.2)
-
-
-
-
-
2,500.1
2,500.1
Other comprehensive income
-
-
0.1
(463.6)
-
-
(463.5)
T
otal comprehensive income
-
-
0.1
(463.6)
-
2,500.1
2,036.6
T
reasury shar
es sold / delivered
(16)
-
-
-
-
4.8
(4.8)
-
T
reasury shar
es acquired
(16)
-
-
-
-
(1.0)
-
(1.0)
Share-based payments
(15)
-
-
-
-
-
8.5
8.5
Balance at 31 December 2021
5.6
6,316.3
(1.4)
(1,705.8)
(113.2)
2,773.4
7,274.9
1
Legal reserve under Dutch Law
.
The notes on pages 185 to 196 are an integral part of these par
ent company ﬁnancial statements.
OCI N.V
.
Annual Report 2021
183
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
P
ARENT COMP
ANY ST
A
TEMENT OF CASH FL
OWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Net proﬁt / (loss)
2,500.1
(930.1)
Adjustments for:
Depreciation
(50)
0.9
0.8
Interest income
(53)
(70.3)
(65.8)
Interest expense
(53)
160.9
198.4
Net foreign exchange (gain) / loss
(53)
104.1
(83.0)
Revenue from dividend income
(49)
(1,322.2)
(176.9)
(Reversal of impairment) / impairment of subsidiaries
(51)
(1,417.7)
1,008.6
Share-based compensation
(22b), (50)
8.5
7.9
Income tax expense
(54)
(31.9)
(3.3)
Changes in:
Inventory
(44)
(21.9)
-
Other receivables
(42)
(106.4)
(68.5)
T
rade and other payables
(48)
4.7
(131.5)
Cash ﬂows:
Interest paid
(175.4)
(184.6)
Interest paid Nile Holding loan
-
(7.1)
Interest r
eceived
58.5
77.0
Income taxes received
-
1.1
Dividends received
1,322.2
176.9
Cash ﬂow (used in) / from operating activities
1,014.1
(180.1)
Investments in intangible assets
(1.1)
-
Capital contributions to subsidiaries
(41)
(261.4)
-
Cash ﬂow (used in) investing activities
(262.5)
-
The notes on pages 185 to 196 are an integral part of these par
ent company ﬁnancial statements.
OCI N.V
.
Annual Report 2021
184
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
P
ARENT COMP
ANY ST
A
TEMENT OF CASH FL
OWS
FOR THE YEAR ENDED 31 DECEMBER
$ millions
Note
2021
2020
Purchase of tr
easury shares
(16)
(1.0)
-
Proceeds fr
om borrowings
(18), (47)
909.2
1,675.0
Proceeds fr
om borrowings from subsidiaries
(47)
600.6
145.9
Repayment of borrowings
(47)
(2,401.2)
(1,756.1)
Repayment of borrowings fr
om subsidiaries
(47)
(8.0)
-
Newly incurred transaction costs
(47)
(0.1)
(10.4)
Settlement of FX derivatives
(53)
(72.8)
45.6
Payment of lease obligations
(0.7)
(0.6)
Cash ﬂow from ﬁnancing activities
(974.0)
99.4
Net increase / (decr
ease) in cash and cash equivalents
(222.4)
(80.7)
Cash and cash equivalents at 1 January
14.2
92.3
Effect of exchange rate ﬂuctuations on cash held
4.7
2.6
Cash and cash equivalents at 31 December
(203.5)
14.2
Cash and cash equivalents in statement of ﬁnancial position
(45)
179.5
14.2
Bank overdraft r
epayable on demand
(47)
(383.0)
-
Cash and cash equivalents in statement of cash ﬂows
(203.5)
14.2
The notes on pages 185 to 196 are an integral part of these par
ent company ﬁnancial statements.
OCI N.V
.
Annual Report 2021
185
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER
35. General
OCI N.V
. (‘The Company’ or ‘OCI’) was established on 2 January 2013 as a public limited liability
company incorporated under Dutch law
, with its head ofﬁce located at Honthorststraat 19, Amsterdam,
the Netherlands. OCI is register
ed in the Dutch commercial r
egister under no. 56821166 dated 2
January 2013. OCI is a holding company and is tax resident in the Netherlands.
36.
Basis of preparation
The parent company ﬁnancial statements have been pr
epared in accor
dance with International Financial
Reporting Standards as endorsed by the Eur
opean Union (IFRS-EU).
The parent company ﬁnancial statements have been pr
epared on the historical cost basis, except when
otherwise indicated.
The ﬁnancial year of OCI commences on 1 January and ends on 31 December
.
The Company’
s functional currency is the Eur
o (‘EUR’). Because the Company’
s major foreign
operations have the US dollar as their functional currency
, the presentation currency of the Company is
the US dollar (‘USD’).
All values are r
ounded to the nearest tenth million (in millions of USD), except when stated otherwise.
The parent company ﬁnancial statements have been authorized for issue by the Company’
s Board of
Directors on
18 March 2022. The ﬁnancial statements ar
e subject to adoption of the Annual General
Meeting of Shareholders.
37.
Accounting principles applied
In the parent company ﬁnancial statements, the same accounting policies have been applied as set out
in the notes to the consolidated ﬁnancial statements, except for the measurement of the subsidiaries
as presented under ‘Investments in subsidiaries’ in the par
ent company ﬁnancial statements. These
policies have been consistently applied to all years presented.
For the amendments that became applicable and the new standards not yet applicable to OCI,
refer
ence is made to note 4.2 of the consolidated ﬁnancial statements.
38.
Summary of signiﬁcant accounting policies
Investments in subsidiaries
These policies have been consistently applied to all years presented.
In the parent company ﬁnancial statements, investments in subsidiaries ar
e recor
ded at cost less
impairment. In the parent company statement of pr
oﬁt or loss and other comprehensive income,
dividend received fr
om investments in subsidiaries is recor
ded as dividend income.
Due to this application, the parent company equity and net r
esult are not equal to the consolidated
equity and net result. A r
econciliation for total equity attributable to owners of the company and total
comprehensive income is pr
esented in note 46 to the parent company ﬁnancial statements.
Dividend distribution
Dividend distribution to the Company’
s shareholders is r
ecognized as a liability in the parent company
ﬁnancial statements, in the period in which the dividend is approved by the Company’
s shareholders.
Dividend Income
Dividend income from the Company’
s subsidiaries is recognized when the right to receive payment is
established.
39.
Use of estimates and judgments
The preparation of the par
ent company ﬁnancial statements requir
es management to exercise judgment
and make estimates and assumptions that affect the application of the Company’
s accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual r
esults could differ fr
om
these estimates.
Estimates and underlying assumptions are r
eviewed on an ongoing basis. Revisions to accounting
estimates are r
ecognized in the period in which the estimates are r
evised and in any future periods
affected.
The areas involving a higher degr
ee of judgment or complexity
, or areas wher
e assumptions and
estimates are signiﬁcant to the par
ent company ﬁnancial statements are the impairment of the
investments in subsidiaries.
V
aluation of investments in subsidiaries
At each balance sheet date, the Company reviews whether ther
e is an indication that its investments in
subsidiaries might be impaired.
An indication for impairment of the investments in subsidiaries may include, respectively
, management’
s
downward adjustment of the strategic plan. Further indications for impairments of its investments
may include other areas wher
e observable data indicates that there is a measurable decr
ease in the
estimated future cash ﬂows. These determinations r
equire signiﬁcant judgment. In making this judgment,
management evaluates, among other factors, the ﬁnancial performance of and business outlook for its
investments, including factors such as industry and sector performance, changes in technology and
operational and ﬁnancing cash ﬂow
.
OCI N.V
.
Annual Report 2021
186
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
39.
Use of estimates and judgments
(continued)
If any indication for impairment exists, the recoverable amount of the investments is estimated in or
der
to determine the extent, if any
, of the impairment loss. An investment is impaired if the recoverable
amount is lower than the carrying amount. The recoverable amount is deﬁned as the higher of an
investment’
s fair value less costs to sell and its value in use.
The investments’ fair value less costs to sell repr
esents the best estimate of the amount OCI would
receive if it sold its investments.
The determination of the investment’
s value in use is based on calculations using pre-tax cash ﬂow
projections based on ﬁnancial budgets appr
oved by management covering a 5-year period and the
terminal value period.
If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying
amount of the investment is reduced to its r
ecoverable amount. Any impairment loss is recognized
immediately in the statement of proﬁt or loss.
Impairment losses recognized in prior periods shall be r
eversed only if there has been a change in the
estimates or external market information used to determine the investment’
s recoverable amount since
the last impairment loss was recognized. The r
ecoverable amount shall not exceed the carrying amount
that would have been determined had no impairment loss been recognized in prior years.
40.
Financial risk and capital management
Reference is made to note 6 ‘Financial risk and capital management‘ in the notes to the consolidated
ﬁnancial statements.
40.1 Credit risk
The maximum exposure to cr
edit risk at the reporting date was as follows:
$ millions
Note
2021
2020
Other receivables
(42)
923.9
1,010.4
Financial assets at fair value through other compr
ehensive income
(43)
2.8
2.9
Cash and cash equivalents
(45)
179.5
14.2
T
otal
1,106.2
1,027.5
The maximum exposure to cr
edit risk for other receivables by geographic r
egion was as follows:
$ millions
2021
2020
Middle East and Africa
0.5
-
Europe
112.1
43.3
Americas
811.3
967.1
T
otal
923.9
1,010.4
40.2
Liquidity risk
The following are the contractual maturities of ﬁnancial liabilities, including estimated inter
est payments
and excluding the impact of netting agreements:
At 31 December 2021
$ millions
Note
Carrying
amount
Contractual
cash ﬂow
Less than
1 year
Between 1
and
5 years
More than
5 years
Financial liabilities
Loans and borrowings
(47)
1,507.1
1,644.3
419.2
1,225.1
-
Loans and borrowings fr
om
subsidiaries
1
(47)
612.3
612.3
612.3
-
-
T
rade and other payables
(48)
221.8
221.8
221.8
-
-
T
otal
2,341.2
2,478.4
1,253.3
1,225.1
-
1
The contractual cash ﬂows do not include interest cash ﬂow for the loan received fr
om OCI Overseas
Holding since this loan is repayable on demand.
At 31 December 2020
$ millions
Note
Carrying
amount
Contractual
cash ﬂow
Less than
1 year
Between 1
and
5 years
More than
5 years
Financial liabilities
Loans and borrowings
(47)
2,660.7
3,140.1
106.6
3,033.5
-
Loans and borrowings fr
om
subsidiaries
1
(47)
277.2
277.2
277.2
-
-
T
rade and other payables
(48)
65.4
65.4
65.4
-
-
T
otal
3,003.3
3,482.7
449.2
3,033.5
-
1
The contractual cash ﬂows do not include interest cash ﬂow for the loan received fr
om OCI Overseas
Holding since this loan is repayable on demand.
OCI N.V
. leases ofﬁce space and vehicles. The ofﬁce space lease at Honthorststraat is r
enewed for a
period of 5 years, with an option to renew the lease ther
eafter
. The ofﬁce space at Willemsparkweg is
for an initial period of 5 years, with an option to renew the lease ther
eafter
. Lease payments are indexed
annually
.
Future minimum lease payments
$ millions
2021
2020
Less than one year
0.8
0.6
Between one and ﬁve years
2.8
0.2
More than ﬁve years
-
-
T
otal
3.6
0.8
OCI N.V
.
Annual Report 2021
187
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
40.2
Liquidity risk
(continued)
As part of the preparation of the ﬁnancial statements, the Company has assessed its liquidity risk.
Liquidity risk is the risk that the Company may encounter difﬁculty in meeting the obligations associated
with its ﬁnancial liabilities that are settled by delivering cash or another ﬁnancial asset. The Company has
made a number of assumptions in assessing its ability to meet its covenant requir
ements and satisfy
obligations as they become due. Determining these assumptions requir
es signiﬁcant judgment about
future r
esults and cash ﬂows. Key assumptions include product pricing, gas pricing, utilization rates, and
the ability to arrange ﬁnancing and obtain waivers for anticipated covenant breaches. Refer to note 6.2
and note 18 of the notes to the consolidated ﬁnancial statements for the Company’
s analyses of liquidity
risk and debt covenants, respectively
. Furthermore, the Company’
s ﬁnancial liabilities include loans and
borrowings fr
om subsidiaries. Although these loans and borrowings fr
om subsidiaries are sometimes
classiﬁed as short-term due the contractual terms, the repayment date of these loans and borr
owings
can be controlled and determined by OCI and may be extended beyond one year
.
40.3
Market risk
Foreign exchange risk
As of 31 December 2021, if the US dollar had weakened / strengthened by 5 per
cent against the Euro
with all other variables held constant, the translation of foreign curr
ency receivables, payables, cash and
cash equivalents and loans and borrowings would have r
esulted in an increase / decr
ease of USD
24.7
million of the proﬁt of the year
.
The summary of quantitative data about the Company’
s exposure to for
eign exchange transaction
exposure based on risk management policy for the main curr
encies was as follows:
At 31 December
$ millions
2021
2020
Other receivables
838.4
961.8
T
rade and other payables
(124.3)
(15.3)
Loans and borrowings
(1,261.0)
(1,364.2)
Cash and cash equivalents
53.0
3.9
The following tables demonstrate the sensitivity to a reasonably possible change in EUR-USD exchange
rates, with all other variables held constant. The impact on the Company’
s general and administrative
expenses is due to changes in the fair value of monetary assets and liabilities, including inter
-company
positions. The Company’
s exposure to for
eign currency changes for all other currencies is not material.
2021
$ millions
Change in
FX rate
Effect on pr
oﬁt
before tax
Effect on
equity
EUR - USD
5 percent
(24.7)
-
(5) percent
24.7
-
2020
$ millions
Change in
FX rate
Effect on pr
oﬁt
before tax
Effect on
equity
EUR - USD
8 percent
(33.1)
-
(8) percent
33.1
-
Interest rate risk
The following table demonstrates the sensitivity to a reasonably possible change in inter
est rates on that
portion of borrowings af
fected. With all other variables held constant, the Company’
s proﬁt befor
e tax
is affected thr
ough the impact on ﬂoating rate borrowings plus r
eﬁnancing of ﬁxed rate borrowings, as
follows:
$ millions
In basis points
2021
2020
Effect on pr
oﬁt before tax for the coming year
+100 bps
(4.0)
(3.5)
- 100 bps
4.0
3.5
Commodity price risk
Natural gas is one of the primary raw materials used in the OCI’
s production pr
ocesses. The Company
is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices.
Management monitors the development of gas prices and products’ selling prices on a daily basis using
external historical and forecast market data provided by several data vendors. Management analyzes
the potential proﬁt margin per pr
oduct based on these data in order to make operational and hedging
decisions.
The Company enters into gas hedges on behalf of subsidiaries, in order to hedge futur
e gas price levels
over a certain period of time. The Company uses derivatives (Basis swaps, Index swaps and options)
in order to do so and does not apply hedge accounting on these instruments, ther
efore all fair value
changes related to these ﬁnancial instruments ar
e recognized in pr
oﬁt or loss.
OCI N.V
. is a participating entity in several hedge strategies of the Group. For the hedge strategies
refer
ence is made to note 6.3.
European Emission Allowance
Several subsidiaries of OCI N.V
. receive European Emission Allowances (“EUAs”) as a r
esult of their
industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission
Authority
. The amount of EUAs granted is based on an estimate of CO
2
emissions in the Netherlands
and the effective Eur
opean emission legislation. In arrears, the subsidiaries have to r
efund allowances to
the Dutch Emission Authority based on actual CO
2
emissions during the year
. In the event that a deﬁcit
in EUAs is identiﬁed, the subsidiaries have to purchase additional EUAs on the commodity markets to
settle its liability to the Dutch Emission Authority
.
During the year
, OCI N.V
. has generated additional liquidity by selling its EUAs to the market. T
o manage
the price exposure on the liability towar
ds the Dutch Emission Authority
, OCI N.V
. entered into ﬁnancial
hedges to purchase EUAs. For further information r
eference is made to note 6.3.
For the fair value of the commodity derivatives refer
ence is made to note 42.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
188
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
40.3
Market risk
(continued)
Categories of ﬁnancial instruments
2021
$ millions
Note
Loans and
receivables /
payables at
amortized cost
Assets /
liabilities at fair
value
Financial asset
at fair value
through other
comprehensive
income
Assets
Other receivables
(42)
881.1
42.8
-
Financial asset at fair value through other
comprehensive income
(43)
-
-
2.8
Cash and cash equivalents
(45)
179.5
-
-
T
otal
1,060.6
42.8
2.8
Liabilities
Loans and borrowings fr
om third parties
(47)
1,507.1
-
-
Loans and borrowings fr
om subsidiaries
(47)
612.3
-
-
T
rade and other payables
(48)
213.0
8.8
-
T
otal
2,332.4
8.8
-
2020
$ millions
Note
Loans and
receivables /
payables at
amortized cost
Assets /
liabilities at fair
value
Financial asset
at fair value
through other
comprehensive
income
Assets
Other receivables
(42)
1,000.2
10.2
-
Financial asset at fair value through other
comprehensive income
(43)
-
-
2.9
Cash and cash equivalents
(45)
14.2
-
-
T
otal
1,014.4
10.2
2.9
Liabilities
Loans and borrowings fr
om third parties
(47)
2,660.7
-
-
Loans and borrowings fr
om subsidiaries
(47)
277.2
-
-
T
rade and other payables
(48)
54.5
10.9
-
T
otal
2,992.4
10.9
-
The only ﬁnancial instrument carried at fair value by the Company is the ﬁnancial asset at fair value
through other compr
ehensive income which is measured with hierar
chy level 1 of the fair value hierarchy
category
.
41.
Investment in subsidiaries
$ millions
2021
2020
Balance at 1 January
7,207.0
7,600.7
Reversal of impairment / (Impairment)
1,417.7
(1,008.6)
Capital contribution
431.9
-
Exchange rate differ
ences
(575.9)
614.9
Balance at 31 December
8,480.7
7,207.0
Capital contributions
In 2021, capital contributions of USD 261.4 million in cash and USD 170.5 million in kind, by settling
loans and receivable balances, wer
e made to OCI Intermediate B.V
.
Impairment testing 2021
An impairment reversal trigger was identiﬁed in OCI N.V
.'s investment in subsidiaries due to an increase
in share price as per December 2021 compar
ed to 2020. As a result, the Gr
oup has prepared an
impairment test on the investment in subsidiaries in accordance with IAS 36. An impairment r
eversal is
recognized if the estimated r
ecoverable amount of an asset exceeds its carrying amount.
The recoverable amount has been estimated based on fair value less cost of disposal. Key elements for
the determination of fair value were the 14 days trailing shar
e price of OCI N.V
. as per 31 December
2021 of USD 26.55 (which is measured with hierar
chy level 1 of the fair value hierarchy category), the
number of outstanding shares of OCI N.V
. (210,306,101 shares) and a contr
ol premium of 30%, which is
the median bid premium for the acquisitions of Dutch listed companies in the period 2000 - 2019
based on the price paid over and above the trading share price to obtain contr
ol and determined to be
a reasonable contr
ol premium for listed companies. The costs of disposal ar
e assumed to be limited
and included in the control pr
emium assumption. This results in a r
ecoverable amount of USD 7,258.7
million.
The recoverable amount of OCI Intermediate B.V
. (which is the total of the investment in subsidiaries,
receivables fr
om subsidiaries and the loans and borrowings) exceeded the carrying amount of the
investment. As a result, an impairment r
eversal of USD 1,417.7 million is recognized in the Par
ent
company statement of Proﬁt or Loss and Other Compr
ehensive Income. The accumulated impairment
as per 31 December 2021 amounts to USD 154.5 million.
List of subsidiaries as per 31 December 2021:
Name
Country of
incorporation
Ownership %
OCI Intermediate B.V
.
The Netherlands
100.0
OCI UK Ltd.
United Kingdom
100.0
OCI Intermediate B.V
. is a holding company which has all operating companies as subsidiaries.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
189
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
42.
Other receivables
$ millions
2021
2020
Receivables from subsidiaries
877.9
995.5
Commodity derivatives
42.8
9.4
Foreign curr
ency derivatives
-
0.8
Other receivables
3.2
4.7
T
otal
923.9
1,010.4
Non-current
703.5
881.8
Current
220.4
128.6
At 31 December
923.9
1,010.4
The carrying amount of receivables appr
oximates their fair value.
The assessment of the expected credit losses did not r
esult in an impairment of receivables. This will be
monitored on a continuous basis going forwar
d and periodically reassessed.
Speciﬁcation of receivables fr
om subsidiaries:
$ millions
T
ype
Interest rate
2021
Long-term
2021
Short-term
2020
Long-term
2020
Short-term
OCI USA Inc.
Unsecured
8% ﬁxed
-
-
392.1
-
OCI USA Inc.
Unsecured
6.418% ﬁxed
-
-
489.7
-
Iowa Intermediate
Fertilizer Holding
Corp
Unsecured
5.2% ﬁxed
40.6
-
-
-
Iowa Intermediate
Fertilizer Holding
Corp
Unsecured
5.2% ﬁxed
662.9
-
-
-
Iowa Intermediate
Fertilizer Holding
Corp
Unsecured
5.1% ﬁxed
-
104.7
-
-
Other receivables
subsidiaries
-
-
-
69.7
-
113.7
T
otal
703.5
174.4
881.8
113.7
43.
Financial assets at fair value through other comprehensive income
$ millions
2021
2020
Orascom Construction Limited (Dubai)
2.8
2.9
T
otal
2.8
2.9
Orascom Construction Limited is a related party
.
44. Inventory
$ millions
2021
2020
European Emission Allowances
21.9
-
T
otal
21.9
-
During 2021, OCI N.V
. purchased 261,247 European Emission Allowances fr
om its subsidiary BioMCN
for an average price of EUR 73.56.
45.
Cash and cash equivalents
$ millions
2021
2020
Bank balances
179.5
14.2
T
otal
179.5
14.2
The bank balances are fr
eely available for usage and are not r
estricted.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
190
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
46.
Equity attributable to owners of the Parent Company
46.1
Reconciliation of consolidated income and equity attributable to shareholders to
Parent Company income and equity attributable to owners
$ millions
2021
Equity
2021
Proﬁt / (loss)
2020
Equity
2020
Proﬁt / (loss)
Consolidated equity attributable to owners of
the company
1,999.0
521.1
1,131.7
(282.1)
Revaluation of subsidiaries
5,329.7
1,417.7
3,912.0
(1,008.6)
Differ
ence gain on demerger 2015
(387.8)
(387.8)
-
Differ
ence in proﬁt or loss
2,776.5
511.9
2,264.6
256.2
Other comprehensive income
(1,543.6)
(414.1)
(1,129.5)
553.4
Business combination Fertiglobe
(723.1)
-
(723.1)
-
Other direct equity movements (including impact
IFRS 9 adoption)
(175.8)
-
162.9
-
Parent Company equity attributable to owners
7,274.9
2,036.6
5,230.8
(481.1)
The differ
ences between total shareholders’ equity and total compr
ehensive income according to the
consolidated ﬁnancial statements and the parent company ﬁnancial statements in general r
elate to
the accounting of investments at cost (fair value as deemed cost upon adoption of IFRS) in the parent
company ﬁnancial statements and subsequent impairments.
The reconciling items for equity and income ar
e further detailed below
.
Revaluation of subsidiaries
The revaluation of subsidiaries of USD 5,329.7 million r
elates to the step up in fair value at the date of
transition to IFRS, 1 January 2014. The revaluation r
eserve related to the deemed cost value step-up
of the subsidiaries was subsequently converted into share capital and partly distributed as part of the
demerger transaction of OCI’
s E&C Business.
The Company recor
ded a reversal of impairment taken in pr
evious year on subsidiaries of USD 1,417.7
million in 2021 (2020: USD 1,008.6 million).
Gain on demerger
In the 2015 parent company ﬁnancial statements, the demerger gain of USD 243.0 million is lower
compared to the demerger gain as r
eported in the consolidated ﬁnancial statements of USD 630.8
million as the investment is stated at cost in the parent company ﬁnancial statements versus the equity
value in the 2015 consolidated ﬁnancial statements.
Differ
ence in proﬁt or loss
The 2021 net result is USD 511.9 million higher in the par
ent company ﬁnancial statements as the net
gain for 2021 is USD 2,500.1 million (mainly driven by partly reversal of the impairment taken in pr
evious
year in subsidiaries of USD 1,417.7 million), whereas the net gain attributable to owners of the company
in the consolidated ﬁnancial statements was USD 570.5 million.
The 2020 net result is USD 256.2 million higher in the par
ent company ﬁnancial statements as the net
loss for 2020 is USD 930.1 million (mainly driven by the impairment in subsidiaries of USD 1,008.6
million), whereas the net loss attributable to owners of the company in the consolidated ﬁnancial
statements was USD 177.7 million.
Other comprehensive income
The reconciliation item ‘Other compr
ehensive income’ repr
esents hedge and currency translation
differ
ences which are r
ecognized in the consolidated ﬁnancial statements but not in the parent company
ﬁnancial statements as the investments are stated at cost.
The 2021 differ
ence in income of USD 414.1 million comprises USD 505.8 million of currency translation
gains, USD 80.8 million of losses on cash ﬂow hedges and USD 10.9 million losses on ﬁnancial asset
at fair value through other compr
ehensive income, which do not occur in the parent company ﬁnancial
statements.
The 2020 differ
ence in income of USD 553.4 million comprises USD 556.2 million of currency translation
losses and USD 5.7 million of gains on cash ﬂow hedges and USD 2.9 million losses ﬁnancial assets
at fair value through other compr
ehensive income, which do not occur in the parent company ﬁnancial
statements.
Business combination Fertiglobe
The Fertiglobe business combination resulted in an incr
ease of USD 723.1
million in equity attributable
to the owners of the company in the consolidated ﬁnancial statements, but had no impact on the parent
company
. Reference is made to note 2.2.1. and note 17.
Other direct equity movements
The other direct equity movements mainly r
elate to the effect of the Fertiglobe’
s IPO bookbuilding
process.
46.2 Appropriation of net pr
oﬁt / (loss)
$ millions
2021
2020
Added to / (deducted from) r
etained earnings
2,500.1
(930.1)
Net proﬁt / (loss) attributable to shar
eholders
2,500.1
(930.1)
Upon adoption of this proposed net pr
oﬁt / (loss) appropriation, the dividend for the 2021 ﬁnancial year
will
be nil. Subsequent to the ﬁnancial year end, the company announced a proposed payment of an
interim distribution for the period H2 2021of €1.45 per share. Refer to note 59 for further details of the
subsequent event.
This proposed net pr
oﬁt / (loss) appropriation is in conformity with article 26 of the
Company’
s Articles of Association.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
191
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
47. Loans and borrowings
$ millions
2021
2020
Senior notes
727.1
2,316.1
T
erm loan and revolving credit facility
397.0
344.6
Bank overdraft facility
383.0
-
Sub-total third-party
1,507.1
2,660.7
OCI Chem 5 B.V
.
-
0.4
OCI Overseas Holding Ltd.
0.1
0.8
OCI Nitrogen
466.9
267.5
OCI Methanol Marketing B.V
.
-
4.0
OCI Fuels B.V
.
-
3.4
OCI Personnel B.V
.
0.1
-
N7
127.5
-
OCI Fertilizers B.V
.
17.7
1.1
Sub-total subsidiaries
612.3
277.2
T
otal
2,119.4
2,937.9
Non-current
1,124.1
2,660.7
Current
995.3
277.2
At 31 December
2,119.4
2,937.9
Reference is made to note 18 ‘Loans and borr
owings’ of the consolidated ﬁnancial statements for
detailed information on third-party loans and the undrawn bank facility
.
The carrying amounts of loans and borrowings fr
om subsidiaries approximates their fair values.
$ millions
2021
2020
Balance at 1 January
2,937.9
2,734.5
Proceeds fr
om borrowings
909.2
1,675.0
Proceeds fr
om bank overdraft facility
398.4
-
Proceeds fr
om borrowings subsidiaries
600.6
145.9
Proceeds fr
om borrowings subsidiaries in kind
-
113.7
Redemptions of borrowings
(2,401.2)
(1,756.1)
Redemptions of borrowings subsidiaries
(8.0)
-
Redemptions of borrowings subsidiaries in kind
(267.3)
(114.1)
Newly incurred transaction costs
(0.1)
(9.3)
Amortization of transaction costs / (bond) premiums
23.5
24.4
Effect of movement in exchange rates
(73.8)
123.8
Accrued interest
0.2
0.1
At 31 December
2,119.4
2,937.9
Proceeds fr
om borrowings
Proceeds fr
om borrowings in 2021 totaled an amount of USD 909.2
million (2020: USD 1,675.0 million).
Reference is made to note 18 of the consolidated ﬁnancial statements.
Redemptions of borrowings subsidiaries in kind
Redemptions of borrowings fr
om subsidiaries in kind of USD 267.3 million consist of contributions to
OCI Chemicals B.V
. by settlement of loans.
The maturity dates of loans and borrowings fr
om third-party and r
elated party are as follows
$ millions
2021
2020
2021
-
-
2022
383.0
-
2023
400.0
350.0
2024
-
1,455.7
2025
733.3
889.0
Sub-total
1,516.3
2,694.7
Deducted transaction costs
(9.2)
(34.0)
T
otal
1,507.1
2,660.7
Speciﬁcation of loans and borrowings fr
om subsidiaries:
$ millions
T
ype
Interest %
2021
Long-term
2021
Short-term
2020
Long-term
2020
Short-term
OCI Overseas
Holding Ltd.
Unsecured
LIBOR + 3.25
-
0.1
-
0.8
OCI Nitrogen
Unsecured
0.05%
-
-
-
-
OCI Nitrogen
Unsecured
Deposit rate 0%
-
466.9
-
267.5
OCI Chemicals B.V
.
Unsecured
Deposit rate 0%
-
-
-
1.1
OCI Methanol
Marketing B.V
.
Unsecured
Deposit rate 0%
-
-
-
4.0
OCI Fuels B.V
.
Unsecured
Deposit rate 0%
-
-
-
3.4
OCI Chem 5 B.V
.
Unsecured
Deposit rate 0%
-
-
-
0.4
N7
Unsecured
Deposit rate 0%
-
127.5
-
-
OCI Fertilizers B.V
.
Unsecured
Deposit rate 0%
-
17.7
-
-
OCI Personnel B.V
.
Unsecured
Deposit rate 0%
-
0.1
-
-
T
otal
-
612.3
-
277.2
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
192
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
48.
Other payables
$ millions
2021
2020
Payables due to subsidiaries
192.7
22.9
Accrued interest
6.2
18.8
Commodity derivative ﬁnancial instruments
8.8
10.9
Other current liabilities
14.1
12.8
T
otal
221.8
65.4
Non-current
-
-
Current
221.8
65.4
T
otal
221.8
65.4
The carrying amount of ‘Other payables’ approximates its fair value.
49.
Revenue from dividend income
Revenue from dividend income in 2021 consists of USD 1,322.2 million fr
om OCI Intermediate of which
USD 1,322.2 million was in cash.
50.
Development of general and administrative expenses
a. Expenses by natur
e
$ millions
Note
2021
2020
Employee beneﬁt expenses
(b)
21.0
15.8
Depreciation
0.9
0.8
Consultancy expenses
9.7
12.5
Other
5.0
1.6
T
otal
36.6
30.7
The expenses by nature comprise ‘general and administrative expenses’.
b.
Employee beneﬁt expenses
$ millions
2021
2020
W
ages and salaries
8.0
5.5
Social securities
0.4
0.3
Employee proﬁt sharing
3.0
1.5
Pension cost
1.1
0.6
Share-based compensation expense
8.5
7.9
T
otal
21.0
15.8
For speciﬁcations on share-based payments, r
eference is made to note 22c of the notes to the
consolidated ﬁnancial statements.
51.
Other income
$ millions
2021
2020
Reversal of impairment of subsidiaries
1,417.7
-
Other
0.2
0.1
T
otal
1,417.9
0.1
52.
Other expenses
$ millions
2021
2020
Impairment of subsidiaries
-
1,008.6
Other
40.6
21.5
T
otal
40.6
1,030.1
Other expenses relate to r
echarges from subsidiaries, mainly OCI UK Ltd. Refer
ence is made to note 41
for the impairment of subsidiaries.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
193
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
53.
Net ﬁnance cost
$ millions
2021
2020
Interest income on loans and r
eceivables third-party
0.1
0.1
Interest income on loans and r
eceivables subsidiaries
70.2
65.7
Foreign exchange gain
98.5
169.3
Finance income
168.8
235.1
Interest expense and other ﬁnancing costs on ﬁnancial liabilities measur
ed
at amortized cost third-party
(160.5)
(198.2)
Interest expense and other ﬁnancing costs on ﬁnancial liabilities measur
ed
at amortized cost related party
-
-
Interest expense and other ﬁnancing costs on ﬁnancial liabilities measur
ed
at amortized cost subsidiaries
(0.4)
(0.2)
Foreign exchange loss
(202.6)
(86.3)
Finance cost
(363.5)
(284.7)
Net ﬁnance (cost) recognized in pr
oﬁt or loss
(194.7)
(49.6)
Foreign exchange gain / (loss) include a net loss of USD 72.8 million on for
eign exchange derivatives
which were settled during the year
.
54. Income taxes
54.1 Income tax in the statement of proﬁt or loss
$ millions
2021
2020
Current tax
21.4
12.7
Deferred tax
10.5
(9.4)
T
otal income tax in proﬁt or loss
31.9
3.3
Current tax
$ millions
2021
2020
Current year
21.4
12.5
Changes in estimates relating to prior years
-
0.2
Income tax beneﬁt / (expense) in proﬁt or loss
21.4
12.7
Deferred tax
$ millions
2021
2020
Origination and reversal of temporary dif
ferences
0.3
0.3
Changes in tax rates
1.0
-
Unrecognized tax assets
-
(9.7)
Recognition of previously unr
ecognized tax losses
9.2
-
Income tax beneﬁt / (expense) in proﬁt or loss
10.5
(9.4)
54.2 Reconciliation of effective tax rate
Reconciliation of the statutory income tax rate in the Netherlands with the effective tax rate can be
summarized as follows:
$ millions
2021
%
2020
%
Proﬁt / (loss) befor
e income tax
2,468.2
(933.4)
Enacted income tax rate in the
Netherlands
25%
25%
T
ax calculated at statutory tax rate
(617.0)
(25.0)
233.4
25.0
Reversal of impairment / (impairment)
of subsidiaries
354.4
14.4
(252.2)
(27.0)
Expenses non-deductible
1
(46.3)
(1.8)
(12.6)
(1.3)
Income not subject to tax
2
330.6
13.3
44.2
4.7
Change in income tax rates
1.0
0.0
-
-
Unrecognized tax assets
-
-
(9.7)
(1.0)
Recognition of previously unr
ecognized
tax losses
9.2
0.4
-
-
Changes in estimates relating to prior
years
-
-
0.2
-
T
otal income tax in proﬁt or loss
31.9
1.3
3.3
0.4
1
The non-deductible expenses mainly relate to non-deductible inter
est expense as a result of the 30%
EBITDA limitation and non-deductible shareholder costs.
2
Income not subject to tax related to dividend income in 2021 of USD 1,322 million gross.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
194
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
54.3
Deferred income tax assets and liabilities
Changes in deferred tax assets and liabilities:
$ millions
2021
2020
At 1 January
(1.2)
4.8
Proﬁt or loss
10.5
(9.4)
Effect of movement in exchange rates
-
-
Other
(3.8)
3.4
At 31 December
5.5
(1.2)
Other relates to change of position fr
om net operating losses being capitalized on the balance sheet in
2019 to creating a valuation allowance for a deferr
ed tax asset in relation to the operating losses.
Recognized deferred tax assets and liabilities:
Assets
Liabilities
Net
$ millions
2021
2020
2021
2020
2021
2020
T
rade and other
receivables
-
-
(0.3)
(0.4)
(0.3)
(0.4)
Loans and borrowings
-
-
(0.6)
(1.1)
(0.6)
(1.1)
T
rade and other payables
-
0.3
-
-
-
0.3
Operating losses carry
forward and tax cr
edits
6.4
-
-
-
6.4
-
T
otal
6.4
0.3
(0.9)
(1.5)
5.5
(1.2)
Netting of ﬁscal positions
(0.9)
(0.3)
0.9
0.3
-
-
Amounts recognized
in the Statement of
Financial Position
5.5
-
-
(1.2)
5.5
(1.2)
Of the deferred tax liabilities at 31 December 2021, an amount of USD 0.3 million is to be settled within
12 months.
Expiration scheme of gross unr
ecognized carry forward tax losses:
2021
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years
Unlimited
T
otal
Gross federal tax
losses
-
-
-
-
-
-
-
Unrecognized
operating losses
carry forward
-
-
-
-
-
-
-
2020
$ millions
Less than
1 year
Between
1 and 5
years
Between
5 and 10
years
Between
10 and 15
years
Between
15 and 20
years
Unlimited
T
otal
Gross federal tax
losses
-
41.6
-
-
-
-
41.6
Unrecognized
operating losses
carry forward
-
41.6
-
-
-
-
41.6
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
195
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
55.
Related party transactions
For an overview of the related parties, r
eference is made to note 30 of the consolidated ﬁnancial
statements. The Company has the following current account r
elated party balances as at
31 December 2021:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding at
year end
Purchase
transactions
during the
year
AP
outstanding at
year end
Loans
receivables
Loans
payables
Interest
income
Interest
expense
Orascom
Construction Egypt
OC group
company
-
-
0.3
-
-
-
-
-
Residencia Europe
Ltd
Related via
shareholder
0.6
0.2
-
-
-
-
-
-
Nassef Sawiris
Executive
Chair
-
-
0.7
0.4
-
-
-
-
NNS Luxembourg
Sarl
Related via
shareholder
-
-
0.2
-
-
-
-
-
T
otal
0.6
0.2
1.2
0.4
-
-
-
-
The Company has the following current account r
elated party balances as at 31 December 2020:
Related party
Relation
Revenue
transactions
during the
year
AR
outstanding at
year end
Purchase
transactions
during the
year
AP
outstanding at
year end
Loans
receivables
Loans
payables
Interest
income
Interest
expense
Nassef Sawiris
Executive
Chair
-
-
0.7
0.2
-
-
-
-
NNS Luxembourg
Sarl
Related via
shareholder
-
-
0.2
0.2
-
-
-
-
T
otal
-
-
0.9
0.4
-
-
-
-
The current accounts consist of management fees, transferr
ed cost and other
.
All outstanding related party balances ar
e unsecured.
56. Contingencies
Guarantees
OCI has provided ﬁnancial guarantees to certain subsidiaries including OCI Nitr
ogen related to its
inventory ﬁnancing. For OCI Chemicals, BioMCN and OMM B.V
. a comfort letter was provided by OCI.
The Company has a guarantee facility with Rabobank for a maximum guarantee amount of EUR 200.0
million (USD 227.4 million). Under this guarantee facility
, EUR 7.4 million (USD 8.4 million) has been
drawn. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational
purposes.
OCI has an uncommitted surety facility with T
okio Marine Europe SA and Zürich Insurance PLC for a
maximum guarantee amount of EUR 100.0 million (USD 113.7 million). Under this guarantee facility
,
EUR 68.8 million (USD 78.2 million) has been drawn. The facility is used to issue a performance
guarantee on behalf of OCI Nitrogen B.V
..
The Company also has a guarantee facility with BNP for an amount of USD 89.4 million, that is fully
drawn.
57. Employees
The total number of employees in 2021 was 44 (2020: 29 employees).
58.
Fiscal unity
OCI N.V
. forms a ﬁscal unity with several Dutch entities for corporation tax purposes. In accordance with
the standard conditions, a company and its subsidiaries that form the ﬁscal unity ar
e jointly and severally
liable for taxation payable by the ﬁscal unity
. The following entities are included in the ﬁscal unity headed
by OCI N.V
.:
•
OCI
N.V
.
•
OCI Intermediate B.V
.
•
OCI Nitrogen B.V
.
•
OCI Personnel B.V
.
•
OCI T
erminal Europoort B.V
.
•
OCI Fertilizers B.V
.
•
OCI China Holding B.V
.
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
196
Parent Company Financial Statements
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
59.
Subsequent events
OCI proposed semi-annual dividend distribution
On 15 February 2022 OCI announced a proposed payment of an interim distribution for the period H2
2021 of EUR 1.45 per share (or c.USD 350 million including a USD 200 million base). OCI is convening
an extraordinary shar
eholders meeting (EGM) on 28 March 2022 to r
esolve on the distribution through
a repayment of capital with an option to shar
eholders to elect for a dividend distribution instead,
resulting in a distribution to shar
eholders scheduled for June, subject to a statutory two-month creditor
opposition period.
OCI Methanol Group dividend distribution
In February 2022, the OCI Methanol Group Boar
d of Directors appr
oved dividends of USD 420
million, which were paid out to OCI Methanol Gr
oup shareholders, OCI (USD 357 million) and minority
shareholders (USD 63 million), on 22 February 2022.
Amsterdam, the Netherlands,
18 Mar
ch 2022
The OCI N.V
. Board of Directors
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de V
ries
Sipko Schat
Jérôme Guiraud
Robert Jan van de Kraats
Gregory Heckman
Anja Montijn-Groenewoud
David Welch
Dod Fraser
Heike van de Kerkhof
NO
TES T
O THE P
ARENT COMP
ANY FINANCIAL ST
A
TEMENTS
FOR THE YEAR ENDED 31 DECEMBER CONTINUED
OCI N.V
.
Annual Report 2021
197
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
OCI N.V
.
Annual Report 2021
197
O
THER INFORMA
TION
Extract from the Articles of Association r
elating to Net Proﬁt/(Loss) appr
opriation
Article 26. ‘Proﬁts and Distributions’.
26.1 The Board may decide that the pr
oﬁts realized during a ﬁnancial year will fully or partially be
appropriated to incr
ease and/or from r
eserves.
26.2 The proﬁts r
emaining after application of Article 26.1 shall be put at the disposal of the General
Meeting. The Board shall make a pr
oposal for that purpose. A proposal to pay a dividend shall be dealt
with as a separate agenda item at the General Meeting of Shareholders.
26.3 Distributions from the Company’
s distributable reserves are made pursuant to a r
esolution of the
General Meeting at the proposal of the Boar
d.
26.4 Provided it appears fr
om an interim statement of assets signed by the Board that the r
equirement
mentioned in Article 26.8 concerning the position of the Company’
s assets has been fulﬁlled, the Board
may make one or more interim distributions to the holders of Shar
es.
26.5 The Board may decide that a distribution on Shar
es shall not take place as a cash payment but as
a payment in Shares, or decide that holders of Shar
es shall have the option to receive a distribution as
a cash payment and / or as a payment in Shares, out of the pr
oﬁt and / or at the expense of reserves,
provided that the Boar
d is designated by the General Meeting pursuant to Articles 6.2. The Board shall
determine the conditions applicable to the aforementioned choices.
26.6 The Company’
s policy on reserves and dividends shall be determined and can be amended by the
Board. The adoption and ther
eafter each amendment of the policy on reserves and dividends shall be
discussed and accounted for at the General Meeting of Shareholders under a separate agenda item.
26.7 The Company may further have a policy with respect to pr
oﬁt participation for employees which
policy will be established by the Board.
26.8 Distributions may be made only insofar as the Company’
s equity exceeds the amount of the paid
in and called up part of the issued capital, increased by the r
eserves which must be kept by virtue of the
law or these Articles of Association.
7.
O
THER
INFORMA
TION
OCI N.V
.
Annual Report 2021
199
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
T
o: the General Meeting of Shareholders and the Supervisory Board of OCI N.V
.
Report on the audit of the nancial statements 2021 included in the
Annual Report
Our opinion
In our opinion the accompanying nancial statements give a true and fair view of the nancial
position of OCI N.V
. as at 31 December 2021 and of its result and its cash ows for the year
then ended, in accordance with International Financial Reporting Standards as adopted by the
European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the nancial statements 2021 of OCI N.V
. (the Company) based in
Amsterdam, the Netherlands.
The nancial statements comprise:
1
the consolidated and parent company statement of nancial position as at 31 December
2021;
2
the following consolidated and parent company statements for 2021: the statement of prot
or loss and other comprehensive income, changes in equity and cash ows; and
3
the notes comprising a summary of the signicant accounting policies and other explanatory
information.
Basis for our opinion
We conducted our audit in accordance with Dutch law
, including the Dutch Standards
on
Auditing. Our responsibilities under those standards are further described in the ‘Our
responsibilities for the audit of the nancial statements’
section of our report.
We are independent of OCI N.V
. in accordance with the ‘V
erordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’
(ViO, Code of Ethics for
Professional
Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
‘V
erordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
Our audit procedures were determined in the context of our audit of the nancial statements
as a whole. Our observations in respect of going concern, fraud and non-compliance with laws
and regulations, climate and the key audit matters should be viewed in that context and not as
separate opinions or conclusions.
We believe the audit evidence we have obtained is sufcient and appropriate to provide a basis
for our opinion.
OCI N.V
.
Annual Report 2021
200
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
Audit approach
Summary
Materiality
Consolidated financial statements
– Materiality of USD 42.5 million
– 0.7% of consolidated revenue amounting to USD 6,318.7 million
Parent company financial statements
– Materiality of USD 57 million (EUR 50 million)
– 0.6% of parent company total assets amounting to USD 9,619.3 million
Group audit
–
Audit coverage of 99% of total assets
–
Audit coverage of 99% of revenue
Going
concern,
Fraud/Noclar
and
Climate
– Going concern: no significant going concern risks identified
–
Fraud & Non-compliance with laws and regulations (Noclar), significant risks identified:
management override of controls (presumed risk) and revenue recognition in relation to
manual override of sales cut-off and non-routine sales transactions (presumed risk)
–
Climate: management’s response to possible future effects of climate change and their
anticipated outcomes have been disclosed. We have considered the impact of climate-
related risks on our identification and assessment of risks of material misstatement in the
financial statements.
Key
audit
matters
– Initial Public Offering (‘IPO’) of Fertiglobe plc
– Litigation and claims
– Recoverable amount in impairment tests
Opinion
Unqualified
Materiality
Based on our professional judgement we determined the materiality for the consolidated
nancial statements as a whole at USD 42.5 million (2020: USD 30 million) and for the parent
company nancial statements as a whole at USD 57 million (EUR 50 million) (2020: USD
60 million (EUR 50 million)). Materiality for the consolidated nancial statements increased
compared to last year due to the improved nancial performance of the Company
.
The materiality for the consolidated nancial statements is determined with reference to the
consolidated revenue, of which it represents 0.7% (2020: 0.8%). We deem prot before tax
from continuing operations as not representative because the benchmark has historically
been negative and/or highly volatile.
As such, we consider revenues as the most appropriate
benchmark as the Company is result oriented.
The materiality for the parent company nancial statements is determined with reference to the
parent company’s total assets, of which it represents 0.6% (2020: 0.7%). Given the nature of
the parent company’s activities – the holding and nancing of investments within the Company
– we consider the use of the total asset benchmark as most appropriate in respect of the parent
company nancial statements.
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the consolidated and company nancial statements for
qualitative reasons.
We agreed with the Board of Directors that misstatements identied during our audit in excess
of USD 1.5 million of the consolidated and parent company nancial statements, would be
reported to them, as well as smaller misstatements that in our view must be reported on
qualitative grounds.
OCI N.V
.
Annual Report 2021
201
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
Scope of the group audit
OCI N.V
. is at the head of a group of components. The nancial information of this group is
included in the nancial statements of OCI N.V
.
Our group audit mainly focused on signicant components, including a signicant equity
accounted investment. T
o ensure sufcient coverage over the group’s nancial information,
we have requested 15 component auditors (2020: 14 component auditors) to perform a full
scope audit of the nancial information of the related component (audit of complete reporting
package). Furthermore, we requested 4 component auditors (2020: 4 component auditors) to
perform specied audit procedures. The relative size of the component and the likelihood for
the component to include a signicant risk were both evaluated in determining the scope of our
component audits.
For the remaining components we have performed audit procedures ourselves or performed
analytical procedures in order to corroborate our assessment that the risk of material
misstatement in the residual population is less than reasonably possible.
We have provided detailed instructions to all component auditors as part of the group audit,
covering the signicant audit areas, including the relevant risks of material misstatement
identied by us, and set out the information required to be reported back to us. In view of
restrictions, caused by the COVID-19 pandemic, on the movement of people across borders, and
also within signicantly affected countries, we made changes to the audit approach to evaluate
the component auditors’
communications and the adequacy of their work.
As a result, we have
requested those component auditors to provide us with remote access to audit workpapers to
perform these evaluations, subject to local law and regulations.
In addition, due to the inability to arrange in-person meetings with such component auditors,
we have increased the use of alternative methods of communication with them, including
through written instructions, exchange of emails and virtual meetings. We have assessed these
expanded communications, with additional robust discussions as needed, to ensure that they
are sufcient for us to evaluate and conclude on the appropriateness and adequacy of the
component auditor
’s work. V
ideo conferences were held with all the component auditors that
were part of the group audit. During these conferences, the planning, audit approach, ndings
and observations were reviewed and discussed.
Any further work deemed necessary was
subsequently performed by the component auditors and reviewed by us.
For the residual population not in scope we performed analytical procedures in order to
corroborate that our scoping remained appropriate throughout the audit.
By performing the procedures mentioned above at group components, together with additional
procedures at group level, we have been able to obtain sufcient and appropriate audit evidence
about the group’s nancial information to provide an opinion about the nancial statements.
The audit coverage as stated in the section summary can be further specied as follows:
Audit response to going concern – no signicant going concern risks identied
The Board of Directors has performed its going concern assessment and has not identied any
signicant going concern risks. T
o assess the Board’s assessment, we have performed, amongst
others, the following procedures:
-
we considered whether the Board of Directors’ assessment of the going concern risks includes
all relevant information of which we are aware as a result of our audit;
-
we analysed the operating results forecast and the related cash ows compared to the
previous nancial year
, developments in the business sector and any information of which we
are aware as a result of our audit;
-
we inspected the nancing agreements in terms of conditions that could lead to signicant
going concern risks, including the terms of the agreement and any covenants; and
-
we analysed whether the headroom of the ratios included in the nancing agreements is
sufcient or if it gives rise to the risk of any of the covenants in the nancing agreement being
breached.
The outcome of our procedures did not give reason to perform additional audit procedures on
management’s
going concern assessment. W
e did not
identify any signicant going
concern risks.
90%
Audit of the complete
reporting package
T
otal assets
Revenue
8%
Audit of specic
items
1%
Specied audit
procedures
91%
Audit of the complete
reporting package
0%
Audit of specic items in
revenue is not applicable
8%
Specied audit procedures
OCI N.V
.
Annual Report 2021
202
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Audit response to the risk of fraud and non-compliance with laws and regulations
In the chapter ‘Risk Management and Compliance’
of the
Annual Report, the Board of Directors
describes its procedures in respect of the risk of fraud and non-compliance with laws and
regulations.
As part of our audit, we have gained insights into the Company and its business environment,
and assessed the design and implementation of the Company’s risk management in relation
to fraud and non-compliance. Our procedures included, among other things, assessing the
Company’s Code of Conduct, Whistle-blower policy
, Insider T
rading & Market
Abuse policy
,
Anti-bribery and Corruption policy
, Competition policy
, Privacy and data policy
, Human Rights
policy
, Business Parter Code of Conduct and Sanctions Policy to investigate indications
of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with
management, those charged with governance and other relevant functions.
As part of our audit procedures, we:
-
held quarterly meetings to perform inquiries with the
Audit & Risk, Legal and the Compliance
department on group level and with local management by our component auditors;
-
evaluated internal reports (including reports from the
Audit & Risk and Compliance
departments) on indications of possible fraud and non-compliance (both on group and
component level);
-
requested our component auditors to submit to us a ‘Questionnaire bribery and fraud,
compliance with laws and regulations’
to assist in completing our risk assessment
procedures;
-
requested and evaluated legal conrmation letters, at group and component level; and
-
obtained an understanding of ‘risk rate’, a tool which is used by the Company to screen third
parties for potential fraud and/or non-compliance risks.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Company and identied the following areas as those
most likely to have a material indirect effect on the nancial statements:
-
health and safety regulation;
-
environmental regulation;
-
anti-bribery and corruption laws and regulations;
-
anti-money laundering laws and regulations; and
-
trade sanctions and export controls laws and regulations.
We, together with our forensics specialists, evaluated the fraud and non-compliance risk factors
to consider whether those factors indicate a risk of material misstatement in the nancial
statements.
Based on the above and on the auditing standards, we identied the following fraud risks
that are relevant to our audit, including the relevant presumed risks laid down in the auditing
standards, and responded as follows:
-
Management override of controls (a presumed risk)
Risk:
-
Management is in a unique position to manipulate accounting records and prepare
fraudulent nancial statements by overriding controls that otherwise appear to be
operating effectively
.
Responses by us, including the work of our component auditors:
-
We evaluated the design and the implementation of internal controls that mitigate fraud
and non-compliance risks, such as processes related to journal entries.
-
We performed a data analysis of high-risk journal entries related to revenue, back postings
and postings with a unusual character and evaluated key estimates and judgments for
bias by the Company’s management, including retrospective reviews of prior years’
estimates with respect to the valuation of xed assets, goodwill, investment in subsidiaries
(standalone), deferred tax assets and provisions. Where we identied instances of
unexpected journal entries or other risks through our data analytics, we performed
additional audit procedures to address each identied risk, including testing of transactions
back to source information.
-
We incorporated elements of unpredictability in our audit, including a specic analysis of
(immaterial) balances and transactions at out-of-scope entities.
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
OCI N.V
.
Annual Report 2021
203
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
-
Revenue recognition (a presumed risk)
Risk:
-
In relation to overstatement of revenue due to manual override of sales cut-off and non-
routine sales transactions.
Responses by us, including the work of our component auditors:
-
With respect to the risk of fraud in revenue recognition we have evaluated the design and
the implementation and, where considered appropriate, tested the operating effectiveness
of internal controls.
-
We performed substantive audit procedures over the manual and non-routine sales
transactions and sales reversal transactions surrounding cut-off to address the signicant
risk with regards to fraudulent revenue recognition, including:
•
(Substantive) analytical procedures to identify potential cut-off errors.
•
Cut-off testing using substantive sampling, selected items were reconciled to
supporting documentation such as goods shipped, services performed, prices invoiced,
sales contracts, bill of loadings, shipping documents, proof of delivery
, and proof of
acceptance. For the items selected it was determined whether sales and the related
receivables have been recorded in the correct accounting period and for the correct
amount.
•
For a selection of credit notes supporting documentation was obtained to determine
whether these were recorded in the correct reporting reported.
•
Identication of material exceptional non-routine revenue transactions and, for those
identied, gained an understanding about the performance obligations which determine
the moment of revenue recognition and obtained supporting documentation for all non-
routine transactions as part of the journal entry testing audit procedures.
•
Final analytical procedures.
Our procedures to address the identied risks of fraud and non-compliance with laws and
regulations did not result in a key audit matter
.
We communicated our risk assessment, audit responses and results to management and the
Audit Committee of the Board of Directors. Our audit procedures did not reveal indications and/
or reasonable suspicion of fraud and non-compliance that are considered material for our audit.
Audit response to climate-related risks
The Board of Directors is responsible for preparing the nancial statements in accordance with
The Board of Directors is responsible for preparing the nancial statements in accordance with
the applicable nancial reporting framework, including considering whether the implications
from climate-related risks and commitments have been appropriately accounted for and
disclosed.
The Board of Directors has performed its analysis of the impact of climate-related risks on the
company’s business and operations on the longer term and on its accounting in the current
nancial statements. In chapter ‘Sustainability’
of the
Annual Report, the Board of Directors
concluded that the effect of climate-related risks do not have a material impact on accounts and
disclosures, including judgements and estimates in the nancial statements.
The evaluation of the effectiveness of management’
s strategy and action plan to meet internal
or external goals set is not in scope of our audit of the nancial statements.
As part of our
audit we consider potential effects of climate-related risks on the accounts and disclosures,
including estimates and judgements in the current year
’s nancial statements to determine
whether the nancial statements are free from material misstatements. This includes discussion
of the company’s strategy and risk assessment process in relation to climate change with
management and those charged with governance and inspecting minutes and external
communications for signicant climate related commitments, strategies and plans made by the
Board of Directors.
Also, we have requested our component auditors to assist us in providing
insight in (upcoming) country specic legislation on climate-related matters and the risks
thereof.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
signicance in our audit of the nancial statements. We have communicated the key audit
matters to the Board of Directors. The key audit matters are not a comprehensive reection of
all matters discussed.
Compared to last year the key audit matter with respect to the Initial Public Offering of
Fertiglobe plc has been added. Furthermore, due to the improved (forecasted) nancial results
the key audit matter related to the recoverable amount in impairment tests is now only related
to a single cash generating unit and the valuation of the subsidiaries in the parent company
nancial statements. No other changes were identied.
OCI N.V
.
Annual Report 2021
204
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
#1
Initial
Public
Offering
of
Fertiglobe
plc
Description
As disclosed in note 17 of the financial statements the Initial Public Offering (‘IPO’) of
13.8% of the shares in Fertiglobe plc (hereafter: Fertiglobe) at the
Abu Dhabi Stock
Exchange (‘ADX’) was completed on 27 October 2021. Fertiglobe is the holding entity of
the Company’s fertilizer business in the MENA
region. The listed shares were previously
owned by the Company and
ADNOC, both remain shareholders after the IPO. The most
significant accounting matter is the assessment whether the Company remained in control
and can continue to consolidate Fertiglobe given the changes to the ownership, structure
and governance at Fertiglobe (post IPO). This also requires judgement from management.
Furthermore the accounting treatment, including the presentation, of the (leveraged) dividend
and the IPO proceeds is a relevant matter
. These matters, together with the intensity of such
a process and the various parties involved, made this transaction significant to our audit.
Our response
A
significant portion of the Company’s operations are included in Fertiglobe. In the structure
before the IPO the Company owned 58% of the shares in Fertiglobe. The ownership,
combined with the formalised shareholder agreements resulted in the position that the
Company had control over Fertiglobe and thus 100% of the activities were consolidated. The
IPO resulted in a decrease of the shareholder to 50% and led to changes in the governance,
the Company assessed whether it retained control over Fertiglobe.
W
e performed the following procedures:
-
We evaluated the design and implementation of relevant controls related to the client
procedures for preparing the control assessment;
-
We obtained the assessment prepared by management discussing relevant changes with
potential impact on the control question;
-
We determined whether the assessment was performed in accordance with IFRS 10;
-
We added an specialised team member to our engagement team assisting us in assessing
the technical aspects of the control assessment and the conclusion that OCI remained in
control over the activities of Fertiglobe;
-
We inspected the legal documentation to determine whether relevant aspects were
considered as part of the control assessment; and
-
We assessed the appropriateness of the disclosure as included in the consolidated financial
statements.
#1
Initial
Public
Offering
of
Fertiglobe
plc
(continued)
Prior to the IPO, dividends were declared and distributed to the shareholders – these
dividends were based on accumulated realised profits which were not yet distributed.
Furthermore, the IPO proceeds were also distributed to the (ultimate) shareholders. Due to
the legal structure of the Company and the accounting policy applied in the parent company
financial statements for the account investment in subsidiaries (accounted at cost) the
proceeds are classified as dividend income in the parent company financial statements.
From a consolidated perspective the only visible impact relates to the measurement of the
non-controlling interest. We inspected the related legal documentation and assessed the
accounting treatment.
As explained above, the presentation of the activities of Fertiglobe are impacted by significant
portions of non-controlling interests. Not only at the level of Fertiglobe third parties are
participating but also at individual entities within the Fertiglobe group. The IPO had a
significant impact on the calculation of non-controlling interest.
Our observation
We determined that the accounting treatment of the various topics described above are
reasonable and in accordance with IFRS:
-
W
e agree with the conclusion that OCI remained in control over the activities of Fertiglobe
and its subsidiaries.
-
W
e determined that the declared dividends are accounted for in accordance with the
supporting documentation and that the identification of the proceeds as dividend income
are correct.
-
W
e determined through recalculation that the updated percentages of non-controlling
interest in the consolidated statement of financial position and in the consolidated statement
of profit or loss and other comprehensive income of the Company are appropriate and
mathematical accurate.
-
Furthermore we concluded that the disclosure (reference is made to Note 17) is adequate.
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
OCI N.V
.
Annual Report 2021
205
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
#2
Litigation
and
claims
Description
As disclosed in Provisions (Note 21) and Contingencies (Note 28) the Company has several
pending litigations and claims (related to legal and tax matters), for which the outcome is
uncertain. Inherent to the Company’s nature and operations, as well as its geographical
spread, the Company is exposed to an indirect material effect on pending legal cases. Based
on the likelihood of occurrence and the exposure, the Company determines if, and for what
amount, a provision should be recognised. This assessment is considered to be significant to
our audit due to management judgement involved.
As the Company is diversified globally
, the
pending claims and litigations differ in terms of risk profile.
Our response
During our audit, we performed the following procedures:
-
Obtained the quarterly updated Litigation report from Group Legal;
-
Performed quarterly update meetings with Group Legal, Compliance and T
ax;
-
Instructed our component auditors to perform procedures over litigations and claims on a
local level, including:
•
Requested certain component auditors to visit local courts to confirm the status of
certain cases;
•
Evaluated the legal expenses and requested external legal letters for lawyers involved
in litigations and claims (group and component level);
•
Obtained internal position papers from management on the cases pending (group and
component level); and
•
Requested external expert opinions for cases with a significant exposure.
-
Assessed the adequacy of the disclosure to the financial statements.
Our observation
and the recording of related provisions to be reasonable. Furthermore, we determined that
the related disclosure with regards to Provisions (Note 21) and Contingencies (Note 28) are
adequate.
#3
Recoverable
amount
in
impairment
tests
Description
As described in Note 7, management has performed an impairment test in order to determine
the impairment loss following the shutdown of the production facilities of BioMCN.
Impairment tests under IFRS require to assess whether the entities’
assets are not carried
at more than their recoverable amount (i.e. the higher of fair value less costs of disposal
and the value in use).
As such, the Company determined the recoverable amount based on
the individual cash generating units’
value in use. This requires estimation in respect of key
assumptions used in the value in use models such as:
-
production volumes;
-
forecasted methanol prices;
-
forecasted natural gas prices;
-
terminal growth rate; and
-
weighted average cost of capital (“WACC”).
Furthermore, as described in Note 41 to the parent company financial statements,
management identified a reverse triggering event in respect of the impairment indicators
of the valuation of subsidiaries. With regards to valuation of subsidiaries management
has determined the recoverable amount based on the fair value less cost of disposal. The
valuation was conducted based on the market capitalisation of the group considering the net-
debt position and application of a control premium.
In respect of the valuation of BioMCN, the determination of the recoverable amount is
considered to be significant to our audit due to management judgement involved in the
assumptions used. This also resulted in the identification of this key audit matter
.
Our response
We evaluated the design and implementation of relevant controls related to the client
impairment assessment. We reviewed the valuation model as prepared by management, this
includes an evaluation of management assessment of cash generating units, the retrospective
review and a sensitivity assessment of significant assumptions used in the model.
In our audit we evaluated the appropriateness of the cash flow projections of the identified
cash generating units. In respect of the key assumptions, we obtained management’s
business plans and amongst others:
OCI N.V
.
Annual Report 2021
206
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
#3
Recoverable
amount
in
impairment
tests
(continued)
Our response (continued)
-
compared the production volumes with the historical average’s and forecasted impact of
(planned) shut-downs;
-
compared the forecasted methanol prices with forward prices as published by pricing
agencies;
-
compared the forecasted natural gas price with forward gas prices as published by pricing
agencies; and
-
involved KPMG valuation specialist to assess the reasonability of the applied methodology
in deriving the recoverable amount, accuracy of the impairment model and to assess the
reasonableness of the W
ACC and terminal growth rate.
We furthermore focused on the sensitivity of the beforementioned assumptions, by evaluating
the impact of a reasonably possible change in assumptions which could materially impact the
estimated recoverable amount. We also assessed the historical accuracy of management’
s
estimates and we assessed the adequacy of the disclosure (Note 7) to the consolidated
financial statements.
In our audit we evaluated the management’s procedures with regards to the valuation
of subsidiaries based on their fair value less cost of disposal.
A
reversal of cumulative
impairments from prior years amounting to USD 1,418 million has been recorded. The
reversed impairment has been determined based on the cost value of the subsidiaries and
the market capitalisation of the group, adjusted for net debt and a 30% control premium.
We involved KPMG valuation specialists to support the audit team in determining the
appropriateness of this calculation. Furthermore, we assessed the adequacy of the disclosure
(Note 41) to the parent company financial statements.
Our observation
Based on our procedures performed, we consider management’s key assumptions and
methodology used in the impairment tests to be within a reasonable range. Furthermore,
we determined that the related disclosure for the valuation of the subsidiaries in the parent
company financial statements (Note 41) and the disclosures in respect of the BioMCN
impairment test (Note 7) are adequate.
Report on the other information included in the annual report
In addition to the nancial statements and our auditor
’s report thereon, the
Annual Report
contains other information.
Based on the following procedures performed, we conclude that the other information:
-
is consistent with the nancial statements and does not contain material misstatements; and
-
contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
management report and other information.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the nancial statements or otherwise, we have considered whether the
other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
than the scope of those performed in our audit of the nancial statements.
The Board of Directors is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
OCI N.V
.
Annual Report 2021
207
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the General Meeting of Shareholders as auditor of OCI N.V
. on 25
May 2021, for the year 2021. Our rst appointment as statutory auditor of the Company was
in 2013 to audit the 2013
Annual Report.
As a consequence of the mandatory rm rotation
legislation, the year 2022 will be the last year that we can be appointed.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in
Article 5(1) of the EU
Regulation on specic requirements regarding statutory audits of public-interest entities.
European Single Electronic Format (ESEF)
OCI N.V
. has prepared its
Annual Report in ESEF
. The requirements for this format are set out
in the Commission Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specication of a single electronic reporting format (these requirements are
hereinafter referred to as: the RTS on ESEF).
In our opinion, the
Annual Report prepared in the XHTML format, including the partially tagged
consolidated nancial statements as included in the reporting package by OCI N.V
., has been
prepared in all material respects in accordance with the RTS on ESEF
.
Management is responsible for preparing the
Annual Report including the nancial statements
in accordance with the RTS on ESEF
, whereby management combines the various
components into a single reporting package. Our responsibility is to obtain reasonable
assurance for our opinion whether the
Annual Report in this reporting package, is in
accordance with the RTS on ESEF
.
Our procedures taking into consideration
Alert 43 of NBA
(the Netherlands Institute of
Chartered
Accountants), included amongst others:
-
obtaining an understanding of the entity's nancial reporting process, including the
preparation of the reporting package;
-
obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL
instance document and the XBRL
extension
taxonomy les have been prepared in accordance with the technical specications as
included in the RTS on ESEF;
-
examining the information related to the consolidated nancial statements in the reporting
package to determine whether all required tagging’s have been applied and whether these
are in accordance with the RTS on ESEF
.
Description of responsibilities regarding the nancial statements
Responsibilities of the Board of Directors for the nancial statements
The Board of Directors is responsible for the preparation and fair presentation of the nancial
statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Board of Directors is responsible for such internal control as management
determines is necessary to enable the preparation of the nancial statements that are free
from material misstatement, whether due to fraud or error
. In that respect the Board of
Directors is responsible for the prevention and detection of fraud and non-compliance with
laws and regulations, including determining measures to resolve the consequences of it and
to prevent recurrence.
As part of the preparation of the nancial statements, the Board of Directors is responsible
for assessing the Company’s ability to continue as a going concern. Based on the nancial
reporting frameworks mentioned, the Board of Directors should prepare the nancial
statements using the going concern basis of accounting unless the Board of Directors either
intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so. The Board of Directors should disclose events and circumstances that may cast
signicant doubt on the Company’s ability to continue as a going concern in the nancial
statements.
The
Boar
d of Directors
is responsible for overseeing
the Company’s
nancial reporting process.
Our responsibilities for the audit of the nancial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to
obtain sufcient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means
we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to inuence the economic decisions
of users taken on the basis of these nancial statements. The materiality af
fects the nature,
timing and extent of our audit procedures and the evaluation of the effect of identied
misstatements on our opinion.
A
further description of our responsibilities for the audit of the nancial statements is included
in the appendix of this auditor's report. This description forms part of our auditor’s report.
Amstelveen, 18 March 2022
KPMG
Accountants N.V
.
C.A. Bakker RA
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
OCI N.V
.
Annual Report 2021
208
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
INDEPENDENT A
UDIT
OR’
S REPOR
T
CONTINUED
Appendix
Description of our responsibilities for the audit of the nancial statements
We have exercised professional judgement and have maintained professional scepticism
throughout the audit, in accordance with Dutch Standards on
Auditing, ethical requirements and
independence requirements. Our audit included among others:
-
identifying and assessing the risks of material misstatement of the nancial statements,
whether due to fraud or error
, designing and performing audit procedures responsive to those
risks, and obtaining audit evidence that is sufcient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
the risk resulting from error
, as fraud may involve collusion, forgery
, intentional omissions,
misrepresentations, or the override of internal control;
-
obtaining an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’
s internal control;
-
evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Board of Directors;
-
concluding on the appropriateness of the Board of Directors use of the going concern basis
of accounting, and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast signicant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor
’s report to the related disclosures in the nancial
statements or
, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor
’
s report. However
, future
events or conditions may cause a company to cease to continue as a going concern;
-
evaluating the overall presentation, structure and content of the nancial statements,
including the disclosures; and
-
evaluating whether the nancial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We are solely responsible for the opinion and therefore responsible to obtain sufcient
appropriate audit evidence regarding the nancial information of the entities or business
activities within the group to express an opinion on the nancial statements. In this respect we
are also responsible for directing, supervising and performing the group audit.
We communicate with the Board of Directors regarding, among other matters, the planned
scope and timing of the audit and signicant audit ndings, including any signicant ndings
in internal control that we identify during our audit. In this respect we also submit an additional
report to the audit committee in accordance with
Article 1
1 of the EU Regulation on specic
requirements regarding statutory audits of public-interest entities. The information included in
this additional report is consistent with our audit opinion in this auditor
’
s report.
We provide the Board of Directors with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine the key audit
matters: those matters that were of most signicance in the audit of the nancial statements.
We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, not communicating the
matter is in the public interest.
AL
TERNA
TIVE
PERFORMANCE MEASURES
OCI presents certain ﬁnancial measur
es when discussing OCI’
s performance, that are not measures
of ﬁnancial performance under IFRS. These non-IFRS measures of ﬁnancial performance (also known
as non-GAAP or alternative performance measures) are pr
esented because management considers
them important supplemental measures of OCI’
s performance and believes that similar measures are
widely used in the industry in which OCI operates. OCI believes that an understanding of its ﬁnancial
performance is enhanced by reporting the following APMs:
•
EBITDA
•
Adjusted EBITDA
•
Adjusted net proﬁt / (loss)
•
Free cash ﬂow
EBITDA, adjusted EBITDA, adjusted net proﬁt / (loss) and fr
ee cash ﬂow are supplemental measur
es
of ﬁnancial performance that are not r
equired by
, or presented in accordance with, IFRS. Ther
efore,
EBITDA, adjusted EBITDA, adjusted net proﬁt / (loss) and fr
ee cash ﬂow should be viewed as
supplemental but not as a substitute for measures pr
esented in the Consolidated Statement of Proﬁt or
Loss and Other Comprehensive Income, which ar
e determined in accordance with IFRS.
External stakeholders should not consider EBITDA, adjusted EBITDA, adjusted net proﬁt / (loss) and
free cash ﬂow (a) as an alternative to operating proﬁt or pr
oﬁt / (loss) before taxation (as determined
in accordance with IFRS) as a measur
e of our operating performance, and (b) as an alternative to
any other measure of performance under IFRS. Because not all companies deﬁne adjusted EBITDA,
EBITDA, adjusted net proﬁt / (loss) and fr
ee cash ﬂow in the same way
, these measures may not be
comparable to similarly titled measures used by other companies.
Deﬁnitions and explanations of the use of the APMs are described below
. Reconciliations of the APMs
to the most directly r
econcilable line item are pr
esented on the following pages.
EBITDA
EBITDA is deﬁned as the total net proﬁt befor
e interest, income tax expenses, depr
eciation, amortization
and impairment, foreign exchange gains and losses and income fr
om equity accounted investees.
Adjusted EBITDA
Adjusted EBITDA is deﬁned as EBITDA, adjusted for additional items and costs that management
considers not reﬂective of our cor
e operations.
Adjusted net proﬁt / (loss)
Adjusted net proﬁt / (loss) is the total net pr
oﬁt / (loss), adjusted for additional items and costs that
management considers not reﬂective of our cor
e operations.
Free cash ﬂow
Free cash ﬂow (FCF) r
eﬂects an additional way of viewing our liquidity that we believe is useful to OCI
shareholders and is deﬁned as cash ﬂow r
eﬂecting the EBITDA for the year
, change in working capital,
maintenance capital expenditure, taxes paid, cash inter
est paid, lease payments, dividends from equity
accounted investees, dividends paid to non-controlling inter
ests and adjustment for other non-cash
items.
Reconciliation of operating proﬁt to adjusted EBITDA
$ million
2021
2020
Operating proﬁt
1,562.8
187.0
Depreciation, amortization and impairment
891.6
592.2
EBITDA
2,454.4
779.2
APM adjustments
72.1
90.6
Adjusted EBITDA
2,526.5
869.8
APM adjustments at EBITDA level
$ million
2021
2020
Natgasoline
94.5
65.9
Unrealized r
esult natural gas hedging
(10.0)
(8.6)
Unrealized r
esult EUA derivatives
(1.7)
-
Gain on purchase r
elated to Fertiglobe
-
(13.3)
Hurricane Laura
-
10.0
Mandatory inspection at OCI Nitrogen
-
7.2
Other including provisions
(10.7)
29.4
T
otal APM adjustments at EBITDA level
72.1
90.6
OCI N.V
.
Annual Report 2021
209
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
AL
TERNA
TIVE PERFORMANCE


s

CONTINUED
The main APM adjustments at EBITDA level in 2021 and 2020 relate to:
•
Natgasoline is not consolidated and an adjustment of USD 94.5 million was made for OCI’
s 50%
share in the plant’
s EBITDA in 2021. Natgasoline’
s contribution to adjusted EBITDA in 2020 was USD
65.9 million.
•
The unrealized r
esults on natural gas hedge derivatives of USD (10.0) million in 2021 and USD (8.6)
million in 2020 relate to hedging activities at OCI Beaumont and in the Netherlands.
•
The unrealized r
esults on EUA derivatives of USD (1.7) million in 2021 relate to the unr
ealized gain on
EUA hedges at OCI Nitrogen and BioMCN.
•
Due to the ﬁnal post-completion settlement related to Fertiglobe, a gain on pur
chase of USD 13.3
million was recor
ded in the income statement in 2020.
•
OCI Beaumont and Natgasoline were pr
e-emptively shut down ahead of the arrival of hurricane Laura
in 2020. As a result of the hurricane both entities faced certain additional costs (mainly r
elated to start-
up costs, e.g. incremental gas costs), loss on thir
d party purchases due to committed sales volumes
and estimated lost margins. The resulting total impact of lost methanol r
evenues and margin was USD
10.0 million in 2020.
•
The impact of the mandatory inspection stop due to COVID-19 rescheduling at OCI Nitr
ogen resulted
in an estimated negative impact on cost absorption based on regular utilization rates and certain
directly allocated costs totaling to USD 7.2 million in 2020.
•
Other adjustments of USD (10.7) million in 2021 and USD 29.4 million in 2020 mainly relates to
movements in provisions r
elated to ongoing litigation and claims.
$ million
2021
2020
Reported net proﬁt / (loss) attributable to owners of the Company
570.5
(177.7)
Adjustments at EBITDA level
72.1
90.6
Exclude: Natgasoline EBITDA adjustment
(94.5)
(65.9)
Adjustment result fr
om associate (unrealized gas hedging Natgas)
(12.2)
(13.5)
Forex (gain) / loss on USD exposur
e
1.4
(108.5)
Non-controlling inter
ests adjustment / release interest accrual / uncertain
tax positions
34.1
8.8
Impairment of BioMCN
278.3
-
Recognition of previously unused tax losses
(197.2)
-
Accelerated depreciation / deactivation assets
22.4
2.2
Expenses related to r
eﬁnancing
61.7
51.3
T
ax effect of adjustments
(4.8)
(0.7)
T
otal APM adjustments at net proﬁt / (loss) level
161.3
(35.7)
Adjusted net proﬁt / (loss) attributable to owners of the Company
731.8
(213.4)
The main APM adjustments at net proﬁt / (loss) level in 2021 and 2020 r
elate to:
•
The adjustment on result fr
om associate of USD (12.2) million in 2021 and USD (13.5) million in 2020
mainly relates to the unr
ealized results on natural gas hedge derivatives at Natgas.
•
FX impact of USD 1.4 million in 2021 and USD (108.5) million in 2020 relates to the for
eign exchange
gains or losses on loans and borrowings and r
elated instruments on USD exposure carried at entities
which do not have USD as functional currency
.
•
Non-controlling inter
ests adjustment of USD 34.1 million in 2021 and USD 8.8 million in 2020 is
related to the calculated pr
oﬁt attributable to non-controlling inter
ests on all APM adjustments and the
impact of the disputed reinvestment obligations at Sorfert (USD 23.7 million after minorities).
• Impairment of USD 278.3 million in 2021 relates to the impairment of BioMCN.
•
Recognition of previously unused tax losses of USD (197.2) million in 2021 r
elates to the recognition of
a deferred tax asset at Iowa Fertilizer Company (IFCo).
•
Accelerated depreciation of USD 22.4 million in 2021 r
elates to the accelerated depreciation of the
shiploader at Fertil (USD 10.5 million), write down of project costs at BioMCN (USD 3.7 million) and
write down of ERP system and furniture and leasehold improvements at Fertil (USD 8.2 million).
•
Reﬁnancing expenses of USD 61.7 million in 2021 and USD 51.3 million in 2020 relates to early
redemption costs and accelerated amortization, mainly at OCI N.V
. and IFCo.
•
T
ax effect of adjustments of USD (4.8) million in 2021 and USD (0.7) million in 2020 is related to the
calculated tax effect of all APM adjustments.
Free cash ﬂow
$ million
2021
2020
Cash ﬂow from operating activities
2,264.1
617.8
Maintenance capital expenditure
(225.4)
(239.4)
Lease payments
(38.8)
(37.3)
Dividends from equity accounted investees
2.7
3.0
Dividends paid to non-controlling inter
ests
(442.7)
(43.2)
Sorfert reinvestment case
29.7
-
Other non-operating items
4.3
3.8
Free cash ﬂow
1,593.9
304.7
OCI N.V
.
Annual Report 2021
210
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
GRI
indicator
Disclosure
Response
2-1
Organizational details
OCI at a glance, page 5
2-2
Entities included in the organization’
s
sustainability reporting
Note 34 of the ﬁnancial statements, Our Approach to Sustainability Reporting, page 37
2-3
Reporting period, frequency
and contact point
Y
ear ended 31 December 2021, investor
.relations@oci.com
2-4
Restatements of information
Any exceptions, r
estatements, or changes to data reported ar
e noted where applicable
2-5
External assurance
Financial information is audited, see auditor's report on page 199. While our non-ﬁnancial information is not externally assured, it is r
eviewed and veriﬁed by senior
leads of relevant functions, including the internal audit and corporate HSE teams, senior management, and corporate function heads.
2-6
Activities, value chain and other business
relationships
How we create value, page 24
2-7
Employees
Employees, pages 72-74
2-8
Workers who ar
e not employees
Health and Safety
, pages 75-79
2-9
Governance structure and composition
Corporate Gover
nance report, pages 95-109, Our Appr
oach to Sustainability Governance, page 81
2-10
Nomination and selection of the highest
governance body
Corporate Governance report, pages 95-109
2-11
Chair of the highest governance body
Board Proﬁle, pages 96-99
2-12
Role of the highest governance body in
overseeing the management of impacts
Board Pr
oﬁle, pages 96-99, Our Approach to Sustainability Governance, page 81
2-13
Delegation of responsibility for managing
impacts
Our Approach to Sustainability Governance, page 81
2-14
Role of the highest governance body in
sustainability reporting
Our Approach to Sustainability Governance, page 81
2-15
Conﬂicts of interest
Potential or actual conﬂicts of interest ar
e governed by OCI’
s Articles of Association and By-Laws, and corporate governance policies and procedures.
A Director shall immediately r
eport any conﬂict of interest or potential conﬂict of interest that is of material signiﬁcance and may not take part in any discussion or
decision-making that involves a subject or transaction in relation to which he has a potential conﬂict of inter
est with the Company
. Personal loans are pr
ohibited in our
Code of Conduct. OCI complies with provisions 2.7.3 2.7.4, 2.7.5 and 2.7.6 of the Dutch Corporate Governance Code.
2-16
Communication of critical concerns
Board Report, pages 100-109
2-17
Collective knowledge of the highest
governance body
Board Report, pages 100-109








General disclosur
es
OCI N.V
.
Annual Report 2021
211
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
GRI
indicator
Disclosure
Response
2-18
Evaluation of the performance of the highest
governance body
Board Report, pages 100-109
2-19
Remuneration policies
Remuneration Report, pages 110-124
2-20
Process to determine r
emuneration
Remuneration Report, pages 110-124
2-21
Annual total compensation ratio
Remuneration Report, pages 110-124
2-22
Statement on sustainable development
strategy
Sustainability report, pages 35-81
2-23
Policy commitments
Sustainability r
eport, pages 35-81
2-24
Embedding policy commitments
Sustainability report, pages 35-81
2-25
Processes to r
emediate negative impacts
Sustainability report, pages 35-81
2-26
Mechanisms for seeking advice and raising
concerns
Compliance Framework, page 92-93
2-27
Compliance with laws and regulations
Compliance Framework, page 92-93
2-28
Membership associations
Industry and Sustainability Partnerships, page 39
2-29
Approach to stakeholder engagement
Stakeholder Engagement, page 38
2-30
Collective bargaining agreements
Our employees, pages 72-74
General disclosur
es
continued







INDEX
CONTINUED
OCI N.V
.
Annual Report 2021
212
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
T
opic-speciﬁc disclosures
GRI
indicator
Disclosure
Response
3-1
Process to determine material topics
Our Material T
opics, page 40
3-2
List of material topics
Our Material T
opics, page 40
3-3
Management of material topics
Sustainability report, pages 35-81
Economic
201-1
Direct economic value generated and
distributed
How we create value for our communities, page 69
201-2
Financial implications and other risks and
opportunities due to climate change
Climate change risks and opportunities, page 46, Sustainability Report pages 35-81, strategy and value creation, page 10-24
Energy
302-1
Energy consumption within the organization
GHG Emissions and Energy Use, page 61
302-3
Energy intensity
GHG Emissions and Energy Use, page 61
W
ater and Efﬂuents
303-1
Interactions with water as a shared r
esource
Water and W
aste, pages 62-65
303-2
Management of water discharge-related
impacts
W
ater and Waste, pages 62-65
303-3
W
ater withdrawal
W
ater and Waste, pages 62-65
303-4
W
ater discharge
W
ater and Waste, pages 62-65
303-5
W
ater consumption
Water and W
aste, pages 62-65
Emissions
305-1
Direct (Scope 1) GHG emissions
GHG Emissions and Energy
, page 61
305-2
Energy indirect (Scope 2) GHG emissions
GHG Emissions and Energy
, page 61
305-4
GHG emissions intensity
GHG Emissions and Energy
, page 61
305-5
Reduction of GHG emissions
GHG Emissions and Energy
, page 61







INDEX
CONTINUED
OCI N.V
.
Annual Report 2021
213
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
T
opic-speciﬁc disclosures
continued
GRI
indicator
Disclosure
Response
Employment
401-1
New employee hires and employee turnover
Our employees, pages 72-74
Occupational health and safety
403-1
Occupational health and safety
management system
Health and safety
, pages 75-79
403-8
Workers cover
ed by an occupational health
and safety management system
Our employees, pages 72-74, Health and safety
, pages 75-79
403-9
Work-r
elated injuries
Health and safety
, pages 75-79
Diversity and equal opportunity
405-1
Diversity of governance bodies
and employees
Our employees, pages 72-74, Corporate Governance, pages 95-109







INDEX
CONTINUED
OCI N.V
.
Annual Report 2021
214
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Category
Disclosure
Page
Governance (a)
Describe the board’
s oversight of climate-related risks and opportunities
81
Governance (b)
Describe management’
s role in assessing and managing climate-related risks and opportunities
81
Strategy (a)
Describe the climate-related risks and opportunities the organization has identiﬁed over the short, medium, and long term
46-51
Strategy (b)
Describe the impact of climate-related risks and opportunities on the organization’
s businesses, strategy
, and ﬁnancial planning
46-51
Strategy (c)
Describe the resilience of the organization’
s strategy
, taking into consideration different climate-related scenarios, including a 2°C or lower scenario
-
Risk Management (a)
Describe the organization’
s processes for identifying and assessing climate-related risks
46-51, 81
Risk Management (b)
Describe the organization’
s processes for managing climate-r
elated risks
46-51, 83
Risk Management (c)
Describe how pr
ocesses for identifying, assessing, and managing climate-related risks ar
e integrated into the organization’
s overall risk management
81, 83-84
Metrics and T
argets (a)
Disclose the metrics used by the organization to assess climate-r
elated risks and opportunities in line with its strategy and risk management process
47
Metrics and T
argets (b)
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 gr
eenhouse gas (GHG) emissions, and the related risks
48, 218
Metrics and T
argets (c)
Describe the targets used by the organization to manage climate-r
elated risks and opportunities and performance against targets
48-51
















OCI N.V
.
Annual Report 2021
215
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
SUS
T
AINABILIT
Y A
CCOUNTING









Sasb Reference Metric
Category
Unit of measure
Page
Environment
GHG gas emissions
RT
-CH-110a.1
Gr
oss global Scope 1 emissions, percentage covered under emissions-limiting r
egulations
Quantitative
Metric tons (t)
CO
2
e,
Percentage (%)
218
RT
-CH-110a.2
Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions,
emissions reduction targets, and an analysis of performance against those targets
Discussion and analysis
n/a
49-51
Air quality
RT
-CH-120a.1
Air emissions of the following pollutants: (1) NOx (excluding N2O), (2) SOx, (3) volatile organic
compounds (VOCs), and (4) hazardous air pollutants (HAPs)
Quantitative
Metric tons (t)
218
Energy management
RT
-CH-130a.
(1) T
otal energy consumed, (2) percentage grid electricity
, (3) percentage renewable,
(4) total self-generated energy
Quantitative
Gigajoules (GJ),
Percentage (%)
218
W
ater management
RT
-CH-140a.1
1) T
otal water withdrawn, (2) total water consumed, percentage of each in regions with High or
Extremely High Baseline W
ater Stress
Quantitative
Thousand cubic
meters (m³),
Percentage (%)
218
RT
-CH-140a.2
Number of incidents of non-compliance associated with water quality permits, standar
ds, and
regulations
Quantitative
Number
219
RT
-CH-140a.3
Description of water management risks and discussion of strategies and practices to mitigate
those risks
Discussion and analysis
n/a
62-65
Hazardous waste management
RT
-CH-150a.1
Amount of hazar
dous waste generated, percentage recycled
Quantitative
Metric tons (t),
Percentage (%)
218
OCI N.V
.
Annual Report 2021
216
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
SA
SB INDEX
SASB Reference Metric
Category
Unit of measure
Page
Social
Community relations
RT
-CH-210a.1
Discussion of engagement pr
ocesses to manage risks and opportunities associated with community interests
Discussion and analysis
n/a
38, 69-71, 79
W
orkforce health & safety
RT
-CH-320a.1
(1) T
otal recordable incident rate (TRIR) and (2) fatality rate for (a) direct employees and (b) contract employees
Quantitative
Rate
219
RT
-CH-320a.2
Description of ef
forts to assess, monitor
, and reduce exposur
e of employees and contract workers to
long-term (chronic) health risks
Discussion and analysis
n/a
75-78
Product design for use-phase ef
ﬁciency
RT
-CH-410a.1
Revenue fr
om products designed for use-phase resour
ce efﬁciency
Quantitative
Reporting currency
219
Safety & environmental stewar
dship of chemicals
RT
-CH-410b.1
(1) Percentage of pr
oducts by revenue that contain Globally Harmonized System of Classiﬁcation and Labeling
of Chemicals (GHS) Category 1 and 2 Health and Environmental Hazar
dous Substances, (2) percentage of
such products by r
evenue that have undergone a hazard assessment
Quantitative
Percentage (%) by revenue,
Percentage (%)
219
RT
-CH-410b.2
Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with reduced human
and/or environmental impact
Discussion and analysis
n/a
77
Genetically modiﬁed organisms
RT
-CH-410c.1
Per
centage of products by revenue that contain genetically modiﬁed organisms (GMOs)
Quantitative
Percentage (%) by r
evenue
219
Operational safety
, emergency prepar
edness & response
RT
-CH-540a.1
Pr
ocess Safety Incidents Count (PSIC), Process Safety T
otal Incident Rate (PSTIR), and Process Safety
Incident Severity Rate (PSISR)
Quantitative
Number
, Rate
219
RT
-CH-540a.2
Number of transport incidents
Quantitative
Number
219
Governance
Management of the legal & regulatory envir
onment
RT
-CH-530a.1
Discussion of corporate positions r
elated to government regulations and/or policy proposals that address
environmental and social factors af
fecting the industry
Discussion and analysis
n/a
46, 77
Other
Activity metric
RT
-CH-000.A
Production by r
eportable segment
Quantitative
Metric tons (t)
218
OCI N.V
.
Annual Report 2021
217
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Environmental performance
Unit
2019
2020
2021
SASB reference
Energy (Ammonia)
Energy consumption
TJ
211,541
206,033
200,556
Energy intensity
GJ / ton gross production
36.64
 36.36
 36.05
Energy (consolidated)
Energy consumption
TJ
288,817
293,846
283,605
RT
-CH-130a.1
Energy intensity
GJ / ton gross production
 18.98
 18.86
 19.22

Grid Electricity
%
NPR
1.6%
1.5%
RT
-CH-130a.1
Renewable
%
NPR
0.7%
0.7%
RT
-CH-130a.1
Self-generated energy
%
NPR
-
-
RT
-CH-130a.1
Emissions to air
GHG emissions (Scope 1 - Direct)
Million tons of CO
2
e
 9.50
 9.20
 9.55
RT
-CH-110a.1
GHG emissions (Scope 1 - CO
2
to Downstream)
Million tons of CO
2
e
 4.93
5.32
 4.65
RT
-CH-110a.1
GHG emissions (Scope 2)
Million tons of CO
2
e
 0.62
 0.66
 0.65

T
otal GHG emissions
Million tons of CO
2
e
15.06
15.18
14.85

GHG intensity
T
on CO
2
e / N-ton
2.37
2.31
2.34

Scope 1 emissions covered under emissions limiting r
egulations
% (Scope 1 – Direct)
17.7%
16.0%
14.0%
RT
-CH-110a.1
NOx
Metric tons
3,018
3,485
3,120
RT
-CH-120a.1
N
2
O
Metric tons
132
151
151
RT
-CH-120a.1
SO
2
Metric tons
158
163
137
R
T
-CH-120a.1
VOCs
Metric tons
134
143
114
R
T
-CH-120a.1
Efﬂuents and waste
Hazardous waste r
eused, recycled or recover
ed
Metric tons
1.98
1.60
2.37
RT
-CH-150a.1
Hazardous waste tr
eated or disposed of
Metric tons
1.27
1.50
1.62
RT
-CH-150a.1
Non-hazardous waste r
eused, recycled or recover
ed
Metric tons
1.80
1.86
2.75

Non-hazardous waste tr
eated or disposed of
Metric tons
18.90
27.33
14.16

W
ater*
T
otal intake by source
Million cubic meters
91.13
92.52
87.78
RT
-CH-140a.1
Groundwater
Million cubic meters
17.34
17.89
16.22

Seawater
Million cubic meters
49.43
48.00
46.21

Surface water
Million cubic meters
20.71
20.74
19.71

Third party water

3.65
5.89
5.64

T
otal water discharge by destination
Million cubic meters
52.21
49.12
42.27
RT
-CH-140a.1
Groundwater
Million cubic meters
4.77
4.62
2.35

Seawater
Million cubic meters
41.17
37.88
31.05

Surface water
Million cubic meters
1.25
1.43
2.38

Third party water
Million cubic meters
5.02
5.19
6.49

W
ater Stress





W
ater withdrawn in regions with High or Extremely High Baseline W
ater Stress
%
73%
71%
72%
RT
-CH-140a.1
W
ater consumed in regions with High or Extremely High Baseline W
ater Stress
%
58%
57%
62%
RT
-CH-140a.1
Production
T
otal
Million tons of ammonia (nutrient tons) and methanol (product tons)
 6.36
 6.58
 6.36
RT
-CH-000.A
ESG PERFORMANCE SUMMAR
Y
TCFD Metrics & T
argets (b)
*
Excludes seawater used for cooling at FERTIL in a ‘once-through’ system, wher
e seawater intake volumes ﬂow through heat exchangers and are safely discharged uncontaminated back to the sea.
OCI N.V
.
Annual Report 2021
218
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
HSE
Unit
2019
2020
2021
SASB reference
Safety
Lost Time Injury Rate - total
Per 200,000 hours worked
0.16
0.09
0.20

Lost Time Injury Rate - employees
Per 200,000 hours worked
0.07
0.06
0.20

Lost Time Injury Rate - contractors
Per 200,000 hours worked
0.30
0.14
0.21

T
otal Recordable Injury Rate - total
Per 200,000 hours worked
0.40
0.23
0.35
RT
-CH-320a.1
T
otal Recordable Injury Rate - employees
Per 200,000 hours worked
0.34
0.12
0.36
RT
-CH-320a.1
T
otal Recordable Injury Rate - contractors
Per 200,000 hours worked
0.49
0.42
0.33
RT
-CH-320a.1
Fatalities
#
0
0
1
RT
-CH-320a.1
Process Safety Incidents
#
18
21
33
RT
-CH-540a.1
Process Safety T
otal Incident Rate
Per 200,000 hours worked
0.29
0.38
0.55
RT
-CH-540a.1
Signiﬁcant Process Safety Incidents
count
17
21
33
RT
-CH-540a.1
Major Process Safety Incidents
count
0
0
0
RT
-CH-540a.1
T
ransport incidents
#
0
0
0
RT
-CH-540a.2
Environmental incidents
Environmental incidents
#
36
37
21

Environmental Incident Rate (EIR)
Per 200,000 hours worked
0.59
0.66
0.35

W
ater
-related permit exceedances*
#
12
16
5
RT
-CH-140a.2
Product design for use-phase ef
ﬁciency



Revenue from pr
oducts designed for use-phase resource ef
ﬁciency
Reporting Currency
NPR
$ 314 million
$ 414 million
RT
-CH-410a.1
Chemical stewardship
Percentage of pr
oducts by revenue that contain Globally Harmonized System
of Classiﬁcation and Labeling of Chemicals (GHS) Category 1 and 2 Health and
Environmental Hazar
dous Substances
%
NPR
36.6%
38.6%
RT
-CH-410b.1
Percentage of such pr
oducts by revenue that have undergone a hazard
assessment
%
NPR
100%
100%
R
T
-CH-410b.1
Genetically Modiﬁed Organisms (GMOs)
Percentage of pr
oducts by revenue that contain GMOs
%
0%
0%
0%
R
T
-CH-410c.1
* IFCo permit for iron discharge is tightest in industry
, a new pipeline was commissioned in 2021 to permanently resolve exceedances.
ESG PERFORMANCE
SUMMAR
Y
C
ONTINUED
OCI N.V
.
Annual Report 2021
219
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
W
orking at OCI
Unit
2019
2020
2021
Employees*
T
otal employees
#
3,715
3,682
3,853
Full-time
#
3,622
3,602
3,779
Part-time
#
93
80
74
Engagement and development
V
oluntary turnover rate
%
2.0%
2.2%
2.7%
Employee absenteeism
%
3.0%
1.9%
1.7%
Employees covered by Collective Bargaining orUnions**
%
37.7%
38.7%
37.2%
Average spending on training and development
$ / employee
1,442
218
321
Compliance & Governance
Incident notiﬁcations
#
12
9
12
Incidents investigated
#
12
9
12
Substantial cases
#
0
0
1
Anonymous notiﬁcations via hotline
#
3
1
4
Cybersecurity training (various topics)**
# employees reached
 1,938
1,921
 1,064
Compliance training (various topics, incl. CoC, ABC, Debiasing, Data privacy
, and others)*
# employees reached
 973
2,002
1,865
Gender
W
omen
%
10.3%
10.5%
11.4%
Women in technical r
oles
%
1.1%
1.5%
3.3%
Women non-technical r
oles
%
9.2%
9.0%
8.1%
Women on the Boar
d of Directors
%
16.7%
23.1%
23.1%
Women in leadership positions
%
18.2%
20.2%
24.0%
Age proﬁle
under 25
%
1.7%
1.9%
1.9%
25-34
%
21.3%
18.1%
20.8%
35-44
%
41.8%
42.1%
42.6%
45-54
%
22.3%
25.1%
23.0%
55-64
%
12.1%
11.9%
10.8%
65+
%
0.8%
0.9%
0.9%
Y
ears of service
0-5 years
%
27.3%
21.7%
25.2%
6-10 years
%
25.3%
25.1%
25.0%
11-20 years
%
36.8%
42.8%
39.7%
21+ years
%
10.6%
10.4%
10.2%

* excl. Natgasoline
** Restated to reﬂect updated Fertiglobe ﬁgur
es for 2019 and 2020
ESG PERFORMANCE
SUMMAR
Y
C
ONTINUED
OCI N.V
.
Annual Report 2021
220
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
ADNOC
Abu Dhabi National Oil Company
AGM or GM
Annual General Meeting of Shareholders
APM
Alternative Performance Measures
AS
Ammonium sulphate
BACT
Best A
vailable Control T
echnology
BN
Billion
CAN
Calcium ammonium nitrate
Capex
Capital expenditure
CO
2
Carbon dioxide
CO
2
e
Carbon dioxide equivalent
COSO
Committee of Sponsoring Organizations of the T
readway Commission
DEF
Diesel exhaust ﬂuid
EBIC
Egypt Basic Industries Corporation
EBITDA
Ear
nings Before Inter
est, T
axes, Depreciation and Amortization
EFC
Egyptian Fertilizers Company
EIR
Environmental incident rate
EPS
Earnings per share
ESG
Environmental, Social, Governance
FCF
Free cash ﬂow
GHG
Gr
eenhouse gas
GJ
Gigajoule
GRI
Global Reporting Initiative
HSE
Health, Safety and Environment
ICF
Inter
nal Control Framework
IEA
Inter
national Energy Agency
I
FA
International Fertilizer Association
IFRS
International Financial Reporting Standards
IPCC
Intergovernmental Panel on Climate Change
ISCC
International Sustainability & Carbon Certiﬁcation
LCA
Life-cycle analysis
LT
I
Lost time injury
L
TIR
Lost time injury rate
M
Million
M m
3
Million cubic meters
MENA
Middle East and North Africa
MMBTU
Million British thermal unit
MT
Million metric tons
N
2
O
Nitrous oxide
NF LoR
Non-ﬁnancial Letter of Representation
NOx
Nitrogen oxide
OHSAS
Occupational Health and Safety Assessment Series
OSHA
Occupational Safety and Health Administration
PSI
Process safety incident
REACH
Registration, Evaluation, Authorization and Restriction of Chemicals
SASB
Sustainability Accounting Standar
ds Board
SDG
Sustainable Development Goal
SO
²
Sulphur dioxide
STEM
Science, T
echnology
, Engineering, and Maths
TCF
T
ask Force on Climate-related Financial Disclosures
TFI
The Fertilizer Institute
TJ
T
erajoule
TRIR
T
otal recordable injury rate
TSR
T
otal shareholder return
UAN
Urea ammonium nitrate
UN F
AOST
A
T
United Nations Food and Agriculture Organization Statistics
VPP
V
oluntary Protection Program
Yo
Y
Y
ear
-on-year
Abbreviations
GL
OSSAR
Y OF ABBREVIA
TIONS AND KEY TERMS
OCI N.V
.
Annual Report 2021
221
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information
Share listing
OCI N.V
.’
s shares have been listed on the Euronext in Amster
dam as of 25 January 2013.
Share capital
The authorized capital of the Company amounts to EUR 12 million. The authorized capital is
divided into 600 million shares, with a nominal value of EUR 0.02 each. OCI’
s issued share capital
consists of 210,306,101 ordinary shar
es. The shares ar
e register
ed shares. No share certiﬁcates
are issued.
As at 31 December 2021, 46.88% of the total shares outstanding wer
e free-ﬂoat.
Shareholder engagement
We place gr
eat importance on maintaining active dialogue with existing and potential
shareholders, banks, and analysts. W
e are committed to pr
oviding relevant, high-quality and
timely information to all stakeholders, and to giving current and potential shar
eholders, analysts
and ﬁnancial press br
oader insight into the Company and the industries in which we operate. We
ensure that r
elevant information is provided equally and simultaneously to all inter
ested parties as
governed by our shareholder communications policy
.
As per our by-laws, we observe a ‘black-out’ period during which analysts’ meetings and
presentations to and/or dir
ect discussions with current or potential shar
eholders do not take place
shortly before the publication of the r
egular ﬁnancial information.
We r
egularly schedule conference calls and meetings with potential and curr
ent equity and debt
investors through r
oadshow days, conferences and inhouse meetings. In addition to the Investor
Relations director
, meetings were conducted by our Executive Chair
, CEO and CFO.
We hold r
esults conference calls hosted by our CEO and CFO on the day r
esults are published,
during which investors and analysts are invited to ask questions. A r
eplay option is made available
on our website.
In order to ensur
e our Board of Dir
ectors is fully apprised of shareholders’ ar
eas of focus,
concerns, and feedback, an investor relations update is provided at each Boar
d meeting.
Dividend policy
OCI’
s Board has approved a new dividend / capital allocation policy
, which combines a consistent
base return of capital of $400 million per year with an additional variable component linked to FCF
generated.
Going forward OCI intends to maintain an investment grade cr
edit proﬁle with a target of net
leverage below 2x through the cycle, and balance availability of funds and excess FCF for pr
oﬁt
distribution to shareholders while pursuing value accr
etive ESG and other growth opportunities.
Should the ratio of net debt to adjusted EBITDA exceed 1.5x then the variable component of the
capital returned will be adjusted to enable balancing capital returns to shareholders with gr
owth
prospects and to ensur
e maintaining an investment grade credit pr
oﬁle.
Information in 2021
Number of outstanding ordinary shar
es as at 31 December 2021
210,306,101
Highest share price (EUR/shar
e)
26.24
Average shar
e price (EUR/share)
21.02
Lowest share price (EUR/shar
e)
15.54
Share price at 31 December 2021 (EUR/shar
e)
23.02
Market capitalization at 31 December 2021 (EUR billion)
4.84
Shareholders
According to the Dutch Financial Supervision Act, shar
eholders of 3% or more must disclose
their holdings to the Dutch Authority for the Financial Markets (AFM). These disclosures ar
e made
available on the AFM’
s public register
, which can be found at www
.afm.nl
According to the AFM’
s register
, the following shareholders possessed an interest of 3% or mor
e
as at 31 December 2021:
Contact us
This annual report is available online at www
.oci.nl
OCI N.V
.
Honthorststraat 19
1071 DC Amsterdam
The Netherlands
OCI N.V
. stock symbols: OCI / OCI.NA / OCI.AS
Investor relations contact
Hans Zayed
Investor Relations Director
E-mail: hans.zayed@oci.nl
T
el: (+31) 20 723 45 00
investor
.relations@oci.nl
Corporate & ESG contact
Erika W
akid
Group Corporate Af
fairs Director
E-mail: erika.wakid@oci.nl
T
el: (+44) 020 7297 8820
sustainability@oci.nl
•
Nassef Sawiris
38.78%
•
Y
ousriya Loza
Sawiris
5.78%
•
Samih Sawiris
8.55%
•
Melinda French-
Gates
8.41%
•
Remaining shares
38.47%
SHAREHOLDER INFORMA
TION
OCI N.V
.
Annual Report 2021
222
Strategy and
value creation
Sustainability
Corporate
governance
Business
performance
Risk management
and compliance
Financial
statements
Other
information