OCI N.V.

OCI N.V. 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 549300NCMRGIBJYUOE57 2021-12-31 549300NCMRGIBJYUOE57 2020-12-31 549300NCMRGIBJYUOE57 2019-12-31 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:IssuedCapitalMember 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:SharePremiumMember 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:OtherReservesMember 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:RetainedEarningsMember 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300NCMRGIBJYUOE57 2020-01-01 2020-12-31 ifrs-full:NoncontrollingInterestsMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:OtherReservesMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300NCMRGIBJYUOE57 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:IssuedCapitalMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:SharePremiumMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:OtherReservesMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:RetainedEarningsMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300NCMRGIBJYUOE57 2019-12-31 ifrs-full:NoncontrollingInterestsMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:IssuedCapitalMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:SharePremiumMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:OtherReservesMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:RetainedEarningsMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300NCMRGIBJYUOE57 2020-12-31 ifrs-full:NoncontrollingInterestsMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:IssuedCapitalMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:SharePremiumMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:OtherReservesMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:RetainedEarningsMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 549300NCMRGIBJYUOE57 2021-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:USD iso4217:USD xbrli:shares 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 s s u p p o r t i n g g l o b a l f o o d s e c u r i t y a n d g r e e n e r f u e l s o l u t i o n s C u l t i v a t i n g a m o r e s u s t a i n a b l e w o r l d t h r o u g h p r o d u c t s a n d P e r f o r m a n c e B e s t i n c l a s s m a r g i n s d r i v e n b y o u r c o m p e t i t i v e s t r e n g t h s O p e r a t i o n s S t a t e - o f - t h e - a r t , w e l l m a i n t a i n e d a n d s t r a t e 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 . Annual Report 2021 10 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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 OCI N.V . Annual Report 2021 11 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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 OCI N.V . Annual Report 2021 12 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 13 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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 OCI N.V . Annual Report 2021 14 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 15 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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. OCI N.V . Annual Report 2021 16 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 . OCI N.V . Annual Report 2021 17 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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    ✔ ✔ ✔ ✔ OCI N.V . Annual Report 2021 18 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 19 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 20 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 21 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information CA SE S 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. OCI N.V . Annual Report 2021 22 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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    OCI N.V . Annual Report 2021 23 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 24 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 2. BUSINESS PERFORMANCE 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 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 OCI N.V . Annual Report 2021 26 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page OCI N.V . Annual Report 2021 27 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 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. 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page • 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. 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 40 17 ICONS: COL OUR VERSION ICONS When an ico n is on a square, tha t square must be pr oportio nal 1 x 1. The white ic on should be con tained by its de ned colou r, or black background. Do not alter th e colours of the S DG icons. ICONS In Januar y 2018, the United Natio ns launched a re vised design of Ic on 10, as seen on this page 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 value creation 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 43 Strategy and value creation Sustainability 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 OCI N.V . Annual Report 2021 46 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance 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 47 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 OCI N.V . Annual Report 2021 48 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 . Annual Report 2021 49 Strategy and value creation Sustainability 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. OCI N.V . Annual Report 2021 50 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 OCI N.V . Annual Report 2021 51 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information          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 OCI N.V . Annual Report 2021 52 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 56 Strategy and value creation 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 Strategy and 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 58 Strategy and value creation Sustainability Corporate governance Business performance Risk management 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 59 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 60 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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. OCI N.V . Annual Report 2021 61 Strategy and value creation Sustainability Corporate governance Business performance Risk management 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 -CH-140a.3 OCI N.V . Annual Report 2021 62 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 -CH-140a.3 Contribution to SDGs             CONTINUED OCI N.V . Annual Report 2021 63 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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. OCI N.V . Annual Report 2021 64 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements 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 OCI N.V . Annual Report 2021 65 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 OCI N.V . Annual Report 2021 66 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 OCI N.V . Annual Report 2021 67 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 OCI N.V . Annual Report 2021 69 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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 OCI N.V . Annual Report 2021 70 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other 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. OCI N.V . Annual Report 2021 71 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information 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 -CH-320a.2 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 -CH-320a.2 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 OCI N.V . Annual Report 2021 78 Strategy and value creation 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 81 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 83 Strategy and value creation 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 84 Strategy and value creation 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 85 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 86 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 OCI N.V . Annual Report 2021 87 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 88 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 92 Strategy and value creation 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 OCI N.V . Annual Report 2021 97 Strategy and value creation Sustainability Corporate governance Business 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 OCI N.V . 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. BOARD REPORT CONTINUED OCI N.V . Annual Report 2021 104 Strategy and value creation 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 CONTINUED OCI N.V . 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 CONTINUED OCI N.V . Annual Report 2021 106 Strategy and 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 CONTINUED OCI N.V . Annual Report 2021 107 Strategy and value creation 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 CONTINUED OCI N.V . Annual Report 2021 108 Strategy and 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 CONTINUED OCI N.V . 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 REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 111 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. REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 112 Strategy and value creation Sustainability Corporate governance Business performance Risk management 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 + = REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 113 Strategy and 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% REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 114 Strategy and value creation 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. REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 115 Strategy and value creation 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 REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 116 Strategy and value creation Sustainability Corporate governance Business performance Risk management 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 . REMUNERA TION REPOR T CONTINUED OCI N.V . Annual Report 2021 117 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial 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 T CONTINUED OCI N.V . Annual Report 2021 118 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 T CONTINUED OCI N.V . Annual Report 2021 119 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 T CONTINUED OCI N.V . Annual Report 2021 120 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 T CONTINUED OCI N.V . Annual Report 2021 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 122 Strategy and value creation 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 OCI N.V . Annual Report 2021 123 Strategy and value creation 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 OCI N.V . Annual Report 2021 124 Strategy and value creation Sustainability Corporate governance Business performance Risk management and compliance Financial statements Other information OCI N.V . Annual Report 2021 125 6. Financial statements OCI N.V . Annual Report 2021 125 Consolidated Financial Statements OCI N.V . Annual Report 2021 126 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 OCI N.V . Annual Report 2021 134 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 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 OCI N.V . Annual Report 2021 135 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 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 OCI N.V . Annual Report 2021 136 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 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 OCI N.V . Annual Report 2021 137 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 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 OCI N.V . Annual Report 2021 138 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 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 OCI N.V . Annual Report 2021 139 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 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 OCI N.V . Annual Report 2021 140 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 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 . Annual Report 2021 141 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 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 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 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 OCI N.V . Annual Report 2021 143 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) 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 [email protected] 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: [email protected] T el: (+31) 20 723 45 00 investor [email protected] Corporate & ESG contact Erika W akid Group Corporate Af fairs Director E-mail: [email protected] T el: (+44) 020 7297 8820 [email protected] • 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

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